OECD: Participants Begin Formal Review of the

UNCLAS PARIS 001747

SIPDIS

FROM USOECD

STATE PASS USTR FOR MALMROSE AND KEMP
STATE PASS EXIM BANK FOR KUESTER, IVANOVA, MORIN AND
FIRESTONE
USAID FOR SALEM-MURDOCK AND MARBURG-GOODMAN
COMMERCE FOR BEADLE AND LENZ
TREASURY FOR MACLAUGHLIN, TVARDEK, DRYSDALE AND EPSTEIN

E.O. 12598: N/A
TAGS: EFIN ETRD EAIR EAID BR OECD
SUBJECT: OECD: Participants Begin Formal Review of the
Civil Aircraft Sector Understanding



1. On 22-23 February 2005, the OECD Participants to the
Arrangement on Officially Supported Export Credits and
officials from Brazil met to start a formal review of
the terms and conditions for officially supported
export credits for civil aircraft. These terms and
conditions are set out in the Sector Understanding on
Export Credits for Civil Aircraft, which is annexed to
the Arrangement on Officially Supported Export Credits.
The participants to the review, who met under the
auspices of the Organization for Economic Cooperation
and Development at OECD's Paris headquarters, are
Australia, Brazil, Canada, the European Community,
Japan, Korea, New Zealand, Norway, Switzerland and the
United States. The participants will meet again in the
week of 18 April 2005 to make additional progress in
the review.


2. Ahead of their meeting, the participants to the
review consulted with the Aviation Working Group (AWG),
which is composed of the major airframe and engine
manufacturers from Brazil, Canada, Europe and the
United States, as well as the world's major aircraft
leasing companies and financiers.

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OECD Tied Aid Consultations Group Meets
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3. The OECD Participants tied aid consultations group
met on 18 February 2005 in Paris to discuss revision of
the Ex Ante Guidance For Tied Aid, which is derived
from the body of experience developed through the
evaluation of individual project notifications for tied
aid since February 1992. The purpose of the Ex Ante
Guidance is to help project managers to anticipate, at
an early stage, whether a given project is likely to
pass the two Helsinki Package key tests on commercial
viability.


4. The Participants discussed amendments to the Ex Ante
Guidance based on experience gained since 1996, when
the Ex Ante Guidance was first issued. All
Participants but Japan agreed to the amendments.
Japan, lacking a mandate to agree, indicated that it
would indicate its formal position within one month.

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OECD Premium Experts Meet
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5. The OECD Experts on Premium and Related Conditions
met on 14-15 February 2005 to discuss technical premium
issues arising under the 1997 Knaepen Package. The
experts discussed minimum premium rates for tied aid
transactions, the Premium Feedback Tools, and Buyer
Risk Pricing Transparency. The Premium Group will next
meet in September 2005.

MORELLA