[Congressional Record (Bound Edition), Volume 148 (2002), Part 3]
[Senate]
[Pages 3301-3304]
[From the U.S. Government Publishing Office, www.gpo.gov]




             EXPORT-IMPORT BANK REAUTHORIZATION ACT OF 2001

  Mr. REID. Mr. President, I ask unanimous consent that the Senate now 
proceed to Calendar No. 141, S. 1372, the Export-Import Bank 
reauthorization.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 1372) to reauthorize the Export-Import Bank of 
     the United States.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. SARBANES. Mr. President, I rise in support of S. 1372, the 
Export-Import Bank Reauthorization Act. This legislation, which was 
reported out of the Committee on Banking, Housing, and Urban Affairs by 
a 21-0 vote, would reauthorize the Export-Import Bank through September 
30, 2006.
  The Export-Import Bank of the United States was created in 1934 and 
established under its present law in 1945 to aid in financing and 
promoting U.S. exports. The Bank operates under a renewable charter, 
the Export-Import Bank Act of 1945, and was last authorized in 1997 
through September 30, 2001. A short-term extension through March 31, 
2002 was contained in the Foreign Operations Appropriations bill 
enacted last year. It is thus urgent for the Congress to act on this 
reauthorization in order for the Eximbank to remain open and able to 
assist U.S. exporters to compete in international markets. In order to 
ensure that the Ex-Im Bank will be able to continue to function until 
this reauthorization bill is enacted, I am also seeking consent today 
on a short-term extension of the authorization of the Ex-Im Bank until 
April 30, 2002.
  In my view, there are two compelling market-based reasons for the 
existence of the Ex-Im Bank. First, the Ex-Im Bank has a critical role 
to play in leveling the playing field for U.S. exporters by matching 
the public financing made available by foreign governments. In 
addition, the Ex-Im Bank provides leverage to U.S. negotiators seeking 
to achieve international agreements to limit the use of government 
export subsidies. U.S. exporters are able to compete effectively in 
international markets on the basis of price and quality. When foreign 
governments provide subsidized financing for their exporters, U.S. 
exporters are placed at a competitive disadvantage.
  Second, emerging market economies can pose credit risks of such 
magnitude that commercial banks are reluctant to finance U.S. exports 
to those countries even though they may present extraordinary 
opportunities for U.S. exporters. The Ex-Im Bank has the difficult but 
important task of weighing the project in light of the country risk 
rating and determining if a guarantee should be provided for a 
commercial export loan that would make possible an export deal that 
otherwise would not occur.
  For these reasons, the Export-Import Bank has traditionally enjoyed 
strong bipartisan support in the Congress. That support is reflected in 
the unanimous 21-0 vote in the Banking Committee in support of this 
legislation. I would like to thank Senator Bayh, Chairman of the 
International Trade and Finance Subcommittee, and Senator Hagel, the 
Ranking Member of the Subcommittee, for their strong support and 
leadership on this legislation. I would also like to thank Senator 
Gramm, the Ranking Member of the Banking Committee, for his cooperation 
in moving this important legislation forward.
  There are four key issues addressed in this legislation: the term of 
the reauthorization of the Ex-Im Bank; the competitive challenge posed 
to the Bank by foreign market windows; Ex-Im Bank financing for small 
business; and the collection of information on the activities of 
foreign export credit agencies as part of the Ex-Im Bank's annual 
report. Following is a brief discussion of these issues, as well as a 
discussion of an amendment that will be offered on the floor by Senator 
Allard to establish an Inspector General for the Eximbank.
  The legislation intentionally provided an authorization until 
September 30, 2006 in order to take the reauthorization of the Ex-Im 
Bank out of the Presidential election cycle. When the reauthorization 
of the Ex-Im Bank falls in the first year of a President's term, it 
runs the risk that a new President will be taking office, as occurred

[[Page 3302]]

last year. In that case, a new Administration must struggle not only to 
put in place a new Chairman of the Ex-Im Bank but also cope with 
providing leadership for the reauthorization of the Ex-Im Bank as well. 
The Banking Committee believed that it makes more sense to put the 
reauthorization of the Ex-Im Bank in the second year of a President's 
term to assure that a new Ex-Im Bank Chairman has been put in place and 
has been on the job with sufficient time to provide leadership for the 
reauthorization of the Bank.
  The second issue addressed in the legislation is the competitive 
challenge to the Ex-Im Bank posed by foreign market windows. In 
hearings held in the International Trade and Finance Subcommittee last 
year, witnesses from industry, academia, and the Administration 
commented on the growing challenges to U.S. exporters posed by foreign 
market windows.
  Market windows are government-sponsored enterprises (for example, 
government owned or directed financial institutions) which provide 
export financing at below market rates. However, the foreign 
governments--notably Germany and Canada--which support them claim that 
these enterprises are not official export credit agencies, and thus not 
subject to the disciplines of the OECD Arrangement. Currently, two 
government entities operate very active market windows. They are the 
German market window KfW and the Canadian market window, the Export 
Development Corporation (EDC). The result is that these foreign market 
windows can provide subsidized export financing outside the OECD 
Arrangement and give their exporters a competitive advantage over U.S. 
exporters. Also, because these foreign market windows are not subject 
to the OECD disciplines, there is often a transparency problem--it is 
difficult to find out the terms of the financing they provide.
  The Ex-Im Bank Act currently authorizes the Ex-Im Bank to ``provide 
guarantees, insurance, and extensions of credit at rates and on terms 
and other conditions which are fully competitive with the Government-
supported rates and terms and other conditions available for the 
financing of exports of goods and services from the principal countries 
whose exporters compete with the United States.'' Since market windows 
are government-supported entities, the Ex-Im Bank views its current 
statute as providing Ex-Im Bank authority to match windows financing 
(but not to create its own market windows institutions). The Bank 
Committee agreed with that view. However, the Banking Committee 
believed it would be helpful to make this authority explicit so as to 
remove any question about Ex-Im Bank's authority and also to send a 
message to the foreign market windows of U.S. concern about their 
operations.
  As a result, the legislation contains two provisions which address 
market windows. The first provision directs the executive branch to 
seek increased transparency over the activities of market windows in 
the OECD Export Credit Arrangement. If it is determined that market 
windows are disadvantaging U.S. exporters, the U.S. would be directed 
to seek negotiations in the OECD for multilateral disciplines and 
transparency for market windows.
  The second provision authorizes the Ex-Im Bank to provide financing 
on terms and conditions that are inconsistent with those permitted 
under the OECD Export Credit Arrangement to match financing terms and 
conditions that are being offered by market windows if such matching 
advances negotiations for multilateral disciplines and transparency 
within the OECD, or when market windows financing is being offered on 
terms that are more favorable than available from private financial 
markets. Ex-Im Bank could also match market window financing when the 
market window refuses to provide sufficient transparency to permit Ex-
Im Bank to determine the terms and conditions of the market window 
financing. The Banking Committee understood that Ex-Im Bank has the 
authority to match market windows financing that is consistent with the 
terms of the OECD Arrangement.
  In addition, the Banking Committee held the view that increased 
information was needed on the activities of foreign market windows. As 
a result, the bill specifies that the Bank's annual report to Congress 
on export credit competition should include information on export 
financing available to foreign competitors through market windows.
  The Banking Committee believed that it was very important to make 
clear that Eximbank has the authority to match market windows financing 
in order to allow U.S. exporters to compete on a level playing field, 
and to direct the executive branch to seek negotiations in the OECD for 
multilateral disciplines and transparency for market windows financing.
  The third issue is small business financing by the Eximbank. The 
Banking Committee has strongly supported the Ex-Im Bank's efforts to 
provide financing for small business. The Ex-Im Bank Act currently 
requires that ``the Bank shall make available, from the aggregate loan, 
guarantee, and insurance authority available to it, an amount to 
finance exports directly by small business concerns which shall not be 
less than 10 percent of such authority for each fiscal year.''
  The legislation increases the requirements to 18 percent. According 
to the Ex-Im Bank, in FY 2000 small business comprised 18 percent of 
the total value of all Ex-Im Bank financing authorizations and 86 
percent of all transactions supported by Ex-Im Bank. In FY 1999 these 
numbers were 16 percent and 86 percent respectively. In FY 1998 they 
were 21 percent and 85 percent respectively.
  The Banking Committee believed that the requirement for Ex-Im Bank 
small business financing could reasonably be raised to a level of 18 
percent without causing disruption to Ex-Im Bank's lending programs. 
Ex-Im Bank remains free to go above this level, as it has in the past, 
but the Committee was concerned the requiring a higher level could have 
the unwanted effect of tying up available Ex-Im Bank resources if the 
Ex-Im Bank could not achieve higher levels of small business financing 
in a given year.
  The legislation makes a number of changes to Ex-Im Bank reporting 
requirements to ensure more timely and complete reporting of the 
activities of foreign export credit agencies.
  The legislation requires the Ex-Im Bank to submit its annual 
competitiveness report to Congress not later than June 30 of each year. 
Currently, the annual competitiveness report comes to Congress in late 
summer/early autumn, too late to be used for any oversight or 
legislation in any given year. Also, with the current submission date, 
the Advisory Committee's annual recommendations, completed in December 
each year, are 8 to 9 months old. Finally, by moving the reporting date 
to June 30, the Ex-Im Bank will have ample time to include data on 
other export credit agencies, in light of the fact that the Berne Union 
reports on global export credit agency activity come in 45 days after 
the close of each quarter.
  As previously mentioned, the legislation also specifies that the 
Bank's annual competitiveness report to Congress should include 
information on export financing available to foreign competitors 
through market windows. The legislation also requires the Ex-Im Bank to 
estimate the annual amount of export financing available from the 
government and government-related agencies and include that information 
in Ex-Im's annual competitiveness report.
  Finally, during the Banking Committee markup on the legislation, 
Senator Allard offered an amendment that would have established an 
Inspector General for the Ex-Im Bank. Members of the Banking Committee 
agreed in principle that Ex-Im Bank could benefit from having an 
Inspector General, but concerns were raised about how an Inspector 
General provision should be structured. Senator Allard withdrew his 
amendment with the understanding that an effort would be made to reach 
an agreement so that this issue could be addressed on the Senate floor. 
An agreement has been reached on an

[[Page 3303]]

amendment by Senator Allard, which he will offer on the floor, to 
establish an Inspector General for the Eximbank that is acceptable to 
the members of the Banking Committee.
  I believe that S. 1372, the Export-Import Bank Reauthorization Act, 
is a very balanced piece of legislation which will assure that the 
Export-Import Bank will be able to continue to provide critically 
needed export financing to U.S. exporters to compete in foreign 
markets. I urge my colleagues to support this legislation.
  Mr. BAYH. Mr. President, I rise today to offer my support for the 
charter reauthorization of the Export-Import Bank of the United States. 
The Ex-Im Bank was last reauthorized in 1997, and its charter expired 
in September of last year.
  As Chairman of the Subcommittee on International Trade and Finance, I 
held two hearings last year in order to craft a bipartisan 
reauthorization bill that is both helpful to the Bank and to the export 
community. The present bill, which authorizes the Ex-Im Bank for 5 
years, includes a number of important provisions that will help make 
the Bank more competitive with other export credit agencies.
  Among other provisions, this bill requires Ex-Im to submit its 
Competitiveness Report to the Banking Committee by June 30 of each 
year. It will be more helpful to the Committee to receive that report 
earlier in order to be able to use its information during the 
reauthorization. The bill also requires Ex-Im to compile and analyze 
data regarding market windows and their effects on the Bank's 
competitiveness for the annual Competitiveness Report. This will give 
the Committee a clearer understanding of the amount of market window 
activity taking place around the world. Finally, the bill requires the 
Bank to estimate the annual amount of export financing available from 
the government and government-related agencies and to include that 
information in Ex-Im's Competitiveness Report. This provision would 
essentially require Ex-Im to rank itself against other export credit 
agencies.
  Although the Ex-Im Bank has played an important role in increasing 
our country's exports, there have been a few instances in which the 
Bank has lent its support to exports that have helped foreign companies 
who are engaged in dumping products into our domestic market. For this 
reason, I offered an amendment to Bank's reauthorization that would 
prohibit the extension of a loan or guarantee to any entity subject to 
a countervailing or anti-dumping order. I will continue working with 
Senators Sarbanes, Dodd, Gramm, and Hagel to develop a compromise 
version of my amendment that will improve the Ex-Im Bank's adverse 
economic impact standards.
  I understand that some people who favor a pure model of economics 
would view the Export-Import Bank as essentially a subsidy that would 
be unnecessary in the give and take of free markets and free economy. 
My own view is that while that model has some merit in terms of 
economic theory, we do not live in a theoretical world. We live in a 
real world. America is currently suffering from a significant balance 
of trade deficit that will undoubtedly have an impact on our currency 
and overall economic health in years to come. It is essential that we 
work to provide a level playing field for American companies, 
particularly at a time when many of our foreign competitors receive 
financial support for their exports from their own governments. If our 
competitors offer their exporters assistance, so should we.
  Since its creation in 1934, the Export-Import Bank of America has 
contributed greatly to the welfare and well-being of America's economy. 
I hope that we will allow the Bank to continue its function, and I 
encourage my colleagues to support reauthorization of this important 
organization.
  Mr. REID. Mr. President, I understand Senator Allard has an amendment 
at the desk. I ask unanimous consent the amendment be considered and 
agreed to, the motion to reconsider be laid on the table; that the 
bill, as amended, be read a third time, passed, and the motion to 
reconsider be laid upon the table, without intervening action or 
debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3029) was agreed to, as follows:

 (Purpose: To establish an Inspector General at the Export-Import Bank 
                         of the United States)

       At the end of the bill, add the following:

     SEC. 7. INSPECTOR GENERAL OF THE EXPORT-IMPORT BANK.

       (a) Establishment of Position.--Section 11 of the Inspector 
     General Act of 1978 (5 U.S.C. App.) is amended--
       (1) in paragraph (1), by striking ``or the Board of 
     Directors of the Tennessee Valley Authority;'' and inserting 
     ``the Board of Directors of the Tennessee Valley Authority; 
     or the President of the Export-Import Bank;''; and
       (2) in paragraph (2), by striking ``or the Tennessee Valley 
     Authority;'' and inserting ``the Tennessee Valley Authority, 
     or the Export-Import Bank,''.
       (b) Special Provisions.--The Inspector General Act of 1978 
     is amended--
       (1) by redesignating section 8I as section 8J and inserting 
     after section 8H the following new section:

     ``Sec.  8I. Special Provisions Relating to the Export-Import 
       Bank of the United States

       ``(a) In General.--The Inspector General of the Export-
     Import Bank shall not prevent or prohibit the Audit Committee 
     from initiating, carrying out, or completing any audit or 
     investigation or undertaking any other activities in the 
     performance of the duties and responsibilities of the Audit 
     Committee, including auditing the financial statements of the 
     Export-Import Bank, determining when it is appropriate to use 
     independent external auditors, and selecting independent 
     external auditors. In carrying out the duties and 
     responsibilities of Inspector General, the Inspector General 
     of the Export-Import Bank shall not be prevented or 
     prohibited from initiating, carrying out, or completing any 
     audit or investigation, or from issuing any subpoena during 
     the course of any audit or investigation. The Audit Committee 
     shall make available to the Inspector General of the Export-
     Import Bank the reports of all audits the Committee 
     undertakes in the discharge of its duties and 
     responsibilities.
       ``(b) Audit Committee.--For purposes of this section, the 
     term `Audit Committee' means the Audit Committee of the Board 
     of Directors of the Export-Import Bank or any successor 
     thereof.'';
       (2) in section 8J (as redesignated), by striking ``or 8H of 
     this Act'' and inserting ``8H, or 8I of this Act''.
       (c) Executive Level IV.--Section 5315 of title 5, United 
     States Code, is amended by inserting after the item relating 
     to the Inspector General of the Environmental Protection 
     Agency the following:
       ``Inspector General, Export-Import Bank.''.
       (d) Initial Implementation.--Section 9(a)(2) of the 
     Inspector General Act of 1978 is amended by inserting ``to 
     the Office of the Inspector General,'' after ``(2)''.
       (e) Technical Corrections.--Section 11 of the Inspector 
     General Act of 1978 is amended--
       (1) in paragraph (1)--
       (A) by striking the second semicolon after ``Community 
     Service'';
       (B) by striking ``and'' after ``Financial Institutions 
     Fund;''; and
       (C) by striking ``and'' after ``Trust Corporation;''; and
       (2) in paragraph (2), by striking the second comma after 
     ``Community Service''.
       (f) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2002.

  The bill (S. 1372), as amended, was read the third time and passed, 
as follows:

                                S. 1372

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Export-Import Bank 
     Reauthorization Act of 2001''.

     SEC. 2. EXTENSION OF AUTHORITY.

       Section 7 of the Export-Import Bank Act of 1945 (12 U.S.C. 
     635f) is amended by striking ``2001'' and inserting ``2006''.

     SEC. 3. SUB-SAHARAN AFRICA ADVISORY COMMITTEE.

       Section 2(b)(9)(B)(iii) of the Export-Import Bank Act of 
     1945 (12 U.S.C. 635(b)(9)(B)(iii)) is amended to read as 
     follows:
       ``(iii) The sub-Saharan Africa advisory committee shall 
     terminate on September 30, 2006.''.

     SEC. 4. GUARANTEES, INSURANCE, EXTENSION OF CREDIT.

       Section 2(b)(1)(A) of the Export-Import Bank Act of 1945 
     (12 U.S.C. 635(b)(1)(A)) is amended--
       (1) in the fourth sentence, by striking ``on an annual 
     basis'' and inserting ``not later than June 30 each year'';
       (2) in the fifth sentence, by inserting ``(including 
     through use of market windows)'' after ``United States 
     exporters''; and
       (3) by inserting after the fifth sentence, the following 
     new sentence: ``With respect to the

[[Page 3304]]

     proceeding sentence, the Bank shall use all available 
     information to estimate the annual amount of export financing 
     available from other governments and government-related 
     agencies.''.

     SEC. 5. FINANCING FOR SMALL BUSINESS.

       Section 2(b)(1)(E)(v) of the Export-Import Bank Act of 1945 
     (12 U.S.C. 635(b)(1)(E)(v)) is amended by striking ``10'' and 
     inserting ``18''.

     SEC. 6. MARKET WINDOWS.

       The Export-Import Bank Act of 1945 (12 U.S.C. 635 et seq.) 
     is amended by adding at the end the following new section:


     ``SEC. 15. MARKET WINDOWS.

       ``(a) Enhanced Transparency.--To ensure that the Bank 
     financing remains fully competitive, the United States should 
     seek enhanced transparency over the activities of market 
     windows in the OECD Export Credit Arrangement. If such 
     transparency indicates that market windows are disadvantaging 
     United States exporters, the United States should seek 
     negotiations for multilateral disciplines and transparency 
     within the OECD Export Credit Arrangement.

       ``(b) Authorization.--The Bank is authorized to provide 
     financing on terms and conditions that are inconsistent with 
     those permitted under the OECD Export Credit Arrangement--

       ``(1) to match financing terms and conditions that are 
     being offered by market windows on terms that are 
     inconsistent with those permitted under the OECD Export 
     Credit Arrangement, if--

       ``(A) matching such terms and conditions advances the 
     negotiations for multilateral disciplines and transparency 
     within the OECD Export Credit Arrangement; or

       ``(B) transparency verifies that the market window 
     financing is being offered on terms that are more favorable 
     than the terms and conditions that are available from private 
     financial markets; and

       ``(2) when the foreign government-supported institution 
     refuses to provide sufficient transparency to permit the Bank 
     to make a determination under paragraph (1).

       ``(c) Definition.--In this section, the term `OECD' means 
     the Organization for Economic Cooperation and Development.''.

     SEC. 7. INSPECTOR GENERAL OF THE EXPORT-IMPORT BANK.

       (a) Establishment of Position.--Section 11 of the Inspector 
     General Act of 1978 (5 U.S.C. App.) is amended--

       (1) in paragraph (1), by striking ``or the Board of 
     Directors of the Tennessee Valley Authority;'' and inserting 
     ``the Board of Directors of the Tennessee Valley Authority; 
     or the President of the Export-Import Bank;''; and

       (2) in paragraph (2), by striking ``or the Tennessee Valley 
     Authority;'' and inserting ``the Tennessee Valley Authority, 
     or the Export-Import Bank,''.

       (b) Special Provisions.--The Inspector General Act of 1978 
     is amended--

       (1) by redesignating section 8I as section 8J and inserting 
     after section 8H the following new section:

     ``Sec.  8I. Special Provisions Relating to the Export-Import 
       Bank of the United States

       ``(a) In General.--The Inspector General of the Export-
     Import Bank shall not prevent or prohibit the Audit Committee 
     from initiating, carrying out, or completing any audit or 
     investigation or undertaking any other activities in the 
     performance of the duties and responsibilities of the Audit 
     Committee, including auditing the financial statements of the 
     Export-Import Bank, determining when it is appropriate to use 
     independent external auditors, and selecting independent 
     external auditors. In carrying out the duties and 
     responsibilities of Inspector General, the Inspector General 
     of the Export-Import Bank shall not be prevented or 
     prohibited from initiating, carrying out, or completing any 
     audit or investigation, or from issuing any subpoena during 
     the course of any audit or investigation. The Audit Committee 
     shall make available to the Inspector General of the Export-
     Import Bank the reports of all audits the Committee 
     undertakes in the discharge of its duties and 
     responsibilities.

       ``(b) Audit Committee.--For purposes of this section, the 
     term `Audit Committee' means the Audit Committee of the Board 
     of Directors of the Export-Import Bank or any successor 
     thereof.'';

       (2) in section 8J (as redesignated), by striking ``or 8H of 
     this Act'' and inserting ``8H, or 8I of this Act''.

       (c) Executive Level IV.--Section 5315 of title 5, United 
     States Code, is amended by inserting after the item relating 
     to the Inspector General of the Environmental Protection 
     Agency the following:

       ``Inspector General, Export-Import Bank.''.

       (d) Initial Implementation.--Section 9(a)(2) of the 
     Inspector General Act of 1978 is amended by inserting ``to 
     the Office of the Inspector General,'' after ``(2)''.

       (e) Technical Corrections.--Section 11 of the Inspector 
     General Act of 1978 is amended--

       (1) in paragraph (1)--

       (A) by striking the second semicolon after ``Community 
     Service'';

       (B) by striking ``and'' after ``Financial Institutions 
     Fund;''; and

       (C) by striking ``and'' after ``Trust Corporation;''; and

       (2) in paragraph (2), by striking the second comma after 
     ``Community Service''.

       (f) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2002.

     

                          ____________________