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U.S. House Approves EXIM Reauthorization; Senate Approval Is the Next Step

U.S. House Approves EXIM Reauthorization; Senate Approval Is the Next Step

EXIM Bank Reauthorization on the Horizon

On Friday, November 15, the U.S. House of Representatives voted to reauthorize the Export-Import Bank of the United States (EXIM) for a 10-year period through 2029.  The House successfully passed H.R. 4863 United States Export Finance Agency Act of 2019 with a vote of 235-184.  In addition to a 10-year reauthorization of the EXIM’s operations and funding, the bill renames EXIM, the “United States Export Finance Agency,” and increases its lending authority from $135 billion to $175 billion over a seven-year period.

The bill is unlikely to be considered in the Senate, as both Senate Majority Leader Mitch McConnell and President Trump have indicated their opposition to the bill.  EXIM appears likely to continue its operations under another temporary budget continuing resolution (CR) to be considered before the current CR ends on November 21, 2019.

Despite broad support for EXIM reauthorization from both political parties, the White House, and a range of economic interests including the U.S. Chamber of Commerce and the AFL-CIO, differences over details of the House bill has divided support for the current reauthorization bill along partisan lines.  A June 2019 compromise draft authored by House Financial Services Committee Chairwoman Maxine Waters (D-California) and Ranking Member Patrick McHenry (R-North Carolina) fell apart in committee with some Republican committee members wanting greater constraints on EXIM financing for projects involving Chinese state-owned corporations, and some Democrat members seeking greater restrictions on financing for fossil-fuel related projects.

The House bill approved on Friday sought to address these concerns but only cleared committee on a partisan 30 – 27 vote, with McHenry and all Republican committee members withdrawing support because of concerns that the bill’s restrictions on China-related financing were not strong enough.  In the final House vote on H.R. 4863, only four Democrats voted no with only 13 Republicans voting yes with the majority.

A bipartisan bill to reauthorize EXIM (S. 2293) has also been introduced in the Senate but has yet to be considered by the Senate Banking Committee.

EXIM resumed full financing capacity in May 2019, when the U.S. Senate confirmed three Trump administration nominees to the EXIM board of directors, and re-established a lapsed quorum that had limited EXIM’s operations since 2015.

 

About EXIM Bank:

EXIM is an independent federal agency that promotes and supports American jobs by providing competitive and necessary export credit to overseas purchasers of U.S. goods and services. A robust EXIM can level the global playing field for U.S. exporters when they compete against foreign companies that receive support from their governments. EXIM also contributes to U.S. economic growth by helping to create and sustain hundreds of thousands of jobs in exporting businesses and their supply chains across the United States. In recent years, 90 percent of the total number of the bank’s authorizations has directly supported small businesses. Since 2000, EXIM has provided $14.8 billion to the U.S. Treasury after paying for all of its administrative and program expenses.

About Securitas:

As a certified EXIM broker, Securitas has decades of experience working with U.S. companies seeking to implement and understand EXIM’s guarantees and insurance policies to mitigate risk, finance international trade and achieve export-driven growth.  Because of the firm’s work in helping US companies increase exports and create jobs, Securitas was named EXIM Broker of The Year in 2015.

Securitas is ready to help businesses, particularly SMEs interested in pursuing an export strategy, learn how to access EXIM’s services.

 

 

 

 

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EXIM Bank Back to Full Financing Capacity

EXIM Bank Back to Full Financing Capacity

On May 8, the U.S. Senate formally confirmed three of the Trump administration’s nominees to the board of directors of the Export-Import Bank of the United States (EXIM).  The nominees include Kimberly A. Reed, confirmed as president and chairman of the board, Spencer T. Bachus III, and Judith DelZoppo Pryor.  Two additional nominees remain under consideration by the Senate.

The confirmation establishes a quorum of three members on the EXIM board of directors need for the bank to authorize transactions greater than $10 million.  EXIM had been operating since July 2015 without a full quorum and was limited in its ability to approve larger, typically long-term financing deals.

EXIM’s inability to fully conduct larger deals hindered its overall ability to support smaller transactions that typically assist small and medium-sized enterprises (SMEs) and to be self-funding—covering its operations on fees and interest it receives from its beneficiary clients.  In fiscal year 2018, EXIM reported $3.4 billion in transactions, down significantly from a high of $35.8 billion in 2015, and also forecast a $492.2 million operating deficit.  The Wall Street Journal reports that EXIM’s own internal estimates value the amount of lost transactions since mid-2015 at $21.5 billion.  While the restoration of EXIMs full financing capacity is welcome news to businesses seeking to increase American exports, EXIMs legal authorization will lapse on September 30, 2019 if Congress fails to reauthorize it past that date.

The Ex-Im Bank helps support U.S. exports through a range of programs, including guaranteeing loans to foreign buyers, credit insurance and some direct lending to foreign companies. To learn more about the range of products offered by the EXIM Bank, click here.

As a certified EXIM broker, Securitas has years of experience working with U.S. companies seeking to access EXIM’s services to help generate export-driven growth.  Offering services such as trade credit insurance and risk insurance, Securitas is able to provide these trade insurance solutions, often at no cost to the exporter, and then works with its customers structure insurance solutions that meet their goals of sustained and secure long-term growth.  In 2015, Securitas was named EXIM Broker of The Year.

Securitas is ready to help businesses, particularly SMEs interested in pursuing an export strategy, learn how to access EXIM’s services.

Links to these hearings:

EXIM Bank can get our exporters back in the game: https://bit.ly/2M3qrpY
Corporate Welfare Wins Again in Trump’s Washington: https://nyti.ms/2VW1C3z
Senate Revives Ex-Im Bank: https://on.wsj.com/2WhvhUb
The Senate is making a big mistake as it drags its feet over EXIM Bank confirmations: https://cnb.cx/2uJiAln

 

 

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Why Securitas?

As an insurance broker rather than an insurance agent, Securitas Global Risk Solutions is able to apply to multiple carriers to find the best contract, with the most coverage, for the least cost. A carrier’s agent can only advise you as to that carrier’s specific contract. We have a team of experts who are available to you 24/7 to answer any questions or concerns. Additionally, our service comes at no charge to you.

Securitas to Participate in EXIM Bank’s 2019 Annual Conference

Securitas to Participate in EXIM Bank’s 2019 Annual Conference

Securitas Global Risk Solutions is pleased to note that it will once again be participating in the 2019 EXIM Conference, to be held at the Omni Shoreham Hotel in Washington, DC from March 28-29, 2019.  The annual event showcases the work of the EXIM Bank and brings together over 1000 business leaders, government officials and foreign dignitaries from across the world with an interest in promoting U.S. exports.

The EXIM Bank is an independent and self-sustaining federal agency that provides a range of trade financing solutions  – including loan guarantees, working capital guarantees, direct loans, and export credit insurance – to promote the sale of U.S. goods and services to foreign buyers.  To learn more about the range of products offered by the EXIM Bank, click here.

The focus of this year’s conference will be the role of trade in promoting national security, as well as highlighting EXIM’s role in assisting American energy and manufacturing sectors.  The program will include keynote speeches, panel discussions, as well as ample networking time for participants to discuss best practices, and export opportunities.

As a certified EXIM broker, Securitas assists U.S. exporters to identify, implement and manage the appropriate EXIM export trade credit insurance program to meet their goals of sustained and secure long-term growth.  Securitas provides these services at no additional cost to the exporter.  In 2015, Securitas was named EXIM Broker of The Year.

Securitas is ready to help businesses, particularly small and medium-sized enterprises (SMEs) interested in pursuing an export strategy and learn how to access EXIM’s export trade credit insurance programs.

Pamela M. Bates Joins Securitas

Pamela M. Bates Joins Securitas

PB

Securitas Global Risk Solutions is delighted to announce that Pamela Bates has joined our team to provide customized solutions to mitigate credit and investment risk in global markets.  Pamela will be based in Virginia, where, in addition to risk mitigation, she will provide strategic and policy advice to assist our clients in navigating international business opportunities.  Working for the U.S. Department of State for over two decades as a foreign service officer, Pamela managed U.S. diplomatic efforts on energy, information technology and government procurement issues.   In addition, she earned an MBA from the Wharton School.  Pamela brings the skills, knowledge and network to support our clients’ international expansion goals.

International markets provide outstanding opportunities for U.S. exporters to diversify their customer base.  Securitas provides risk mitigation strategies to help reduce the uncertainty associated with approaching new markets.  Pamela will concentrate on solutions ranging from mitigating private sector credit risk, sovereign contract frustration risk, financing international trade, protecting equity investments against political risk, along with government relations strategies, to bring products to global markets.

Having previously lived and worked in France, Germany, Switzerland, and Brazil, Pamela has an extensive network of contacts around the world. She speaks Spanish, Portuguese, and French, along with English.  While a State Department employee, she taught classes on diplomatic tradecraft, including how to evaluate sources of risk.  In addition to her MBA, Pamela earned a Bachelor’s degree in Economics and Environmental Studies from Bowdoin College in Maine and a Master’s degree in International Affairs from the Johns Hopkins University, School of Advanced International Studies.

Thank you for welcoming Pamela to Securitas team.

The Export-Import Bank of the United States and Its Future

The Export-Import Bank of the United States (EXIM) is the official export credit agency of the United States. Its mission is to support American jobs by facilitating the export of U.S. goods and services. It does so by assuming credit risk, primarily through two programs – extending export credit insurance for exporters and providing working capital guarantees. These programs are available to companies of any size with 80% of authorizations are to SBA defined small business.

The Current State:
EXIM is congressionally authorized through 2019. While this seems several years from now, it’s important to note the last two authorizations have been tenuous, including a period in 2015 when its charter lapsed for six months. President Obama and congressional Democrats generally supported EXIM through this period, however there was an influential group of House Republicans that held up authorization process.

In addition to upcoming the re-authorization debate, EXIM also lacks three board members. Therefore, it does not have the quorum required to approve authorizations over $10MM.

The new administration brings renewed and increased speculation regarding the future of EXIM. President Trump campaigned on a platform of reduced government and seemed less friendly toward global trade. However, he heavily emphasized his business background and experience, which included strong support of U.S. manufacturers and small businesses, both of which he believes are critical to economic growth.

Against this backdrop, members of the Securitas team attended the EXIM 2017 Annual Conference on April 7-8 to learn more about the bank’s future.

Key Takeaways:

  • 95% of global population and 80% of global GDP is outside the U.S.
  • According to the Organization for Economic Co-operation and Development (OECD), there are 32 countries with Export Credit Agencies (ECAs) that compete with the U.S.
  • Exports will become even more critical in helping the U.S. grow its GDP, reduce the debt and balance the budget.
  • In order to compete globally against China, the U.S. needs to increase its support of exports. For example, the U.S. EXIM Bank supported $10 billion in authorizations in 2015. In comparison, China supported $500+ billion in exports through EXIM-China, China Development Bank and Sinosure).
  • Jobs created by export-related business tend to pay an estimated 18% more according to the International Trade Administration.

During a panel discussion regarding the future of EXIM, congressional members Jack Ryan, R-PA and Chris Collins R-NY both indicated President Trump fully supported the bank and recognized the need to support U.S. exporters though tax policy and regulation reform. They further indicated his commitment to a fully functioning bank by filling the vacancies on its board with immediate appointment approval of three new board members.

While there is still internal debate within the Republican caucus regarding the future of EXIM, it does appear the agency has the backing of President Trump and will continue to be an important tool in the U.S. government’s toolbox to support exports.

Securitas awarded 2015 Broker of the Year by Export-Import Bank

Securitas awarded 2015 Broker of the Year by Export-Import Bank

 

 

 

 

 

We’re honored to recognized for this award, and want to thank our clients, associates and friends as it wouldn’t have been possible without you.  Thanks again!

Export-Import Bank press release:

http://www.exim.gov/newsandevents/releases/2015/The-ExportImport-Bank-Announces-first-Recipients-of-Fiscal-Year-2014-Export-Awards.cfm