Overview

The Export Finance and Insurance Corporation Act 1991 was enacted to facilitate and support Australian exports by providing finance and insurance services to exporters. This legislation was introduced to address the problem of insufficient financial and insurance support for Australian businesses looking to expand their export activities, thereby enhancing the competitiveness of Australian goods and services in the global market. The Act allows the Export Finance and Insurance Corporation (EFIC) to enter into national interest transactions that support this objective. Enacted by the Parliament of Australia, the policy objective of the Act is to foster economic growth by enabling Australian businesses to secure the necessary financial and insurance backing to pursue and sustain export opportunities. During the reporting period from 1 March 2019 to 31 March 2019, EFIC entered into a national interest transaction involving a loan of up to AUD 10,000,000 with a government shareholding of 100%, issued on 28 March 2019, with a term of seven years.

Scope and Application

The Export Finance and Insurance Corporation Act 1991 applies to the Export Finance and Insurance Corporation (EFIC) and its operations as specified under the Act. The Act pertains to transactions that are deemed to be in the national interest, which can include various financial products such as loans, guarantees, bonds, and insurance. The scope of the Act covers both direct financial support and risk mitigation instruments designed to facilitate and secure Australian exports. The Act’s jurisdiction extends across the Commonwealth of Australia, impacting industries and entities involved in exporting activities. The Act includes provisions for the EFIC to enter into transactions that align with national economic and trade policies, subject to the approval of the relevant authorities. Notably, the Act does not specify particular exclusions or exemptions, but it does allow for the issuance of subordinate instruments that can further define the scope of transactions and the application of the Act. This legislative framework ensures that EFIC’s activities are regulated and aligned with broader national economic objectives.

Key Provisions

The Export Finance and Insurance Corporation Act 1991 (EFIC Act) encompasses various sections that govern the operations of the Export Finance and Insurance Corporation (EFIC). Section 30(1) is particularly significant as it mandates the notification of certain transactions to the public, ensuring transparency and adherence to the legislative framework. Specifically, this section requires EFIC to notify the public when it engages in national interest transactions as directed or approved under Part 5 of the Act. These notifications are published in the Gazette to inform stakeholders of EFIC’s activities and decisions. EFIC's obligations under the Act include obtaining any necessary directions or approvals before entering into national interest transactions. Section 30(1) necessitates that EFIC provides detailed information about the transactions, such as the currency, interest rates, maximum exposure facility limits, government percentage, and the issue date of the transaction. These details are crucial for transparency and accountability, ensuring that the public is well-informed about EFIC's activities. Additionally, EFIC must ensure that any national interest transactions align with the objectives and criteria outlined in the Act. The Act imposes certain requirements on EFIC to maintain the integrity and effectiveness of its operations. EFIC must ensure that all national interest transactions are conducted in a manner that supports Australia's export and investment objectives. This includes conducting thorough assessments to determine if a transaction qualifies as a national interest transaction and obtaining the necessary approvals from the relevant authorities. Furthermore, EFIC is obligated to maintain accurate records of all transactions and make them available for review upon request. Failure to comply with the provisions of the EFIC Act can result in various consequences. While the Act itself does not specify explicit offences, breaches of the conditions set out in the Act or the directions and approvals granted under it may lead to civil or criminal liability. In cases where there is a deliberate or reckless disregard for the requirements of the Act, EFIC or its officials could face legal action. Additionally, the severity of penalties would depend on the nature and extent of the breach, with potential outcomes including fines, restitution, or other remedial measures. The Act underscores the importance of adhering to its provisions to maintain the trust and confidence of stakeholders.