US Ex-Im is now able to support an increased portion of the local costs in US export contracts the bank is helping to finance. Local costs in the buyer country can include site preparation and construction services provided by the importing country.
Eligible local cost coverage has been increased from 15% to 30% of the US export contract. The decision followed changes in local cost guidelines as set out by the Organisation for Economic Development and Cooperation (OECD) for officially-supported export credits, which became effective at the beginning of January 2008.
"This rule change will help US exporters remain competitive with foreign firms that are supported by their respective export credit agencies," explains John McAdams, US Ex-Im's Bank chief operating officer and senior vice-president for export finance.
The new rule is not only being implemented by US Ex-Im, but by export credit agencies (ECAs) around the world. It is effective for a three-year period after which the OECD will conduct a formal review of the new policy.
The policy was introduced following a consultation period with exporters and labour unions. Support for local cost is available on long-term loan guarantees, and some medium-term guarantees on a case-by-case basis.
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