Exporting Used and Refurbished Equipment

 

Equipment that has been previously owned or placed into service is generally eligible for support under Ex-Im Bank’s loan, guarantee and insurance programs, provided certain criteria are me.  To be eligible for Ex-Im Bank support, used equipment, including equipment that has been refurbished in the U.S., must meet the following eligibility criteria:

 

  1. To be considered U.S. content, the used equipment must be of original U.S. manufacture, AND, if previously exported, must have been in use in the U.S. for at lease one year prior to export.
  2. The U.S. cost associated with the refurbishment of the equipment is eligible for Ex-Im Bank support, provided they meet Ex-Im Bank’s foreign content policy parameters.   Ex-Im Bank can support the lesser of 85 percent of the U.S. Contract Price of the item or 100% of the actual U.S. content of the item provided that (a) the item is shipped from the U.S. and (b) the foreign content of the item does not exceed 50 percent of the item’s total production cost.
  3. If the used equipment is of either original foreign manufacture o original U.S. manufacture, previously exported and has not been in use in the U.S. for at least one year prior to is proposed export, then Ex-Im Bank will treat it as a foreign content and the following applies:
    1. If the equipment is to be refurbished, the used equipment procurement cost is considered eligible for foreign content provided that this cost is less than 50 percent of the total procurement and refurbishment cost.
    2. If the foreign content of the used equipment exceeds 50 percent of the cost associated with the procurement and refurbishment of the equipment, then only the U.S. refurbishment portion will be considered eligible for Ex-Im bank support.
  4. Previously exported goods that benefited from Ex-Im Bank financing in the past will be considered eligible for Ex-Im Bank support provided that the original financing has been paid in full and that the equipment has been in use in the U.S. at least one year.
  5. The repayment term that Ex-Im Bank offers for used and refurbished equipment will be consistent with Ex-Im Bank’s international agreements for repayment terms based on contract value.  Ex-Im Bank, at its sole discretion, will determine the remaining useful life of such equipment.
    1. If the remaining useful life of the equipment is at least half the useful life of equivalent new equipment, then Ex-Im Bank may support a repayment term equal to that offered new equipment.
    2. If the remaining useful life of the equipment is less than half of the useful life of equivalent new equipment, then Ex-Im Bank may support a repayment term equal to the useful life remaining.
    3. If the sale includes more than one item, including a mixture of new and used items, a weighted average of the useful lives of all the items will be calculated by applying the rules of 5(a) and 5(b) above.

 

 

  1. Foreign Content for used pieces should be determined by contacting the original manufacturer to ascertain the value on a percentage basis of foreign components contained in the equipment during the manufacturing process.   This percentage should be applied to the suppliers purchase price to determine the current value of foreign components.  This value should then be adjusted to account for the value of any additional foreign components installed during the refurbishment process.

 

NOTICE: The above information may not be current and should be used only as a guide and not as a part of an established agreement condition.   Contact Market World, Inc. for additional addendum information.