03-29779. Export Trade Certificate of Review

ACTION:

Notice of application.

SUMMARY:

The Office of Export Trading Company Affairs (“OETCA”), International Trade Administration, U.S. Department of Commerce, has received an application for an Export Trade Certificate of Review. This notice summarizes the conduct for which certification is sought and requests comments relevant to whether the Certificate should be issued.

FOR FURTHER INFORMATION CONTACT:

Jeffrey C. Anspacher, Director, Office of Export Trading Company Affairs, International Trade Administration, [phone] (this is not a toll-free number) or e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

Title III of the Export Trading Company Act of 1982 (15 U.S.C. 4001-21) authorizes the Secretary of Commerce to issue Export Trade Certificates of Review. An Export Trade Certificate of Review protects the holder and the members identified in the Certificate from state and federal government antitrust actions and from private treble damage antitrust actions for the export conduct specified in the Certificate and carried out in compliance with its terms and conditions. Section 302(b)(1) of the Export Trading Company Act of 1982 and 15 CFR 325.6(a) require the Secretary to publish a notice in the Federal Register identifying the applicant and summarizing its proposed export conduct.

Request for Public Comments

Interested parties may submit written comments relevant to the determination whether a Certificate should be issued. If the comments include any privileged or confidential business information, it must be clearly marked and a nonconfidential version of the comments (identified as such) should be included. Any comments not marked privileged or confidential business information will be deemed to be nonconfidential. An original and five (5) copies, plus two (2) copies of the nonconfidential version, should be submitted no later than 20 days after the date of this notice to: Office of Export Trading Company Affairs, International Trade Administration, U.S. Department of Commerce, Room 1104H, Washington, DC 20230. Information submitted by any person is exempt from disclosure under the Freedom of Information Act (5 U.S.C. 552). However, nonconfidential versions of the comments will be made available to the applicant if necessary for determining whether or not to issue the Certificate. Comments should refer to this application as “Export Trade Certificate of Review, application number 03-00008.” A summary of the application follows.

Summary of Application

Applicant: California Pistachio Export Council, LLC (“CPEC”), 5497 E. Olive Avenue, Fresno, California 93727.

Contact: Carter Brown, Esquire, Consultant to the applicant, Telephone: [phone].

Application No.: 03-00008.

Date Deemed Submitted: November 19, 2003. Expedited Review of the application has been requested.

Members (in addition to applicant): A&P Growers Cooperative, Inc., Tulare, CA; Gold Coast Pistachios, Inc., Fresno, CA; Keenan Farms, Inc., Avenal, CA; Monarch Nut Company, Delano, CA; Nichols Pistachio, Hanford, CA; Primex Farms, LLC, Wasco, CA; and Setton Pistachio of Terra Bella, Inc., Terra Bella, CA.

CPEC seeks a Certificate to cover the following specific Export Trade, Export Markets, and Export Trade Activities and Methods of Operation:

Export Trade

1. Products: California in-shell and shelled pistachios, raw and roasted. Included within this definition are organically produced pistachios and flavored pistachios.

2. Export Trade Facilitation Services (as they Relate to the Export of Products): All export trade-related facilitation services, including but not limited to: development of trade strategy; sales, marketing, and distribution; foreign market development; promotion; and all aspects of foreign sales transactions, including export brokerage, freight forwarding, transportation, insurance, billing, collection, trade documentation, and foreign exchange; customs, duties, and taxes; and inspection and quality control.

Export Markets

The Export Markets include all parts of the world except the United States (the fifty states of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, Guam, the Commonwealth of Northern Mariana Islands, and the Trust Territory of the Pacific Islands).

Export Trade Activities and Methods of Operation

1. CPEC, on its own behalf or on behalf of all or less than all of its Members, through CPEC or through Export Intermediaries (to the extent provided in section 1.g) may:

a. Export Sales Price. Establish sales price, minimum sales price, target sales price and/or minimum target sales price, and other terms of sale;

b. Marketing and Distribution. Conduct marketing and distribution of Products;

c. Promotion. Conduct joint promotion of Products;

d. Quantities. Agree on quantities of Products to be sold, provided each Member shall be required to dedicate only such quantity or quantities as each such Member shall independently determine;

e. Market and Customer Allocation. Allocate geographic areas or countries in the Export Markets and/or customers in the Export Markets among Members;

f. Refusals to Deal. Refuse to quote prices for Products, or to market or sell Products, to or for any customers in the Export Markets, or any countries or geographical areas in the Export Markets;

g. Exclusive and Nonexclusive Export Intermediaries. Enter into exclusive and nonexclusive agreements appointing one or more Export Intermediaries (as defined under “Definitions” paragraph 1) for the sale of Products with price, quantity, territorial and/or customer restrictions as provided in sections 1.a through 1.f, inclusive, above;

h. Non-Member Activities. Purchase Products from non-Members to fulfill specific sales obligations, provided that CPEC and/or its Members shall make such purchases only on a transaction-by-transaction basis and when the Members are unable to supply, in a timely manner, the requisite Products at a price competitive under the circumstances. In no event shall a non-Member be included in any deliberations concerning any Export Trade Activities; and

i. Transportation Activities. Negotiate favorable transportation rates (volume discounts) and consolidate shipments.

2. CPEC and its Members may exchange and discuss the following information:

a. Information about sales and marketing efforts for the Export Markets, activities and opportunities for sales of Products in the Export Markets, selling strategies for the Export Markets, sales for the Export Markets, contract and spot pricing in the Export Markets, projected demands in the Export Markets for Products, customary terms of sale in the Export Markets, prices and availability of Products from competitors for sale in the Export Markets, and specifications for Products by customers in the Export Markets; b. Information about the price, quality, quantity, source, and delivery dates of Products available from the Members to export;

c. Information about terms and conditions of contracts for sale in the Export Markets to be considered and/or bid on by CPEC and its Members;

d. Information about joint bidding or selling arrangements for the Export Markets and allocations of sales resulting from such arrangements among the Members;

e. Information about expenses specific to exporting to and within the Export Markets, including without limitation, transportation, trans-or intermodal shipments, insurance, inland freight to port, port storage, commissions, export sales, documentation, financing, customs, duties, and taxes;

f. Information about U.S. and foreign legislation and regulations, including federal marketing order programs, affecting sales for the Export Markets;

g. Information about CPEC or its Members' export operations, including without limitation, sales and distribution networks established by CPEC or its Members in the Export Markets, and prior export sales by Members (including export price information); and

h. Information about export customer credit terms and credit history.

3. CPEC and its Members may prescribe the following conditions for admission of Members to CPEC and termination of membership in CPEC:

a. Membership shall be limited to Handlers as defined under “Definitions” paragraph 3.

b. Membership shall terminate on the occurrence of one or more of the following events:

i. Withdrawal or resignation of a Member;

ii. Expulsion approved by a majority of all Members;

iii. Death or permanent disability of a Member who is an individual, or the dissolution of a Member other than an individual; and

iv. The bankruptcy of a Member as provided in CPEC's Operating Agreement.

c. Members may be added to the Certificate, if the action is

i. Approved by a majority of the members, and

ii. Approved by the Secretary of Commerce, with the concurrence of the Attorney General, pursuant to an appropriately filed application to amend the Certificate; and

iii. Any new member must pay a pro-rata share of the start-up costs for the CPEC. This payment will be equally divided amongst the members who paid the initial start-up costs.

4. CPEC and its Members may meet to engage in the activities described in paragraphs 1 through 3 above.

Definitions

1. “Export Intermediary” means a person (including a Member) who acts as a distributor, sales representative, sales or marketing agent, or broker, or who performs similar functions, including providing, or arranging for the provision of Export Trade Facilitation Services.

2. “Handle” means engage in: (a) receiving pistachios; (b) hulling and drying pistachios; and/or (c) further preparing pistachios by sorting, sizing, shelling, roasting, cleaning, salting, and/or packaging for marketing in or transporting to any and all markets in the course of interstate or foreign commerce; provided, however, that transportation within the Production Area between Handlers and from the orchard to the processing facility is not handling.

3. “Handler” means a person who handles Pistachios grown in California.

4. “Member” means a person who has membership in the CPEC Export Trade Certificate of Review, and who has been certified as a “Member” within the meaning of § 325.2(1) of the Regulations (15 CFR 325.2(1) (2003).

5. “Product” means in-shell or shelled pistachios, roasted or raw produced in the Production Area.

6. “Production Area” means the State of California.

Dated: November 24, 2003.

Jeffrey C. Anspacher,

Director, Office of Export Trading Company Affairs.