2006/789/EC: Council Decision of 13 November 2006 on consultation and information procedures in matters of credit insurance, credit guarantees and financial credits (Codified version)
Date: 2006-11-13
Institutions: Council of the European Union
Subjects: codification of EU law, consultation procedure, credit, credit guarantee, credit insurance

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COUNCIL DECISION

of 13 November 2006

on consultation and information procedures in matters of credit insurance, credit guarantees and
financial credits

(Codified version)

(2006/789/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community, and in particular Article 133 thereof,

establishing the European

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Having regard to the opinion of the European Economic and
Social Committee (2),

Whereas:

insurance,

Council Decision 73/391/EEC of 3 December 1973 on
consultation and information procedures in matters of
financial
credit
credit
credits (3) has been substantially amended (4).
In the
interests of clarity and rationality the said Decision
should be codified.

guarantees

and

TITLE I

GENERAL PROCEDURE

SECTION I

Scope

Article 2

1.
Consultation in accordance with the procedure laid down
in Section II shall take place where it is proposed — by a State,
any other State organisation or any State body for credit
insurance or
fully or
partially, foreign credits:

finance — to grant or guarantee,

(a)

linked to exports of goods or services;

(b) which depart from the norms listed in Annex I or from any

other norm adopted by the Member States.

2.

The consultation procedure shall be applicable:

(a) whether it concerns supplier credits or financial credits;

By a Decision of 27 September 1960 (5), the Council set
up a Policy Coordination Group for Credit Insurance,
Credit Guarantees and Financial Credits.

(b) whether these credits form the subject-matter of individual
contracts or global credit arrangements as described in
Article 3;

It is appropriate to provide for consultation and infor-
mation procedures in matters of credit insurance, credit
guarantees and financial credits,

(c) whether the credits are purely private or are sponsored fully

or partially out of public funds.

(1)

(2)

(3)

HAS ADOPTED THIS DECISION:

Article 1

3. Mixed credits combining public and private funds and
global private credit arrangements combined with public fund
interest subsidies shall
the consultation
procedure be considered as public credits.

for the purpose of

This Decision concerns the procedures for consultation and
information in matters of credit insurance, credit guarantees
and financial credits.

(1) OJ C 226 E, 15.9.2005, p. 43.
(2) OJ C 302, 7.12.2004, p. 19.
(3) OJ L 346, 17.12.1973, p. 1. Decision as last amended by the 1994

Treaty of Acccession.

(4) See Annex III.
(5) OJ 66, 27.10.1960, p. 1339.

Article 3

‘Global credit arrangement’ shall mean any understanding
1.
or statement,
in whatever form, whereby the intention to
guarantee supplier or financial credits or to open financial
credits, up to a specified or ascertainable ceiling, and in
respect of a connected series of transactions,
is made known
to a third country or to exporters or to financial institutions.

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The consultation procedure shall be applicable to these global
arrangements even where the nature of the transactions has not
been specified and no formal commitment has been entered
into, without prejudice to the right to decide on each particular
contract.

2.
If, in the course of a consultation on the granting of a
global arrangement — whether public or private in nature — a
Member State or the Commission should request oral consul-
tation and if
this oral consultation seven
Member States should request that all or some of the individual
contracts to be charged to this global arrangement constitute
the
consultation shall be
consultations,
subject of prior
applicable to such contracts.

in the course of

Any Member

3.
global
State which has
arrangement shall, at a date subsequent thereto, and every six
months thereafter, give notification of the use made of that
arrangement.

granted

a

SECTION II

Procedure

Article 4

(iii) repayment rate;

(iv) where repayment

is not

to be effected by equal
instalments at regular intervals between the starting-
point and termination of the credit, exact details of
how this
each
to be
instalment and exact date of payment);

effected (percentage of

is

(v) amount of effective interest subsidy, where it differs
system;
is to be granted out of

receivable under
the credit

the normal

from that
interest rate if
public funds;

(vi) credit insurance charges, where these differ from those

payable under the normal system;

(vii) scope and terms of any support for local expenditure;

(f) precise grounds cited for not applying, or departing from,
the norms set out in Article 2(1). Where they obtain, the
following circumstances must be specified:

In the case of an individual contract, the Member State initiating
consultation shall supply the following information:

(i) aid credit;

(a) country of destination;

(ii) competition from a third country (with indication

whether or not supported);

(b) location of the transaction or, failing that, address of head
office of the contracting party in the country of destination;

(iii) transaction to be charged to a global arrangement
which has been the subject of previous consultation.

(c) characteristics of the transaction:

Article 5

(i) nature of transaction: type of material and approximate

number of items to be supplied;

In the case of global credit arrangements, the Member State
initiating consultation shall supply the following information:

(ii) value rating according to the scale given in Annex II;

(a) country of destination;

(iii) whether buyers and any guarantors are public or

private;

(iv) if

transaction is to be put

for international

tender,

closing date for submission of tenders;

(b) ceiling of global credit arrangement;

(c) purpose of credit:

(i) if known, place where transaction is to be carried out;

(d) principal credit terms applied for by proposed recipient;

(ii) type of material, the supply of which is contemplated;

(e) credit

terms

the authorities

in the exporting country

propose to offer:

(iii) whether borrowers and any guarantors are public or

private;

(i) percentage payable on credit;

(ii) duration of credit and starting-point thereof (e.g. each

delivery, last delivery, commissioning);

(d) credit terms as under point (e) of Article 4 and eligibility
requirements for individual contracts (e.g. closing dates for
charging to global credit arrangement, minimum contract
prices to be set, if any);

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(e) precise grounds cited for not applying, or departing from,
the norms set out in Article 2(1). Where they obtain, the
following circumstances must be specified:

(i) aid credit;

Article 9

The information specified in Articles 4 and 5,
the replies
specified in Article 10 and the notification referred to in
Article 15 shall be transmitted by telex to recipients designated
by each Member State, the Commission and the General Secre-
tariat of the Council respectively.

(ii) competition from a third country (with indication

whether or not supported).

All correspondence relating to a consultation shall bear the
latter's number and an indication of the country of destination.

Article 6

Article 10

1. Member States and the Commission may:

The following numbering shall be observed when transmitting
information:

(a)

individual contracts: letters corresponding to the consulting
Member State followed by a serial number for each year;
where a contract is charged to a global arrangement, the
numbering of
shall also be
such global arrangement
indicated;

(b) global private credit arrangements: letter ‘X’ followed by the
letters corresponding to the consulting Member State and a
serial number for each year;

(c) public or mixed credits:

letter ‘A’ followed by the letters
corresponding to the consulting Member State and a serial
number for each year.

Article 7

In order to enable Member States to coordinate their attitudes
in due and proper time,
the information prescribed under
Articles 4 and 5 must be transmitted as soon as possible
after initiation of the study either of the guarantees and the
proposed credits proper, or of any other decision which,
under the terms of national regulations or national adminis-
trative practices, would constitute
the
a prerequisite
subsequent examination of such guarantees or credits.

for

(a)

indicate that the terms proposed by the consulting Member
State do not call for any comments;

(b) request the consulting Member State to provide additional

details;

(c) make comments and reservations or express an unfa-
vourable opinion; only an opinion expressly stated to be
an ‘unfavourable opinion’ shall be considered to be such;

(d) request a consultative meeting.

to consultation receive an
2. Where transactions subject
unfavourable opinion from seven Member States, consultative
meetings shall take place automatically.

Except where Article 13 applies, the consulting Member
3.
State shall suspend its decision until the expiry of the periods
prescribed in Article 11, or, where a consultative meeting is due
to take place automatically under paragraph 2, until such
meeting has been held.

Article 11

Article 8

The procedure referred to in Article 10(1) must be initiated
within a period of seven calendar days from the date of the
introductory communication from the consulting Member State.

Where there are changes in the factors justifying departure from
the norms or if new basic terms of the credit are proposed
which differ from those initially specified by the consulting
Member State, renewed consultation shall take place under a
revised reference.

Where requests for additional details are addressed to the
consulting Member State, by the date of expiry of the seven
calendar-day time-limit at the latest, the latter must reply within
five calendar days at the latest.

If, however, the new terms proposed are more restrictive, the
Member State concerned shall be committed only to direct
information under the initial reference.

Participants in the aforementioned procedure shall be allowed a
maximum period of three working days following receipt of
such additional details within which to express their opinion.

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Article 12

Failure on the part of the Member States consulted or of the
Commission to reply within the periods prescribed in Article 11
shall be deemed an absence of comments as defined in point (a)
of Article 10(1).

As soon as a Member State requesting additional details has
notified the recipients referred to in Article 9 of
failure to
receive a reply by the date of expiry of the period prescribed
in the second paragraph of Article 11 a consultative meeting
shall take place automatically and Article 10(3) shall apply.

Article 13

As an exceptional measure, the consulting Member State may
take an immediate decision on the transaction proposed if it
considers that such decision can no longer be delayed.

However, except in the case of public credits, the first paragraph
shall not apply:

(a)

based only on intra-Community

in the case of the decision to grant or guarantee the credit
being
competition.
However, the possibility of taking an immediate decision
on transactions
shall be permitted on terms which
another Member State has already decided to support;

(b) to the extent that any procedure laid down in an interna-
tional context and to which all Member States are parties
affords all participants, only the sole alternative, in cases of
urgency, of reducing the normal periods for reply.

Consultative meetings shall be held at the seat of the General
Secretariat of the Council.

Article 15

In all cases the final decision taken in respect of each trans-
action shall be made known to the other Member States. The
such decision shall be accompanied by a
notification of
statement of
the reasons for which the consulting Member
State was unable to take account of any comments, reservations
or unfavourable opinions expressed by the partners consulted.

TITLE II

SPECIAL PROCEDURES

Article 16

Any Member State may ask any other Member State whether it
has knowledge of a transaction which until then has not been
the subject of consultation and, in particular, of the credit terms
alleged by an exporter or a financial institution. Should no reply
to these requests for details be forthcoming within seven
calendar days, the enquiring Member State shall be entitled to
consider that the Member State consulted has knowledge of this
matter and that the alleged credit terms are deemed to have
been established. In accordance with the procedure referred to
in Title I, the enquiring Member State shall have the right to
institute a consultation while indicating expressly that
is
motivated by a competitive situation which is deemed to have
been established.

it

If consultation has already been initiated by a Member State and
another Member State which is called upon to support the same
transaction questions the first-mentioned State as to its final
position, failure to reply to such questioning on the expiry of
five working days shall authorise the enquiring
a period of
Member State to consider that the Member State thus ques-
tioned has
indicated
supported the matter on the terms
during consultation.

Article 14

Article 17

the

Consultative meetings shall be held on the occasion of any
meeting of
Policy Coordination Group for Credit
Insurance, Credit Guarantees and Financial Credits set up by
the Council Decision of 27 September 1960, or of
its
if any Member State so requests, special
subgroups. Further,
meetings
the
Group or of its subgroups.

shall be convened in between meetings of

Untied credits departing from the norms set out in Annex I or
from any other norm adopted by the Member States shall,
within the framework of the Policy Coordination Group for
Insurance Credit, Credit Guarantees and Financial Credits,
entail notification:

(a) of the basic components of credits granted in the course of

the preceding quarter;

Member States and the Commission shall communicate to the
recipients referred to in Article 9, if possible four calendar days
before the consultative meetings, lists of the matters which they
intend to submit for discussion.

(b) of

the use made of untied credits at

the close of

the

preceding year.

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Article 18

When a Member State concludes with a third country an
agreement which refers
to the possible grant of credits
without specifying the precise terms thereof:

(a)

in the case of tied credits,
it shall on conclusion of the
agreement communicate the main features thereof to the
recipients referred to in Article 9;

(b) in the case of untied credits, the notifications provided for

in Article 17 shall equally apply to such credits.

TITLE III

PERIODIC REPORTS

Article 19

The Policy Coordination Group for Credit
Guarantees
reports on the application of
Titles I and II.

and Financial Credits

Insurance, Credit
submit half-yearly
the procedure referred to in

shall

These periodic reports notwithstanding, supplementary reports
if the nature and importance of the
shall also be drawn up,

difficulties encountered in the application of
procedure so require.

the relevant

TITLE IV

FINAL PROVISIONS

Article 20

Decision 73/391/EEC is repealed.

References to the repealed Decision shall be construed as
references to this Decision and shall be read in accordance
with the correlation table in Annex IV.

Article 21

This Decision is addressed to the Member States.

Done at Brussels, 13 November 2006.

For the Council
The President

E. TUOMIOJA

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ANNEX I

COMMUNITY NORMS WHICH CANNOT BE DEPARTED FROM WITHOUT CONSULTATION

A. Duration of credits

The duration of any credit granted, whether supplier credit or financial credit, must not exceed five years calculated
from the following starting points:

1. Capital goods consisting of individual items usable in themselves (for example, locomotives):

— the mean date, or actual dates, on which the buyer is to take physical possession of the goods in his own

country.

2. Capital goods for complete plants or factories where the supplier has no responsibility for commissioning:

— the date on which the buyer is to take physical possession of the entire goods (excluding spare parts) supplied

under the contract.

3. Construction contracts where the contractor has no responsibility for commissioning:

— the date on which construction has been completed.

4. Installation (or construction) contracts where the supplier (or contractor) has a contractual responsibility for

commissioning:

— the date on which the supplier (or contractor) has completed installation (or construction) and preliminary tests
to ensure that it is ready for operation, whether or not the installation (or construction) is handed over to the
buyer at that time in accordance with the terms of the contract and irrespective of any continuing commitment
which the supplier (or contractor) may have entered into, for example to guarantee its effective functioning or
to train local personnel.

5. In the case of points 2, 3 and 4, where the contract involves the separate execution of individual parts of a project:

— the date of the starting-point for each separate part, or the mean date of those starting-points or, where the
supplier has entered into a contract not for the whole project but for an essential part of it, the starting-point
appropriate to the project as a whole.

B. Percentage of local expenditure

In the case of guaranteed private credits, the balance of the local portion payable on credit must not exceed 5 % of the
contract price.

However, consultation shall not be instituted in the case of contracts which provide for payment of the local portion
to be made, at the latest, upon the expiry of a period of three months calculated from the final completion of the
works or deliveries.

For the proper interpretation of this rule:

(a)

‘balance payable on credit’ shall mean the balance outstanding after charging against the local portion all payments
made on account in connection with the contract;

(b) ‘local portion’ shall mean that portion of the contract price representing the expenditure the exporter expects to
incur on the spot in the way of payments to employees and others and payments for goods and materials;

(c)

‘contract’ shall mean any type of contract for the supply of goods and materials; for the carrying out of work;
mixed (i.e. supply and works) contracts;

(d) ‘payments on account’ shall mean all the sums payable between the placing of the order and final completion of

the works or deliveries.

C. Leasing contracts

For the purposes of application of the rules, which are the subject of the present Decision, leasing contracts shall be
treated as credits. Where their total duration is not expressly restricted, such duration shall be regarded as being in
excess of five years.

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ANNEX II

SCALE OF VALUES TO BE USED

Category I:

up to 750 000 special drawing rights.

Category II:

from 600 000 to 1 200 000 special drawing rights.

Category III:

from 1 000 000 to 2 200 000 special drawing rights.

Category IV:

from 2 000 000 to 3 200 000 special drawing rights.

Category V:

from 3 000 000 to 5 000 000 special drawing rights.

Category VI:

from 4 800 000 to 7 600 000 special drawing rights.

Category VII:

from 7 400 000 to 11 200 000 special drawing rights.

Category VIII:

from 10 000 000 to 22 000 000 special drawing rights.

Category IX:

from 20 000 000 to 44 000 000 special drawing rights.

Category X:

over 40 000 000 special drawing rights.

ANNEX III

REPEALED DECISION WITH ITS AMENDMENT

Council Decision 73/391/EEC (1)

(OJ L 346, 17.12.1973, p. 1)

Council Decision 76/641/EEC

(OJ L 223, 16.8.1976, p. 25)

(1) Decision 73/391/EEC was also amended by the following acts which have not been repealed:

— The 1985 Act of Accession;
— The 1994 Act of Accession.

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ANNEX IV

CORRELATION TABLE

Decision 73/391/EEC

This Decision

Article 1

Article 2

Article 1

Article 21

Annex, Article 1, introductory wording

Article 2(1), introductory wording

Annex, Article 1, first and second indents

Article 2(1)(a) and (b)

Annex, Article 2, first paragraph, introductory wording

Article 2(2), introductory wording

Annex, Article 2, first paragraph, first to third indents

Article 2(2)(a) to (c)

Annex, Article 2, second paragraph

Annex, Article 3

Article 2(3)

Article 3

Annex, Article 4(a) and (b)

Article 4(a) and (b)

Annex, Article 4(c), first to fourth indents

Article 4(c)(i) to (iv)

Annex, Article 4(d)

Article 4(d)

Annex, Article 4(e), first to seventh indents

Article 4(e)(i) to (vii)

Annex, Article 4(f)

Annex, Article 5(a) and (b)

Article 4(f)(i) to (iii)

Article 5(a) and (b)

Annex, Article 5(c), first to third indents

Article 5(c)(i) to (iii)

Annex, Article 5(d)

Annex, Article 5(e)

Article 5(d)

Article 5(e)(i) and (ii)

Annex, Article 6, introductory wording

Article 6, introductory wording

Annex, Article 6, first to third indents

Article 6(a) to (c)

Annex, Articles 7 to 9

Articles 7 to 9

Annex, Article 10(1), introductory wording

Article 10(1), introductory wording

Annex, Article 10(1), first to fourth indents

Article 10(1)(a) to (d)

Annex, Article 10(2) and (3)

Annex, Articles 11 and 12

Article 10(2) and (3)

Articles 11 and 12

Annex, Article 13, first paragraph

Article 13, first paragraph

Annex, Article 13, second paragraph, introductory wording Article 13, second paragraph, introductory wording

Annex, Article 13, second paragraph,
indents

first and second

Article 13, second paragraph, points (a) and (b)

Annex, Articles 14 to 16

Articles 14 to 16

Annex, Article 17, introductory wording

Article 17, introductory wording

Annex, Article 17, first and second indents

Article 17(a) and (b)

Annex, Article 18, introductory wording

Article 18, introductory wording

Annex, Article 18, first and second indents

Article 18(a) and (b)

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Decision 73/391/EEC

This Decision

Annex, Article 19

—

Annex 1, point A

Article 19

Article 20

Annex I, point A

Annex 1, point B, introductory wording

Annex I, point B, first paragraph

Annex 1, point B, first indent

Annex I, point B, second paragraph

Annex 1, point B, subindents 1 to 4 of the second indent Annex I, point B, third paragraph, (a) to (d)

Annex 1, point C

Annex I, point C

Annex 2

—

—

Annex II

Annex III

Annex IV