EXIM's shipping requirements are based on 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 export credit transactions:
- Direct loans regardless of term or amount,
- Guarantees and medium-term insurance valued over $20,000,000 (excluding exposure fee),
- Guarantees with repayment terms greater than seven (7) years (except as noted below), and
- Credit Guarantee Facility (CGF) disbursements over $20,000,000 (excluding exposure fee) up to $25,000,000.
The following transactions are exempt from U.S. flag shipping requirements:
- Short-term insurance, working capital guarantees, and supply chain guarantees,
- Guarantees and medium-term insurance not exceeding $20,000,000 (excluding exposure fee) and (i) with a repayment period of seven (7) years or less, or (ii) over seven (7) years due to the transaction qualifying for a longer repayment term under EXIM's Environmental Exports Program, Transportation Security Program, or Medical Equipment Initiative, and
- CGF disbursements not exceeding $20,000,000 (excluding exposure fee).
Make More in America Transactions:
U.S. flag shipping requirements and exemptions as explained above also apply to certain imports that EXIM finances under the Make More in America initiative to strengthen the domestic production capacity of current and potential U.S. exporters and facilitate U.S. jobs in the process. The U.S. flag shipping requirement does not apply to imported commercial off the shelf (COTS) items purchased in the U.S.
EXIM strongly encourages interested parties who anticipate receiving a financing commitment from EXIM 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 interested parties 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.
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. 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 below referenced guidance document.
Contact MARAD at email@example.com