Important Rule Change Will Help Maintain U.S. Competitiveness
FOR IMMEDIATE RELEASE April 6, 2008
Marianna Ohe (202) 565-3200
WASHINGTON, D.C. -- The Export-Import Bank of the United States (Ex-Im Bank) now can support an increased portion of the local (buyer country) costs in U.S. export contracts that the Bank is helping to finance. Local costs include such items as site preparation and construction services provided in the importing country.
The Bank's board of directors approved the increase in eligible local cost coverage from 15 percent to 30 percent of the U.S. export contract. The board action followed a change in local cost guidelines by the Organization for Economic Development and Cooperation (OECD) for officially supported export credits, which became effective January 1, 2008.
This rule change will help U.S. exporters remain competitive with foreign firms that are supported by their respective export credit agencies, said John A. McAdams, Ex-Im Bank chief operating officer and senior vice president for Export Finance.
The new rule, which is being implemented by Ex-Im Bank as well as competing export credit agencies (ECAs) in other countries, is effective for a three-year period after which the OECD will conduct a formal review of the new provision's use.
The policy change followed a review process including consultation with such interested parties as exporters and labor unions. Support for local cost is available for long-term loan guarantees and for medium-term guarantees on a case-by-case basis.
Ex-Im Bank is the official export-credit agency of the United States. The independent, self-sustaining federal agency, now in its 74th year, helps create and maintain U.S. jobs by financing the sale of U.S. exports, primarily to emerging markets throughout the world, by providing loan guarantees, export-credit insurance and direct loans. In fiscal year 2007, Ex-Im Bank authorized $12.6 billion in financing to support an estimated $16 billion of U.S. exports worldwide. For more information, visit www.exim.gov.