Index for September 2013

Volume 12, Issue 9

  • (Trade Finance, 27 September 2013, Washington) The Export-Import Bank of the United States (US Ex-Im) and Overseas Private Investment Corporation (OPIC) have published contingency plans in the event that Congress fails to agree to a continuing resolution to fund the US government. For OPIC, “commitments of new loans, loan guarantees, and political risk insurance will not take place during shutdown – not because of a hiatus in appropriations, per se , but because a temporary reauthorisation provision dependent on the appropriations process will lapse during the shutdown”. At US Ex-Im, new obligations as well as delegated authority to exporters and/or banks under insurance and guarantee programmes will be suspended. The bank will continue to process and deposit funds received, and will pay claims under its guarantee and insurance programme, which carry the full faith and credit of the US government. Of Ex-Im’s employees, 17 will be retained out of the total of 409 (4.1%) in addition to three contractors, three Presidential appointees, and 24 employees on an on-call status. Details of US Ex-Im’s plans can be found here, and OPIC’s here.

  • (Heritage Foundation, 3 September 2013, Washington) For some lawmakers, corporate welfare is okay, unless it hurts someone in their district. Four lawmakers from Minnesota and Michigan are up in arms over a proposed $650 million financing deal for Roy Hill, an Australian mining company. The deal, backed by the Export-Import Bank, the U.S. government’s export credit agency, is for the purchase of Caterpillar mining equipment manufactured in the U.S. But Senators Amy Klobuchar (D–MN), Al Franken (D–MN), Carl Levin (D–MI), and Debbie Stabenow (D–MI) don’t like this deal because Roy Hill competes with American iron ore producers, the majority of which operate in the Senators’ home states of Minnesota and Michigan.

  • Jubilee Australia has teamed up with a group of Sydney visual artists to create a visual arts installation for the Sydney Fringe Festival that profiles the themes in Jubilee Australia's 2012 report Pipe Dreams: The PNG LNG Project and the future hopes of a nation.  The report is the most complete discussion to date of the potential risks and benefits to the people of PNG of the LNG Project, which was provided with financial support by no fewer than five ECAs and pivotal diplomatic support from the Australian government.  The report argues that, contrary to the official discourse, there are serious risks that the revenues generated by the Project will not mitigate the negative economic and social impacts of the Project.  In fact, it is very likely that the Project will exacerbate poverty, increase corruption and lead to more violence in the country.

    Potatomation Art Collective's installation entitled Retelling PNG Pipe Dreams will be on exhibit at the 2013 Sydney Fringe Festival through Saturday 21 September.

    Jubilee Australia published Pipe Dreams in December 2012 as a follow to its 2009 report on Australia's export credit agency, Export Finance and Insurance Corporation (EFIC) called Risky Business: Shining a spotlight on Australia's export credit agencyJubilee Australia advocates for reforms to EFIC and keeps a close watch on its business providing financial products to Australian multinationals in the extractives industry.

  • (SpaceNews, 23 September 2013, Paris) Representatives of the U.S. and French export-credit agencies gave no sign of pulling back on their support for their domestic rocket and satellite builders despite ongoing concerns by private-sector bankers that the agencies are funding projects that cannot survive. The allegation that ECA low-interest financing stimulates projects of dubious long-term solvency is not new. But it has assumed a new relevance with the spate of emerging-market nations using ECA support for telecommunications satellite systems whose national markets raise questions of their survivability.

  • (Moscow Times, 13 September 2013, Moscow) European credit agencies will help finance the sales of Russia's Superjet 100 aircraft, Vedomosti reported Thursday. A source close to Sukhoi Civil Aircraft, which produces the planes, said the Superjet has been deemed a European product because 70 percent of its components are European. The move paves the way for European export credit agencies, which can provide government-backed loans without seeking a commercial return, to push the plane on the international market... The U.S. and European financing deals allow the Superjet to compete with its biggest rivals, the Embraier 190 and CRJ 1000, bringing it a step closer to Russia's ambitious goal of manufacturing $250 billion worth of aircraft by 2025.

  • (Folha de Sao Paulo, 27 August 2013, Brasilia) BNDES President Luciano Coutinho said that financing granted to Angola and Cuba were classified as secret by the government because of an agreement made between the two countries and Brazil. "The contracts are subject to provisions from the countries of destination. They are subject to a treaty or a provision by a sovereign country benefiting from an export," he said on the 27th during a public hearing at the Senate's CAE (Committee on Economic Affairs). Folha revealed in April that the Development, Industry and Foreign Trade Minister Fernando Pimentel had declared documents on loans to the two nations secret, which did not occur with another 13 beneficiaries of funding from the state bank. At that time, the ministry claimed that the contracts contained "strategic" information and were "covered by commercial confidentiality". In 2012 alone, BNDES disbursed $ 875 million to Cuba and Angola. According to Coutinho, the global values ​​involved are public, but the details of the transaction can not be revealed. He said the loan money was destined for supporting the production and export of capital goods and engineering services to both countries.

  • (All Africa News, 19 September 2013, Abuja) NEXIM, the Nigerian Export-Import Bank was established in 1991 and is owned equally by the Central Bank of Nigeria and the Ministry of Finance. Since 2009, NEXIM has reformed its processes and redefined its focus to promoting the diversification of the Nigerian economy and deepening the external sector, particularly the non-oil sector, through provision of credit facilities, export credit guarantee & export credit insurance; business development and financial advisory services. The bank's current strategic initiatives are targeted towards boosting employment creation and foreign exchange earnings in the manufacturing, agro-processing, solid minerals and services (tourism, transportation and entertainment) industries.

  • (PRN Newswire, 12 September 2013, Washington) The Office of Inspector General (OIG) for the Export-Import Bank of the United States (Ex-Im Bank) announced today that Teolinda Briseyda Angeles, an owner of an electronics company in Miami, Florida, was sentenced to serve one year and one day in prison for her role in a scheme to defraud Ex-Im Bank of nearly $446,876.

  • (Alliance News, 23 September 2013, London) - Aureus Mining Inc. Monday said the Export Credit Insurance Corporation of South Africa has approved export credit support for the company's US$88 million project debt finance facility to fund the development of its Liberian New Liberty Gold Project, with the finance facility being provided by Nedbank Ltd and Rand Merchant Bank. South Africa's ECIC has experienced a "phenomenal" growth in its insurance portfolio to R17bn (US$1.69bn) in the year to end-March from the previous year’s R11bn (US$1.01bn).

Volume 12, Issue 8

  • OECD 2012 ECA Bribery Survey Responses Now Available

    (ECA Watch, Ottawa, 31 August 2013) The latest available OECD ECA bribery survey responses on how member ECAs implement the 2006 OECD Recommendation on Bribery and ECAs is available on their web site. However, despite the OECD's claims of transparency and effective gathering and dissemination of statistics, a confusing public link for what they say are the 2012 responses as of 30 June 2013 actually takes you to their blank 2007 questionnaire form. One has to persist and know how to uncompress all the individual country reports from another document in order to review the 2012 individual responses. It appears from the wording of the OECD announcement that only 6 of the 35 reporting countries (36 ECAs) responded to the 2012 survey. Most ECAs rely largely on reporting by corporate applicants who have little interest in providing information that might lead to rejections. In addition, some individual ECA forms (for example see p.10 Part 8 of the Atradius applicant form) only require the briefest of information on bribery, making it less likely that problematic situations will surface through this rather weak OECD monitoring and reporting process.