Romania Pays $5.4M Of US’ Loan, On Behalf Of Local Cotton Importers

According to a draft law approved recently, the government will pay from the state budget the capital installments and the interest rates of part of a $10 million total loan on cotton acquisition, to avoid jeopardizing its relationship with the USA.

Romania will pay the money in tranches, until 2022, and in the meantime it will try to recover the money in court from the companies involved in the contract.

The Executive does not want to „endanger the commercial and diplomatic relationship with the USA,” according to the draft law.

In 1992, the US Government granted Romania a commercial loan of $10 million, on a 30-year period, with a 6-year grace period and at a 3% annual interest rate. The loan targeted the acquisition of cotton fiber from the USA.

Five foreign trade companies were selected in a public bid for cotton import, namely Romanoexport, Tricorom, Textilcotton, Impex Overseas and Tuvic Impex.

These five companies concluded a special commission contract undertaking to import cotton from the USA and to pay back the installments and interest rates for the loan. They only paid interest rates until 1998, and then, with the maturity of the first installments, they ceased payments allegedly saying the enterprises to which they sold cotton have not paid for it.

Romania has already paid the installments and the interests for the 1998-2005 period from the state budget.