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CHAPTER IV-EXPORT-IMPORT BANK
Part 401 402
Procedures. Extension of credit.
PART 401-PROCEDURES Sec. 401.1 Types of credit assistance available. 401.2
How to apply. 401.3 Principals, agents, certifications and
covenants. AUTHORITY: $$ 401.1 to 401.3 issued under sec. 2, 59 Stat. 526, as amended; 12 U. S. C. 635.
SOURCE: $$ 401.1 to 401.3 appear at 22 F. R. 6863, Aug. 24, 1957. $ 401.1 Types of credit assistance avail
able. (a) Direct financing. The Bank engages in direct financing of exports when it purchases from an exporter without recourse upon him a portion of the notes or acceptances of a foreign importer received by the exporter in connection with an export sale. In a like manner, direct financing of exports is provided by the Bank when it makes loans to a United States or foreign private entity or foreign government for purchases of United States materials, equipment or services destined for a project abroad. Similarly, the Bank directly finances imports when it purchases the obligation of a United States importer in connection with an import transaction.
(b) Guaranties. In lieu of direct purchase of obligations by the Bank, the financing of either exports or imports is frequently provided through guaranties extended directiy to exporters or
importers, or through purchase of the obligations from them by a commercial bank or other financial institution in the United States under an agency or guaranty agreement with the Export-Import Bank. Such guaranties may cover all of the risks of repayment or, if so requested, may be limited to coverage only of dollar transfer or other specified risks.
(c) Advance commitments. United States exporters who expect to bid on specific foreign business may consult the Export-Import Bank prior to submission of bids in order to obtain an understanding of the conditions under which the Bank might consider the granting of a credit or a guaranty. In instances in which sufficient information is supplied with respect to the prospective buyer and the proposed transaction, the Bank will issue a commitment to enable the exporter to make a bid or negotiate a contract of sale. § 401.2
How to apply. (a) Method of application. Applications to Export-Import Bank should be in writing but no application form is prescribed. The applicant should present all the information on which he relies to justify financial assistance by the Bank. Additional information, if required, will be requested by the Bank after review of the initial submission. Alternatively, preliminary inquiry may be made in a letter to the Bank outlining
the proposed transaction. On the basis individual employees or staff members of the information contained in such a
to the extent of their regular remuneraletter, the Bank should be able to indi- tion, any commission, fee, or compensacate whether it would be advisable for tion in connection with obtaining such the applicant to take the time and incur financial assistance, except such amounts the expense involved in preparation of as are included in the certificate, such a complete application.
certificate to set forth the name and ad
dress of each such person or persons, to(b) Classes of applicants. Applicants may be divided into three general types
gether with the description of the serv
ices rendered, accompanied by the verias follows: (1) United States exporters
fication of the recipient or beneficiary of or importers, (2) private firms, whether
an agreement to pay named in the cerdomiciled in the United States or abroad, that desire to purchase United States
tificate required hereunder.
(ii) No employee, agent, attorney, or materials, equipment, or services for
consultant, of such person who perutilization in a project abroad, and (3)
formed services in connection with obforeign governments or their agencies
taining such financial assistance was a that wish to purchase United States ma
Director, officer, or employee of the Bank terials, equipment, or services for utiliza
during the period of one year immedition in a project abroad.
ately preceding the authorization of the $ 401.3 Principals, agents, certifications
extension of such financial assistance. and covenants.
(2) Upon determination by the
Board of Directors that any commission, (a) Principals. Applications for cred- fee, or other compensation paid or agreed its must be signed by the principals in- to be paid in connection with the obvolved. In the case of a corporation or taining of such financial assistance and similar entity, a duly authorized officer disclosed in the certification required of the entity shall sign on its behalf. In under this subsection is unreasonable, the case of a government, a duly accred
the person in whose favor the extension ited representative of the government of financial assistance has been authorshall sign on its behalf. In the case of a ized shall as a condition precedent to the United States exporter seeking financing utilization of such assistance, effect an of the sale of goods to a foreign buyer adjustment satisfactory to the Bank in on credit terms, the exporter shall con- such commission, fee, or other compensastitute the principal.
tion. (b) Agents. The Bank prefers to (3) Every person, including any fordeal with principals, especially in nego- eign government or agency thereof, intiations leading up to the granting of a dividual, partnership, corporation, or loan, but the applicant has the right to association, in whose favor the Bank engage attorneys, engineers, or other authorizes the extension of financial qualified persons to advise and aid in assistance within the purview of the preparing material required by the Bank Export-Import Bank Act of 1945, as in connection with a loan application or amended, shall, as a condition precedent with the operation of a loan which has to each advance: been granted.
(i) If such person is the supplier of (c) Certification. (1) Every person, the equipment, materials, or services including any foreign government or an with respect to which the advance has agency thereof, individual, partnership, been requested, certify that, other than corporation, or association, in whose as disclosed to the Bank, no payments, favor the Bank authorizes the extension allowances, or charges in connection with of financial assistance within the pur- the sale of, or obtaining the contract to view of the Export-Import Bank Act of sell, such equipment, materials, or serv1945, as amended, shall, as a condition ices have been paid or granted or agreed precedent to the utilization of such fi- to be paid or granted by such person to nancial assistance, represent and certify any other person, except such person's to the Bank in such form and at such regular full-time individual employees or time or times as may be prescribed by staff members to the extent of their the Bank that:
regular remuneration. (i) Such person has not paid or agreed (ii) If such person is not the supplier to pay to any person including any in- of the equipment, materials, or services dividual, partnership, corporation, or with respect to which the advance has association, except its regular full-time been requested,
(a) Certify that such person has paid pensation satisfactory to the Bank for or agreed to pay for the equipment, ma- bona fide professional, technical, or terials, or services with respect to which other comparable services incident to the advance has been requested, no more presenting the merits of the application and no less than the amounts which such and operation of the credit and such perperson has certified to the Bank as the son will certify to the Bank any such purchase price and all payments, al- amounts, such certificates to set forth lowances, and charges connected there- the name and address of each such perwith.
son together with a description of the (b) Furnish the Bank with a certifi- services rendered, accompanied by the cate of the supplier of the equipment, verification of the recipient or benematerials, or services, with respect to ficiary of an agreement to pay named in which the advance has been requested, the certificate required hereunder. addressed to the Bank and setting forth (2) Upon a determination by the that such supplier has not, other than Board of Directors that any commission, as disclosed to the Bank, paid or granted fee, or other compensation paid or or agreed to pay or grant to such person agreed to be paid in connection with the or any other person, except such sup- obtaining of such financial assistance plier's regular full-time individual em- and disclosed in the certification or covployees to the extent of their regular enants required under this sub-section is remuneration, any payments, allowances unreasonable, the person in whose favor or charges in connection with the sale the extension of financial assistance has of, or obtaining the contract to sell, such been authorized shall, as a condition equipment, materials, or services.
precedent to the utilization of such as(d) Covenants. (1) Every person, in
sistance, effect an adjustment satisfac
tory to the Bank in such commission, cluding any foreign government or an
fee, or other compensation. agency thereof, individual, partnership,
le) Remedies and penalties. (1) The corporation, or association, in whose
certificates, representations, and covefavor the Bank authorizes the extension of financial assistance within the pur
nants provided for in this part are
deemed to be material to and an inview of the Export-Import Bank Act of
ducement for the extension by the Bank 1945, as amended, shall, as a condition
of such financial assistance and falsifiprecedent to the utilization of such financial assistance, covenant and agree
cations in any such representation or with the Bank in such form as may be
certificate or the breach of any such cov
enant shall entitle the Bank to cancel prescribed by the Bank that:
any commitment for the extension of (i) Such person will not during the
financial assistance to such person or period of two years following the author
such additional remedies as may be proization of the extension of such financial
vided in the credit agreement. assistance employ or enter into any
(2) The remedies of the Bank prounderstanding to employ any person who
vided for in this section and in the conis a Director, officer, or employee of the
tract shall be in addition to any liability Bank or was a Director, officer, or employee of the Bank during the period of
or penalty provided by law including
those provided for in 18 U. S. C. 1001.' one year prior to the authorization of the extension of such financial assist
(f) List of loans, borrowers, and repance, unless such employment is ap
resentatives before the Bank. The Bank proved in writing by the Bank after full
will maintain for public inspection durdisclosure to the Bank of all facts in connection therewith which the Board of
1 Section 18 U. S. C. 1001 provides: "WhoDirectors shall deem to be relevant.
ever, in any matter within the jurisdiction
of any department or agency of the United (ii) Such person has not paid or
States knowingly and willfully falsifies, agreed to pay and will not pay or agree conceals or covers up by any trick, scheme, or to pay to any person including any indi- device a material fact, or makes any false, vidual partnership, corporation, or as- fictitious or fraudulent statements or redsociation except its regular full-time in- resentations, or makes or uses any false writdividual employees or staff members to
ing or document knowing the same to conthe extent of their regular remuneration,
tain any false, fictitious or fraudulent state
ment or entry, shall be fined not more than any fee, commission, or compensation in
$10,000 or imprisoned not more than five connection with obtaining such financial
years, or both." (June 25, 1948, ch. 645, assistance, except for reasonable com- sec. 1, 62 Stat. 749.)
ing regular hours of business the follow- (b) The Bank generally makes loans ing information with respect to its only for specific purposes. A corollary operations:
of this principle is that disbursements (1) The name of each person includ- under a commitment by the Bank are ing any government, government agency, made only upon receipt of satisfactory individual, partnership, corporation, or evidence that the purpose of the loan association in whose favor the Bank has have been or are being carried out. authorized financial assistance;
(c) The Bank makes only loans which (2) The amount of such financial as- offer reasonable assurance of repayment. sistance, the undisbursed part of such This assurance usually involves not only amount, the principal outstanding; the credit-worthiness of the borrower
(3) The purpose of such financial as- but also the ability of the borrower to sistance; and
obtain the necessary dollar exchange to (4) The names of all persons who have service the loan. been certified to the Bank as authorized (d) As a general rule, the Bank exto act for or on behalf of the respective tends credit only to finance purchases recipients of financial assistance from of materials and equipment produced or the Bank and of all persons listed in cer- manufactured in the United States totificates required in connection with gether with technical services of Ameriparagraphs (c) (1) (i) and (d) (1) (ii) can firms and individuals, as distinof this section.
guished from expenditures for goods and
services in the borrowing country or for PART 402-EXTENSION OF CREDIT
purchases in third countries.
(e) The Bank supplements and enSec.
courages the utilization of private capi402.1 Basic principles.
tal in export and import trade and in 402.2 Maturities, interest rates, and partici
foreign investment generally. Financial pation.
assistance is not extended by the Bank 402.3 Marine transportation and insurance.
for any purpose if capital for the same AUTHORITY: $$ 402.1 to 402.3 issued under purpose is believed to be obtainable from sec. 2, 59 Stat. 526, as amended; 12 U. S. C.
private sources on reasonable terms. 635.
(f) In the absence of a clear showing SOURCE: $ $ 402.1 to 402.3 appear at 22 F. R. to the contrary, it is assumed that credit 6864, Aug. 24, 1957.
for periods of less than one year may § 402.1 Basic principles.
be obtained on reasonable terms from
private sources. Accordingly, the Bank The Export-Import Bank is guided in generally limits its consideration to its operations by the following basic transactions justifying credit of one year principles:
or more. (a) The Bank extends loans, guaran- (g) The Bank is prepared to consider ties, or financial assistance in other proposals for the purchase of portions forms for the primary purpose of pro- of its portfolio by commercial banks or moting the export and import trade of other private investors. the United States. This foreign trade may be assisted, for example, by financ
$ 402.2 Maturities, interest rates, and ing specific exports of United States
participation. products or by financing exports of (a) Maturities. The maturities of equipment, materials, and services re- credits granted by the Export-Import quired for specific developments abroad. Bank are arranged in accordance with Foreign trade may also be promoted the circumstances in each case. Genthrough financing to build up the econ- erally speaking they are commensurate omy, increase employment and raise in- with those customarily extended in the come levels in foreign countries, which United States for similar goods or projthereby afford better markets for Amer- ects. Principal amounts are ordinarily ican products or become better suppliers made payable in equal semiannual or of imports required by the United States. quarterly installments. Imports can usually be financed through (b) Interest rates. In determining normal commercial channels; but in ex- rates of interest to be charged on loans, ceptional cases where private financing is the Bank will take into consideration not available the Bank may assist in the maturity of the loan and the extent their financing.
of credit risk to be assumed by the Bank
as affected by such guaranties as may be offered, as well as prevailing United States commercial and government rates. Interest is computed on the outstanding balance and is usually payable semiannually or quarterly.
(c) Participation. The Bank ordinarily requires that a United States exporter who desires financial assistance from it shall have contracted to receive a cash payment of not less than 20 percent of the invoice value not later than delivery of the goods, and that the exporter shall participate in the financing to the extent of not less than 25 percent of the financed portion. Similarly if the applicant is the foreign buyer he should, wherever possible, arrange participation in the financing by the proposed United States exporter. $ 402.3 Marine transportation and in
gress, requires that exports of agricultural or other products fostered by loans made by any instrumentality of the United States Government shall be carried exclusively in vessels of United States registry unless it is determined by the Maritime Administration that such vessels are not available in sufficient numbers or in sufficient tonnage capacity or on necessary sailing schedule or at reasonable rates. When appropriate the Bank is prepared to finance United States inland freight and ocean freight under the relative credit.
(b) Insurance. When the Bank determines that shipments of exports financed through its credits must be coyered by marine insurance, the insurance contracts shall be satisfactory to the Bank and shall provide that payments for loss or damage will be made in United States dollars. When such insurance contracts are placed in the United States market the Bank is prepared to finance the premiums under the relative credit.
(a) Marine transportation. Public Resolution No. 17, Seventy-Third Con