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Signed

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CANADIAN EM BAS SY AMBASSADE DU CANADA

Djakarta, No. ll3

July ll,

1968

Excellency,

I have the honour to refer to the Agreement concluded between our two countries on July

3, 1959,

and to subsequent Agreements, whereby the Canadian Government supplied to the Indonesian Government food aid grants under the Colombo Plan.

The Canadian Government is prepared again to furnish the

Indonesian Govenunent a food aid grant to the value of $350,000 (Canadian) from funds allocated for this purpose during the Canadian fiscal year April l,

1967

to March 31,

1968.

It is proposed that this food aid grant would be in the form of wheat flour and skim milk powder, and would be subject to the following arrangements which have been discussed between officials of our two Governments:

l. Canada will provide one-third of tne value of the food aid grant in ski.m milk powder and two-thirds of the value of the grant in soft wheat flour FAS (FOB) at a Canadian port; the specifications of the

connnodities and arrangements for their delivery FAS or FOB at a designated Canadian port will be agreed upon separately.

His Elccellency Adam Halik, Minister of Foreign affairs of the Republic of Indonesia, Djakarta.

-2-2. Indonesia will assume responsibility for the payment of all shipping

and insurance charges connected with the onward transport of the

skim milk powder and wheat flour from the Canadian port of loading.

3.

Within four months of the date appe&ring on the Ocean Bill of Lading

pertaining to the shipment of the commodities, Indonesia will

deposit in the Special Bank Account entitled 11_{Pemerintah, Counterpart}

Fund Canadian Foodstuffs Assistance Progrannne" in the name of the

Government of Indonesia, Rupiah counterpart funus in an amount

equivalent to the Canadian FAS or FOB value of the corrunodities

cal-culated at the official Bonus ExPort (BE) rate of exchange in effect

for the date appearing on the revelant Ocean Bill of La.ding.

4. For the purpose of calculating these counterpart funds, Canada will

notify Indonesia of the official cross-rate between the U.S. Dollar

and the Cano.dian Dollar established by the International Monetary

Fund on the actual date appearing on the relevant Ocean Bill of

Lading; the total U. S . JJollar equivalent will then be converted to

Rupiahs, for Counterpart ｰｵｲ ｾ ｯｳ･ｳＬ＠ at the B.E. rate prevailing on

the actual date of ocean loading.

5. '!he two Governments agree that the Rupiah counterpart funds, established in accordance with the procedure set out in Section ｾＮ＠ above and

deposited in the Special Bank Account mentioned in Section 3 above, will be immediately transferred, on the date of their deposit in the

Special Bank Account, to the Consolidated Revenue Account of the

Government of Indonesia as an identifiable budgetary income item •

-3-60

'Ihe Government of Indonesia will provide on the date when the Rupiah

counterpart funds are deposited in the aforementioned Special Bank Account and transferred to the Indonesian1_{s Government's Consolidated}

Revenue Account a certificate from the Central Bank of Indonesia

confirming both transactions, i.e. certifying the amount of Rupiah counterpart funds deposited in the Special Bank Account and the amount of Rupiah counterpart funds transferred to the Government's

Consolidated Revenue Account.

7.

'Ihe two Governments agree that the Rupiah counterpart funds arising from the food aid grant and deposited in the Government of Indonesials Consolidated Revenue Account will be expended on economic, educational or technical development projects. '!he Government of Indonesia will supply, as soon as practics.ble, a certificate from the Director General of the Budget, Department of Finance, indicating the use to which these Rupiah counterpart funds have been put .

I suggest, .l:!;xcellency , that if your Government agrees to the fore-going proposals, this note and your reply confirming acceptance of these proposed arrangements shall constitute an agreement between our two countries.

Accept, bxcellency, the renewed assurance of my highest con-sideration.

Signed