Ex-Im is an independent agency operating under the Export-Import Bank Act of 1945, as amended. Its mission is to support the export of U.S. goods and services, thereby supporting U.S. jobs. Ex-Im’s charter states that it should not compete with the private sector. Rather, Ex-Im’s role is to assume the credit and country risks that the private sector is unable or unwilling to accept, while still maintaining a reasonable assurance of repayment. Ex-Im must operate within the parameters and limits authorized by law, including, for example, statutory mandates that it support small business and promote sub-Saharan African and environmentally beneficial exports. In addition, Ex-Im must provide financing on a competitive basis with other export credit agencies and minimize competition in government-supported export financing and must submit annual reports to Congress on its actions. Ex-Im operates in several functional areas under the leadership of its President who also serves as Chairman of Ex-Im’s Board of Directors.Functional areas include the Office of the Chief Financial Officer, Office of General Counsel, Office of Resource Management, and Export Finance Group. The Export Finance Group is subdivided into business divisions that are responsible for underwriting related to loan guarantees, including processing applications, evaluating compliance of transactions with credit and other policies, performing financial analysis, negotiating financing terms, coordinating and synthesizing input to credit recommendations from other divisions, and presenting credit recommendations for approvals. Ex-Im offers export financing through direct loans, loan guarantees, and insurance. Ex-Im’s loan guarantees cover the repayment risk on the foreign buyer’s loan obligations incurred to purchase U.S. exports. Loan guarantees are classified as short, medium, or long term. Figure 1 highlights the basic differences between the three loan guarantee types. Further, while Ex-Im relies on the value of U.S. content as a proxy to evidence support for U.S. jobs, it also considers exporter-supplied data on jobs created or preserved. Because foreign content and local costs represent amounts that do not directly benefit the U.S. economy or U.S. employment, Ex-Im developed requirements that limit the extent to which Specifically, Ex-Im’s content such amounts are covered by its financing.policy includes criteria for identifying exports eligible for Ex-Im support based on the amount of foreign labor, materials, and overhead included in the production of the exported goods or services. Eligibility criteria and the amount of financing Ex-Im will provide based on content value depends on the terms of the financing requested and, for short-term transactions, whether the exporter is a small business. Ex-Im’s content policy is self-imposed and establishes (1) the level of financing available depending on the content of exported goods and services and terms of the transaction and (2) procedures for exporters to report content information to Ex-Im and for Ex-Im to assess the reasonableness of such information. When a loan guarantee transaction is approved, exporters are required to complete and provide an Exporter’s Certificate in which they certify the amount of foreign and domestic content included in the goods or services financed by Ex-Im. The certificate warns exporters of the federal penalties for making false statements. Short-term loan guarantees: Ex-Im’s short-term loan guarantee product is focused on working capital financing (hereinafter referred to as working capital loan guarantees). Working capital loan guarantees may be approved for a single transaction or a revolving line of credit that can be extended up to 3 years. In general, if the financed eligible product contains more than 50 percent U.S. content, then the entire transaction value is eligible for an Ex-Im working capital loan guarantee. Generally, Ex-Im guarantees 90 percent of the loan’s principal and interest if the borrower defaults. Therefore, the lender maintains the risk of the remaining 10 percent. Ex-Im’s payment of working capital claims is conditional upon the guaranteed lenders’ compliance with Ex-Im requirements, such as underwriting policies, deadlines for filing claims, payment of premiums and fees, and submission of proper documentation. Ex-Im has reported that over 80 percent of its working capital guarantee transactions are approved by lenders with delegated authority, which means that commercial lenders approve the guaranteed loans in accordance with agreed- upon underwriting requirements without first obtaining Ex-Im approval. If a lender does not have delegated authority, Ex-Im performs its own underwriting procedures and approves the guaranteed loans. Medium- and long-term loan guarantees: Financing eligibility for Ex-Im’s medium- and long-term loan guarantee support is limited to the lesser of (1) 85 percent of eligible goods and services in the U.S. export contract or (2) 100 percent of the U.S. content. Ex-Im’s medium- and long-term loan guarantees generally cover 100 percent of the loan’s principal and interest if the buyer defaults. Ex-Im’s guarantee to the lender is transferable, carrying the full faith and credit of the U.S. government, and is unconditional, meaning that Ex-Im must pay submitted claims regardless of the cause of default, as long as the claim is filed timely and no amendments were made without Ex-Im’s consent. The underwriting of medium-term loan guarantees is generally performed by Ex-Im and approved by certain Ex-Im officers with delegated authority. For about 3 percent of medium-term loan guarantee transactions, Ex-Im has provided certain lenders delegated authority to underwrite and approve these guarantees. The underwriting of long-term loan guarantees is performed by Ex-Im and approved by the Ex-Im Board of Directors. Ex-Im’s annual authorizations for direct loans, loan guarantees, and insurance increased from about $12 billion in 2006 to over $27 billion in 2013, an increase of about 125 percent. Over the same period, Ex-Im’s staff level, as measured by full-time employees, increased from 376 to 403, about 7 percent (see fig. 2). Of the annual authorizations for all Ex-Im financing products, as shown in figure 3, Ex-Im’s number of authorized transactions for working capital and long-term loan guarantees fluctuated from 2006 to 2013. However, the number of medium-term loan guarantee transactions decreased from 2006 to 2013. There were 533 working capital, 68 medium-term, and 73 long-term loan guarantee authorizations that totaled $14.9 billion, or 55 percent, of Ex-Im’s total annual authorizations in 2013. Although the number of working capital loan guarantees greatly exceeds the number of medium- and long-term loan guarantees, long-term loan guarantees account for the greatest dollar value of loan guarantees (see fig. 4). During the period 2006 through 2013, reported claim payments on defaulted loan guarantees have fluctuated and averaged $76.5 million. Such claim payments ranged from a high of $176.5 million in 2010 to lows of $19.3 million and $28.4 million in 2012 and 2013, respectively. Ex-Im’s Loan, Guarantee and Insurance Manual (Manual), which was updated in January 2013, February 2014, and March 2014, describes, among other things, Ex-Im’s underwriting procedures for long-term, medium-term, and working capital loan guarantees. The Manual describes the responsibilities of Ex-Im’s divisions (e.g., Transportation or Working Capital Finance) involved in the credit process, including application processing activities shown in figure 5. The underwriting of loans guaranteed by Ex-Im is performed by either Ex-Im loan officers or qualified lenders with delegated authority, which allows a lender to authorize a loan guaranteed by Ex-Im in accordance with agreed-upon underwriting requirements without first obtaining Ex-Im approval. All of the underwriting for long-term loan guarantees is performed by Ex-Im loan officers. According to Ex-Im officials, the underwriting process is essential to helping to prevent fraud because of the due diligence performed over the transactions and the transaction participants. Application intake. When an application is initially received, it is screened for basic completeness; follow-up on incomplete or unacceptable applications is performed; and once considered complete, it is assigned to a processing division. Application screening. After an application is determined to be complete, it is assigned to the applicable Ex-Im division that oversees the type of transaction. For example, an application for the purchase of an aircraft would be assigned to the Transportation Division. Once assigned, a loan officer in that division is to assess the eligibility of the transaction, and eligibility of the including eligibility of the export item, additionality,country where goods are to be shipped. To ensure compliance with laws and regulations, the loan officer is to obtain and assess various certifications from transaction participants, such as Iran Sanctions Certifications and antilobbying statements.required to submit the corporate and individual names and addresses of lenders, borrowers, guarantors, and other transaction participants to the Ex-Im Library. Library staff are then to conduct a Character, Reputational, and Transaction Integrity review—a procedure designed to, among other things, provide due diligence over various risks and to help prevent fraud by checking loan participants’ information with approximately 20 databases. Databases include various U.S. government and international debarment and sanction lists, as well as lists maintained by international financial institutions, the World Bank, and the Inter-American Development Bank. These lists contain the names and addresses of individuals and organizations that have been debarred or placed on a sanctions list by major international financial institutions because of their involvement in irregular, fraudulent, or corrupt acts. A credit report is a document created by a credit reporting agency that summarizes the financial history of a party (a person or a business).