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Export Credits For Commercial Aircraft Agreed Internationally

by Ulrika Lomas, Tax-News.com, Brussels

24 December 2010


Several governments have agreed in principle on new terms for state financing to support the export of commercial aircraft. The proposed terms - following extensive negotiations at the OECD – would move fees closer to market rates and allow for regular adjustments to reflect market developments.

The Aviation Sector Understanding (ASU) negotiations await official approval by the participating governments – Brazil, Canada, EU (including France, Germany, UK and Italy), Japan and the US. The participants aim to have formal approval by January 20, 2011, with entry into force on February 1, 2011.

The objective of the agreement is to create and maintain a market- and risk-based fee system that produces a level playing field between manufacturers, airlines and governments.

The agreement, if formally approved, will unify the previous disparate financing terms and conditions between large and regional jets. It also contains mechanisms to smooth very sharp market movements. It contains no quantitative restrictions on export credit agency programmes.

The agreement includes a transition period for certain previously ordered aircraft which will be covered by existing financing terms.

TAGS: aviation

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