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International Financial Assistance Regulations (SOR/2019-249)

Regulations are current to 2024-05-28

International Financial Assistance Regulations

SOR/2019-249

INTERNATIONAL FINANCIAL ASSISTANCE ACT

Registration 2019-06-25

International Financial Assistance Regulations

P.C. 2019-914 2019-06-22

Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs and the Minister for International Development and with the concurrence of the Minister of Finance, pursuant to section 8 of the International Financial Assistance ActFootnote a, makes the annexed International Financial Assistance Regulations.

Definitions

Marginal note:Definitions

 The following definitions apply in these Regulations.

Act

Act means the International Financial Assistance Act. (Loi)

OECD DAC List

OECD DAC List means the Organisation for Economic Co-operation and Development’s Development Assistance Committee List of Official Development Assistance Recipients, as amended from time to time. (liste établie par le CAD de l’OCDE)

Sovereign Loans

Marginal note:Conditions to make a loan

 The competent minister must not make a loan under paragraph 3(1)(a) of the Act unless

  • (a) the competent minister is of the opinion that the recipient or guarantor of the loan is creditworthy, taking into consideration World Bank and International Monetary Fund debt sustainability assessments; and

  • (b) the recipient or guarantor of the loan is the government of

    • (i) a country or territory that is included in the OECD DAC List, and

    • (ii) a borrowing member of the International Bank for Reconstruction and Development of the World Bank Group.

Marginal note:Foreign state limit

 The sum of all outstanding loans made by the competent minister under paragraph 3(1)(a) of the Act to the government of a single foreign state and all outstanding loans made by the competent minister under that paragraph that are guaranteed under subsection 3(2) of the Act by the government of that foreign state must not exceed $120 million or the value of 20% of all outstanding loans made by the competent minister under paragraph 3(1)(a) of the Act, whichever is greater.

Marginal note:Maximum loan term

 The maximum term of a loan made under paragraph 3(1)(a) of the Act is 10 years.

Marginal note:Interest rate

 The interest rate applicable to a loan made under paragraph 3(1)(a) of the Act is a fixed rate that equals the Government of Canada’s cost of borrowing as determined by reference to the zero-coupon yield curve for Government of Canada bonds published by the Bank of Canada.

Marginal note:Initiation fee

 The initiation fee for a loan made under paragraph 3(1)(a) of the Act is the lesser of 0.15% of the amount of the loan and $100,000.

Marginal note:Commitment fee

 In the case of a loan made under paragraph 3(1)(a) of the Act that is to be disbursed in a single disbursement, the per annum commitment fee is 0.25% of the amount of the loan for the period beginning on the day that is 60 days after the effective date of the loan and ending on the day on which the recipient draws the loan, payable on a semi-annual basis.

Marginal note:Terms and conditions of repayment

  •  (1) Subject to subsection (2), principal and interest payments related to a loan made under paragraph 3(1)(a) of the Act are payable by the recipient on at least an annual basis.

  • Marginal note:Grace period

    (2) The competent minister may grant the recipient a grace period during which the recipient is not required to make principal or interest payments, or both, on a loan made under paragraph 3(1)(a) of the Act if there is an imbalance between the recipient’s cash inflows and outflows.

Marginal note:Exception

 Sections 2, 4 and 8 of these Regulations do not apply to a loan made under paragraph 3(1)(a) of the Act as part of debt restructuring.

Marginal note:Currency

 A loan made under paragraph 3(1)(a) of the Act may only be made in the currency of Canada, the United States, the European Monetary Union, the United Kingdom, Japan or another currency identified by the International Monetary Fund as an official foreign exchange reserve currency.

Marginal note:Approval — Minister of Finance

 The competent minister must not carry out any of the following transactions without the approval of the Minister of Finance:

  • (a) making a loan under paragraph 3(1)(a) of the Act;

  • (b) amending a financial term of a loan made under paragraph 3(1)(a) of the Act.

Marginal note:Consultation — Minister of Finance

 The competent minister must consult with the Minister of Finance before a debt or obligation relating to a loan made under paragraph 3(1)(a) of the Act is written off or forgiven.

Innovative Financing

Marginal note:Persons or entities

 Under paragraph 4(a) of the Act, the competent minister must not guarantee an obligation undertaken by a person or entity unless

  • (a) the guarantee supports international assistance in a country or territory included in the OECD DAC List; and

  • (b) the competent minister obtains from the recipient of the guarantee an undertaking to make reasonable efforts to recover losses related to the obligation.

Marginal note:Maximum guarantee exposure

  •  (1) The maximum amount of outstanding guarantees provided under paragraph 4(a) of the Act must not exceed $500 million.

  • Marginal note:Recipient limit

    (2) The maximum amount of outstanding guarantees provided under paragraph 4(a) of the Act to a particular recipient must not exceed $100 million.

Marginal note:Partial guarantee

 If the competent minister provides a partial guarantee under paragraph 4(a) of the Act, the competent minister must not guarantee more than 50% of the obligation undertaken by a person or entity.

Marginal note:Initiation fee

 Subject to section 18 of these Regulations, the initiation fee for a guarantee provided under paragraph 4(a) of the Act is the lesser of 0.15% of the amount of the guarantee and $100,000.

Marginal note:Fees

 Subject to section 18 of these Regulations, the fee to obtain a guarantee provided under paragraph 4(a) of the Act is an amount equal to the net present value of the expected financial loss to the Government of Canada of the guarantee.

Marginal note:Fees — guarantees with co-guarantor

 If the competent minister provides a guarantee under paragraph 4(a) of the Act with a co-guarantor, the initiation fee and the fee to obtain the guarantee are the amounts charged for similar fees by the co-guarantor on a prorated basis.

Marginal note:Circumstances of dealing with shares

  •  (1) The competent minister must not under paragraph 4(f) of the Act acquire, hold, assign, exchange, sell or otherwise dispose of shares except in respect of an investment that supports international assistance in a country or territory included in the OECD DAC List.

  • Marginal note:Manner of dealing with shares

    (2) The competent minister must not seek to acquire or hold a controlling or majority interest in a corporation when making the investment referred to in subsection (1).

Marginal note:Approval — Minister of Finance

 The competent minister must not carry out any of the following transactions without the approval of the Minister of Finance:

  • (a) providing a guarantee under paragraph 4(a) of the Act;

  • (b) executing a transaction under any of paragraphs 4(b) to (f) of the Act, except if the transaction is executed under paragraph 4(f) of the Act through a transfer payment;

  • (c) amending a financial term of a transaction that was executed under any of paragraphs 4(a) to (f) of the Act, except if the transaction is executed under paragraph 4(f) of the Act through a transfer payment.

Program for Climate Change

Marginal note:Condition

 The competent minister must not, under section 5 of the Act, seek to acquire or hold a controlling or majority interest in a corporation.

Coming into Force

Marginal note:S.C. 2018, c. 27, s. 659

Footnote * These Regulations come into force on the day on which section 659 of the Budget Implementation Act, 2018, No. 2 comes into force, but if they are registered after that day, they come into force on the day on which they are registered.


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