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Indo-Myanmar Credit Agreement dated November 17, 2000 for US$ 15 million
The
Government of India have extended a line of credit of US$ 15 million (US Dollar
fifteen Million only) to the Government of the Union of Myanmar under a credit
agreement entered into between the two Government on November 17, 2000. The
credit will be available to the Government of the Union of Myanmar for import
from India of capital goods of Indian manufacture, consultancy services and
consumer durables as specified in the Annexure. The contents of the Annexure may
be modified by way of additions, deletions, or substitutions from time to time
as may be mutually agreed to between the two Governments. The credit will not
cover third country imports. The export of goods from India and their import
into Myanmar shall take place through normal commercial channels and will be
subject to the laws and regulations in force in both the countries.
2.
The broad terms and conditions of the line of credit are as under:
a)
All export contracts under the line of credit will be subject to the approval of
the Government of India and the Government of Myanmar and shall contain a clause
to that effect. The contracts should be forwarded to the Ministry of Finance,
Department of Economic Affairs, Government of India, New Delhi, for approval.
The Government of Myanmar and the State Bank of India, New Delhi, will be
informed in respect of each approved contract by the Ministry of Finance,
Government of India.
b)
The credit of US$ 15 million will be available on f.o.b. (free on board) basis
and will cover 100 percent value of the eligible goods to be exported from
India. The contracts should be expressed in U.S. Dollars. Letters of credit
should specify that 100 percent value shall be financed from the credit.
c)
All disbursements under the credit should be made under letters of credit opened
by banks in Myanmar only. All letters of credit shall be advised by banks in
Myanmar to the state bank of India, New Delhi, for onward transmission to the
exporters either direct or through another bank in India, if any, nominated by
the exporter/ s. Normal commercial practices followed in respect of advising
payments under letters of credit will be applicable. Further, all letters of
credit should be supported by a copy of the contract and should contain the
following reimbursement clause:
�Reimbursement
for 100 percent of the f.o.b. value of the contract shall be provided by the
State Bank of India, New Delhi, from U.S. $ 15 million credit extended by the
Government of India to the Government of Myanmar. The letter of credit is
negotiable after the State Bank of India has issued an advice that it is
operative.�
3.
The contracts to be financed under the credit agreement for items
specified in paragraph 1 of the Annexure should be signed and relative letters
of credit established by November 30, 2001. The terminal date for drawal of the
full amount under the credit has been fixed as November 30, 2002. In the case of
items specified in paragraph 2 of the Annexure, contracts should be signed,
letters of credit opened and the full amount be drawn on or before November 30,
2001. If the full amount of the loan is not drawn by the above dates, the
balance will be cancelled and the final instalment of the repayment to be made
by the Government of the Union of Myanmar shall be reduced accordingly, except
as may otherwise be agreed to by the Government of India.
4.
Shipments of goods covered by the credit agreement should be declared on
GR/ SDF Forms, with a prominent superscription reading �Exports to Myanmar
under credit agreement dated November 17, 2000 between the Government of India
and the Government of the Union of Myanmar�. The number and date of this
circular should also be recorded on the GR/ SDF forms in the space provided
therefore. On receipt of the full payment of the bills in the manner indicated
above, authorised dealers should certify duplicate copies of the relative GR/
SDF Forms and forward them to the concerned Regional Office of Reserve Bank of
India in the prescribed manner.
5.
Ordinarily, no agency commission shall be payable in respect of exports
financed under the line of credit. However, Reserve Bank may consider on merit
requests for payment of commission upto a maximum extent of 5 percent of the
f.o.b. value in respect of goods, which require after sales service. In such
cases, commission will have to be paid in Myanmar by deduction from the invoice
value of the relevant shipment and the reimbursable amount will be 100 percent
of the f.o.b. value minus the commission paid. Approval for payment of
commission should be obtained before the relevant shipment is effected.
6.
Authorised dealers may
bring the contents of this circular to the notice of their constituents engaged
in exports to Myanmar.
7.
The directions contained in this circular have been issued under Section
10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999, (42 of
1999). Any contravention or non-observance of these directions is subject to the
penalties prescribed under the Act.
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