FOR IMMEDIATE RELEASE September 23, 2001
Cheryl Crispen (202) 565-3200
The Export-Import Bank of the United States (Ex-Im Bank) today took immediate action in response to changes in global aviation insurance in the wake of the events of September 11, 2001. Ex-Im Bank is notifying all airlines operating Ex-Im Bank-financed aircraft that Ex-Im Bank will not, for a period of seven days (subject to revocation on 24 hours notice), enforce its rights to require third-party liability war risk insurance coverage above that which is currently available.
As a direct consequence of the September 11, 2001 terrorist attacks, aviation insurers gave notice to airlines worldwide that liability insurance arising from acts of war and terrorism (war risk liability insurance) is cancelled effective 7 p.m. Eastern Daylight Time today. Similarly, insurance coverage for loss of aircraft arising from war risks is being cancelled. These coverages can be reinstated at a higher cost, but coverage for third-party war risk liability is severely limited.
Ex-Im Bank is the largest financier of U.S.-manufactured aircraft, said Ex-Im Bank Chairman John E. Robson. Ex-Im Bank hopes that during this seven-day period a longer term solution to this critical problem will be found either in the insurance markets themselves, through action by governments who have not yet acted to provide coverage for their domestic carriers, as the United States has done, or by concerted international action.
Ex-Im Bank currently supports more than $17 billion of financings for more than 500 U.S.-manufactured aircraft to approximately 70 non-U.S. airlines in over 45 foreign countries. Ex-Im Bank is requiring airlines to obtain the maximum amount of third-party war risk liability insurance available in the marketplace and participate in any home government program offering such insurance. Without today's action, a significant number of airlines operating Ex-Im Bank-financed aircraft would not be able to obtain required third-party war risk liability insurance and would be in violation of their contractual obligations to Ex-Im Bank.
In addition, Ex-Im Bank's action does not affect the rights of any other parties, including other financiers, nor does it affect an airline's obligation to comply with all laws and regulations in all applicable jurisdictions. Ex-Im Bank does not by this action make any comment on any aspect of an airline's business or operations, including any decision by an airline to operate or not operate any aircraft or any route.
Ex-Im Bank is an independent U.S. government agency that helps finance the sale of U.S. exports primarily to emerging markets throughout the world, by providing loans, guarantees, and insurance. Ex-Im Bank supported $15.5 billion in U.S. exports in fiscal year 2000.