Improving the Role of Eximbanks/ECAs in the OIC Member States
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denominated in the same currency as the export credit), or the payment by them of all or
part of the costs incurred by exporters or financial institutions in obtaining credits, in so
far as they are used to secure a material advantage in the field of export credit terms.
The text goes on to clarify an exception to this export subsidy principle for export credit
practices which conform to the provisions of a separate “international undertaking on
official export credits”. Specifically it states that:
“… an export credit practice which is in conformity with those provisions shall not be
considered an export subsidy prohibited by this Agreement.”
WTO jurisprudence has established that the OECD Arrangement on Export Credits is such an
international undertaking. Hence, export credits that conform to the OECD Arrangement are
understood to be in conformity with WTO member states’ obligations. Such export credits are
therefore not subject to WTO trade remedies. This “safe haven” holds for all WTO member states,
not just members who are Participants in the OECD Arrangement.
1.4.3 Implications for countries with high financing costs
In principle, the safe haven offers some advantage for countries with relatively high
funding costs. Paragraph 1 of item (k) says a subsidy would be found if an ECA grants
credits at rates below the government’s own costs; i.e. a country with high financing
costs would be required to pass on those high costs to its exporters. However, the “safe
haven” effectively levels the playing field by allowing ECAs to provide export credits on
terms and conditions which conform to internationally agreed rules (for practical
purposes, the OECD Arrangement), even when those credit terms are more favorable
than those available to the government itself.
In recognition of these principles, Participants in the OECD Arrangement have adopted
transparency measures to allow all WTO member states to conform to Arrangement rules and
thereby benefit from the “safe haven”.
1.5 ECA Cooperation
1.5.1 Strategic Cooperation
Because of the nature of international trade, where supply chains may involve value-added
inputs from a range of countries and – to put simply - transactions have sellers from one country
and buyers from another, ECAs are naturally driven towards collaboration with each other. There
are a number of ways in which this happens at a strategic level, at a market level and at a
transaction level. At the strategic level, there are several associations promoting cooperation
amongst ECAs with similar mandates. Membership in these organizations by OIC ECAs is listed
in Annex B.
Berne Union
The Berne Union was founded in 1934 by private and state export credit insurers from France,
Italy, Spain and the UK.