REGULATORY UPDATES FOR EXPORTERS AND INTERNATIONAL INVESTORS
EXIM Bank recently published its updated Country Limitation Schedule; if you’re an exporter, trading company, or a multinational (on a small scale), this information is of critical importance, so I would suggest you review it, together with its attachments, very carefully and thoroughly -- especially in light of the current federal administration.
Also, for those of you involved in international investing and transnational projects, this might just be a good time to refresh your understanding of some key regulations which will affect your every major move. The most important of these regulations are synopsized in the paragraphs which follow prior to the EXIM Bulletin. For your review:
CFIUS (or occasionally CFUS) - DEFINITION of 'Committee on Foreign Investment in the United States - CFIUS' An interagency committee of the United States government that reviews financial transactions to determine if they will result in a foreign person controlling a U.S. business. CFIUS specifically focuses on transactions where foreign control will result in a threat to national security. It is chaired by the U.S. Treasury Department, and draws members from notable agencies such as the Department of State and Department of Defense.
FATCA - FATCA stands for the Foreign Account Tax Compliance Act. • FATCA is a United States (“US”) legislation that primarily aims to prevent tax evasion by US taxpayers by using non-US financial institutions and offshore investment instruments. FATCA is a tax law that compels US citizens at home and abroad to file annual reports on any foreign account holdings. The Foreign Account Tax Compliance Act (FATCA) was endorsed in 2010 as part of the HIRE Act in order to promote transparency in the global financial services sector.
FCPA - DEFINITION of 'Foreign Corrupt Practices Act' A United States law passed in 1977 which prohibits U.S. firms and individuals from paying bribes to foreign officials in furtherance of a business deal and against the foreign official's duties. The FCPA places no minimum amount for a punishment of a bribery payment. While the act requires corrupt intent, it is better to err on the side of caution when dealing with a foreign official for business matters. Punishments allowable under the act include fines of up to double the amount of the benefit expected to be received from the bribery. In addition, the individuals involved can face imprisonment for up to five years
Dear Readers: The bottom line is to BE DILIGENT!
And now, back to EXIM…
Thank you, as always, for reading me. - Douglas
Country Limitation Schedule Update
Export-Import Bank of the United States sent this bulletin at 10/19/2017 04:41 PM EDT
You are subscribed to Country Limitation Schedule (CLS) for Export-Import Bank of the United States. This information has recently been updated, and is now available.
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The Country Limitation Schedule (CLS) issued by the Export-Import Bank of the United States (EXIM Bank) has been updated. The new CLS is effective October 25, 2017.
The new CLS may be accessed on-line on October 25, 2017 at: http://www.exim.gov/tools-for-exporters/country-limitation-schedule. The CLS and Cover Letter are also attached as PDF files below.
The CLS indicates where EXIM Bank is "open for cover" and where EXIM Bank is "off-cover." The "open for cover" designation refers to the possibility, rather than the certainty of EXIM Bank support in particular cases. Where the CLS presents an X mark, EXIM Bank is "off-cover," and is therefore not willing to consider approval of routine transactions. These "off-cover" determinations are due to economic and/or political risks associated with the country.
Where the CLS indicates support is not available, EXIM Bank can still consider financing arrangements that eliminate or externalize country risks. Potentially acceptable transactions include structured transactions that earn revenues offshore in a country with no CLS restrictions and are held in a bank or trust account acceptable to EXIM Bank; third-party support from creditworthy entities in countries with no CLS restriction; and asset-backed lease and financing structures involving equipment such as aircraft.
It should be noted that these exceptions do not apply in countries where EXIM Bank is legally prohibited from operating.
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