Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Act 2017

Administered by Department of Foreign Affairs and Trade

Legislation au C2017A00100 In force Act

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Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Act 2017

 

No. 100, 2017

 

 

 

 

 

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—Amendments

Export Finance and Insurance Corporation Act 1991

 

 

 

Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Act 2017

No. 100, 2017

 

 

 

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

[Assented to 14 September 2017]

The Parliament of Australia enacts:

1  Short title

  This Act is the Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Act 2017.

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 after this Act receives the Royal Assent.

15 September 2017

Note: This table relates only to the provisions of this Act as originally enacted.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  Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.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—Amendments

 

Export Finance and Insurance Corporation Act 1991

1  Subsection 3(1)

Insert:

Commonwealth company has the same meaning as in the Public Governance, Performance and Accountability Act 2013.

Commonwealth entity has the same meaning as in the Public Governance, Performance and Accountability Act 2013.

EFIC’s Commonwealth entities function means the function set out in paragraph 7(1)(dc).

large business: see section 3A.

related party, for a business, has the meaning given by section 228 of the Corporations Act 2001.

substantial part of a business means a part of a business that is substantial and not minor or insignificant.

2  At the end of subsection 3(3)

Add:

 ; or (e) the supply to persons who are not ordinarily resident in Australia of services relating to tourism; or

 (f) the conduct of an online business with customers outside Australia; or

 (g) the sale or licensing of intellectual property and related rights to persons outside Australia; or

 (h) direct investment outside Australia where a benefit flows back to Australia (whether directly or indirectly).

2A  After section 3

Insert:

3A  Meaning of large business

 (1) A business is a large business at a particular time in a financial year (the current financial year) if:

 (a) its revenue for the previous financial year is $150,000,000 or more; or

 (b) if there was no time in the previous financial year when the business was carried on—its revenue for the current financial year is as at that time $150,000,000 or more.

 (2) Revenue is to be calculated for the purposes of this section in accordance with accounting standards in force at the relevant time.

3  After paragraph 7(1)(db)

Insert:

 (dc) as directed by the Minister, to assist Commonwealth entities and Commonwealth companies in performing their functions or achieving their purposes by providing services in relation to financial arrangements and agreements;

4  At the end of section 7

Add:

 (3) The reference in paragraph (1)(dc) to providing services in relation to financial arrangements and agreements does not include the provision of loans, insurance or guarantees.

5  Subsection 8(3)

Repeal the subsection, substitute:

 (3) Subsection (1) and subparagraphs (2)(b)(i) and (iii) do not apply in relation to:

 (a) EFIC’s Northern Australia economic infrastructure functions; or

 (b) EFIC’s Commonwealth entities function.

6  Subsection 9(6)

Omit all the words after “does not apply”, substitute:

  in relation to:

 (a) EFIC’s Northern Australia economic infrastructure functions; or

 (b) EFIC’s Commonwealth entities function.

6A  At the end of section 16

Add:

 (3) However, EFIC must not make a guarantee or enter into a contract under this section in relation to a loan or a proposed loan that is to be used for the dominant purpose of direct investment outside Australia unless the requirements in subsection (4) are satisfied.

 (4) For the purposes of subsection (3), the requirements are the following:

 (a) the person who carries on the business must certify, by writing given to EFIC, that the person reasonably believes that the loan will result in a net increase in the number of people employed in Australia by the business, or a related party of the business, during the term of the loan;

 (b) at the completion of the loan, the person carrying on the business must certify to EFIC whether the loan has resulted in a net increase in the number of people employed in Australia by the business, or a related party of the business;

 (c) if the business is a large business—the person who carries on the business must certify, by writing given to EFIC, that the loan will not be used to move the whole or a substantial part of the business, or of a related party of the business, overseas; and

 (d) EFIC must ensure that it publicly discloses copies of the certification it receives under subsection (4)(b).

6B  At the end of section 23

Add:

 (3) However, EFIC must not lend money under this section for the purpose of financing a transaction whose dominant purpose is direct investment outside Australia by a person carrying on business in Australia unless the requirements in subsection (4) are satisfied.

 (4) For the purposes of subsection (3), the requirements are the following:

 (a) a person to whom the money is lent must certify, by writing given to EFIC, that the person reasonably believes that the loan will result in a net increase in the number of people employed in Australia by the business, or a related party of the business, during the term of the loan;

 (b) at the completion of the loan, the person carrying on the business must certify to EFIC whether the loan has resulted in a net increase in the number of people employed in Australia by the business, or a related party of the business;

 (c) if the business is a large business—the person who carries on the business must certify, by writing given to EFIC, that the loan will not be used to move the whole or a substantial part of the business, or of a related party of the business, overseas; and

 (d) EFIC must ensure that it publicly discloses copies of the certification it receives under subsection (4)(b).

7  Section 84A

Repeal the section, substitute:

84A  EFIC must charge for certain services

 (1) EFIC must charge fees for services it provides in performing the following:

 (a) EFIC’s Northern Australia economic infrastructure functions;

 (b) EFIC’s Commonwealth entities function.

 (2) The fees:

 (a) must be sufficient to compensate EFIC for the services it provides in relation to those functions; but

 (b) must not be such as to amount to taxation.

 

 

[Minister’s second reading speech made in—

House of Representatives on 9 November 2016

Senate on 8 August 2017]

(168/16)

 

Overview

The Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Act 2017 was enacted by the Parliament of Australia to amend the Export Finance and Insurance Corporation Act 1991. This Act was introduced to address the need for the Export Finance and Insurance Corporation (EFIC) to provide support for Commonwealth entities and companies, particularly in terms of financial arrangements and agreements. The policy objective of this amendment is to enhance the capacity of EFIC to assist these entities and companies in performing their functions and achieving their purposes, while ensuring that the services provided do not include the provision of loans, insurance, or guarantees. The Act specifies that EFIC's functions include assisting Commonwealth entities and Commonwealth companies through services related to financial arrangements and agreements, thereby broadening the scope of EFIC's role to include support for these entities beyond what was previously defined. Additionally, the Act introduces specific conditions for EFIC when providing financial support for direct investment outside Australia. It mandates that EFIC must not guarantee or contract for loans intended for such purposes unless certain conditions are met, such as a certification from the business that the loan will result in a net increase in Australian employment and that it will not be used to relocate a substantial part of the business overseas. These provisions aim to ensure that the financial support provided by EFIC contributes positively to the Australian economy, particularly in terms of job creation and retention within Australia.

Scope and Application

The Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Act 2017 amends the Export Finance and Insurance Corporation Act 1991 to redefine the functions of the Export Finance and Insurance Corporation (EFIC) to include assisting Commonwealth entities and Commonwealth companies by providing services related to financial arrangements and agreements, as directed by the Minister. This Act applies to Commonwealth entities and Commonwealth companies, which are defined under the Public Governance, Performance and Accountability Act 2013, and it also extends to large businesses with a revenue of $150 million or more in the previous financial year, or if the business was not carried on during the previous financial year, a revenue of $150 million or more as at the time the business was carried on. The amendments exclude certain functions, such as the Northern Australia economic infrastructure functions and the Commonwealth entities function, from certain provisions. Additionally, EFIC is mandated to charge fees for services provided in relation to the specified functions, ensuring that these fees compensate EFIC without amounting to taxation. The Act came into effect on the day after receiving Royal Assent, which was 15 September 2017.

Key Provisions

The Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Act 2017 amends the Export Finance and Insurance Corporation Act 1991, introducing changes that aim to better support Commonwealth entities through financial arrangements and agreements. Section 3(1) of the amending Act defines key terms such as "Commonwealth company" and "Commonwealth entity," which align with definitions in the Public Governance, Performance and Accountability Act 2013. Additionally, it specifies new functions for the Export Finance and Insurance Corporation (EFIC), such as assisting Commonwealth entities and companies by providing services related to financial arrangements and agreements, as outlined in section 7(1)(dc). It is crucial to note that these services do not include loans, insurance, or guarantees, as stated in section 3(3). The Act further delineates the scope of EFIC's functions to include services relating to tourism, online businesses, intellectual property sales, and direct investments that benefit Australia, as inserted in section 3(3). The obligations imposed on EFIC include providing services to Commonwealth entities and companies without offering loans, insurance, or guarantees, as stipulated in section 3(3). Section 7(1)(dc) emphasizes that these services must align with the functions of EFIC without extending to prohibited financial instruments. Furthermore, EFIC is mandated to charge fees for services provided under its Northern Australia economic infrastructure functions and its Commonwealth entities function, as per section 84A. These fees must be sufficient to cover costs but cannot be considered taxation. Additionally, EFIC must ensure compliance with specific conditions when making guarantees or entering into contracts and when lending money for certain purposes, such as ensuring that loans for direct investments do not lead to a net loss of employment in Australia or the relocation of business operations overseas, as outlined in sections 6A and 6B. Violations of the provisions in the Export Finance and Insurance Corporation Amendment (Support for Commonwealth Entities) Act 2017 may result in penalties. However, the Act does not explicitly state penalties for non-compliance in the provided text. The absence of specific penalties implies that breaches might be addressed through other applicable laws or regulations. For instance, failure to adhere to the specified conditions for loans or guarantees could potentially lead to civil or administrative consequences, depending on the context of the breach. It is advisable for practitioners to refer to related legislation and regulatory frameworks to understand the full scope of consequences for non-compliance.

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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.