EX-IM BANK SIGNS AGREEMENT TO SUPPORT TRADE BANK OF IRAQ Program Will Cover U.S. Exports to Assist Iraqi Reconstruction
FOR IMMEDIATE RELEASE December 4, 2003
Phil Cogan or Bo Ollison (202) 565-3200
ROME, ITALY -- The Export-Import Bank of the United States (Ex-Im Bank) joined export credit agencies (ECAs) from 15 other nations today in signing framework agreements with the Trade Bank of Iraq (Trade Bank) and the Coalition Provisional Authority (CPA), providing for a total of over $2 billion in support for the Trade Bank to help facilitate Iraqi reconstruction.
Ex-Im Bank's Board of Directors last week approved a $500 million short-term insurance facility to support the export of U.S. goods and services to Iraq financed by the Trade Bank.This facility becomes effective with today's signing ceremony.
Ex-Im Bank is committed to participating with other nations in Iraq's reconstruction, said Ex-Im Bank Chairman Philip Merrill.Re-establishing Iraq's trade with its neighbors and the world is a key element in rebuilding Iraq's economy.Opening Ex-Im Bank's programs in Iraq will further this objective while fulfilling our mission to support U.S. exports and jobs.
Ex-Im Bank Chief Operating Officer and General Counsel Peter Saba, Trade Bank Chairman and President Hussein Al-Uzri, and CPA Director of Economic Policy Ambassador Marek Belka signed the framework agreement at the Italian Ministry of Economy and Finance. Also participating in the signing ceremony on behalf of Iraq was Iraq Minister of Trade Ali Allawi. Representatives from a number of ECAs including Italy, UK, Poland, Japan, Spain and Germany, among others, entered into similar framework agreements.Ex-Im Bank's sister U.S. Government agency the Overseas Private Investment Corporation also participated in the signing ceremony.
Ex-Im Bank took the lead in developing the framework agreement in close collaboration with the U.S. Department of Treasury and the CPA. It is good to see so many other countries adopting similar agreements. This demonstrates the high degree of international cooperation involved in rebuilding Iraq. This is a win for the Iraqi people, a win for multinational cooperation and a win for U.S. exporters, said Saba.
Interested U.S. companies should visit Ex-Im Bank's web site (www.exim.gov) to obtain a fact sheet on Ex-Im Bank's support for U.S. exports to Iraq and to receive notifications on export opportunities to Iraq.
The CPA established the Trade Bank on July 17, 2003 as an independent government entity created to facilitate the reconstruction of Iraq by providing trade financing services that Iraqi financial institutions are currently unable to offer.Initially, import transactions supported by the Trade Bank will consist of goods and services to fulfill the needs of the Iraqi Ministries and the CPA for the reconstruction of Iraq. These imports will be funded through the Development Fund of Iraq.
Ex-Im Bank's facility will utilize two of Ex-Im Bank's short term insurance products:
·Bank Letter of Credit Insurance Policies:Ex-Im Bank will insure letters of credit issued by the Trade Bank and confirmed by a commercial bank.This product provides comprehensive coverage to the confirming bank against the failure of the Trade Bank to pay the confirming bank under an irrevocable letter of credit.
·Financial Institution Buyer Credit Insurance Policies: Ex-Im Bank will provide comprehensive coverage on short term credits extended to TBI by an insured bank. U.S. exporters will receive payment under letters of credit issued by the insured bank.Certain provisions of the policy (reporting and claim filing periods) will be aligned to those of the Bank Letter of Credit policy.
·Working Capital: Ex-Im Bank will consider applications under its Working Capital Guarantee Program to support pre-export activities of subcontractors- particularly small businesses -- operating under U.S. government funded reconstruction projects.
·Third Country Obligors: Ex-Im Bank also will consider applications for financing of U.S. exports to Iraq under its loan guarantee, working capital, and credit insurance programs if there is a creditworthy source of repayment in a third country.
Ex-Im Bank is an independent federal government agency that helps finance 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 2003, Ex-Im authorized financing to support approximately $14.3 billion of U.S. exports worldwide.