PROMOTION OF UNITED STATES EXPORTS WEDNESDAY, AUGUST 30, 1961 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, SUBCOMMITTEE No. 3, The subcommittee met, pursuant to notice, at 10 a.m., in room 1301, New House Office Building, Hon. Abraham J. Multer (subcommittee chairman) presiding. (The bills H.R. 8381, H.R. 7102, H.R. 7103, H.R. 7266, and H.R. 8249 are as follows:) [H.R. 8381, 87th Cong., 1st sess.] A BILL To amend the Export-Import Bank Act of 1945 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (c) of section 2 of the Export-Import Bank Act of 1945 is amended to read as follows: 66 '(c) (1) The Export-Import Bank of Washington, in furtherance of its objects and purposes under this Act, is authorized and empowered to guarantee, insure, coinsure, and reinsure against risks of loss arising in connection with export transactions; and to establish and maintain fractional reserves in connection therewith. The reserves maintained by the Bank for the guarantees, insurance, coinsurance or reinsurance issued pursuant to this section shall be not less than 25 per centum of the related contractual liability of the Bank. Insofar as contracts of guarantee, insurance, coinsurance, and reinsurance are concerned, only that part of the Bank's liabilities represented by reserves provided for above shall be taken into account for the purposes of applying the limitations imposed by section 7 of this Act. "(2) The Bank may issue such guarantees, insurance, coinsurance, and reinsurance to or with exporters, insurance companies, financial institutions, or others, or groups thereof, and where appropriate may employ any of the same to act as its agent in the issuance and servicing of such guarantees, insurance, coinsurance, and reinsurance, and the adjustment of claims arising thereunder." SEC. 2. Section 8 of the Export-Import Bank Act of 1945 is amended by striking out "June 30, 1963" and inserting in lieu thereof "June 30, 1968". [H.R. 7102, 87th Cong., 1st sess.] A BILL To create the American Export Credits Guaranty Corporation Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "American Export Credits Guaranty Corporation Act of 1961". PURPOSE SEC. 2. The Congress recognizes that domestic agricultural pursuits, production of goods, and full employment of labor are directly encouraged by a thriving foreign outlet for domestic produce, manufactures, and services. In order to attain these desirable ends, carry out the foreign policy of this Nation, and im prove its relations with other countries, it is the policy of the Congress to improve the economic climate for trade in exports from the United States. To that end, it is the purpose of this Act to create a federally chartered corporation to issue guaranties to United States exporters of goods and services against loss resulting from certain political and commercial credit risks. SEC. 3. As used in this Act DEFINITIONS (a) The term "exporter" means any citizen or resident of the United States or any corporation, partnership, or association organized and existing under the laws of the United States, or any State thereof, or the Commonwealth of Puerto Rico, who is qualified to do business therein and is engaged or intending to engage in good faith in the business of exporting goods or services or financing the export thereof in compliance with applicable law; and the term "buyer" means the person who purchases such goods or to whom such services are rendered by the exporter. (b) The term "goods" means all tangible or intangible personal property at least 50 per centum of the export value of which is originated, grown, manufactured, produced, or added through processing in the United States, and which is directly or indirectly exported commercially, including (without limiting the generality of the foregoing) all commodities (whether in raw, semiprocessed, or processed state), and all other materials (whether in raw, semiprocessed, processed, or manufactured state). (c) The term "services" means all services by exporters ordinarily resident in the United States rendered in foreign countries, and shall include (without limiting the generality of the foregoing) the rendering of engineering, architectural, contracting, and other technical services, the financing through loans or equity investments of business transactions, the rental of leasehold property, and the licensing of intangible property rights including patents, trademarks, and copyrights. (d) The term "political risk" means the risk of loss caused, in whole or part, by the occurrence, on or after the date of a guaranty contract entered into under the terms of this Act, of any governmental action interfering with the completion of or the payment for an export transaction in accordance with the lawful terms agreed upon by the parties thereto, within a period of time stipulated in the guaranty contract, including losses caused by (1) restriction of the transfer of payments from the buyer's country to the United States; or (2) incurring of additional handling, transportation, insurance, or other charges occasioned by interruption or diversion of voyage due to any cause set forth in this subsection (d) where it is impractical to recover such charges from the purchaser; or (3) imposition, after the making of the guaranty contract, of any law, decree, order, or regulation, including any licensing requirement, quota, embargo, or discriminatory increase in tariff rates, which, in circumstances outside the control of the exporter or the buyer, prevents the import of goods or services into the buyer's country or the export of goods or services from the seller's country; or (4) cancellation, in circumstances outside the control of the exporter or the buyer, of authority to import goods or services already issued and valid at the time the guaranty contract is executed; or (5) cancellation or nonrenewal of an export license or the imposition of restrictions on the export of goods or services not previously subject to license; or (6) requisition, expropriation, or confiscation by action of any government of goods covered by a guaranty contract; or (7) occurrence of war between the debtor's country and the United States; or (8) occurrence of hostile or warlike action including civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, in time of peace or war, and including action in hindering, combating, or defending against an actual, impending, or expected attack— (A) by any government or sovereign power (de jure or de facto); or (B) by any authority maintaining or using military, naval, or air air forces; or (C) by any agent of an such government, power, authority, or forces; or (9) any other governmental action which is beyond the control of the exporter or the foreign buyer. (e) The term "commercial credit risk” means the risk of loss caused by the occurrence, on or after the date of a guaranty contract entered into under the terms of this Act, of— (1) the insolvency of the buyer as hereinafter defined; or (2) the protracted default of the buyer, as hereinafter defined, not caused in whole or in part by a political risk; or (3) the failure or refusal on the part of the buyer to accept and pay for goods or services which have been exported or contracted for export from the United States where such failure or refusal is not excused by and does not arise from or in connection with any breach of condition or warranty on the part of the exporter or from any other cause within his control, provided the exporter has given the Corporation prompt notice of such failure or refusal and complied with all reasonable requirements of the Corporation as to enforcing the exporter's rights under its contract with the buyer and has also taken all reasonable steps which in the exporter's judgment are necessary to enforce its rights under its contract with the buyer; or (4) any other cause of loss not being within the control of the exporter or of the buyer which arises from events occurring outside the United States, which is not normally insurable with insurers covering other than export credit risks, and which was not caused, in whole or in part, by a political risk. (f) The term "insolvency" with respect to a buyer means that (1) the buyer is declared by competent governmental authority to be a bankrupt or insolvent, or the buyer has made an assignment, composition, or other arrangement for the benefit of his creditors generally; or (2) a receiver, liquidator, trustee, or assignee in bankruptcy or insolvency, or similar person, has been appointed by a court or other government official to manage the buyer's estate; or (3) if the buyer is an incorporated body, (A) an order has been made for the winding-up or liquidation of its affairs, or (B) an order has been made approving a petition seeking reorganization under laws similar to the National Bankruptcy Act, or (C) an arrangement binding on all creditors has been sanctioned by a court or has otherwise become legally effective; or (4) whether the buyer is incorporated or unincorporated, such conditions exist as are equivalent in effect to any of the foregoing conditions. (g) The term "protracted default" means the failure of the buyer to pay the exporter in the United States and in United States currency the amount due under the terms of the transaction guaranteed within a period of six months (or such other period as shall be specified in the guaranty contract) after the date on which payment is due under the terms of the transaction guaranteed. (h) The term "United States" includes the several States, dependencies, and possessions of the United States, the Commonwealth of Puerto Rico, and the District of Columbia. (i) The term "State" means any State of the United States and any district, dependency, or possession thereof. CREATION OF CORPORATION SEC. 4. There is hereby created a body corporate to be known as the American Export Credits Guaranty Corporation (in this Act referred to as the "Corporation"). The principal office of the Corporation shall be located in the city of New York, but the Corporation may establish branch offices in places other than the city of New York. The duration of the Corporation shall be perpetual. BOARD OF DIRECTORS SEC. 5. (a) The management of the Corporation shall be vested in a Board of Directors (hereinafter referred to as the "Board") consisting of (1) eight class A Private Directors elected by majority vote of the holders of class A common stock and four class B Private Directors elected by a majority vote of the holders of class B common stock, such elections and the filling of vacancies in the Board to be in such manner as the Corporation shall, by its bylaws, provide, and (2) a Government Director, representing the Export-Import Bank of Washington, appointed by the President of the United States by and with the advice and consent of the Senate. The Private Directors shall be first chosen at a |