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This is a Bill, not an Act. For current law, see the Acts databases.
1996-97
The Parliament of
the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Export Finance
and Insurance Corporation Amendment Bill
1997
No. ,
1997
(Industry, Science and
Tourism)
A Bill for an Act to amend the
Export Finance and Insurance Corporation Act
1991
9701620—975/24.2.1997—(16/97)
Cat. No. 96 7215 X ISBN 0644 49803X
Contents
A Bill for an Act to amend the Export Finance and
Insurance Corporation Act 1991
The Parliament of Australia enacts:
This Act may be cited as the Export Finance and Insurance Corporation
Amendment Act 1997.
(1) Subject to subsection (2), this Act commences on a day to be fixed by
Proclamation.
(2) If this Act does not commence under subsection (1) within the period
of 6 months beginning on the day on which it receives the Royal Assent, it
commences on the first day after the end of that period.
Each Act 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repealed as set out in the applicable items in the Schedule concerned, and any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.
1 At the end of subsection
54(9)
Add:
; and (c) an expected loss by, or liability of, EFIC under or in relation
to a DIFF loan, as defined in section 66A, is to be ignored to the extent that
the Commonwealth would be liable to pay an amount to EFIC under that section in
relation to the loss or liability.
2 At the end of subsection
56(2)
Add:
; and (c) a likely liability of EFIC in relation to a DIFF loan, as
defined in section 66A, or a likely default of a kind referred to in paragraph
(1)(b) in relation to such a loan, is to be ignored to the extent that the
Commonwealth would be liable to pay an amount to EFIC under section 66A in
relation to the same matter.
3 At the end of section 66
Add:
(11) On the commencement of section 66A, this section ceases to apply to a
loan to which that section applies. This does not affect any liability incurred
under this section before the commencement of section 66A.
4 After section 66
Insert:
Purpose of section
(1) The purpose of this section is to provide for the Commonwealth to
assume the risk associated with DIFF loans. A DIFF loan is a loan
with the following characteristics:
(a) the loan was made under this Act, the Australian Trade Commission
Act 1985 or the Export Finance and Insurance Corporation Act 1974
before the commencement of this section; and
(b) the borrower’s liability in relation to the loan has not been
fully discharged before the commencement of this section; and
(c) either:
(i) the loan funds included money made available by the Commonwealth as
part of an overseas aid project (as defined in subsection 7(2)); or
(ii) the loan was made in conjunction with a grant of aid by the
Commonwealth, or a Commonwealth instrumentality, as part of such an overseas aid
project.
Note: The abbreviation “DIFF” stands for
“Development Import Finance Facility”.
Commonwealth assumption of risk on DIFF loans
(2) If, after the commencement of this section, there is a default in
payment of an amount due under a DIFF loan:
(a) the Commonwealth must pay to EFIC an amount equal to the default
amount; and
(b) the Commonwealth must indemnify EFIC for:
(i) any other loss (including damages) suffered by EFIC because of the
default; and
(ii) any costs incurred by EFIC in attempting to recover the default
amount; and
(c) if EFIC recovers the whole or part of the default amount or a loss or
cost referred to in paragraph (b), EFIC must pay to the Commonwealth an amount
equal to the amount recovered.
Note: The obligation in paragraph (b) applies whether or not
the Commonwealth’s liability has been replaced as mentioned in subsection
(4).
Commonwealth may instead direct EFIC to borrow money
(3) The Minister may, on behalf of the Commonwealth, direct EFIC to seek
approval under section 59 to borrow an amount equal to an amount payable by the
Commonwealth under subsection (2).
Commonwealth liability if it directs EFIC to borrow money
(4) If:
(a) the Minister gives EFIC a direction under subsection (3) to borrow an
amount; and
(b) the Treasurer approves the borrowing under section 59;
the Commonwealth’s liability under subsection (2) is replaced by a
liability to pay to EFIC the amount needed to discharge the borrowing by EFIC
and to pay all costs (including interest) incurred by EFIC in connection with
the borrowing.
EFIC to make payment to Commonwealth
(5) EFIC must pay $40,000,000 from its reserves to the
Commonwealth.
EFIC may also have to pay Commonwealth a proportion of DIFF loan risk
premiums
(6) The Minister for Finance may direct EFIC to pay to the Commonwealth a
specified amount representing part of the risk premiums paid in relation to the
DIFF loans. The amount must not exceed what is necessary to give the
Commonwealth an appropriate proportion of the risk premiums.
Commonwealth to pay EFIC a fee for administering DIFF
loans
(7) The Commonwealth is liable to pay to EFIC an administration fee in
respect of EFIC’s costs in administering the DIFF loans after the
commencement of this section. The amount of the administration fee, and how and
when it is to be paid, are to be as directed by the Minister for
Finance.
Commonwealth and EFIC may set off amounts owed
(8) Amounts that the Commonwealth and EFIC owe to each other under this
section may be set off.
Directions under this section
(9) A direction under this section is to be in writing.
(2A) A DIFF loan, as defined in section 66A, is to be disregarded for the
purposes of subsection (1).