Overview

The Export Finance and Insurance Corporation Act 1991 was enacted to provide for the establishment and operations of the Export Finance and Insurance Corporation (EFIC). It was introduced to address the need for a body to facilitate and insure exports, thereby supporting Australian exporters and promoting economic growth. The Act empowers Efic to declare specified causes of loss that can be insured under Part 4, facilitating more comprehensive insurance coverage for exporters. This legislation was enacted by the Australian Parliament and its policy objective is to support and insure the export activities of Australian businesses, ensuring they are protected against financial risks associated with international trade. The 2021 Declaration, issued under the Act, updates the list of approved causes of loss, ensuring that the insurance framework remains relevant and effective in supporting the export sector.

Scope and Application

The Export Finance and Insurance Corporation Act 1991 Declaration of Approved Causes of Loss 2021 is a legislative instrument that serves to update the approved causes of loss for the purposes of the Export Finance and Insurance Corporation Act 1991. This instrument applies to any person who seeks to enter into a contract of insurance with the Export Finance and Insurance Corporation (EFIC), specifically those who require the specification of an approved cause of loss in their application under section 22 of the Act. The instrument is designed to provide clarity and consistency in the types of losses that Efic will insure against, thereby impacting the scope of cover for applicants. Geographically, the Act operates within the Commonwealth jurisdiction, impacting entities and individuals seeking export finance and insurance within Australia. The instrument itself does not introduce any new exclusions or exemptions but rather updates the existing list of approved causes of loss, ensuring that the regulatory framework remains relevant and effective. Subordinate instruments may extend or further specify the application of the Act, although this particular instrument focuses on the declaration of approved causes of loss.

Key Provisions

The Export Finance and Insurance Corporation Act 1991 – Declaration of Approved Causes of Loss 2021 (the Declaration) specifies the causes of loss that are approved for insurance purposes under section 22 of the Export Finance and Insurance Corporation Act 1991 (the Act). This legislative instrument serves to update the approved causes of loss, as outlined in Clause 6, and it replaces the previous version from 2019. The Declaration is made under section 21(1) of the Act, which allows the Export Finance and Insurance Corporation (EFIC) to declare certain causes of loss as approved for insurance contracts. The approved causes of loss are detailed in the Schedule to the Declaration and are intended to ensure that applicants for insurance can specify a cause of loss that is recognised under the Act. The Declaration imposes specific obligations on the parties involved. Applicants seeking to enter into an insurance contract with Efic must specify an approved cause of loss in their application, as required by section 22 of the Act. This ensures that the insurance contract is based on a cause of loss that is recognised and approved by Efic. The Declaration itself does not alter existing arrangements but updates the list of approved causes of loss to reflect current circumstances and needs. Breach of the provisions outlined in the Declaration can lead to civil or criminal consequences, depending on the nature of the breach. While the Declaration does not explicitly state penalties, breaches of the Act or related regulations could result in legal action, fines, or other penalties as prescribed by the relevant legislation. The maximum penalties for such breaches are typically outlined in the primary legislation, the Export Finance and Insurance Corporation Act 1991, and could include substantial fines or imprisonment for serious offences. The Declaration is subject to disallowance under section 42 and sunsetting under section 50 of the Legislation Act 2003. This means that Parliament has the power to disallow the instrument within a specified period, and it will cease to have effect if not renewed before the sunset date. Additionally, the instrument is compatible with human rights and freedoms as recognised under the Human Rights (Parliamentary Scrutiny) Act 2011, as detailed in Attachment A of the explanatory statement.