The “Arrangement on Officially Supported Export Credits“ established by the Organisation for Economic Co-operation and Development (OECD), provides common guidelines for government-supported export credits. It plays a crucial role in maintaining consistency and fairness in export credit activities, thereby minimizing distortions in international trade. Consequently, it levels the playing field among exporters from different countries.
Environmental and Social Due Diligence
The 2023 edition introduces enhanced guidelines for environmental and social due diligence. These guidelines ensure that export credit applications consider environmental and social impacts. Therefore, this helps in promoting sustainable development through responsible lending practices.
Transparency and Reporting
Increased requirements for transparency in reporting export credit activities mark another significant update. These new requirements aim to improve oversight and adherence to the guidelines. As a result, there is better monitoring and accountability in international trade finance.
Sector-Specific Rules
The Arrangement also updates rules for specific sectors like renewable energy. These sectors may receive more favorable terms due to global environmental priorities. Hence, this encourages investment in sustainable energy projects, reflecting the evolving needs of international trade.
Impact on Export Credit Agencies (ECAs)
For Export Credit Agencies (ECAs), the Arrangement sets minimum standards for providing officially supported export credits. This ensures ECAs operate within an internationally accepted framework, thus reducing the risk of competitive escalation among countries. It maintains a fair and stable environment for international trade. Moreover, the emphasis on transparency and environmental/social guidelines addresses the growing scrutiny of international trade’s impact on sustainable development.
References
The Arrangement on Officially Supported Export Credits
Organisation for Economic Co-operation and Development (OECD)
