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ARRANGEMENT BETWEEN THE GOVERNivlENT OF THE REPUBLIC OF INDONES IA MID THE GOVERNJ1_{1E:NT OF JAPAN FOR THE}

SUPPLY OF COTTON YARNS TO THE REPUBLIC OF INDONESIA, PARTIALLY AGAI NST RAW COTTON TO BE DELIVERED FROM THE UNITED STATES PL ｾＮＸＰ＠ FRO GRAMME.

The Qove1 .. nment o:f the Republic of' Indonesia. o.ncl the Gove1 .. nment oi' Jo.pun, dcsiPine:; to mo.kc O.l:'Po.ng cmcnts i'op the expo1 .. t oi' cotton yru:>ns

runountine:; to o.pp1"oximutely

s.,

1,099, 000 f'1"om Jo.pun to the Republic of

Indonesia., o.nd i'o1" the a.ccepto..nce in Jo.pun of' l"O.W cotton of' the vo.lue

oi' U.S.$ 2,000,000 in po.x•tio.l payment

(65%)

fo1• the cotton yo.1"ns so cxpoPtccl (the ba.lo.nce

(35%)

to be po.id in stel"ling) have concluded o.n ru"1•0.ngement ns set i'o1 .. th below.

This .AJ:•i:>a.n5 ement wa.s mo.de in the knowledge that the Gove1"nment

o:f the United Stutes of AmCl:>ico. ho.ve o.9:>eed to issue to the Gove1 .. nment of the Republic of Indonesia a. pm:>cha.se o.uthOJ:'iza.tion (he1"eino..fteP called PA) 1'01• J:>o.w cotton pursuo.nt to Title I, United Sto.tes P'i.lblic

Lo.w

480-83Nl

congPess (hm:>eino.i'te1" Pefel"Ped to, o.s PL

480),

o.ncl ha.ve a greed tho.t the GOve1•nment of the Republic of' Indcmes ia. mo.y tJ:>o.ns:fm:>, a.s needed, to the GoveP:nmcnt of' Jo.pun the a.uthoPity to sub-o.uthOJ:>izc

the PA.

Fop the pm .. pose of' this fil:>1"0.ng cmcnt the l:'o.te of' convePsion

between the pound ste1"line; o.nd the U

.s.

dollm" will be: 1 pound ste:i."ling

=

2.8 U.S. dollru"s.

1. The GOvePnmcnt of Jo.pun

A. will f'o.cilito.te the expo1 .. t of' cotton ym"ns mo.nuf'o.cttu:>ed

in Jo.pan, o.t competitive pPiccs o.nd o.ccordins to O.gi."eed qua.litics;

B. will m"Po.nge fo:i." the o.cccpto.nce of' l."O.W cotton mo.de a.va.ila.ble

to the C--0ve1"nment of the Republic Of Indonesia. by the United

Stutes undel" the PL ＡｾＸＰ＠ in po.Ptio.l pa.yment i'Ol." the FOB va.lue of' the cotton yo.rns ･ｸｰｯＱｾｴ･､＠ to impo1"tm:>s in Indoncsio. undc1 ..

this fil:>J:>o.ns emcn t :

c. will Ul"J."o.ng c f'op the cont:i:-o.cting fo1" the l"O.W cotton undel"

the PA pPiOl." to June

30, 1961

and .fo1" the shipment p:i."iOP to July

31, 1961

with the undc:i. .. sto.ndine tho.t these tc:i."mino.l cont1 .. ucting a.nc.1 shipping do.tes ma.y be extended by 0.1)."ecment between the GOvci--nment o.f the Republic oi' Indonesia. a.ncl the G.ovePnmcnt o.f the United Sta.tcs;

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-D. will W."J:>o.nge tho.t the l"O.W cotton undcP the PA sho.11 bo impo1"ted uncle1" the o.pplica.ble J:>c3ulo.tions o"f: the United Stutes Dcpru."tmcnt of' AgJ:>icultui"c, o.nd o.gi"'cc th.o.t the Po.w cotton sho.11 not be impo1"tcd into Jo.po.n unless i-•espccti ve

Lcttc1"s of' C1"cdi t .fa1" cotton yru."ns ho.vc been opened, with the undm."sto.ndinc tho.t the impoPts of J:>o.w cotton will only a.mount to

65%

of' the FOB vo.lue of Lcttm:-s of' CPedit

so opened;

E. will inf'o1"m the GOve1"'nment of' the Republic o:f Indonesia. i'1"om time to time of the net vo.lues oi' shipments of

cotton yru:-ns, of m:-edi ts opened fop l.'.'o.W cotton, o.nd of the net vo.lucs of actual shipments of' Po.w cotton l"'ecci vcd;

F Ｎｐ･｣ｯ ｾｮｩｳ｣ｳ＠ tho.t the l.'.'O.W cotton impoJ:-tcd f1"om the United

states o"f: Amm."ico. to Jo.pun undeP this A.Pi:>o.neement will be in addition to ro.w cotton tho.t would othcPwisc be impo1"ted .f1 .. om the United Sto.tcs of AmcPica. o.ncl countPies i'riendly to the United States of' A,mCl"ica;

G. accepts tho.t clo.ims in Pcspcct of dc.ficicncy in quality 01" quo.ntity of cotton yru."ns sho.11 be settled by

negotiat-ions between expo;:>te1"'s in Jo.po.n o.nd imp0Pte1"s in Indonesia. in o.ccol"do.ncc with nol:>mul commcPcio.l practice, o.nd tho.t any dei'icicncy in quality o.nd quantity will be made 3ood by o.dditiono.l supplies o"f: cotton yo.1"ns , 01", fo.ilins tho.t, by remittance in stePlinG in fo.vou:e or impol"tePs in

Indonesia.;

H. (1) i f , o..fte1" one month .fpom the date of' tx>o.ns.fe1" of the o.utho1"i ty to sub- o.uthoPisc the PA .fo1" l"O.W cotton,

comme:ecio.l contPacts :fOJ:' the supply of' cotton yru:-ns h.o.ve not been concluded between Jo.po.nos c expox>tel"s and

Indoncsio.n Lmpo1"te:i:-s to o. minii."'11um of £

342,

000, accepts

tho.t the c-ovel:>nment of the Republic of Indonesio. mo.y o..ftc1" informins the GovePnmcnt o.f Jo.pun, be Pelcascd f'x>om its

undm:-to.king undm:- pru:-o.gPo.ph II B below in x•cspect of the bo.lo.nce o.f the toto.l specified in tho.t pru:-n.g:i."o.ph;

(2) in the event tho.t the Govm:-nmcnt of the Republic of'

Indonesia. is pr•cpru:-cd to suspend its l."ight under the pi.'.'c ccc1inc; sub-po.l.'.'O.Q.'.'Uph .fop an o.cldi t iono.l pei.'.' iod of one month, o.ccepts tho.t the GOvcpnmcnt of the Rcpubllc of

I n donesia. mo.y speci.fy 11 f'w:-thm:- :riinimum vo.luc of contpo.cts

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-II. The GovCJ:-nmcnt o:f the Republic of Indonesia.

A. will t1 .. o..ns.fel" to the Gove1"'nment of' Jupa.n the o.utho1.,i ty to

sub-authorize the PA .for i.,o.w cotton cquiva.lcnt to the vo.luc

o.f u.s.$ c,000,000 a.s soon o.s possible o.i'ter the GovePnmcnt

oi' the Ropublic o:f Indonesia. hns i.,eccivod the PA;

B . will ru."1"o.nec :for the irnpo1"t of' cotton Yo.l"'ns f1:-om Ja.pa.n

and will issue licences a.nd/or mo.kc o.lloco.tions to importel"s

in Indonesia. o.s soon a.s possible o.ftc1" the comin13 into eff'ect o:f this .AJ:>Pa.ngcment, p1"ovidcd tha.t sixty-f'ivc (65) pcl"ccnt o.f the toto.l FOB vo.luc of' the expo1"tcd cotton yru"ns sh.all be cquiva.lent to U. S . $ 2,000,000 worth of' l"O.W cotton.

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such licences sho.11 be va.lid only fo1"' Ja.pa.n a.nd sho.11 be

distinguished fl"Om 01 .. dina.J."Y impo1 .. t o.utho1"izo.tions by nota.tion: "Fo1 .. PL

480

T1"a.nsa.ctions only11_•

The impo1"'t licences a.nd/01" o.lloca.tions shall be vo.lid until Ma.y 31, 1961, but this do.to ma.y be extended pD.l .. i pussµ

with the tCJ:>minnl da.tcs fOi.., the cont1"'a.cting f01", nnd shipment of, 1:-0.w cotton :from the Uni tcd Sta.tes mentioned in pru .. 0.(9. .. a.ph

I.e. a.bovc;

c.

will ｯＮｊＮＢｲ｡Ｎｮｾ｣＠ tha.t importers in Indonesia. of' cotton yru."'ns complete theil" pm"cha.so contJ:>a.cts with expoPtePs in Jo.pun

o.s expeditiously a.s possible, a.nd will ru. .. 1 .. 0.ngc tha.t such pm .. cha.sc contl .. a.cts cull fo1"' a. shipment da.te us co.i"ly o.s

possible a.nd mutua.lly convenient;

D. will solely be J:>esponsible fo1"' the deposit to the a.ccount of tho GovcPnmcnt or the United Stutes of America of the Rupia.h equivalent o:f U. S . dollfil .. disbm .. scment o.s requil"cd under the PL ｬｾｂｯ＠ Ae1"comcnt between the Govc1 .. nments o:f the Republic of Indonesia. o.nd o:f the United Stutes of Amel"ico. a.nd u.ndci"

the PA;

E . will J:>ccommcnd to the Govc1"runent of the United Stutes of Amel"'ica. o. i .. eo.sona.ble extension of' the PA in the event that

the fulfilment of' the D.l"l"a.ngement o..s mentioned in pro .. a.gi .. a.ph I . C. a.bove is pl"'eVented by some OCCUl"l"cnce, O.S thCl .. C Q.l"C:

J:>a.ilvrn.y and no. tui .. a.1 ca. to.s t1"ophics, f'il"c, cxplos ions, s t1" ike, lock-out, wm", riot , civil commotion a.s well a.s otheP events

which will generally be l"ccognised a.s ca.sos of 11_{1'01 .. cc ma.jcui"e",} ovc1" which the Govc1"nrncnt o.f Jo.pun ha.s no contPol;

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-F. 1"ocognises that the cotton yo.rns imp::n .. tcd f'J:>om Japan to

Indonesia undoP this Al"l:>o.nccment will be in o.ddi tion to

the cotton yru."ns that would othc1"wiso be impo;."'tod i'Pom

the United Sto.tes of' .A.mel"ica and countl"ies f'1"iendly to

tho United Stutes of' .A.mel"'ica..

III. Gone1"al Stipulations :

A. Any J:>csicluo.l omount of' sub-o.utho1 .. izo.tion a.50.inst the PA in the neichbom"hood of' U .s.$ 1, 000 aftc1" to.king into account adjustment pof'unds ma.do, f'o1:> which the Unit e(l stat cs cannot

1"00.sonnbly be expected to make shipment, sho.11 bo settled,

without delay, by the Govel"nment of tho Republic of'

Incloncsio. to tho .fo1"oii:;n oxch.n.ne;c bank of' Japan in ca.sh.

B. coni..mePcial cont1"acts i'ox• the dclivc1"y of' the cotton yru."ns

shall be made on tc):>:ms to be nceotio.tcd between cJ::.por•to1"s

in Jo.pan and importers in Indonesia.

c. The o.nno:x.ecl pl"Ocec.hu .. c shall be i--ego.1"c.lcc.1 as a. po.1"t of this

A1."'1"0.Il8ement •

In Witness Whc1"eof', the undo1"signed, be inc; duly n.utho1"'ised have sic;nec.1 the p1 .. esont Al"l"'aneement.

Done in duplico.to, in the English lanc;uo.go, at

Djo.kru. .. to., this ninth c.1.n.y of' May,

1961.

FOP the COVCl"'nrnent of tho

Republic of Indonesia

Signed

R. SU1'!ITO KUSUNUWllJAlf.UO

Soci."cto.ry Goncl"'nl

Dopo.l."tmcnt of Foi--cign Af'f'o.irs.

Fol"' the Gove1"'n.7Tlent of Ja.po.n

Signed

TAKIO ODA Ambassador ｅｸｴｲ｡ｯｩＭＭ､ｩｮｲｵＮｾｹ＠

P

r o c o

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A. F'or cotton yarns thnt will be imported by tho

Republic or Indonesia..

1. Tho Government of' tho Republic of' Indonesia will issue import

licences and/or ma.ke allocations to its importers for the

FOB

va.luo of' tho cotton ynrns.

2. Importers in Indonesia will place orders tor tho cotton yarns

with exporters in Jc.pen a.nd open sterling irrovocc.ble sight

Letters or Credit in :f'a.vour of' exporters in Jc.pan to cover

the purchases. All contra.ct prices shall be expressed in

sterling. Tho sterling irrevocable sight Letters of' Crodit

will be opened 1mmedic.toly after conclusion or the relevant

contra.ct end advised through the foreign exchc.nge bc.nk of' Jc.pen.

3.

Expartors in Jc.pnn will ship the cotton ynrns a.nd drc.w drc.fts

c.gninst the sterling irrevocable sight Lottors of Credit. The

drafts shc.11 bo drc.wn sepc.ra.toly (c.) for manuf'c.ctur1ng chc.rges

expressed in sterling representing tho sum of thirty-five

(35)

percent of' the contra.ct prices ror exported cotton ynrns, and

(b) tor ra.w cotton in pnrtinl

ｰｮｾ･ｮｴ＠

for exported cotton ya.ms

expressed in sterling representing the sum of sixty-five

(65)

percent or tho contra.ct prices tor exported cotton ynrns.

4.

The foreign exchc.nge b:mk of Jc.pen will negotia.te drc.:f'ts drawn

by the oxportors.

5.

Tho foreign oxchf"..ngo bank of' Jc.pnn will rorwnrd the dro.t'ts and

relevant documants to tho foreign oxchc.nge bunk of' Indonesia.

6.

The foreign exchc.nge bf".llk of Indonesia. will mnke reimbur:.Jment

to the foreign oxchnngo bank of' Jc.p:m in sterling for the sum

or dra.tts for mnnuf'acturing

｣ｨＮｾｲｧ･ｳＬ＠

the omount of' which

cor-responds to tho.t as stipulc.tod in pc.ra.gra.ph 3.(c.) 1n this

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pe.,mant for exported cotton ye.ms, tho amount of which

cor-responds to th.at ns stipula.tcd in pc.ra.gra.ph 3-{b) of this

Procedure, to the Sterling Escrow Account in the nrune of

the f'oroign

excbtmge bn.nk

of' Jo.pan.

7.

The amounts in the Sterling Escrow Account will be debited

only in accordance with the terms stipula.ted in the pcra.grc.ph

B.8.(i).

B. For the United Sta.tos ra.w cotton th.at will be

imported by Jo.pan.

1. The United Ste.tea Department of Agriculture (Commodity Credit

Corporc.tion) will issue Letters of Commitment to the Unitod

States bank nominc.ted by the foreign exchange bnnlt of Indonesia.

in respect of the

u.s.

dollar Letters of Credit to bo oponod

U..'TldOl" the PA by the foreign exch.P.nge bank of Jt'.pa.n.

2. Importers in Jo.pan will plc.ce orders for the rnw cotton with

exporters in the Uhitod Ste.tea.

3.

The foreign exchange bank of Jc.pan will open U.S. dollar

Letters of Crodit

1n

fnvour of the rnw cotton exporters and

a.dvise them through tho United Sta.tea bcnk holding Letters of

Commitment which hnve been issued.

4.

Exporters

1n

tho United Ste.tea will ship the rnw cotton c.nd

drnw dra.fts C.g(l.inst the U.S. dollar Letters of Credit.

5.

The United Stutes bcnk will negotiate the drc.fts and pay

exporters

1n

the United Stntos

1n

u.s.

dollars and will forward

documents of title to tho foreign exchange bank of Jc.pen.

6.

The Unitod States Department of Agriculture (Commodity Credit

Corporation) will mnko roim.bursoment for the pc..,mont by the

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Tho United Stc.tos bc.nk will notify tho roroign cxchcnge bank

of Indonesia and request it to deposit

an

equivc.lent amount

of Rupic.h to the Special United Ste.tea Government Account,

and

the foreign exchnnge bank of Jl:'.pen will confirm.

8.

The foreign excho.ngo

bank

of Indonosic. will

(1}

debit tho Sterling Escrow Account

1.n

tho Ill'.me of the foreign

exchange bank of Jc.pan tho amounts of the

u.s.

dolla.r drnfts

at the rnte or exchange

1

pound sterling

=

2.8

u.s.

dolla.rs,

(ii) credit the Special United States GovernmEnt Account with

c.pproprie.te amounts of Rupiahs.

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(1)

The foreign oxcbn.nge bcnk of Ja.po.n will make pa:ymont to

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:lmportors or rnw cotton of

c.11

u.s.

dolla.r sums remitted by the

United States shippers in respect of shipnonts deficient

1n

quality or quantity (or

1n

respect of other claims a.s specified

1n

the PA).

(11) The Uhited States bank will report to the Conrnodity Credit

Corporation nt tho end of each calendar quarter tho total a.mount

of such

u.s.

dollar sums remitted during the ClUl'.rters.

(iii) On dema.nd by the United States bank, tho foreign exchange

bc.nk-of Jnpa.n will pny to tho United States bank for the account

of Commodity Credit Corporc.tion

a.

sum

1n

u.s.

dollars equal to

the total a.mount of the

u.s.

dollar sums remitted during the

quarter.

(iv) On receipt of tho

u.s.

dollar

ｰ｡Ｎｾ･ｮｴ＠

from tho foreign

oxchnngo

ba.nlt

of Jn.pen, tho United Stntes Depnrtment of

Agriculture will issue a PA for raw cotton to the same

u.s.

dollar va.lue to the Government of the Republic of Indonesia.

who will a.s soon a.s possible transfer e.11 authority to

sub-a.uthorise it to the Government of Japan.

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-This PA will a.uthorise repla.coment of cotton without a. deposit

in loca.1 cur1?ency, and United Ste.tea Depa.rtment of Agriculture

would look to Japa.n f'or settlement of any claims which might

a.rise under the ref'und

PA.

Only ninety-five

(95)

percent

of the invoico VC'.luo will be financed tmder the ref'und PA.

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Mo.y

9,

1961.

Exec llency,

I have the honotu." to J."ci'cx• to Otu" nce;otia.tions

lcq..dinG up to tho si3nin13 o.f the A:i:-ro.ngement between the GOvePnmont oi' Jo.po.n o.nd tho GOvepnment o.f the Ropublic o.f Indonesia .fop the Supply o.f cotton Yru,ns to tho Republic

o.f Indonesio., pru.,tio.lly o.Go.inst Ro.w Cotton to be deliverod .fpe>m the United Stutes of' Amo1"ico. unde1, the United States PL

480

Pl"og1,o.mmo on this <.1.n.y, o.nd to coni'frm, on behal.f

of tho GOve1"nment o.f Jo.pun, tho following undm:-sto.nding

Pouched dm"in13 the cow:-sc of' tho noc;otiations.

I. Tho Govc1,nmont of the Republic of Indonesia

will not mo.kc o.n objection to the i'o1"'raution of' t1,o.de bodies by tho oxpo1,to1"s in Jo.pun in connection with the expo1,to.tion

of cotton ya1"ns undm" this Al,j:'ungement.

II. The fo1,oiGn o:xcho.nse bank of' Jo.pun a.nd tho f'oPoign cxcho.nisc bank of' Indonesia. mentioned in tho Pl"Ocedm,o

of' the so.id Al,Po.ngcmcnt a.Pc tho Bank of' Tokyo, Oso.ka. a.nd the Bank Imlonesio., Dja.kru."ta., l,cspectivcly.

I sha.11 be e1"a.te.ful fop yom" confi:J."'ma.tion of tho o.bov·o-mentioned undCJ:-sto.nding on behalf' of' tho GOVCJ:>nment

of the Republic of' Indonesia..

I a.va.il myself' of this oppo1 .. tunity to l"cncw to YOtU." Excellency tho a.ssm:-ancc of my highest considoPation.

His Excellency

R . ｳｵＭｾｩｴｯ＠ Kusumowido.gdo

SecPotru"y GonoPal,

Dopo.i"tment of' Forcien A.ffo.il"s.

Signed

TAKIO ODA

Ambasso.cl01" Ex.t1"a01"dinru:-y and Plonipotonti&u"y.

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