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Indo-Vietnam Credit Agreement
The
Government of India have extended a line of credit upto an amount of Indian
Rs.600 million (Rupees six hundred million only) to the Government of the
Socialist Republic of Vietnam under a credit agreement entered into between the
two Governments on 1st December, 1999. The credit will be available to the
Government of Vietnam for import of capital goods including original spare parts
and accessories purchased along with the capital goods and included in the
original contract as also consumer durables and consultancy services as
mentioned in the Annexure, from India. 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 export of goods and
services from India and their import into Vietnam under the line of credit shall
take place through normal commercial channels and will be subject to the laws
and regulations in force in both the countries. The broad terms and conditions
of the line of credit are as under:
All
export contracts will be subject to the approval of the Government of India and
the Government of Vietnam and shall contain a clause to that effect. The
contracts should be sent to the Ministry of Finance, Department of Economic
Affairs, Government of India, New Delhi for approval. After each contract has
been approved, intimation thereof will be sent to the Government of Vietnam and
to the State Bank of India, New Delhi, by the Ministry of Finance, Government of
India.
The
credit will be available for 100% of the f.o.b. value of the goods mentioned in
the Annexure to be exported from India. Accordingly, Letters of Credit should
specify that 100% f.o.b. value should be financed from the credit. The contract
should be expressed in Indian Rupees.
All
disbursements under the credit shall be under letters of credit opened by the
Bank of Foreign Trade of the Socialist Republic of Vietnam. All Letters of
Credit will be advised by Bank of Foreign Trade of the Socialist Republic of
Vietnam, Vietnam to the State Bank of India, New Delhi for onward transmission
to the exporter/s either direct or through another bank in India, if any,
nominated by the exporter/s. The letters of credit should be supported by a copy
of the contract and should contain the following reimbursement clause:
"Reimbursement
for 100% of the f.o.b. value of the contract shall be provided by the State Bank
of India, New Delhi from the credit extended by the Government of India to the
Government of Vietnam. The Letter of Credit is negotiable after the State Bank
of India has issued an advice that it is operative".
2.
Contracts concerning the items of goods mentioned in paragraph 1 of the
Annexure to be financed under the credit agreement should be signed and relative
Letters of Credit established latest by 31st December, 2000 and the
full amount be drawn under the credit by 31st December, 2001. In
regard to items specified in paragraph 2 of Annexure contracts to be financed
under the credit agreement should be signed, relative letters of credit opened
and the full amount drawn by 31st December 2000. If the full amount
is not drawn by the aforesaid dates, the balance will be cancelled and the final
instalment of the repayment to be made by the Government of Vietnam shall be
reduced accordingly, except as may otherwise be agreed to by the Government of
India.
3.
Shipments of goods and export of consultancy services covered by the
Credit Agreement should be declared on GR/ SDF/ SOFTEX forms with prominent
superscription reading "Exports to Vietnam under Credit Agreement dated 1st
December, 1999 between the Government of India and the Government of
Vietnam." The number and date of this circular should be recorded on the GR/
SDF/ SOFTEX 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/ SOFTEX form and forward the
same to the concerned office/s of Reserve Bank in the usual manner.
4.
The import content of exports under the Line of Credit should be kept
within low or negligible limits.
5.
No agency commission should be allowed in respect of exports under this
credit.
6.
Authorised Dealers may bring the contents of this circular to the notice
of their constituents engaged in exports to Vietnam.
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) and any contravention or non-observance thereof is subject to the
penalties prescribed under the Act.
ANNEXURE
Nature
of goods referred to in Indo-Vietnam Credit Agreement of 1999
1.
Capital goods (along with original spare parts and accessories purchased
with the capital goods and included in the original contract).
2.
Items eligible for coverage under this credit also include consumer
durables and consultancy services.
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