Overview

The Export Finance and Insurance Corporation Act 1991 (Cth) was enacted to provide a framework for the Export Finance Australia to support and promote Australian exports. The Act was introduced to address the gap in financial support and insurance services for Australian exporters, thereby enhancing the competitiveness of Australian goods and services in the international market. The policy objective of the Act is to facilitate and encourage the growth of Australian exports by providing financial products and services that mitigate the risks associated with international trade. The Act was enacted by the Commonwealth Parliament and empowers Export Finance Australia to enter into various transactions that are deemed to be in the national interest, subject to certain conditions and approvals as outlined in the Act. The notification under Section 30(1) of the Export Finance and Insurance Corporation Act 1991 (Cth) informs that Export Finance Australia has engaged in specific National Interest transactions during the specified period. These transactions are part of the broader effort to support Australian exporters by providing necessary financial facilities. During the period from 1 March 2021 to 31 March 2021, Export Finance Australia entered into one loan transaction and did not engage in any guarantee, bond, overseas investment insurance, political risk insurance, or credit insurance National Interest transactions. The details of the loan, including the currency, interest rate, maximum exposure facility limit, government percentage, and signing date, are provided in the notification. This practice ensures transparency and compliance with the legislative requirements for National Interest transactions.

Scope and Application

The Export Finance and Insurance Corporation Act 1991 (Cth) applies to Export Finance Australia and its transactions, particularly those that are categorised as National Interest transactions. These transactions are authorised under Part 5 of the Act and require either a direction or an approval, ensuring that they align with broader national economic and strategic objectives. The Act’s application is national in scope, as it operates under the Commonwealth of Australia, impacting entities engaged in export financing activities across various industries. Notably, the Act provides specific exclusions and thresholds, which determine the types of transactions that require governmental oversight or approval. Subordinate instruments may further extend or restrict the application of the Act, providing flexibility and precision in its implementation. The notification under Section 30(1) highlights transactions that Export Finance Australia has undertaken, specifying details such as the currency, interest rate, maximum exposure limit, and the government’s percentage involvement. This notification also confirms that no other National Interest transactions, such as guarantees, bonds, or insurances, were entered into during the specified period.

Key Provisions

The Export Finance and Insurance Corporation Act 1991 (Cth) (the "Act") outlines the powers and operations of Export Finance Australia, including provisions for entering into transactions deemed to be in the national interest. Section 30(1) of the Act (section 30(1)) requires Export Finance Australia to notify the public about such transactions through a gazette notification. This recent notification (C2021G00371) provides details of National Interest transactions entered into by Export Finance Australia between 1 March 2021 and 31 March 2021, in accordance with the directions or approvals under Part 5 of the Act. Under section 30(1), Export Finance Australia must provide specific details about each National Interest transaction, including the loan number, currency, interest rate, maximum exposure facility limit, government percentage, and the date the agreement was signed. The notification clearly states that during the reporting period, Export Finance Australia entered into one loan transaction (Loan Number 1314/21). This loan, denominated in Australian dollars, has an interest rate of the Bank Bill Swap rate plus 5.00% per annum. The maximum exposure facility limit for this transaction is AU$4,700,000, with the Australian government holding a 100% interest. The agreement was signed on 16 March 2021. The obligations imposed on Export Finance Australia by the Act include transparency and accountability in its dealings. Specifically, section 30(1) mandates that the corporation must provide detailed notifications of National Interest transactions, ensuring the public is informed about significant financial activities. Additionally, Export Finance Australia must ensure that any transactions entered into align with national interests as defined under Part 5 of the Act. Failure to comply with the requirements set out in the Act could lead to various consequences. While the Act does not specify particular offences under section 30(1), breaches of other sections could result in civil or criminal penalties. For instance, misleading or omitting information in gazette notifications could result in fines, imprisonment, or both, depending on the severity of the breach. The maximum penalties can vary, but they typically align with the legal standards for similar regulatory breaches in Australia. It is important for Export Finance Australia to adhere strictly to these provisions to avoid any legal repercussions.