Export Finance and Insurance Corporation Amendment Act 1983

Overview

The Export Finance and Insurance Corporation Amendment Act 1983 was enacted to amend the Export Finance and Insurance Corporation Act 1974, addressing gaps in the regulation of export finance and insurance activities within Australia. This Act was passed by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia. The primary policy objective of this legislation is to expand the scope of financial activities that the Export Finance and Insurance Corporation can engage in, including the provision of finance in various forms, the offering of subsidies to lenders, and the insurance of overseas investment transactions, while ensuring that such activities do not cover losses or detriments due to circumstances within the control of the insured party. The Act also seeks to clarify and expand the definition of loans and related financial activities, thereby providing a more comprehensive framework for the Corporation’s operations in supporting Australian exports and overseas investments.

Scope and Application

The Export Finance and Insurance Corporation Amendment Act 1983 applies to the Export Finance and Insurance Corporation, as defined in the Export Finance and Insurance Corporation Act 1974. The Act provides amendments to the original Act, expanding the Corporation's powers and scope in relation to providing finance and insurance for export transactions, including overseas trade and investments. The Act extends to the whole of the Commonwealth of Australia and applies to entities and persons involved in eligible export transactions, as well as to transactions themselves. The amendments introduce changes to the definition of "loan" to include various forms of finance, and modify the conditions under which the Corporation can offer export payments insurance and guarantees. Notably, the Act prohibits insurance against losses attributable to circumstances within the control of the insured party. The application of the Act may be further defined or extended through subordinate instruments, although no specific provisions for this are mentioned in the text.

Key Provisions

The Export Finance and Insurance Corporation Amendment Act 1983 (the Act) introduces several amendments to the Export Finance and Insurance Corporation Act 1974 (the Principal Act). The most notable changes pertain to the Corporation’s capacity to provide guarantees and insurances under various conditions. Section 4 amends the definition of "loan" within the Principal Act to include the provision of finance in any form, such as drawing, making, accepting, purchasing, indorsing, and discounting bills of exchange and promissory notes. This broader definition allows the Corporation greater flexibility in how it can offer financial support under the Act. Sections 13 and 14 of the Principal Act are amended by omitting sub-section (2) in each, which previously imposed certain restrictions on the Corporation's ability to enter into export payments insurance contracts. These amendments likely aim to streamline the process of insuring trade transactions, potentially making it easier for exporters to secure necessary insurance coverage. The insertion of section 23a in the Principal Act introduces the possibility for the Corporation to enter into contracts with lenders whereby the Corporation agrees to pay the lender an amount in specified circumstances. This arrangement is contingent on the lender making or agreeing to make a loan to a buyer, thereby providing an incentive structure for lenders to engage in export financing. The Act also imposes specific obligations on the Corporation and the Minister regarding the terms under which insurance contracts can be approved. Section 29a and section 30 of the Principal Act are amended to prohibit the Corporation and the Minister from entering into contracts of insurance that cover losses or detriments attributable to circumstances within the control of the insured party. This requirement ensures that the Corporation and the Minister do not indemnify parties for losses resulting from their own actions or negligence. In terms of penalties and consequences, the Act does not explicitly detail any new offences or penalties for breaches of its provisions. However, any breaches of the amended provisions in the Principal Act would likely be subject to the existing penalties and enforcement mechanisms under the Principal Act, which could include fines or other civil or administrative penalties. The precise penalties would depend on how the existing provisions of the Principal Act are interpreted and applied in light of the amendments introduced by the Act.