Export Credit
Guarantee Program: No Activity Since Last Publication
The Export Credit Guarantee
Program (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 the FY 1999 GSM-102 programs for which USDA has
authorized credit guarantees for sales of U.S.
horticultural products as of August 6, 1999. 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:
Supplier Credit
Guarantee Program: No Activity Since Last Publication
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 1999 SCGPs for which USDA has authorized
credit guarantees for sales of U.S. horticultural
products as of August 6, 1999. 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:
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.
(For further
information on the SCGP or GSM-102 Program for
horticultural commodities, contact Yvette Wedderburn
Bomersheim, 202-720-0911 or Elizabeth Mello,
202-720-9903).
