Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the Meeting of the Participants to the Arrangement on Officially Supported Export Credits
Date: 2018-08-02
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: State aid, Türkiye, accession to an agreement, export aid, export credit, framework agreement, international meeting

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   EUROPEAN COMMISSION  Brussels, 2.8.2018 COM(2018) 565 final 2018/0297 (NLE)  Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the Meeting of the Participants to the Arrangement on Officially Supported Export Credits  
 
 
EXPLANATORY MEMORANDUM 

1. 

SUBJECT MATTER OF THE PROPOSAL 

This proposal concerns the decision establishing the position to be taken on the Union's behalf 
in the Meeting of the Participants to the Arrangement on Officially Supported Export Credits 
(the  ‘Meeting  of  the  Participants’)  in  connection  with  the  envisaged  adoption  of  a  decision 
concerning the request from Turkey to become a Participant to the Arrangement on Officially 
Supported Export Credits (‘the Arrangement’) of the Organisation for Economic Cooperation 
and Development (‘OECD’). 

2. 

CONTEXT OF THE PROPOSAL 

2.1. 

The Arrangement on Officially Supported Export Credits 

The Arrangement is a Gentlemen's Agreement among the EU, the US, Canada, Japan, Korea, 
Norway, Switzerland, Australia and New Zealand which aims to provide a framework for the 
orderly use of officially supported export credits. In practice, this means providing for a level 
playing  field  (whereby  competition  is  based  on  the  price  and  quality  of  the  exported  goods 
and not the financial terms provided) and working to eliminate subsidies and trade distortions 
related  to  officially  supported  export  credits.  The  Arrangement  entered  into  force  on  April 
1978,  it  is  of  indefinite  duration  and,  although  it  receives  the  administrative  support  of  the 
OECD Secretariat, is not an OECD Act1.  

The Arrangement is subject to regular updates to take into account new technical and policy 
developments  affecting  export  credits  in  various  sectors.  The  Arrangement  has  been 
transposed,  and  hence  been  made  legally  binding  in  the  EU,  by  Regulation  (EU)  No 
1233/2011 of the European Parliament and of the Council23. Updates are incorporated into EU 
legislation through delegated Acts pursuant to Article 2 of this Regulation.  

2.2. 

The  Meeting  of  the  Participants  to  the  Arrangement  on  Officially  Supported 
Export Credits 

Article  67  of  the  Arrangement  provides  that  "The  Participants  shall  review  regularly  the 
functioning  of  the  Arrangement.  In  the  review  the  Participants  shall  examine,  inter  alia, 
notification  procedures,  implementation  and  operation  of  the  DDR  system,  rules  and 
procedures on tied aid, questions of matching, prior commitments and possibilities of wider 
participation in the Arrangement". 

The  European  Commission  represents  the  Union  in  the  Meeting  of  the  Participants,  where 
decisions on all modifications to the Arrangement are taken by consensus. The position of the 
Union  is  adopted  by  the  Council  and  discussed  with  Member  States’  representatives  within 
the Working Group on Export Credits4. 

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As defined in Article 5 of the OECD Convention.  
Regulation (EU) No 1233/2011 of the European Parliament and of the Council of 16 November 2011 
on the application of certain guidelines in the field of officially supported export credits and repealing 
Council Decisions 2001/76/EC and 2001/77/EC (OJ L 326,8.12.2011, p. 45). 
In  the  past,  earlier  versions  of  the  OECD  Arrangement  had  already  been  transposed  into  EU  law  by 
Council Decisions.  
Council Decision setting up a Policy Co-ordination Group for Credit Insurance, Credit Guarantees and 
Financial Credits, (OJ 66, 27.10.1960, p. 1339/60). 

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2.3. 

The  envisaged  act  of  the  Meeting  of  the  Participants  to  the  Arrangement  on 
Officially Supported Export Credits 

Article 3 of the Arrangement provides that "Other OECD Members and non-members may be 
invited  to  become  Participants  by  the  current  Participants".  Turkey  has  been  an  OECD 
Member since 2 August 1961. 

By  letter  dated  20  September  2017  and  addressed  to  the  Chairman  of  the  Meeting  of  the 
Participants  to  the  Arrangement,  Turkey  requested  to  become  a  Participant  to  the 
Arrangement. 

Turkey's  request was discussed  at the Meeting of the Participants in  confidential  session on 
15th  November  2017.  No  decision  was  taken  as  the  Participants,  including  the  EU,  did  not 
have a position on the issue. 
In the week of 12th November 2018 the Meeting of the Participants to the Arrangement is to 
adopt a decision regarding this request from Turkey (‘the envisaged act’). 

The  envisaged  act  will  become  binding  on  the  parties  in  accordance  with  Article  67  of  the 
Arrangement.  

3. 

POSITION TO BE TAKEN ON THE UNION'S BEHALF 

Turkey has been an observer to the Arrangement since 2006.  

Turkey is already under the obligation to comply with EU legislation on officially supported 
export  credit  policy,  pursuant  to  Article  12  of  the  EU-Turkey  Customs  Union  Agreement 
which provides that: 

“Turkey  shall,  in  relation  to  countries  which  are  not  members  of  the  Community,  apply 
provisions  and  implementing  measures  which  are  substantially  similar  to  those  of  the 
Community's commercial policy set out in the following Regulations: […] - Council Decision 
93/112/EEC (officially supported export credits)5” 

Council Decision 93/112/EEC has now been replaced by Regulation (EU) No 1233/2011 and, 
even if Turkey has not completely aligned itself with the EU legislation on export credits (as 
stated  still  in  the  Turkey  2016  Report6),  admitting  Turkey  as  a  Participant  to  the  OECD 
Arrangement will increase the pressure on Turkey to comply with those rules. Since rules on 
officially supported export credits are adopted by consensus in the Meeting of Participants to 
the  Arrangement,  Turkey  will  be  fully  involved  in  the  decision  making  process  once  it 
becomes a Participant.  

Finally, Turkey is a member of the International Working Group on Export Credits, set up in 
2012 to negotiate new rules on export credits with the participation of emerging, non-OECD 
economies,  where  it  has  been  participating  actively  and  has  been  supportive  of  the  EU 
position. 

Therefore, Turkey's request to become a Participant to the Arrangement should be supported. 

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OJ No L 44, 22.2.1993, p. 1 
SWD(2016) 366 final 

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4. 

LEGAL BASIS 

4.1. 

Procedural legal basis 

4.1.1.  Principles 

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides for 
decisions establishing ‘the positions to be adopted on the Union’s behalf in a body set up by 
an  agreement,  when  that  body  is  called  upon  to  adopt  acts  having  legal  effects,  with  the 
exception of acts supplementing or amending the institutional framework of the agreement.’ 

The concept of ‘acts having legal effects’ includes acts that have legal effects by virtue of the 
rules of international law governing the body in question. It also includes instruments that do 
not  have  a  binding  effect  under  international  law,  but  that  are  ‘capable  of  decisively 
influencing the content of the legislation adopted by the EU legislature’7. 

4.1.2.  Application to the present case 

The act which the Meeting of the Participants is called upon to adopt constitutes an act having 
legal effects. The envisaged act is capable of decisively influencing the content of EU law, by 
virtue of Article 2 of Regulation (EU) No 1233/2011 of the European Parliament and of the 
Council of 16 November 2011 on the application of certain guidelines in the field of officially 
supported export credits and repealing Council Decisions 2001/76/EC and 2001/77/EC which 
states  that  "[t]he  Commission  shall  adopt  delegated  acts  in  accordance  with  Article  3  to 
amend Annex II as a result of amendments to the guidelines agreed by the Participants to the 
Arrangement". 

Therefore, the procedural legal basis for the proposed decision is Article 218(9) TFEU. 

4.2. 

Substantive legal basis 

4.2.1.  Principles 

The  substantive  legal  basis  for  a  decision  under  Article  218(9)  TFEU  depends  primarily  on 
the objective and content of the envisaged act in respect of which a position is taken on the 
Union's  behalf.  If  the envisaged act  pursues  two  aims  or  has  two  components  and  if  one  of 
those  aims  or  components  is  identifiable  as  the  main  one,  whereas  the  other  is  merely 
incidental, the decision under Article 218(9) TFEU must be founded on a single substantive 
legal basis, namely that required by the main or predominant aim or component. 

4.2.2.  Application to the present case 

The  objective  and  content  of  the  envisaged  act  relate  to  the  common  commercial  policy. 
Therefore, the substantive legal basis of the proposed decision is Article 207. 

4.3. 

Conclusion 

The  legal  basis  of  the  proposed  decision  should  be  Article  207  in  conjunction  with  Article 
218(9) TFEU. 

5. 

PUBLICATION OF THE ENVISAGED ACT 

As the act of the Meeting of the Participants will amend the Arrangement, it is appropriate to 
publish it in the Official Journal of the European Union after its adoption. 

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Judgment  of 
ECLI:EU:C:2014:2258, paragraphs 61 to 64.  

the  Court  of  Justice  of  7  October  2014,  Germany  v  Council,  C-399/12, 

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2018/0297 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken on behalf of the European Union in the Meeting of the 
Participants to the Arrangement on Officially Supported Export Credits 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207 in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

The  Arrangement  on  Officially  Supported  Export  Credits  ("the  Arrangement")  has 
been transposed, and hence been made legally binding in the EU by Regulation (EU) 
No 1233/2011 of the European Parliament and of the Council89.  

Pursuant  to  Article  3  of  the  Arrangement,  the  Meeting  of  the  Participants  to  the 
Arrangement  may  adopt  a  decision  to  invite  other  OECD  Members  to  become 
Participants to the Arrangement. 

On 20 September 2017, Turkey announced its intention to become a Participant to the 
Arrangement. 
The  Meeting  of  the  Participants  to  the  Arrangement,  during  its  140th  session  on  the 
week of 12 November 2018, is to adopt a decision concerning the request from Turkey 
to become a Participant to the Arrangement. 

It  is  appropriate  to  establish  the  position  to  be  taken  on  the  Union's  behalf  in  the 
Meeting  of  the  Participants  to  the  Arrangement,  as  the  envisaged  decision  will  be 
capable of decisively influencing the content  of Union law, by virtue of Article 2 of 
Regulation (EU) No 1233/2011. 

HAS ADOPTED THIS DECISION: 

Article 1 
The  position  to  be  taken  on  the  Union's  behalf  in  the  140th  session  of  the  Meeting  of  the 
Participants  to  the  Arrangement  on  Officially  Supported  Export  Credits  shall  be  to  approve 
Turkey's request to become a Participant to the Arrangement on Officially Supported Export 
Credits. 

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Regulation (EU) No 1233/2011 of the European Parliament and of the Council of 16 November 2011 
on the application of certain guidelines in the field of officially supported export credits and repealing 
Council Decisions 2001/76/EC and 2001/77/EC (OJ L 326,8.12.2011, p. 45). 
In  the  past,  earlier  versions  of  the  OECD  Arrangement  had  already  been  transposed  into  EU  law  by 
Council Decisions. 

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This Decision is addressed to the Commission. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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