Related News

US Ex-Im Bank, the Iraqi Ministry of Finance, and the Trade Bank of Iraq have signed a framework agreement that enables US Ex-Im to continue to support US exports for Iraqi reconstruction.

The agreement replaces an agreement concluded last December between Ex-Im, the Trade Bank, and the Coalition Provisional Authority (CPA), and reflects the assumption last June of sovereignty by the interim government of Iraq.

“Ex-Im Bank is pleased to establish a formal working relationship with the government of Iraq, and we look forward to financing US exports to help Iraq rebuild,” Ex-Im Bank chairman Philip Merrill says. “This is an important step for Iraq in re-establishing its trade and financing relationships around the world as they rebuild their economy. Just as the export credit agencies (ECAs) of 15 other nations joined us in signing framework agreements in December, we continue to see this is a multilateral effort and look forward to other ECAs developing similar agreements.”

The Trade Bank was established in July 2003 to provide trade-financing services to facilitate Iraqi reconstruction and benefit the economy of Iraq. In November 2003, Ex-Im approved a US$500mn short-term insurance facility to support the export of US goods and services to Iraq financed by the Trade Bank. Renewal of the framework agreement will allow the Trade Bank to continue to access this US$500mn facility.

Under today’s agreement, Ex-Im can support US exports to Iraq using two of its short-term insurance products:

  •  Bank letter of credit insurance policies: US Ex-Im will insure letters of credit issued by the Trade Bank and confirmed by a commercial bank. This product provides comprehensive coverage to the confirming bank against the failure of the Trade Bank to pay the confirming bank under an irrevocable letter of credit.

  •  Financial institution buyer credit insurance policies: Ex-Im will provide comprehensive coverage on short-term credits extended to the Trade Bank by an insured bank. US exporters will receive payment under letters of credit issued by the insured bank. Certain provisions of the policy (reporting and claim filing periods) will be aligned to those of the bank letter of credit policy.