CELEX: 51985PC0202
Language: en
Date: 1985-04-30
Title: PROPOSAL FOR A COUNCIL DECISION amending the Decision of 4 April 1978 on the application of certain guidelines in the field of officially supported export credits (presented by the Commission to the Council)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (85) 202
Vol. 1985/0096
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 ---pagebreak---                                                                            C0M(85) 202 fi n a l
     COMMISSION                                                           Brussels, 30 apri l 1985
        OF THE
EUROPEAN COMMUNITIES                                                      FOR OFFICIAL USE ONLY
    General Secretariat
                                              PROPOSAL
                                                FOR A
                                        COUNCIL DECISION
                                                       ■ r· .»·:
                                                           *: -'                  f
                         •amending the Decision of 4 April 1978
                         on the application of c ertain guidelines
                           in the f i e l d of o f f i c i a l l y supported
                                           export c re d its
                        (presented by the Commission to the Council)
   C0MC85) 202 fi n a l
 ---pagebreak---                                          EXPLANATORY MEMORANDUM
1. The Arrangement on guidelines for o f f i c i a l l y supported export credit
    (the Consensus) came into e f f e c t in April 1978 and has since repeated­
    ly been amended and extended, most recently by a Council Decision of
   1 April t h i s year.
2. At the m in is te r ia l meeting of the OECD Council held in Paris on 11 and
   12 April, i t was agreed that
   "Measures aiming at strengthened transparency and d i s c ip l i n e in the
     f i e l d of t i e d aid c re d i ts and associated financing of exports will
     continue to be pursued expeditiously. A study i s to be completed by
     30 September 1985 so th at new measures aiming at a fu r th er increase
     in d i s c ip l i n e and transparency could be taken promptly. As a f i r s t
     ste p , there was agreement on reinforced n o t i f i c a t i o n and consultation
     procedures as well as an increase to 25 percent of the minimum per­
     missible grant element for those t r a n s a c ti o n s " .
3. I t was c le ar from the m in i s te r s ' di|£ussion th a t the phrase "reinforced
   n o t i f i c a t i o n and consultation procedures" should be in terpreted as
   acceptance of the proposals contained in Mr. Wallen's report and
   e a r l i e r referred to in the aide-mémoire in TD/C0NSENSUS/84.59. Action
   under the m in i s te r ia l agreement therefore includes:
   a) the increase of the minimum permissible grant element for t ie d aid
         c r e d i t s and associated financing of exports from 20 to 25 per cent;
   b) the p rio r n o t i f i c a t i o n of t i e d aid c r e d i ts and associated financing
         of exports with a grant element of less than 50 per cent, together
         with the lengthening from ten calendar to twenty working days of
         the waiting periods prescribed for matching purposes in the proce­
         dures;
   c) the i n s t i t u t i o n of a process of face-toface consultations as set out
         in the protocol in Part A of document TD/CONSENSUS/84.58.
                                                                                        «· /...
                          I
 ---pagebreak--- A Council Decision of 10 December mandated the Commission to negotiate
the strengthening of n o t i f i c a t i o n procedures and the introduction of
face -to -fa ce consu lta tio ns. On 4 March the Commission laid before the
Council a fresh recommendation for a Decision on the position to be
taken by the Community in in te r n a tio n a l negotiations for the amendment
of c er tain provisions of the Consensus. This recommendation was designed
to supplement the o r i g in a l mandate so as (a) to allow a modest increase
in the grant element fo r t i e d aid credits and (b) to enable the OECD
S e c re t a r i a t to study the implications of such credits for trade and
development. The Council has not adopted the recommendation, which has
been placed on the agenda for the economic and financial a f f a i r s Council
meeting scheduled for 13 May.
 Agreement having been reached by the ministers a t the OECD Council
meeting, however, t h e measures agreed in Paris should now be incorpor­
ated into Community law without loss ·ƒ< time.
 It is th ere fo re recommended th a t the Council adopt the amended te x t of
the Arrangement annexed to t h i s Decision.
 ---pagebreak---                                        COUNCIL DECISION
                                       OF
                      amending the Decision of 4 April 1978
                 on the application of c ertain guidelines in
              the f i e l d of o f f i c i a l l y supported export c re d i ts
THE COUNCIL OF THE EUROPEAN ddhHÜNlfIESy
Having regard to the Treaty e stab lish in g the European Economic
Community, and in p a r t i c u l a r 113 th ere o f,
Having regard to the proposal from the Commission,
 ---pagebreak---                                                      - 2  -
Whereas the Community i s party to the Arrangement on guidelines for
o f f i c i a l l y supported export c r e d i t s ;
Whereas t h i s Arrangement was the subject of the Council Decision of
4 April 1978; whereas th a t Decision has been extended and amended,
most recently by the Decision of 1 April 1985;
Whereas i t i s in the Community's i n t e r e s t t h a t the Arrangement should
continue to play a key p art in putting an end to wasteful competition
in the f i e l d of export c re d i ts and t ie d aid c r e d i t s , and in reducing /
su b sid izatio n ;                                                                   j
Whereas the Community put proposals to the other Arrangement p a rtic ip a n ts
                                                                                    /
for measures to improve transparency in the f i e l d of t i e d aid c re d i ts and
introduce a system of fac e-to -face con sulta tions;
Whereas measures were agreed a t ‘the m in i s te r ia l meeting of the OECD
Council which took place in P a n s on 11 and 12 April 1985;
Whereas the agreement reached a t thè m in i s te r ia l meeting i s intended
not merely to improve transparency but to strengthen d i s c ip l i n e in the
f i e l d of t i e d aid c r e d i t s , and c a l l s for the setting-up of a procedure
for fac e -to -fa ce consultations;
Whereas in the i n t e r e s t s of the Community and in furtherance of the p rin ­
c ip le of in te r n a tio n a l cooperation, the Arrangement, as amended accord­
ingly, should be applied in the Community,
                                                       Hi
 ---pagebreak--- HAS ADOPTED THIS DECISION:
                                  Article 1
The Annex to the Decision of 4 April 1978, as amended by the Decision
of 21 February 1983, i s hereby amended as indicated in Annexes I and II
to t h i s Decision.
                                   A rticle 2
This Decision i s addressed to the Member State s..
                                                    For the Council
Done at Brussels,
                                                    The President
 ---pagebreak---                                            ANNEX I
Lines 8 and 9 in the No Derogation Commitment set
out in paragraph 10 of the text of the Arrangement
is amended to read as follows
      Paragraphs 9(a)(1) and 9(b)(l)(iv) to support
      tied aid credits with a grant element of
      less than 25%.
Participants will prior notify commitments of tied
aid credit involving a grant element of less than
50% without specifying whether such notifications
                         '♦ ■
are being made under paragraph 9(a)(1) or 9(b)(1)
and will give twenty working days notice before
issuing any such commitments.
 ---pagebreak---                                                       ANNEX II
     /
   PROTOCOL BETWEEN PARTICIPANTS TO THE ARRANGEMENT
ON GUIDELINES FOR OFFICIALLY SUPPORTED EXPORT CREDITS
            Participants to the Consensus,
            Whereas at the OECD Ministerial meeting of 17/18 May
    1984, the Ministers enjoined the competent bodies of the
    Organisation for Economic Co-operation and Development to
    take the prompt action to improve existing arrangement so as
    to strengthen transparency and discipline in the area of Aid
    and Trade related concessional finance by all appropriate
    means;
           Whereas Participants to the Consensus recognise the
    advantage which can accrue.·if/a clearly defined common atti­
    tude toward the credit terms for a particular transaction can
    be achieved and if maximum use is made of the existing
    arrangements for exchanging information at an early stage;
           Whereas the OECD Exchange of Information System of 1972
   lays down rules for exchanging information amongst members of
   the OECD Group on Export Credits and Credit Guarantees;
           Whereas this System outlines procedures to be followed
   in the event that all members taking part in an exchange of
   information agree to accept that the credit terms for a parti­
   cular transaction should be the subject of a binding obligation
           Whereas although government grants, untied loans, tied
   official development assistance loans on concessional terms
                                                                ;! !
   are excluded from the System, Members agreed, in a protocol
   attached to the OECD Council Decision implementing the System o
   Exchanging Information, that they would use their best efforts
 ---pagebreak---                                                 ANNEX II
to give as far as possible the same information on tied
development assistance loans on concessional terms as for
transactions covered by the system, and that any agreed
 binding obligation would apply also to tied official
development assistance loans on concessional terms;
       Whereas at a meeting of the OECD Consensus Group in
April 1934 all Participants firmly undertook to consider
favourably face-to-face consultations if a Participant so
                                                                 «
requests in the case of,important transactions .
       Whereas this undertaking was motivated by the unsatis­
factory functioning of existing procedures for exchanging
information .in a number of important transactions;
       Whereas the implementation of the provisions of the
Consensus can be jeopardised if procedures for exchanging
                    ... “     . .. 0 -····';·''
information do not Jfuncfridff efficiently;
       Whereas any weakening in Consensus discipline risks
provoking wasteful export·, credit and/or tied aid credit compe­
tition and increasing subsidies;
       Whereas the search for a common attitude, does not pre­
judice the possibility for participants to retain their rights
and·liberty as to whether to insure or finance credits for a
particular transaction, in the framework of their international
obligations.
       Have decided as tfollows ;
       Within the framework of existing procedures in the field
of officially supported export credits and tied aid credits,,
and with a view to imporving transparency, Participants :
 ---pagebreak---                                                     ANNEX II
                                                          3.-
                                  t
1)      Confirm that they will strive to provide the fullest
possible details on the credit terms and conditions which they
may be considering offering for any transaction wnich is the
subject of an exchange of information;
2)      Acknowledge that the interests of all Participants are
best served if agreement can be reached at an early stage on
a common attitude on the export credit conditions for a parti­
cular transaction and if the provisions of that agreement are
maintained;                                                    *
3)      Reaffirm, therefore, the need to promote commun attitudes,
particularly on important transactions;
4)      Recognise that in certain instances, notably when existing
exchange of information procedures are perceived to be func­
tioning in an unsatisfactory manner, face-to-face consultations
could facilitate the adoption of a common line;
5)      Undertake, in such circumstances, to respond favourably
to any such request for early face-to-face consultations and to
attend any meeting arranged in order to reach a commun attitude
on credit terms in conjunction with other interested Participants.
In this respect , particular attention will be paid to the ob­
 servance and common interpretation of the guidelines;
6)      Confirm moreover the importance they attach to a strict
observation of the formal notification procedures provided for
in the Arrangement.
         Ii