USDA Extends Credit Guarantees to
Andean Region, Egypt and Southeast Asia Region
Since October 22, the United States
Department of Agriculture (USDA) has authorized credit
guarantees for sales of U.S. agricultural commodities to
the Andean Region, Egypt, and Southeast Asia Region under
the Export Credit Guarantee Program (GSM-102) for FY
2000. USDA authorized $350 million in credit guarantees
for sales of U.S. agricultural commodities to the Andean
Region. The Andean Region includes Bolivia, Chile,
Colombia, Peru, Ecuador, and Venezuela. USDA also
authorized $100 million in credit guarantees to Egypt and
$90 million to the Southeast Asia Region. The Southeast
Asia Region includes Malaysia, Philippines, Thailand, and
Vietnam.
Exporters may apply for credit guarantees
on a first-come, first-served basis to cover sales of any
of the commodities specified in the GSM list of
commodities published in FAS program announcement PR
0450-99, issued October 1, 1999, or as superseded. The
list of eligible commodities will apply to all individual
country and regional announcements unless otherwise
stated in the announcements. The following horticultural
products are eligible under the export credit guarantee
programs for FY 2000: dried fruit; fresh fruit; frozen
fruit; canned fruit; 100 percent fruit juices; fruit and
vegetable concentrates, pastes, pulps and purees; honey;
hops or hops extract; beer; tree nuts; fresh vegetables;
canned vegetables; dried vegetables; wine; and brandy.
From time to time, this list may be amended as additional
commodities become eligible. The allocation does not
assign dollar amounts to any of the commodities specified
in the GSM list of commodities, providing buyers and
sellers maximum flexibility in arranging the size of
their transactions within the scope of the overall
allocation.
The GSM-102 program makes available credit
guarantees for 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.
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:
USDA Extends Supplier Credit Guarantees to Andean Region and Southeast
Asia Region
Since October 22, USDA has authorized $10
million in supplier credit guarantees for sales of U.S.
agricultural commodities to the Andean Region and $50
million to the Southeast Asia Region under the Supplier
Credit Guarantee Program (SCGP) for FY 2000. Eligible
destinations under the Andean Region include Bolivia,
Chile, and Peru. The Southeast Asia Region includes
Malaysia, the Philippines, and Thailand.
Exporters may apply for credit guarantees
on a first-come-first-served basis to cover sales of any
of the eligible commodities. The following horticultural
products are eligible under the SCGP: dried fruit; fresh
fruit; 100 percent fruit juices; fruit and vegetable
concentrates, pastes, pulps and purees; honey; hops or
hops extract; tree nuts; fresh vegetables; canned
vegetables; dried vegetables; wine; and brandy.
This list of eligible commodities will
apply to all individual country and regional SCGP
announcements unless otherwise stated in the
announcements.
The 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 28 presents the FY 2000
SCGPs for which USDA has authorized credit guarantees for
sales of U.S. horticultural products as of November 19,
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:
The General Sales Manager 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.
The SCGP encourages exports to buyers in
countries where credit is necessary to maintain or
increase U.S. sales but where financing may not be
available without Commodity Credit Corporation (CCC)
guarantees. Under the SCGP, CCC guarantees a portion of
payments due from importers under short-term financing
(up to 180 days) that exporters have extended directly to
the importers for the purchase of U.S. agricultural
commodities and products. These direct credits must be
secured by promissory notes signed by the importers. CCC
does not provide financing but guarantees payment due
from the importer.
Program announcements which can be
accessed on the internet provide information on specific
country and commodity allocations, length of credit
periods, the required form of promissory note, and other
program information and requirements.
(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).
