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REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY

PART I—Section 1

PUBLISHED BY AUTHORITY

No. 175] NEW DELHI, SAT URDAY, JULY 29, 1972/ SRAVANA 7, 1894

Separate paging is given to this Part in order that it may be filed

as a separate compilation

M I N I S T RY OF FOREIGN TRADE PUBLIC NOTICES

IMPORT TRADE CONTROL

New Delhi, the 23th July 1973

SUBJECT,—Licensing conditions applicable to French Credit for 1972-73 both to private and public sectors (Project and Non-Project Portions also).

No. 112-ITC(PN)/72.—The licensing conditions governing issuance of import licences under French Credit for 1972-73, both private and public sectors as given in the Appendix to this Public Notice are notified for the information of the trade. These licensing conditions will also be applicable to project and ion-project portions.

APPENDIX

Licensing conditions applicable to French Credit for 1972-73 for Private and Public

Sectors (Project and Non-Projeci portions also).

1. Import Licence.—The import licence will be issued on CIF basis, with initial validity period of 4 months for ordering and tweleve months for completing ship- ments. Within a fortnight of the receipt of the import licence, the importer should

(1417)

intimate to the Department oi Economic Affairs (WEI Section) the fact of receipt of the import licence and furnish supply contract against the licence within the period of validity for oitiei'inw. The contract must De iurnlshed alungwith com- plete documents, stipulated in condition d below.

This condition will not be deemed Lo have beyn complied with' unless complete contiact documents aie iu.wished wiunn the stipulated period of 4 months.

Wlierc this stipulation is not complied with within lour months, the licence may bo presumed tu lao ULJ&E/JCCI&E lor revahdaiion for ordering, giving reasons why contracting could not be completed within four months. A copy of the letter to the iX'I&jfi/JCCIⅈ may be sent to the Department of Economic Affairs (WE-I Section).

The request lor ruvaliclation would be considered on merits, in consultation with the DepaiLinent of Economic AITairs, and if accepted, the licence will be revalidated for ordering for a further period not exceeding three months.

2. Ordering.,—Orders on the basis of firm, prices have to be placed on the French suppliers for the whole amount of the licence.

In the case of allocation for non-project segment of the- French credit, normally a single contract has to be entered Into for the whole amount subject to provision in the following clause. No amendment having financial implications can be subsequently mad; in Lhe contract.

In the case of import of equipment under the non-project, more than one contract can be entered mto subject to permission specifically obtained from the Department of Economic Affairs, giving reasons for doing so before placing orders.

Under the Credit Agreement for 1972-7:4, Government of India have the option to substitute Buyers' Credit by Suppliers' Credit if such a course Is found to be more benellcial. It has, therefore, been considered necessary that Indian Importers who have been given allocation of and above FF 5 million from the project portion of the French Credit should invite quotations from French Suppliers for supply of equipment on credit terms mentioned below : Down payment upto 5 per cent of the contract value; repayment of the balance. ,>v?r a period of 10 years commencing six months after the completion of the shipments and interest rate

3. Terms Of Contracts,—The contract should be plnrcd in French Francs on a C.I.F., or C&F basis and should clearly indicate FOB, Freight and Insurance of the contract value separately for each clement.

Th" value should be reckoned at present at the Central rate of one French Franc- Rs. 1A22.

The above rate of exchange is, however, subject to revision, if and when the IMF fixes a different parity between the Indian Rupee and the French Franc.

4. Value Limits Of Contracts.—The value of each contract falling in different categories mentioned below should not fall below the amounts indicated against each category:

(Rs. Lakhs)

FF Million

5.00

5.00 0.50

0.20 0.05

(71.100) (71.100) (7.110) (2.B44) (0.711) (i) Large Industrial Projects (in Projects for Heavy Equipment (iii) Fertilizers (iv) Capital Goods (v) Other Goods

5. Orlqin Of Goods.—The ftnods should be of French origin unless a part thereof Is -permitted by the French authorities to be of non-French origin. A stipulation as to the origin of gonds should be incorporated and wherever necessary a letter eviden- cing npproval of tho French authorities to the third countrv imports should accom- pany the contract. However, if necessary, goods can be shipped from non-French ports.

ti. Payment Terms.—(ij Advance Payments.—An advance payment of 5 per cent of the price oJ! the supplies caa be provided at the time oi! the contract coming into effect, unless any other terms settled between, the buyers and the sellers, in accor- dance with the normal international commercial Practice in this matter, ior the paniculars type of goods concerned.

However, where an amount higher than 5 per cent Is to be provided for payment as un advance, prior approval of the Department of Economic Affairs should be obtained, with lull justification, before any commitments are made.

(ii) Other Payments.—(a) Industrial Projects.—Apart from the amount ol down payment will be payable pro rata according to the value df goods covered by each, equipment under Uie contract, or at the time of comptfition of erection, or on com- missioning ol the plant.

However, depending on the type of project, the payment for contracts for indust- rial projects may also be provided for as for the commodities, referred to in (b) below.

0)) Commodities.—In the contracts for commodities (light equipment, aparea, components, chemicals, fertilizers, raw muteriais, etc.), the amount left after down payment will be payable pro rata aecoading to the value of goods covered by each shipment, on the basis of the shipping schedule.

7. Ccmdition^ to be Stipulated m thu CaatracU—The contract should suitably incorporate the terms and conditions set out below, apart from those considered necessary by the contracting parties, to make it eligible for financing under the French Credit: —

(i) That the contract is, suuject to the approval of the Indian .and French authorities for financing under the French Credit is terms of the Iwdo- t'rench Financing Protocol, according to which the French Credit would be a combination of a French Treasury loan and a Buyer's Credit. Each contract will be financed equally from both,

(ii) That the suppliers, or their banks will be paid from the French Treasury loan upto the first 50 per cent of the value of the contract and for the remaining 50 per cent payment to them will be made from the Buyers' Credit, in accordance with condition 13 below,

(iii) That the suppliers should present the payment documents in quadrupli- cate (this may be increased if the importer needs more than one set) to the Banque National de Paris, 16, Boulevard Des Italians, Paris (9e) or the Banque Frenchaise du Commerce Exterieur, 21 Boulevard Hussmann, Pans (9emc), as the case may be, which will arrange for making the necessary payment itself, or through, any other agency in France. The presentation of payment documents should be prescribed in each contract. An illustrative list of the documents is given in the Aimexure 1.

(iv) That the contract value is broken down into FOB cost, Freight and Insu- rance elements, separately.

(v) That the terms of payments, e.g. amount payable on the contract becoming effective, imd that payable against shipments/completion of project etc., are set out in precise terms, with details showing the schedule of deliveries/payments.

8. Cvstomaru Guarantee. — The importer may arrange for obtaining any custom- ary guarantee (s) which may be necessary for safe guarding his interest.

9. Submission Of Contract Documents.—Within 20 days of the placing of orders, the importer should send a letter accompanied by the following documents to the Ministry of Finance, Department of Economic Affairs (WE-1 Section), North Block, New Delhi:

(i) Ten certified copies of the contract and any further amendment(s) duly executed in English language and signed by both the Indian importer and the French supplier. The order placed by the importer will not be construed to constitute a contract without its acceptance by the French suppliers. Where the Suppliers' acceptance letter is in French, an English translation of the letter should be provided. In cas<\ where a contract has not been executed as a s1n"le document, 10 certified copies of both the importer's order and suppliers' acceptance thereof, along- with amendment (e). if any, should be furnished. If the contract

. *w - AR L^AKT I—SEC, 1}

consists of several amendments or several letters exchanged between the importer and the suppLier, a consolidated contract should be entered into in substitution. The contract can be processed only if all the documents are complete, along with those stipulated below,

(ii) Photo copy of impart licence valid Tor contracting on the date of execu- tion of the contract/acceptance of French supplier of the order placed. on him by the importer.

(iii) Bank Guarantee.—A Bank guarantee (as in Annexure-II) obtained from a Scheduled Bank authorised by the Reserve Bank of India to deal In foreign exchange.

(iv) Other Particulars stipulated in AnnexLire-IH. (Central and State Govern- ment Departments. State Electricity Boards and Public Sector Under- takings shall send these particulars In duplicate').

Thd Contract will be proposed as per condition 10 below, only after all these docu- ments have been furnished.

10. Notification Of Contract.—The contract will be notified by the Department of Economic Affairs to the Counsellor for Economic Affairs, Embassy of France, New Delhi if it is complete and, the documents, including the Bank Guarantee, etc. are in order and the import licence is valid for ordering and is considered eligible for financing under the French Credit.

11. Effectuation Of Contract.—-The contract will be deemed to have become effec- tive 20 days after its notification by the Department of Economic Affairs, provide! no objection is raised by the Embassy of France within that period.

11!. Remittance From India.—No remittances from India are permissible under the import licence issued under the French Credit, except in terms of condition 15 below.

13. Method of Payment.—Payments are made to the supplier both from the French Treasury loan and the Buyers' credit, through Banque National de Paris, or the Banque Francaise du Commerce Exterieur, or any other agency in France, on the basis of a "Letter of Instruction" to be issued bv the Controller of Aid Accounts. Department of Economic Affairs, Ministry of Finance, on effectuation of the contract.

14-. Ucsjjath of Shipping Documents.—Immediately aft?r payments have been effected in accordance with the Letter of Instruction referred to above, the original set of documents (negotiable), alwigwith details of bank charges (l/8th of the one per cent documentation charge plus tax @ 17.60 per crnt thereon) and expenses on postage, will be sent by Banquc Nationale d

(i) the importer's Bank in India, which has provided the Bank Guarantee [Vide condition fl(iii) supra] in the fas? of importers in the private sector; or

(ii) to the nominated branch of the State Bank of India, or of any one of the fourteen nationalised banks, in the ense of Public Sector Under- takings; or

fiiil tti the importers direct in the case of the Departments of Central and State Governments, including State Electricity B.'a^ds.

15. Remittances of Bank Charges.—Within a wetk of receiving the intimation about bnnV charges, vide condition 14 snora from Ih^ Banque Nationale de Paris, or the Banque Francaise du Commerce Exlerisui's, as the case may be, the Indian Bank will remit the amount of bank charges directly to the French Bank concerned.

For thip purpose, necessary rupees will be collected by the Indian bank from the Indian importer, in addition to the amount required under their guarantee ride condition y(lii) supra.

In icspert of O'frel and Stale Governments and the Stale Electricity Boards. the remittances of Bank charges mentioned will he arranged by the Controller of Aid Accounts. Department of Economic Affairs bv debit to the authority concerned. For this purpose those authorities should intimate the charges promptly to the Controller of Aid Accounts.

16. Time Limit for Effecting Rupee Deposits,— (i) Private Sector importer and Public Undertaking.—Within ten days, at the maximum, of the receipt of the documents mentioned in condition 14 supra, the Bank which has issued the guaran- tee, or the nominated branch of the State Bank of India, or one of the fourteen nationalised banks in India, will arrange to deposit equivalents of the payments made to the foreign suppliers, as indicated in the invoice together with commission and incidental charges at the rate of 10 per cent ad valorem, on the payments made to the suppliers. In addition, Interest at 6 per cent per annum, for the actual period between the date of payment to the foreign suppliers and the date of deposit of rupee equivalent shall also be paid into the Government account. The rupee equivalents will be calculated at the composite rate arrived at on the j;basis of a formula given in Public Notice issued by the Ministry of Foreign Trade No. 15 ITC(PN)/72 dated 28th January, 1972. However, this rate is subject to revision if and when the IMF parity rate of exchange undergoes a change.

(ii) Government Departments.—In respect of imports made by the Departments •cf Central and State Governments (including State Electricity Boards; the documents will be sent direct to the importers, who will' ensure that: their respective Accounts ""Officers promptly accept the debits, as and when raised by AGCR, on the basis of advices issued by the Ministry of Finance. The procedure of making deposits! will not apply in their case.

17. Bank's Responsibility.—It will be the responsibility of the Indian Bank which has given the guarantee or the State Bank of India, or one of the 14 nation- alised banks, as the case may be, to arrange for the timely deposits of these amounts. before handing over the original documents to the importer.

18. Method of making Rupee Deposits.-—Deposits may be made either at the Reserve Bank of India, New Delhi, or the State Bank of India, Tis Hazari Branch, •Delhi-G, or remitted by means 01 a demand draft from the local branch of the State Bank of India, or Its subsidiaries, drawn on and made payable to the State Bank of India, Tis Hazari Branch, Delhi-6, for credit to the Central Government Account In terms of Import Trade Control Public Notice No. 2.S3-ITC(PN)/G8, dated the 24th October, 1968. The challan should inter alia indicate the amount of foreign exchange, the composite rate applied, the date on which the supplier was paid and the date of rupee deposit and all other essential particulars prescribed in Public Notice No. 132- ITC(PN)/71, dated 5th October, 1971. The principal amount, the incidental charge at the rate of 1 per cent ad valorem and the interest payment at 6 per cent should be shown separately. The demand draft should be sent direct to the State Bank of India, Tis Hazari Branch, Delhi-C, with Treasury Challan (duly filled in and signed by remitter) in quadruplicate. The Head of Account to be credited is "T-Deposits and Advances Part II-Deposits not bearing interest deposit Accounts- Departmental and Judicial Deposits—Civil Deposits—Daposits for purchases abroad under Direct Payment procedure as applicable to foreign credits—under the

detailed head, "value of goods under the FF 150,00 million French Credit 1972- 73"

19. Reporting Rupee Deposits to Government of India,—One copy of the challan .10m the Reserve Bank of India, or the State Bank of India, or Intimation regaidine he furnishing of Demand Draft to State Bank of India, Tis Hazari Branch, Delhi-6, ;hould be sent by the Bank concerned to the Contro'ler of Aid Accounts, Depart- nent of Economic Affairs, Jeevan Deep Building, Parliament Street, New Delhi-1.

ANNEXURE I

Illustrative List of Documenu

Para 7 (Hi)

1. Commercial Invoice for the value of tho equivalent shipped and for details of any down payments, as the case may be.

2. Complete set of clean-on-board ocean or charter party bills of lading or Air Way Bills, as the case may be, with packing lists where applicable; certificates, it any prescribed in the contract.

3. Written attestation from the suppliers alongwith necessary customs documents, certifying that the French suppliers have complied with the percentages of foreign expenses authorised by the French Government.

4. Any other documents.

AKNEXTJRE tl

Bank Guarantee Bond

To

The President of India.

In consideration of the President of India (hereinafter called the Government) having agreed to arrange for payment in FF for import of by

(hereinafter called

under the terms and conditions of the French the importer)

Credit and in pursuance of Import Licence No issued on ". in favour of the importer against the above mentioned credit, we Bank, at the request of the importer hereby undertake to arrange to deposit witnm ten days of the receipt of the advice of payment Indian rupses equivalent to FF converted at the composite rate of exchange of FFI arrived at on the basis of the formula given in Public Notice issued by the Ministry of Foreign Trade, New Delhi, No. 15 ITC(PN)/72, dated 28th January, 1972 and notified from time to time along with commission and other charges @ 1 per cent ad valorem converted at the above rate for credit to the Government account in the manner and against the appropriate Heads of Account as indicated by the Govern- ment of India under the said credit, together with interest thereon at the rate of 6 per cent per annum, from the date of payment to the French supplier to the date of deposit of rupee equivalent for credit to the Government account. We shall arrange the deposit to the credit of the Government in the Reserve Bank of India, New Delhi, State Bank of India. Tis Hazari Branch, Delhi-6. or where this may not be feasible by means of a Demand Draft dra^-n on and made rsavable to the State Bank of In^ia, Tis Hazari Branch, Delhi-6 (for credit to Central Government Account"). The demand draft shall be sent direct to State Bank of India. Tis Hazari Branch, Dalhi-8 alon* with Treasury Challan (duly filled in and signed by remit- ter), in quadruplicate.

2. We the

Bank, also undertake that the negotiable s°t of import documents will be released to the importer only after the rupee deposits contemnlated above have been made.

3. We the , Bank, also undertake to indemnify and keep indemnified the Government against any default in payment by the importer of any sum that may be due and payable by the importer to the Govern- ment at such place and in such manner as tbe Government may direct, such sums not exceeding Rs or any part thereof, for the time being due and payable by the importer togt.tre-,- with interest thereon at the rate of six per cent per annum from :h.j d=;te of payment to the 'French Supplier ?.nd commission and other charges at the rate of 1 -ner cent ad valorem. The decision of the Gov- ernment as to anv default in the said nayment by the importer, or on his part and in regard to the amount nayable to fho" C-ovprrmer.⁴ ' -- vr< Bank, shall be final anH '.Muding o~> us

Bank,

4. We

Bank, further agree that in case of increase in the value of mr—uts or increase in the value of unfulfilled deliveries under the contract as a result of change in IMF paritv rate of exchange or otherwise, the amount of this guarantee bond will be adjusted as on the date when the change takes place, in proportion to this change.

5- We

Bank, futher agree that the guarantee herein contained shall remain in full force and effect during the period that would be taken for the performance of the said agreement/contract regarding delivery of the equipment and that it shall continue to be enforceable till all the dues to the Government under, or by virtue of this guarantee have been fully paid and its claims satisfied or discharged.

G. The Guarantee herein contained shaj] not be affected by any change in the constitution of the importer or the Bank, and the Government shall .have the fullest liberty without the guarantee to postpone for any time and irom time to time any of the powers exereiseable by it against the importer and either to enforce payment by the Importer of any of the amount the payment whereof is intended to be hereby secured and the Bank, shall not be released from its liability under this guarantee by any exercise of the Government of the liberty with reference to the matter aforesaid or by reason of "time being to the importer or any other forbearance, act or omission on the part of the Government of any indulgence by the Government to the importer or by any other matter or thing whatsoever which under the law relating to sureties shall, but for this provision, have the effect of so releasing the Bank, from its such liability,

7. We

Bank, lastly undertake not to revoke this guarantee during its currency, except with previous consent of the 'Government, in writing,

8. Our liability under this guarantee is normally restricted to Rs, * (plus interest charges not excepted to exceed one per cent of the guaranteed amount) and this guarantee shall remain in force till the dayf of

9. We, however, undertake to make such additional deposits as may be necessary in terms of Public Notice No. 15 ITCfPN)/72, dated 28th January, 1972, as notified from time to time. Unless claims under this guarantee are made in writing within six months of this date and unless a suit or action to enforce these claims is com- menced within another six months thereafter, i.e. upto , all rights of the Government of India under this guarantee shall be forfeited and we shall be relieved and discharged from all liability thereunder.

Date the day of for

.Accepted for and on behalf of the President of India by Shrl

(Name and designation)

Signature

Note.—The value of the Stamped paper on which guarantee is to be executed

is to bp adjudicated by the Collector of Stamps

*This amount should be worked out by adding 1 per cent to the value of the contract at the Central rate of 1 FF^Rs. 1.422.

tThis date shall be arrived at by adding one Month to the date by which all payments to the Suppliers are expected to be finalised.

ANNEXURE III

(Only ctne Copy by the importers in private sector) (in duplicate by the Public

Sector Undertakings. Central and State Government Departments including State

Electricity Boards)

To

The Secretary, Ministry of Finance, Department of Economic Affairs, WE. I Section, North Block, New Delhl-1.

Sir,

SUBJECT.—Import under the French Credit

In connection with the import of

(short description of the goods or services)

Irom France under the above credit, we furnish the following particulars: —

(a) Name and address of Importer.

(b) Number, date, value and last date of validity of the import licence for ordering, and (il) shipments.

(c) Name and address of the French Suppliers;

(d) Date of the contract:

OR

Date of Suppliers letter of acceptance of the orders placed against the licence.

FOB price:

Freight:

Insurance:

Total:

(f) Short description of the goods to be impirted:

(g) Terms of payment under the contract:

(h) The date on which payments under the contract will fall due in respect of advance payments and other payments:

(i) The dates on which the equipment will be shipped or services performed together with the value of each shipment, or service performed, based on the delivery schedules, or stipulations In the contract:

2. Ten certified copies of the contract (or each of the order and the letter of acceptance) and 0/ the amendment (if any), and a photostat copy of the import licence are enclosed.

*-\3. A bank guarantee established by

fApplicable only to importers in private sector.

name and address ol the Indian Scheduled bank, authorised to deal in foreign exchanged) and which has been duly adiudicated by the Collector of Stamps, In accordance with Section 31 of the Stamp Act 1899, is also attached.

or

•f3. The import documents may be sent to the

(complete name and postal address oil the branch of the State tAppllcable to Bank of India or of any of the 14 nationalised banks) the Public sector who will release the documents to us only after making the Undertaking, deposits of rupee equivalents into Government account calculated at the composite rate oi. exchange arrived at on the basis of the formula given in Public Notice No. 15 ITC(PN)/72 dated 28th January, 1972 and reproduced in RBI Bombay A.D. Circular No. 11 dated 17th February, 1972 or as notified from time to time, with interest at 6 per cent per annum, from the dale of payment to the French suppliers to the date of deposit of rupee equivalent and commission and incidental charges at 1 per cent ad valorem and bank charges (l/8th of one per cent documentation, charges plus tax @ 17.60 pnr cent thereon and expenses for actual postage charges) as required under para. 15 of the licensing condi- tions.

or

*§3. DebUs relating to the transactions and adjustable in

the books of

(Designation complete postal Address of the Accounts 5Applicab]e to Officer) Departments of and we shall ensure that they arc adjusted as soon as they Central & State are raised in terms of para 15 of the licensing conditions. Governments

(including State Electricity Boards).

4. You are requested to get the contract approved for financing under the French Credit and issue nercssary authorisation to the French authorities to arrange for payments to the suppliers or their bankers.

Yours falthfulK

Licensee.

*Delete whichever is not applicable.

SUBJECT.—Submission of applications for licences for import of capital goods.

No. 113-ITC(PN)/72.—Attention is invited to column 6(viii) of form 'E' meant for applications for Import of Capital goods, appearing in Appendix 3 (pages 313—• 323) of the Import Trade Control Hand Book of Rules and Procedure, 1972-73, according to which the applicants requiring to import Capital goods have to furnish satisfactory documentary evidence from foreign suppliers (e.g., the proforma Inv ice etc.) in support of the C.I.F. value of the goods sought to be imported.

2. It has been decided that, in future, the proforma invoice or other satisfactory and acceptable evidence in support of the C.I.F. price, furnished with the applications for import of Capital Goods, should indicate separately the amount to be incurred on account of (i) freight and (il) insurance, as included in the C.I.F. price declared by the applicant in his import application.

H. Import licences for Capital Goods will continue "to be issued for C.I.F. value but the licencing authorities will endorse the licence indicating separate amounts in respect of (i) the F.O.B. value of equipment, (ii) freight and (iii) insurance. It will also be a condition of the licence thflt the amount paid in respect of each of these iball not exceed the amount as specified in the licence or the actual amount charged, whichever is lower

(Sd.) M. M. SEN,

Chief Controller of Imports & Ertport.