Overview

The Export Finance and Insurance Corporation Act 1991 (Cth) was enacted by the Parliament of Australia to facilitate the export of Australian goods and services by providing financial support and insurance, thereby addressing gaps in the availability of export finance and insurance for Australian businesses. This Act empowers the Export Finance and Insurance Corporation to engage in activities that promote and support Australian exports, which is essential for the economic growth and diversification of the Australian economy. The policy objective of the Act is to enhance Australia's export capabilities by mitigating the financial risks associated with international trade through the provision of loans and insurance, thus ensuring that Australian businesses can compete effectively in global markets.

Scope and Application

The Export Finance and Insurance Corporation Act 1991 (Cth) applies to Export Finance Australia and the financial transactions it undertakes, including loans and insurance. The Act operates on a Commonwealth level and governs transactions that have been identified as being in the national interest, as well as those that relate to approved causes of loss. The Act applies to persons, entities, and industries involved in export finance and insurance activities. The geographic reach of the Act is national, applying across Australia. The Act may extend or restrict its application through subordinate instruments such as the Declaration of Approved Causes of Loss, which was most recently updated on 5 July 2022. This declaration specifies the causes of loss that are approved for insurance purposes under the Act. The Act does not currently outline any specific exclusions, exemptions, or thresholds, though it is likely that these would be detailed within the subordinate instruments or in the specific terms of the transactions involved.

Key Provisions

The Export Finance and Insurance Corporation Act 1991 (Cth) (the Act) provides for the making of loans and the provision of insurance by Export Finance Australia (EFA) in circumstances that are deemed to be in the national interest. Section 30(1) of the Act allows EFA to enter into transactions that are in the national interest, while section 21(3) enables EFA to declare specified causes of loss as approved causes of loss for the purposes of providing insurance. In this notification, EFA has entered into a series of loans (sections 1319/22 to 1323/22) and insurance contracts (sections 1318/22 and 1329/22), which are considered to be in the national interest. EFA is required to provide notice under sections 30(1) and 21(3) of the Act when it enters into a transaction that is in the national interest or declares an approved cause of loss. The notice must include details of the transaction, such as the currency, interest rate, maximum exposure facility limit, and the percentage of government ownership (sections 1319/22 to 1323/22 and 1318/22 to 1329/22). In this notification, EFA has provided details of five loans and two insurance contracts, including the interest rates, maximum exposure limits, and the signing dates. Failure to comply with the requirements of the Act may result in civil or criminal penalties. Under section 140 of the Act, a person who contravenes a provision of the Act is liable to a penalty of up to 10,000 penalty units for an individual and up to 50,000 penalty units for a body corporate. In addition, under section 141 of the Act, a person who is found guilty of an offence against the Act may be subject to imprisonment for up to five years. It is important for EFA to comply with the requirements of the Act to avoid any potential penalties or consequences. In summary, the Export Finance and Insurance Corporation Act 1991 (Cth) allows EFA to enter into transactions that are in the national interest and to declare approved causes of loss for the purposes of providing insurance. EFA is required to provide notice under sections 30(1) and 21(3) of the Act when it enters into such transactions or declares approved causes of loss. Failure to comply with the requirements of the Act may result in civil or criminal penalties, including fines and imprisonment. It is important for EFA to comply with the Act to avoid any potential penalties or consequences.