Approved on February 23, 1999 by the Ministry of Finance of the Republic of Uzbekistan on February 23, 1999, No. 10-04, the Central bank of the Republic of Uzbekistan No. 115-B

Payment procedure when calculating for the handed-over grain by fund for calculations for the agricultural products which are purchased for the state needs

This Procedure is developed in pursuance of the Presidential decree of the Republic of Uzbekistan "About creation of Fund for calculations for the agricultural products which are purchased for the state needs" from 31.12.98g. also it is aimed at uninterrupted financial provision of cultivation and procurement of grain for the state needs.

The procedure determines features of implementation of payments when calculating for grain by Fund for calculations for the agricultural products which are purchased for the state needs (further Fund) which are perfromed by opening of letters of credit.

In this Procedure the following terms are used:

The advice - the bank message, the notice

The advising bank - bank of the agricultural producer

The letter of credit - the conditional monetary commitment of bank issued to them at the request of the client for benefit of his partner under the agreement under which bank, the opened letter of credit (emitting bank), shall make to the supplier payment or confer powers to other bank (performing) to make such payments on condition of submission of the documents provided in the letter of credit to them and in case of accomplishment of all conditions of the letter of credit.

The Applikant is the Applicant - the Commercial agent Fonda, the payer - JSC Uzdonmakhsulot

Emitting bank - the Financial agent of Fund - OAKB "Agrobank"; the bank opening the letter of credit

The beneficiary - the payee - the agricultural producer Performing (transferiruyushchy) bank - bank of the company supplier

1. Opening of the letter of credit

1.1. The fund, proceeding from the expected grain yield amount, based on the signed General agreements with Financial (OAKB "Agrobank") and Commercial (JSC Uzdonmakhsulot) agents allocates target funds for calculations for actually purchased grain from agricultural enterprises

1.2. At the request of the Commercial agent of the "Fund" (which is referred to as further with applikant"), the Financial agent of "Fund" (who is referred to as further with "emitting bank")" from the special target accounts opened to the Commercial agent exposes the irrevocable, documentary, covered, divisible, transferabelny letter of credit for benefit of the companies suppliers.

The amount of the letter of credit on grain constitutes 100% of cost of amount of the prepared products according to agreements of contracting.

1.3. The application form is filled in for opening of the letter of credit of the established form by applikant in duplicate based on the signed contract between applikant and the company supplier and it is represented in emitting bank.

Bank issuer based on the application received from applikant addresses to Fund behind means according to item 1.1. this Procedure.

1.4. According to the payment order of payment processing center Fund of Tashgorupravleniya of the Central bank of the Republic of Uzbekistan makes transfer of target means to Emitting bank into account N 29801 "Settlings with clients" for the purpose of the subsequent direction into special target accounts of applikant on opening of letters of credit for benefit of the companies suppliers.

1.5. Effective period and procedure of payments according to the letter of credit is established in the contract between applikant and the company supplier which contains the following information:

- name of emitting bank;

- type of the letter of credit (irrevocable, covered, divisible, documentary, transferabelny) and method of its execution (on production of documents);

- method of the notice of the company supplier on opening of the letter of credit (e-mail, telegraph); the complete list and the exact characteristic of the documents submitted by the company supplier for receipt of means for the letter of credit:

- the term of submission of documents to week of signing of the reconciliation statement in the performing bank (within 7 days),

other necessary documents and conditions (terms of payment, banking expenses, etc.).

1.6 The emitting bank checks correctness of execution of the statement and its compliance to the agreement and advises electronically "the performing bank" (bank of the company supplier) about opening of the letter of credit for benefit of the company supplier. Along with it the amount of the letter of credit is credited into the off-balance account of contingencies N 90908 - "The paid letter of credit opened in payer banks".

1.7 "Emitting bank" transfers covering to the amount of the letter of credit on electronic payment system in performing - transferiruyushchy bank with further transfer of funds for the letter of credit account of the company supplier 22602 "Deposits of clients according to letters of credit".

1.8. In the performing bank the electronic application on the letter of credit is printed out in duplicate where one copy is filed in documents of day of bank, other copy is located in card-index N 1 "The settlement documents expecting payment due date". Then the performing bank informs the company supplier on opening in its advantage of the letter of credit.

1.9. The company supplier verifies conditions of the letter of credit with terms of the contract and gives written consent or disagreement about acceptance of conditions of the letter of credit during 3 banking days from the moment of receipt of the bank notice on opening of the letter of credit in its advantage.

In case of refusal the company supplier demands modification of conditions of the letter of credit according to the agreement from adoption of the letter of credit or cancellation of this letter of credit. In case of default the letter of credit is deemed accepted.

1.10. All letters of credit opened by the commercial agent of Fund shall correspond to the legislation of the Republic of Uzbekistan.

2. Transfer of the letter of credit

2.1. The company supplier based on the signed contracts of contracting with agricultural enterprises uses the right to "transfer" - readvising open irrevocable, documentary, the letter of credit on agricultural producers (beneficiaries) without providing with means. For this purpose the company supplier gives the written assignment to the performing bank to pereavizovat conditions of the letter of credit on all amount or its part for benefit of agricultural enterprise, i.e. the beneficiary.

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