The Arrangement is a "gentlemen's agreement" amongst its Participants: Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye, the United Kingdom and the United States. The Arrangement first came into existence in 1978, building on the export credit “Consensus” agreed among a smaller number of OECD countries in 1976. Since then, it has been regularly developed and updated to reflect Participants’ needs and market developments.
The main purpose of the Arrangement is to provide a framework for the orderly use of officially supported export credits by fostering a level playing field in order to encourage competition among exporters based on quality and prices of goods and services exported rather than on the most favourable officially supported export credits.
To this end, the Arrangement places limitations on the financing terms and conditions (repayment terms, minimum premium rate, minimum interest rates) to be applied when providing officially supported export credits as well as on the use of tied aid by the Participants. The Arrangement contains various transparency provisions among Participant to ensure that these limitations are effectively applied.
The Arrangement applies to all officially supported export credits with a repayment term of two years or more. It does not, however, apply to military equipment or to agricultural commodities.
The new Arrangement text may be downloaded as a publication from the OECD’s legal compendium.
Sector Understandings
Some of the rules laid out in the Arrangement are sector-specific and are detailed in the sectoral annexes of the Arrangement (called “Sector Understandings”):
The current Arrangement on Officially Supported Export Credits is the July 2023 version and is applicable as from 15 July 2023.
Compared to the previous version of the Arrangement (January 2022), it incorporates:
The Climate Change Sector Understanding (CCSU) (Annex I of the Arrangement) was originally agreed with a more reduced scope (Renewable Energies and Water Projects) and included in the Arrangement as a permanent sector understanding. This annex provides more flexible terms and conditions for the provision of officially supported export credits relating to climate change.
In July 2023, as part of the modernisation of the Arrangement package reform, the CCSU was amended to include a wider scope of mitigation sectors as well as to increase the flexibility of the financing terms and conditions: increased maximum repayment terms of up to 22 years and additional repayment flexibilities – see Evolution of the Arrangement for further information.
Additional information on OECD works on Climate Finance (promoting good practice to scale up and better target public and private finance to support climate-friendly investment) is provided by the Environment Directorate of the OECD.
The Nuclear Sector Understanding (NSU) (See Annex II of the Arrangement) was first included as an Annex to the Arrangement in 1984. It provides more flexible terms and conditions for the provision of officially supported export credits relating to nuclear power plants.
In July 2023, as part of the modernisation of the Arrangement package reform, the NSU was amended to provide more flexible terms and conditions by increasing the maximum repayment terms allowed (up to 22 years instead of 18 years) and adding further repayment flexibilities (frequency, size and pattern or repayment of principal and interest) – see Evolution of the Arrangement for further information.
The Aircraft Sector Understanding (ASU) is a self-contained agreement for officially supported export credits relating to civil aircraft. It operates with no recourse to any of the provisions of the Arrangement.
The ASU is managed by its own Participants, which are Australia, Brazil, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, United Kingdom and the United States. See Annex III of the Arrangement and Aircraft Specific Rules.
The SSU provides specific disciplines that may be applied to officially supported export credits relating to the export of sea-going vessels, ship conversions and hovercraft vessels. The SSU was initially agreed to in 1969 as a stand-alone agreement; the prevailing version of the SSU can be found in Annex IV of the Arrangement.
The Participants to the SSU are: Australia, the European Union, Japan, Korea, New Zealand and Norway. The SSU is managed by the OECD Council Working Party on Shipbuilding (WP6).
On 22 October 2021, the Participants agreed to end support for unabated coal-fired power plants.
These new restrictions came into force on 1 November 2021 and are reflected in all versions of the Arrangement since January 2022: more specifically these new restrictions have led to the creation of a new Article 6 (Prohibitions on Arrangement Support) and the deletion of the Coal-Fired Electricity Generation Sector Understanding – see Evolution of the Arrangement for further information.
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