RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/OMN/2
20 September 2001
(01-4484)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions from the UNITED STATES1 Regarding
the New and Full Notification of THE SULTANATE OF OMAN2
The following communication has been received from the Permanent Mission of The
Sultanate of Oman on 18 September 2001.
_______________
Q1. Can you please provide information on the Oman Export Credit Guarantee Agency
(ECGA)?  Is the ECGA an Omani Government agency?
Reply
The Export Credit Guarantee Agency (ECGA) commenced its export credit insurance
operations since November 1991 under its previous name as Export Guarantee and Financing Unit
(EGPU), operating under the umbrella of the Oman Development Bank (ODB), following Resolution
No. 72/89 of the then Development Council.  It is th e only national export credit agency within the
GCC region.  ECGA provides various credit and fi nancing services in promoting Omani non-oil
exports.
The Ministry of Finance has entrusted the overall responsibility of the Export Credit
Guarantee Agency to the Board of directors of the Oman Development Bank.
Export Credit Insurance Services
The Export Credit Guarantee Agency provides its export credit insurance cover to Omani
exporters against both commercial and political (non-commercial) risks.  The Agency also advises
exporters on creditworthiness of overseas buyers and guides the exporters on their collection andrecovery of bad debts.
The Agency offers two types of cover that is shipment policy cover and contract policy cover.
Under shipment policy, credit insurance is effective once the goods are shipped where the goods are
standard products which can be easily marketable while for contract policy, it applies for speciallydesigned goods made as per the request of the buyer.  It is catering for a special market, with cover
commencing from the date of contract.
                                                     
1 G/SCM/Q2/OMN/1
2 G/SCM/N/71/OMNG/SCM/Q2/OMN/2
Page 2
Under both the policies, they cover the buyer risks as well as political or country risks as
listed as follows:
Buyers Risks Covered
• Insolvency of the buyer.
• Non-payment of export bills by the buyer.
• Buyer's failure of refusal to accept goods dispat ched which comply with the contract of sale.
Country Risks Covered
• Delays in transferring funds from buyer's country.
• Any action of the government of the foreign county which wholly, or partly, prevents
performance of the contract.
• Political events or economic, legislative or administrative measures occurring outside the
Sultanate which prevent or delay transfer of payment.
• War, civil war and the like in the buyer's country preventing performance of the contract.
• Cancellation or non-renewal of an import licence or imposition of new restrictions on exports
after date of contract.
• The failure or refusal on the part of a public buyer to fulfil any of the terms of the contract where
ECGA has agreed that the buyer is a national government authority.
Under both policies the Omani exporters are covered up to 80 per cent of loss against
commercial risks and 85 per cent against political risks.
The benefits of both the policies, i.e. shipment as well as contract policies can be assigned to
the commercial banks as additional collateral to them.  Such assignment provides the opportunity for
the exporters to obtain new or enhance existing post shipment financing facilities on better or
concessional terms than the banks might otherwise have been prepared to offer if the exporter was notcredit insured or the policy is not available.  Thus, the Export Credit Policy does not only minimize
the risk of non-payment to the exporter but also assists him to obtain post-shipment financing and at
better interest rates.  The credit-insured exporters can also benefit from pre-shipment financing
through his banks.
Q2. What are the terms of the export credits offered by the ECGA?
Reply
For the terms and conditions of the Export Credit Policy, kindly refer to the attached Annex 1.
Q3. Does the ECGA subsidize the cost of export loans?  If so, on what terms?
Reply
The primary goals of the Export Credit guarantee Agency (ECGA) are to promote Omani
exporters.  It does this by the following means:
• Provides export insurance cover to Omani exporters against commercial/political risks.
• Assists exporters in availing financing facilities for credit insured exports at concessional interest
rates.
• Issues guarantees to commercial banks to grant pre-shipment facilities to exporters.G/SCM/Q2/OMN/2
Page 3
Q4. Are the facilities of the ECGA availa ble to all enterprises and industries?
Reply
The export credit insurance services of ECGA are available to any Omani exporter of any
size, operating in any industrial commodity or services factor.
Q5. Can you please provide details on the ty pes of facilities and benefits available to
enterprises or industries located in the Port Salalah free trade zone?
Reply
The following incentives will be available for customs of the Salalah Free Trade Zone.  These
incentives have been accepted as part of the Business Plan dated 4 July 2001 prepared by Hillwood
and Salalah Port Services ("SPS").  These incentives will be confirmed through two royal decrees to
be issued in August 2001;
• Free Zone Companies will be exempt from all direct and indirect taxes and duties during the term
of the concession, except for taxes relating to corporate income, profit and dividends, which willbe exempt for thirty (30) years.  This thirty year exemption may be renewable at the discretion of
the Ministerial Committee of the Government responsible for Free Zones.  The details of these
taxes shall be specified in the Concession Agreement;
• 100 per cent ownership of companies in the Free Zone will be allowed;
• there will be no minimum capital requirements for Free Zone Companies;
• there will be no personal income taxes on Free Zone employees;
• there will be no restrictions on availability of foreign currency;
• there will be no restrictions on repatriation of capital, profits and investments;  and
• Free Zone Companies will only be obligated to have a minimum of ten per cent (10%) of their
workforce as Omani citizens.  In partnership with the Government, a technical training school willbe established in Salalah to provide workers with  access to the education needed to obtain the
necessary skills sets to compete for the new jobs created in Free Zone Companies.  Free Zone
Companies will be encouraged to offer employment opportunities to graduates of the training
school in order to increase the percentage of Omanization in the future.
The Salalah Free Zone is a 6,000 acre master planned community that will provide a full
complement of world class facilities and services including industrial, office, retail, residential, resort
and golf courses.  Customers will be able to secure facilities in three ways:  (i) through a ground lease,
in which case the customer will build its own building in accordance with a set of designspecifications provided by the Salalah Free Zone Company ("SFZC");  (ii) by leasing a building the
SFZC will build with no predetermined tenant;  or (iii) through a "build-to-suit" arrangement whereby
the SFZC builds the tenants building and leases it back to them.G/SCM/Q2/OMN/2
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Q6. Are all enterprises and industries eligible to locate in the Port Salalah free trade zone?
Reply
Unless they are involved in illegal or environmentally hazardous businesses, all forms of
companies are welcome to seek facilities in the Salalah Free Zone.  Not all companies will quality for
free zone status though.  The incentives available as described above are most beneficial for those
customers whose primary business is export related or serving other free zone companies.  The
incentives do not apply to anyone selling goods back into the Sultanate of Oman.  This combination
of incentives is specifically designed to attract companies whose primary business is export.
Q7. We understand that the Omani Government offers tax exemptions, utility discounts, and
soft loans to light industry, fisheries and agriculture.  So that we may more fully understand the
conditions in which these benefits are offered and used, could you please provide more details
on the above (such as implementing legislation or laws, to what specific enterprises and/or
industries these benefits apply, and under what conditions these benefits are granted)?
Reply
Tax Exemption
The implementing legislation is the Law of Income Tax on companies No. 47/81, the Foreign
Capital Investment Law No. 102/94 and their amendmen ts.  Exemption from taxes is for five years,
renewable (the renewable conditions for renewal are under consideration).  Enterprises to which the
benefit apply are all licensed manufacturing industries irrespective of ownership.
Utility rates
Implementing legislation is the decision from the Ministry of Electricity and Water and
Housing.  Rates for electricity for industrial consumption are given to all licensed manufacturing
industries irrespective of ownership as opposed to domestic users as follows:
Winter (8 months) -    12 Baisa/kwh
Summer (4 months) -    12 Baisa (kwh)
Soft loans
Implementing legislation is Decree No. 17/97 regarding financial assistance to the private
sector in some economic and service sectors and its implementing regulation by Ministerial Decreefrom Ministry of Finance No. 135/97.  The conditions of loan and the enterprises to which it apply are
enclosed.  (Annex 2)
Q8. Does the Oman Development Bank offer any special incentives or aid to any specific
industries or enterprises?  If so, what are these incentives or aid and to whom are they offered?
Reply
Oman Development Bank (ODB):
Is set up to promote and encourage economic development in the Sultanate of Oman by
providing financial assistance to small and medium projects (within a total cost of OR 250,000) in the
fields of Industry, Agriculture, Animal resources, Fi sheries, Tourism, Education, Professional offices,
Conventional Crafts and Workshops.G/SCM/Q2/OMN/2
Page 5
Type of assistance
• Advancing or guaranteeing medium and long-term loans.
• Participating in the capital of Joint Stock Compan ies or underwriting the issues of their shares to
the public.
• Provision of technical assistance to Omani companies with regard to investment opportunities and
conducting of feasibility studies within the limits of the Bank's capabilities.
• Management of the loans and grants advanced by the Governments to the craftsmen.
Eiligibility for utilizing the bank facility
• The project should belong to one of the above-mentioned sectors.
• Should be registered in Oman and subj ect to Omani Commercial Companies Law
• Should have obtained all the initial Government licences and approvals.
• Should be located in the Sultanate of Oman.
• Should be technically feasible and economically viable.
• The promoter(s) should be of good reputation.
• Should provide sufficient securities that cover the amount of loan.G/SCM/Q2/OMN/2
Page 6
ANNEX 1
EXPORT CREDIT POLICY
ISSUED by OMAN DEVELOPMENT BANK SAOG (EXPORT CREDIT GUARANTEE
AGENCY) hereinafter called the INSURER to the EXPORTER named in Schedule 1.
WHEREAS the EXPORTER has by a proposal applied to the INSURER for indemnity
against losses in respect of contracts which relate to the export from the Sultanate of Oman of goods
wholly or partly produced in the Sultanate of  Oman which indemnity the INSURER has agreed to
give subject to the terms and conditions hereinafter stated.
NOW IT IS HEREBY AGREED THAT
1. In consideration of the premium to be paid as specified below and in Schedule (1) attached
hereto and subject to the terms and conditions of the POLICY the INSURER agrees to pay the
EXPORTER a percentage of the amount of any loss as hereinafter defined which the EXPORTER
may incur in connection with any contract to which this POLICY applies by reason of the occurrence
after the goods have been exported of any of the following causes:
RISKS COVERED
(i) The insolvency of the buyer as hereinafter defined;  or(ii) the failure of the buyer to pay to the EXPORT ER within (6) months after due date of payment
the invoice value of goods exported to and accepted by the buyer;  or
(iii) the failure or refusal of the buyer to accept goods which have been exported where such
failure or refusal does not arise from any breach of contract or failure on the part of the
EXPORTER;  or
(iv) a general moratorium decreed by the government of the buyer's country or by that of a third
country through which payment must be affected;  or
(v) any other measure or decision of the government of a foreign country which prevents
performance of the contract;  or
(vi) political events or economic difficulties or legislative or administrative measures which
prevent or delay the transfer to the account of the EXPORTER in the Sultanate of Oman of
payments made in respect of the contract;  or
(vii) the occurrence of war between the buyer's country and the Sultanate of Oman;  or war,
hostilities, civil war, rebellion, revolution, riot, cyclone, flood, earthquake, volcanic eruption,
or tidal wave which occur outside the Sultanate of Oman and which prevents performance of
the contract;  or
(viii) where in respect of any contract the INSURER has stated in writing that:
(a) the buyer under that contract is a national government authority, orG/SCM/Q2/OMN/2
Page 7
(b) he is satisfied, in the case of a guarantee of payment or indemnity for breach of
contract, that the giver of the guarantee or indemnity is a national government
authority,
the failure or refusal on the part of the buyer to fulfil any of the terms of that contract;  or
(ix) any other cause to be determined at the IN SURER's sole discretion and not being within the
control of the EXPORTER or the buyer which arises from events occurring outside the
Sultanate of Oman and which prevents performance or payment of contract.
EXCLUSIONS
Provided that the INSURER will not be liable for any loss which arises from:
(a) the failure by the EXPORTER or by any pe rson acting on behalf of the EXPORTER to fulfil
any of the terms and conditions of the contr act or to comply with any law affecting the
performance of that contract.
(b) the failure of the EXPORTER or buyer or persons acting on their behalf to obtain any licence
or any other authorization necessary for the performance of the contract under any law in
force at the date on which the INSURER's liability in respect of the contract commences
under this POLICY.
(c) (where the terms of payment are cash against documents or documentary sight draft) the
release of the documents and/or goods to the buyer is authorized by the EXPORTER or a
person acting on the EXPORTER's behalf against a deposit in a currency other than the
currency of contract, unless the INSURER has agreed in writing that the documents and/orgoods may be so released.
(d) any event of loss which can be insured with Commercial Insurers.
CONTRACTS COVERED
2. This POLICY shall apply top all contracts made by the EXPORTER in respect of the sale for
export from the Sultanate of Oman of goods wholly or partly produced within the Sultanate of Oman
(as herein defined) that are exported during the period given in Schedule (1).
3. The INSURER may at any time give written notice to the EXPORTER suspending cover in
respect of any contract that may be made with a buyer in any country specified or with a particularbuyer specified, and if such notice is given this POLICY will not apply to any export that may be
made on or after such date as may be specified in the notice (not being earlier than the date of the
notice).  The INSURER may also give written notice to the EXPORTER restoring cover in respect of
such country or buyer in which the POLICY will not apply to any export made before such date as is
specified in that notice.
DEFINITIONS
4.(a) "Insolvency" will be deemed to occur when:
(i) an adjudication in bankruptcy has been made against the buyer;  or
(ii) if the buyer is a company, an order for winding-up has been made by the court on the
grounds that the company is insolvent;  orG/SCM/Q2/OMN/2
Page 8
(iii) an order for administration of the buyer's affairs has been made by a court for the
benefit of his creditors;  or
(iv) in the course of execution of a judgement the levy of execution has not satisfied the
debt in full or in part;  or
(v) the buyer has made a valid assignment, composition, or other arrangement for the
benefit of all his creditors;  or
(vi) such conditions exist as are by any other system of law substantially equivalent in
effect to any of the foregoing conditions.
(b) "Deductions" is defined as:
(i) any amount which at the date that loss is ascertained the buyer is entitled to credit to
his own account;
(ii) any amount which at the date that loss is ascertained the EXPORTER is entitled to
offset against payment of the debt;
(iii) any expenses served by the EXPORTER by non-fulfilment of the contract;(iv) any interest payable by the buyer for credit facilities in respect of any period
subsequent to payment by the INSURER.
(c) The words "due date of payment" in paragaphs 1, 10 and 17 of this POLICY will be deemed
to include, in any case where time has been extended with the consent of the EXPORTER and
INSURER, the date to which the time has been so extended.
(d) For the purposes of this POLICY "export" and "exported" is deemed to occur when the
EXPORTER, or his agent, parts with possession of the goods in any way for the purpose of
transmitting them to a buyer at a place outside the Sultanate of Oman.
(e) "Goods partly produced in the Sultanate of Oman" is defined as a product which meets the
GCC domestic value added criteria or such other criteria which the Sultanate of Oman may at
any date introduce.
CREDIT LIMIT
5. In respect of every buyer there shall be a credit limit established in accordance with the
following terms and the credit limit will apply in rela tion to all exports made to that buyer to which
this POLICY may at any time apply.  Unless and until otherwise agreed by the INSURER in writing
the amount of that credit limit for any particular buyer will be the amount approved in writing by theINSURER on application for that purpose by the EXPORTER.
DECLARATION
6. The EXPORTER will declare to the INSURER on or before the tenth day of each month,(a) particulars of all exports made during the previous month to which this POLICY applies, or
will, if no exports have been made, make a declaration to that effect;G/SCM/Q2/OMN/2
Page 9
(b) all amounts which at the end of the previous month remain unpaid for more than two months
from the original due date.
PREMIUM
7.(i) The EXPORTER will pay premium in relation to each export required to be declared in
accordance with paragraph (6) of this POLICY at the rates set out in Schedule (1) and such
premium shall be calculated for each RO 100 of the gross invoice value of the export (but
excluding any irrevocable payment made in  Rial Omani prior to the commencement of
liability of the INSURER in respect of that export).  The amount of premium calculated will
be paid by the EXPORTER immediately on rece ipt of the INSURER's invoice or failing such
receipt by the end of the month in which the declaration is required to be made.
(ii) Failure by the EXPORTER to pay such premium on the date it is required to be paid shall be
deemed to be a breach of this POLICY and the INSURER will be entitled to give written
notice terminating the POLICY with immediate effect and disclaiming liability for any loss
suffered by the EXPORTER.
(iii) Any premium rate may be varied upon written notice to that effect given by the INSURER, in
such a case the variation will apply to exports made on or after the date specified.
LOSS
8. The percentage of the amount of loss wh ich the INSURER agrees to pay will be:
(a) 80 per cent where the loss is due to the occurrence of either of the causes specified at (i) and
(ii) of paragraph 1 of this POLICY;
(b) 85 per cent where the loss is due to the occurrence of either of the causes specified at (iv) to
(ix) inclusive of paragraph 1 of this POLICY;
(c) 80 per cent of balance remaining after the EXPORTER has borne the first loss of 20 per cent
of the amount payable under the contract where the occurrence is the cause specified at (iii) of
paragraph 1 of this POLICY.
9. The amount of loss will be the gross invoice value of the goods;
less
any deductions as herein defined, and thereafter any amount (in excess of the credit limit
established for the particular buyer in accordance with paragraph 5 of this POLICY.
10. The INSURER will pay to the EXPORTER the percentage of the amount of loss after loss has
been ascertained and such loss shall be ascertained:
(i) where the loss is due to the cause specified at paragraph 1(i) of this POLICY, one month after
the EXPORTER has received confirmation that the insured debt has been admitted against the
insolvent estate in favour of the insured;
(ii) where the loss is due to the cause specified at paragraph 1(ii) of this POLICY, immediately
after the expiry of the said period of (6) months;
(iii) where the loss is due to the cause specified at paragraph 1(iii) of this POLICY, one month
after the date on which, with the INSURER's approval, the goods have been resold or
otherwise disposed of by the EXPORTER;G/SCM/Q2/OMN/2
Page 10
(iv) where the loss is due to the cause specifie d at paragraph 1(iv) of this POLICY, (6) months
after the due date of payment, or (6) months from the completion of the formalities necessary
in order to obtain transfer to the Sultanat e of Oman of the payments or deposits made,
whichever is the later;
(v) in all other cases 6 months after the occurrence of the cause of loss or immediately after the
date on which the Exporter actually suffered loss as a result of that occurrence, whichever is
the later;
except that when the buyer's country is rated for premium purposes by Schedule (1) as B, C and D,
the period of (6) months stated at (iv) and (v) of these paragraphs should be (8), (10) and (12) monthsrespectively;
provided that where the buyer claims to be justified in withholding payment of the contract price or
the invoice value or any part thereof or in not pe rforming any of his obligations under the contract the
loss will not be ascertained, unless the INSURER otherwise agrees in writing, until the buyer haswithdrawn such claim or the EXPORTER has establ ished the invalidity of such claim by legal
proceedings against the buyer in the buyer's count ry, or otherwise in such manner as the INSURER
may require in writing.
11. The INSURER will not be under any liability to make payment in respect of any loss in
accordance with paragraph (10) of this policy unless either:
(a) the EXPORTER has at the time of making a claim in respect of such loss made a declaration
in writing that he has not assigned or charged any part of the contract price to which the loss
relates or any right or interest acquired by virtue thereof and has not received any security inrespect thereof;  or
(b) in any case where the EXPORTER has made any such assignment or charge or has received
any such security the person in whose favour such assignment or charge has been made or
from whom such security has been received has given an undertaking in writing to the
INSURER that in consideration of the INSURER making the said payment the said person
will not make any claim whatsoever to any recoveries subsequently made in respect of theloss other than such claim as he may be entitled to make to the proportion of the recoveries
reserved to the EXPORTER under paragraph 13 below.
RECOVERIES
12. Upon payment by the INSURER, the EXPORTER will:
(i) take all steps which may be necessary or expedient, or which the INSURER may at any time
require, to effect recoveries, whether from the buyer or from any guarantor or other person
from whom such recoveries may be made, including (if so required) the institution of legalproceedings in any country.
(ii) upon request assign and transfer to the INSURER the EXPORTER's rights in connection with
any contract in respect of which such payment has been made, including the right to receive
any amount payable under such contract or the right to damages for any breach thereof;
(iii) upon request deliver to the INSURER any goods relating to any contract in respect of which
such payment has been made and any documents, negotiable instruments, guarantees, or other
securities relating thereto and assign and transfer to the INSURER the EXPORTER's rightsG/SCM/Q2/OMN/2
Page 11
and interest in any such goods, documents, negotiable instruments, guarantees, or other
securities.
13. Any amount recovered by the EXPORTER in resp ect of a loss to which this POLICY applies
after the date at which loss is ascertained, whether from the buyer or any other source, will afterreceipt be divided between the EXPORTER and th e INSURER in the proportion which the amount of
loss ascertained  is borne by each of them respectively, whether or not such division results in the
retention by the INSURER of a greater sum th an the amount paid by the INSURER under this
POLICY in connection with the amount of loss.  The EXPORTER will pay all amounts so recovered
to the INSURER immediately upon being receiv ed by the EXPORTER or any person on the
EXPORTER's behalf.  The EXPORTER hereby acknowle dges  and declares that until such  payments
are made to the INSURER the EXPORTER receiv es and holds such amounts in trust for the
INSURER, and is liable to the INSURER for interest levied at the commercial bank maximum
lending rate for any period between receipt and making such payments.
GENERAL CONDITIONS
14. It is declared that this POLICY is give n on condition that the EXPORTER at the date of
giving the POLICY has disclosed and will at all times during the operation of this POLICY promptly
disclose all facts in any way affecting the risks covered.
15. If the EXPORTER makes any declaration, statem ent, or claim for loss knowing the same to
be false or fraudulent the liability of the INSURER will cease and this POLICY shall, unless the
INSURER otherwise elects in writing, to be void but the EXPORTER will repay to the INSURER on
demand all amounts paid by him and the INSURER will be entitled to retain all payments of premium
made to him.
16. In order to prevent or minimise loss the EXPORTER shall:
(i) exercise reasonable care and prudence in making contracts and in granting credit to and by
withholding credit from any particul ar buyer covered by this POLICY;
(ii) ensure that all rights against the goods, buyers, and third parties are properly preserved and
exercised;
(iii) if required by the INSURER take any measures which he may require including the
institution of legal proceedings.
17. The EXPORTER will not, either in the contract or otherwise, agree in advance to a
postponement of the due date of payment and will consult with the INSURER before agreeing to such
postponement.
18.(a) This POLICY is issued in Rial Oman i and any amounts payable under the POLICY are
payable in Rial Omani.
(b) In respect of a contract which provides for payment to be made in a currency other than Rial
Omani:
(i) all amounts calculated for declaration and ascertainment of loss purposes in
accordance with paragraph 6 and 10 of this POLICY will be converted into Rial
Omani at the buying rate of exchange for Rial Omani at the close of business in
Oman for the date on which the export was made;G/SCM/Q2/OMN/2
Page 12
(ii) all amounts recovered in accordance with paragraph 13 of this POLICY will be
converted into Rial Omani at the buying rate of exchange for Rial Omani at the close
of business in Oman for the date on which the recovery is received by the
EXPORTER or any person on his behalf.
19. The terms and conditions of this POLICY may be varied by endorsement or by Schedule (1)
to this POLICY or by any credit limit establishment for a particular buyer as notified in writing by the
INSURER to the EXPORTER.
20. Due performance and observance of each and every stipulation contained herein shall be a
condition precedent to any liability of the INSURE R, and, any failure by the EXPORTER to comply
with any of the terms and conditions of this POLICY will not be accepted by the INSURER unless thesame is accepted by the INSURER in writing.
21. Any unresolved differences between the IN SURER and EXPORTER on the interpretation of
the terms and conditions of this POLICY shall be settled by reference to the Commercial Court in the
Sultanate of Oman.G/SCM/Q2/OMN/2
Page 13
ANNEX 2
A Guide to the Finance Support to the Private Sector in
Economical and Service Sector
FIRST:  LOAN TERMS:
The award of a Government loan to industry, Tourism, Education, Higher Education, Health
and Handicraft following conditions:
1. The Project shall be within the above-mentioned economical service sectors.
2. The project shall have fulfilled the registration and licensing or approval procedures
prevailing in the Sultanate.
3. The requisite capital shall have been fully paid in at the time of the loan application.
4. The project shall have a special subsidiary budget not intervening in the other activities of the
company if such a company is of diverse activities.
5. 51 per cent of the project capital shall be owned by Omanis throughout the loan period.
SECOND:  LOAN AIMS
The Ministry shall provide loans for both the new and existing projects for the following
purposes:
1. For the new projects, loans are granted to assist in the financing of establishing new projects.
A new project shall mean any project that has obtained a licence or approval from the concerned
Ministry but has not started production or services yet.
2. For the existing Projects, loans are granted for either of two purposes:(a) To assist in purchasing the machinery and equipment, or Services Facilities necessary for the
expansion and improvement of the project production capacity or improvement of services.
(b) To support the existing project which is faced by production or services problems subject to
the following conditions:
- The project shall be one of those that contribute to the promotion of the national economy
to what is decided by the concerned Ministry.
- At least three years shall have lapsed since the registration of or approval of the project,
provided the project presents an audited budget for the latest financial year.
The project shall prove to the Committee for the Financial Support that the difficulties of
the project are not due to inefficiency in the project management.
- It shall be indicated by studies that the project shall attain its economic feasibility on
getting the loan.
An existing project shall mean every project that has started production or services and
obtained a certificate of registration or approval from the concerned Ministry.  Both the new and theG/SCM/Q2/OMN/2
Page 14
existing projects which are involved in expansion works shall undertake to use the loan amount in
financing the establishment and equipment contract.  The owner of the project shall undertake to
submit to the Ministry, at least two price quotati ons for the required works from two different sources
so that the contracting shall not take place before the Ministry's approval to the finally chosen
quotations.
THIRD:  THE PROCEDURES OF GRANTING THE LOAN FOR PROJECTS WHICH ITS TOTAL
COST IS ABOVE RO 250,000
1. The individual projects or those which take the status of general or limited partnerships,
limited liabilities companies or individual estab lishments (companies other than the joint stock
companies).
- the maximum loan shall be RO 500,000 provided that the loan does not exceed 150 per cent
of the paid-up capital in the Muscat Governorate and 250 per cent of the paid up capital if the
project is outside the Muscat Governorate.
2. The projects that take the form of Omani jo int stock companies or owned by such companies
and have covered not less than 40 per cent of their capital by public subscription.
- the maximum loan for such projects does not exceed 150 per cent of the paid up capital if
they are in the Muscat Governorate and 250 per cent of the paid up capital if they are outsideMuscat or Wilayat of Quriat and with a maximum loan of R.O. 5 million.
Granting a loan to a project shall be once;  nevertheless in exigent cases, another loan may be
granted by a decision of the competent Ministerial Committee.  But it should be observed that the
maximum loan shall be reduced by the balance of any Government loan the project might haveobtained before.  Consequently, the number of loans a project may get throughout its duration shall be
only two loans and within the limits of the company paid-up capital.
__________