E6-3147. Export Trade Certificate of Review

ACTION:

Notice of Issuance of an Export Trade Certificate of Review, Application No. 05-00002.

SUMMARY:

On February 21, 2006, The U.S. Department of Commerce issued an Export Trade Certificate of Review to California Tomato Export Group (“CTEG”). This notice summarizes the conduct for which certification has been granted.

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 by E-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

Title III of the Export Trading Company Act of 1982 (15 U.S.C. sections 4001-21) authorizes the Secretary of Commerce to issue Export Trade Certificates of Review. The regulations implementing Title III are found at 15 CFR part 325 (2005).

Export Trading Company Affairs (“ETCA”) is issuing this notice pursuant to 15 CFR 325.6(b), which requires the U.S. Department of Commerce to publish a summary of the certification in the Federal Register. Under section 305(a) of the Act and 15 CFR 325.11(a), any person aggrieved by the Secretary's determination may, within 30 days of the date of this notice, bring an action in any appropriate district court of the United States to set aside the determination on the ground that the determination is erroneous.

Description of Certified Conduct

Export Trade

1. Products

Processed tomato products: Processed tomato products limited to tomato paste, diced tomatoes, canned food service tomatoes, canned retail tomatoes and formulated glass retail tomato products.

2. Export Trade Facilitation Services (As They Relate to the Export of Products)

All export-related services, including, but not limited to, international market research, marketing, advertising, sales promotion, brokering, handling, transportation, common marking and identification, communication and processing of foreign orders to and for Members, financing, export licensing and other trade documentation, warehousing, shipping, legal assistance, foreign exchange and taking title to goods.

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

1. With respect to Export Trade Activities, CTEG and/or one or more of its Members may on behalf of and with the advice and assistance of its Members:

a. Engage in export promotion of Products through:

i. Researching, developing and conducting promotion and public relations activities to develop demand for the exported Products of the Members;

ii. Seeking export promotional funds to jointly promote the Members' exports of Products in existing and new markets;

iii. Developing and disseminating industry news reports (based only on publicly available information) to foreign buyers and providing publicly available information collectively to prospective export buyers regarding items such as crop inventory and structure of the U.S. processed tomato industry; and

iv. Organizing and conducting joint representation to buyers for export sales at tomato industry conferences;

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

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

ii. Write contracts for export payments;

iii. Develop and maintain a Web site/newsletter and marketing brochures with publicly available product and crop information for the benefit of foreign customers;

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

v. Engage in minor product or packaging modification activities necessary to insure compatibility of Products with the requirements of foreign markets and/or design, develop, and market generic corporate labels and packaging materials for export Products;

vi. Negotiate and enter into agreements with providers of transportation services for the export of Products;

vii. Consolidate CTEG shipments to Export Markets; and

viii. Administer phytosanitary protocols to qualify the Products for Export Markets;

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

d. Design and develop foreign marketing strategies for CTEG's Export Markets and design, develop and market generic corporate and/or CTEG labels for export;

e. Establish export sales prices, minimum export sales prices, target export sales prices and/or minimum target export sales prices, and other terms of export sale in connection with actual or potential bona fide export opportunities;

f. Engage in joint bidding or other joint selling arrangements for exported Products and allocate export sales resulting from such arrangements;

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

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

ii. Non-tariff trade barriers in the Export Markets;

h. Refuse to quote prices for export Products, or to market or sell export Products, to or for any customer in the export Product market, or any countries or geographical areas in the Export Markets;

i. Allocate geographic areas or countries in the Export Markets and/or customers in the Export Markets among Members of the CTEG;

j. 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;

k. Conduct meetings with Members of the Certificate and/or CTEG's manager and/or consultant present to engage in export trade activities and/or methods of operation herein described in paragraph 1, or exchange information described in paragraph 2 below;

l. Enter into agreements with non-members, whether or not exclusive, to provide Export Trade Facilitation Services. Purchase Products 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

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

i. Establishing procedures regulating the export of Products, and

ii. Fulfilling the phytosanitary and/or funding requirements imposed by foreign governments for export of Products.

2. CTEG may exchange the following information with and among its Members:

a. Information about export sales and marketing efforts, selling strategies, and contract and spot pricing in the Export Markets;

b. Information regarding Product demand in the Export Markets;

c. Information about the customary terms of sales in Export Markets;

d. Information about export prices and availability of competitor's Products for sale in the Export Markets;

e. Specifications for Products by customers in the Export Markets;

f. Information about terms, conditions, and specifications of contracts relating to actual or potential bona fide export opportunities in the Export Markets to be considered and/or bid on by CTEG and its Members;

g. Information about the price, quality, source, and delivery dates of Products available for export by CTEG Members;

h. Information about joint bidding and/or selling arrangements for Export Markets;

i. Information about expenses specific to exporting to and within the Export Markets, sales, and distribution networks established by CTEG and/or its Members in the Export Markets;

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

k. Information about United States and foreign legislation and regulations, including federal marketing order programs, affecting sales to the Export Markets;

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

m. Information about the 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;

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

o. Publicly available information regarding the industry-wide forecasted quantity of Products secured through contracts for upcoming seasons; and

p. Relevant information about non-domestic 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.

Definition

“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.

Members (Within the Meaning of Section 325.2(1) of the Regulations)

The Members are Ingomar Packing Company, Los Banos, California; Los Gatos Tomato Products, Huron, California; and SK Foods, Lemoore, California.

Protection Provided by Certificate

This Certificate protects CTEG, its Members, and directors, officers, and employees acting on behalf of CTEG and its Members from private treble damage actions and government criminal and civil suits under U.S. federal and state antitrust laws for the export conduct specified in the Certificate and carried out during its effective period in compliance with its terms and conditions.

Effective Period of Certificate

This Certificate continues in effect from the effective date indicated below until it is relinquished, modified, or revoked as provided in the Act and the Regulations.

Other Conduct

Nothing in this Certificate prohibits CTEG and Members from engaging in conduct not specified in this Certificate, but such conduct is subject to the normal application of U.S. antitrust laws.

Disclaimer

The issuance of this Certificate of Review to CTEG by the Secretary of Commerce with the concurrence of the Attorney General under the provisions of the Act does not constitute, explicitly or implicitly, an endorsement or opinion by the Secretary of Commerce or by the Attorney General concerning either (a) the viability or quality of the business plans of CTEG or Members or (b) the legality of such business plans of CTEG or its Members under the laws of the United States (other than as provided in the Act) or under the laws of any foreign country.

A copy of the certificate will be kept in the International Trade Administration's Freedom of Information Records Inspection Facility, Room 4100, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

Dated: March 1, 2006.

Jeffrey Anspacher,

Director, Export Trading Company Affairs.