On
March 11, the U.S. Department of Agriculture authorised $5 million in
export credit guarantees to Azerbaijan under the Commodity Credit
Corporation (CCC) Export Credit Guarantee Program (GSM-102). An
additional $5 million was approved under the CCC Supplier Credit
Guarantee Program. The two programs support commercial financing for
exports of U.S. foods and agricultural commodities and encourage U.S.
exporters to develop new agricultural trading relationships with
potential Azeri partners. The International Bank of Azerbaijan became
the first Azeri bank to be accredited under these U.S. Department of
Agriculture programs.
"These
agricultural credit lines are an example of U.S. support for bilateral
business development, particularly in Azerbaijan's potentially rich
agricultural sector," remarked Ambassador Ross Wilson.
"GSM-102 and the Supplier Credit Program will introduce competitive
financing for future agricultural transactions and encourage U.S.-Azeri
business partnerships in this key sector for Azerbaijan's economy. The
waiver of Section 907 has opened a new era in U.S.-Azeri relations, and
further economic reforms including privatisation, improved tax
administration, and a strong and independent court system will further
encourage U.S. trade and investment in this country," added
Ambassador Wilson.
GSM-102
guarantees cover up to 98 percent of the value of the commodity for a
period of up to one year. The program normally operates through
confirmed letters of credit between approved banks in the United States
and the importing country. The International Bank of Azerbaijan has been
pre-approved to participate in this program. During fiscal year 2001,
GSM-102 guarantees helped finance approximately $3 billion in U.S.
agricultural product sales to importers in over fifty countries.
The
Supplier Credit Program operates directly through promissory notes which
are negotiated between the exporter and importer and can cover up to 65
percent of the value of the transaction for a period up to six months.
This program is relatively new and financed about $116 million dollars
in U.S. agricultural products last year.
Thousands
of different U.S. foods and agricultural products, including grains,
oilseeds, meats and poultry, and other supermarket items, are eligible
for financing under these programs.
