US embassy cable - 05PARIS1747

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 
------------------------- 
 
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