Exporters Can Pursue Trade Goals with Confidence
Legislation passed just before the end of 2019 has reauthorized the Export-Import Bank of the United States (EXIM) for a seven-year period, until December 31, 2026, the longest authorization in the institution’s history. EXIM reauthorization was part of the nearly $1.4 trillion federal appropriations package passed by Congress and signed by President Trump on December 20, 2019.
In addition to the seven-year authorization extension, the legislation also includes a process that allows EXIM to continue operations in the event that the bank’s Board of Directors lacks a quorum. (EXIM’s quorum lapsed in 2015, significantly limiting the bank’s lending operations, and was only restored in mid-2019).
EXIM’s authorization also includes a number of key policy changes critical to bipartisan congressional support as well as support from the administration. These include:
1. A goal of increasing small business exporters participation in EXIM projects, with a target of increasing small business exports to 30% (from the current 25%) of total EXIM supported exports by 2021.
2. An additional goal for EXIM to reserve 5% of its exposure authority to support renewable energy, energy efficiency, and energy storage technology exports.
3. A new initiative, called the “Program on China and Transformational Exports” which reserves 20% of EXIM exposure authority to assist American exporters to compete directly with Chinese exports and to assist exporters in innovative technologies, such as artificial intelligence, biotechnology and biomedical sciences, wireless communications, quantum computing and high performance computing, renewable energy, energy efficiency and storage, semiconductor manufacturing, emerging financial technologies, and water treatment and sanitation.
4. A requirement that EXIM consult with the State Department to assess risk to national interest of any proposed transaction over $25 million in which the end user, obligor, or lender is controlled by, or a business entity of the Chinese government.
With an extended period of authorization and full financing capacity, US exporters and their overseas clients can more confidently access and utilize EXIM’s services. EXIM Chair Kimberly Reed noted, ““This legislation ensures EXIM’s authority to support jobs and keep America strong through exports for a long time to come.” In addition to the initiatives noted above, the EXIM Bank helps support US 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 active EXIM broker, Securitas has years of experience working with ExIm’s various trade credit insurance policies to ensure U.S. companies generate export-driven growth. In 2015, Securitas was named EXIM Broker of The Year.
Securitas is ready to help companies, particularly small businesses interested in pursuing an export strategy, learn how to access EXIM’s services.