[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1493.230]

[Page 824-825]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1493--CCC EXPORT CREDIT GUARANTEE PROGRAMS--Table of Contents
 
       Subpart C--CCC Facility Guarantee Program (FGP) Operations
 
Sec. 1493.230  Eligible transactions.

    (a) Program announcements. From time to time CCC will issue program 
announcements indicating the availability of facility payment guarantees 
in connection with sales of goods or services to emerging markets. The 
announcements will specify the emerging markets, the maximum amount, in 
U.S. dollars, of guarantee exposure that CCC will undertake, and may 
specify special terms or conditions that will be applicable.
    (b) Sale requirements. CCC will issue facility payment guarantees 
only in connection with projects that CCC determines will benefit 
primarily exports of U.S. agricultural commodities and products, and 
only where there is a firm contract for the sale of goods or services 
for the establishment or improvement of an agriculture-related facility. 
The contract may be contingent,

[[Page 825]]

however, on the issuance of a CCC facility payment guarantee.
    (c) Initial payment requirement. The contract for sale of goods or 
services between the exporter and the importer shall oblige the importer 
to make an initial payment(s) to the exporter of at least 15 percent of 
the net contract value in Sec. 1493.260(b)(1). Such initial payment(s) 
shall be in U.S. dollars or instruments having a definite value in U.S. 
dollars, and shall be made prior to the export of the goods or services.
    (d) Required method of payment. CCC will issue a facility payment 
guarantee only in connection with a sale in which payment will be made 
under either:
    (1) An irrevocable foreign bank letter of credit specifically 
stating the deferred payment terms under which the foreign bank is 
obligated to make payments in U.S. dollars as payments become due; or
    (2) An irrevocable foreign bank letter of credit supported by a 
related obligation specifically stating the deferred payment terms under 
which the foreign bank is obligated to make payment in U.S. dollars as 
such payments become due.
    (e) Form of letter of credit. The foreign bank letter of credit 
referred to in paragraph (d) of this section shall be an irrevocable 
commercial letter of credit, subject to the revision of the 
International Chamber of Commerce Uniform Customs and Practices for 
Documentary Credits[copy] in effect when the letter of credit is issued, 
providing for payment in U.S. dollars against stipulated documents and 
issued in favor of the exporter by a CCC-approved foreign banking 
institution.
    (f) Form of related obligation. The related obligation referred to 
in paragraph (d) of this section shall be in one of the following forms:
    (1) A letter of credit including a specific promise to pay on 
deferred payment terms as a special instruction from the issuing bank 
directly to the U.S. financial institution to refinance the amounts paid 
by the U.S. financial institution for obligations financed according to 
the tenor of the letter of credit;
    (2) A separate document specifically identified and referred to in 
the letter of credit as the agreement under which the foreign bank is 
obligated to repay the U.S. financial institution on deferred payment 
terms;
    (3) A separate document setting forth the related obligation, or in 
a duly executed amendment thereto, as having been financed by a U.S. 
financial institution pursuant to, and subject to, repayment in 
accordance with the terms of such related obligation; or
    (4) A promissory note executed by a foreign bank issuing the letter 
of credit in favor of the financial institution.