ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (86) 108
Vol. 1986/0036
Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983
concernant l'ouverture au public des archives historiques de la Communauté économique
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983,
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit
règlement.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983
concerning the opening to the public of the historical archives of the European Economic
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243,
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this
file have been declassified in conformity with Article 5 of the aforementioned regulation.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1.
Februar 1983 über die Freigabe der historischen Archive der Europäischen
Wirtschaftsgemeinschaft und der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983,
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5
der genannten Verordnung freigegeben.
COMMISSION
OF THE
EUROPEAN COMMUNITIES
G e n e ra l S e c re ta r ia t
C0MC86) 108 f i n a l
Brussels, 28 Feb ru a ry 1986
FOR OFFICIAL USE ONLY
P r o p o s a l f o r a
COUNCIL DECISION
on t h e a p p l i c a t i o n o f t h e U n d e r s t a n d in g on G u i d e l i n e s f o r
O f f i c i a l l y S uppor ted Expor t C r e d i t s f o r C i v i l A i r c r a f t
( s u b m i t t e d t o t h e Counci l by t h e Commission)
C0MC86) 108 f i n a l
EXPLANATORY MEMORANDUM
INTRODUCTION
On 10 December 1984, t h e C ounc i l e s t a b l i s h e d n e g o t i a t i n g d i r e c t i v e s
f o r i n t e r n a t i o n a l n e g o t i a t i o n s on e x p o r t c r e d i t s f o r a i r c r a f t .
These d i r e c t i v e s a r e d i v i d e d i n t o two p a r t s (A : " l a r g e a i r c r a f t " -
B : " o t h e r a i r c r a f t " ) and a r e a imed a t a g l o b a l ag reem en t c o v e r in g
a l l c a t e g o r i e s of a i r c r a f t .
S in c e t h e n , n e g o t i a t i o n s on each p a r t have been opened . On l a r g e
a i r c r a f t ("w ide b o d ie d j e t a i r c r a f t " ) which a r e p ro d u c e d o n ly in
t h e US and t h e EC, t h e Community n e g o t i a t e d b i l a t e r a l l y w i th t h e US
and an ag reem en t was c onc luded by a D e c i s io n o f t h e C ounc i l w i th
e f f e c t from 1 s t J u l y 1985.
T h is ag reem en t was s u b s e q u e n t l y e n d o r s e d by t h e OECD. The US a l s o
a g r e e d t h a t t h e U n d e r s t a n d in g on l a r g e a i r c r a f t s h o u ld be i n c o r p o r a t e d
i n a g l o b a l OECD agreem ent on e x p o r t c r e d i t s f o r a l l t y p e s o f a i r c r a f t
when t h e ongoing n e g o t i a t i o n s on a ir c ra f t other than wide-bodied j e t a i rc ra f t
in the OECD had been concluded, which was the case on January 24th 1986 ad referendum.
With t h e p r e s e n t com munica t ion t h e C ounc i l i s r e q u e s t e d t o approve
a ) The a d d i t i o n o f two a i r c r a f t t o t h e a ppend ix t o t h e C ounc i l
D e c i s io n o f 1 s t J u l y 1985 on t h e a p p l i c a t i o n o f a s e c t o r
u n d e r s t a n d i n g on e x p o r t c r e d i t s f o r a i r c r a f t (BAE 146 and F 1 0 0 ) .
b) The S e c t o r U n d e r s t a n d in g on e x p o r t c r e d i t s f o r c i v i l a i r c r a f t ( o t h e r
t h a n l a r g e commerc ial a i r c r a f t ) c o n c lu d e d ad r e fe re n d u m i n t h e
framework o f t h e OECD on J a n u a r y 2 4 t h .
APPRECIATION OF THE PROPOSAL
a) Addition of aircraft to the list contained in the appendix to
the Understanding on large commercial aircraft
The append ix t o t h e U n d e r s t a n d in g on l a r g e commerc ial a i r c r a f t
a l l o w s f o r t h e a d d i t i o n o f s i m i l a r a i r c r a f t by ag reem en t be tween
t h e P a r t i c i p a n t s . On a c c o u n t o f t h e c o m p e t i t i v e market s i tuation an addition
o f t h e BAE 146 and F 100 i s c o n s i d e r e d j u s t i f i e d .
- 2 -
b) U n d e r s t a n d in g on o t h e r a i r c r a f t
The Commission i s o f t h e o p i n i o n t h a t t h e U n d e r s t a n d in g
n e g o t i a t e d in t h e framework of t h e OECD i s in c o n f o r m i ty
w i th t h e n e g o t i a t i n g d i r e c t i v e s . In p a r t i c u l a r :
i . The U n d e r s t a n d in g c o v e r s e x p o r t s o f s m a l l and medium s i z e
a i r c r a f t t o a l l m a r k e t s .
i i . A i r c r a f t a r e c l a s s i f i e d i n t o t h r e e c a t e g o r i e s t o t a k e a cc o u n t
o f bo th t h e i r t e c h n i c a l c h a r a c t e r i s t i c s and t h e c o m p e t i t i v e
s i t u a t i o n of t h e m a r k e t .
i i i . I n t e r e s t r a t e c o n d i t i o n s and maximum repayment t e rm s a r e in
c o n f o r m i ty w i th g e n e r a l Consensus c o n d i t i o n s w i th a g e n e r a l
e x t e n s i o n o f maximum repayment t e rm s t o t e n y e a r s f o r C ategory
A a i r c r a f t .
i v . There i s a p r o v i s i o n p r o h i b i t i n g t i e d a i d f i n a n c i n g ,
p a r t i a l l y u n t i e d a i d f i n a n c i n g o r any o t h e r k in d o f
f i n a n c i n g on c r e d i t c o n d i t i o n s t h a t a r e more f a v o u r a b l e
t h a n t h o s e s e t o u t in t h e S e c t o r U n d e r s t a n d i n g .
v . A i r c r a f t compet ing w i th t h o s e from a n o t h e r C a tego ry
w i l l be a b l e t o b e n e f i t from t h e same e x p o r t c r e d i t
t e rm s and c o n d i t i o n s .
v i . The U n d e r s t a n d in g p r o v i d e s f o r rev iew a n n u a l l y i n t e r a l i a
o f :
- o f f i c i a l s u p p o r t f o r e x p o r t o f used a i r c r a f t
- c o n d i t i o n s f o r m a i n t e n a n c e , s p a r e p a r t s and s e r v i c e
c o n t r a c t s
- w id e r p a r t i c i p a t i o n in t h e U n d e r s t a n d in g
v i i . Terms no t c ove red s p e c i f i c a l l y i n t h e U n d e r s t a n d in g
on o t h e r a i r c r a f t s h a l l be g o ve rne d by t h e a p p r o p r i a t e
p r o v i s i o n s o f t h e Arrangement on G u i d e l i n e s f o r O f f i c i a l l y
S u p p o r ted Expor t C r e d i t s ( t h e C o n s e n s u s ) .
- 3 -
3 . CONCLUSIONS
The L i s t s o f a i r c r a f t c o n t a i n e d in t h e a p p e n d i c e s t o t h e U n d e r s t a n d in g
both f o r Large Commercial A i r c r a f t and O th e r A i r c r a f t w i l l
need t o be amended from t im e t o t im e t o t a k e a c c o u n t o f t h e
marke t s i t u a t i o n and d e v e l o p m e n t s ; i t i s , t h e r e f o r e a p p r o p r i a t e
t o make t h e a d d i t i o n s t o t h e a ppend ix t o t h e U n d e r s t a n d in g
f o r Large A i r c r a f t as p r o p o s e d .
With r e g a r d t o t h e U n d e r s t a n d in g on O th e r A i r c r a f t , g iv e n t h a t
t h e o b j e c t i v e s s e t ou t by th e C ounc i l in December 1984 have been
a c h i e v e d , i t i s in t h e i n t e r e s t s o f t h e Community t o conclude
t h e S e c t o r U n d e r s t a n d in g a s n e g o t i a t e d . The U n d e r s t a n d in g
s h o u ld become e f f e c t i v e as f o r e s e e n on March 10 th 1986.
COUNCIL DECISION
OF
on t h e a p p l i c a t i o n o f t h e U n d e r s t a n d in g on G u i d e l i n e s
f o r O f f i c i a l l y S u ppo r ted Expor t C r e d i t s
f o r C i v i l A i r c r a f t
THE COUNCIL OF THE EUROPEAN COMMUNITIES
Having r e g a r d t o t h e T r e a t y e s t a b l i s h i n g t h e European Economic
Community, and i n p a r t i c u l a r A r t i c l e 113 t h e r e o f ,
Having r e g a r d t o t h e p r o p o s a l from t h e Commission,
- 2 -
Whereas it is necessary to establish international discipline in
sectors not covered by the Arrangement on Guidelines for Officially
Supported Export Credits in order to minimize self-defeating
and counter-productive credit competition between suppliers in
these areas;
Whereas n e g o t i a t i o n s f o r an U n d e r s t a n d i n g f o r l a r g e a i r c r a f t were
n e g o t i a t e d and by d e c i s i o n o f t h e C ounc i l came i n t o e f f e c t
from 1 s t J u l y 1985;
Whereas i t i s a p p r o p r i a t e t o amend t h e l i s t o f a i r c r a f t c o n t a i n e d
in t h e a ppend ix t o t h e U n d e r s t a n d in g f o r l a r g e a i r c r a f t ;
Whereas n e g o t i a t i o n s were c o nc luded on a i r c r a f t o t h e r t h a n l a r g e
a i r c r a f t ;
Whereas t h e r e s u l t s o f t h e s e n e g o t i a t i o n s meet t h e i n t e r e s t s o f
t h e Community;
Whereas , i n t h e i n t e r e s t s o f t h e Community and i n o r d e r t o g iv e
e f f e c t t o t h e p r i n c i p l e of i n t e r n a t i o n a l c o - o p e r a t i o n , i t i s
n e c e s s a r y t o a p p ly t h i s U n d e r s t a n d in g on o t h e r a i r c r a f t in t h e Community; ;
Whereas b o th t h e Large A i r c r a f t S e c t o r U n d e r s t a n d i n g and t h e
U n d e r s t a n d in g on o t h e r a i r c r a f t a r e i n t e n d e d a s a com prehens ive
c i v i l a i r c r a f t ag reem en t t o be c o n c lu d ed e x p e d i t i o u s l y ,
HAS ADOPTED THIS DECISION
A r t i c l e 1
From 10 th March 1986 t h e a p p en d ix t o t h e Large A i r c r a f t
U n d e r s t a n d in g s h a l l be amended t o i n c l u d e t h e f o l l o w i n g
a i r c r a f t :
B r i t i s h A erospace 146
Fokker 100
A r t i c l e 2
From 1 0 th March 1986, t h e U n d e r s t a n d in g on G u i d e l i n e s f o r
O f f i c i a l l y S u p p o r te d Expor t C r e d i t s f o r O th e r A i r c r a f t
s h a l l be a p p l i e d in t h e Community.
The text of the Understanding is annexed to this Decision.
A r t i c l e 3
This Decision is addressed to the Member States.
Done at
For the Council
ANNEX
SECTOR UNDERSTANDING ON EXPORT CREDITS FOR CIVIL AIRCRAFT
Large Commercial Aircraft.
(See C ounci l D e c i s io n o f 24 June 1985)
All Aircraft Except Large Commercial Aircraft-
Form and Scope
This Sector Understanding complements the Arrangement on Guidelines for
Officially Supported Export Credits· It sets out the particular
complementing Guidelines which are applicable to officially supported
export credits financing contracts for the international sale or lease
of new (not used) aircraft and, if ordered concurrently with the
aircraft or if ordered for manufacturing or assembly into such
aircraft, engines, sub-assemblies and spare parts of aircraft not
covered by part I of this Sector Understanding- It does not apply to
hovercraft. (1)
Participation
The rules on participation of the Arrangement shall apply (2).
Best Endeavours
The provisions of this Sector Understanding represent the most generous
terms which Participants are allowed to offer when giving official
support. Participants will however continue to respect customary
market terms for different types of aircraft and will do everything in
their power to prevent these terms from being eroded. (3)
Categories of Aircraft
The following categories have been agreed upon in view of the
competitive situation:
A. — Turbine-powered aircraft -- including helicopters -- (e.g. turbo
jet, turbo-prop, and turbo-fan aircraft), with generally between
30 to 70 seats. In case a new large turbine-powered aircraft
with over 70 seats is being developed, immediate consultations
shall be held upon request with a view to agree on the
classification of such an aircraft in this category or in
chapter I of this Understanding in view of the competitive
situation.
B. -- Other turbine-powered aircraft, including helicopters
C. -- Other aircraft, including helicopters.
An illustrative list of aircraft in categories A and B is appended to
this document.
25. Credit Terms and Conditions
Participants undertake not to support credit terms more favourable than
those set out in this article.
* ■* ‘
Category A. 10 years at matrix rates or respective CIRRs. Credit
terms longer than 8 years are subject to prior
notification in accordance with paragraph 9(b) of the
Arrangement. (4)
Category B. 7 years at matrix rates or respective CIRRs. ,
I
i
Category C. 5 years at matrix rates or respective CIRRs.
6. Sales or Leases to Third Countries (relay countries)
In cases where the aircraft are to be on-sold or on-leased to an
end-buyer or end-user in a third country, the interest rate shall be
that applicable to the country of final destination.
t
7. Matching Provisions
In the event of officially supported competition, aircraft competing
with those from another category or chapter shall for a specific sale
be able to benefit from matching of the same export credit terms and
conditions. Before making the matching offer, the matching authority
shall make reasonable efforts to determine the export credit terms and
conditions the competing aircraft benefits from. The matching
autnority will be considered to have made such reasonable efforts if it
has informed by telex the authority assumed to offer the terms it
intends to match of its intention to do so but has not been informed
within three working days that the terms it intends to match will not
be used to support the transaction in question.
8. Tied Aid Credits Prohibition
Participants shall not provide tied aid financing, partially untied aid
financing, or any other kind of financing on credit conditions that are
more favourable than those set out in this Understanding.
9. Consultation and Notification Procedures
The procedures of the Arrangement shall apply to officially supported
export credits not in conformity with the terms of this Sector
Understanding. In addition, should any Participant believe that
another Participant may be offering an officially supported export
credit not in conformity with this Sector Understanding without giving
advance notice, consultations shall be held within ten days upon
request.
310. Review
The provisions of this Sector Understanding are subject to review
annually, normally during the spring meeting of Participants of the
Arrangement. In the review, Participants will examine possible
modifications of the provisions notably in order to bring them closer
to market conditions. In particular, Participants will examine, at the
first review session, the questions of:
-- the prior notification requirements and procedures of paragraph 5
(Category A);
-- insurance premiums and guarantee fees;
— official support for export of used aircraft; (5)
-- conditions for maintenance, spare parts and service contracts; (5)
-- wider participation, including follow-up of contacts with Brazil and
Indonesia.
Tn addition if market conditions or customary financing practices
change considerably, any Participant is entitled to ask for a special
review of the provisions.
NOTES AND REFERENCES
A list of non-conforming commitments outstanding on 1st Decejnber 1.9.85.
their conditions and expiry date shall be notified to the iecrecariat
no later than 15th Mar.ch_J.986 and circulated in a separate document.
Upon their expiiy , these commitments shall be brought into conformity
with this Sector Understanding.
2. Israel, "having accepted the invitation of the Participants of the
Arrangement to become a Participant of this Sector Understanding, has
declared its willingness to apply this Sector Understanding including,
where relevant, the Arrangement on Guidelines for Officially Supported
Export Credits.
3. Best endeavours shall be made inter alia with respect to the
willingness to respond favourably to the invitation by another
Participant to consult on possibilities of achieving conditions as
close to the market as possible, for example in matching.
The minimum interest rate applicable for repayment terms of over 8.5
and up to 10 years being the same as for repayment terms of over 5 and
up to 8.5 years.
Pending the review on these matters, these goods and services shall be
covered by the Arrangement on Guidelines for Officially Supported
Export Credits. The tied aid credits prohibition in paragraph 8 of
this Sector Understanding shall apply.
4.
5.
4Illustrative List of Aircraft
This list is not exhaustive and serves only to indicate the type of
aircraft to be included in the different categories where doubts could arise.
~ + '
Manufacturer Designation
CATEGORY A
Aeritalia
Aeritalia/Aerospatiale
Aérospatiale/MBB
Avitech
Brit Aerospace
Canadair
De Havilland Cy
De Havilland Cy
De Havilland Cy
Embraer ,
Fokker
Fokker
Fokker
Gulfstream America
Saab
Short
Short.
etc.
G 222
AIR 42
C160 Transall
CN 235
HS 748 series 2A
a 215
Dash 5
Dash 7
Dash 8
BIB 120 Brasilia
F 27'
F 28
F 50
Gulfstream 1-4
SF 340
SD 3-30
SD 3-60
CATEGORY B
Aeritalia
Ahrens
Beech
Beech
Beech
Beech
British Aerospace
British Aerospace
Casa
Cessna
Dassault Breguet
De Havilland Cy
Domier
Dornier
Embraer
Fairchild
Fairchild
IAI
Mitsubishi
Hiatus Britten-Norman
Piper
Hper
Reims
Short
SIAI-Marchetti
etc.
G180
404
1900
B-200 Super King Air
Model 200 Starship 1
300 Super King Air
BAe Jetstream 31
BAe 125
C 212-200
441 Conquest II
Falcon
Dash 6
Do 128-6
Do 228-200
EMB H O P2
Merlin/300
Metro III A
Arava 101 B
Mu2 Marquise
BN2A Islander
T 1 020
T 1 040
Cessna-Caravan II
Skyvan SC-7 Series 3
SF 600 Canguro
Full & Egal Universal Law Academy