Since November 26, USDA has
authorized credit guarantees for sales of U.S.
agricultural commodities to Indonesia under the Export
Credit Guarantee Program (GSM-102) for FY 2000. USDA
authorized $400 million in credit guarantees for sales of
U.S. agricultural commodities to Indonesia.
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superseded.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 Commodity Credit
Corporation (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 Azerbaijan
Since December 13, USDA has
authorized $5 million in supplier credit guarantees for
sales of U.S. agricultural commodities to Azerbaijan
under the Supplier Credit Guarantee Program (SCGP) for FY
2000.
USDA has amended the
Commodity Credit Corporation’s SCGP for the
Southeast Asia Region for FY 2000 to change the country
destinations. Eligible destinations are Indonesia,
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 below presents the
FY 2000 SCGP’s for which USDA has authorized credit
guarantees for sales of U.S. horticultural products as of
December 16, 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 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).
