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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