[Federal Register Volume 86, Number 77 (Friday, April 23, 2021)]
[Notices]
[Pages 21732-21734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08418]


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EXPORT-IMPORT BANK


Information Request on U.S. and Foreign Content in 
Transformational Exports

AGENCY: Export-Import Bank of the United States.

ACTION: Notice.

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SUMMARY: To assist the Export-Import Bank of the United States (EXIM) 
in the implementation of its historic seven-year reauthorization and 
directive to establish a new ``Program on China and Transformational 
Exports'' (``directive''), EXIM seeks information on the level of U.S. 
and foreign content in U.S. exports

[[Page 21733]]

in the identified transformational export areas.

DATES: Comments are due on May 14, 2021

ADDRESSES: Interested parties may submit comments on this transaction 
electronically on www.regulations.gov. To submit a comment, enter 
``Information Request on U.S. and Foreign Content in Transformational 
Exports'' under the heading ``Enter Keyword or ID'' and select Search. 
Follow the instructions provided at the Submit a Comment screen. Please 
include your name, company name (if any) and ``Information Request on 
U.S. and Foreign Content in Transformational Exports'' on any attached 
document. Comments can also be sent by email or mail to Scott Condren, 
[email protected], Export-Import Bank of the United States, 811 
Vermont Ave. NW, Washington, DC 20571.

FOR FURTHER INFORMATION CONTACT: To request additional information, 
please contact Scott Condren, [email protected], 202-565-4277.

SUPPLEMENTARY INFORMATION:

Background

    On December 17th, 2020, the Board of Directors of EXIM approved new 
content principles for ten congressionally defined transformational 
areas as part of the Program on China and Transformation Exports 
(PCTE). Under the new principles, full EXIM support is available for 
eligible transformational export transactions having a U.S content 
level of 51% or more, down from the previous level of 85% for medium 
and long-term transactions. The principles also allows EXIM to consider 
full support for transactions with less than 51% U.S. content if 
certain pre-requisites are met, including the exporter providing an 
acceptable actionable written plan to increase U.S. based jobs in the 
next 3-5 years and at least one of seven factors being applicable to 
the transaction. Finally, the Board also made Chinese content 
presumptively ineligible for transactions financed under the 
transformational exports content policy, as well as providing for 
incentives to maximize U.S. content.
    A narrow implementation of the transformational export area 
principles would limit EXIM's support of foreign content to what is 
currently called ``eligible foreign content,'' or foreign content that 
is included in a U.S. export contract and shipped from the United 
States. Furthermore, for financings covered by the new principles, all 
Chinese content would be considered ``ineligible foreign content,'' 
meaning the dollar value would be subtracted from the value of the U.S. 
export contract that EXIM is financing.
    A more expansive implementation would allow for EXIM to support 
goods in a U.S. exporter's contract (including those supplied by 
foreign subsidiaries and sub-suppliers) that ship directly from a third 
country to a foreign buyer. While supporting such shipments raises the 
question about the feasibility of applying EXIM's current U.S. flag 
shipping policy to such exports, first and foremost, EXIM wants to 
ensure that any expansion of the types of foreign content supported 
results in more U.S. jobs, as supporting U.S. jobs remains the core 
purpose of EXIM.
    Current guidance is the new principles allow up to 49% of eligible 
foreign content in transformational exports transactions, based on the 
percentage of U.S. content in shipments from the United States. 
Transactions with more than 49% eligible foreign content may be 
eligible if the previously mentioned pre-requisites are met.
    For reference, EXIM currently uses the following terms and 
definitions for transformational exports:

    U.S. content: U.S. content includes U.S. labor, material costs, 
direct overhead, profit, mark-up, indirect overheard and costs (R&D, 
sales and marketing, etc.), and all other costs incurred in the 
United States. The U.S. content in an export is therefore generally 
found by subtracting the cost of foreign inputs from the U.S. 
export's price, rather than identifying and quantifying the amount 
of each U.S. input.
    Eligible foreign content: foreign content in the export contract 
that is incorporated in the U.S. exports and/or ships from the 
United States.
    Ineligible foreign content: foreign content in an export 
contract that does not ship from the United States. For purposes of 
the content policy applicable to transformational exports, it also 
includes Chinese content shipped from either the United States or 
elsewhere.

    For example, a U.S. electric vehicle (included in the energy 
efficiency transformational areas) is manufactured in the United 
States, but the vehicle's tires are manufactured in Mexico. U.S. 
content in the vehicle would be sales price of the vehicle minus the 
cost of the tires. The tires installed in the United States would be 
eligible foreign content and included in EXIM's financing as long as 
they were no more than 49% of the value of the car. If the foreign 
buyer also bought spare tires, which shipped directly from Mexico to 
the foreign buyer, such spares would be considered ineligible foreign 
content, and thus not receive EXIM financing. If such tires were 
shipped by U.S. exporter from the U.S., however, they would be 
considered eligible foreign content.
    This notice requests comments and information from the public 
regarding how EXIM can continue implementing this program in a way that 
supports EXIM's charter and American job creation. Specifically, EXIM 
welcomes feedback that assists EXIM in:
     Estimating the average annual value of U.S. exports in 
each of the ten transformational areas that could potentially need EXIM 
support over the next 5 years.
     Estimating the average/typical percent of U.S. content in 
the supply chain of each of the ten areas, with (if less than 85% 
percent U.S. content) commentary as to why.
     Estimating the average/typical percent of foreign content 
in each area for which it is infeasible to bring it through the U.S. 
prior to shipping to the final buyer, with (if more than 0% foreign 
content) commentary as to why.
     Estimating the average/typical percent of foreign content 
for each area that is from China, with (if more than 0% Chinese 
content) commentary on the relative ease/difficulty to source that 
content from a non-Chinese entity.
     Evaluating the availability, typical timing and cost 
implications of requiring U.S. shipping for foreign-port-of-origin 
shipments from a third country to the buyer/borrower via ocean 
transport.
     Evaluating the typical timing and cost implications of 
prohibiting Chinese shipping for any foreign-port-of-origin shipments 
from a third country to the buyer/borrower.

Written Comments

    EXIM is interested in comments and information related to the 
ability of EXIM's new content policy to be successful in supporting 
exporters competing with the People's Republic of China. The 
congressionally defined transformational export areas are:
     Artificial intelligence.
     Biotechnology.
     Biomedical sciences.
     Wireless communications equipment (including 5G or 
subsequent wireless technologies).
     Quantum computing.
     Renewable energy, energy efficiency, and energy storage.
     Semiconductor and semiconductor machinery manufacturing.
     Emerging financial technologies (including technologies 
that facilitate financial inclusion through increased access to capital 
and financial services; data security and privacy; payments, the 
transfer of funds, and associated

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messaging services; and efforts to combat money laundering and the 
financing of terrorism).
     Water treatment and sanitation (including technologies and 
infrastructure to reduce contaminants and improve water quality).
     High-performance computing;
     Associated services necessary for use of any of the 
foregoing exports.
    EXIM requests respondents to be explicit as to which 
transformational area they are addressing. Exporters should identify 
whether they are an exporter of a transformational technology, or if 
company exports products or services used by a transformational area, 
as well as specifying the relevant transformational area. Please 
indicate, where applicable, whether your response applies to foreign 
content shipped from the U.S., U.S. content shipped from a foreign 
port, and/or foreign content shipped from a foreign port. EXIM would 
appreciate commentary on:

    1. Average U.S. exports over the last five years and expected 
U.S. export values over the next five years.
    a. To the extent export sales have been falling or expected to 
fall, please explain why.
    2. A description of the current supply chain in your industry/
company, including:
    a. The percent of foreign content included in your exports/
export contracts.
    b. of the foreign content, the percent from the People's 
Republic of China in your exports/export contracts.
    3. The importance, if any, in supporting foreign content shipped 
directly from other countries to foreign buyers.
    4. Why such foreign content is unable to be sourced from the 
United States or to be incorporated into products in the United 
States.
    5. The timing and cost implications of requiring U.S. shipping 
for shipments from foreign ports directly to the buyer.
    6. The feasibility of an EXIM prohibition on covering content 
from the People's Republic of China.
    a. including the impact of prohibiting use of shipping from the 
People's Republic of China.

    EXIM encourages respondents, when addressing the points above, to 
identify which point they are responding to by using the same numbers 
and heading as set forth above. For example, a respondent submitting 
comments responsive to (2), ``Description of current supply chain in 
your industry/company'', would use that same text as a heading followed 
by the respondent's specific comments responding to it. This formatting 
will assist EXIM in more easily reviewing and summarizing the comments 
received in response to these specific points of inquiry.

Scott Condren,
Sr. Policy Analyst, Office of Policy Analysis and International 
Relations.
[FR Doc. 2021-08418 Filed 4-22-21; 8:45 am]
BILLING CODE 6690-01-P