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Drumbeat: Ad Buzzaar
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Monday, June 1, 1998
US sanctions not to include public sector
ENS ECONOMIC BUREAU
MUMBAI, May 31: The Institute of International Bankers, based in the United States, has clarified that the term "government of that country" in the executive order issued by president Bill Clinton while invoking economic sanctions against India shall not include "companies or other entities owned or controlled by the Republic of India or its political sub-divisions engaging in commercial activities."In effect, the state-owned banks or public-sector undertakings will not be subjected to sanctions. The institute has written a detailed communication to Indian banks to clarify the exact implication of sanctions imposed on India by the US following the nuclear tests. The executive order further excludes: The transactions involving the purchase of securities and derivatives of the government of India, including Reserve Bank of India, except for direct purchases of government of India obligations from the centre;
Customary trade finance transactions including, but not limited to, letters of creditand bankers' acceptances;
Foreign exchange transactions including spot, forward options and hedging transactions;
Any clearing settlement exposure resulting from interbank clearance or settlement of payment obligations or payment for securities;
Any holding of government of India obligations or the placement of funds with the government of India or the RBI to satisfy legal reserve or liquidity requirements applicable to branches or other offices located in India;
Payments and other transactions related to travelers cheques or pursuant to credit or charge card arrangements; and
The existing loans, extensions of credit and commitments will not be affected by the sanctions, it said.Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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