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This chapter prescribes forms and procedures agencies use to prepare reports for submission to the Department of the Treasury (Treasury) relating to U.S. Government grants, loans, credits, and contingent liabilities on loans, credits, and other payment scheduling agreements involving foreigners.

Section 4510-Authority

Section 114 of the Budget and Accounting Procedures Act of 1950 (31 U.S.C. 3513a) requires the Secretary of the Treasury to prepare reports to inform the President, the Congress, and the public on financial operations of the U.S. Government and provides that each executive agency must furnish the Secretary of the Treasury with information relating to the agency's financial condition and operations as the Secretary may require.

The following Congressional reports launched the Foreign Credit Reporting System (FCRS) and the annual Treasury publication, "U.S. Government Foreign Credit Exposure":

• The House Committee Report on Foreign Operations Appropriations Bill 1992.
  
  
• The Conference Report 101-344, dated November 11, 1989.

Data collected also will provide information for the Organization for Economic Co-operation and Development's (OECD's) Creditor Reporting System (CRS), which has annual, semiannual, and quarterly reporting requirements.

Section 4515-Scope and Applicability

The Secretary of the Treasury requires the information agencies provide to fulfill reporting responsibilities to the Congress. In addition, the reported information provides data for:

• The annual "U.S. Government Foreign Credit Exposure" report.
  
  
• Submissions to the OECD's CRS.
  
  
• Assistance to the Office of Management and Budget (OMB) in preparing budget estimates.

The provisions of this chapter apply to all departments and agencies of the executive branch of the U.S. Government, including Government corporations subject to the Government Corporation Control Act, that:

• Extend foreign grants;
  
  
• Authorize, commit, or have outstanding, loans or other transactions creating foreign indebtedness to the U.S. Government;
  
  OR
  
  
• Have contingent liabilities under agreements pertaining to loans, credits, or other payment scheduling agreements involving foreigners.

Treasury requests that agencies of the legislative and judicial branches of Government also submit reports so that Treasury financial reports will include all such transactions and accounts of the Federal Government. Agencies are exempt from reporting provisions applicable to grants where total foreign grant activity is less than $100,000 per fiscal year.

Section 4520-Definitions

Arrears/Overdue-Represents the failure of a borrower to pay an obligation by the payment due date. Generally applies to due and unpaid amounts of principal and interest, late interest charges, and late fees for direct loans and claim payments.

Canceled-Represents all terminations of credit authority occurring during the period covered, whether or not authorization to cancel occurred during the period covered.

Claim-An assertion of a right to payment. A lender may file a claim to assert its right to that portion of the unpaid balance due on a defaulted loan that is guaranteed or insured by the Government or to the remaining portion of a guarantee not already recovered by a lender.

Claims Outstanding-Claims paid to lenders in accordance with guarantee or insurance agreements that have not been recovered.

Closed Out Contract-Indicated by one final status record, with cumulative values through the final disposition of the credit, reported to identify completed payment schedules. On direct loans, zero amounts in Principal Undisbursed, Principal Outstanding, Principal in Arrears 1-Day or More, Principal in Arrears 90-Days or More, Interest in Arrears 1-Day or More, and Interest in Arrears 90-Days or More indicate a closed out contract. On guaranteed or insured credits, zero amounts in Principal Undisbursed, Principal Outstanding, Claims Outstanding 1-Day or More, and Claims Outstanding 90-Days or More indicate a closed out contract.

Commercial Risk-The risk of nonpayment by a nonsovereign or private sector buyer or borrower arising from default, insolvency, and/or failure to take delivery of goods that have been shipped according to the supply contract.

Commitment-For budgetary purposes, signifies that a lender has officially designated a portion of its loan, guarantee, or insurance authority as being dedicated to a particular use, which is, therefore, not available for alternative uses.

In OECD reporting, a commitment is a firm obligation to furnish resources of a specified amount under specified financial terms and conditions and for specified purposes for the benefit of a recipient country, expressed in an agreement or equivalent contract undertaken by the Government or an official agency acting on its behalf. A commitment under the OECD definition occurs on the signature date of the loan or credit agreement.

Commitment Date-The date the budget commitment occurs. (See Signature Date.)

Commitment Fee-The fee charged for holding available the undisbursed portion of a loan upon which a loan commitment or loan agreement has been executed.

Contingencies-Represent conditions, situations, or circumstances included in existing loan agreements that involve uncertainty and could result in gains or losses if certain specific eventualities occur. For example, guaranteed loans represent contingent liabilities since they obligate the Government to indemnify a lender in the event of a borrower default.

Coverage Expiry Date-The date on which the agency ceases to have a contingent liability under the guarantee or insurance agreement.

Credit-Any amount for which there exists a specific obligation for repayment. Includes loan and other transfer agreements that give rise to specific obligations to repay over a period of time, usually with interest. May include grants, but only where reference is to "tied aid credits," as defined by the OECD Arrangement on Officially Supported Export Credits.

Creditor/Lender-One who provides money or resources and to whom payment is owed, including the U.S. Government, Federal agencies, or private financial institutions, under a specific credit agreement.

Creditor Reporting System (CRS)-OECD/DAC system that has annual, semiannual, and quarterly reporting requirements.

Debt-Refers to an amount of money or property that has been determined to be owed to the U.S. Government from any person, organization, or entity, other than another Federal agency. It includes amounts owed on direct and guaranteed loans, and all other amounts due the U.S. from fees, duties, leases, rents, royalties, services, sales of goods or services, overpayments, fines, penalties, damages, interest, taxes, forfeitures, and other sources.

Debt Relief or Reorganization-Any action by a creditor that officially alters established terms for repayment. Debt reorganization includes forgiveness, rescheduling, rephasing, and refinancing.

Debt Service:

Actual-The set of repayments actually made to satisfy a debt, including principal, interest, and late fees (income stream).

Scheduled-The set of repayments contractually required to be made through the life of the debt, including principal and interest.

Default-The failure to meet any obligation or term of a credit agreement, grant, or contract. A payment that is overdue or in arrears is technically "in default," since, by virtue of nonpayment, the borrower has failed to abide by the terms and conditions of the credit. In practical terms, when a guaranteed loan or credit is considered "in default" varies by agency.

Development Assistance Committee (DAC)-One of the key OECD forums in which the major bilateral donors work together to increase the effectiveness of their common efforts to support sustainable development. The DAC concentrates on how international development cooperation contributes to the capacity of developing countries to participate in the global economy and the capacity of people to overcome poverty and participate fully in their societies. Members of the DAC are expected to have certain common objectives concerning the conduct of their aid programs. To this end, guidelines have been prepared for development practitioners in capitals and in the field.

Direct Loan-An obligation created when the Government agrees to disburse funds to and contracts with the debtor for repayment, with or without interest; a Federal agency purchases non-Federal loans through secondary market operations; or an agency sells assets on credit terms.

Disbursement-Occurs when a creditor places resources, such as goods or funds, at the disposal of a borrower through a cash payment or creation of a line-of-credit and the borrower draws upon it. The term "utilized" may be used when credit extended is other than currency.

Dollar Equivalent-The unit of valuation for transfers occurring or balances existing in currencies other than U.S. dollars.

Forgive-To renounce a legally binding claim or to grant relief from all or part of a debt under statutory authority. "Waive" is the preferred term for domestic debts.

Grant Element-A measure of concessionality of a loan, calculated as the difference between the face value of the loan and the discounted present value of the future service payments the borrower will make. It is expressed as a percentage of the face value of the loan. By convention, a 10 percent discount rate is used. This is an OECD/DAC reporting requirement.

Guarantee of a Loan-A legally binding agreement to pay part or the entire amount due on a debt instrument extended by a lender in event of nonpayment by the borrower.

Insurance-A legally binding agreement to insure exporters, investors, and lenders against specific risks during specified periods. Export-Import Bank insurance covers commercial and political risks of nonpayment of export obligations. Overseas Private Investment Corporation insurance covers transfer and political risks associated with foreign investments.

Interest/Fees Outstanding-Interest in arrears, penalties, fines, and administrative charges associated with an original amount classified as "principal outstanding." Interest and fees outstanding do not include normal interest coming due during the life of the loan.

Liability-Represents an amount owed (that is, payable) by an individual or entity for items or services received, expenses incurred, assets acquired, construction performed, and amounts received, but not yet earned. A liability represents an obligation for performance that has not yet been accomplished.

Loan-A legally binding document that obligates a specific value of funds available for disbursement. The amount of funds disbursed is to be repaid (with or without interest and late fees) in accordance with the terms of a promissory note and/or repayment schedule.

Long-Term-Refers to loans, guarantees, or insurance contracts with an original or extended maturity of more than 1 year.

Maturity-A measurement of the time at which a debt is due to be paid in full. For reporting to the OECD, maturity is the time between commitment and the final repayment of principal. In Paris Club discussions, maturity may refer to payments due on a specific date.

Maturity Date-The date at which a debt is due to be paid in full.

Official or Private Obligor-Agencies must classify obligors as "official" or "private" according to the following principles:

• Official obligors (borrowers) or guarantors are:
  
  - Central governments or their departments (ministries).
  
  - Political subdivisions such as states, provinces, departments, and municipalities.
  
  - Foreign central banks.
  
  - Autonomous institutions (such as corporations, development banks, railways, utilities, etc.) where:
  
  (1) The budget of the institution is subject to the approval of the government of the recipient country;
  
  (2) The government owns more than 50 percent of the voting stock or more than half of the members of the board of directors are government representatives;
  
  AND
  
  (3) In the case of default, the government or central bank would become liable for the debt of the institution.
  
  - Any official multinational organization.
  
  
• Private obligors (borrowers) or guarantors are defined as obligors other than official.

Official Development Assistance (ODA)-Flows to developing countries and multilateral institutions provided by official agencies, including State and local governments, or by their executive agencies, each transaction of which meets the following tests:

• The transaction is administered with the promotion of the economic development and welfare of developing countries as its main objective.
  
  AND
  
  
• The transaction is concessional in character and conveys a grant element of at least 25 percent.

Paris Club-A forum for creditor governments to work together and with debtor governments facing payment problems to enhance the prospects of debt repayment.

Percentage Cover-The proportion of any loss suffered by the exporter on which the agency will pay claims.

Principal Outstanding-The amount disbursed and not repaid that includes principal amount in arrears.

Principal Repayment Schedule-Identifies the repayment stream of principal by due date and installment amounts.

Promissory Note-A written promise to repay a loan (either with or without interest). Specifies terms of principal and interest repayment, and can include the amount of principal installments, rate of interest, calculation of interest, due dates, and maturity date.

Reductions-Amounts forgiven under legislative authorization or international treaty. Includes total amounts forgiven or written-off, not merely associated subsidy amounts.

Refinance-The extension of a new credit, the proceeds of which are to be used to make payments due under a previously existing credit. For Department of Defense (DOD), this use is restricted to a commercial lender refinancing eligible Financial Management Service debt; no new credits per se are available.

Repayment Agreement-An agreement between a borrower and a lender that establishes the terms and conditions governing the recovery of a debt.

Repayment Period/Credit Period-The period during which repayments under the financing are due to be made. For reporting to the OECD, the Repayment Period is the time between the first repayment of principal and final repayment of principal.

Rephase-Changing the terms of credit/repayment (extending the maturing period), where the creditor and borrower develop a revised repayment schedule for interest and principal and where each credit retains its identity while the creditor remains unchanged.

Reporting Date-The date as of which agencies must report historical debt service data, status information, and scheduled debt service data.

Reschedule-

• An OECD term for the extinguishing of debt owed under all or part of existing credits and the creation of a new and separate credit or credits, which normally in the aggregate are of volume equal to the amount of the total debt being extinguished. Rescheduling normally is done in connection with facilitating repayment, although it is not required.
  
  Multiple rescheduling occurs whenever debt owed under all or part of more than one existing credit is extinguished under a single rescheduling action, whether or not a single new credit results.
  
  
• A Paris Club term for a form of debt reorganization in which scheduled debt service payments falling due in a specific interval are consolidated, resulting in a new credit with a new payment schedule.¹

¹Reporting agencies are reminded to adhere to NAC Action 82-285 regarding the procedures and reporting of foreign debt.

Service Payments-Amounts actually remitted by the borrower to repay a debt.

Short-Term-Refers to loans, guarantees, or insurance contracts with an original maturity of 1 year or less.

Signature Date-The date the loan, guarantee, or insurance agreement (specifying the amount, financial terms and conditions, and the purpose of the transaction) was signed or otherwise made known to the recipient.²

²DCD/DAC/TD/ECG(90)1 page 76, paragraph 362, refers to this as "commitment" date.

Sovereign-Refers to obligations entered into by the state. They may carry the "full faith and credit" of the central government. These often include transactions guaranteed by the Central Bank, Treasury, or Ministry of Finance. On a country-by-country basis, other institutions also may be designated, by law or by custom, as sovereign institutions, acting on behalf of the state.

Subsidy-The net present value of the difference between estimated cash outflows, such as cash disbursements and default claim payments, and cash inflows, such as loan repayments and recoveries, related to that loan.

Writeoff-Occurs when an authorized official determines that a debt will not be repaid. Statutory authority may be required to write off debts owed by foreign governments. (See Forgive and Reductions.)

Section 4525-Quarterly Reports

Agencies submit data via the Internet quarterly using the following seven reports:

• Direct Long-Term Credits History (DH);
  
  
• Guarantees and Insurance of Long-Term Credits History (GH);
  
  
• Direct Long-Term Credits Status (DS);
  
  
• Guarantees and Insurance of Long-Term Credits Status (GS);
  
  
• Aggregated Data on the Status of Direct Short-Term Credits and Guarantees and Insurance of Short-Term Credits (AS);
  
  
• Direct Long-Term Credits Scheduled Payments (DP);
  
  AND
  
  
• Guarantees and Insurance of Long-Term Credits Scheduled Payments (GP).

Submit the quarterly reports, using the formats and instructions provided in Appendix 1, as follows:

• DS, GS, and AS formats for all direct credits, insurance contracts, and guarantees.
  
  
• DP and GP formats for scheduled payments on any new contracts committed during the previous quarter (or any changes in existing payment schedules).
  
  
• DH and GH formats for transactions occurring during the respective calendar quarter (the applicable quarter will be determined from the reporting date). The Foreign Credit Reporting System (FCRS) will calculate calendar year historical data by summing the quarterly reports.

Upload the quarterly reports in the prescribed formats via the FCRS File Upload module, Upload Agency Files screen.

The quarterly reports are due on or before the due date. The due date is 45 days after the quarter-end reporting date. If the due date falls on a U.S. national holiday or weekend, the next business day is the due date. The data will be loaded into the FCRS within 3 workdays after the Request to Move Uploaded Files into Staging.Application.

Agencies must complete the quarterly data editing and approval process in the FCRS within 2 weeks after receiving notification that the reporting period data are available for editing via notification on the FCRS File Upload module, Batch Statistics screen. Agency personnel should follow the instructions in the "Foreign Credit Reporting System (FCRS) Web Site Overview and Data Editing Guide for Agency Users." Agencies may request additional time beyond the 2 weeks, if needed.

4525.10-Submitting Previously Unreported Information

Agencies that have not reported on loans, guarantees, or insurance contracts previously, should submit information for the current quarter as indicated above in Section 4525. In addition, status (DS and GS) and history (DH and GH) reports for the previous 5 years should be reported separately. Contact the FCRS Data Administrator (see the Contacts page) for instructions.

Section 4530-Entering Data

Provide data as ASCII characters with right-justified integers in all fields except dates, interest rates, calendar years, country codes, names of borrowers, percentages, program codes, agency identification numbers, and Treasury transaction numbers.

Agencies unable to provide ASCII formatted files may substitute Comma Separated Values (CSV) files in the proper formats and field lengths. If submitting the optional CSV format, the character positioning is unnecessary; however, the field length is critical. Fields must be separated by commas and string values must be enclosed in double quotes (for example, "MyValue").

Agencies must use the specified formats to support the system, to allow timely completion of agency data editing, and to complete the reports. In addition, they must verify that the ASCII data are correctly positioned and complete using an editor.

Agencies must retain the underlying "raw" data and be prepared to make this data available to OMB or Treasury, if requested.

4530.10-Amounts

Report amounts on a cash basis rather than an accrual basis, in accord with the nature of the item, per the following conventions:

• Use unsigned positive integers without comma separators or decimal points (for example, no "," or "." symbols in amount fields); if negative, use a leading minus sign.
  
  
• Do not use a currency symbol (for example, no "$" symbol);
  
  AND
  
  
• Round the amount to the nearest whole U.S. dollar or dollar equivalent.

4530.15-Dates

Enter dates numerically in century, year, month, and day sequence. For example, "20020331" represents March 31, 2002.

4530.20-Interest Rates

Enter interest rates as real numbers with 2 integer digits, a period, and 3 decimal digits. For example, report 6 1/2 percent as "06.500".

4530.25-Calendar Year

Agencies no longer need to enter the calendar year. This information is calculated from the Reporting Date on the DH and GH files.

4530.30-Country Codes

Use the appropriate 2- or 3-character country codes taken from the list in Appendix 2.³ This information, and all other baseline information, is accepted initially and changed only from the status reports DS and GS.

³The codes are based on Federal Information Processing Standards Publication (FIPS PUB) 10-4, Countries, Dependencies, Areas of Special Sovereignty, and Their Principal Administrative Divisions, as amended by FIPS PUB 10-4 Change Notices; Department of State, Office of the Geographer, Guidance Bulletins, and information from the Office of the Geographer. Certain codes have been added to alleviate unusual reporting problems. (See www.state.gov/www/regions/independent_states.html, www.state.gov/www/regions/dependencies.html, http://www.state.gov/countries.)

4530.35-Borrower Name

Report the borrower name in its entirety if possible. However, because of space limitations, standard abbreviations and truncations are acceptable.

4530.40-Percentages

Report percentages as real numbers to the nearest tenth of a percent. Include the decimal point to separate decimal values. For example, report 95.5 percent as "95.5"; report 80 percent as "80.0".

4530.45-Program Codes

Use the appropriate program codes from the list of program names and codes in Appendix 3. This information is accepted initially and changed only from the status reports DS and GS.

4530.50-Agency Identification Number

Report the agency identification number that the agency assigned to the loan, guarantee, or insurance agreement. The agency must use this number consistently in future reports. This information is critical to matching the history DH and GH and scheduled payments DP and GP records with the applicable status record DS and GS reports in order to create a complete contract.

4530.55-Treasury Transaction Number

Report the Treasury transaction number that the agency assigned to identify the loan, guarantee, or insurance agreement for OECD CRS purposes. The Treasury transaction number consists of a 2-digit numeric commitment-year identifier, a sequential 4-digit numeric identifier, and a 2-character alphanumeric extension, if needed. Verify that leading zeros appear in the Treasury transaction number for credits committed in calendar year 2000 and beyond. For example, "021234" indicates a commitment in calendar year 2002 (the leading zero requires a text field). Agencies must maintain Treasury transaction numbers used on records submitted as of December 31, 1994, as long as there is any activity related to the particular loan, guarantee, or insurance agreement, including claims outstanding. For agencies reporting Officially Supported Export Credit transactions directly to the OECD or Berne Union on Form 1 C, the first 6 digits of the Treasury transaction number must coincide with the CRS identification number used. Agencies must use the assigned Treasury transaction number consistently in future reports as long as there is any activity related to the particular loan, guarantee, or insurance agreement, including claims outstanding. This information is accepted initially only from the status reports DS and GS.

Section 4535-FCRS Edits

The FCRS runs edits on individual records under the following "reasonableness" assumptions. In each status record:

• The cumulative amount of principal committed should equal the sum of the cumulative amounts of principal canceled, undisbursed, and disbursed for any direct credit or guaranteed loan.
  
  
• The cumulative amount of principal disbursed should equal the sum of the cumulative amounts of principal outstanding, repaid, rescheduled, and reduced for any direct credit or guaranteed loan.
  
  
• Amounts in arrears (or outstanding) 1 day or more should be greater than or equal to the equivalent amount in arrears (or outstanding) 90 days or more.
  
  
• Principal in arrears 1 day or more should not exceed principal outstanding on any direct credit.

For any direct credit or guaranteed loan:

• The sum of historical amounts in a given category should not exceed the cumulative amounts in that category on the status record.
  
  
• The historical amounts in a given category during the preceding quarter should not exceed 10 percent of the difference between the cumulative amounts in that category on the status records for the current and preceding quarters.
  
  
• The sum of scheduled principal repayments in the projection records should not exceed the sum of principal undisbursed plus principal outstanding (minus principal in arrears 1 day or more on direct credits) on the status record.
  
  
• The sum of scheduled principal repayments in the projection records should not be less than the amount of principal outstanding (minus principal in arrears 1 day or more on direct credits) in the status record.

If there are valid reasons for not applying the above tests to specific records, provide detailed explanations of these reasons in a separate correspondence.

Note: Do not omit any relevant credits, guarantees, or insurance contracts. If the agency has reported contracts, it must close out the contracts before removing them from the inventory of active records for the agency.

Section 4540-Filenames

Compose filenames using the agency identifier, the 2-digit type code indicated in the format, a 4-digit reporting date, and the text extension. For example, the Export-Import Bank would name the direct credit history file as of December 31, 2002, as "EDH0212.txt".

CONTACTS

Direct inquiries concerning this chapter to:

Office of International Debt Policy
Office of International Affairs
Department of the Treasury
1500 Pennsylvania Avenue, NW.
Washington, DC 20220
Telephone: 202-622-7825

In lieu of sending quarterly reports via e-mail to the following addresses, access to verified agency data will be provided via the Foreign Credit Reporting System to:

bertram.wolfe@do.treas.gov   Office of International Debt Policy, FCRS Data Administrator

patricia.mosley@bea.doc.gov   U.S. Department of Commerce/BEA, BE-58

wmccormick@usaid.gov   U.S. Agency for International Development, Policy and Program Coordination

Appendices Listing

Appendix 1 - Data Formats and Instructions

Appendix 2 - Federal Information Processing Standards (FIPS) Country Codes

Appendix 3 - Program Codes

Appendix 4 - Purpose Codes

The appendices are available in PDF format only.

Transmittal Letter No. 620

Volume I

To: Heads of Government Departments, Agencies, and Others Concerned

1. Purpose

This transmittal letter releases revised I TFM 2-4500: Grants, Loans, Credits, and Contingent Liabilities Involving Foreigners. This chapter prescribes forms and procedures agencies use to prepare reports for submission to the Department of the Treasury relating to U.S. Government grants, loans, credits, and contingent liabilities on loans, credits, and other payment scheduling agreements involving foreigners.

2. Page Changes

Remove

I TFM 2-4500 (T/L 496)

Table of Contents for Part 2 (T/L 618)

Insert

I TFM 2-4500

Table of Contents for Part 2

3. Effective Date

This transmittal letter is effective immediately.

4. Inquiries

Direct questions concerning this transmittal letter to:

Office of International Debt Policy
Office of International Affairs
Department of the Treasury
1500 Pennsylvania Avenue, NW.
Washington, DC 20220
Telephone: 202-622-7825

Date: December 5, 2004

Richard L. Gregg
Commissioner