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REGISTERED No.D(D)-72 The Gazette of India

EXTRAORDINARY

PART I -Section 1

PUBLISHED BY AUTHORITY

No. 26) NEW DELHI, MONDAY, JANUARY 22,1979/MAGHA 2,1900

Separate paging is given to this Part in order that it may be filed as a separate compilation.

(201)

1114GI/78—1

APPENDIX I TO DEPARTMENT OF COMMERCE

PUBLIC NOTICE NO. 8-ITC(PN)/79

DATED 22-1-1979

Licensing conditions in respect of Private Sector Imports under the Yen Credit (Commodity Aid) ID-C4 for 1978-79

extended oy the Overseas Economic Cooperation

Fund (OECF)

Section I—General Conditions

The Yen Commodity Credit for 1978-79 extended by the Overseas Economic Cooperation Hind of Japan (OECF) is untied in favour of OECD and developing countries. Accor- dingly the commodities and services incidental thereto to be procured under ihis credit can be imported from Japan and all countries enumerated in the lj<.t Lit Annexurc 1 which will be the eligible source countries under the credit. However, if commodities imparted under the licence contain compo- nents originating from u iiuo-eligible source country or rtmn- trlcs, it should he ensured by the impoitcr, while negotiating a supply contract, Ihat the total c.i.f. coat, including import duties, of such components imported into the country of the supply contract is less than 30 per cent of the f.o.b. value ol the supply contract. In such a case, a certificate to this effect should be obtained from suppliers nnd attached to the supply contract.

(iij The licence will bear the superscription "Japanese Ten Credit No. ID-C4". The licence code for the first and second suffix will be "S/JN", These will also be repeated in the letter from the CCT&E forwarding the import licence.

(iii) No remittance of foreign exchange will be permitted against the import licence, except bank charges which may oe remitted through normal banking channels. Any payment towards Indian Agent's commission should be made in Indian rupees to the agents in India. Such payment however, will form part of the licence value and will, therefore, be charged to the licence.

(iy) The import licence will be issued on CIF basis with an initial validity of 12 months. For extension of the validity of the licence, the licensee should approach the licensing nuthority concerned who shall consult the Department of Economic Affairs (WE-I Section) in the matter.

(v) Firm order must be placed on CIF or on C&F bails on the overseas suppliers located in Japan or in other eligi- ble countries mentioned in Annexurc I and sent to the Under Secretary, Department of Economic Affairs (WE-I Section), Ministry of Finance, North Block, New Delhi within 4 month* from the date of issue of the import licence. "Firm orders" means purchase orders placed by the Indian licensee on the overseas supplier duly supported by order confirmation by the letter of purchase contract duly signed by both the Indian Importer and the overseas supplier. Orders on Indian Agents of Overseas suppliers and/or order confirmation by <™ch Indian Agents are not acceptable.

MINISTRY OF COMMERCE, CIVIL SUPPLIES

AND COOPERATION

(Department of Commerce)

IMPORT TRADE CONTROL

PUBLIC NOTICE NO. 8-ITC (PN)/79

New Delhi, the 22nd January, 1979

Subject: Licensing conditions for private sector imports and public sector imports under the Yen Credit (Commodity Aid) ID-C4 for 1978-79 extended by the Overseas Economic Co-operation Fund

(OECF).

F. No. IPC/39/5/78—The conditions governing the

issuance of import licences for private sector imports under the Yen Credit (Commodity Aid) ID-C4 for 1978-79 an given in Appendices I and II to this Public Notice are noti- fied for information.

K. V. SESHADRI,

Chief Controller of Imports and Exports (vi) This condition of the placement of contracts within 4 months period will be treated as not having been complied with unless complete contract document-, reach the Ministry of Finance. Department of Economic Affairs, WE-I Section, within four months from the date of issue of the import licence. If firm orders as explained in para l(v) above can- not be placed within four months for valid reasons, the licensee should submit the import licence to the concerned licensing authorities giving reasons why ordering could not be completed within four months. Such requests ordering for extension in the ordering period will be considered on merits by the licensing authorities who may grant extension upto a further maximum period of 4 months. If, however, extension is sought beyond 8 months from the date of Issue of this import licence such proposals will invariably be re- ferred by the licensing authorities to the Department of Eco- nomic Affairs TWE-I Section). Ministry of Finance, North Block, New Delhi who will consider mch extension on (he merits of each case and communicate their decision to the licensing authorises for communication to the licensee.

Only on production by the licensee of a letter from the licensing authorities sanctioning; such extension will the autho- rised dealers and departmental authorities permit the facility of bank fiiiarantee, letter of authorifv for the establishment of letter of credit, acceptance of deposits of rupee equivalent, etc. in respect of supply contracts entered into under the import licence.

(vii) All payments must be completed within one rnonm from the expiry of the import licence. Individual payments must be arranged upon shipment of goods. The contract should piuviik fur payment on ca'.h basis, i.e., on presentation of shipping UurumenK No credit fueilify of any kind will be permitted to he availed of by the Indian importer tiom the Overseas Supplia. The conlruct should piovide for the period oC delivery of goods as follows :

" Months after the receipt of Letter ot

Credit but to be completed latest by the end of

Jn fixing the terminal date fur shipment it should be noted

that this dale should not be beyond.

Section—II SJMSCLII points to be kept in view while negotiating a supply contract

(i) (a) The value of (he contract should be expressed In Yen or US Dollars or Pound Sterling without fraction less than one Yen, one cent or one Panny and should exclude Indian Agent's commission, if any, which should be paid in Indian rupees. J>1 no cirruinstHnt.es the contract vahic should he cxpro'sud io Indian rupee¹; or in any other currency. The FOB cost, insurance find freight amount may be shown sep- arately but it should be clarified in the contract whether the freight charges will be payable on actual basis or whether the freight charges indicated in the contract would be the amount payable irrespective ol" the actual charges.

(b) The purchase order and supplier's order confirmation

should be in English only,

(ii) For individual imports not exceeding Yen 300 million or US $ 1,500,(KM) or Pound S00,0()0 in value (exclusive of Indian aaents commission) the licensee is free to effect pur- chases directly from the suppliers without recourse to inter- national tender enquiries from the countries listed in Ann- exurc I.

(iii) Where, however, the supply contracts exceed the limit prescribed in II(ii) above in value (exclusive of Tndian Agents commission), any one of the following procedures for pro- curement should be rigidly followed.

(a) Formal Open International Tendering.

(b) Forma] selective Internationa] Tendering,

(c) Informal International Competitive Procurement,

(iv) Any reference to International Tendering or Intel- national Procurement will mean tendering or procurement, as the case may be, from the eligible source countries.

The hove procedure may be relaxed in favour of Informal

Competitve procurement or Direct purchase where

1. a number of qualified suppliers exist in one particular

country or in a limited number of countries.

2. purchase of a commodity by reference to a particular specification, trade namo or designation is necessary in order to assure the intcrchanceabilitv or standardisation of equip- ment or because of special design requirement,

3. Purchases arc in the category of emergency procurement. The licensee is therefore advised that in case where the pro- cedure at (a) and (b) of para Il(iii) above cannot be taken recourse to, a reference to the Department of Fconomic Aff- airs shall have to he made who will consider each such case on merits.

(v) Where Formal Open International Tendering 3a rssoi-

ted to, the following points should be borne in mind :—

(a) Invitations to bid shall have to be advertised in at least on newspaper of general circulation in India.

(b) Bid bonds or bidding guarantees are a usual re- quirement but they should not be set so high as to discourage suitable bidders.

(c) Bid bonds or guarantees should be released to un- successful bidders as soon as possible after the bids have been opened.

(vi) The payment to the overseas supplier should be arran-

ged through an irrevocable letter of credit to be opened by the importer's bank in their favour which will be routed through the Bank of Tndia, Tokyo under the OECF Yen Credit (Commoditv Aid) for 1978-79 the details of which arc given in Section VI below.

(vii) Only one contract should be entered into for the full value of the import licence. In exceptional cases, more than one contract may be permitted to be entered into for which prior approval of ihe Department of Economic Affairs, Min- istry ol Finance, should be obtained soon after the date of issue of the import licence.

(viii) Eligibility of Supplier The Supplier shall be a national of the eligible source countries, or a juridical person governed substantially by nationals of the eligible source countries.

Section III—Conditions to be incorporated Id tile Supply Contracts

(i) The following provisions should be specifically embodied

in the supply contract :—

(a) The Contract is arranged in accordance with the Loan Agreement between the Government of India and the Japanese Overseas Economic Cooperation Fund (OECF) dated the 6th October, 1978, con cerning the Yen Credit No. ID-C4 (Commodity Aid) and will be subject to the approval of the Go- vernment of India for financing it under the said credit.

(b) Payments to the suppliers shall be made through an irrevocable Letter of Credit to be issued under the Lonn Agreement dated 6-10-1978 between the Go- vernment of India and the Japanese Overseas Eco- nomic Cooperation Fund (OECF) concerning (he Yen Credit No. ID-C4 (Commodity Aid).

(c) The Overseas Supplier would agree to furnish such information and documents as may be required under the Yen Credit arrangements by the Govern- ment of India on the one hand and the OECF on the other.

(d) A certificate in the form indicated below :

"I (We) hereby state that my (our) company has been registered in- ——(eligible source country) and is governed by nationals of the eligible source countries for judicial persons registered and incor- porated in the eligible source countries".

(ii) Where the suppliers are located in Japan, the supply contract should contain a specific clause to the effect lhat the lapanese Supplier should furnish a report to the Embasyy of India, Tokyo immediately after completion of shipping arr- angement alongwith one copy of the invoice and one copy of the Bill of Lading.

Section—IV Detailed Procedure for procurement ami finalt- satioD of supply contract has been indicated in Annexure II

Section—V Contract Approval by Government of India

(i) Within the stipulated period for placement of firm orders the licensee should forward to the Under Secretary, (WE-T Section), Deportment of Economic Affairs, Ministry of Finance, North Block, New Delhi 4 copies of the con- tract duly signed by both parties or purchase order by (he Indian importer placed on the Overseas Suppliers supported by order confirmation in writing by the Overseas Supplier or their photo-copies, complete in all respects, together with two photo copies of the relevant valid import licence and also with nn application (in duplicate) in the form attached as Anncx- ure III, requesting for issue of Letter of Authorisation for opening Letter of Credit, accompanied by a Bank Guarantee in the form prescribed in Annexuic IV duly adjudicated by the Collector of Stam.ns under Section 31 of the Indian Stamp Act.

Where supply contract is based on formal Open Inter- national Tendering or Formal selective International Tender- ing a certificate to the following effect ahould bo furnished in duplicate :—

(i) Name of the Newspapers in which the bid specifica-

tion was published ;

(ii) Name of parties who quoted against the tender en-

quiry;

(iii) the reason for selecting a particular offer indicating

whether it is the lowest technically suitable bid.

(ii) Bank Guarantee—Amount for which it should be exe- cuted.—The Hnnk Guarantee should be for an amount re- presenting the rupee equivalent of the foreign currency amount for which the Letter of Authority/Letter of Credit is sought plus interest and other charges as mentioned in Annexurc IV. The rate of conversion shall be at (he exchange rate notified by the Department of Revenue and prevailing on the date of issue of the import licence as per para 2 of the Public Notice No. 78-ITC(PN)/74 dated the 6th June, 1974 issued by the CC1&E. This rate is meant only for the purpose of arriving at the value of the Bank Guarantee to be furnished by the licensee. For the purpose of making rupees deposits into Government account towards the cost of imports, Ihe rupee equivalent will have to be worked out In the manner indicated in Section VII below.

(iii) If the contract documents, Request for issue of letter of authorisation, the Bank Guarantee and other connected documents are found to be In order, the Ministry of Finance, Department of Economic Affairs, WE-I Section will approve the contract and notify the same to the OECF for their Information that contract will be financed under the Yen Credit (Commodity Aid) and simultaneously forward one set of documents to the Controller of Aid. Accounts & Audit, Ministry of Finance, UCO Bank Building, 1st Floor, Parlia- ment Street, New Delhi, for issue of necessary letter of autho- risation. A copy of this communication will also b" endorsed to the licensee for information.

The above procedure of approving contracts will ipso facto apply to each contract amendment involving revised scope of supply and/or increase/decrease in the value of contract.

Section VI—Payment to the Overseas Supplier—Letter of Credit procedure

(I) On receipt from WE-I Section, Ministry of Finance, Department of Economic Affairs, North Block, New Delhi, the documents mentioned in para v(iil) above, the Controller of Aid Accounts & Audit (CAA&A), Department of Econo- mic Affairs, Ministry of Finance, UCO Bank Building, Par- liament Street, New Delhi (hereinafter referred to as CAA&A for convenience) will issue a letter of authorisation as in the form attached as Annexure V to the Indian Bank that has furnished the Bank Guarantee for opening the irrevocable letter of credit as in the form attached as Annexure VI in favour of the Overseas Supplier, A copy of this Letter of Authority will be endorsed by the CAA&A to OECF, the Bank of IndiK, Tokyo, Embassy of India in Japan and the WE-I, Section, Department of Economic Affairs, Ministry of Finance,

(II) On the basis of this letter of authority, the Indian bank concerned will establish an irrevocable letter of credit in favour of overseas supplier concerned, and forward the ori- ginal letter of credit (along with four copies thereof) to the Bank of India, Tokyo requesting them to add their confirma- tion and forward if to the overseas supplier. (It should be noted that the letter of credit issued on the suppliers bank in respect of private sector imports should be routed invariably through the Bank of India, Tokyo who will add its confirma- tion). The Bank of India. Tokyo will forward a copy of the letter of credit to the OECF and the CAA&A.

The above procedure of opening letter of credit on the basis of letter of authority from the CAA&A would inso facto apply to all such amendments to letters of authority/ letters of credit as may become necessary due to contract amendment.

(iii) The overseas supplier shall, after effecting shipment of the goods, present through his bankers, the documents specified in the letler of credit to the Bank of India, Tokyo for payment. If the documents are found to be in order, the Bank of India, Tokyo will release the amount specified in the documents to the overseas supplier through his bankers and will thereafter obtain the reimbursement of the cost of imports from the OECF.

(iv) Banking charges payable to the Bank of India Tokyo for adding this confirmation to the letter of credit, for nego- tiations thereunder, and charges if nny, of overseas supplier's banker and interest charges payable to the Bank of India. Tokyo for the period counting from the date of payment by them of the cost of imports to the overseas supplier to the date of reimbursement by the OECF, shall be settled by re- mittance by the concerned importer's bank in India to the Bank of India, Tokyo through normal banking channels with- out affecting the Government of India.

Section VII—Responsibility of Rupee deposit

(ij The original negotiable shipping documents will invari- ably be forwarded by the Bank of India, Tokyo to the concerned importer's bank in India who should release these negotiable set of doenmentu to the licensee only after ensuring that the rupee equivalent of the Yen/US Dollar/Pound Ster- ling payments made to the overseas supplier along with interest charges thereon calculated at the rale of 9 per cent per annum for the first thiity days and at 15 per cent for the period in excess thereof, reckoned from the date of payment by the Bank of India, Tokyo, to the overscan supplier to the date of actual rupee deposit, is deposited into Government of India account in terms of the Public Notice No. 46-ITC(PN)/ 76 dated 16-6-1976, The interest is payable for both the days i.e. the day on which payment is made to the overseas supplier and also the day on which rupee deposit is made into Government account vide Public Notice No. 74-ITC (PN)/74 dated 31-5-1974 as modified under Public Notice No. 103-ITC(PN)/76 dated 12-10-1976. The exchange rate to be adopted for computing the rupee equivalent of the Yen/US Dollar/Pound Sterling payments will be the com- posite rate of exchange as laid down in CCI&E Public Notice No. 8-rTC(PN)/76 dated 17-1-1976 or as may be notified by Government from time to time ihrough Public Notices of the CCI&E or through Exchange Control Circulars of the Reserve Bank of India Any change in this regard as also in regard to the rate of interest will be notified as and when necessary. It will be the responsibility of the Indian Bank concerned to ensure that the amounts due are correctly de- posited Into Government account before the import docu- ments are handed over to the Importers. The licensee should also ensrurc that the amounts due are correctly deposited into Government Account before taking delivery of the documents from their bankers, The Head of Account to which the above rupee deposit ehould be credited is "K—Deposits and Advances—843 Civil Deposits—Deposits for purchases etc. nbroad Purchases under Credit/loans Agreements—credits from the Government of Japan under the detailed head "Yen Credit (Commodity Aid) No. ID-C4 for 1978-79 from Japan."

(ii) The amount referred to above should be deposited in cash to the credit of the Government either in the Reserve Bank of India. New Delhi, or State Bank of India, Tis Hazari, Delhi, or, if this is not feasible, should be remitted by means of a demand draft obtained from any branch of in* State Bank of India or its subsidiaries or any one of the nationalised Bank (drawee) drawn on and made payable to the State Bank of India, Tis Hazari Branch, Delhi-6 (Drawee and payee), for credit to the Government account as contemplalcd in Public Notices No, 184-ITC(PN)/68, dated 30-8-196R, No 233-ITC fPN)/68 dated 24-10-196K, No. 132-ITC(PN)/71 dated 5-10-1971, No. 74-ITC(PN)/74 dated 31-5-1974 and No. 103- ITC(PN)/76 dated 12-10-1976.

(iii) The concerned bank in India

(a) Ministry of Finance letter of authority No. and date.

fb) Amount of foreign currency in respect of which de- posits are to be made together with rate of conver- sion adopted.

(c) Date of payment to the overseas supplier.

(d) The amount of in'erest paid and the period for which

it has been calculated.

(e) Total amount deposited.

Thereafter, the Treasury challans evidencing the rupee de- posit should be sent by Registered post to CAA&A indicating reference to the letter of authorisation issued by him and also enclosing copies of invoice and shipping documents.

"Note : Importer's Banks in India should ensure that the rupee deposits are invariably made within 10 days

of the rt-iript of the advice of payments and ni.j;otiablr pupping document^ horn tbr Hank (.>( Inilij, Inl>vn and 'hat ihe < \.\AA, MiniMiv ol Finance, (DhA) New Delhi 19 kepi informed ol I he f;ict immediately thereafter."

(iv) The concerned bank in India should endorse Ihe amount of rupee deposits on the exchange control copv of the licence and send the icquisile 'S" form to the Rescnc Bank of India, Bombay.

fv) After the obligations in terms of the Bank Guarantee and the letter of authorisation ivmed by the CAA&A in the Mini- stry of Finance me fulfilled, the concerned Hank" in India can apply to the CAA & A for the release of bank guarantee. The application for this purpo.c be made in the form laid down in Annexure—VII.

Section VIII—lYliscellnneoii'i provisions

10 The importer should send a monthly report, after the letter of credit has been opened, regarding shipments and payments made thcrcagain-.t und about the balance left, lo the CAA& \.

(ii) Notifying Suppliers of Spcciul Conditions.—The licensee should apprise the supplier of any special provisions in the import licence which may aflect the suppliers in carrying out the transaction.

(iii) Disputes.—-It should be understood that the Govern- ment of India will nol undertake responsibility for disputes, if any, that may arise between the licensee and the suppliers, provisions dealing with settlement of disputes should be in- cluded in the condition of the contract.

(iv) Future Instructions .—Tbe licensee shall promptly com- ply with any directions, instructions or orders issued by the Government of India, from time to time regarding any and all matters arising from or pertaining to the import licence and for meeting all obligations under the Yen Credit Agree- ment (Commodity Aid) with the Japanese authorities.

fv) Breach or violation.—Any breach or violation of con- ditions set forth in the above clauses will result in appropriate action under Ihe Impoits and F.xpoits (Control^ Act.

fvi) List of AnrtemrcJ

Annexure \—List of eligible source countries.

Annexure II—Procedure for piocnrcmcnl and finali-

•ation of supply contract.

Annexure III—Form of Request for issue of the Letler of Authority for opening the Letter of Credit.

Annexure TV—Bank Guarantee Form.

Annexure V Letter of Authority Form.

Annexure VI—Form of Letter of Credit.

Antrexure VII—Form of Application for release of Rant

Guarantee.

ANNF.XURF f

[Ref, : Section I -Para ](v)l

List of Eligible source Countries

A. OEC'D Countries

Australia Austria Belgium Canada Denmaik Finland, France, the Federal Republic of Germany Greece Iceland Ireland Italy Japan Luxembourg the Netherlands, New Zealand Norway Portugal

1 114 GI/7K— 4

-Spain Sweden, NwiU.ciland, Turkey

the United Kingdom and the United States.

U. Development Countries and Territorial!

(hi) Non-O.P.F.C. Developing Countries

1. AfricH, North of Sahara

Egypt Morocco Tunisia

JI, Africa, South of Sahara Angola Botswana Burundi Cameroon Cape Verde Islands Central African Rep. Chad Comoro Islands Congo, People's Republic of Dahomay (1) Equatorial Guinea Ethiopia Gamhia Ghana Guinea Ivory Coast Kenya Lesotho Liberia Malagasy Republic- Malawi Mali Mauritania Mauritius Moozambique Niger Portuguese Guinea Reunion Rhodesia Rwanda St. Helena and dep. 12) Sao Tome and Principee Senega I Seychelles Sierra Leone Somalia Sudan Swaziland Terra. Afars and Issai Tago Ufjanda lln. Rep. of Tana7nnia Upper Volta Zaire Republic- Zambia

ITf. America, North and CeHt,

Bahamas Barbodoses Belize Bermuda Costa Rica Cuba Dominican Republic Fl Salvador Guadeloupe Guatemala Haiti Honduras lamaica Martinique

fl) Formerly the territory of Spanish Guinea, including (he

island of Fernando Po.

(2) Including the following islands ; Ascension, Tristan da

fnacceswblev Nightingale, Gough.

(31 Main islands, Arubn, Bonajrt, Curacao, Sana, St. Hus-

(acit St. Martin (Southern Part).

III. America, North and Cent. (Contd.)

IX. Europe

Mexico NciherJands A tillcs Nicaragua Panama St. Pierre & Miquelon Trinidad and Tabago West (ndies (Be.) n.i.e.

Cyprus Gibralter Greece Malta Spain Turkey Yugoslavia

(b2) Member or Vsociate Countries of OPEC (a) Associated States (1) (b) Dependencies (2)

IV. America, South

Argentina Bolivia Brazil Chile Colombia Falkland Islands Fiench Guiana Guyana Paraguay Peru Surinam Uruguay

Algeria Bolivia Libyan Arab Republic Gabon Nigeria Ecuador Venezuela Iran Iraq Kuwait Qatar Saudi Arabia Abu Dhabi Indonesia

V. Asia, Middle East

ANNEXURE II

Guidelines for Procurement of Commodities under th"

Commodity Loan IV

I. Introduction.

Bahrain Israel Jordan Lebanon Oman Syrian Arab Republic United Arab Amir.ite¹. (3) Yemen A rah I'l-niiblic Yemen, People'-, n.R 14)

VI. A.-rta, South

The proceeds of the Commodity Loan TV extended by the Fund shall be used with due attention to efficiency and non- discrimination among the eligible source countries for pro- curement of commodities and services incidental thereto con- cerning the Commodity Loan IV in accordance with the pro- curement procedures set out in this Guidelines.

II. Selection of Procurement Procedure,

The following proeedmes shall be applicable to the procure- Afghanistan R:'tigl;ideih Bhutan Burma Maldivis Nepal Pakistan Sri Lanka

VII. Asia, Far East

ment of Listed Commodities under the Fund's Loan : (1) Formal Open International Tendering. (2) Formal Selective International Tendering. (3) Informal International Competitive Procurement. (4) Direct Purchases.

(a) In the case of the procurement by the government unil/or a government agency, Formal Open Inter- national tendering or Formal Seleclive Interna- tional Tendering shall be applied.

Burnci Hons Kong Khmer Republic Korea, Republic of L:irv,

MilflO

(b) In case of non-fiovernment procurement, any of the procedures mentioned above may be applied.

(d) in any case mentioned above, Importer shall get u comiimulion ui. me Bori'jvver concerning Mo eli- gibility ui procurement in accordance with the pro- curement proccuiuc set lorth in thi* Section 1— 3. lhe Boiiower .';nali send the Report or Con- traci with a copy o£ the Contract to the Fund.

UI. Conditions of Contract.

Any contract to be linanced under the Loan shall fulfill the

following conditions.

1. Conditions L4. Commodities.—As the use of Me Loan is

limited to lirunc'iig expenditures for Listed Commodities pro- duced in the eligible source countries, the subject items o! the Lonlruut :,huii be Lisieu Coiiimodiics pioduccd in the eligible souicc countries and to be shipped to an Indian pott from the eligible soiuce countries. li the imported portion from non-eligible source countries is less than thirty per cent (30 per cem) of the following formula. Listed Commodities will be financed even if the imported portion from non-eligible source countries is included as a part of the Listed Commo- dities in the items of the Contract. Formula mentioned above :

Imported Price + Import Duty

. X 100

Supplier's FOB Price.

2. Conditions of Supplier,—The Supplier snail be a national of the eligible source countries, or a juridical person registered in the eligible source countries.

3. Conditions of Importer.—The procurement of any Com- modities by the armed lorces or their affiliated organizations of India shall not be eligible under the Loan.

4. Denomination of Currency.—The Contract :,hall be feed and payable in Japanese Yen, United Stales Dollar, or Sterl- ing Pound without any fraction less than one Yen ( £. 1.00). One cent ($ 1.00) or One Penny (d 1.00) respectively.

5. Standard Form of Contract

fa) The following uems shall be inserted in the Con-

tract to be financed by the Fund.

(1) Name and Nationality of Supplier and Importer. (2) Number and Date of ths Contract. (3) Name and Origin of (he Commodities. (4) Contract Price and Quantity. (5) Payment Terms. (6) Delivery and Shipment Schedule. (7) Other General Regulations.

(b) The Contract duly figned by both parties or purchase order by the Indian Importer placed on the overseas supplier supported by order confirmation in writing by the overseas supplier, or their photo copies, arc also acceptable to the Fund.

(c) The following statement of eligibility by the Supplier

shall be added to each contract.

"I (We) hereby state that my four) company has been registered in— — (eligible source country)". 6. Payment.—Each payment shall be made on and after the

date of signing of the Loan Agreement,

In principle, the full amount of a shipment shall bo paid to the supplier at each time of presentation of the relative shipping documents under an irrevocable Letter of Credit.

IV. International Tendering.

When International Tendering is applied, the procurement snail be made in accordance with the following principles, among others;

1. Advertising,—On all contracts subjects to Formal Open international Tendering, invitations to bid shall be advertised in at least one newspaper of general circulation in India.

2. Time Interval Between Invitation and Submission of Bids.—The time allowed for preparation of bids will depend to n Jargf extent upon the magnitude and complexity of the con'oct Cfncraliv not less than 30 days should be allow- ed k.r international bidding The time allowed, however shou'd be governed by the cireum ;. nes relating to each con- tract.

3 Bid Opening Procedures.—The dnte, hour and place for the h ^ . ' t i - o rt of bids nnd for the bid opening should be announced m the invitations to bid and all bids should be opened publicity at the stipulated time. Bids received after this time should be returned unopened. The name of the bidder and the total amount of each bid and of any alterna- tive bids, if they have been requested or permitted, should be read aloud and recorded.

4. Bid Bonds or Guarantees.—In the case of bidding, bid bonds or bidumg guarantees are a usual requirement, but they should not be set so high as to discourago suitable bidders.

Bid bonds or guaianiees should be released to unsuccessful bidders as soon as possible after the bids have been opened.

5. Standards,—If national standards with which equipment oi materials must comply arc cited, the specifications should state that commodities meeting Japan Industrial Standard or other internationally accepted standards, which ensure an equal or higher quality than the standards mentioned, will also bo accepted.

6. Use of Brand Names.—Specifications should be based ou performance capability and should only prescribe brand names, catalogue numbers, or products of specific manufacturer if .specific spare parts arc required or it has been determined that a degree of standardization is necessary to maintain cer- tain essential features.

In the latter case the specifications should permit offers of alternative commodities which have similar characteristics and provide performance and quality at least equal to those speci- fied.

7. Guarantees and Performance Bonds.—Bidding documents may require some form of surety for guarantees, if necessary. This surety can be provided cither by a bank guarantee or by a performance bond.

8. Liquidated Damages.—Liquidated damages clauses, if necessary, should be included in bidding documents when de- lays in delivery will result in extra expenditures, loss of re- venues or loss of other benefits to the Importer.

9. Force Majeure.—The conditions of the Contract includ- ed in the bidding documents should contain clauses, when appropriate, stipulating that a failure on the part of the parties to perform their obligations under the contract shall not be considered a default under the Contract if such failure is the result of an event of force majeure (to be defined in the conditions of the Contract).

10. Settlement of Disputes.—Provisions dealing with the settlement of disputes should be included in the conditions of the contract. It is desirable lhat the provisions should be based on "Rules of Conciliation and Arbitration" which have been prepared by the International Chamber of Commerce or on such other arrangements as may be mutually acceptable to the Indian Importer and the overseas Supplier.

11. Evaluation.

ANNEXURE UT

[Ref. Section V—Para V(l)]

Request for hjiie of the letter of authority

No. Date

To

The Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, UCO Bank Building, 1st Floor, Parliament Street, New Delhi—110001.

Subject —Tmport of

from Japan under t he Yen Credit (Commodity Aid) for No. ID-C4 for 1978-79.

Sir,

In connection with the import of—— . from Japan under the above mentioned Yen Credit (Commodity Aid) I oan Agreement No. ID-C4, we furnish the follon'inir n.irti- culara to enable you to issue the Letter of Authority to t he (Name of the Bank which should be the same as given in (nl below for opening a letter of credit in Overseas Supplier concerned).

(a) Name and Address of the Indian Importer.

(b) Number, date and value of the Tmport Licence and

Date up to which it is valid).

(c) Method of procurement—whether it is based on

direct purchase or Formal Open International ten- dering in which case it should be indicated whether

the contract has been awarded on the basis of lowest technically suitable otter with reasons, it' any,

(d) Brief description of the coods.

(e) Origin of the goods.

(1) Percentage of the import components from non-

eligible source countries, if any,

(B) Value of contract in Yen/US $ / £ — it should be

clearly indicated whether it is C&F or CIF.

(h) Amount of Indian Agents commission (in Yen/IIS $/<£.)• if any, payable in Indian rupees and the net value in Yen/US $/,£ payable to Overseas Suppli- ers.

(i) Value in Yen/Us S /£ for which (he Letter of

Authority is requested.

U) Number nnd date of the contract with Overseas Sup-

pliers.

(10 Name nnd Address ol the Overseas Supplier.

(1) Payment terms and probable dates on which payments

under the contract will fall due.

(m) Hxpected date of completion of deliveries,

(n) Name and address of the importer's Bank in India (which will be the bank that has furnished Bank Guarantee).

(o) Number, date and value of the Bank Guarantee indi-

cating the period up to which it is valid.

(p) Whether a contracts) under the same licence has been placed and notified to the OECF and if so, the name, date and value of each such contract and the reference of the Ministry of Finance under which it has been notified to the OfiCF.

Signature — •— .—

ANNEXURE IV

fRef. Section V—Para V (iijj Guarantee Bond

To

the first 3() days and the rate of 15 per cent per annum for the periou excess thereof reckoned from the date of the pay-

ment to the overseas supplier. The decision of the Govern-

ment as to any default in the said payment by the importer, or on his part and in retard lo the amount payable to the Government by us- — — (Bank), shall be final and binding on us • (Bank).

3. We,— „ ( B a n k , ), further agree (hat in case of increase in the value of imports or increase in the vnlue of unfulfilled deliveries under the contract as ci result of change in the composite rate of exchange mentioned in para 1 above, the amount of this guarantee bond will be adjusted as on the date when the change take place, in pro- portion to this change,

4. We, (Bank), further agree (hat the guarantee hetein contained shall remain in full force and cfl'ec-t during the period that would be taken for the perfor- mance of the said agreement/contract and that it shall con- tinue to be enforceable till al] the dues to the Government under, or by virtue of this guarantee, have been fully paid and its claims satisfied or discharged.

5. The guarantee herein contained shall not be aflccted hy any change in the constitution of the importer or t h e ' — —- —~ (Bank), and the Government shall have the fullest liberty without affecting the guarantee to postpone for any time and from time to time of (he powers cxerciseable by it against the importer and the • — --(Bank) shall not be released from its liability under this guarantee by any exercise of the Government of (he liberty with reference to the matter aforesaid or by reasons of time being given to the importer or any other forebearunce, act or omission on the part of the Government or any other matter or thing the Government to the imporlei 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 (he —•— (Bank) from its such liability.

6. We- • (Bank), 'astly undertake not to re- voke this guarantee during its currency except with previous consent of the Government iti Witing,

7. Our liability under this bond/guarantee is restricted to R s .~ ••(plus interest and¹ all banking charges, not expected lo exceed 1 per cent of the guarantee amount), and this guarantee shall remain in force fill"* the date of— (monlh) ——19 —. Unless claims under this bond/surantec are made in writing within six months of this date and unless suit or action to enforce these claims is commenced within another six months thereafter, i.e. upto — . all Government's rights under this bond/guarantee arc made in writing within six relieved and discharged from all liability thereunder.

Date the- —day of—— ——19 for—. -. _ . ..(Bank).

Accepted for and on behalf of the President of India by Shri— • . — —- .

(Name and Designation!

Signature Signature

""•This date shall be arrived at by addine one month to the date up to which the Letter of Credit is required to be kept valid.

for opening Lettei of Credit—Import Licence N o .— — -dated- — —~ —

Doar Siis,

., — .

With reference to your Bunk Guarantee No. • dated—— and letter No. —dated .__ __ from M/s. —•—(Importer) in which they have requested permission for opening a. letter of credit through your Bank under the Yen Credit (Com- modity Aid) No. 1D-C4, I am to enclose the Department of Economic Affairs Letter of Authority (format attached as Appendix I to this Annexure-V) No.— -dated - - . issued to the Bank of India. Tokyo with one spare copy authoiising them lo airange payments uptu Yen/Us &/£, Sterling to the Overseas suppliers. This letter of authority should be sent by you to the Bank of India, Tokyo Brunch alongwith the Letter of Credit opened by you.

2. You arc hereby authorised to open the Letter of Credit for an amount not exceeding Yen/US $/Pound Sterling „ _ — __ -within a period of thirty days from the date ol this letter under intimation to this Department. In terms of paru. 10 Section VII of the Exchange Control Manual, you are required to ensure that the date of expiry of the Letter of Credit is not later i_han 45 days after the final date for shipment as stated in the relative import licence of the date indicated in Ihe Letter of Authority whichever is earlier. Before opening the Letter of Credit, it may pieusc he ensured that the importers are in posses- sion of u valid import licence.

3. The Letter of Credit opened by you will incorporate a clause that it will be effective only after it has been con- firmed by the Bank of India, Tokyo. The Letter Ot Credit will, therefore, have to be routed through that Bank requesting them to add their confirmation to the effect that they undertake to pay on presentation of docu- ments in terms of the Yen Credit (Commodity Aid) No. ID- C4, Bank of India, Tokyo will forward the letter of credit after adding its confirmation to the overseas supplier through his bankers.

4 The amount of the Letter of Credit should not exceed

without a specific authorisation from this Ministry.

5. The honking charges and interest charges of th$, WanK of India, Tokyo and charges, if any of overseas suppliers bankers will on demand he remitted by you direct to the Bank of India, Tokyo, through the normal banking channels.

6. You are requested to arrange to deposit the rupee equi- valents of the Yen or US Dollars or Pound Sterling pay- ments to the overseas suppliers in terms of the Guarantee furnished by you, within 10 days of the receipt of docu- ments from the Bank of India, Tokyo. The rupee equivalent of amounts disbursed to the suppliers will have to be calculat- ed by applying the composite rate of conversion as pre- vailing on the date of payment to suppliers in accordance with the Public Notice No. K-ITCIPNV76 dated 17-1-76 or such other Public Notices, which may be issued from time to time. Interest at the rate of 9 per cent per annum for the first thirty days and at the rate of 15 per cent per annum for I he period excess thereof reckoned for the period between the date of payment to the supplier and the datt on which the rupee equivalents are to be deposited into Government account in terms of Public Notice No. 46-ITC (PN)/76 dated 16-6-76, will also have to be credited along- with the above amount to the Government of India's account. The interest is payable for both the days i.e. the day on which payment is made lo the overseas supplier and also the date on which rupee deposits is made into Government account (Any change in this rate will be intimated if and when made). Tt will be vour responsibility to arrange for the DEPOSIT OF THFSE AMOUNTS correctly, before the import docu- ments ore HANDED over to the importer.

7. Thesf amounts should be dcnositei'. either wilh iMe Reserve Dank of India, New Delhi, or the Slate Bank of India, Tis Haziiri. Delhi or remitted by means of a demand draft ohlained by you from any Hranch of the State Bank of India or its subsidiaries or any one of the nntionalised b-oiks. dr;iwn on and made nnvnblc to the State Bank of India. Tis Hazari Branch. Delbi-6 (drawee and payed In 1 his connection vour attention i" also inviVJ In iho nrmiMiiii,, uf llu- I'ublk- Nulii.-.j No ?H ITOPNl/dN c WJ 2-1 in I<-K>H mid No I K4 ITfd'N I '

8. One copy of the challan in original, in cases where the rupee equivalents are credited in cash at the Reserve Bank of India, New Delhi, or the State Bank of India, Tis Hazari, Delhi as prescribed in Public Notice No. 132- LTC(PN)/71 dated 5-10-1971 should be sent by you to the address given below alongwith a forwarding letter giving deposit and citing reference to this communication :—

The Controller of Aid Accounts & Audit,

Ministry of Finance, Department of Economic Affairs, 1st Floor, UCO Bank Building, Parliament Street, New Delhi-1 10001.

In case where the rupee equivalents are lemitted by mearo of demand drafts as laid down In the Public Notice No. 233-TTC(PN)/68 dated 24-10-1968, mentioned above, inti- mations thereof should be sent to the address given above. In all cases, full particulars of the rupee equivalents deposited alongwith the amount of interest paid and the period for which interest has been calculated should be fur- nished to this Department.

The receipt of this lettei may please be acknowledged.

Yours faithfully,

Accounts Officer,

Copy forwarded to :—

1. M/s. — (Importer) • for information, with reference to their letter quoted above. A copy of the Letter of Authority is also enclosed.

2. Bank of India, Tokyo, for information and necessary action in terms of their Agreement with the Govern- ment of India dated 30-10-1976,

3. The Director, Loan Department II, Overseas Econo- mic Cooperation Fund, Lino Building, 1-1, Uchiaai- vvaicho, 2 Chome-Chiyoda-ku, Tokyo.

4. Embassy of India, Tokyo for information,

5. Under Secretary (WE-I Section), Department of Fconomic Affairs, alongwith a copy of Letter of Authority with reference to their letter No.

dated.

Accounts Officer.

APPENDIX I TO ANNEXURE V

Letter of Authority No. —

No. F.

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Economic Affair*;

New Delhi, the

To

Bank of India,

Tokyo Branch,

Tokyo (Japan)

Subject :—Import under Yen Credit (Commodity Aid) Loan Agreement No. ID-C4-—Issue of Letter of Authority for confirmation of Letter of Credit.

Dear Sir,

In accordance with the terms and conditions of the agree- ment dated 30-10-76 entered into with your Bank, we hereby .'uuhorisc you to confirm the Letter of Credit to be opened h\ llihliiin Bank) favouring (Overseas Supplier) for Yen^—— L.^trini: Hie unpoit ot against contract entered

into b y — — — ( I n d i an Importer), to be forwarded to the beneficiary and to pay the amount under the said Letter of Credit on presentation of the requisite documents there- under.

2. After cuch payment, the shipping and other docu- ments (negotiable) may he forwarded direct to (Indian hank) alongwiih a payment advice and you mast claim imnicdiaLcly reimbursement of Ihe amounts paid by furnishing necessaiy documents to the OECF. As and when any payment is made by you and reimbuisement is made to you, an advice in the prescribed form should be sent to this Ministry. 3. Your banking charges and charges if any of overseas Suppliers bankers and interest charges under the above Letter of Credit will be settled directly with you by the (Indian bank).

4. This authority will remain valid upto— • ~— .

Yours faithfully. Accounts Officer.

in accordance with the provisions of the Letter of Commitment, (the designated foreign exchange bank in Tokyo) undertakes to remit the amount of the draits iu accordance with instructions issued by you.

2. You must forward the drafts and one complete set of documents to (the designated loreign exchange bank in Tokyo) together with the certilicnto stating that the remaining documents have been airmailed direct to us.

3. All banking charges under this credit arc for account of (Lhe Importer) under the said Loan Agreement.

Yours faithfully,

(Name of the Issuing Bank)

By :

(Authorised Signature)

ANNEXURE VII

[Section VII—Para VlJ(v)J

Form of Application for release of Bank Guarantee

ANNEXURE VI [Ref : Section VI—Para Vl(li)] Irrevocable Letter of Credit Date : L/C Mo.

To

(Name and Address of and Advising Bank, This letter of

credit has been issued pursuant to Loan Agreement No. ...

dated between (borrower) and THE OVERSEAS ECONOMIC COOPERATION FUND, Tokyo, Japan. Dear Sirs,

We request you to advice (name and address of ihe Supplier) that we have opened our irrevocable credit No. , . .—in their favour for account of (name of the purchaser) for a sum or sums not exceeding an aggregate amount of YenAJS $ /£ Sterling) Say Yen $ / £— — available by bencficiarys drafts at sight for full invoice value drawn on (the designated foreign ex- change bank in Tokyo), To be accompanied by the following documents :— Signed commercial invoice in Packing list in Certificate of Origin in Fullsct of clean on board (ocean bills of lading made out

lo order and Bank endorsed and marked "Freight " and "Notify

" (Other documents')

to

evidencing shipment of (Brief description of goods referring to Contract No. ) from Partial shipments are permitted. Transhipment if permitted. Bill of lading must be dated not later than , 19 . Drafts must be presented to the drawee not later than 19

"Drawn under (Name of the Issuing Bank) irrevocable credit No, dated J9 . and Imoort Reference No. (s) (if any)".

This credit is not transferable. We hereby undertake that all drafts drawn under and in compliance with the terms of this credit shall be duly honour- ed on due presentation and delivery of documents to the drawee.

Unless otherwise cxprcssely stated, this credit is subject to "Uniform Customs and Practice for Documentary Credits (1974 Revisions), International Chamber of Commerce, Publication No. 290". Special Instructions to the tteRorintlnjj bank.

1. This credit shall become effective when Cthe designat- ed foreign exchange brink in Tokyo) acknowledged receipt of the letter of commitment from THF. OVFRSHAS ECONOMIC COOPERATION FUND

under the aforementioned Loan Agreement.

After obtaining The reimbursement from TIIH OVERSEAS ECONOMIC COOPERATION FUND To

The Controller of Aid Accounts & Audit, Ministry of Finance, Department of Economic Affairs, UCO Bank Building, 1st Floor, Parliament Street, New Delhi-1.

Sir,

We are furnishing below detailed information on the rupee deposits made by us in the discharge of our obliga- tions under Bunk Guarantee No. — dated — — — f or an amount of Rs.——-—• with the request that the same may be iclcased and returned to us.

1. The name and full address of the importer/licen"ec

on whose behalf the Bank Guarantee was furnished.

2. The import licence No. date, value, brief description of the equipment and/or commodities allowed for import thereunder,

3, Particulars of the nuthorisalion(s) for opening Letters of Credit obtained from the Ministry of Finance (to be given separately for each letter of authorisation).

(a) Letter No. and date.

(bi Amount of Authorisation

(c) Japanese Yen Credit No.

4, Particulars of imports and rupee deposits made (to be given separately for each Letter of Credit Authori- sation).

(a) Paiticulars of Letters) of Credit opened (No., date,

value, the supplier's name).

(,b) Invoice No. and date relative to each Letter of

Credit.

(c) Amount of Invoice (net in Yen/Us $,/£•

(d) Amount of Rupee deposit,

(c) Relative challan No. and date and the name of

Treasury/Bank.

(f( If by demand draft, No, and date of the demend draft and No. and date of the Letter with which the draft was sent to the State Bank of India, Delhi.

5. Amount utilised and balance unutilised (Yen/US

$ / £ .) in each Letter of Credit Authorisation.

II. We certify that ;—

(1) ''The balance amount of Yen —

available in the authorjsation(s) given by the Ministiy of Finance hag not been utilised/will not be utilised.

OR

No letter of credit was opened under the aulhorisa-

tion(s) and the authorisation^) lapsed.

OR

The letter of credit w;is opcncO against the authorisation

letter(s) expired unutilised.

(2) Our obligation under ihe Bank. Guarantee in ques-

tion have been fully discharged.

Til. We confirm that the inleiest and banking charges of the Bunk of India, Tokyo and charges, if any, of overseas suppliers Bankers relative to this transaction have been remitted by us lo the Bank of India, Tokyo.

TV. We request (hat the bank guarantee may please be

released and returned to us for cancellation.

Yours faithfully.

Authorised Agent for and on behalf of the Bank.

•whichever is applicable.

be completed within four months. Such requests for exten- sion in the ordering period will he considered on merit by the licensing authorities who may grunt extension upto a further maximum period of 4 months. If however, cxtsntion U sought beyond 8 months from the date of issue of this import licence, such proposals will invariably be referred by the licensing authorities to the Department of F.conomic AlTairs (WE-I Section), Ministry of Finance, North Block, New Delhi who will consider such extension on the merits uf each case and communicate their decision to the licensing artthoi itics for communication to the licensee.

Only on production of the licensee of a letter from tho licensing authorities sanctioning such extension will the authorised dealers and departmental authorities permit tho facility of letter of authority for the establishment of letter of credit, acceptance of deposits of rupee equivalent, etc. in respect of supply contracts entered into under the import licence.

APPENDIX II TO DEPARTMENT OF COMMERCE

PUBLIC NOTICE NO. 8-lTC(PN)/79 DATED 22-1-1979

(vii) All payments must be completed within one month from the expiry of the import licence. Individual payments must be arranged upon shipment of goods. The contract should provide for payment on cash basis i.e. on presentation of shipping documents. Nn credit facility of anv kind will be permitted to bo availed of by the Indian importer from the Overseas Supplier. The contract should provide for the period of delivery of goods as follows :—

Deeming conditions in respect of public sector import*

under the Yen credit (Commodity AID) ID-C4 for 1978-

79 extended by the Overseas Economic Cooperation Fund

(OECF)

Section I—General Conditions:

" Months after the receipt of Tetter of Credit but to be completed latest by the end of ."

In fixing the terminal date for shipment it should be noted

that thus date should not be beyond.

Section II—Special points to be kept in view while negotiat-

ing a supply contract

(i) The Yen Commodity Credit for 1978-79 extended by the Overseas Economic Cooperation Fund of Japan (OECF) is united in favour of OFCF and developing countries. Accordingly the commodities and services incidental thereto to be procured under this credit can he imported from Japan and all countries enumerated in the list at AnncMirc-1 which will be the eligible source countries under the credit. How- ever, if commodities imported under the licence contain com- ponents originating from u non-clii'ible source country or countries, it should be ensured by the importer, while negotiat- ing a supply contract, that the total ci.f. cost, including import duties, of such components imported into the country of the supply contract is less than 30 per cent of the f.o.b. value of the supply contract. Tn such a case, a certificate to this effect shuuld be obtained from suppliers and attached to th: supply contract.

(ii) The licence will bear the superscription "Japanese Yen Credit No. ID-C4". The licence code for the first and second su/Iix will bo "S JN". These will also be repeated In the letter from the CCI&F forwarding the import licence.

(iii) No remittance of foreign exchange will be permitted against ih" import licence, except bank charges which may be remitted through normal banking chnrnrls. Any payment towards Indian Agent's commission should be made in Indian run^cs to the agents in India. Such payments however, will form priil of the licence value and will, therefore be charged to the licence.

(iv) The import licence will be issued on CTF basis with an initial validity of 12 months. For extension of the validity of the licence, the licensee should approach the licensing ailthoritv conc-rncd who shall consult the Department of Economic Affairs (WE-T Section) in the matter.

(v) Firm order must be placed on C&F basis on the overseas suppliers located in Japan and in other elicibie countries mrnlioncil in Anncxurc-T and sent to the Under Secretary, Department of Economic Affairs fWF-I Section). Ministry of Finance, North Block, New Delhi within 4 month" from th? date of issue of the import licence. "Firm Orders" means purchase orders placed bv the Indian licensee on the Overseas supplier duly supported by order confirmation bv the latter or purchase contract dulv sian^d by bo'h the Tndian importer and the oversea? supplier Orders on Indian Agents of overseas suppliers and/or order confirmation of sudi Indian Agents are not acceptable.

(vi) This condition of the placement oC contracts wilhin 4 months period will be treated as not having been cnmrOifd with unless complete con'ract documents r?ach ihc Ministry of Finance, Department of Economic Affairs, WE-T Section, within ftmr months from the dite of issue of the imnort licence. If firm orders as exnlaincd in pnr.-i lfv) above (•input be nla^d within four months for valid reasons, the licensi-e should "lihmi* th<* imnort licence *n the concerned licen^'nt; an

(b) The purchase order and the supplier's order con-

firmation should be in English only.

(ii) For individual imports not exceeding Yen 300 million or US $ 1,500, 000 or ,£ 800,000 in value (exclusive of Tndian aeents commission) the licensee is free to effect puchase.s directly from the supplier without recourse lo international tender enquiries from the countries listed in Annexure-T,

(iii) Where, however, the supply contracts ercced_ (he value limit prescribed in ll(ii) above (exclusive of Indian Agents commission), the following procedure for procurement should be rigidly followed ;—

(a) Formal Open International Tendering, (h) Formal Selective International Tendering. (c) Informal International Competitive Procurement.

(iv) Any reference to International Tendering or Interna- tional Procurements will mean rendering or Procurement, as the case may be from the eligible soiuce countries.

The above procedure may be n-'hxed ;n favour of Informal

Competitive procurement or Direct Purchases where : —

1. a number of qualified suppliers exist in one particular

country or in a limited number of countries

2. purchase of a commodity by reference to a pmticular specification, trade name or designntion is necessary in order to assure the intcrchangeability or standari- sation of equipment or because of special design requirements.

3. Where purchases are in the cateRorv of emergency

procurcment.

The licensee is therefore advised that in case where the procedure at (a) and (b) of Para Il(iii) above cannot be taken recourse to a reference to the Department of Economic

Affairs shall have to be made \t'bo ulll give necessary am- roval on merits of each case.

(v) Where Formal Open International Tendering is lesurtcd

to the following points should be borne in mind : —

(a) Invitations to bid shall have to be advertised in at least one newspaper of general circulation in India.

(b) Bid bonds or bidding guarantees are a usual re- quirement but they should not be so high as to dis- courage suitable bidders.

(c) Bid bonds or guarantees should be released to un- successful bidders as soon as possible after the bids have been opened.

(vi) The payment to the overseas supplier should oc arranged through an irrevocable letter of credit to be opened by the Bank of India, Tokyo in their favour under the OECF Ven Credit (Commodity Aid) No. ID-C4 for 1478-79 the details of which are given in Section VI below.

(vii) Only one contract should be entered into against tht import licence. In exceptional cases, more than one contact may be permitted to be entered into, tor which prior approval of the Department of Economic Affairs, Ministry of Finance, should be obtained soon after the date of issue of the import licence,

(viii) Eligibility of Supplier :

The Supplier shall be a national of the eligible source countries or a juridical person registered and incorporated tn the eligible source countries.

Section III—Conditions to be Incorporated In the Supply

Contracts

(i) The following provisions should be specifically em-

bodied in the supply contract.

(a) The contact is arranged in accordance with the Txmn Agreement between the Government of India and the J-ananesc Overseas Fconomiu Cooperation Fund (OECF) dated the 6th October, 1978, con- cerning the Yen Credit No. ID-C4 (Commodity

Aid) and will be subject to the approval of the Government of India for financing it under the said credit.

Ib) Payments to the supplier shall be made through an irrevocable Letter of Credit lo be issued by the Bank, of India. Tokyo, under the Loan Agreement No. TD-C4 dated 6th October, 1978 between the Government of Tndin and the Japanese Overseas Economic Cooperation Fund (OECF)

(c) The Overseas Suppliers agrees to furnish such in- formation and documents as may be required under the Yen Credit arrangements by the Government of India on the one hand anj the OECF on the other.

(d) A certificate (triplicate) in the form indicated

below :—

"I (we) hereby stale that my four) company has been registered in (eligible source country) and is governed bv nationals of the eligible source countries or juridical persons registered and in- corporated in the eligible source countries",

(ii) In case the supplier is located in Japan, the supply contract should contain u clause that the Japanese supplier agrees to make shipping arrangements in consultation with the Embassy of India, Tokyo and that for this purpose he would keep the Embassy of India. Tokvo informed of the delivery schedule of the goods involved and notify the Embassy of Tndia at least four weeks in advance of Ihe shipp- ing required so that suitable arrangements should be made. In exceptional cases, where the Indian importers require it, this period of notice mav be reduced. The Japanese supplier should also agree to send a cable advice to the importer after each shipment givinu the necessary details .nnd a copy thereof should be sent to the Embassy of India. Tokvo.

Section IV—Contract Approval by Government of India

(i) Within the stipulated period for olacement of firm orders the licensee should forward to the Under Secretary tWE-I Section), Department of Economic Affairs, Mini'itry of Finance, North fliock, N>-:\v Delhi, A cown of I he contract, duly signed by both pailies oi purchase orders h\ the Indian importer placed on the Overseas Suppliers supported hy order confirmation in writing by the Overseas Supplier or their photo copies complete in the respects, together with two photo copies of the relevant valid import licence, also with an appli- cation (in duplicate) in the form attached as Annexurc-]II requesting for issue of Letler of authorisation for opening Letter of Credit.

Where supply contract is based on formal Open Interna- tional Tendering or Formal Selective International Tendering a certificate to the following effect should be furnished in duplicate : —

(i) Name of Ihc Newspnper(s) in which tht bid speci-

fications was published;

(ii) Name of parties who quoted against the tender

enquiry;

(iii) the reason for selecting a particular offer indicating

whether it is the lowest technically suitable bid.

Note :•—For detailed procedure for procurement of commodi- ties and' finalisation of supply contract sec Annexure- n.

(ii) If the contract documents, the request for issue of letter of authorisation and the import licence are found to be in order, the Ministry of Finance, Dcpnrtment of Economic Affairs, WE-I Section will approve Ihc contract and notify the same to the OECF lor their information that contract will be financed under the Yen Credit (Commodity Aid) and simultaneously forward, one .iel of documents to the Cont- roller of Aid Accounts & Audit, Ministry of Finance, Depart- ment of Economic Affairs, UCO Bank Building, 1st Floor Parliament Street, New Delhi, for issue of necessary letter of authorisation. A copv of this communication will also be endorsed to the licensee for information.

The above procedure of approving contract will ipso facto apply to each contract amendment including revised scope of supply and/or increase/decrease in the value of contract. Section V—Payment to the overseas supplier—Letter of Cre-

dit procedure

(i) On receipt of the documents mentioned in nar.i IV(h) above the Controller of Aid Accounts & Audit, Department of Economic Affairs, Ministry of Finance, UCO Bank Building 1st floor, Parliament Street. New Delhi (hereinafter referred to as the CAA&A for convenience) will issue a letter of authorisation as in Ihe form attached as Annexure-IV addre.ised to the Tokyo Branch of the Bank of India for opening an irrevocable letter of credit as in Ihe form altached as Anriexure-V in favour of the oveiseas supplier concerned and will endorse a copy thereof to (lie OECF, the Embassy of India, Tokyo, the importer's Bank in India and WE-1 Sec- tion, Department of Economic Affairs, Ministry of Finance.

(ii) On receipt of the letter of authority, the Bank of India, Tokyo, will establish an irrevocable letter of credit in favour of the overseas supplier concerned and will also forward n copy of the same to the OECF, Embassy of India. Tokyo ; the importer's bank in India and (he CAA & A. (It should be noted that fis per the Yen Credit arrangements the Itttcrs of credit in respect of public sector imports, Central Govern- ment Departments, State Governments and Flectrkity Boards would be opened only by ihe' Tokyo Branch of th- Bank of India.)

The above procedure of opening of letters ol credit on the basis of letters of authority from the CAA&A would inso facto apply to all such amendments to letters of autho- rity/letters of credit as may become necessary due to con- tract amendment.

(iii) The overseas supplier shall, after affecting shipment of goods, present through his bankers the documents speci- fied in the letter of credit to the Bunk of India, Tokyo. Tt the documents are found to be in order the Bank of Tndiu, Tokyo will release the amount specified in the documents to the overseas supplier throueh his bankers and will thereafter obtain reimbursement of the said amount from the OHCF.

(iv) Bankincr charges payable to the Bank of Tndia. Tokyo onening the letter of credit, for negotiations thereunder ;jnd charges, if anv. of overseas supplier's bankt-r and interest charges payable to the Bunk of India, Tokyo, for the period

counting from the date of payment of the cost of imports by them to the overseas supplier to the date of reimbursement by the OECF shall be settled by the concerned importer's bunk in India by remittances to the Bank of India, Tokyo through normal banking channel without affecting the Government of India's account. In respect of imporls by Central Government Departments, the Bank of India, Tokyo will, however, recover these charges from the Timhassy of India, Tokyo,

iSuction VI ; Responsibility of rupee deposit :

(i) The original negotiable shipping documents will be invariably forwarded by the Bank of India, Tokyo, to the concerned importer's bank in India which would be a branch ot the State Bank of India or any of the nationalised banks las mentioned in (m) in Anncxure-Ill) who should release these negotiable set of documents to the public sector projects. State Government and Electricity Boards, concerned only atlcr ensuring that the rupee equivalent or Ihe Yen/ US$/Pound Sterling Payments made to the overseas supplier along with interest charges thereon calculated at the rate of l.; per cent per annum i'or the first thirty days and .it 1? pei" cent lor the period in excess thereof, reckoned tram the dale of. payment by the Bank of India, Tokyo to Ihe overseas supplier to the date of actual rupee deposit, is deposited into Government of India account in terms o£ the Public Notice No. 46-ITC(PN)/76 dated lfi-6-1976. The interest in pay- able for both the days i.e. the day on which payment is made to the overseas supplier and also the d;iy an which rupee deposits is made into Government account vide Public Notice Nu 74"lT(~(PN)/74 dated 31-5-1974 us modified under Public Notice No. 103-ITC(PN )/76 dated 12-10-1976. The exchange rale to be adopted for computing the rup'.'e equi- valent of the Yen/US $ /£ Sterling payment will be the pre- vailing composite rate of e\chani;e as laid down in CCI&F. Public Notice No. B-ITC(PN)/76~dated 17-1-1976 or as may be notified by Government from time to lime through Public Notices of the CCI&E or through Fxchange Control Circulars of the Reserve Bank of India. Any change in this regard as ;dso in regard to the rate of interest will be notified as and when necessary. It will be the responsibility of the •nJian Bank concerned to ensure that the amounts due are correctly deposited into Government Account before ihe import documents arc handed over to -bs inporL':s. The licensee should also ensure that the amounts due are correctly deposited into Government account heforc taking delivery of the documents from their bankers. The Head of Account to which the above rupee deposits should be ci edited is "K- Deposits and Advances-H43-Civil Deposits—Deposits for pur- chases etc., abroad—Purchase under Yen Credits/Loan Agree- ment—Credits from the Government of Japan" under ibe detailed head "the Credit No. 1D-C4 for 1978-79 (Commodity

Aaid) from Japan".

(ii) The amount referred to above should be deposited in ca

Nationalised Banks drawn on and made payable to the Stnte Bank of India, Tis Hazart Branch, Dclhi-6 (drawee and invcc) for credit to Government account as corilcmnlaie.l in Public Notices No. 184-lTC( PN) /68 d'leJ ^0-K-1

(iii) The concerned bank in India shall also furnish such additional deposit in the same manner stipulated above as may lie requested by the Government of India on ;'ccount of service charges within seven days- after such n demand is made bv the Government. WhiK- filling iri the various columns in the chailan it should be ensured by the Importers /their bankers that the information prescribed in para 2 of Public Notice No. 132- TTC (PN1/71 dated 5-10-1971 and also in Public Notice No. 74-ITC(PNV74 dated 31-5-1974 read with Public Notice No. 103-lTC(PN)/76 dated 12-10-76 is invariably indicated in the column "full articulars of remittances and authority (if any)" of the chailan. The following particulars should invariably be furnished in the Treasury Challans :

(a) Ministry of Finance letter of authority No. and

date.

1114 GI/78—5

(b) Amount of Yen/US Dollar /Pound Sterling in respect of which deposits are to be made together with rate of conversion adopted.

(c) Date of payment to the overseas supplier.

(d) The amount of interest paid and the period for which

it has been calculated.

(e) Total amount deposited.

(Interest is 1o be calculated for the period from the date of payment to the overseas supplier upto the date of deposit of rupee equivalents into Govern- ment Account).

Thereafter the Treasury Challans evidencing tho rupee deposit should be sent by legisicrcd poi't to ine C AA & A indicating reference to the letter of authorisation issued by him and also enclosing copies of invoice and shipping documents.

Note :—Importer's Banks in India should ensure that the rupee deposits are invariably made within JO days of the receipt of the advice of payments and negotiable shipping documents from the Bank of India, Tokyo and that CAA&A, Ministry of Finance, (DBA), New Delhi is kept informed of the fact immediately thereafter.

(iv) Tho concerned bank in India should also endorse the amount of rupee deposits on the exchange control copy of the licence and send the requisite "S" Form to the Reserve Bank of India, Bombay,

(v) (a) In the case of imporls by the Department of the Central Government, the Bank of India, Tokyo will forward the negotiable shipping documents to their accredited bankers in India, as indicated in the Ap- pendix to the re'evant letter of Authority, and the bankers will in turn ensure that the Departments mako the rupee deposits at RBI, New Delhi or S.B.I. Tis Hazari, Delhi in the manner laid down in the other paras of this Section. The provisions regard- ing the recovery of interest charges on the rupee equivalents due will not however apply in the case of imports by the Central Government Departments (vide Government of India, Ministry of Finance Circular Letter No. F. 45(30)-ECA(A)/73 dateiJ 21-4-1976) extending the procedure of settlement of rupee deposits through Hank to the Departments of the Central Government.

(b) The rupee equivalents of Yen payments on account of hanking and intciesl charges, etc. made by Em- bassy of lndi;i, Tokyn, will also be calculated in the above manner and deposited in favour of the Principal Accounts Officer, in the Ministry of Ex- ternal Affairs, New Delhi, for which purpose, CAA & A will be issuing suitable advices.

Suction VTf : Miscellaneous Provisions :

The importer should send a monthly report, after the letter

of credit has been opened regarding shipments and payments made there against and about the balance left, to the Control- ler of Aid accounts & Audit, Department of Economic Affairs, Ministry of Finance, UCO Bank Buildinc, Parliament Street, New Delhi.

(f) Reports on the utilisation of the import licence

The licensee should apprise the supplier of any special provisions in the import licence which may affect the supp- liers in carrying out the transaction.

(Iii) Disputes :

ft should be understood that the Government of India will not undertake any responsibility for dispute, if any, that may arise between the licensee and tho suppliers. The conditions to be fulfilled by the supplier before payment by the Bank of India, Tokyo must be clearly spelt out by the importer in Annexure-IIT under "Terms of Payment". Provision dealing with a settlement of disputes be included in the con- dition of contract.

(h) Futnre Instructions The licensee shall promptly comply with any directions, instructions or orders issued by the Government of India from time to time regarding and all matters ariying from or pertaining to the import licence and for meeting all

oblinations under the Yen Credit Agreement (Commodity Aid) No, ID-C4 with the Japanese authorities.

(v) Breach or Violation Any breach or violation of the conditions set forth in the above clauses will result in appropriate action under the Im- ports and Exports (Control) Act.

(vt) List of Annexnres s Annexure-I List of eligible source countries. Annexure-II Detailed procedure for procurement. Annexure-III Form of Request for issue of Letter of

Authority for opening the Letter of Credit.

Annexure-lV Form of Letter of Authority. Anncxure-V Form of Letter of Credit,

ANNEXURE I

[Ref. : Section T—Para l(v)] List of Eligible Source Countries

A. OECD Countries

Australia Austria Belgium Canada Denmark Finland, France, the Federal Republic of Germany Greece Iceland Ireland Italy Japan Luxembourg the Netherlands,

Now Zealand Norway Portugal

Spain, Sweden, Switzerland,

Turkey the United Kingdom nnd the United States.

B. Developing Countries and Territories

I. AFRICA, North of Sahara

Egypt Morocco Tunisia

II. AFRICA, South of Sahara

Angola Botswana Burundi, Cameroon Cape Verde Islands Central African Rep. Chad Comoro Islands Congo, People's Republic of Dahomay (1) Equatorial Guinea Ethiopia Gambia Ghana Guinea Ivory Coast Kenya Lesotho Liberia Malagasy Republic Malawi Mali Mauritania Mauritius Moozambiqu© Niger Portuguese Guinea Reunion

Rhodesia. Rwanda St. Helena and dep. (2) Sao Tome and Principle Senegal Seychelles Sierra Leone Somalia Sudan Swaziland Tcrro. Afars and Tssas Tago Uganda Un. Rep. of Tanazania Upper Voita Zaire Republic Zambia

(0 Formerly the territory of Spanish Guinea, including the

island of Fernando Po.

(2) Including the following islands : Ascension, Tristan da

Tnaccessibles, Nightingale, Gough.

(3) Main Islands, Aruba, Bonaire, Curacao, Suha, St.

Eustacit St. Martin (Southern Part).

JIT. AMERICA, North and Cent

Bahamas Barbodoses Belize Bermuda Costa Rica Cuba Dominican Republic El Salvador Guadeloupe Guatemala Haiti

Honduras Jamaica Martinique

Mexico

Netherlands A tilles Nicaragua Panama St. Pierre & Miquelon Trinidad and Tabago West Indies (Br.) n.i.e.

(a) Associated States (1) (b) Dependencies (2)

IV. AMERICA, South

Argentina Bolivia Brazil Chile Colombia Falkland Islands French Guiana Guyana Paraguay Peru Surinam Uruguay

V. ASIA, Middle East

Bahrain Israel Jordan Lebanon Oman Syrian Arab Republic United Arab Amirates (3) Yemen Arab Republic Yemen, People's D.R. (4)

VI. ASIA, South

Afghanistan Bangladesh Bhutan Burma Maldivis Nepal Pakistan Sri Lanka

VIT. ASIA, Fur VAM

Burnei Hong Kong Khmer Republic Korea, Republic of Laos Macao Malaysia Phillippines Singapore Taiwan Thailand Timer Vlet-Nam, Rep. of Vlet-Nam Dem. Rep.

VITT. OCEANIA

Cock Islands Fiji Gilbert & Ell ice Is. French Pelynesla (5) Nau nil New Caledonia New Hebrices (Br. and Fr.) Hicu Pacific Islands (US) (6) Papua New Guinea Solomon Islands (Br.) Tongo Wailis and Fuluna Western Samoa

IX. EUROPE

Cyprus Gibraltcr Greece Malta Spain Turkey Yugoslavia

(b2) Member or Associates Countries of OPEC

Algeria Bolivia Libyan Arab Republic Gabon

(1) Main islands : Antiguia, Dominica, Grenada, St. Kitts (St. Caristephe), Nevis-Anguilla, St. Lucia and St, Vin- cent.

(2) Main islands; Montserrant, Gayman, Turks and Calcos,

and British Virgin Islands.

(3) Ajman, Dubai, Fujairah, Ras el Khaimah, Sharjah and

Umm al Quaiwain.

(4) Including Aden and various sultanates and emirates.

(5) Comprising the Society Islands (including Tahiti), The Austral Islands, the Tuamotu-Gambier Group and the

Marquesas Islands.

(6) Trust Territory of the Pacific Islands; Caroline Islands,

Marshall Islands, and Marine Islands (except Guam).

Nigeria Fxuador Venezuela Iran Iraq Kuwait Qatar Saudi Arabia Abu Dhabi Indonesia

ANNEXURE II

Guidelines for Frocifrement of Commodities under the Com-

modity Loon IV

I. Introduction

The proceeds of the Commodity Loan IV extended by ihe Fund shall be used with due attention to efficiency and non- discrimination among the eligible source countries for procure- ment of commodities and services incidental thereto concern- ing the Commodity Loan IV in accordance with the prociwe- ment procedures set out in this Guidelines.

II. Selection of Procurement Procedure

The following procedures shall be applicable to the procure-

ment of Listed Commodities under the Fund's loan :

(1) Formal Open International Tendering (2) Formal Selective International Tendering O) Informal International Competitive Procurement (4) Direct Purchases

fa) Tn the case of the procurement by the government and/or a government agency, Formal Open International Ten- dering or Formal Selective International Tendering shall lie applied.

(b) In case of non-government procurement, any of the

procedures mentioned above may be applied.

(c) The Fund, however, iw in a position to accept the procurement through Informal International Competitive Pro- curement or Direct Purchases in the following cases :

(i) Where the amount of a proposed contract does not exceed—£ 300,000,000. US $ 1,500,000. or STG £, 800,000. in terms of currency of the con-

tract.

(Ji) Where the number of qualified suppliers is limited.

(hi) Where purchase of a commodity by reference to a particular specification, trade name or designation is necessary in order to assure the interchangeability or standardization of equipment, or because of special design requirements.

liv) Where the Fund deems inapplicable cither proce- dure ^l) or procedure (2) by the reason other than the case (i), (ii) and (iii) above (e.g. in case of emergency procurement).

(d) Tn any case mentioned above, Importer shall get a confirmation of the Borrower concerning the eligibility of procurement in accordance with the procurement 'procedure •ct forth in this Section 1-3. The Borrower shall send the Report of Contract with a copy of the Contract to the Fund.

III. Conditions of Contract

Any contract to be financed under the Loan shall fulfil the

following conditions :

1. Conditions of Commodities.—As the use of the Ix)an is limited to financing expenditures for Listed Commodities produced in the eligible source countries, the subject items of the Contract shall be Listed Commodities produced in the eligible source countries and to be shipped to an Indian port from the eligible source countries. Tf the imported portion from non-eligible spurce countries is less than thirty per cent (30 per cent) of the following formula. Listed Commodi- ties will be financed even if the imported portion from non- eligible source countries is included as a part of the Listed Commodities in the items of the Contract Formula mentioned above :

Import Price + Import Duty X 100

Supplier's FOB Price

2 Conditions of Supplier.—The Supplier shall be a ational of the eligible source countries, or a juridical person ;t;isterixl in thj eligible source countries.

i. Conditions oi' Importer.—The procurement of any ommodities by the armed forces or their affiliated organiza-

ions of India shall not be eligible under the Loan.

4. Denomination of Currency.—The Contract shall be fixed nd payable in Japanese Yen, United States Dollar, or Sterling bund without any fraction less than one Yen (Y-1,00). )nc cent (C-1.00) or Otic Penny (D-1.00) respectively.

5. Standard Form of Contract:

(a) The following items shrill he inserted in the Contract

to be financed by the Fund :

(1) Name and Nationality of Supplier and Impoiter (2) Number and Date of the Contract (3) Name and Onyn u- the Commodities ',4) Contract Piive :ind Ouantity (5) Payment Terms (6) DelivL-iy and Shipment Schedule (7) OttiT Gent-ial Recitations

(b) The Contract duly signed by both parties or purchase order by the Indian Impoiter placed on the overseas Hipplier supported by order confirmation in writing by the overseas supplier, or their photo copies, aie oho acceptable to the Fund.

ic) The following statement of eligibility by the Supplier

shall be added to each contract:

¹-J(we) hereby state that my four) company has been registered in -—-(eligible source country)."'

6. Payment.—l-ach payment shall be made on and after

^he date of signing of the Loan Agreement.

In principle, the full amount of a shipment shall he paid :o the supplier at each time of presentation of the relative shipping documents under an irrevocable Letter of Credit.

IV. International Tendering

When International Tendering is applied, the procurement shall be made in accoidance with the following principles, among others :

1. A

2. Time Interval Between Invitation and Submission of Bids.—The time allowed for preparation of bids will depend to ii Inrac extent upon the magnitude and complexity of tbc contract. Generally not less than 30 days should lie allow- ed Tor international bidding. The time allowed, however, shuiili) be governed by the circumstances relating to each contract.

3. Bid Opening Procedures.—The date, hour and place for the Litest receipt of bids and for the bid opening should be announced in the invitations to bid and nil bids should be openyj publicly at the stipulated time. Bids received after this time should be returned unopened. The name of the bidder and the lota] amount of each bid and of any alternative bids, if they have been requested or permitted, should be read aloud and recorded.

4. Bid Bonds or Guarantees.—In tho case of bidding, bid bonds or bidding guarantees are a usual requirement, but they should not be set so high as to discourage suitable bidders.

Bid bonds or guarantees should be released to unsuccessful bidders as soon as possible after the bids have been opened.

5. Standards.—If national standards with which equipment in materials must comply are cited, the specifications should state that commodities meeting Japan Industrial Standard or other internationally accepted standards, which ensure an equal or higher quality than the standards mentioned will also be accepted.

6. Use of Brand Names.—Specifications should be based on performance capability and should only prescribe brand names, catalogue numbers, or products of specific manufac- turer if specific spare parts are required or it has been deter- mined that a degree of standardization is necessary to main- tain certain essential features.

In the latter case the specifications should permit offers of alternative commodities which have similar characteristics and provide performance and quality at least equal to those

specified.

7. Guarantees and Performance Bonds.—Bidding, documents may require some form of surety for guarantees, if neces- sary. This surety can be provided either by a bank guarantee or by a performance bond,

8. Liquidated Damages.—Liquidated damages clauses, il" necessary, should be included in bidding documents when delays in delivery will result in extra expenditures, loss of revenues or loss of other benefits to the lmportei.

9. Force Mnjcnre.-—The conditions of the Contract included in the bidding documents should contain clauses, when apprn- piiate, stipulating that u failure on the part of the parties to perform their obligations under the contract shall not be considered a default under the Contract if such failure is the result of an event of force majeure (to be defined in the

conditions of the Contract).

10. Settlement of Disputes.—Provisions dealing with the settlement of disputes should be included in tho conditions of the contract. It is desirable that the provisions should be based on "Rules of Conciliation and Arbitration" which have been prepared by the International Chamber of Commerce Or on such other arrangements as may be mutually accept- able to the Indian Importer and the overseas Supplier.

11. Evaluation.

A N N E X U RE 111

fRcf : Section IV—Puvn IVfilJ

Request for Issue of the Letter of Authority

No. Date

To

The Controller of Aid Accounts & Audit. Ministry of Finance, Department of Fconomic Affairs, U.CO. Bank Building, 1st Floor, Parliament Street, New Delhi-1 10001.

Subject,—Import of——— ~—from Japan under the Yen Credit No. ID-C4 (.Commodity Aid) for 1978-79

Sir,

[n connection with the import of— —from — under the above mentioned Yen Credit No. ID-C4 (Commodity Aid) we furnish the following particulars to enable you to issue the Letter of Authority lo the—• fnnme of (he Bank) which should be the same as given in fn) below for opening a letter of credit in favour of (he overseas supplier concerned :—

in) Name and Addiess of the Indian importer.

(b) Number, date and value of the import licence and

d;.tt upto which it is valid.

(c) Method of procurement—whether it is based on direct purchase or Formal Open International tendering in which case it should be indicated whether tho contract has been awarded on the basin of techni- cally suitable offer with reasons, if any.

(d) Brief description of the goods,

(e) Origin of tho goods.

(f) Percentage of the import components from non-eligi-

ble source countries, if any.

(g) C&F value of contract in Yen/US Dollar/Pound

Sterling.

(h) Amount of Indian Agents commission in Yen/US Dollar/Pound Sterling, if any, payable in Indian rupees and the net value of Yen/US $/Pound Sterling payable to overseas suppliers.

(i) Value in Yen /US $ /Pound Sterling for which the

Letter of Authority is required,

(j) Number and date of the contract with Overseas Sup-

plieia,

(k) Name and Address of the Overseas Suppliers.

(1) Payment terms and probable dates on which payments

undei the contract will fall due.

(m) Expected date of completion of deliveries. (n) Document to be presented at the time of payment to Bap., of india, Tokyo (indicating No. of sets of each and their disposal).

(o) Shipment instructions (indicate if trans-shipment/

part-shipment permitted or not permitted).

(p) Name and Address of the Importer's bank in India.

(q) Whether a contract(s) under the same licence has been placed and notified to the Japanese authorities, and if so, the No., date and value of each such contract and the reference of the Ministry of Finance under which it hag been notified to the OECF.

ANNEXURE IV [Ref : Section V—Para V(ii)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (Department of Economic Affairs)

To

The Bank of India, Tokyo Branch, Tokyo (.Japan).

Subject.—Import under Yen Credit (Commodity Aid) Loan Agreement No. ID-C4—Issue of Letter of Autho- rity for opening Letter of Credit.

Dear Sirs,

In accordance with the terms and conditions of the agree- ment dated 30th October, 1976 entered into with your Bank you are hereby authorised to open ii revocable Letter of Credit for an amount not exceeding Yen/US $/Pound Sterling favouring M/s as per attached details.

A copy each of the letter of credit opened by your Bank may be endorsed to the importer's Bank, to the OECF, Em- bassy of India, Tokyo and to us.

Payments to the suppliers in terms of the letter of credit will be made initially out of your own funds. After payments, you must claim immediately reimbursements of the amounts paid by furnishing necessary documents to the OECF.

For the time lag between the date? of payment by you to the supplier and the date of its reimbursement by the OECF, you will be paid interest as per terms of the above agreement directly by the importers' bank. The other banking charges including charges for handling documents, if any, and charges of overseas suppliers bankers, if any, will also be settled directly by the importers' bank. As such no reimbursement of such charges ia to be claimed from the OECF.

As and when any payment is made by you and reimburse- ment is made to you, an advice in the prescribed torm should be sent to this Ministry.

This Letter of Authority, ia intended for opening of L/C favouring the overseas suppliers. Subsequent amendments to L/C or further fresh L/Cs against this authorisation may not be acted upon in the absence of a specific authority from this Ministry.

This Letter of Authority will remain valid upto .

Yours faithfully, Accounts Officer for public sector imports including Govt. Departments.

Copy forwarded to :—

1. Importer with reference to their letter

No. dated

.

2. Importer's Banker . They are requested to arrange to deposit the rupee equipment of the Yen/ US $'/•£, payment to the overseas suppliers on receipt of documents

IJ14GI/78—6

f-om the Bank of India, Tokyo Branch. The rupee equivalent of amount;, disbursed to the suppliers will have to be calculat- ed by applying the composite rate of conversion as prevailing on the dale of payment to overseas suppliers in accordance with the Public Notice No. 8-lTC(PN)/76, dated 17th January, 1976 or ;,i;ch oihiv Public Notices as m.;y be IS-USJ from time to time. Interest <§• 9 per cent per annum tor the first thirty dayj and at the rate of 15 per cent per annum for the period excess thereof reckoned for the period between the date of payment to the supplier and the date on whi.b. the ruoee equivalents arc deposited into ;he Government ac- coun'.. i-- also reqv'rei! to be deposited into th; Government of India account in terms of Public Notice No. 46-1TQPN)/ 76 dated 16th June, 1976. The interest is payable for both the dayj i.e. the day on which payment is made to the Overseas Supplier and also the date on which rupee deposit is made into Government account. (Any change in this rate will be intimated if and when made). It should be ensured that these deposits are made before the original set of import documents are handed over to the importer for Customs Clearance.

These amounts should be deposited either with the RBI, New Delhi or the SBl. Tis Hazari, Delhi or remitted by means of a Demand Draft obtained by them from any Branch of the SBI or its subsidiaries or any one of the Nationalised Banks drawn on and made payable to the SBI, Tis Hazari, De)hi-6 (Drawee and Payee). In this connection their attention is also invited to the provisions of the Public Notices No. 233- TTC(PN)/68 dated 24th October, 1968. No. 132-ITC(PN)/71 dated 5th October, 1971, No. 74-ITC(PN)/74 dated 31st May, 1974 and 103-lTC(PN)/76 dated 12th October, 1976. The head of Account to be credited is 'K-Deposits & Advances-843- Civil Deposits—Deposit for purchases etc. abroad under Pur- chases under Credit/Loan Agreements' under detailed head "Yen Credit (Commodity Aid) No. ID-C4 for 1978-79 from Japan-Credits from the Government of Japan".

One copy of the chalian in original, in cases where the rupee equivalents are credited in cash at the RBI, New Delhi, or the SBI. Tis Hazari, Delhi as prescribed in Public Notice No. 132-ITC(PN)/71 dated 5th October, 1971 should be sent by them to the address given below along with a forwarding letter giving full details of the advice notes received from the Bank of India, Tokyo, Branch.

The Controller of Aid Accounts & Audit, Ministry of Finance (Department of Economic Affairs), 1st Floor UCO Bank Building, Parliament Street, New Delhi-1,

In cases where the rupee equivalents are remitted by means of demand drafts as laid down in the Public Notice dated 24th October, 1968 mentioned above, intimations thereof should be sent to the address given above. In all cases, full particulars of the rupee equivalents deposited along with the amount of interest paid and the period for which interest has been calculated should be furnished to this Department.

The banking charges, interest and other charges of the Bank of India. Tokyo Branch, including charges of the over- seas suppliers bankers, if any, should be settled directly bet- ween the Indian Bank and the Bank of India, Tokyo Branch. 3. The Director. Loan Department-II, Overseas Economic Cooperation Fund, Lino Building-1-1. Uchisaiwai-Cho, 2-Chome. Chiyoda-ku, Tokyo.

4. Embassy of India, Tokyo.

5. The Under Secretary (WE-I) Branch, Ministry of

Finance, Department of Economic Affairs, New Delhi.

Accounts Officer.

ANNEXURE V [Ref : Section V—Para V(ii)] Irrevocable Letter of Credit Date:

To

(Name and Address of the Supplier)

The Letter of Credit has been issued pursuant to Loan Agreement No. dated between (Borrower) and THE OVERSEAS ECONOMIC CO- OPERA (TON FUND.

Dear Sirs,

We advise you that we have opened our irrevocable credit No.- in your •favour for account of for a sum or sums not exceeding an aggregate amount of Y/US $ / £,

(say Y c n / $ / £) available by your drafts at sight for full invoice value drawn on us, to be accompanied by the follow- ing documents.

Unless otherwise expressly staled, this credit is subject te "Uniform Customs and Practice for Documentary Credits (1974 Revision), International Chamber of Commerce Publi- cation No. 290".

Special Instructions to the necotlatlnc bank ;

Signed commercial invoice in lull tet of clean on board ocean bills of hiding made out to order and blank endorsed and marked "Freight" and "Notify".

Other documents.

evidencing shipment of (brief description of goods to be ship- ped referring to Contract No. —) (it any)—• from to •—•—Partial shipment a r e — — p e r- mitted. Transshipment is——permitted. Bills of Lading must be dated not later than-— — Drafts must be pre- sented for negotiation not later than — -—.

All drafts and documents under this credit must be marked "Drawn under— —irrevocable credit No. , dated and Import Reference No.(s) if any."

This credit is not transferable.

We hereby undertake that all drafts drawn under and in compliance with the terms of the credit shall be duly honour- ed on due presentation and delivery of document! to the drawee.

1. After obtaining the reimbursement for our payments from THE OVERSEAS ECONOMIC COOPERA- TION FUND in accordance with the provisions of Letter "of Commitment issued thereby under the above-mentioned Loan ARreement, we undertake to remit the amount of the drafts in accordance with instructions issued by the negotiating bank.

2. The negotiating bank must forward the drafts and one complete set of documents to us together with the certificate stating that the remaining documents have been air mailed direct to .

3. All banking charges under this credit are for account

of (the importer) under the said Loan Agreement.

Yours faithfully,

(A Commercial Bank)

By- _ _ _„

(Authorized Signature)

PUNTBD BY THE MANAGfiR, GOVT. OF INDIA FBBM, KING ROAD, NEW DELHI-1100*4

AND PUBLKHEB BY THE CONTROLLER OF PUBLICATIONS, DELHI-110054, 1979