Selanjutnya

I

•

AGREEMENT BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF INDONESIA AND

I

I

AGREEMENT BETWEEN THE GOVERNMENT OF THE

REPUBLIC OF INDONESIA

AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA

FOR SALES OF AGRICULTURAL COMMODITIES

The Government of the Republic of Indonesia and the Government of

the United States of America , recognizing the desirability of expanding

trade in agricultural commodities between the United States of America

(hereinafter referred to as the Exporting Country) and the Republic of

Indonesia (hereinafter referred to as the Importing Country) and with

other friendly countries in a manner that will not displace usual

marketings of the Exporting Country in these commodities or unduly

disrupt world prices of agricultural commodities or normal patterns of

commercial trade with friendly countries;

Taking into account the importance to developing countries of their

efforts to help themselves toward a greater degree of self-reliance,

including efforts to meet their problems of food production and

population growth;

Recognizing the policy of the Exporting country to use its

agricultural productivity to combat hunger and malnutrition in the

developing countries, to encourage these countries to improve their own

agricultural production, and to assist them in their economic

I

I

Recognizing the determination of the Importing Country to improve

its own production, storage, and distribution of agricultural food

products, including the reduction of waste in all stages of food

handling;

Desiring to set forth the understandings that will govern the sales

of agricultural commodities to the Importing Country pursuant to Title

I of the Agricultural Trade Development and Assistance Act, as amended,

(hereinafter referred to as the Act), and the measures that the two

governments will take individually and collectively in furthering the

above-mentioned policies:

Have agreed as follows:

PART I - GENERAL PROVISIONS

ARTICLE I

A. Agreement to Finance Commodity Sales

The Government of the Exporting Country undertakes to finance

the sales of agricultural commodities to purchasers authorized by the

Government of the Importing Country in accordance with the terms and

conditions set forth in this Agreement.

B. Purchase Authorizations

The financing of the agricultural commodities listed in Part II

I

I

1. The issuance by the Government of Exporting Country of

Purchase Authorizations and their acceptance by the

Gover nment of the Importing Count r y; and

2 . The availability of the specified commodities at the time

of exportation .

c .

Application for Purchase Authorizations

Application for Purchase Authorizations will be made within 90

days afte r the effective date of this Agreement , and , with respect to

any additional commodities or amounts of commodit i es provided for in

any amendment to this Agreement , within 90 days after the effective

date of such amendment to this Agreement. Purchase Authorizations

shall include provisions relating to the sales and deli very of such

commodities, and other relevant matters.

o.

Delivery Periods

Except as may be authorized by the Government of the Exporting

Country , all deliver i es of commodities sold under this Agreement shall

be made within the supply periods specified in the Commodity Table in

Part II .

E. Maximum Export Values

The value of the total quantity of ea ch commodity covered by

the Purchase Authorizations shall not exceed the maximum export market

I

I

Exporting country may limit the total value of each commodity to be

covered by Purchase Authorizations as price declines or other marketing

factors may require, so that the quantities of such commodity sold will

not substantially exceed the applicable approximate quantity specified in Part II .

F. Ocean Freight

The Government of the Exporting Country shall bear the ocean

freight differential for commodities the Government of the Exporting

Country requires to be transported in United States flag vessels. The

ocean freight differential is deemed to be the amount , as determined by

the Government of the Exporting Country, by which the cost of ocean

transportation is higher (than would otherwise be the case) by reason

of the requirement that the commodities be transported in United States

flag vessels. The Government of the Importing Country shall have no

obligation to reimburse the Government of the Exporting Country or

deposit local currency of the Importing Country for the ocean freight

differential borne by the Government of the Exporting Country.

G. Transportation Letters of Credit

Promptly after contracting for United States flag shipping

space to be used for commodities required to be transported in United

States flag vessels , and in any event not later than presentation of

vessel for loading, the Government of the Importing Country or the

purchasers authorized by it shall open a Letter of Credit, in United

I

I

H. Change in Conditions

The financing, sale, and delivery of commodities under this

Agreement may be terminated by either government if that government

determines that because of changed conditions the continuation of such

financing, sale, or delivery is unnecessary or undesirable.

ARTICLE II

A. Initial Payment

The Government of the Importing Country shall pay, or cause to

be paid, such initial payment as may be specified in Part II of this

Agreement. The amount of this payment shall be that portion of the

purchase price (excluding any ocean transportation costs that may be

included therein) equal to the percentage specified for initial payment

in Part II, and payment shall be made in United states dollars in

accordance with the applicable Purchase Authorization.

B. Currency Use Payment

The Government of the Importing country shall pay, or cause to

be paid, upon demand by the Government of the Exporting Country in

amounts as it may determine, but in any event no later than one year

after the final disbursement by the Commodity Credit Corporation under

this Agreement, or the end of the supply period, whichever is later,

I

I

to Section 103(B) of the Act (hereinafter referred to as the currency

Use Payment) . The Currency Use Payment shall be the amount financed on

credit terms by the Exporting Country equal to the percentage specified

for Currency Use Payment in Part II . Payment shall be made in

accordance with paragraph G, and for purposes specified in Subsections

104(A), (B), (E) , and (H) of the Act, as set forth in Part II of this

Agreement . such payment shall be credited against (a) the amount of

each year's interest payment due during the period prior to the due

date of the first installment payment, starting with the first year ,

plus (b) the combined payments of principal and interest starting with

the first installment payment , until the value of the currency Use

Payment has been offset. Unless otherwise specified in Part II, no

requests for payment will be made by the Government of the Exporting

Country prior to the first disbursement by the Commodity Credit

Corporation of the Exporting country under this Agreement.

c. Type of Financing

Sales of the commodities specified in Part II shall be financed

in accordance with the type of financing indicated therein. Special

provisions relating to the sale are also set forth in Part II.

o.

Credit Provisions Applicable to Sales to be Financed on Credit

Terms as Specified in Part II:

1 . With respect to commodities delivered in each calendar year

under this Agreement, the principal of the credit (hereinafter referred

I

I

Government of the Exporting Country for the commodities (not including

any ocean transportation costs.)

The Principal shall be paid in accordance with the payment

schedule in Part II of this Agreement. The first installment payment

shall be due and payable on the date specified in Part II of this

Agreement .

Subsequent installment payments shall be due and payable at

intervals of one year thereafter. Any payment of Principal may be made

prior to its due date.

2. Interest on the unpaid balance of the Principal due the

Government of the Exporting Country for the commodities delivered in

each calendar year shall be paid as follows:

a. In the case of dollar credit , interest shall begin to

accrue on the date of last deli very of these

commodities in each calendar year. Interest shall be

paid not later than the due date of each installment

payment of Principal, except that if the date of the

first installment is more than a year after such date

of last delivery, the first payment of interest shall

be made not later than the anniversary date of such

date of last delivery, and thereafter payment of

interest shall be made annually and not later than the

I

I

b. In the case of convertible local currency credit,

interest shall begin to accrue on the date of dollar

disbursement by the Government of the Exporting

Country. such interest shall be paid annually

beginning one year after the date of last delivery of

commodities in each calendar year, except that if the

installment payments for these commodities are not due

on the same anniversary of such date of last delivery,

any such interest accrued on the due date of the first

installment payment shall be due on the same date as

the first installment, and thereafter such interest

shall be paid on the due dates of the susbequent

installment payments.

3. For the period of time from the date the interest begins to

the due date for the first installment payment, the interest shall be

computed at the initial interest rate specified in Part II of the

Agreement. Thereafter, the interest shall be computed at the

continuing interest rate specified in Part II of this Agreement.

E. Payment Provisions Applicable to Sales to be Financed on credit Terms as Specified in Part II:

All payments shall be made in United States dollars or, if the

Government of the Exporting Country so elects,

1. The payments shall be made in readily convertible

currencies of third countries at a mutually agreed rate of exchange and

I

I

its obligations or, in the case of currency use Payments, used for the

purposes set forth in Part II of this Agreement: or

2. The payments shall be made in local currency at the

applicable exchange rate specified in Part I, Article III, paragraph G

of this Agreement in effect on the date of payment and shall, at the

option of the Government of the Exporting Country, be converted to

United States dollars at the same rate, or used by the Government of

the Exporting Country for payment of its obligations or, in the case of

currency use Payments, used for the purposes set forth in Part II of

this Agreement in the Importing Country.

F. Payment Provisions Applicable to Sales to be Financed on Local

Currency Terms as Specified in Part II:

1. The Government of the Importing Country shall pay, or cause

to be paid, to the Government of the Exporting country an amount of

local currency equivalent to the dollar amount disbursed by the

Government of the Exporting Country for the commodities to be financed

on local currency terms {not including any ocean transportation costs),

less any portion of the initial payment payable in dollars, not later

than 120 days after date of disbursement by the Government of the

Exporting Country. The calculation of this local currency equivalent

shall be at the applicable rate of exchange specified in Part I,

Article III G of this Agreement, using the rate in effect on the date

of payment by the Government of the Importing Country.

2. The Government of the Exporting country shall determine

I

I

Importing Country any local currency due the Government of the

Importing Country as a result of refunds received by the Government of

the Exporting Country of dollar amounts financed hereunder.

G. Deposit of Payments

The Government of the Importing country shall make , or cause to

be made, payments to the Government of the Exporting Country in the

currencies, amounts, and at the exchange rates provided for in this

Agreement as follows:

1. Dollar payments shall be remitted to the Treasurer,

Commodity Credit Corporation, United States Department of Agriculture,

Washington, D.C. 20250, unless another method of payment is agreed upon

by the two governments.

2. Payments in the local currency of the Importing country

(hereinafter referred to as Local Currency), shall be deposited to the

account of the Government of the United States of America in interest

bearing accounts in banks selected by the Government of the United

States of America in the Importing Country.

H. Uses of Local Currency

1. The local currency accruing to the Government of the

Exporting Country from sales of commodities financed on Local Currency

terms shall be made available for use by the Government of the

I

I

Government of the Exporting Country shall determine, for the purposes

and in the proportions indicated in Part II of the Agreement.

a. Any percentage of such Local currency indicated in Part

II for loans t o intermediary financial institutions will be available

for loans by the Government of the Exporting country t o financial

institutions located or operating in the Importing Country for the

purpose of relending t o individuals, cooperatives, corporations, or

other entities within the Importing Country, in order t o finance:

{i) Productive, private enterprise investment within

the Importing Country including such investment

in projects carried out by cooperatives and

non-profit voluntary organizations;

{ii) Private enterprise facilities for aiding the

utilization and distribution, and increasing the

consumption of and markets for , United States

agricultural

thereof; or

commodities and the products

{iii) Private enterprise support of self-help measures

and projects outlined in Part II below.

b. The Government of the Exporting country will keep the

Government of the Importing Country informed, in a timely manner, as t o

the intermediary financial institutions selected as recipients of

I

I

terms will be consistent with the currency conversion obligations of

the Government of the Importing Country under this Agreement.

c. Any percentage of such Local Currency indicated in Part

II for agricultural technical assistance shall be made available by the

Government of the Exporting country for activities to support and

expand private sector enterprise in the Importing Country, and

activities to develop and expand markets for United states agricultural

commodities and products thereof.

d. Local currency paid to the Government of the Exporting

country by the intermediary financial institutions (under the terms of

their loan agreements) may be used by that Government:

( i) To finance additional productive, private

enterprise investment under agreements with

intermediary financial institutions;

(ii) To develop new markets for United States

agricultural commodities;

(iii) To pay United States obligations in the Importing

Country; or

I

I

'

I. Currency conversion Requirements

1. The amount of Local currency which has accrued to the Government of the Exporting country from the sale of commodities financed on Local currency terms under this Agreement, and which has been repaid to that Government by intermediary financial institutions, less amounts thereof used to pay United States obligations, or used for the development of new markets for United States agricultural commodities , if any, in the Importing Country, shall be convertible to United States dollars in accordance with the conversion schedule specified in Part II. The calculation of the United States dollar equivalent shall be at the applicable rate of exchange specified in Part I, Article III G of this Agreement on the date of conversion .

2. Local Currency received by the Government of the Exporting Country under the terms of a local agreement with an intermediary financial institution in excess of the amount specified in paragraph l above may be converted to United States dollars as mutually agreed.

J. Sales Proceeds

I

I

the currency Use Payment, if any, made by the Government of the Importing Country . The exchange rate to be used in calculating this Local Currency equivalent shall be the rate at which the central monetary authority of the Importing Country , or its authorized agent, sells foreign exchange for Local Currency in connection with the commercial import of the same commodities. Any such accrued proceeds that are loaned by the Government of the Importing Country to private or non-governmental organizations shall be loaned at rates of interest approximately equivalent to those charged for comparable loans in the Importing Country. The Government of the Importing Country shall furnish in accordance with its fiscal year budget reporting procedure, at such times as may be requested by the Government of the Exporting Country but not less often than annually, a report of the receipt and expenditure of the proceeds, certified by the appropriate audit authority of the Government of the Importing Country, and in case of expenditures the budget sector in which they were used.

K. Computations

I

I

ARTICLE III

A. World Trade

The two governments shall take maximum precautions to assure

that sales of agricultural commodities pursuant to this Agreement will

not displace usual marketings of the Exporting Country in these

commodities or unduly disrupt world prices of agricultural commodities

or normal patterns of commercial trade with countries the Government of

the Exporting Country considers to be friendly to it (referred to in

this Agreement as Friendly Countries). In implementing this provision

the Government of the Importing country shall :

1. Insure that total imports from the Exporting Country and

other Friendly Countries into the Importing Country paid for with the

resources of the Importing Country will equal at least the quantities

of agricultural commodities as may be specified in the Usual Marketing

Table set forth in Part II during each import period specified in the

Table and during each subsequent comparable period in which commodities

financed under this Agreement are being delivered. _{The imports of}

commodities to satisfy these usual marketing requirements for each

import period shall be in addition to purchases financed under this Agreement.

2. Take steps to assure that the Exporting Country obtains a

fair share of any increase in commercial purchases of agricultural

[image:16.611.31.562.35.925.2]

I

I

3. Take all possible measures to prevent the resale, diversion in transit, or transshipment to other countries or the use for other than domestic purposes of the agricultural conunodities purchased pursuant to this Agreement (except where such resale, diversion in transit, transshipment or use is specifically approved by the Government of the United States of America).

4. Take all possible measures to prevent the export of any commodity of either domestic or foreign origin, which is defined in Part II of this Agreement, during the export limitation period specified in the Export Limitation Table in Part II (except as may be specified in Part II or where such export is otherwise approved by the Government of the United States of America) .

B. Private Trade

In carrying out the provisions of this Agreement , the two governments shall seek to assure conditions of commerce permitting private traders to function effectively.

c .

Self-Help

I

I

D. Reporting

In addition to any other reports agreed upon by the two

governments, the Government of the Importing Country shall furnish , in

such form and at such time as may be requested by the Government of the Exporting Country:

l . A report on the arrival of each shipment of commodities

purchased under the Agreement which shall include: the name of each

vessel; the commodity and quantity received; the discharge port; the

date discharge was completed; the condition of the commodity on

arrival ; any significant loss or damage in t r ansit; and advice of any

claims for , or recovery of , or reduction of freight charges due to loss

or damage in transit on U.S. flag ships;

2. A report covering the supply period specified in Part II,

Item I of the Agreement and containing: statistical data on imports by

country of origi n to meet usual marketing requirements specified in

Part II, Item III of the Agreement ; a statement of the measures taken

to implement the provisions of Section A, Items 3 and 4 of this

Article; statistical data on exports by country of destination of

commodities the same as or like those imported under the Agreement, as

specified in Part II , Item IV of the Agreement; a statement of

utilization of commodities imported under the Agreement ; and a

statement of measures taken to implement the publicity provisions of

I

I

E. Procedures for Reconciliation and Adjustment of Accounts

The two governments shall each establish appropriate procedures

to facilitate the reconciliation of their respective records on the

amounts financed with respect to the commodities delivered during each calendar year. _{The Commodity Credit Corporation of the Exporting}

Country and the Government of the Importing country may make such

adjustments in these accounts as they mutually decide are appropriate.

F. Definitions

For the purposes of this Agreement:

1. Delivery shall be deemed to have occurred as of the

on-board date shown in the ocean Bill of Lading which has been signed or initialed on behalf of the carrier,

2. Import shall be deemed to have occurred when the commodity has entered the country, and passed through c ustoms , if any, of the

Importing Country, and

3. Utilization shall be deemed to have occurred when the commodity clears customs and enters normal distribution channels within

the Importing Country, including: being transported to mills, bakeries, refineries or other facilities for further processing; being

transported to local, regional or central storage for subsequent

distribution; or being transported directly to commercial or government

•

I

G. Applicable Exchange Rates

For the purposes of this Agreement, the applicable exchange

rate for determining the amount of any Local currency to be paid to the

Government of the Exporting Country shall be a rate in effect on the

date of payment by the Importing Country which is not less favorable to

the Government of the Exporting Country than the highest exchange rate

legally obtainable in the Importing Country and which is not less

favorable to the Government of the Exporting Country than the highest

exchange rate obtainable by any other nation. With respect to Local Currency:

1. As long as a unitary exchange rate system is maintained by

the Government of the Importing Country, the applicable exchange rate

will be the rate at which the central monetary aut hority of the

Importing Country, or its authorized agent, sells foreign exchange for Local Currency .

2. If a unitary rate system is not maintained, the applicable

rate will be the rate (as mutually agreed by the two governments) that

fulfills the requirements of the first sentence of this Section G.

H. Consultation

The two governments shall, upon request of either of them,

consult regarding any matter arising under this Agreement, including

•

'

I

I. Identification and Publicity

The Government of the Importing count ry shall undertake such

measures as may be mutually agreed prior to delivery for the

identification of food commodities at points of distribution in the

Importing Country, and for publicity in the same manner as provided for

in Subsections 103(L) and 108(A)(2) of the Act •

PART II - PARTICULAR PROVISIONS

Item 1. Commodity Table:

Supply Approximate Maximum Export

Period Quantity Market Value

Commodity (U.S. Fiscal Year) (Metric Tons) (U.S. Dol. Million)

Wheat 1987 210 , 000 23 . S

TOTAL 210 ,000 23 . S

Item II. Payment Terms:

Convertible Local Currency Credit (CLCC). Th irty -two (32)

years.

(1) Initial payment - ten (10) percent .

(2) Currency Use Payment - ten (10) percent for Section 104(A)

purposes.

•

•

( 4) Amount of each installment payment - approximately equal annual amounts .

(5) Due date of the first installment payment - seven (7) years after

date of last delivery of commodities in each calendar year.

(6) Initial interest rate - two (2) percent •

(7) Continuing interest rate - three (3) percent.

Item III. Usual Marketing Table:

Commodity

Wheat/wheat flour

(grain equivalent

basis)

Import Period

(U.S. Fiscal Year)

1987

Item IV. Export Limitation

(A) Export limitation period:

usual Marketing

Requirements

(Metric Tons)

1,372,800

The export limitation period shall be United States fiscal year

1987, or any subsequent United States fiscal year during which

commodities financed under this Agreement are being imported or

•

•

(B) Commodities to which export limitations apply:

For the purposes of Part I, Article III (A)(4) of this Agreement,

the commodities which may not be exported are: for wheat/wheat flour

-wheat, wheat flour, rolled -wheat, semolina, farina, and bulgur (or the

same products under different names).

Item

v.

Self-Help Measures:

(A) The Government of the Republic of Indonesia agrees to undertake

self-help measures to improve the production, storage , and distribution

of agricultural commodities. The following self-help measures shall be

implemented to contribute directly to development progress in poor

rural areas and enable the poor to participate actively in increasing

agricultural production through small farm agriculture.

(B) The Government of the Republic of Indonesia agrees to undertake the following activities and in doing so to provide adequate financial,

technical, and managerial resources for their implementation:

These self-help measures will address priority constraints to

agricultural diversification and related agro-processing and rural

financial markets. In the event that the agriculture and rural sector

support program is not approved, the funds will be jointly programmed

I

I

Representatives of the signatory governments will, no later than ninety (90) days after the signing of the Agreement, complete work on a Memorandum of Understanding (MOU) detailing the self-help measures to be carried out under this Agreement. This MOU will contain the information necessary to fulfill the requirements set forth in, and executed in the same manner as, the Agreed Minutes.

Item VI. Economic Development purposes for which proceeds accruing to the Importing Country are to be used:

(A) The proceeds accruing to the Importing Country from the sales of commodities financed under this Agreement will be used for financing the self-help measures set forth in the Agreement, and for agricultural development, rural development, nutrition and population planning, in a manner designed to increase the access of the poor in the recipient country to an adequate, nutritious, and stable food supply. Sales proceeds will be apportioned between the Department of Finance and the Department of Agriculture over a two-year period approximately as follows:

I

I

2. Department of Agriculture: US$12 million will be attributed to

the Secretariat General, the Directorate General of Food Crops and the

Agency for Agricultural Research and Development within the Department

of Agriculture over a two-year period, IFY 88/89 and IFY 89/90.

(B) In the use of proceeds for these purposes, emphasis will be placed

on directly improving the lives of the poorest of the recipient

country's people and their capacity to participate in the development

of their country. This will be achieved through supporting budgets

which finance agricultural di versification and financial markets

development as a means to increase the potential for rural employment

and incomes.

PART III - FINAL PROVISIONS

A. This Agreement may be terminated by either government by notice

of termination to the other government for any reason , and by the

Government of the Exporting Country if it should determine that the

self-help program described in the Agreement is not being adequately

developed . such termination will not reduce any financial obligations

the Government of the Importing Country has incurred as of the date of

I

I

This Agreement shall enter into force upon signature.

IN WITNESS WHEREOF, the respective representatives, duly authorized for the purpose, have signed the present Agreement.

DONE at Jakarta, Indonesia, in duplicate, this sixteenth day of June, 1987.

FOR THE GOVERNMENT OF THE REPUBLIC OF INDONESIA

Signed

Ors. Haringun Hardjotanojo Acting Director General

of

Foreign Economic Relations , Department of

Foreign Affairs

FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA

Signed

Paul Wolfowitz Ambassador Extraordinary

and Plenipotentiary of the United States of America to the Republic

I

I

AGREED MINUTES OF TITLE I, PL 480 AGREEMENT FOR FY 1987

ATTACHMENT I

PROVISIONS OF FY 1987 PL 480 TITLE I AGREEMENT

AGREEMENT

The representatives of the United States explained that in view of

extensive changes in the PL 480 program caused by recent U.S.

legislation, all negotiations in FY 1987 would have to cover the full

text of an agreement. This full text requirement applies to the

negotiations between the United States Government (USG) and the

Government of Indonesia (GOI), even though some portions of the full

text do not apply to the Agreement with Indonesia.

It was agreed by the representatives of both governments that the

following portions within Part I of the FY 1987 Agreement are not

applicable:

Article II, part F.

Article II, part G.2

Article II, part H.

Article II, part I.

It is also understood that the phrase, "or deposit local currency of

I

I

not apply to this Agreement. It is further understood that since, at

the time of signing, there is a unitary rate of exchange in Indonesia,

the following portions of Article III, paragraph Gare not applicable:

n

• which is not less favorable to the Government of the

Exporting Country than the highest exchange rate legally

obtainable in the Importing Country and which is not less

favorable to the Government of the Exporting country than the

highest exchange rate obtainable by any other nation.

respect to Local Currency:

With

1. As long as a unitary exchange rate system is maintained by

the Government of the Importing Country, • • n

" 2. If a unitary rate system is not maintained, the applicable rate will be the rate (as mutually agreed by the two

governments) that fulfills the requirements of the first

sentence of this Section G."

COMMODITY COMPOSITION

The commodity composition is shown in Part II, Item 1, of the

Agreement. This provides for approximately 210,000 MT of wheat with a

market value of

us$23.S

million.

The representatives of the GOI understand that the export market value

specified in Part II may not be exceeded. This means that, if

commodity prices increase over those used in Part II of the Agreement,

approximate maximum quantity set forth in Part II. _{However, should}

actual prices be lower at the time of purchase, the GOI may purchase up

to maximum export market value.

COMMODITY DELIVERIES

The supply period of the Agreement is United States fiscal year 1987

(October 1, 1986 _{September 30, 1987). In order to expedite}

implementation of the Agreement after signature, the GOI agrees to make

early request, through its Embassy in Washington, for purchase

authorizations (PA's). GOI representatives also agree that letters of

credit will be opened promptly for both commodity and freight after

PA's are issued.

PAYMENT TERMS

Payment terms are shown in Part II, Item II, of the Agreement. The

financing for the Agreement provides for US$23.5 million under

convertible local currency credit (CLCC) terms of thirty-two (32) years

including a seven (7) year grace period, an initial payment (IP) of ten

(10) percent, a Currency Use Payment of ten (10) percent, a two (2)

percent initial interest rate, and a three (3) percent continuing

interest rate.

ARREARAGES

It was noted by the representatives of both governments that there were

I

I

USUAL MARKETING REQUIREMENTS

The usual marketing requirements (UMR) are set forth in Part II, Item

III, of the Agreement. The 1987 UMR is 1,372 , 800 MT of wheat. The GOI

representatives were reminded that the USG hopes that the United States

would receive a fair share of any increase in Indonesia's commercial

purchase of wheat.

EXPORT LIMITATIONS

The provisions shown in Part II, Item IV, paragraphs A and B of the

Agreement are standard.

SELF-HELP MEASURES AND USES OF SALES PROCEEDS

Section 109(A) of PL 480 requires that, before entering into agreements

for the sale of commodities, consideration be given to the extent to

which the ｲ･｣ｩｾｩ･ｮｴ＠ country is undertaking self-help measures to

increase per capita production and improve the means for storage and

distribution of agricultural commodities. In addition, it is required

that particular account be taken to determine the extent to which the

measures are being carried out in ways designed to contribute directly

to development progress in poor rural areas and to enable the poor to

participate actively in increasing agricultural production through

small farm agriculture. Literacy and health programs for the rural

poor are also possible subjects for self-help measures.

The self-help measures which the GOI agrees to undertake shall be

I

ｾ＠

I

measurable terms, and ( 2) in a manner which ensures that the needy people in Indonesia will be the major beneficiaries of the self-help measures pursuant to the Agreement. To the maximum extent feasible, self-help measures agreed to are to be additional to the measures that the GOI otherwise would have undertaken irrespective of this Agreement.

The uses of sales proceeds shall be shown in Part II, Item V, of the Agreement.

COMPLIANCE AND REPORTING REQUIREMENTS

Compliance and reporting are an essential part of the Title I PL 480 program. The GOI representatives understand that their government will be responsible for compliance with the reporting provisions contained in Articles II and III of Part I of the Agreement. Likewise, they understand that submission of timely and accurate reports on compliance, shipping and arrival information, self-help , and uses of sales proceeds facilitates timely administration of Title I activities by the U.S. government.

The USG representatives informed the GOI representatives that the Annual Self-Help Measures Report is due in the

u.s.

Mission, Jakarta, by November 15 of the

u. s.

fiscal year following the signing of the Agreement.

I

I

appropr i ate GOI audit authority. Representat i ves of both governments

agreed that the appropriate audit authority is the internal audit unit

of Badan urusan Logistik ( BULOG). _{The USG representatives suggested}

that this repor t be submitted at the same time as the Self-Help Measures Report .

SHIPPING ISSUES

The GOI representatives were informed that , pursuant to the Food

Security Act of 1985 , seventy (70) percent of the tonnage of the goods

covered by the FY 1987 PL 480 Agreement wil l be carried on u.s . flag vessels. As indicated in Part I, Article I , paragraph F, of the

Agreement, the USG will bear the ocean freight differential cost for

the portion of the commodities carried by U. S . flag vessels.

The GOI representatives agreed to the new cargo apportionment with the

proviso that the 30 percent which could be shipped on non-u.s. flag

vessels would all move on Indonesian flag vessels or vessels under the

control of Indonesian shipping companies. This was agreed upon by the

USG representatives.

GOI and USG representatives had earlier discussed the use of u.s. flag

tankers to transport wheat to Indonesia . _{At that time, the GOI}

representatives provided the following statement (which was transmitted

I

I

QUOTE:

Your request to use tanker vessels

We regret to inform you once again that we are not able to grant your above mentioned request to use such transportation modes for reasons clearly stated in our letter to you No. B-85/III/01/1984 of January 19, 1984.

In addition, your request to permit such vessels to participate only on the basis of full lightening into smaller bulk carriers does not eliminate the hazards (danger) to the labourers who have to go via the manholes into the cargo holds to guide the suckers enabling them to reach the wheat grains. our great concern is the safety of the workers and we will not take the risks. Safety could perhaps be ensured if the tankers are converted into open hatches similar to those of normal bulk carriers. As long as the tankers have only manholes, the danger still exists.

Apart from the safety of the workers, tanker vessels with existing manholes will be very slow in discharging and therefore nowhere near that of bulk carriers' discharge capacity.

I

I

AGREED MINUTES OF TITLE I, PL 480 AGREEMENT FOR FY 1987

ATTACHMENT II

OPERATIONAL CONSIDERATIONS

PURCHASE AUTHORIZATION

The USG representatives explained that, as a general rule, purchase

authorizations will not be issued until the U.S. Department of

Agriculture (USDA) has received an operational reporting cable. Early

submission of an operational reporting cable can expedite PA issuance.

The following information, developed in consultation with the GOI,

should be contained in the operational reporting cable:

(1) Type and grade of commodity to be purchased in accordance with

official U.S. standards.

(2) Proposed contracting and delivery schedules. "Deli very" means

delivery of commodity on board vessel at U.S. port.

(3) Name and address of bank in Indonesia and U.S. commercial bank

through which Letter of Credit for commodity and ocean freight

I

I

(4) Assurance that appropriate GOI authorities are prepared to make prompt transfers of funds to cover initial payment and ocean freight costs on commodities purchased under the Agreement.

The GOI provides assurance that arrangements will be made by appropriate authorities to relay to the .Indonesian Embassy in Washington all instructions, information, and authority necessary to ensure timely implementation of the Agreement, _including: (A)

information outlined in points (1), (2), (3), and (4) above: (B) complete instructions regarding arrangements for purchasing commodity and contracting for freight: and ( C) instructions to contact PL 480 Operations Division, Export Credits, Foreign Agricultural Service (FAS), USDA, telephone (202) 447-5780, for assistance in implementing the Agreement.

ADDITIONAL LANGUAGE FOR IFB'S

The GOI representatives requested that the following (or similar) language be included in IFB's issued pursuant to this Agreement:

"Sellers to furnish to S.G.s. 3 copies of final invoice prepared as per L/C requirements, l copy of dated on-board bill of lading, l copy of letter of credit with any amendments thereto, l copy of sales contract, and l copy of commission declaration. S.G.s. will furnish without delay to sellers original and 4 copies of clean report of findings (LKP)."

I

•

REGULATORY/LEGISLATIVE REQUIREMENTS

The GOI representatives understand that, under current regulatory and

legislative requirements:

- (1) Purchase of commodities under the Agreement must be made on the

basis of invitations for bids {IFB' s) publicly advertised in the

United states and on the basis of b ids {offers) which shall conform

to the IFB. Bids are to be received and publicly opened in the

United States. All awards under IFB' s must be consistent with

open, competitive and responsive bid procedure.

- (2) Terms of all IFB's {including IFB's for ocean freight) must be

submi tted to the General Sales Manager, FAS, USDA, for review prior

to issuance.

- (3) If the GOI nominates a purchasing or shipping agent to procure

commodities or arrange ocean transportation under the Agreement,

the GOI is required to notify the General Sales Manager, FAS, USDA,

in writing, of such nomination and may attach a copy of the

proposed agency agreement. All purchasing and shipping agents must

be approved by the General Sales Manager, FAS, USDA, in accordance

with regulatory standards designed to eliminate certain potential

conflicts of interest.

LETTERS OF CREDIT

The GOI assures that appropriate measures will be taken to ensure that

I

I

freight will be issued, advised or confirmed by a prior designated U.S. bank.

The GOI understands that commodity and ocean freight suppliers may refuse to load vessels when acceptable letters of credit for commodities or ocean freight are not available at time of loading. This can result in costly claims by vessel owners (demurrage) and by commodity suppliers (carrying charges).

The GOI understands it must open letters of credit for one hundred ( 100) percent of ocean freight not later than forty-eight ( 48) hours prior to vessel presentation for loading, providing for sight payment or acceptance of a draft in U.S. dollars in favor of the ocean transportation supplier on the basis of tonnage and rates specified in the applicable charter party or booking note.

I

r

PERFORMANCE BONDS

The GOI understands that, if the corrunodity IFB issued by the GOI

requires a performance bond, the requirement must be fair to both buyer

and seller. _{USDA has developed performance bond language which}

satisfies these concerns and which may be used in commodity IFB' s.

Likewise, the USDA will be available to coordinate implementation of

ｉ ｾ＠

AGREED MINOTES

Attachments I and II constitute the minutes of negotiation of the FY

1987 PL 480 Title I Agreement as agreed upon by the representatives of

the signatory Governments.

DONE at Jakarta, in duplicate, on this sixteenth day of June, 1987.

REPUBLIC OF INDONESIA

Signed

Sukriya ａｾ｜ Ｇ＠

Vice-Chairman

Badan Urusan Logistik

Republic of Indonesia

UNITED STATES OF AMERICA

Signed

!Dti

l!jt

D. Sisson ... Ｍ ａｾｬｴｵｲ｡ｬ＠ Attache

Embassy of the