EXPORT NEWS AND OPPORTUNITIES
USDA amends Russia GSM-102 program to include additional horticultural products
On January 20, the United States Department of Agriculture (USDA) amended the allocation of credit guarantees available to U.S. agricultural commodities to Russia to include additional horticultural products. Dried fruit (raisins, prunes, dates, figs, pears, peaches, apricots and apples) and wine and brandy are now eligible under the Russia GSM-102 program. All other terms and conditions previously announced remain the same.
The GSM-102 program makes available financing for the sales of U.S. agricultural commodities overseas. USDA does not provide financing, but guarantees payments due from foreign banks. USDA typically guarantees 98 percent of the principal and a portion of the interest. The GSM-102 program covers credit terms from 90 days to 3 years.
Under the program, once a firm sale exists, the qualified U.S. exporter applies for a payment guarantee before the date of export. The U.S. exporter pays a fee calculated on the dollar amount guaranteed, based on a schedule of rates applicable to different lengths of credit periods. The CCC-approved foreign bank issues a dollar-denominated, irrevocable letter of credit in favor of the U.S. exporter, ordinarily advised or confirmed by the financial institution in the United States agreeing to extend credit to the foreign bank. The U.S. exporter may negotiate an arrangement to be paid as exports occur by assigning the U.S. financial institution the right to proceeds that may become payable under the guarantee, and later presenting required documents to that financial institution. Such documents normally include a copy of the export report.
If a foreign bank fails to make any payment as agreed, the exporter or the assignee may file a claim with USDA for the amounts due and covered by the guarantee. USDA will pay the U.S. bank and will take on the responsibility of collecting the overdue amount from the foreign bank.
The table on page 11 presents FY 1998 GSM-102 programs for which USDA has authorized credit guarantees for sales of U.S. horticultural products as of February 13, 1998. Additional information about the GSM-102 program, regulations, country specific press releases and program announcements, and a Monthly Summary of Export Credit Guarantee Program Activity may be accessed on the Internet at: http://www.fas.usda.gov/excredits/exp-cred-guar.html
USDA announces the Southeast Europe Region Supplier Credit Guarantee Program and amends the Mexico Program
On January 7, USDA authorized $20 million in supplier credit guarantees for sales of U.S. agricultural commodities to the Southeast Europe Region for FY 1998. The Southeast Europe Region consists of Croatia and Slovenia. Exporters may apply on a first-come-first-served basis to cover sales of the following horticultural products: dried fruit, fresh fruit, fresh vegetables, and tree nuts. Coverage up to 50 percent of the principal is offered on credit terms up to a maximum of 180 days.
On February 11, USDA amended the allocation of credit guarantees available for sales of U.S. agricultural commodities to Mexico for FY 1998 to offer coverage on a broader selection of canned fruit. Eligible canned fruit include apples, apricots, blueberries, cherries, grapefruit, oranges, pears, peaches, prunes, raspberries, strawberries, and mixed canned fruit. All other terms and conditions remain the same.
The Supplier Credit Guarantee Program (SCGP) is unique because it covers short-term financing extended directly by U.S. exporters to foreign buyers and requires that the importers sign a promissory note in case of default on the CCC-backed payment guarantee. The SCGP emphasizes high-value and value-added products, but may include commodities or products that also have been programmed under the GSM-102 program.
The table on page 12 presents the FY 1998 SCGPs for which USDA has authorized credit guarantees for sales of U.S. horticultural products as of February 13, 1998. Additional information about the SCGP, regulations, country specific press releases and program announcements, and a Monthly Summary of Export Credit Guarantee Program Activity may be accessed on the Internet at: http://www.fas.usda.gov/excredits/scgp.html
Note: The GSM will consider requests to establish a SCGP and/or GSM Program for a country or region or amend an authorized program to include horticultural commodities and products which are currently not eligible. Information on the FY 1998 GSM-102 and Supplier Credit Guarantee Programs.
(For further information on the SCGP or GSM-102 Program for horticultural commodities, contact Yvette Wedderburn Bomersheim, 202-720-9903).
1/Coverage is detailed in FAS Program Announcements for all commodities, including those not listed as of February 13, 1998. FAS news releases are available on the Internet at http://www.fas.usda.gov/excredits/ exp-cred-guar.html. 2/Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela. 3/Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. 4/Czech Republic, Hungary, and Slovakia. 5/Kenya, Uganda, and Tanzania. 6/Angola, Botswana, Burundi, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda, Seychelles, South Africa, Swaziland, Democratic Republic of the Congo (formerly Zaire), Zambia, and Zimbabwe.
FY 1998 SUPPLIER CREDIT COVERAGE 1/
1/Coverage is detailed in FAS Program Announcements for all commodities, including those not listed as of February 13, 1998. FAS news releases are available on the Internet at http://www.fas.usda.gov/excredits/scgp.html. 2/Bolivia, Chile, Colombia, Ecuador, and Peru. 3/Estonia, Latvia, and Lithuania. 4/Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. 5/Czech Republic, Hungary, and Slovakia. 6/Indonesia, Malaysia, Philippines, Singapore, and Thailand. 7/Croatia and Slovenia.