GSM-102 Eligibility Requirements for Foreign Financial Institutions

The Commodity Credit Corporation (CCC) will consider only foreign financial institutions that are capable of effecting payment either via:

  1. An irrevocable foreign bank letter of credit, issued in favor of the exporter, specifically stating the deferred payment terms under which the foreign bank is obligated to make payments in U.S. dollars as such payments become due; or
  2. An irrevocable foreign bank letter of credit, issued in favor of the exporter, that is supported by a related obligation specifically stating the deferred payment terms under which the foreign bank is obliged to make payment to the exporter, or the exporter's assignee, in U.S. dollars as such payments become due.

Evaluation Criteria

The following information, generally provided by the foreign bank, will enable CCC to evaluate the eligibility of financial institutions to assume payment obligations in connection with the GSM-102  program:

  • Legal name and address of financial institution
  • Three most recent annual reports or related documents which include the following:
    • Auditor's report
    • Audited balance sheet
    • Off-balance sheet contingencies
    • Audited income statement
    • Audited cash flow statement or statement of sources and uses of funds
    • Related notes to financial statement
  • Statement of internal accounting practices
  • Description of internal controls employed to reduce risk associated with the bank's lending and other operations
  • Breakdown of bank ownership provided in the following format:
    • Individual shareholder ownership by percentage
    • Percent of government ownership
    • Identify entity or person with ultimate control or decision making authority, if different from majority shareholder
  • Organizational structure; i.e. independent or a subsidiary, affiliate, or branch of another bank.
  • Names and profiles of chief executive officer, chairman of the board, executive vice presidents, vice presidents, etc.
  • Percentage breakdown of loan portfolio by industrial sector
  • Total loans receivable 90 days or more past due
  • Breakdown of other assets (if amount exceeds ten percent of total assets) and contingent liabilities
  • Breakdown of amounts of loss reserves to cover losses on loans, other assets, and contingent liabilities
  • Breakdown of amounts and types of collateral to cover losses on loans, other assets, and contingent liabilities
  • Description of asset-liability and foreign exchange management strategies
  • Name of regulatory entity which governs the bank
  • List of correspondent banks in the U.S., including contact names, telephone, and fax numbers
  • Any other relevant quantitative or qualitative data which could assist CCC in fully evaluating the bank

Off-Balance-Sheet Activities

Institutions must also disclose the types and outstanding amounts of derivatives (including futures, options, swaps), and other off-balance-sheet, interest-rate-sensitive instruments (including repurchase and reverse repurchase transactions).

  • How are these instruments utilized? Describe any methods used for setting limits on these transactions.
  • How is the performance of the above instruments managed? How is the market value of contracts monitored? Describe the types of pricing models employed.
  • How long has the bank utilized derivatives? Describe any losses incurred
  • How are credit risk, legal and documentation risk managed? Who is authorized to develop derivatives contracts?

Participation Limits

Once CCC has deemed a foreign bank eligible, it will establish a participation limit. To find out a particular foreign bank's participation limit, contact the appropriate bank analyst by the method described under "CCC Contact" in the section below.

Application Submission

Interested foreign banks should provide information above to:

Via Courier
Via Mail
USDA/FAS/OTP/CPD/Risk and Asset Management
ATTN: Teri Ryan
1400 Independence Ave., SW
Room 5509
Washington, DC 20250
USDA/FAS/OTP/CPD/Risk and Asset Management
ATTN: Teri Ryan
1400 Independence Ave., SW
Mail Stop 1025
Washington, DC 20250-1025

For your convenience, we have provided a Sample Foreign Bank Application Form.

Additional information regarding the eligibility of foreign financial institutions to participate in the GSM-102 program can be found in the program regulations, 7 CFR Part 1493.