EXPORT FINANCE AND INSURANCE CORPORATION ACT 1991

This compilation was prepared on 1 July 2007
taking into account amendments up to Act No. 6 of 2007

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General's Department, Canberra

Contents

Part 1--Preliminary 1

1............ Short title [see Note 1] ....................................................................... 1

2............ Commencement .................................................................................. 1

3............ Interpretation ...................................................................................... 1

4............ Extension to Territories ...................................................................... 4

5............ Application of Act outside Australia ................................................. 4

5A......... Application of the Criminal Code ...................................................... 4

Part 2--Establishment and functions of Export Finance and Insurance Corporation 5

6............ Establishment of EFIC ....................................................................... 5

7............ Functions of EFIC .............................................................................. 5

8............ Primary duties of EFIC ...................................................................... 6

9............ Ministerial directions to EFIC ............................................................ 6

10.......... Reimbursement of cost of complying with directions ........................ 7

Part 3--General powers and duties of EFIC 8

11.......... General powers of EFIC ..................................................................... 8

12.......... Offices of EFIC .................................................................................. 9

13.......... Formation of companies, partnerships etc. ........................................ 9

Part 4--Insurance and financial services and products 10

14.......... Export payments insurance contracts .............................................. 10

15.......... Reinsurance etc. in relation to business of EFIC .............................. 10

16.......... Guarantees and subsidies in relation to loans to Australian suppliers 10

17.......... Guarantees and subsidies in relation to loans to overseas buyers etc. 11

18.......... Guarantees to co‑lenders in relation to export transactions ............. 11

19.......... Tender guarantees and performance guarantees ................................ 12

20.......... Reinsurance of guarantees, insurance etc. relating to export business etc. 12

21.......... Approved causes of loss .................................................................. 13

22.......... Insurance in respect of overseas investment transactions ................ 14

23.......... Loans to finance eligible export transactions .................................... 15

Part 5--National interest transactions 16

24.......... Interpretation .................................................................................... 16

25.......... Reference of applications to Minister .............................................. 16

26.......... Ministerial directions regarding reference of applications ................ 16

27.......... Approval of EFIC entering into contracts etc. ................................. 17

28.......... Conditional approvals ...................................................................... 18

29.......... Ministerial directions regarding entry into national interest contracts etc. 18

30.......... Gazettal of national interest contracts etc. ....................................... 19

31.......... Reinsurance etc. in relation to EFIC business under Part 5 .............. 20

Part 6--Board 21

32.......... Establishment of the Board .............................................................. 21

33.......... Functions of the Board ..................................................................... 21

34.......... Membership of the Board ................................................................ 21

35.......... Term of office and conditions of office of members ......................... 22

36.......... Terms and conditions of appointment ............................................. 22

37.......... Remuneration etc. of appointed members ........................................ 22

38.......... Acting Chairperson and acting Deputy Chairperson ....................... 22

39.......... Acting members ................................................................................ 23

40.......... Leave of absence of appointed members .......................................... 24

41.......... Resignation of appointed members .................................................. 24

42.......... General provision for termination of appointment of appointed members 24

43.......... Termination of appointment of appointed members at instance of Board or for non‑performance etc. 25

44.......... Meetings of the Board ...................................................................... 25

46.......... Resolutions without meetings .......................................................... 26

47.......... Committees ....................................................................................... 27

Part 7--Corporate plans 28

49.......... Matters to be included in corporate plans ........................................ 28

Part 8--Finance 29

52.......... Capital of EFIC ................................................................................ 29

53.......... Transfers to capital from reserves .................................................... 29

54.......... Callable capital of EFIC .................................................................... 29

55.......... Payment of dividends to the Commonwealth .................................. 31

56.......... Maintenance of adequate capital and reserves .................................. 32

58.......... Borrowings from the Commonwealth .............................................. 33

59.......... Other borrowings .............................................................................. 33

60.......... Security ............................................................................................. 33

61.......... Limitation on borrowing etc. ............................................................ 34

61A....... Debt neutrality charge ...................................................................... 34

62.......... Guarantee by Commonwealth .......................................................... 34

62A....... Guarantee fees .................................................................................. 34

63.......... Exemptions from taxation ................................................................. 35

63A....... Tax‑equivalent payments ................................................................. 35

64.......... Transactions in the national interest: EFIC share of liability ........... 36

65.......... Contracts and guarantees in the national interest ............................. 36

66.......... Loans made in the national interest .................................................. 38

66A....... DIFF loans--assumption of risk by the Commonwealth ................ 39

67.......... Subsidy to EFIC ............................................................................... 41

68.......... Maximum contingent liability under Part 4 ...................................... 42

69.......... Limit of total amount of loans under Part 4 ..................................... 42

70.......... Extra matters to be included in annual report ................................... 43

Part 9--Managing Director and Deputy Managing Director 44

71.......... Appointment of Managing Director and Deputy Managing Director 44

72.......... Appointments to be full‑time and at Board's pleasure .................... 44

73.......... Terms and conditions of appointment ............................................. 44

74.......... Disclosure of interests ...................................................................... 44

75.......... Exclusion from certain Board deliberations ...................................... 45

77.......... Duties of Managing Director and Deputy Managing Director ......... 45

78.......... Outside employment ........................................................................ 45

79.......... Acting Managing Director and acting Deputy Managing Director ... 45

80.......... Resignation ....................................................................................... 46

Part 10--Miscellaneous 47

81.......... Use of name of Corporation ............................................................. 47

82.......... Application of the Lands Acquisition Act 1989 ................................ 47

83.......... Delegations by Minister and Managing Director ............................. 48

84.......... Delegation by the Board ................................................................... 48

85.......... Annual reports .................................................................................. 48

87.......... Secrecy .............................................................................................. 49

88.......... Offences ............................................................................................ 50

89.......... Effectiveness of acts of EFIC ........................................................... 51

90.......... Staff .................................................................................................. 51

91.......... Regulations ....................................................................................... 51

Notes 53

Notes to the Export Finance and Insurance Corporation Act 1991

Note 1

The Export Finance and Insurance Corporation Act 1991 as shown in this compilation comprises Act No. 148, 1991 amended as indicated in the Tables below.

For all relevant information pertaining to application, saving or transitional provisions see Table A.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions
Export Finance and Insurance Corporation Act 1991	148, 1991	21 Oct 1991	1 Nov 1991
Export Finance and Insurance Corporation Amendment Act 1997	65, 1997	30 May 1997	30 June 1997 (see Gazette 1997, No. S222)	--
Tax Law Improvement Act 1997	121, 1997	8 July 1997	Schedule 3 (item 68): (a)	S. 4
Audit (Transitional and Miscellaneous) Amendment Act 1997	152, 1997	24 Oct 1997	Schedule 2: (items 736-750): 1 Jan 1998 (see Gazette 1997, No, GN49) (b)	--
Corporate Law Economic Reform Program Act 1999	156, 1999	24 Feb 1999	Schedule 10 (item 82): 13 Mar 2000 (see Gazette 2000, No. S114) (c)	--
Export Finance and Insurance Corporation Amendment Act 2000	11, 2000	15 Mar 2000	Schedule 1 (items 1-3): Royal Assent (d) Schedule 1: (item 4): 1 July 1998 (d)	--
Foreign Affairs and Trade Legislation Amendment (Application of Criminal Code) Act 2001	35, 2001	28 Apr 2001	26 May 2001	S. 4
Abolition of Compulsory Age Retirement (Statutory Officeholders) Act 2001	159, 2001	1 Oct 2001	29 Oct 2001	Sch. 1 (item 97)
Financial Framework Legislation Amendment Act 2005	8, 2005	22 Feb 2005	Schedule 2: (items 98-112, 174): Royal Assent	Sch. 2 (item 174)
Australian Trade Commission Legislation Amendment Act 2006	56, 2006	21 June 2006	Schedule 3 (items 2-5): 1 July 2006	--
Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006	101, 2006	14 Sept 2006	Schedule 2 (item 49) and Schedule 6 (items 1, 6-11): Royal Assent	Sch. 6 (items 1, 6-11)
Export Finance and Insurance Corporation Amendment Act 2007	6, 2007	19 Feb 2007	Schedule 1: 1 July 2007 (see F2007L01579) Remainder: Royal Assent	Sch. 1 (items 8, 12)

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
Part 1
S. 3 .....................................	am. No. 11, 2000; No. 8, 2005; No. 56, 2006; No. 6, 2007
S. 5A ..................................	ad. No. 35, 2001
Part 2
Note to s. 6(2).....................	ad. No. 152, 1997
Part 3
Note to s. 11(2) ..................	ad. No. 152, 1997
Part 6
S. 34....................................	am. No. 56, 2006; No. 6, 2007
S. 35 ...................................	am. No. 159, 2001; No. 6, 2007
Heading to s. 36 .................	rs. No. 159, 2001
S. 36 ...................................	am. No. 159, 2001
S. 38....................................	am. No. 56, 2006; No. 6, 2007
S. 42....................................	am. No. 152, 1997; No. 156, 1999
S. 44....................................	am. No. 6, 2007
S. 45....................................	rep. No. 152, 1997
S. 46....................................	am. No. 152, 1997
Part 7
S. 48....................................	rep. No. 152, 1997
S. 49....................................	am. No. 152, 1997
Note to s. 49(2)...................	ad. No. 152, 1997
Ss. 50, 51............................	rep. No. 152, 1997
Part 8
S. 54....................................	am. No. 65, 1997; No. 8, 2005
S. 56....................................	am. No. 65, 1997
S. 57....................................	rep. No. 152, 1997
Ss. 58, 59............................	am. No. 8, 2005
S. 61A ................................	ad. No. 11, 2000
S. 62A ................................	ad. No. 11, 2000
S. 63....................................	am. No. 121, 1997; No. 101, 2006
S. 63A ................................	ad. No. 11, 2000
S. 65....................................	am. No. 8, 2005
S. 66....................................	am. No. 65, 1997; No. 8, 2005
S. 66A.................................	ad. No. 65, 1997
	am. No. 8, 2005
S. 69....................................	am. No. 65, 1997
Heading to s. 70..................	am. No. 152, 1997
S. 70....................................	am. No. 152, 1997
Part 9
S. 71....................................	am. No. 6, 2007
S. 76 ...................................	rep. No. 159, 2001
Part 10
S. 85....................................	am. No. 152, 1997
S. 86....................................	rep. No. 152, 1997

Table A

Application, saving or transitional provisions

Tax Law Improvement Act 1997 (No. 121, 1997)

4 Application of amendments

An amendment made by an item in a Schedule (except Schedule 1) applies to assessments for the 1997‑98 income year and later income years, unless otherwise indicated in that Schedule.

Foreign Affairs and Trade Legislation Amendment (Application of Criminal Code) Act 2001 (No. 35, 2001)

4 Application of amendments

(1) Each amendment made by this Act applies to acts and omissions that take place after the amendment commences.

(2) For the purposes of this section, if an act or omission is alleged to have taken place between 2 dates, one before and one on or after the day on which a particular amendment commences, the act or omission is alleged to have taken place before the amendment commences.

Abolition of Compulsory Age Retirement (Statutory Officeholders) Act 2001 (No. 159, 2001)

Schedule 1

97 Application of amendments

The amendments made by this Schedule do not apply to an appointment if the term of the appointment began before the commencement of this item.

Financial Framework Legislation Amendment Act 2005 (No. 8, 2005)

Schedule 2

174 Saving provision--provisions that formerly referred to the Treasurer

(1) Any thing that:

(a) was done by the Treasurer, or by a delegate of the Treasurer, before the commencing time under an affected provision; and

(b) was in effect immediately before the commencing time;

continues to have effect after the commencing time as if it had been done by the Finance Minister under the affected provision.

(2) In this item:

affected provision means a provision that is amended by an item in this Schedule so as to replace references to the Treasurer with references to the Finance Minister.

commencing time means the day this Act receives the Royal Assent.

Finance Minister means the Minister who administers the Financial Management and Accountability Act 1997.

Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006
(No. 101, 2006)

Schedule 6

1 Application of Schedule 1 and 2 amendments

Except as mentioned in items 2 and 3, the repeals and amendments made by Schedules 1 and 2 apply:

(a) so far as they affect assessments--to assessments for the 2006‑07 income year and all later income years; and

(b) otherwise--to acts done or omitted to be done, or states of affairs existing, after the commencement of the repeals and amendments.

6 Object

The object of this Part is to ensure that, despite the repeals and amendments made by this Act, the full legal and administrative consequences of:

(a) any act done or omitted to be done; or

(b) any state of affairs existing; or

before such a repeal or amendment applies, can continue to arise and be carried out, directly or indirectly through an indefinite number of steps, even if some or all of those steps are taken after the repeal or amendment applies.

7 Making and amending assessments, and doing other things, in relation to past matters

Even though an Act is repealed or amended by this Act, the repeal or amendment is disregarded for the purpose of doing any of the following under any Act or legislative instrument (within the meaning of the Legislative Instruments Act 2003):

(a) making or amending an assessment (including under a provision that is itself repealed or amended);

(b) exercising any right or power, performing any obligation or duty or doing any other thing (including under a provision that is itself repealed or amended);

in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies.

Example 1: On 31 July 1999, Greg Ltd lodged its annual return under former section 160ARE of the Income Tax Assessment Act 1936. The return stated that the company had a credit on its franking account and that no franking deficit tax was payable for the 1998‑99 franking year. Under former section 160ARH of that Act, the Commissioner was taken to have made an assessment consistent with the return.

Following an audit undertaken after the repeal of Part IIIAA of that Act, the Commissioner concludes that Greg Ltd fraudulently overfranked dividends it paid during the 1998‑99 franking year, and had a franking account deficit for that franking year. As a result, the Commissioner considers that franking deficit tax and a penalty by way of additional tax are payable.

The Commissioner can amend the assessment under former section 160ARN of that Act, because item 7 of this Schedule disregards the repeal of that section for the purposes of making an assessment in relation to the 1998‑99 franking year. Item 7 will also disregard the repeal of Division 11 of former Part IIIAA to the extent necessary for the Commissioner to assess Greg Ltd's liability to a penalty by way of additional tax.

Despite the repeal of sections 160ARU and 160ARV, item 9 will ensure that the general interest charge will accrue on the unpaid franking deficit tax and penalty until they are paid.

Item 7 will also preserve Greg Ltd's right, under former section 160ART of that Act, to object against the Commissioner's amended assessment (including the penalty), since the objection is the exercise of a right in relation to a franking year that ended before the repeal of Part IIIAA.

Example 2: During the 1997‑98 income year, Duffy Property Ltd withheld amounts from its employees' wages as required by former Divisions 1AAA and 2 of Part VI of the Income Tax Assessment Act 1936. The company failed to notify the Commissioner of those amounts, and failed to remit them to the Commissioner.

Following an audit undertaken after the repeal of those Divisions, the Commissioner discovers that the withheld amounts have not been remitted. The company's records are incomplete and the Commissioner is unable to completely ascertain the extent of its liability for the withheld amounts. Under section 222AGA of that Act, the Commissioner makes an estimate of the liability.

Item 7 will disregard the repeal of section 220AAZA of that Act (which empowered the Commissioner to recover the amount of the estimate). Even though the estimate is made after the repeal, it relates to amounts withheld before the repeal.

8 Saving of provisions about effect of assessments

If a provision or part of a provision that is repealed or amended by this Act deals with the effect of an assessment, the repeal or amendment is disregarded in relation to assessments made, before or after the repeal or amendment applies, in relation to any act done or omitted to be done, any state of affairs existing, or any period ending, before the repeal or amendment applies.

9 Saving of provisions about general interest charge, failure to notify penalty or late reconciliation statement penalty

If:

(a) a provision or part of a provision that is repealed or amended by this Act provides for the payment of:

(i) general interest charge, failure to notify penalty or late reconciliation statement penalty (all within the meaning of the Income Tax Assessment Act 1936); or

(ii) interest under the Taxation (Interest on Overpayments and Early Payments) Act 1983; and

(b) in a particular case, the period in respect of which the charge, penalty or interest is payable (whether under the provision or under the Taxation Administration Act 1953) has not begun, or has begun but not ended, when the provision is repealed or amended;

then, despite the repeal or amendment, the provision or part continues to apply in the particular case until the end of the period.

10 Repeals disregarded for the purposes of dependent provisions

If the operation of a provision (the subject provision) of any Act or legislative instrument (within the meaning of the Legislative Instruments Act 2003) made under any Act depends to any extent on an Act, or a provision of an Act, that is repealed by this Act, the repeal is disregarded so far as it affects the operation of the subject provision.

11 Schedule does not limit operation of section 8 of the Acts Interpretation Act 1901

This Schedule does not limit the operation of section 8 of the Acts Interpretation Act 1901.

Export Finance and Insurance Corporation Amendment Act 2007
(No. 6, 2007)

Schedule 1

8 Saving provision

(1) Despite the amendments to section 35 of the Export Finance and Insurance Corporation Act 1991 made by item 7, an appointed member, other than the government member, whose appointment is in force immediately before the commencement of this Schedule continues to hold office for the balance of the period of the appointment as if the amendments had not been made.

(2) Subitem (1) does not prevent the Minister terminating the appointment under section 42 or 43 of that Act or from otherwise varying or revoking the appointment.

12 Saving provision

(1) Despite the amendments to section 71 of the Export Finance and Insurance Corporation Act 1991 made by item 11, the Managing Director of EFIC whose appointment is in force immediately before the commencement of this Schedule continues to hold office as if the amendments had not been made.

(2) Subitem (1) does not prevent the Board from terminating the appointment under paragraph 72(b) of that Act.

Commonwealth Consolidated Acts

EXPORT FINANCE AND INSURANCE CORPORATION ACT 1991 - NOTES