Chinese Government provides RMB 46 million interest-free loan — via 1996 ETCA — for the Container Inspection Equipment Project

In 1996, the Chinese Government and the Government of Lebanon signed an Economic and Technical Cooperation Agreement (ETCA) in which the Chinese Government agreed to finance projects in Lebanon. Then, in 2005, the Chinese Government issued an interest-free loan to the Government of Lebanon for the Container Inspection Equipment Project. The loan had a face value of RMB 46 million; its maturity and grace period are unknown. The purpose of the project was to supply and install two non-intrusive (THSCAN) x-ray container/vehicle inspection scanners in the Port of Beirut. The scanners would enhance Lebanon's anti-smuggling and counter-terrorism efforts, while also allowing customs inspection to be more efficient and rigorous. Nuctech Company, Ltd. was the contractor responsible for the provision of the scanners. It signed an implementation contract with Lebanon’s Ministry of Finance on April 11, 2006 for the provision of the scanners and the training of Lebanese Customs officials in their use and maintenance. The contract also stipulated that the scanners would be delivered to Lebanon in 6 months. The outbreak of the 2006 Lebanon War (also known as the 2006 Israel–Hezbollah War, the July War, and the Second Lebanon War) in July and August 2006 delayed the arrival of the scanners for some time. A ceremony on October 18, 2006, was held to mark the arrival of the first scanner arrived in the Port of Beirut. Nuctech Company, Ltd. dispatched engineers to install the equipment. The second scanner was expected to arrive before the end of 2006. The second scanner was delivered in 2007, but its precise implementation end date is unknown. According to China's Ministry of Commerce, the scanners reduced customs clearance times and helped reduce smuggling and other customs-related crimes.

Additional details

1. The Chinese project title is 集装箱检测设 or 动式集装箱检查系统和车载式集装箱检查系统 or 购买清华同方威视组合移动式集装箱检查系统和车载式集装箱检查系统各一套. 2. According to the 2005 MOFCOM yearbook (Chinese title: 中国商务年鉴) and the Almanac of China’s Foreign Economic Relations & Trade (Chinese title: 中国对外经济贸易年 间), the proceeds of the 2005 interest-free loan in 2005 were earmarked for the provision of computers, electrical equipment, and a container detection system (Original Chinese text: 集装箱检测系统和电脑及电子设备). 3. AidData has treated the Chinese Ministry of Commerce (MOFCOM) as the specific Chinese Government institution responsible for the provision of this loan because ETCAs are a MOFCOM-specific financing mechanism. 4. Since borrowing terms for the interest-free loan are unavailable, AidData has set maturity to 20 years by default and grace period to 10 years by default per China's Foreign Assistance White Paper (http://www.cidca.gov.cn/2018-08/06/c_129925064_3.htm) which states that the maturity of interest-free loans is 20 years, with a drawdown period of 5 years, grace period of 5 years, and repayment over 10 years. AidData treats the drawdown period as providing 5 years of additional grace.

Number of official sources

8

Number of total sources

12