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EXIM Bank's shipping requirements are based on the sense of Congress expressed in Public Resolution 17 (PR-17) enacted in 1934 concerning U.S. flag shipping of certain U.S. government agency supported export cargos.  Only exports shipped on ocean-going vessels must follow the U.S. shipping requirements since the purpose of PR-17 is to maintain a viable U.S. merchant marine.  U.S.-flag shipping costs are eligible for EXIM support as a U.S. services export.

Shipping on U.S. flag vessels is required for the following EXIM Bank transactions:

  1. Direct loans regardless of term or amount and
  2. Guarantees valued over $20,000,000 (excluding EXIM Bank exposure fee) or with repayment terms greater than seven (7) years, unless the export qualifies for a longer repayment term under EXIM’s Medical Equipment Initiative, Environmental Exports Program, or Transportation Security Program.

The following transactions are exempt from U.S. flag shipping requirements:

  1. Credit Guarantee Facilities, regardless of amount;
  2. Short-term insurance, regardless of amount;
    1. Medium-Term Insurance, regardless of amount or term; and
  3. Guarantees of up to $20,000,000 (excluding EXIM Bank exposure fee) with a repayment period of seven (7) years or less.

EXIM Bank strongly encourages exporters and foreign buyers who anticipate receiving a financing commitment from EXIM Bank to contact U.S.-flag carriers as early as possible to obtain bids for transporting their ocean-bound cargos in order to obtain the most favorable rates and shipping schedule.

The U.S. Maritime Administration (MARAD) offers facilitation services to assist exporters and foreign buyers with obtaining suitable shipping arrangements on U.S.-flag vessels.  MARAD may (as part of the facilitation process) work with shippers and U.S.-flag carriers to identify any flexibility in schedules, rates, routes and capacity that would facilitate U.S.-flag vessel availability.  In addition, MARAD has developed certain options, such as the use of Advance Shipping Plans, Booking Subject to Completion, and Service Contracts as part of its facilitation process.  Please refer to a description of these options in www.maritime.dot.gov/cargo-preference/civilian-agencies/maritime-administration-us-flag-shipping-guidance-shipments .

Under some limited circumstances, EXIM may approve financing of goods shipped on foreign-flag vessels pursuant to a MARAD certification of unavailability of U.S.-flag carriage or other MARAD determination (historically referred to as “waivers”). Shippers should submit requests for a certification or determination to MARAD pursuant to the criteria and procedures set forth at U.S. Department of Transportation, Maritime Administration (link is external).

If a shipper disagrees with MARAD’s decision regarding a request to use non-U.S.-flag carriage, a shipper can request MARAD to reconsider that decision, as specified in the above referenced guidance document.  MARAD publishes the outcome of requests for determinations on its website at www.maritime.dot.gov/cargo-preference/civilian-agencies/ex-im-bank-determinations (link is external)

For more information: Maritime Administration (MARAD) (link is external)

www.maritime.dot.gov/cargo-preference/civilian-agencies/maritime-administration-us-flag-shipping-guidance-shipments