Overview

The Export Finance and Insurance Corporation Act 1991 was enacted to establish Export Finance Australia as a statutory corporation to provide export credit and insurance services. The Act was introduced to address the need for financial support and risk mitigation for Australian exporters, thereby promoting trade and economic growth. The policy objective of the Act is to facilitate and secure Australian exports by providing financial products that support exporters in navigating the complexities of international trade. Enacted by the Parliament of Australia, the Act empowers Export Finance Australia to enter into various financial transactions that are deemed to be in the national interest, subject to certain conditions and approvals. Under Section 30(1) of the Act, Export Finance Australia is required to notify the public of any National Interest transactions it enters into, ensuring transparency and accountability. The notification process involves detailing the specific transactions, including loans, guarantees, bonds, and insurance products, along with their respective terms and conditions. This legislative framework ensures that the activities of Export Finance Australia are conducted in a manner that aligns with Australia's broader economic and trade policy objectives, fostering a robust and resilient export sector.

Scope and Application

The Export Finance and Insurance Corporation Act 1991 (Cth) applies to Export Finance Australia, which is the entity responsible for entering into various financial transactions under the Act. These transactions, as notified in the Gazette, include loans, guarantees, bonds, overseas investment insurance, political risk insurance, and credit insurance, all of which are considered to be in the national interest. The geographic and jurisdictional reach of this Act is Commonwealth-wide, extending to all transactions that Export Finance Australia undertakes within Australia and internationally. The Act provides a framework for Export Finance Australia to engage in financial activities that support Australia's economic interests, with specific transactions being authorised through directions or approvals under Part 5 of the Act. The legislation does not specify exclusions or exemptions, but the application of the Act can be extended or restricted through subordinate instruments, such as regulations or guidelines issued by the relevant authorities. The transactions listed in the Gazette for the specified period, such as loans with detailed terms including currency, interest rates, maximum exposure limits, and government involvement, are examples of how the Act is operationalised in practice.

Key Provisions

The Export Finance and Insurance Corporation Act 1991 (Cth), as notified under Section 30(1), details Export Finance Australia's engagement in National Interest transactions. Specifically, during the period from 1 October 2020 to 31 October 2020, Export Finance Australia entered into two loans, as outlined in the gazetted notifications. Under Section 30(1), these transactions were conducted in compliance with the direction or approval provided under Part 5 of the Act. The two loans, numbered 1304/20 and 1305/20, were provided in Australian Dollars (AUD) at interest rates of BBSW + 7.25% per annum and BBSW + 5.5% per annum, respectively. The maximum exposure limits for these loans were AU$250,000 and AU$500,000, with the government holding a 100% stake in both transactions. The loans were signed on 14 October 2020 and 23 October 2020, respectively. It is important to note that no Guarantee, Bond, Overseas Investment Insurance, Political Risk Insurance, or Credit Insurance National Interest transactions were entered into during this reporting period. The Act imposes several obligations and requirements on Export Finance Australia. Primarily, it mandates that any National Interest transactions must be carried out in accordance with directions or approvals under Part 5 of the Act. This ensures that all transactions are aligned with national interests and economic policies. Furthermore, Export Finance Australia is required to notify the public of these transactions through gazetted notifications, providing transparency and accountability. The Act also requires detailed reporting on each transaction, including the currency, interest rates, maximum exposure limits, government percentage, and signing dates. These obligations are designed to maintain the integrity and oversight of the financial activities undertaken by Export Finance Australia. For breaches of the Export Finance and Insurance Corporation Act 1991 (Cth), the Act outlines potential offences and penalties. While the specific penalties are not detailed in the gazetted notifications, breaches of the Act can lead to both civil and criminal consequences. Civil penalties may include fines, restitution, or other monetary penalties, while criminal penalties could involve imprisonment depending on the severity and nature of the breach. The Act empowers relevant authorities to enforce these penalties to ensure compliance and uphold the integrity of the national interest transactions. The exact penalties would be determined based on the specific provisions of the Act and the judicial discretion in individual cases.