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Catalog of Federal Domestic Assistance

Program Descriptions

70.003:  Foreign Investment Insurance

Popular Name:  Political Risk Insurance

Objectives:  To insure investments of eligible United States investors in developing countries and emerging markets, against the political risks of inconvertibility, expropriation, and political violence. Special programs include insuring contractors and exporters against arbitrary drawings of letters of credit posted as bid, performance or advance payment guaranties, energy exploration and development, and leasing operations.

PROGRAM AND AWARD	FINANCIAL AND INFORMATION CONTACTS
ELIGIBILITY REQUIREMENTS	FINANCIAL AND ADMINISTRATIVE INFO.
APPLICATION AND AWARD PROCESS	INFORMATION CONTACTS
RELATED PROGRAMS	ASSISTANCE CONSIDERATIONS
PROGRAM ACCOMPLISHMENTS	POST ASSISTANCE REQUIREMENTS

70.003 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Citizen of the United States; a corporation, partnership, or other association created under the laws of the United States or any State or territory, of which more than 50 percent is beneficially owned by United State citizens; a foreign corporation at least 95 percent owned by such entities; or any other 100 percent United State owned foreign entity.

Beneficiary Eligibility:  OPIC does not support projects that will result in the loss of United State jobs, that have a negative impact on the host country's economy or environment, or contribute to violations of internationally recognized worker rights. OPIC supports projects that contribute to the economic and social development of the host country.

Credentials/Documentation:  A bilateral agreement between the United States and the host country government must be in place before OPIC can provide insurance for a given country. Additionally, project approval by the foreign government is required in some countries before insurance can be provided.

70.003 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  Registration letter. This program is excluded from coverage under E.O. 12372.

Application Procedure:  The insurance program has a two-step application process. Investors must first register their projects with OPIC before making an irrevocable commitment to invest. Once the details of the investment have been clarified, an application for insurance coverage is filed. OPIC charges a retainer fee after the submission of an application for insurance in order to proceed with review of the project. Registration and application forms are available on request from the Insurance Applications Officer, Overseas Private Investment Corporation, 1100 New York Ave., NW., Washington, DC 20527.

Award Procedure:  Insurance is issued directly to the applicant by OPIC, or through a broker if the investor so chooses.

Deadlines:  Registration must be made prior to making an irrevocable commitment. The registration remains active at OPIC for 2 years.

Range of Approval/Disapproval Time:  Will vary depending on size and complexity of project.

Appeals:  Not applicable.

Renewals:  OPIC insurance contracts can be offered at fixed rates for up to 20 years. Investor has the opportunity to change insurance elections annually. Policies are non-cancelable by OPIC, provided that investor is paying premiums and is not in material breach of the contract.

Criteria for Selecting Proposals:  See USES AND USE RESTRICTIONS and ELIGIBILITY REQUIREMENTS.

Examples of Funded Projects:  Examples of insured projects include: private power generation, mining, petroleum, telecommunications, commercial bank, oil and gas processing equipment, construction, food processing, equipment leasing, etc.

Range and Average of Financial Assistance:  From $67,500 to $200,000,000.

70.003 RELATED PROGRAMS:

• 70.002 Foreign Investment Financing.

70.003 PROGRAM ACCOMPLISHMENTS:

70.003 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  OVERSEAS PRIVATE INVESTMENT CORPORATION

Type of Assistance:  Insurance.

Obligations:  (Insurance Issued) (Aggregate Maximum Insured Amount) FY 99 $4,842,000,000; FY 00 est $5,000,000,000; and FY 01 est $6,000,000,000.

Budget Account Number:  71-4184-0-3-151.

Authorization:  Foreign Assistance Act of 1969, Title IV, Section 234(a), Public Law 91-175, 22 U.S.C. 2191, et seq.

Regulations, Guidelines, and Literature:  "OPIC Program Handbook," free.

70.003 INFO CONTACTS:

Regional or Local Office:  None.

Headquarters Office:  Information Officer, Overseas Private Investment Corporation, 1100 New York Ave., NW., Washington, DC 20527. Phone: (202) 336-8799. For program information by telefax: (202) 336-8700; electronic mail: OPIC@opic.gov; internet: www.opic.gov.

(See Appendix IV for more contact info.)

70.003 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  Not applicable. In most cases, insured must retain at least 10 percent of the risk as self-insurance.

Length and Time Phasing of Assistance:  Maximum insurance term is 20 years for equity investment; for loans, the term of the loan; for contracts, the term of the contract.

Uses and Use Restrictions:  To encourage private United State investment in developing countries and emerging economies by protecting against certain political risks. Investments may be eligible for insurance if they contribute significant benefits to the social and economic development of the host country. OPIC will not support projects that could result in the loss of United State jobs, adversely affect the United State economy, have a negative impact on the host country's development or environment, or contribute to violations of internationally recognized worker rights.

70.003 POST ASSISTANCE REQUIREMENTS:

Reports:  Annual election of current coverage, annual payment of premiums, and such information as may be requested by OPIC to monitor the project or to make a determination in the case of a claim for compensation.

Audits:  Not applicable.

Records:  When claim for compensation is pending and after such payment is made, the investor has a duty to cooperate with OPIC in supplying all information requested pertaining to the claim. These responsibilities are clearly spelled out in each insurance contract.