After more than 5 years of negotiation, the Participants to the Arrangement on Officially Supported Export Credits (The Participants) reached an agreement in November 2016 on a new set of rules governing the level of credit risk premium that must be charged for official export credits to countries where private market financing is generally available. Specifically, “market benchmark transactions” (i.e. transactions involving ultimate obligors or guarantors in category 0 countries, high income OECD countries and high income Euro Area countries) are now, like all other transactions covered by the Arrangement, subject to a concrete minimum credit risk premium regime.
After two years of intensive negotiations, the Participants to the Arrangement on Officially Supported export Credits, at their 112th Meeting held on 3 February 2010, concluded the details of an agreement to revise and expand the premium-related rules of the Arrangement [TAD/PG(2010)10].
The rules and principles of the Knaepen Package were designed with the perspective of the exporter in mind. This means that they are meant to provide for a level playing field with regard to the premium cost of official export credit support for exporters in competition for overseas sales. Since official export credit support is provided through insurance, guarantees and direct credits, these different systems are taken into account in the premium rules; mainly through differentials in the required Minimum Premium Rates (MPRs) for various types of products. The premium rules of the arrangement on officially supported export credits (the knaepen package) were explained in [TD/PG(2004)10/FINAL].
The Knaepen Package was concluded on 20 June 1997 and integrated formally into the Arrangement in December 1997. The actual rules of the Arrangement related to premium can be found in Articles 22 - 28, 43, 44 and Annexes V through VIII. References in this document to the “Knaepen Package” should be understood to represent these articles and annexes as a whole.
This section provides technical assistance and guidelines to determine the minimum premium rates for transactions involving obligors or guarantors in category 0 countries (i.e. market benchmark transactions) according to the Arrangement on Officially Supported Export Credits.
Information note for guidance on premium rules for officially supported export credits in market benchmark countries: [TAD/PG(2017)7/FINAL]
The PDRs are to be used to convert country category 1-7 MPRs which are computed as up-front premium rates into margins (these PDRs may also be used to ensure that a spread is at least as high as the required MPR in Country category 1-7). The applicable PDR varies depending on when the premium is collected (see pdf below for the applicable PDR):
last updated: 7 August 2018