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.
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 0003-00, issued January 5, 2000, 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superseded.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. For most countries and
regions, 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 table presents
the FY 2000 GSM-102 for which USDA has authorized credit
guarantees for sales of U.S. horticultural products as of
June 15, 2000. 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
Guarantees Available to Developed/Mature Markets: Taiwan
On June 6, the U.S.
Department of Agriculture (USDA) authorized $50 million
in supplier credit guarantees for sales of U.S.
agricultural commodities to Taiwan under the Commodity
Credit Corporation's Supplier Credit Guarantee Program
(SCGP) for fiscal year 2000. 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 0003-00 of Jan. 5, 2000, or as
superseded. 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.
In addition to Taiwan, USDA
is also considering expanding the scope of eligible
countries under the SCGP to include other
developed/mature economies or markets. If you would
like to discuss other developed/mature markets where
supplier credit guarantees would help to facilitate
horticultural exports, please contact Yvette Wedderburn
Bomersheim on (202) 720-0911.
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 Supplier Credit
Guarantee table presents the FY 2000 Supplier Credit
Guarantee Program for which USDA has authorized credit
guarantees for sales of U.S. horticultural products as of
June 15, 2000. 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).
