Agreement No. 95/14 between National Bank of Uzbekistan, Uzkhleboprodukt (Uzdonmakhsulot),
Odil, and Galla-Bank dated October 2, 1995.
NBU advances to Odil $8.1 million (15% of $54 million)
Clause 2.3: The obligations of the debtor under the present agreement will be considered performed for the amount and as of the date when the documents evidencing the deliveries to Uzbekistan, signed by the subdebtor (Uzkhleboprodukt), are presented to the bank
Clause 3.4: NBU can unilaterally take payment from Uzkhleboproduktís hard currency account.
Clause 5.1: NBU can unilaterally take payment from Uzdonís or Uzkhleboproduktís hard currency accounts.
Clause 5.2: A guarantee is to be given by the Council of Ministers
Clause 7.1: NBUís obligations (i.e. to advance the money) only come into effect once the guarantee of the Council of Ministers has been given.
NBU had recourse when proper documents were presented by CS First Boston, but failed to freeze assets or investigate properly.
Uzkhleboprodukt, as subdebtor, had incentive to falsify documents to get the loan repaid by Romakís grain.
Council of Ministers, as guarantor, had incentive to pave the way for the repayment of Odilís loan with Romakís grain (i.e. acceptance of railway re-esters as proof of shipment).