What assurances does the Eximbank have that it will not be supporting a project with untoward environmental repercussions?
China Eximbank cancelled a loan for a dam in Gabon on environmental grounds.
In other words, the provision ensures that Eximbank loans can be made to Poland without regard for prospects of repayment.
By law, Eximbank cannot issue loans unless its Board of Directors determines that there is a reasonable assurance of repayment.
Similarly, repayment of Eximbank loans made in 1986 for a satellite communication earth station and loans made in 1987 are also overdue.
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Moving ahead on Eximbank availability would probably doom any executive branch effort to forge a common alliance policy on this important issue.
Under a deal last year, it raised money from America's Eximbank to hire Halliburton, an oil-services company, to help manage the Samotlor field.
It has been reported that Eximbank assumes that some 27% of the Caterpillar loan would not be recovered and has put aside reserves for that eventuality.
Instead, Eximbank seems to be whistling past this graveyard by simply relying upon the assertion that Gazprom possesses a positive hard currency cash flow that can be accessed.
The loan, which was the largest ever provided to Russia by Eximbank, will finance the sale of 295 Caterpillar tractors for a natural gas pipeline project in the Siberian arctic.
Similarly, the proposition that Eximbank has obtained genuinely dedicated income streams to amortize the loans through escrow account arrangements does not measure up to standard commercial banking standards and practices.
After all, it was finalized at the very moment Eximbank was contending publicly that, under present circumstances, the Bank felt compelled to insist upon collateralized arrangements for its lending to Russia.
Such an agreement, coupled with a bilateral investment treaty are required prior to granting the Soviet Union access to a number of U.S. government programs such as Eximbank credits and OPIC insurance.
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For Poland, the bill also waives Eximbank's current statutory requirement that it obtain a "reasonable assurance of repayment" for its loans and authorizes the President personally to provide those assurances to the Bank.
Unfortunately for Acting Chairman Lawson and his friends, the proposed Eximbank lending facility for the Russian energy sector cannot be implemented so long as Moscow is in default to Eximbank, as it is at present.
Eximbank loans made in 1985 for several meat-processing plants, copper-processing facilities, a turnkey chemical complex, a color-television tube plant, a glass funnel facility, a process computer used in steel manufacturing, and a tractor factory remain unpaid.
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Even if Russia cleans up its arrearages with Eximbank, another problem confronts conscientious professionals at the Bank: The Export-Import Bank is required by statute to determine that there is a reasonable assurance of repayment from the borrower.
"This fall, we will almost surely be told by the Bush Administration that Eximbank and Commodity Credit Corporation loan guarantees are needed for U.S. firms and banks to compete with our allies in the Soviet market, " noted Roger W. Robinson, Jr.
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