Deutsche Bank and Standard Bank of South Africa have signed a memorandum of understanding (MoU) to closely cooperate under the US government's programme designed to encourage exports of certain US agricultural output to eligible emerging markets.

The US Department of Agriculture's GSM-102 programme is especially focused on African countries and provides competitive credit terms.

L/C arrangements

Under the MoU, Standard Bank will issue irrevocable US dollar denominated deferred payment letters of credit (L/Cs) for the import of eligible agricultural products from the US.

Deutsche Bank will advise, confirm and negotiate these L/Cs in accordance with the GSM-102 programme regulations.

Export promotion

The programme is intended to promote exports to buyers located in developing countries who have the financial strength and foreign exchange capabilities to make scheduled payments.

The US Department of Agriculture's Foreign Agricultural Service will administer the GSM-102 programme on behalf of the Commodity Credit Corporation, which issues credit guarantees.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.