Courtesy of NAA:
The U.S. Department of Agriculture Foreign Agriculture Service (FAS)’s Export Credit Guarantee Program (GSM-102) provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products.
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.
Live aquatic animals, fresh aquatic animal products and prepared aquatic animal products are eligible commodities for this program. View the full list of eligible live or fresh aquatic products. View the full list of eligible prepared aquatic products.
How GSM-102 Works
The GSM-102 program guarantees credit extended by the Commodity Credit Corporation (CCC) in the United States to approved foreign financial institutions using dollar-denominated, irrevocable letters of credit for purchases of U.S. products by foreign importers. Typically, 98 percent of principal and a portion of interest are covered by a guarantee.
The CCC qualifies exporters before they can participate, as well as foreign financial institutions to which credit is being extended. To qualify for participation, you must register in in SAM.gov and the complete the Exporter Qualification Application.
Once approved to participate, the exporter negotiates terms of the export sale with the importer. Once a firm export sale exists, the qualified U.S. exporter must apply for a payment guarantee before the date of export. The exporter pays a fee calculated on the dollar amount guaranteed based on several factors determined by the CCC.
If the foreign financial institution fails to make any payment covered by the GSM-102 guarantee, the holder of the payment guarantee must submit a notice of default to CCC within the timeframe required by the program regulations. Typically, 98 percent of principal and a portion of interest are covered by a guarantee.