Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Act 2021

Administered by Department of Foreign Affairs and Trade

Legislation au C2021A00114 In force Act

Legislation content

 

 

 

 

 

 

Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Act 2021

 

No. 114, 2021

 

 

 

 

 

An Act to amend the Export Finance and Insurance Corporation Act 1991, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedules

Schedule 1—Equity investments

Export Finance and Insurance Corporation Act 1991

Schedule 2—Guarantees for overseas infrastructure development

Export Finance and Insurance Corporation Act 1991

 

 

Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Act 2021

No. 114, 2021

 

 

 

An Act to amend the Export Finance and Insurance Corporation Act 1991, and for related purposes

[Assented to 28 October 2021]

The Parliament of Australia enacts:

1  Short title

  This Act is the Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Act 2021.

2  Commencement

 (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1.  The whole of this Act

The day this Act receives the Royal Assent.

28 October 2021

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

 (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedules

  Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Equity investments

 

Export Finance and Insurance Corporation Act 1991

1  Subsection 3(1) (note to the definition of overseas infrastructure financing)

Omit “or providing a financial accommodation”, substitute “providing a financial accommodation or making an equity investment”.

2  Subsection 3(2)

Omit “or to the provision of a financial accommodation”, substitute “the provision of a financial accommodation or the making of equity investments”.

3  At the end of subsection 7(3)

Add:

Note: The provision of loans includes providing finance, providing a financial accommodation or making an equity investment, in any form: see subsection 3(2).

4  Paragraph 16(1)(a)

After “has lent, or proposes to lend,”, insert “other than in the form of an equity investment,”.

5  Subsection 17(1)

After “has lent, or proposes to lend,”, insert “other than in the form of an equity investment,”.

6  Paragraph 18(a)

After “has lent, or proposes to lend,”, insert “other than in the form of an equity investment,”.

7  Paragraph 18(b)

After “has also lent, or proposes to lend,”, insert “other than in the form of an equity investment,”.

8  Subsection 23(1) (note)

Omit “or to provide a financial accommodation”, substitute “to provide a financial accommodation or to make an equity investment”.

9  Subsection 23(3)

After “must not lend money”, insert “(other than in the form of an equity investment)”.

10  At the end of section 23

Add:

 (5) In addition, EFIC must not lend money in the form of an equity investment under this section unless an application for the loan has been referred to the Minister under section 25.

Note: A direction under section 26 may prevent such applications from being referred to the Minister. EFIC cannot lend money under this section in those circumstances.

11  Subsection 23A(1) (note)

Omit “or to provide a financial accommodation”, substitute “to provide a financial accommodation or to make an equity investment”.

12  At the end of section 23A

Add:

 (4) In addition, EFIC must not lend money in the form of an equity investment under this section unless the application for the loan has been referred to the Minister under section 25.

Note: A direction under section 26 may prevent such applications from being referred to the Minister. EFIC cannot lend money under this section in those circumstances.

13  At the end of subsection 27(4)

Add:

Note: The provision of loans includes providing finance, providing a financial accommodation or making an equity investment, in any form: see subsection 3(2).

14  At the end of subsection 27(4A)

Add:

Note: The provision of loans includes providing finance, providing a financial accommodation or making an equity investment, in any form: see subsection 3(2).

15  Paragraph 28(c)

After “the rate of interest to be charged”, insert “(if applicable)”.

16  Paragraph 29(5)(c)

After “the rate of interest to be charged”, insert “(if applicable)”.

17  Paragraph 30(2)(c)

After “the rate of interest to be charged”, insert “(if applicable)”.

18  At the end of subsection 56(1)

Add:

 ; and (c) to make adequate provision for losses in relation to loans made in the form of equity investments made by EFIC.

19  Paragraph 56(2)(b)

After “in relation to a loan made by EFIC,”, insert “or a likely loss of a kind referred to in paragraph (1)(c) to a loan made by EFIC in the form of an equity investment,”.

20  Paragraph 66(6)(b)

After “in respect of which default”, insert “or loss”.

21  After subsection 66(10)

Insert:

 (10A) For the purpose of subsection (10), the expenses of EFIC in relation to a loan made in the form of an equity investment include expenses incurred by EFIC in relation to the acquisition, management or sale of its equity interest.

22  Application of amendments

The amendments of sections 23 and 23A of the Export Finance and Insurance Corporation Act 1991 made by this Schedule apply in relation to money lent after the commencement of this item.

Schedule 2—Guarantees for overseas infrastructure development

 

Export Finance and Insurance Corporation Act 1991

1  Section 18A

Repeal the section, substitute:

18A  Guarantees in relation to overseas infrastructure development

  If a person (in this section called the lender) has lent, or proposes to lend (other than in the form of an equity investment) money to a person for the purpose of supporting overseas infrastructure development, EFIC may guarantee to the lender:

 (a) the repayment of the whole, or any part, of the money lent, or to be lent; and

 (b) the payment of the whole or a part of any interest or other charges that may become payable to the lender in respect of the money lent, or to be lent.

 

 

 

 

[Minister’s second reading speech made in—

House of Representatives on 4 August 2021

Senate on 31 August 2021]

 

(96/21)

 

Overview

The Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Act 2021 was enacted by the Parliament of Australia to address specific gaps in the Export Finance and Insurance Corporation Act 1991, primarily by enabling the Export Finance and Insurance Corporation (EFIC) to engage in equity investments in addition to its existing lending functions. This legislation was introduced to enhance EFIC’s capabilities in supporting Australian businesses and infrastructure projects overseas by allowing it to invest in the equity of projects, thereby diversifying its financial support tools. The policy objective behind this Act is to empower EFIC to better facilitate and finance Australian exports and overseas investments, thus contributing to the broader economic interests of Australia. The Act amends the Export Finance and Insurance Corporation Act 1991 to include the provision of equity investments as a legitimate activity for EFIC, alongside traditional forms of financial accommodation such as loans and guarantees. It also introduces safeguards to ensure that EFIC’s equity investments are managed prudently, with provisions for the referral of such applications to the Minister and the making of adequate provisions for potential losses. The Act commenced on 28 October 2021, the day it received Royal Assent, and includes detailed amendments to various sections of the 1991 Act to reflect the new equity investment provisions.

Scope and Application

The Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Act 2021 amends the Export Finance and Insurance Corporation Act 1991 to facilitate the Export Finance and Insurance Corporation's (EFIC) ability to make equity investments and provide guarantees for overseas infrastructure development, while also introducing certain restrictions and requirements. This Act applies to EFIC as the entity responsible for administering these functions and to any persons or entities involved in transactions where EFIC's equity investments or guarantees are utilised. The jurisdictional reach of this Act is Commonwealth, as it pertains to the activities of an entity established under Commonwealth legislation. The Act does not specify any exclusions or exemptions but introduces conditions and thresholds, such as the requirement for ministerial referral before certain equity investments can be made. The application of these amendments extends to loans made after the commencement of the Act, as specified in Schedule 1. Subordinate instruments may further extend or restrict the application of these provisions, as necessary.

Key Provisions

The Export Finance and Insurance Corporation Amendment (Equity Investments and Other Measures) Act 2021 amends the Export Finance and Insurance Corporation Act 1991 (EFIC Act) in several significant ways. First, the Act introduces provisions allowing EFIC to make equity investments, a departure from its previous focus on financial accommodations and loans (Section 3). It specifically modifies the definition of "overseas infrastructure financing" to include equity investments (Section 3(1)), and it mandates that EFIC must not lend money in the form of equity investments without an application being referred to the Minister (Sections 23 and 23A). The Act also requires EFIC to make adequate provision for losses in relation to equity investments (Section 56(1)(c)). The obligations imposed by the Act on EFIC and other parties include ensuring that any equity investment made complies with the statutory requirements and ministerial referrals (Sections 23, 23A). EFIC must also account for expenses related to the acquisition, management, or sale of its equity interests (Section 66(10A)). Additionally, the Act outlines the circumstances under which EFIC may guarantee repayments and interest charges for loans related to overseas infrastructure development, excluding equity investments from these guarantees (Section 18A). For breaches of the provisions set out in the Act, specific offences and penalties are not explicitly stated within the provided excerpt. However, under the general legal framework of Australian legislation, breaches of statutory requirements can lead to civil or criminal consequences depending on the nature and severity of the breach. Civil penalties could include fines or restitution, while criminal penalties might involve imprisonment, particularly if the breach is deemed serious or wilful. The exact penalties would be determined by the courts based on the specific circumstances of the case and any relevant sentencing guidelines.

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Commercial Law
Instrument
Amending Act
Concepts
Commencement Provisions
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.