Foreign Content Policy for Medium- and Long-Term Exports

Products & Policies | Ex-Im Bank Policies | Foreign Content

Foreign Content Policy for Short-Term Exports

Ex-Im Bank’s mission is to support U.S. jobs through exports.  To fulfill its jobs mandate, Ex-Im Bank relies on U.S content as a proxy to evidence support for U.S jobs.  Accordingly, there are eligibility criteria and limitations on the level of foreign content that may be included in transactions supported by Ex-Im Bank.

Ex-Im Bank offers two short-term programs -- export credit insurance and Working Capital.  Consistent with the Bank’s Charter to consider the “unique business requirements of small businesses” in formulating its policies, Ex-Im Bank has two separate short-term content policies for:  (1) small business exporters as defined by SBA and (2) non-small business exporters. 

I.  SMALL BUSINESS ELIGIBILITY CRITERIA

To be eligible for Ex-Im Bank support:

• Each product must be shipped from the U.S.to a foreign buyer; and
• Each product must have more than 50% U.S content based on all direct and indirect costs, including but not limited to labor, materials, research and administrative costs, exclusive of profit; or
• The aggregate content of all products in an invoice must be more than 50% U.S. based on all direct and indirect costs, including but not limited to labor, materials, research, and administrative costs, exclusive of profit.; or
• If the U.S. content of any product or aggregate U.S. content of all products in an invoice is 50% or less, only the U.S. content is eligible.

[Note:  Value added after export from the U.S., as well as foreign charges such as import duties, taxes, and inland freight are excluded from cover.]
Level of Support                
If the product or the aggregate products in a single invoice meets the more than 50% U.S content eligibility threshold, 100% of the gross invoice value (sales price) is normally eligible for coverage at the insured percentage that is applicable.  If the U.S. content of the product or aggregate products in a single invoice is 50% or less, Ex-Im may cover the value of the U.S. content only at the insured percentage that is applicable.   Based on the applicable program or policy type chosen, standard percentages of coverage are 90 to 95%.
II.  NON-SMALL BUSINESS ELIGIBILITY CRITERIA
To be eligible for Ex-Im Bank support:

• Each product must be shipped from the U.S. to a foreign buyer;
• Each product itemized on an invoice must be produced or manufactured in the U.S.; and
• Each product must have more than 50% U.S. content based on labor, material, and direct overhead, exclusive of any profit).

[Note:  Value added after export from the U.S., as well as foreign charges such as import duties, taxes, and inland freight are excluded from cover.]

Level of Support

If the product meets the eligibility criteria, 100% of the gross invoice value (sales price) is normally eligible for coverage at the insured percentage that is applicable. Based on the applicable program or policy type chosen, standard percentages of coverage are 90 to 95%.

Example of Ex-Im’s ST Content Policy for Non-Small Business and Small Business

Below is an illustrative example of a medical equipment transaction seeking Ex-Im Bank support involving a small business exporter and a non-small business exporter. Export-Import Bank of the United States

The following discussion highlights how the eligibility criteria, calculation of eligibility, and the level of support vary for non-small and small business exporters.

Item #1-
Non- Small Business:  This item is eligible for 100% of the Sales Price ($17,400) because (i) the calculation of eligible U.S. content* ($6,000/$11,000=55%) was more than 50%; and (ii) the item was produced in the U.S.

Small Business:  This item is eligible for 100% of the Sales Price ($17,400) because the calculation of eligible U.S. content** ($9,000/$14,500=62%) was more than 50%.

Item #2-
Non- Small Business:   This item is ineligible for any Ex-Im support because the calculation of eligible U.S. content* ($2,000/$10,000=20%) was less than 50%.
 
Small Business:  Because the calculation of eligible U.S. content** ($3,000/$11,500=26%) was less than 50%, this item is only eligible for 100% of the U.S. costs ($3,000).

Item #3-
Non- Small Business:  Even though the calculation of eligible U.S. content* ($10,000/$13,000=77%) was more than 50%, the item is ineligible for any Ex-Im support because the core product was produced outside the U.S.

Small Business:    This item is eligible for 100% of the Sales Price ($24,000) because the calculation of eligible U.S. content** ($16,000/$20,000=80%) was more than 50%.

Total Transaction Support-

Non-Small Business          $17,400

Small Business:                  $44,400

Updated: July 2010