Master Guarantee Agreement Exim Bank
Requests for guarantees are submitted by financial institutions in the prescribed form of EGGS 2, in accordance with the main guarantee agreement. All security applications are submitted by the principal administrators of the funding institute. The U.S. Export-Import Bank (Ex-Im Bank), an agency independent of the U.S. government, is trying to increase the competitive position of U.S. exporters in overseas markets by supporting the financing of U.S. export sales. As a general rule, the former Im Bank guarantees repayment of loans or lends to international buyers of U.S. goods and services. Ex-In bank also expands export credit insurance, thus protecting U.S.
exporters from the risk of non-payment for political or commercial reasons. An appropriate repayment guarantee must be guaranteed for each transaction financed. The former Im Bank first signed a framework agreement with the Chinese Ministry of Finance in 2005. Under this agreement, a Chinese bank (usually China EXIM) acted as a borrower, the MoF providing a state guarantee on the borrower bank`s bonds for imports from the United States for Chinese government projects. The Sovereign Guaranteed Loan (SGLP) program was launched to strengthen economic and trade relations between the two countries by providing favourable conditions to boost U.S. exports of advanced technology and equipment. SGLP has offered significant benefits by renouncing import duties and VAT for eligible projects, facilitating the authorisation process for Chinese buyers, and proceeding with a pre-negotiated form of a master`s guarantee agreement to streamline documentation. The program has helped finance a wide range of exports to China, ranging from renewable energy, medical and environmental equipment to transportation, telecommunications and other infrastructure equipment. However, the SGLP cannot currently be proposed. In April 2017, the former Im Bank and the Chinese Ministry of Finance (MoF) discussed the need for a new framework agreement after China implemented its new finance law in 2015.
While the law was intended to better manage local government debts, the law limited EXIM and MOF to support the SGLP under the existing agreement. The former Us-Im Bank and the Chinese Treasury (MoF) continue to negotiate a new agreement. SGLP cannot be proposed until further agreement is reached between the two parties. Although the SGLP is currently limited, Chinese buyers of U.S. goods and services have other financial services from Ex-Im Bank in the short, medium and long term. For more information, visit the U.S. Ex-Bank. For private sector borrowers, the Us-Ex-Im Bank accepts audited accounts in accordance with acceptable accounting practices, with densames and statements from the legal auditor, which reveal financial conditions appropriately and provide an appropriate basis for dependence on the information provided.
The conditions for standard export financing are governed by the OECD agreement on export credits.