E5-6872. Export Trade Certificate of Review

ACTION:

Notice of application.

SUMMARY:

Export Trading Company Affairs (“ETCA”), International Trade Administration, 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 Anspacher, Director, Export Trading Company Affairs, International Trade Administration, by telephone at [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. A 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 Act 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 copies, plus two 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, Department of Commerce, Room 7021H, Washington, DC 20230, or transmit by E-mail at [e-mail]. 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 05-00002.” A summary of the application follows.

Summary of the Application

Applicant: California Tomato Export Group (“CTEG”), 230 Thunderbird Drive, Aptos, California 95003; Contact: Rodger Wasson, Consultant; Telephone: [phone].

Application No.: 05-00002.

Date Deemed Submitted: November 21, 2005.

Members (in addition to applicant): CTEG is a newly formed export joint venture comprising the following members: Ingomar Packing Company, Los Banos, CA; Los Gatos Tomato Products, Huron, CA; and SK Foods, Lemoore, CA.

CTEG seeks a Certificate to engage in the Export Trade Activities and Methods of Operation described below in the following Export Trade and Export Markets:

Export Trade

Products

CTEG plans to export processed tomato products. Products that are included are tomato paste, diced tomatoes, canned foodservice tomatoes, canned retail tomatoes, and formulated glass retail products.

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 the Northern Mariana Islands, and the Trust Territory of the Pacific Islands).

Export Trade Activities and Methods of Operation

CTEG seeks certification for the following activities and exchanges of information:

CTEG and/or one or more of its Members may on behalf of and with the advice and assistance of its Members:

1. Export Promotion of Processed Tomatoes

a. Research, develop and conduct promotion and public relations activities to develop demand for the exported products of the member companies;

b. Seek export promotional funds jointly to combine efforts to promote the companies' exports aimed at expanding existing markets and creating new markets;

c. Develop and disseminate industry news reports of interest to foreign buyers. Provide information collectively to prospective export buyers regarding items such as crop inventory and structure of the U.S. processed tomato industry; and

d. Organize joint representation at world tomato conferences;

2. Investment

Invest jointly in export infrastructure, activities, and operations, such as:

a. Bill and collect from foreign buyers and provide collective accounting, tax, legal and consulting assistance and services;

b. Write contracts for export payment terms;

c. Organize and conduct joint representation at tomato industry conferences where foreign buyers are present;

d. Develop and maintain a website/newsletter and marketing brochures with product and crop information for the benefit of foreign customers;

e. Purchase/rent warehouse facilities to conduct export operations;

f. Combine purchases of inputs for export operations;

g. Negotiate and enter into agreements with providers of transportation services for the export of processed tomato products;

h. Consolidate CTEG shipments to export markets;

i. Administer phytosanitary protocols to qualify the processed tomato products for export markets;

3. Funding

Apply for and utilize export assistance and incentive programs, as well as arrange financing through bank holding companies, governmental programs, and other arrangements;

4. Export Market Development

a. Design and develop foreign marketing strategies for CTEG's export markets; and

b. Design, develop, and market generic corporate and/or CTEG labels for export;

5. Export Sales Prices

Establish export sale prices, minimum export sale prices, target export sales prices and/or minimum target export sale prices, and other terms of sale;

6. Joint Bidding

Engage in joint bidding or other joint selling arrangements for export processed exported tomatoes and allocate export sales resulting from such arrangements;

7. Quantities

Agree on quantities of processed tomatoes to be exported, provided each member shall be required to dedicate only such quantity or quantities as each such member shall independently determine;

8. Foreign Buyer Negotiations

Participate in negotiations and enter into agreements with foreign buyers (including governments and private persons) regarding:

a. The quantities, time periods, prices and terms and conditions in connection with actual or potential bona fide export opportunities; and

b. Non-tariff trade barriers in the export markets;

9. Refusals to Deal

Refuse to quote prices for export products, or to market or sell export products, to or for any customer in the export processed tomato market, or any countries or geographical areas in the export markets;

10. Market and Customer Allocation

Allocate geographic areas or countries in the export markets and/or customers in the export markets among members of the California Tomato Export Group;

11. Exclusive and Nonexclusive Export Intermediaries

Enter into exclusive and nonexclusive agreements appointing one or more export intermediaries for the sale of export products with price, quantity, territorial and/or customer restrictions. “Export Intermediary” means a person who acts as a distributor, sales representative, sales or marketing agent, broker, or who performs similar functions including providing or arranging for the provision of export trade facilitation services;

12. Meetings

Meet with members of the Certificate and manager of the Certificate present;

13. Non-Member Activities

a. Enter into agreements with non-members, whether or not exclusive, to provide export trade facilitation services;

b. Purchase tomatoes from non-members to fulfill specific export sales obligations, provided that CTEG 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 activities and operations; and

14. Government Liaison

Advise and cooperate with the United States and foreign governments in:

a. Establishing procedures regulating the export of processed tomato products, and

b. Fulfilling the phytosanitary and/or funding requirements imposed by foreign governments for export of the processed tomato products.

CTEG may exchange the following information with and among the Members as necessary to carry out export trade activities and methods of operation:

1. Information about export sales and marketing efforts; selling strategies, contract and spot pricing in the export markets;

2. Information regarding projected demand in the export markets;

3. Information about the customary terms of sales in export markets;

4. Information about export prices and availability of competitor's processed tomato products for sale in the export markets;

5. Specifications for processed tomato products by customers in the export markets;

6. Information about terms and conditions of contracts for sale in the export markets to be considered and/or bid on by CTEG and its members;

7. Information about the price, quality, source, and delivery dates of processed tomato products available for export by CTEG members;

8. Information about joint bidding and/or selling arrangements for export markets;

9. Information regarding terms, conditions, and specifications of particular export contracts for sale or to be considered and/or bid on by the CTEG;

10. Information about expenses specific to exporting to and within the export markets, sales and distribution networks established by CTEG or its members in export markets;

11. Information about export customer credit terms and credit history;

12. Information about United States and foreign legislation and regulations, including federal marketing order programs, affecting sales to the export markets;

13. Information about joint bidding or selling arrangements for the export markets and allocations of sales resulting from such arrangements among the members;

14. 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;

15. Information about CTEG's or its members' export operations, including without limitation, sales and distribution networks established by CTEG or its members in the export markets, and prior export sales by members (including export price information);

16. Information regarding the forecasted quantity of processed tomatoes secured through contracts by each member for upcoming seasons;

17. Information regarding the potential available supply of processed tomato products available for export and not committed to domestic markets in upcoming seasons; and

18. Information about global tomato crop supply, including planting intentions, growing conditions, weather, disease, transportation, consumer trends, health news, regulatory impacts and information that impacts on the availability, conditions and costs to foreign buyers.

Dated: December 1, 2005.

Jeffrey Anspacher,

Director, Export Trading Company Affairs.