EXIM Board Votes to Notify Congress of a Potential $450 Million Transaction to Support U.S. Exports to Iraq and an Estimated 1,700 American Jobs
August 14, 2020
(Ex-Im Bank)
Transaction Could Support U.S. Agriculture and Engineering Exports and
Address COVID-19 Challenges; Underscores EXIM’s Commitment to $5 Billion MOU
with Republic of Iraq Ministry of Finance
WASHINGTON – The Export-Import Bank of the United States (EXIM) Board of
Directors today unanimously voted to notify the U.S. Congress, pursuant to the
law, of its consideration of a potential transaction that would facilitate the
authorization of $450 million of insurance coverage on letters of credit issued
by the Trade Bank of Iraq (TBI) for the purchase of U.S. goods and services,
such as agricultural commodities, including wheat and rice, and engineering
services. If approved, the facility would support an estimated 1,700 jobs across
the United States.
Under this approval, EXIM is expected to authorize various transactions that
will insure covered U.S. banks including J.P. Morgan in relation to TBI’s
irrevocable letters of credit associated with the purchase of U.S. goods and
services such as agricultural commodities, including wheat and rice from
America’s great agricultural exporters, and engineering services.
Private-sector trade finance insurers are unavailable for this transaction, and
EXIM support will protect U.S. exporters against the risk of buyer non-payment.
EXIM support may be extended only where there is a “reasonable assurance of
repayment” and should supplement, not compete with, private capital. This
transaction meets these requirements.
On October 16, 2019, EXIM President and Chairman Kimberly Reed and Republic of
Iraq then Deputy Prime Minister and Minister of Finance Dr. Fuad Hussein signed
a $5 billion Memorandum of Understanding (MOU) between EXIM and the Republic of
Iraq Ministry of Finance. Under the MOU, both parties agreed to identify
potential projects in Iraq for procurement of U.S.-produced goods and services.
EXIM also agreed to explore options for providing the agency’s medium- and
long-term loans, guarantees, and export credit insurance to support U.S. exports
to Iraq. Dr. Hussein currently is the Republic of Iraq Minister of Foreign
Affairs.
“Building on the $5 billion Memorandum of Understanding that I signed
with the Republic of Iraq Deputy Prime Minister and Minister of Finance and my
recent conversations with Iraq Ambassador the United States Fareed Yasseen and
U.S. Ambassador to Iraq Matthew H. Tueller, today’s unanimous Board action
underscores EXIM’s commitment to strengthening and expanding our relationship
with Iraq while supporting U.S. jobs—including in American agriculture—here
at home. This potential transaction also is particularly important as we address
COVID-19 challenges in both of our countries,” said EXIM President and
Chairman Kimberly A. Reed.
“The transactions that EXIM notified Congress of today will not only sustain
approximately 1,700 jobs in the United States but will also support the American
farm community hard hit by the current pandemic,” said EXIM Board member
Spencer T. Bachus, III.
“Following years of conflict and compounded by the global pandemic and related
economic fallout, the United Nations’ Food and Agriculture Organization
estimates there are about three million Iraqis facing food insecurity,” said
EXIM Board Member Judith D. Pryor. “This special delegated authority will
ensure EXIM short-term insurance policies for the shipment of grain and rice are
available quickly. Not only are we supporting American workers and agricultural
exports, we are supporting food security for Iraq’s citizens.”
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