This bill allows the Export-Import Bank of the United States (EXIM) to exclude financing provided to certain U.S. exporters from its default rate cap calculations.
EXIM, the official export credit agency of the United States, provides financing for U.S. exports of goods and services. EXIM monitors credit and other transaction risks, reserves against losses, and submits quarterly reports to Congress on its default rate. If its default rate reaches 2%, EXIM faces an immediate lending cap freeze.
This bill exempts certain transactions from EXIM's default rate calculation, thereby allowing EXIM to provide financing to these U.S. exporters without the risk of reaching the default rate cap.
Specifically, the bill allows EXIM to exclude from the default rate cap any financing provided to U.S. exporters under the China and Transformational Exports Program. (This program allows EXIM to extend loans, guarantees, and insurance to advance the comparative leadership of the United States with respect to China in specified export areas, such as artificial intelligence, biotechnology, and wireless communications equipment.)
Additionally, the bill allows EXIM to exclude from the default rate cap any financing provided to U.S. exporters that are competing with products or services provided by (1) a foreign entity included on the Entity List maintained by the Department of Commerce's Bureau of Industry and Security (e.g., entities involved in activities contrary to U.S. national security or foreign policy interests), or (2) a foreign individual or entity sanctioned by the Department of the Treasury's Office of Foreign Assets Control.