EXIM Thailand to finance Russian trade under BPA Program
Section: Business News - Export-Import Bank of Thailand (EXIM Thailand), under the Bilateral Payment Arrangement
(BPA) Program, signed an agreement to provide "Revolving Trade Financing Facility" to Russia through the
Russian government's appointed bank, Vneshtorgbank, in a bid to increase the trade volume between the two
countries.
According to Mr. Sataporn Jinachitra, EXIM Thailand President, following the Thai and Russian governments'
account trade policy to promote international trade between the two nations, EXIM Thailand and Vneshtorgbank, as the
government appointed banks, have concluded the BPA agreement aiming to facilitate and boost the confidence of Thai and
Russian export-import enterpreneurs in their business undertaking. However, in the meantime, the volume of Thai import
from Russia is much higher than export, resulting in an unbalanced trade of export and import between the two countries.
EXIM Thailand and Vneshtorgbank, thus, have settled on an agreement that EXIM Thailand provides the short-term
"Revolving Trade Financing Facility" worth 20 million US dollars to Vneshtorgbank to be used for the finance
of Thai export to Russia.
EXIM Thailand President revealed that the "Revolving Trade Financing Facility" would facilitate increased
volume of Thai export to Russia as practically, after Russian importer issued an L/C sight of not less than 50,000 US
dollars to purchase goods from Thailand and Thai exporter had shipped out the goods, the Thai exporter could present the
L/C to immediately receive payment of L/C value at the day of EXIM's acceptance of that L/C. Then EXIM will allow
the credit term of 180 days before proceeding with the payment collection with Vneshtorgbank. While Thai exporters can
receive their money right away under this facility, Russian importers can still benefit from the term payment in spite
of L/C sight possession, which allows them time to sell the goods before settling the payment.
Mr. Sataporn added that by adopting such system for international trade transaction to boost Thai exports to various
countries, Thailand's export volume will be larger while the competitiveness of Thai exporters will be
strengthened. Nonetheless, the agreement is applicable to trade transactions worth higher than 50,000 US dollars only;
therefore, to cater for the transactions of lower than 50,000 US dollars, to develop Thai-Russian businesses further and
to include transactions with private banks in Russia, EXIM Thailand will also provide the facility to negotiate and
confirm L/C sight to L/C term of up to 90 days that are issued by 9 Russian banks, namely, Vneshtorgbank, Alfa-Bank,
Vnesheconombank, Bank Zenit, Globex Commercial Bank, International Moscow Bank, Open Joint-Stock Commercial Bank
Avtobank-Nikoil, Promsvyazbank, and Gazprombank.
Export-Import Bank of Thailand 8 June 2004
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