Proposal for a COUNCIL DECISION on the position to be taken on behalf of the Union at the meetings of Participants to the OECD Arrangement on Officially Supported Export Credits in relation to common lines on the minimum down payment requirement
Date: 2024-10-15
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: OECD, advance payment, export (EU), export aid, export credit, framework agreement, revision of an agreement

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   EUROPEAN COMMISSION  Brussels, 15.10.2024  COM(2024) 459 final 2024/0251 (NLE)  Proposal for a COUNCIL DECISION on the position to be taken on behalf of the Union at the meetings of Participants to the OECD Arrangement on Officially Supported Export Credits in relation to common lines on the minimum down payment requirement  
 
EXPLANATORY MEMORANDUM 

1. 

SUBJECT MATTER OF THE PROPOSAL 

This  proposal  concerns  the  decision  establishing  the  position  to  be  taken  on  the  Union’s 
behalf  at  the  meetings  of  Participants  to  the  OECD  Arrangement  on  Officially  Supported 
Export Credits (“Arrangement”) in relation to future common lines presented by Participants 
on the minimum down payment requirement. 

2. 

CONTEXT OF THE PROPOSAL 

2.1. 

The Arrangement on Officially Supported Export Credits 

The  Arrangement  is  a  gentlemen's  agreement  which  aims  to  provide  a  framework  for  the 
orderly use of officially supported export credits. In practice, this means establishing a level 
playing  field  (whereby  competition  is  based  on  the  price  and  quality  of  the  exported  goods 
and  services  and  not  on the  financial  terms  provided),  while  working  to  eliminate  subsidies 
and  trade  distortions  related  to  officially  supported  export  credits  (‘official  support’).  The 
Arrangement entered into force in April 1978 and it is of indefinite duration. 

The Arrangement is administratively embedded in the OECD and receives support from the 
OECD Credit Secretariat. Nevertheless, it is not an OECD Act1. 

The European Union – and not the Member States – is a Participant to the Arrangement and 
its text has been transposed into the acquis communautaire by virtue of Regulation (EU) No 
1233/2011 of the European Parliament and of the Council of 16 November 2011.2 Therefore, 
the Arrangement is legally binding as a matter of Union law. 

2.2. 

The Participants to the Arrangement 

There  are  currently  eleven  Participants  to  the  Arrangement  (‘Arrangement  Participants’): 
Australia,  Canada,  the  European  Union,  Japan,  Korea,  New  Zealand,  Norway,  Switzerland, 
Türkiye, the United Kingdom and the United States. 

The  Arrangement  Participants  may  take  decisions  on  modifications  of  the  Arrangement, 
including  ‘common  lines’  in  accordance  with  Chapter  IV,  Section  5  of  the  Arrangement. 
Decisions are taken by consensus, so that, if any Participant objects, the modification of the 
Arrangement or the common line cannot be adopted. 

The  European  Commission  represents  the  Union  for  decision-making  purposes,  whether  in 
meetings of the Arrangement Participants or in written procedures. 

A  common  line  is  an  instrument  under  the  Arrangement  that  allows  the  Participants,  on  an 
exceptional  basis,  to  diverge  from  the  Arrangement’s  provisions  either  for  a  specific 
transaction  or  temporarily  for  a  non-specific  number  of  transactions.  The  procedures  for 
reaching  agreement  on  common  lines  are  set  out  in  Articles  54  to  59  of  the  Arangement. 
Common lines may be accepted in written procedure by remaining silent because a Participant 
remaining  silent  shall  be  deemed  to  have  accepted  the  common  line  proposal.  The  same 
applies  for  a  Participant  which  advises  that  it  has  no  position.  Responses to  a  common  line 
proposal  must  be  made  in  principle  within  20  calendar  days,  with  a  possible  extension  by 
eight  calendar  days.  The  OECD  Export  Credit  Secretariat  is  required  to  inform  the 

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2 

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). 

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Participants whether the common line has been accepted, with the agreed common line taking 
effect three calendar days after this announcement. 

2.3. 

Position to be taken on the Union's behalf 

Several common lines in relation to the down payment  required from buyers in transactions 
under  Arrangement  rules  have  been  adopted  in  the  past  years.  On  5  November  2021,  a 
common  line,  proposed  by  the  EU,  lowering  the  down  payment  requirement  to  5%  (as 
opposed to the 15% requirement as set out in Article 11 a) of the Arrangement) and increasing 
the maximum official  support limit  to  95 % of the export  contract  value (as opposed to  the 
85%  as  set  out  in  Article  11  c)  of  the  Arrangement)  was  adopted  by  the  Participants.  The 
measure was validated by the Participants as an urgent and exceptional step required to react 
to the economic downturn resulting from the Covid-19 health crisis. The 2021 common line, 
originally  effective  until  4  November  2022,  was  extended  for  an  additional  year,  and  thus 
expired on 4 November 2023. 

On  14  December  2023,  another  common  line  on  the  minimum  down  payment  requirement 
was adopted by the Participants following a proposal by the UK. While the rationale for the 
flexibility at the time of the 2021 common line no longer applied, the UK advanced that there 
were  nonetheless,  at  the  time  of  the  common  line  proposal,  specific  difficulties  regarding 
access  to  finance  for  public/sovereign  buyers  in  low  and  medium  income  countries  in 
operation, such as increased interest rates and continuing inflationary pressures. The common 
line,  which  applies  until  13  December  2024,  covers  official  export  credit  support  for 
transactions  with  sovereign/public  buyers  in  Category  II  countries  with  a  country  risk 
classification between 5 and 7, inclusive, as established under Article 22 of the Arrangement. 
For such transactions, the minimum required down payments is lowered to 5% of the export 
contract, and the limit for maximum official support that the Participants can provide is raised 
to 95%. 

Considering the objective need for the Union to be able to act expeditiously and flexibly at the 
international  level  following  common  line  proposals,  the  Commission  proposes  that  the 
Council allows the Commission to draw up a position to be adopted on behalf of the Union in 
the  meetings  of  the  Participants  to  the  OECD  Arrangement  on  Officially  Supported  Export 
Credits  in  relation  to  future  common  lines  proposed  by  Participants  on  the  minimun  down 
payment requirement. More particularly, the position to be taken on behalf of the Union shall 
be to reject any future common line on the minimum down payment proposed by a Participant 
to the Arrangement, as long as the common line is horizontal in nature and applies to more 
than one specific transaction.  

The EU does not believe a quasi-permanent change to the terms of the Arrangement’s down 
payment rules should be achieved by the constant renewal of common lines. Instead any such 
adjustment  should  be  addressed  by  deliberative  discussions  among  Participants.  (Such 
dicussions were launched in March 2023 and will look into all the parameters of any possible 
change  to  Arrangement  rules  on  down  payment.  A  separate  Commission  proposal  for  an 
Council Decision to accommodate such a permanent change is in preparation.)  

On this basis the EU must be in a position to reject future proposals to use the common line 
procedure to further extend the flexibilities. Accounting for the fact that the policy context at 
both the international and EU level is likely to evolve over time, the proposed Decision shall 
be applicable until three years after its adoption, after which the Council will be able to revise 
the policy as established in this Decision. 

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3. 

LEGAL BASIS 

3.1. 

Procedural legal basis 

3.1.1.  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’3. 

3.1.2.  Application to the present case  

The  rules  of  an  agreed  common  line  supersede  the  rules  of  the  Arrangement  only  for  the 
transaction or in the circumstances specified in the common line. While common lines are soft 
law  for  other  Participants  to  the  Arrangement,  for  the  EU,  common  lines  constitute  acts 
having legal effects by virtue of Article 1 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 "The guidelines contained in the Arrangement on Officially 
Supported  Export  Credits  (‘the  Arrangement’)  shall  apply  in  the  Union.  The  text  of  the 
Arrangement is annexed to this Regulation." As common lines are agreed by the Participants 
following the procedure set out in Articles 54 to 59 of the Arrangement involving the OECD 
Export Credit Secretariat, they also constitute acts adopted by an international body within the 
meaning of Article 218(9) TFEU. 

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

3.2. 

Substantive legal basis 

3.2.1.  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. 

3.2.2.  Application to the present case 

The main 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 TFEU. 

3.3. 

Conclusion 

The  legal  basis  of  the  proposed  decision  should  be  the  first  subparagraph  of  Article  207(4) 
TFEU in conjunction with Article 218(9). 

4. 

PUBLICATION OF THE ENVISAGED ACT 

As the act of the Participants to the Arrangement will amend the Arrangement on Officially 
Supported Export Credits which forms Annex II to the Regulation (EU) No 1233/2011, it is 
appropriate to publish it in the Official Journal of the European Union after its acceptance. 

3 

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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2024/0251 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the position to be taken on behalf of the Union at the meetings of Participants to the 
OECD Arrangement on Officially Supported Export Credits in relation to common lines 
on the minimum down payment requirement 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(4), first subparagraph, in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

The guidelines contained in the Arrangement on Officially Supported Export Credits 
(‘Arrangement’)  are  transposed,  and  hence  made  legally  binding  in  the  European 
Union  by  Regulation  (EU)  No  1233/2011  of  the  European  Parliament  and  of  the 
Council4.  

A common line is an instrument  under the Arrangement that allows the Participants, 
on  an  exceptional  basis,  to  diverge  from  the  Arrangement’s  provisions,  either  for  a 
specific  transaction  or  temporarily  for  a  non-specific  number  of  transactions,  for 
example with regard to the minimum down payment  pursuant to Article 11 a) of the 
Arrangement. 

The Participants to the Arrangement (‘Participants’) decide, in a written procedure, on 
common lines in accordance with Chapter IV, Section 5 of the Arrangement. Common 
lines may be accepted in written procedure by remaining silent because a Participant 
remaining  silent  shall  be  deemed  to  have  accepted  the  common  line  proposal.  The 
same  applies  for  a  Participant  which  advises  that  it  has  no  position.  Responses  to  a 
common  line  proposal  must  be  made  in  principle  within  20  calendar  days,  with  a 
possible extension by eight calendar days. The short period of time given to react to a 
common line proposal, coupled with the fact that silence implies approval, justifies the 
need for a framework Decision under Article 218(9) TFEU. 

It is appropriate to establish the position to be taken on the Union's behalf regarding 
proposed  common  lines  in  the  written  procedure  by  the  Participants,  as  proposed 
common  lines,  once  agreed,  will  be  capable  of  decisively  influencing  the  content  of 
Union  law  by  virtue  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. 

4 

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). 

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(5) 

(6) 

(7) 

In  view  of  the  expedited  procedure  established  under  the  Arrangement  to  adopt  this 
common line, it is in the interest of the Union that such positions be established at EU 
level  in  an  expeditious  manner  to  allow  the  Union  to  exercise  effectively  its  rights 
under  the  Arrangement.  Hence,  this  Decision  establishes  an  efficient  and  expedited 
procedure for the establishment of the position to be taken on the Union's behalf with 
regard  to  any  future  common  line  on  the  minimum  down  payment  proposed  by  a 
Participant to the Arrangement, as long as the common line is horizontal in nature and 
applies to more than one specific transaction.  

The  EU  does  not  believe  that  a  quasi-permanent  change  to  the  terms  of  the 
Arrangement’s  down  payment  rules  should  be  achieved  by  the  constant  renewal  of 
common  lines.  Instead  any  such  adjustment  should  be  addressed  by  deliberative 
discussions  among  Participants.  On  this  basis  this  Decision  establishes  that  as  a 
general  rule  the  EU  should  be  in  a  position  to  reject  future  proposals  to  use  the 
common line procedure to further extend the flexibilities relating to the down payment 
rules in Article 11(a) of the Arrangement. 

If  during  the  discussions  in  the  Council  Working  Group  on  Export  Credits,  it  is 
concluded  that  a  deviation  from  the  position  established  in  this  Decision  is 
appropriate,  the  Commission  has  always  the  possibility  to  submit  a  proposal  for  a 
Council decision establishing the position to be adopted on the Union’s behalf which 
deviates from the position established in this Decision. Indeed, this Decision remains 
without prejudice to the right of the Commission to submit, also on its own initiative, a 
proposal for a Council decision establishing the position to be adopted on the Union’s 
behalf which deviates from the general position established in this Decision.  

(8) 

To ensure that the Council is able to assess and, where appropriate, revise the policy in 
this Decision on a regular basis, and in the spirit of the sincere cooperation among the 
Union  institutions  enshrined  in  Article  13(2)  of  the  TEU,  this  Decision  may  be 
periodically reviewed, 

HAS ADOPTED THIS DECISION: 

Article 1 

The position to be adopted on the Union's behalf in the written procedure by the Participants 
to  the  Arrangement  on  Officially  Supported  Export  Credits  as  regards  future  proposals  by 
other Participants for common lines on the minimum down payment requirement shall be to 
reject  any  future  common  line  presented  by  a  Participant  in  relation  to  the  minimum  down 
payment  requirement  pursuant  to  Article  11  a)  of  the  Arrangement  if  the  common  line  is 
horizontal in nature and applies to more than one specific transaction. 

The  Commission  shall  transmit  in  sufficient  time  before  each  meeting  of  the  Participants  a 
document containing proposed common lines referred to in Article 1 to be discussed at that 
meeting to the Council Working Group on Export Credits for discussion. 

Article 2 

This  Decision  shall  be  assessed  and,  where  appropriate,  revised  by  the  Council  upon  a 
proposal from the Commission, at the latest three years after the adoption of this Decision. 

Article 3 

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Article 4 

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This Decision shall enter into force on the date of its adoption. 

It shall apply until three years after its adoption. 

Done at Brussels, 

For the Council 
The President 

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