The Import-Export Bank of the United States: Priorities and Programs to Support Business and Jobs in the United States | Foley & Lardner LLP

The Export-Import Bank of the United States (EXIM) has released its Annual report 2020 highlighting the results and priority initiatives of EXIM in its mission to support American employment by facilitating the export of American goods and services. EXIM, an independent federal government agency, is authorized by Congress until 2026 to maintain $ 135 billion in credit risk. Through direct loans, guarantees, credit insurance and supply chain finance support, EXIM finances US exporters and suppliers who cannot arrange export finance from sources. private without the credit support of EXIM. EXIM also provides foreign buyers of US goods and services with credit support so that US exporters can compete even in today’s environment where foreign credit agencies, such as those in the People’s Republic of China, compete. foreign in foreign markets.

Key tests for EXIM funding

To be eligible for EXIM funding, one must assess that EXIM funding promotes additional exports (called “additionality”) – in other words, the transaction is unlikely to proceed without EXIM support. In addition, the exported goods and services must be “made in the United States”, as tested to have an adequate content in the United States as measured according to the guidelines. EXIM funding cannot have a negative economic impact on domestic industries. Finally, there are identified countries where EXIM funding is not available.

Congress mandates

EXIM has reported on its results under several Congress mandates:

  1. Small business mandate. Effective January 1, 2021, EXIM’s mandate to finance small businesses was increased from 25% to 30% of the entire EXIM lending, guarantee and insurance authority. About 90% of the number (and almost 39% of the guarantee authority) of authorizations in 2020 directly supported small businesses.
  2. China and Transformative Technologies Mandate Program. In FY2020, EXIM established a new China and Transformational Exports program with a 20% Mandated Total Funding Authority ($ 27 billion out of $ 135 billion). The program is designed to neutralize subsidies from China and establish US leadership in certain technologies.

    The transformational technologies to be supported under the China program are: artificial intelligence, biotechnology, biomedical sciences, wireless communication equipment, quantum computing, renewable energies, energy efficiency and energy storage. energy, semiconductor and semiconductor machine manufacturing, emerging financial technologies and related technologies, water treatment and sanitation and related technologies and infrastructure, high performance computing and related goods and services.

  3. Mandate for environmentally friendly goods and services. EXIM supports U.S. exports of renewable energy equipment, wastewater treatment projects, air pollution technologies, waste management services, and other environmental goods and services. In fiscal 2020, EXIM authorizations for environmentally beneficial goods and services totaled $ 92.6 million (approximately 1.7% (1.7%) of EXIM authorizations for fiscal 2020).
  4. Mandate for Sub-Saharan Africa. In fiscal 2020, EXIM authorized $ 137 million for a total of 69 transactions in support of U.S. exports to the region. One project highlighted in EXIM’s annual report was the export of design, engineering and construction services for a rural electrification project in the Republic of Senegal; a small Illinois-based company with fewer than 20 employees will export U.S. goods and services (some contracted through a large U.S. supplier) and in doing so, support approximately 500 jobs in 14 states.

EXIM also reported that in 2020:

  • EXIM’s credit approvals in 2020 supported approximately 37,000 US jobs.
  • The board approved new directives to determine “additionality” – the likelihood that a transaction would not proceed without EXIM’s support.
  • The board voted in favor of a new tightly tailored 51% content policy (share of content exported to the United States) specific to the China program.
  • EXIM reported on several initiatives related to COVID-19, including:
    • A new bridge financing program to meet demand for US export finance as economic conditions remain uncertain.
    • EXIM’s guarantee has temporarily increased from 90% to 95% as part of its supply chain finance guarantee program and working capital guarantee program.
  • At the end of fiscal 2020, 92 lenders were participating in the EXIM Working Capital Loan Guarantee Program to finance American exporters.

Export finance and supply chain finance contribute to the success of US exporters and suppliers. EXIM’s funding initiatives promise to ease US business and even the playing field against foreign competitors. Congress made a historic commitment to the role of EXIM and mandated EXIM to provide significant credit support of up to $ 135 billion. Businesses are encouraged to learn more and take advantage of EXIM’s credit support programs.

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