Export Guarantee Program

 

The U.S. Department of Agriculture's (USDA) Export Credit guarantee Program (GSM-102) provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products, while providing competitive credit terms to buyers. By reducing financial risk to lenders, credit guarantees encourage exports to buyers in countries, mainly developing countries that have sufficient financial strength to have foreign exchange available for scheduled payments. The program guarantees credit extended by the private banking sector in the U.S. (or, less commonly, by the U.S. exporter) to approved foreign banks using dollar-denominated, irrevocable letters of credit for purchases of U.S. food and agricultural products by foreign buyers. USDA's Foreign Agricultural Service (FAS) administers the program on behalf of the Commodity Credit Corporation (CCC), which issues the credit guarantees. GSM 102 covers credit terms of up to three years; maximum terms may vary by country.

General information about this opportunity
Last Known Status
Active
Program Number
10.610
Federal Agency/Office
Foreign Agricultural Service, Department of Agriculture
Type(s) of Assistance Offered
F - Guaranteed/Insured Loans
Program Accomplishments
Not applicable.
Authorization
OMB 7 CFR 1493
Agricultural Trade Act of 1978, Title 7, Part 1493, Section A, 7 U.S.C. 5602, 5622, 5661, 5662, 5663, 5664, 5676; 15 U.S.C. 714b(d), 714c(f). Executive Order 13175, Title 7, Part 1493, Section A, 15 U.S.C. 714
Who is eligible to apply/benefit from this assistance?
Applicant Eligibility
Export Credit guarantee Program (GSM-102) provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products, while providing competitive credit terms to buyers. By reducing financial risk to lenders, credit guarantees encourage exports to buyers in countries, mainly developing countries, that have sufficient financial strength to have foreign exchange available for scheduled payments. This Program provides guarantees to lenders.
Beneficiary Eligibility
Exporters or the exporters assignee are the direct beneficiaries and must meet the applicant eligibility requirements. Interested parties, including U.S. exporters, foreign buyers, banks, may request that the CCC establish a GSM-102 program for a country or region. Prior to announcing the availability of guarantees, the CCC evaluates the ability of each country and foreign bank to service CCC guaranteed debt.
Credentials/Documentation
Not applicable.
What is the process for applying and being award this assistance?
Pre-Application Procedure
Preapplication coordination is not applicable.
Application Procedure
2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. CCC must qualify exporters for participation before accepting guarantee applications. An exporter must have a business office in the U.S. and must not be debarred or suspended from any U.S. government program. Financial institutions must meet established criteria and be approved by CCC. CCC sets limits and advises each approved foreign bank on the maximum amount CCC will guarantee for that bank. The
Award Procedure
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 U.S. agreeing to extend credit to the foreign bank. The U.S. exporter may negotiate an arrangement to be paid as exports occur by assigning to the U.S. financial institution to the right to process that may become payable under the CCC's guarantee. Under this arrangement, the exporter would also provide transaction-related documents required by the financial institution, including a copy of the export report, which must also be submitted to CCC.
Deadlines
Contact the headquarters or regional location, as appropriate for application deadlines
Approval/Disapproval Decision Time
Please contact the headquarters or regional office for addition approval information.
Appeals
Not applicable.
Renewals
Not applicable.
How are proposals selected?
Not applicable.
How may assistance be used?
CCC guarantees payments due from approved foreign banks to exporters or financial institutions in the U.S. However, the financing must be obtained through normal commercial sources. Typically, 98 percent of principals and a portion of interest are covered by a guarantee. because payment is guaranteed, financial institutions in the U.S. can offer competitive credit terms to the foreign banks, usually with interest rates based on the London Inter Bank Offered Rate (LIBOR). Any follow-up on credit arrangements between the foreign bank and the importer are negotiated separately and are not covered by the CCC guarantee.
What are the requirements after being awarded this opportunity?
Reporting
Not applicable.
Auditing
Recipients under this program are subject to audit by the Office of the Regional Inspector General, U.S. Department of Agriculture.
Records
For CCC audit purposes, the U.S. exporter must obtain documentation to show that the commodity arrived in the eligible country, and the exporter or the exporter's assignee must maintain all transaction documents for five years from the date of completion of all payments.
Other Assistance Considerations
Formula and Matching Requirements
Statutory Formula: Title 7 Chapter 14 Part 1493 7

Matching requirements are not applicable to this assistance listing.

MOE requirements are not applicable to this assistance listing.
Length and Time Phasing of Assistance
The payment guarantee applies to a credit period established in the application, and coverage begins either on the date(s) of export or the date when interest begins to accrue, whichever is earlier. Coverage will continue during the credit term specified in the payment guarantee. However, the payment guarantee does not become effective until the date of export. Method of awarding/releasing assistance: Letter.
Who do I contact about this opportunity?
Regional or Local Office
For more information, contact: Director, Credit Programs Division, Office of Trade programs FAS/USDA, Stop 1025, 1400 Independence Ave SW Washington DC 20250-1025
Headquarters Office
Juan McCoy
1400 Independence Avenue SW
Washington, DC 20250 USA
juan.mccoy@usda.gov
Phone: 2027200370
Website Address
http://www.fas.usda.gov/programs/export-credit-guarantee-program-gsm-102
Financial Information
Account Identification
12-1336-0-1-351
Obligations
(Guaranteed/Insured Loans) FY 18$1,977,571,267.00; FY 19 est $2,000,000,000.00; FY 20 est $5,500,000,000.00; FY 17$1,578,800,312.00; FY 16$6,748,000,000.00; -
Range and Average of Financial Assistance
Not applicable/available.
Regulations, Guidelines and Literature
Program Announcements issued by the Foreign Agricultural Service provide information on specific country and commodity allocations, length of credit period, and other program information and requirements.
Examples of Funded Projects
Not applicable.

 



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