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Updated January 28, 2022
Export-Import Bank of the United States (Ex-Im Bank)
Ex-Im Bank, the official U.S. export credit agency (ECA),
private capital. It also must be “fully competitive” with the
provides financing and insurance to facilitate U.S. goods
rates, terms, and other conditions offered by foreign ECAs
and services exports to support U.S. jobs, pursuant to a
(see “International ECA Landscape”). The Bank must
renewable, general statutory charter (Export-Import Bank
consider a proposed transaction’s potential economic
Act of 1945, as amended; 12 U.S.C. §§635 et seq.). It aims
impact to U.S. industry and its environmental impact,
to support U.S. exports when the private sector is unwilling
among other factors. The Bank, which views the U.S.
or unable to do so, and/or when competing against ECA-
content in an export contract to be a proxy for U.S. jobs,
backed foreign exporters. It is demand-driven, fee-based,
reduces its level of support based on foreign content in an
and backed by the U.S. government’s full faith and credit.
export contract. It also has a new, more flexible content
Background
policy specific to CTEP. The Bank has U.S. flag shipping
requirements, as well as reporting, notification, and other
Authorization. Congress extended the Bank’s general
obligations. In specific U.S. export focuses, the Bank must:
statutory authority for seven years, through December 31,
2026 (P.L. 116-94, Div. I, Title IV, enacted December 20,
make available not less than 30% of its total financing
authority each year to support small business exports;
2019). Absent reauthorization, the Bank generally would be
promote, and make available not less than 5% of its total
unable to approve new transactions, but it would be able to
financing authority each year to support, renewable
continue managing its existing financial obligations, and
energy exports;
perform certain other functions for “an orderly liquidation.”
support environmentally beneficial exports (no
Leadership. A five-member board of directors, drawing
percentage requirement);
from both political parties, leads the Bank. Members are
support exports to sub-Saharan Africa (no percentage
presidentially-appointed and Senate-confirmed. The Bank’s
requirement); and
president and first vice president serve, respectively, as the
aim to reserve up to 20% of its total financing authority
board’s chairman and vice chairman. The board needs a
for support that is made pursuant to CTEP.
quorum of at least three members to conduct business, such
Activity. For FY2021, the Bank reported authorizing $5.8
as to approve transactions above a certain threshold (now
billion for more than 2,000 transactions (see Figure 1), to
$25 million), make policies, and delegate authority. The
support some $9.2 billion of U.S. export sales. It also
2019 reauthorization provided alternative procedures in the
reported activity in statutory export focuses. For example,
event of a quorum lapse. An Advisory Committee and a
small businesses comprised 28.2% of authorizations by
Sub-Saharan Africa Advisory Committee support the board.
dollar amount and 86.9% by number; and CTEP comprised
The board is operating currently with an acting president
2.5% of authorizations by dollar amount. A lapse of the
and chair, an acting first vice president and vice chair, and a
board quorum (from July 2015 until its restoration in May
Senate-confirmed board director (whose term expires in
2019) constrained the Bank’s financing capacity previously.
January 2023). In the second session of the 117th Congress,
Figure 1. Ex-Im Bank Authorizations, FY2000-2021
committee-approved nominations for the president, the first
vice president, and a director are pending before the Senate.
Programs. Key Ex-Im Bank programs include:
direct loans to foreign buyers of U.S. exports (interest
rates are based on spreads set in international rules
above U.S. Treasury rates);
loan guarantees to lenders against default on loans to
foreign buyers of U.S. exports (lender usually sets rate);
insurance to protect U.S. exporters or financial
institutions against export-related risks; and
working capital guarantees of short-term loans.
Some deals may use underwriting techniques such as
project, structured, and supply chain finance. A new China
and Transformational Exports Program (CTEP) aims to
Source: CRS, based on data from Ex-Im Bank annual reports.
counter export subsidies provided by China and/or other
designated countries, by providing Bank financing or other
In 2021, the board extended temporary relief measures set
support in statutory “transformational” export areas, e.g.,
up in response to the Coronavirus Disease 2019 (COVID-
wireless communication equipment, including 5G.
19) pandemic to add liquidity and flexibility to current
Bank products, e.g., expanded program eligibility and
Statutory and Policy Requirements. Bank financing may
be extended only where there is a “reasonable assurance of
guarantee level for working capital guarantees.
repayment” and should supplement, not compete with,
Additionally, the Bank’s Advisory Committee now has
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Export-Import Bank of the United States (Ex-Im Bank)
China competition- and climate-focused subcommittees,
purported size, financing tactics, lack of transparency, and
and the Bank has a new strategically-oriented office to
operation outside of OECD rules. For instance, Chinese
source deals, especially for certain statutory export focuses.
ECAs are outside of the OECD tied aid rules and reportedly
Funding. Ex-Im Bank’s revenues include interest, risk
pair export credits with concessional financing to offer
premia, and other fees charged for its support. Revenues
buyers a more attractive financing package, placing
acquired in excess of forecasted losses are recorded as
competitive pressure on OECD ECAs. Efforts launched in
offsetting collections. The Bank reports contributing to the
2012 among the United States, China, and other leading
Treasury, since 1992, a net of $9.0 billion after covering all
export credit providers to develop new export credit rules
expenses, loan-loss reserves, and administrative costs. (This
were halted in 2020, due to diverging positions on core
is on a cash basis, and different from the amount calculated
issues, especially transparency into export financing terms.
on a budgetary basis.) Offsetting collections did not fully
In 2020, official medium- and long-term export credits
cover program and administrative costs in FY2018-2021.
declined globally by one-third from 2019, amid the
For FY2021 (P.L. 116-94), the Bank had a limit of $110.0
pandemic and greater short-term and working capital
million for administrative expenses, and $6.5 million in
financing. China’s ECA financing reflected this decline
funding for its Office of Inspector General (OIG). For
($18 billion in 2020 versus $33.5 billion in 2019), but
FY2022, the President’s budget request provides a limit of
remained dominant (see Figure 2).
$114.0 million for administrative expenses; $10.0 million
Figure 2. Export Financing by Selected ECAs in 2020
for program budget (last received by the Bank in FY2013),
for certain transactions where expenses are expected to
exceed receipts, mainly to offset Chinese practices and
support clean energy exports; and $6.5 million for the OIG.
Full-year FY2022 appropriations have yet to be enacted.
Risk Management. The Bank monitors credit and other
transaction risks, maintains reserves against losses, and
reports its default rate quarterly. If its default rate reaches
2%, the Bank faces an immediate freeze on its lending cap.
In FY2021, the Bank had loss reserves of $3.1 billion (7.4%
of total exposure), up from $2.9 billion (6.2% of total
exposure) in FY2020. Its default rate was 1.377% at the end
of FY2021, up from 0.819% in FY2020; the Bank attributes
the rising default rate to COVID-19-related economic
effects. The FY2022 budget request includes a temporary
increase of the default rate cap from 2% to 4% for the Bank
to continue its activities while it addresses defaults.
International ECA Landscape. Ex-Im Bank abides by the
Organisation for Economic Co-operation and Development
(OECD) Arrangement on Officially Supported Export
Source: CRS, based on Ex-Im Bank, 2020 Competitiveness Report.
Credits. First established in 1978, the Arrangement aims to
Note: Data are for new medium- and long-term official export credit
ensure a level playing field for exporter competition.
financing, and subject to analytic assumptions and other limitations.
Applying to ECA financing with repayment terms of two
*Brazil abides by the Arrangement’s Aircraft Sector Understanding.
years or more, the Arrangement is a framework that places
Policy Debate and Issues for Congress
limitations on financing terms and conditions, and has
Ex-Im Bank has been subject to ongoing policy debate.
provisions on transparency, tied aid (concessional financing
Supporters argue that the Bank fills gaps in private-sector
linked to procurement from the donor country), and other
financing for exports and helps U.S. firms compete against
issues. Under World Trade Organization (WTO) rules,
foreign ECA-backed firms, while managing risks and
Arrangement-compliant export credit practices are not
advancing other U.S. policy goals. Critics argue that the
deemed prohibited export subsidies.
Bank crowds out the private sector, picks winners and
Differences among ECAs’ programs and policies may be
losers, is corporate welfare, and imposes taxpayer risks.
competitiveness levers when ECAs have more
Issues for the 117th Congress include:
implementation flexibility under the rules, e.g., on content
potential Senate consideration of board nominations;
policies. Over time, many ECAs have eased or removed
the Bank’s competitiveness in supporting U.S. exports,
domestic content requirements, in part because of more
balanced with its risk management;
globalized input sourcing. Many U.S exporters, while
the Bank’s support for statutory export focus areas,
lauding the Bank’s programs and policies in other respects,
response to China-related competitiveness challenges,
view its foreign content approach as the strictest among
and response to COVID-19-related financial risks;
ECAs and a detractor from its competitiveness. Policy
options to address “unfair” competition from foreign
modifications may raise competing stakeholder interests.
ECAs under existing rules and potential new tools; and
Unregulated ECA financing has grown as non-OECD
potential changes to the Bank’s programs, policies, and
countries operate ECAs and OECD members provide
activity, and implications for the Bank’s mission.
financing outside of the OECD rules. China’s ECA activity
Shayerah I. Akhtar, Specialist in International Trade and
especially raises competitiveness concerns due to its
Finance
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Export-Import Bank of the United States (Ex-Im Bank)
IF10017
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https://crsreports.congress.gov | IF10017 · VERSION 29 · UPDATED