[Federal Register Volume 62, Number 17 (Monday, January 27, 1997)]
[Proposed Rules]
[Pages 3810-3823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1736]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 62, No. 17 / Monday, January 27, 1997 /
Proposed Rules
[[Page 3810]]
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 17
Regulations Governing the Financing of Commercial Sales of
Agricultural Commodities
AGENCY: Commodity Credit Corporation, Agriculture.
ACTION: Proposed rule.
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SUMMARY: The Commodity Credit Corporation (CCC) proposes to revise the
regulations applicable to the financing of the sale and exportation of
agricultural commodities pursuant to title I of the Agricultural Trade
Development and Assistance Act of 1954, as amended (Pub. L. 480).
The purpose of these changes is to simplify the purchasing
procedures and shorten the regulations, keep the costs of the Pub. L.
480, title I program as low as possible, reflect the provisions of the
Federal Agricultural Improvement and Reform Act of 1996 (``FAIR Act of
1996''), and reduce the public reporting burden.
DATES: Written comments in duplicate should be submitted on or before
March 28, 1997.
ADDRESSES: Comments should be sent to Christopher E. Goldthwait,
General Sales Manager, Foreign Agricultural Service, U.S. Department of
Agriculture, Room 5071 South Building, Stop 1001, 1400 Independence
Ave., S.W., Washington, D.C. 20250-1001.
FOR FURTHER INFORMATION CONTACT: Connie B. Delaplane, Director, P.L.
480 Operations Division, Export Credits, Foreign Agricultural Service,
Room 4549 South Building, Stop 1033, U.S. Department of Agriculture,
1400 Independence Ave., S.W., Washington, D.C. 20250-1033. Telephone:
(202) 720-3664.
SUPPLEMENTARY INFORMATION: This proposed rule is issued in conformance
with Executive Order 12866. It has been determined significant for the
purposes of E.O. 12866 and, therefore, has been reviewed by the Office
of Management and Budget (OMB).
Regulatory Flexibility Act
This proposed rule has been reviewed with regard to the
requirements of the Regulatory Flexibility Act. The Vice President,
CCC, who is the General Sales Manager, has certified that this rule
will not have a significant economic impact on a substantial number of
small entities. The proposed rule would eliminate several existing
program requirements which should make it easier for firms to
participate, including small businesses, and may result in some
suppliers receiving payment more quickly. A copy of this proposed rule
has been submitted to the General Counsel, Small Business
Administration.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372 which requires intergovernmental consultation with state and
local officials. See the Notice related to 7 CFR Part 3015, Subpart V,
published at 48 FR 29115 (June 24, 1983).
Paperwork Reduction Act
This proposed rule revises the Pub. L. 480, title I financing
regulations. CCC has submitted the information collection requirements
in this proposed rule to the Office of Management and Budget (OMB) for
approval under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
Title: Regulations--Financing Commercial Sales of Agricultural
Commodities Under Title I, Pub. L. 480.
OMB Control Number: 0551-0005.
Expiration Date of Approval: Three years from OMB approval.
Type of Request: Revision.
Abstract: The purpose of the changes in this proposed rule is to
simplify the purchasing procedures and shorten the regulations, keep
the costs of the Pub. L. 480, title I program as low as possible,
reflect the provisions of the ``FAIR Act of 1996'', and reduce the
public reporting burden. The proposed rule would eliminate the
requirement that suppliers report to USDA payments to representatives
of importing countries and the requirement that prospective commodity
suppliers submit information to the P.L. 480 Operations Division in
order to participate. Prospective suppliers that have been determined
to be eligible for participation in the GSM-102 or GSM-103 export
credit guarantee programs could participate in title I sales.
Prospective suppliers that are not yet eligible for GSM programs would
have to submit information to GSM; this information is not as extensive
as that presently required for becoming an eligible supplier under
title I. CCC would require shipping agents to provide complete
information on the firm and its activities only once per fiscal year
instead of doing so each time they are nominated by a title I importer.
The recordkeeping requirement would be retained. Successful
commodity suppliers would still be required to report to USDA the
details of sales made under the program for price review and to submit
to USDA, for approval, information on any amendments to the sales.
Estimate of Burden: CCC estimates the public reporting burden to be
1 hour for new suppliers that need to develop the information necessary
for eligibility under GSM programs; 1\1/4\ hours for shipping agents to
prepare a complete package of information required by the regulations
each fiscal year and \1/4\ hour to prepare each subsequent submission
updating information as changes occur; and \1/4\ hour for commodity
suppliers to prepare telephonic notices of sale and requests for
approval of sale amendments.
Respondents: Commodity suppliers that are interested in becoming
eligible to participate in title I sales; shipping agents that have
been selected by importers to help them purchase Title I commodities
and arrange ocean transportation; and commodity suppliers that have
been awarded sales under the program.
Estimated Number of Respondents: Eight new commodity suppliers; 10
shipping agents; and 15 successful commodity suppliers.
Estimated Number of Responses per Respondent: One for each new
commodity supplier; between 1 and 4 for each shipping agent; and,
between 1 and 25 for each successful commodity supplier.
Estimated Total Annual Burden on Respondents: Including
recordkeeping requirements, 455 burden hours.
CCC requests comments regarding: (a) Whether the collection of
information is necessary for the proper performance of
[[Page 3811]]
the functions of the agency, including whether the information will
have practical utility; (b) the accuracy of the agency's estimate of
burden including the validity of the methodology and assumptions used;
(c) ways to enhance the quality, utility, and clarity of the
information to be collected; (d) ways to minimize the burden of the
collection of information on those who are to respond, including
through the use of appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology.
USDA will accept comments on this information collection at: Desk
Officer for Agriculture, Office of Information and Regulatory Affairs,
Office of Management and Budget, Washington, D.C. 20503, and to Connie
B. Delaplane, Director, Pub. L. 480 Operations Division, Export
Credits, Foreign Agricultural Service, Room 4549 South Building, Stop
1033, U.S. Department of Agriculture, 1400 Independence Avenue, SW,
Washington, DC 20250-1033. USDA will incorporate all comments as part
of the public record.
The Paperwork Reduction Act requires OMB to make a decision
concerning the collection(s) of information contained in this proposed
rule between 30 and 60 days after publication of this document in the
Federal Register. Therefore, a comment to OMB is best assured of having
its full effect if OMB receives it within 30 days of publication. This
does not affect the deadline for the public to comment to USDA on the
proposed rule. CCC submitted the information collection requirements to
OMB totaling 455 burden hours.
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. The proposed rule would have preemptive effect
with respect to any state or local laws, regulations, or policies which
conflict with such provisions or which otherwise impede their full
implementation. The final rule would not have retroactive effect. The
rule does not require that administrative remedies be exhausted before
suit may be filed.
Background
Title I of the Agricultural Trade Development and Assistance Act of
1954, as amended (Pub. L. 480) authorizes CCC to finance the sale and
exportation of agricultural commodities on concessional credit terms. 7
U.S.C. 1701 et seq. On September 13, 1995, the Foreign Agricultural
Service (FAS) published an Advance Notice of Proposed Rulemaking (60 FR
47495) requesting comments on how to streamline and simplify the
purchasing and shipment procedures under the Public Law 480, title I
program. CCC considered these comments in drafting the proposed rule,
and welcomes further input regarding the issues raised in the ANPRM at
this stage of rulemaking procedure. The key comments received are
discussed below, except those that were outside the scope of the ANPRM
and those which have already been implemented by final rules published
on December 7, 1995 (60 FR 62072) and April 23, 1996 (61 FR 17823). A
copy of the ``Benefit-Cost Assessment'' prepared in connection with
this proposed rule can be obtained from Connie B. Delaplane. See ``For
Further Information Contact.''
Discussion of Comments
Purchase Authorization
After CCC and the participant have signed a title I agreement, CCC
issues a purchase authorization (``PA'') which establishes general
specifications for the commodity to be purchased, sets the contracting
and delivery periods, and establishes conditions for CCC's financing of
the commodity and any authorized ocean transportation costs. The
participant issues, upon CCC approval, public Invitations for Bids
(``IFB's'') for commodities and ocean transportation. These IFB's
contain the importer's requirements including precise commodity
specifications, delivery dates, and payment documents. Subsequently the
importer and suppliers of commodities and ocean transportation enter
into contracts based upon offers received in response to these IFB's.
The ANPRM asked for comments on whether the PA could be eliminated,
with the relevant portions being incorporated into the financing
regulations or the IFB, as appropriate. Most comments stated there was
no urgent need for the PA, agreeing that the PA terms could be
incorporated in the title I agreement, the buyer's IFB or the
regulations. One comment supported retaining the PA, suggesting that
the PA terms were not appropriate for either the regulations or the
IFB.
The proposed rule would retain the PA. By doing so CCC could delete
from the regulations Appendix A (Contracting Requirements) and Appendix
B (Documentary Requirements). CCC's up-to-date contracting and
documentary requirements for a commodity would appear in the PA. (The
regulations specify that the PA may contain requirements in addition
to, or in lieu of, the regulations.) Through the PA we could quickly
update CCC's program requirements, if needed, and make that information
widely available. If the PA did not exist, it would be necessary to
make such changes by amending the regulations or the title I agreement,
which could delay purchasing and shipment of the commodities. If the
buyer were required to include such information in the IFB's, those
documents would be longer and more complex.
Some respondents felt that the PA issuance procedure could cause
delays in implementing the program. We would like to receive specific
examples of such delays to help us improve the process. A delay in PA
issuance may simply reflect the fact that the participant is not ready
to purchase.
Letters of Credit
After the participant enters into commodity and ocean freight
contracts, the existing regulations provide that the importer must
cause a separate letter of credit to be opened for the commodity
supplier, and for the supplier of ocean transportation when CCC is
financing any part of the ocean transportation. CCC also issues a
Letter of Commitment to the U.S. bank that has issued, confirmed or
advised the letter of credit. The supplier receives payment from the
bank upon presentation of required documentation. CCC will reimburse
the bank, pursuant to this Letter of Commitment, for payments made
under the letter of credit.
The ANPRM asked for comments on an alternative procedure under
which CCC would simply pay the suppliers directly for the commodity and
for ocean freight costs which are financed by CCC. The participant
would not open a letter of credit for these amounts, and there would be
no need for CCC to issue any Letters of Commitment.
Most comments supported direct payment by CCC, noting that the bank
charges associated with letters of credit ranged from 1-2% of the value
of the letter of credit. Since the buyers were required to bear these
costs, the benefit of the title I program to the recipient was
lessened. Under the proposed rule, title I recipients would save about
$2.5-$5 million each year in banking costs, based on an estimated $250
million per year which would be paid directly to suppliers by CCC
instead of through letters of credit. U.S. banks would bear some costs
from this change, based on the loss of these fees, and reduced
opportunities to develop business relationships with food aid
recipients.
[[Page 3812]]
The change is proposed based on the assessment that the cost to U.S.
banks would be outweighed by the significant benefits to food aid
recipients, given the relatively small size of these letter of credit
fees relative to total bank income, the static or declining food aid
budget, and the length of time needed for recipients to develop into
commercial opportunities for U.S. banks. There would still be
opportunities for banks to issue letters of credit for a portion of the
ocean freight costs, as discussed in detail below. Based on the fiscal
year 1996 title I program, such letters of credit might be opened for
about $16 million, generating banking fees of $160,000-$320,000.
Commodity suppliers have generally been unwilling to load vessels
without a letter of credit to secure payment. Such delayed loading can
be costly to the recipient, which may owe ``carrying charges'' to the
commodity supplier and ``detention'' to the supplier of ocean
transportation. These costs are not financed by CCC and they can be
significant; for example, one day of ``detention'' for a U.S.-flag
vessel can cost the recipient as much as $25,000.
Finally, some title I recipient countries do not have well
established banking systems through which to open letters of credit.
As a result, the proposed rule would adopt the procedure for direct
payment by CCC for all commodity and freight costs which are financed
by CCC (see Sec. 17.9.) In connection with this change, the proposed
rule would also prohibit certain payments which are permitted under
existing regulations, but which cannot be financed by CCC. This
includes consular fees for legalization of documents, and total ocean
transportation brokerage commissions in excess of 2\1/2\ percent of the
freight. Under existing regulations, the supplier is required to show
on the invoice any amounts which are not eligible for financing by CCC.
The bank may then pay the supplier the total invoice amount under the
importer's letter of credit, and CCC would deduct the ineligible amount
from its reimbursement to the bank under the Letter of Commitment. With
the proposed direct payment procedure, there is no simple mechanism to
allow a supplier to be paid for such costs while protecting CCC from
ultimately bearing the costs. It would not be equitable to prohibit a
supplier from recouping these costs as part of the supplier's sales
price and such a rule may discourage firms from showing on the invoice
any amounts ineligible for CCC financing. Consequently, the proposed
rule would prohibit payment of these costs; however, suggestions are
requested regarding other ways to address the issue of costs which are
ineligible for CCC financing.
Several comments expressed concern about how quickly CCC would pay
suppliers, saying that direct payment would not be beneficial if it
took longer than payment by a bank under a letter of credit. CCC plans
to pay suppliers as promptly as a bank does, upon receipt of the
documentation required by the importer and by CCC.
This proposal is not expected to significantly increase USDA's
workload, although there will be a slight increase in burden for the
Farm Service Agency (``FSA''), which would be responsible for making
the payments to suppliers.
One comment raised the issue of potential financial exposure on the
part of CCC for financing a product that did not meet specifications,
for example. CCC would examine each document with reasonable care to
ascertain that it appears on its face to be in accord with documentary
requirements specified in the regulations, the PA, and the buyer's own
IFB or contract. Agreements between CCC and the participants would
provide that CCC would be liable only for breaching this standard of
review.
Comments indicated some confusion regarding payment of ocean
transportation costs. CCC would not require the participant to open a
letter of credit for shipments for which the participant paid the
entire freight costs, or in the rare instances when CCC financed 100%
of the freight costs. However, when CCC financed a portion of the
freight costs on a shipment and the participant paid the balance, the
participant would be required to open a letter of credit for its share
of the freight costs. For example, when commodities are shipped on a
U.S.-flag vessel and CCC finances only the ocean freight differential,
the supplier would collect the ocean freight differential from CCC and
the balance from a U.S. bank under the participant's letter of credit.
The regulations would require the participant to open this partial
letter of credit in order to provide the supplier of ocean
transportation a high level of confidence that the participant's
portion of the freight would be paid in accordance with the contract.
This should keep freight costs down and encourage competition.
CCC would not pay any commodity or freight costs which were not to
be financed by CCC, which is consistent with the current operation of
the program.
Cost and Freight
The ANPRM asked for comments on whether CCC should finance
commodity contracts on a cost and freight (C&F) basis, or a cost,
insurance and freight (CIF) basis, instead of requiring separate
contracts for the commodity and the ocean transportation. Under such
contracts the commodity supplier would be responsible for securing
ocean transportation.
Respondents were concerned that such contracts would keep smaller
commodity suppliers, which do not own or control vessels, from offering
competitively. They also noted that it would be more difficult to
enforce cargo preference requirements for use of U.S.-flag vessels with
C&F or CIF sales. Several comments stated that contracting under these
terms would blur the distinction between the commodity costs and the
freight costs, complicating both commodity price review and the
determination of ``fair and reasonable'' U.S.-flag freight rates by the
Maritime Administration, Department of Transportation. The proposed
rule retains the option for such contracts; however, permitting such
contracts would be a matter of agency policy, as at present.
Other Comments
The proposed rule contains several provisions based on other
comments submitted in response to the ANPRM. For example, shipping
agents (firms helping the buyers arrange the purchase and shipment of
Title I commodities) would be required to provide complete information
on the firm and its activities only once per fiscal year. At present,
they must submit the information each time a firm is nominated by a
recipient. The firm would certify, in conjunction with any subsequent
nominations as shipping agent during the fiscal year, that the
information initially submitted was still current, or would specify any
changes. This proposal would reduce the reporting burden on shipping
agents and also save a small amount of FAS staff time.
Another comment recommended that the Form FAS-359 (``Declaration of
Sale'') and the Form CCC-105 (``Request for Vessel Approval'') be
eliminated. We believe that it is necessary to retain a written price
approval document, a purpose served by the existing ``Declaration of
Sale'' form. This key document insures that all parties--the commodity
supplier, FAS, and the entity making payment--clearly understand the
terms of the sale as approved for financing by CCC. The document
includes the unit price,
[[Page 3813]]
delivery period, and commodity specifications.
The Form CCC-105, submitted to FAS by the charterer, is the formal
written notification from the importer regarding the ocean freight
contract and contains the information on which the written ``Advice of
Vessel Approval'' is based (Form CCC-106). The latter form is a
required payment document, which shows the amount of freight to be
financed by CCC, along with the main contract terms. If the Form CCC-
105 were eliminated, the CCC-106 would be more likely to contain errors
and thus delay payment to the supplier.
Other Key Changes
The proposed rule would contain a definition of ``private entity,''
and would amend the definition of ``participant'' to cover both private
entities and foreign countries. This reflects the FAIR Act of 1996
which permitted title I agreements to be signed with private entities.
(References to ``private trade entities,'' no longer included under the
legislation, have been deleted.) The proposed rule would require that,
in order to participate, a private entity would need to have a legal
presence in the United States.
The proposed rule would eliminate the requirement in existing
Sec. 17.7 that prospective commodity suppliers must submit information
to the P.L. 480 Operations Division, FAS, including a current financial
statement, to be determined eligible to participate. Any supplier
eligible under the GSM-102 or GSM-103 programs could participate.
Financial information on the firm and experience as an exporter are not
required for eligibility under the GSM-102 and GSM-103 programs, which
are fully commercial. Comments are requested as to whether the bid and
performance bond requirements in the importer's IFB would be sufficient
to insure performance by a supplier.
Approximately ten firms per year wish to become eligible commodity
suppliers under title I. Two or three of those firms are already
eligible under the GSM programs, and would have no additional reporting
burden to be eligible under title I. The remaining seven or eight firms
would require only about an hour to develop the information needed for
eligibility under the GSM programs instead of the three hours currently
estimated for title I. FAS would also save a small amount of staff time
by deleting this separate eligibility requirement for title I
suppliers.
The proposed rule would also require that cotton suppliers report
sales to FAS, instead of to the Kansas City Commodity Office, Farm
Service Agency. FAS would become responsible for price review and for
vessel approval for cotton shipments, as it is now for all other
commodities purchased under title I.
The proposed rule would eliminate the requirement in existing
Sec. 17.12 that suppliers report to USDA any payments made to
representatives of the importer or importing country. The underlying
legislation was repealed in December 1995 by the Federal Reports
Elimination and Sunset Act of 1995. CCC will not finance such payments,
however, except for ocean transportation brokerage commissions which do
not exceed 2-\1/2\% of the freight.
The ocean transportation provisions in Sec. 17.8(b)(2) of the
proposed rule would not contain the prohibition in existing
Sec. 17.14(b)(2) against ``clarification or submission of additional
information'' under competitive freight IFB's. This is not intended to
reflect a substantive policy change. Only freight offers which were
responsive to the terms of the IFB as of the date and time for receipt
of offers could be considered, as at present. No information or
clarification submitted after that date and time could be used to make
the offer responsive. The prohibition against negotiation also remains
in the regulations. This change would simply acknowledge that it is
occasionally necessary to seek factual information after an offer has
been submitted, such as the maximum tonnage which can be loaded at a
certain port, given existing draft conditions and stowage factors for
the commodity in question.
The proposed rule does not contain the requirement in existing
Sec. 17.18(c)(7) that a ``transshipment certification'' be placed on
the commodity invoice in certain circumstances. The Maritime
Administration of the U.S. Department of Transportation published a
final rule on May 17, 1996 (61 FR 24895) which amended the definition
of ``available'' commercial U.S.-flag service for shipments during the
1996-2000 Great Lakes shipping seasons. This change made the
transshipment certification unnecessary. (Purchase authorizations for
affected commodities already exempt exporters from this requirement.)
The proposed rule would not provide for the obsolete ``letter of
conditional reimbursement'' procedure (existing Sec. 17.4(h)), nor for
the ``reimbursement method of financing,'' (existing Sec. 17.16) which
would no longer be necessary with direct payment to suppliers by CCC.
List of Subjects in 7 CFR Part 17
Agricultural commodities, Exports, Finance, Maritime carriers.
Accordingly, it is proposed to revise Part 17 of 7 CFR as follows:
PART 17--SALES OF AGRICULTURAL COMMODITIES MADE AVAILABLE UNDER
TITLE I OF THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF
1954, AS AMENDED
Subpart A--Regulations Governing the Financing of Commercial Sales
of Agricultural Commodities
Sec.
17.1 General.
17.2 Definition of terms.
17.3 Purchase authorizations.
17.4 Agents of the participant or importer.
17.5 Contracts between commodity suppliers and importers.
17.6 Discounts, fees, commissions and payments.
17.7 Notice of sale procedures.
17.8 Ocean transportation.
17.9 CCC payment to suppliers.
17.10 Refunds and insurance.
17.11 Recordkeeping and access to records.
Authority: 7 U.S.C. 1701-1704, 1731-1736b, 1736f, 5676; E.O.
12220, 45 FR 44245, 3 CFR, 1980 Comp., p. 263.
Subpart A--Regulations Governing the Financing of Commercial Sales
of Agricultural Commodities
Sec. 17.1 General.
(a) What this subpart covers. This subpart contains the regulations
governing the financing of the sale and exportation of agricultural
commodities by the Commodity Credit Corporation (CCC), through private
trade channels to the maximum extent practicable, under the authority
of Title I of the Agricultural Trade Development and Assistance Act of
1954, as amended (hereinafter called ``the Act'').
(b) Agricultural commodities agreements. (1) Under the Act, the
Government of the United States enters into Agricultural Commodities
Agreements with governments of foreign countries or with private
entities. These agreements cover financing of the sale and exportation
of agricultural commodities, including certain ocean transportation
costs.
(2) Agricultural Commodities Agreements may provide that a
participant will repay CCC for the financing extended by CCC either in
dollars or in local currencies.
(c) Purchase authorizations. This subpart covers, among other
things, the issuance by the General Sales Manager of purchase
authorizations which authorize the participant to
[[Page 3814]]
(1) Purchase agricultural commodities and
(2) Procure ocean transportation therefor.
(d) Financing. For amounts to be financed by CCC, CCC will pay the
supplier of commodity or of ocean transportation upon receipt of the
documents specified in the subpart, the purchase authorization and the
IFB. The cost of ocean freight or ocean freight differential will be
financed by CCC only when specifically provided for in the purchase
authorization.
(e) Where information is available. General information about
operations under this subpart is available from the Director, Public
Law 480 Operations Division, Foreign Agricultural Service, U.S.
Department of Agriculture, Washington, D.C. 20250-1033. Information
about financing operations under this subpart, including forms
prescribed for use thereunder, is available from the Controller,
Commodity Credit Corporation, U.S. Department of Agriculture, P.O. Box
2415, Washington, D.C. 20013-2415.
Sec. 17.2 Definition of terms.
Terms used in the regulations in this subpart are defined or
identified as follows, subject to amplification in subsequent sections:
Affiliate and associated company--any legal entity which owns or
controls, or is owned or controlled by, another legal entity. For a
corporation, ownership of the voting stock is the controlling
criterion. A legal entity is considered to own or control a second
legal entity if--
(1) The legal entity owns an interest of 50 percent or more in the
second legal entity, or
(2) The legal entity and one or more other legal entities, in which
it owns an interest of 50 percent or more, together own an interest of
50 percent or more in the second legal entity, or
(3) The legal entity owns an interest of 50 percent or more in
another legal entity which in turn owns an interest of 50 percent or
more in the second legal entity.
CCC--the Commodity Credit Corporation, U.S. Department of
Agriculture.
Commodity--an agricultural commodity produced in the United States,
or product thereof produced in the United States.
Controller--the Controller, Commodity Credit Corporation, or the
Controller's designee.
Copy--a photocopy or other type of copy of an original document
showing all data shown on the original, including signature or the name
of the person signing the original or, if the signature or name is not
shown on the copy, a statement that the original was signed.
Delivery--the transfer to or for the account of an importer of
custody and right of possession of the commodity at U.S. ports or
Canadian transshipment points in accordance with the delivery terms of
the contract and purchase authorization. For purposes of financing,
delivery is deemed to occur as of the on-board date shown on the ocean
bill of lading.
Destination country--the foreign country to which the commodity is
exported.
Director--the Director, Public Law 480 Operations Division, Foreign
Agricultural Service.
Expediting services--services provided to the vessel owner at the
discharge port in order to facilitate the discharge and sailing of the
vessel; this may include assisting with paperwork, obtaining permits
and inspections, supervision and consultation.
FAS--the Foreign Agricultural Service, U.S. Department of
Agriculture.
FSA--the Farm Service Agency, U.S. Department of Agriculture.
FSA Office--the office designated in the purchase authorization to
administer this financing operation on behalf of CCC.
Finance--To expend CCC funds, whether or not the participant is
required to repay the funds to CCC. For example, this subpart refers to
CCC ``financing'' both the ocean freight differential, which the
participant does not repay, and the commodity cost, which the
participant does repay.
Form CCC-106--the form entitled ``Advice of Vessel Approval.''
Form CCC-329--the signed original of the form entitled ``Supplier's
Certificate.''
General Sales Manager and GSM--the General Sales Manager, FAS, or
the General Sales Manager's designee.
Importer--the person that contracts with the supplier for the
importation of the commodity. The importer may be the participant or
any person to which a participant has issued a subauthorization.
Importing country--any nation with which an agreement has been
signed under the Act.
Invitation for bids and IFB--a publicly advertised request for
offers.
Legal entity includes, but is not limited to, an individual (except
that an individual and his or her spouse and their minor children are
considered as one legal entity), partnership, association, company,
corporation and trust.
Letter of credit--an irrevocable commercial letter of credit
issued, confirmed, or advised by a banking institution in the United
States and payable in U.S. dollars.
Local currency and foreign currency--interchangeable terms; the
currency of the importing or destination country.
Notice of arrival--a written notice in accordance with Sec. 17.8(g)
stating that the vessel has arrived at the first port of discharge.
Ocean bill of lading--
(1) In the case of cargo carried on a vessel other than LASH
barges: An ``on-board'' bill of lading, or a bill of lading with an
``on-board'' endorsement, which is dated and signed or initialed on
behalf of the carrier, or
(2) In the case of cargo carried in a LASH barge:
(i) For the purpose of financing commodity price, an ``on-board''
bill of lading showing the date the commodity was loaded on board
barges, which is dated and signed or initialed on behalf of the
carrier, or a bill of lading or a LASH barge bill of lading with an
``on-board barge'' endorsement which is dated and signed or initialed
on behalf of the carrier.
(ii) For the purpose of financing ocean freight or ocean freight
differential, a bill of lading which is dated and signed or initialed
on behalf of the carrier indicating that the barge containing the cargo
was placed aboard the vessel named in the Form CCC-106 not later than
eight running days after the last LASH barge loading date (contract
layday) specified in the Form CCC-106. This may be either an ``on
board'' bill of lading or a bill of lading or a LASH barge bill of
lading with an ``on-board ocean vessel'' endorsement.
(3) Documentary requirements for a copy of an ``ocean bill of
lading'' refer to a non-negotiable copy thereof.
Ocean freight contract--a charter party or liner booking note.
Ocean transportation--interchangeable with the term ``ocean
freight''.
Ocean transportation brokerage--services provided by shipping
agents related to their engagement to arrange ocean transportation and
services provided by ships brokers related to their engagement to
arrange employment of vessels.
Ocean transportation-related services--furnishing the following
services: lightening, stevedoring, and bagging (whether these services
are performed at load or discharge), and inland transportation, i.e.,
transportation from the discharge port to the designated inland point
of entry in the destination country, if the discharge
[[Page 3815]]
port is not located in the destination country.
Participant--the collective term used to denote the importing
country or the private entity with which an agreement has been
negotiated under the Act.
Person--an individual or other legal entity.
Private entity--the nongovernmental legal entity with which an
agreement has been signed under the Act. A foreign private entity must
maintain a bona fide business office in the United States and have a
person, principal, or agent on whom service of judicial process may be
had in the United States.
Purchase authorization--Form FAS-480, ``Authorization to Purchase
Agricultural Commodities,'' issued to a participant under this subpart.
Purchasing agent--any person engaged by a participant to procure
agricultural commodities.
Secretary--the Secretary of Agriculture of the United States, or
the Secretary's designee.
Selling agent--a representative for the supplier of the commodity,
who is not employed by or otherwise connected with the importer or the
participant.
Shipping agent--any person engaged by a participant to arrange
ocean transportation.
Ships broker--any person engaged by a supplier of ocean
transportation to arrange employment of vessels.
Supplier--any person who sells a commodity to an importer under the
terms of a purchase authorization, or who sells ocean transportation to
an importer or supplier of the commodity under the terms of a purchase
authorization.
United States--the 50 States, the District of Columbia, and Puerto
Rico.
USDA--the U.S. Department of Agriculture; includes all or any of
the agencies mentioned in this section.
Sec. 17.3 Purchase authorizations.
(a) Issuance. After an agreement is signed, the GSM will issue a
purchase authorization to the participant for each commodity included
in the agreement.
(b) Contents. Each purchase authorization includes the following
information:
(1) The commodity to be purchased and specifications, approximate
quantity and maximum dollar amount authorized;
(2) Contracting requirements;
(3) The contracting period, during which suppliers and importers
must enter into contracts; and the delivery period, during which the
commodity must be delivered;
(4) The terms of delivery to the importer;
(5) Documentation required for CCC financing in addition to or in
lieu of the documentation specified in Sec. 17.9;
(6) Provisions relating to payment to CCC, if applicable;
(7) The address of the FSA office administering the financing
operation on behalf of CCC;
(8) The method of financing provided under the Agricultural
Commodities Agreement;
(9) Any provisions relating to financing by CCC in addition to or
in lieu of those specified in this subpart;
(10) Authorization to procure ocean transportation, and provisions
relating to the financing of ocean freight or ocean freight
differential, as applicable;
(11) Any other provisions considered necessary by the General Sales
Manager.
(c) Applicability of this subpart. In addition to the provisions of
a particular purchase authorization, each purchase authorization,
unless otherwise provided, is subject to the provisions of this subpart
to the same extent as if the provisions were fully set forth in the
purchase authorization.
(d) Modification or revocation. The General Sales Manager reserves
the right at any time for any reason or cause whatsoever to supplement,
modify or revoke any purchase authorization, including the termination
of deliveries, if it is determined to be in the interest of the U.S.
Government. CCC shall reimburse suppliers who would otherwise be
entitled to be financed by CCC for costs which were incurred as a
result of such action by the GSM in connection with firm sales or
shipping contracts, and which were not otherwise recovered by the
supplier after a reasonable effort to minimize such costs: Provided,
however, That such reimbursement shall not be made to a supplier if the
GSM determines that the GSM's action was taken because the supplier
failed to comply with the requirements of the regulations in this
subpart or the applicable purchase authorization; Provided further,
That reimbursement to suppliers of ocean transportation shall not
exceed the ocean freight differential when the purchase authorization
provides only for financing the differential.
(e) Subauthorizations. The participant may issue subauthorizations
to importers consistent with the terms of the applicable purchase
authorization. The participant, in subauthorizing, shall specify to
importers all the provisions of the applicable purchase authorization
which apply to the subauthorization.
(f) Cotton textiles. (1) Except as provided in paragraph (f)(2) of
this section, financing of textiles under this subpart is limited to
cotton yarns and fabrics processed up to and including the dyed and
printed state, and preshrinking. Any processing of such yarns and
fabrics beyond this stage will be at the expense of the participant.
(2) Purchase authorizations may permit cotton textiles processed
beyond the stage described in paragraph (f)(1) of this section to be
purchased, but the maximum financing by CCC is limited to the
equivalent value of the cotton yarns and fabrics described in paragraph
(f)(1) of this section, contained in the textiles, plus eligible ocean
transportation costs.
(3) Financing is available only for textiles manufactured entirely
of U.S. cotton in the United States.
Sec. 17.4 Agents of the participant or importer.
(a) General. (1) A participant or importer is not required to use a
purchasing agent or shipping agent, or employ the services of any other
agent, broker, consultant, or other representative (hereafter
``agent'') in connection with arranging the purchase of agricultural
commodities under title I of the Act and arranging ocean transportation
for such commodities. However, if an agent is used, the participant
shall submit a written nomination of the agent to the Deputy
Administrator, Export Credits, along with a copy of the proposed
agreement between the participant or importer and such agent. The
written nomination shall also specify the period of time to be covered
by the nomination. A person may not act as agent for a participant or
importer unless the Deputy Administrator, Export Credits, has provided
a written statement that the nomination is accepted in accordance with
the provisions of this section.
(2) See Sec. 17.6(c) regarding commissions, fees, or other
compensation of any kind to agents of a participant or importer.
(3) A freight agent employed by the Agency for International
Development under titles II and III of the Act is not eligible to act
as an agent for the participant or importer during the period of such
employment. A subcontractor of such freight agent is not eligible to
act as an agent for the participant or importer during the period of
its subcontract.
(b) Affiliate defined. For purposes of this section, the term
affiliate has the meaning provided in Sec. 17.2 and, in addition,
persons will also be considered to be affiliates if any of the
following conditions are met:
(1) There are any common officers or directors.
[[Page 3816]]
(2) There is any investment by eligible commodity suppliers,
selling agents, or persons engaged in furnishing ocean transportation
or ocean transportation-related services for commodities provided under
any title of the Act, section 416(b) of the Agricultural Act of 1949,
or the Food for Progress Act of 1985, whether or not any part of the
ocean transportation is financed by the U.S. Government, or by agents
of such persons, or their officers or directors, in the agent of the
participant or importer.
(3) There is any investment by the agent of the participant or
importer, or its officers or directors, in approved commodity
suppliers; selling agents; or persons engaged in furnishing ocean
transportation or ocean transportation-related services for commodities
provided under any title of the Act, section 416(b) of the Agricultural
Act of 1949, or the Food for Progress Act of 1985, whether or not any
part of the ocean transportation is financed by the U.S. Government, or
in agents of such persons. These conditions include those cases in
which investment has been concealed by the utilization of any scheme or
device to circumvent the purposes of this section but does not include
investment in any mutual fund.
(c) Information to be furnished. A person nominated to act as an
agent of the participant or importer, and any independent contractor
that may be hired by such person to perform functions of a shipping
agent, shall furnish to the Deputy Administrator, Export Credits, the
following information or documentation as may be applicable:
(1) The names of all incorporators;
(2) The names and titles of all officers and directors;
(3) The names of all affiliates, including the names and titles of
all officers and directors of each affiliate, and a description of the
type of business in which the affiliate is engaged;
(4) The names and proportionate share interest of all stockholders;
(5) If beneficial interest in stock is held by other than the named
shareholders, the names of the holders of the beneficial interest and
the proportionate share of each;
(6) The amount of the subscribed capital;
(7) For USDA acceptance of a nomination covering services provided
during each U.S. fiscal year (October 1--September 30), a written
statement signed by such person:
(i) Certifying that, during the U.S. fiscal year covered by USDA's
acceptance of the nomination, the person has not engaged in, and will
not engage in, supplying commodities under any title of the Act or the
Food for Progress Act of 1985 or furnishing ocean transportation or
ocean transportation-related services for commodities provided under
any title of the Act, section 416(b) of the Agricultural Act of 1949,
or the Food for Progress Act of 1985, whether any part of the ocean
transportation is financed by the U.S. Government; and that the person
has not served and will not serve as an agent of firms engaged in
providing such commodities, ocean transportation and ocean
transportation-related services;
(ii) Certifying that, for ocean transportation brokerage services
provided during the U.S. fiscal year covered by USDA's acceptance of
the nomination, the person has not shared and will not share freight
commissions with the participant, the importer, or any agent of the
participant or the importer, whether CCC finances any part of the ocean
freight. CCC will consider as sharing a commission a situation where
the agent forgoes part or all of a commission and the supplier of ocean
transportation pays a commission directly to the participant, the
importer, or any other person on behalf of the participant or the
importer; and
(iii) Undertaking that, during the U.S. fiscal year covered by
USDA's acceptance of the nomination, affiliates of such person have not
engaged in and will not engage in the activities or actions prohibited
in this paragraph (c)(7).
(8) A certification that neither the person nor any affiliates has
arranged to give or receive any payment, kickback, or illegal benefit
in connection with the person's selection as agent of the participant
or importer.
(d) USDA acceptance. (1) USDA will consider accepting the
nomination of a person to act as an agent of the participant or
importer when the documents required to be submitted by this section
are received by the Deputy Administrator, Export Credits.
(2) USDA's acceptance of such nomination shall remain in effect for
the period of time requested by the participant or such shorter period
as the Deputy Administrator, Export Credits, may determine. USDA will
withdraw such acceptance if the agent of the participant or importer,
or any of the affiliates of such agent, violates the certifications or
undertakings made pursuant to paragraphs (c) (7) and (8) of this
section.
(3) A person is required to submit the information and
documentation required by paragraph (c) of this section to support the
person's first nomination to act as an agent of any participant or
importer for each fiscal year. For subsequent nominations covering the
same fiscal year, the person must provide a written certification that
all the information and documentation provided earlier is still
accurate and complete, or must provide the details of any changes.
(e) Notification. The Deputy Administrator, Export Credits shall
promptly notify persons nominated as agents of the participant or
importer, of the determination or of the need for further inquiry, and
shall provide a written response within 30 calendar days of receipt of
all the required documents. If USDA will not accept the nomination, the
notification shall state the reasons therefor. The determination of the
Deputy Administrator, Export Credits is effective immediately and
continues in effect pending the result of any appeal to the General
Sales Manager.
(f) Non-acceptance or withdrawal. (1) If USDA does not accept the
nomination of a person, or if acceptance has been withdrawn pursuant to
the provisions of this section, the person may, within 30 calendar
days, present to the General Sales Manager, orally or in writing, any
reasons as to why such action should not stand. Nothing in this
paragraph shall be construed as to prohibit a person whose nomination
has not been accepted or whose acceptance has been withdrawn by USDA
from being nominated at a later time.
(2) If, in the procurement of commodities made available under
title I, Public Law 480, a participant or importer uses an agent whose
nomination has not been accepted in writing by the Deputy
Administrator, Export Credits, USDA may withhold sales approval.
(3) If, in the shipping of commodities made available under title
I, Public Law 480, a participant or importer uses an agent whose
nomination has not been accepted in writing by the Deputy
Administrator, Export Credits, USDA may withhold vessel approval or may
deduct from the ocean freight differential to be paid, the amount of
any commission to the agent in connection with the shipment.
(g) No competitive advantage. A shipping agent may not take any
action which would give a competitive advantage to any supplier of
commodities or ocean transportation. This includes, but is not limited
to, providing advance notice of IFB's or amendments, or selectively
enforcing IFB or contract requirements.
[[Page 3817]]
Sec. 17.5 Contracts between commodity suppliers and importers.
(a) Commodity suppliers and selling agents. (1) In order to
participate in the Public Law 480, title I program, a prospective
commodity supplier must submit to CCC the information required by 7 CFR
1493.30.
(2) If, at the time the commodity supplier reports the sale it is
determined that an agent employed or engaged by a commodity supplier to
obtain a contract is not a selling agent as defined in Sec. 17.2, the
sale will not be eligible for financing.
(b) Eligibility for financing. To be eligible for financing,
commodity contracts must comply with the following requirements unless
otherwise specified in the purchase authorization.
(1) Commodity contracts between suppliers and importers are
considered to be conditioned on the approval by USDA of the contract
price; conformance of the sale to the provisions of the purchase
authorization; responsiveness of the offer to IFB terms; and compliance
by the supplier and the selling agent, if any, with paragraph (a) of
this section.
(2) Importers and suppliers must enter into contracts within the
contracting period specified in the purchase authorization. The
contracts must provide for deliveries to the importer in accordance
with the delivery terms and during the delivery period specified in the
purchase authorization, or any amendment or modification thereto.
(3) Contracts for a commodity, under a purchase authorization which
limits delivery terms to f.o.b. or f.a.s., must be separate and apart
from the contracts for ocean transportation of the commodity.
(4) The supplier's sales price may not exceed the prevailing range
of export market prices as applied to the terms of sale at the time of
sale, as determined by USDA. The ``time of sale'' is the date and time
specified in the IFB for receipt of offers; or the date of the contract
amendment if the amendment affects the sale price, as determined by
USDA. The contract price may not be on a cost plus a percentage-of-cost
basis.
(c) Contracting procedures--(1) Purchasing--general. (i) Importers
must purchase commodities on the basis of IFB's.
(ii) The participant shall maintain a record of all offers received
from suppliers until the expiration of three years after final payment
under contracts awarded under the purchase authorization. The GSM may
examine these records or request specific information in connection
with the offers.
(2) Invitations for bids. The following conditions shall apply on
all purchases of commodities on the basis of IFB's:
(i) The General Sales Manager must approve the terms of the IFB
before it is issued by the importer.
(ii) The importer shall issue the IFB in the United States and
shall open all offers in public in the United States at the time and
place specified in the IFB.
(iii) The IFB must permit submission of offers from all suppliers
who meet the requirements of this subpart.
(iv) The IFB may not preclude offers for shipment from any United
States port(s) unless the purchase authorization provides for
exportation only from certain ports.
(v) The IFB may not establish minimum quantities to be offered or
which will be considered.
(vi) The IFB must be in compliance with the regulations, the
purchase authorization, and sound commercial standards.
(3) Contract awards. (i) The importer shall consider only offers
which are responsive to the IFB and shall make awards either on the
basis of the lowest commodity price(s) offered or on the basis of
lowest landed cost. However, when vessels offered under the flag of the
participant, the importing country or the destination country; or
vessels controlled by the participant, the importing country or the
destination country are to be used, the participant must purchase
commodities for shipment on such vessels only on the basis of the
lowest commodity price(s) offered. This limitation may, however, be
waived by the GSM:
(A) When the lowest commodity price(s) offered are in locations
where vessels cannot reasonably be made available without a substantial
increase in freight costs to the participant;
(B) For small quantities offered at additional loading points (in
aggregate not more than 15 percent of the total tonnage offered by a
vessel); or
(C) Where this limitation would conflict with the purposes of the
program.
(ii) For purposes of this section, ``lowest commodity price(s)''
means the lowest commodity price(s) offered for loading onto the type
of vessel (dry bulk carrier, tanker, etc.) to be utilized to carry the
commodity purchased.
(iii) For purposes of this section, ``lowest landed cost'' means
the combination of commodity price and ocean freight rate resulting in
the lowest total cost to deliver the commodity to the importing
country, considering the quantity which must be shipped on privately
owned U.S.-flag commercial vessels, as determined by the Director.
Lowest landed cost may be defined on either a foreign flag or U.S. flag
basis. Awards may not be made on the lowest landed cost basis unless
IFB's are issued for commodity and ocean freight so that all commodity
and ocean freight offers are reviewed simultaneously.
(iv) Participants are encouraged to purchase commodities on the
basis of lowest landed cost when U.S. flag vessels are to be used. If
such commodity purchases are not made on the basis of lowest landed
cost (U.S. flag), ocean freight differential payments will nonetheless
be calculated on the rates of U.S. flag vessels which would represent
the lowest landed cost.
(v) Announcement of awards shall be made in the United States. The
importer shall promptly submit to the Director copies of all offers
received with a copy of the IFB which was issued. No sale can be
approved for financing until this information has been received by FAS.
The decision of the GSM shall be final regarding the responsiveness of
offers to IFB terms in the awarding of contracts.
(d) Contract quantity eligible for financing. The quantity eligible
for financing in the contract between the supplier and the importer may
not exceed that quantity approved by the Public Law 480 Operations
Division, FAS, including any approved contract tolerance.
(e) Contract disputes. Contracts between suppliers and importers
should stipulate the responsibility of each party for payment of any
costs not eligible for financing by CCC. Questions as to payment of
ineligible costs should be resolved between the contracting parties.
(f) Contract provisions. Each contract entered into for financing
under this subpart is deemed to include all terms and conditions
required by this subpart.
(g) Export Trade Act (Webb-Pomerene Law). A supplier who is a
member of a Webb-Pomerene association and who enters into contracts
with importers as a member of such an association shall so indicate in
a statement on, or attached to, the copy of the supplier's detailed
invoice referred to in Sec. 17.9(c)(2).
Sec. 17.6 Discounts, fees, commissions and payments.
For purposes of this section, the term ``payment'' means a
commission, fee or other compensation of any kind. The term ``other
compensation of any kind'' includes anything given in return for any
consideration, services, or benefits received or to be received.
(a) Discounts. If a contract provides for one or more discounts
(including but not limited to trade or quantity
[[Page 3818]]
discounts and discounts for prompt payment) whether expressed as such
or as ``commissions'' to the importer, CCC will only pay the invoice
amount after the discount (supplier's contracted price less all
discounts).
(b) Selling agents. (1) A supplier may not make a payment to a
selling agent employed or engaged by the supplier to obtain a contract.
This prohibition applies to any payment to a person who has acted as a
selling agent to obtain a contract even though the payment may be for
services performed that are not themselves services to obtain a
contract.
(2) A person is deemed to act ``to obtain a contract'' if the
person acts on behalf of a commodity supplier to:
(i) Influence a buyer to award a contract to the supplier;
(ii) Give the supplier a competitive advantage in relation to other
potential suppliers; or
(iii) Influence CCC to approve a contract for financing under these
regulations.
(3) CCC will not consider acts which are purely ministerial in
nature and do not require the exercise of personal influence, judgment,
or discretion (such as attending bid openings or presenting offers at
bid openings), or services to implement a contract after it has been
entered into by the parties (such as handling documentation problems or
contract disputes), as acts to obtain a contract.
(c) Other prohibitions. (1) Suppliers of commodities or ocean
transportation may not:
(i) Pay a commission to the participant or importer; to any agency,
including an agency of the government of the importing country or the
destination country; or to a corporation owned or controlled by the
participant or the government of the importing country or the
destination country.
(ii) Pay a commission to any affiliate of the participant, if the
participant is a private entity;
(iii) Make any payment to an agent of the participant or importer,
in the person's capacity as such agent, other than total ocean
transportation brokerage commissions which do not exceed 2\1/2\ percent
of the freight.
(iv) Pay an address commission or payment.
(2) For ocean transportation, in addition to this paragraph, see
also Sec. 17.8(j).
(3) If a payment is made in violation of this section, CCC may
demand dollar refund of the entire amount financed by CCC under the
contract.
Sec. 17.7 Notice of sale procedures.
(a) Telephonic notice of sale. The supplier shall, immediately upon
making a firm sale, telephone a notice of sale to Public Law 480
Operations Division, FAS. A sale is considered firm when the supplier
has been notified by the importer of an award, even though the contract
is conditioned on approval by FAS (see Sec. 17.5(b)(1).) If the
supplier fails to furnish a notice of sale within 3 working days after
the date of sale, CCC has the right to refuse to finance the sale.
(b) Sale approval. (1) Public Law 480 Operations Division will
notify the supplier by telephone of approval of the notice of sale.
(2) The supplier will prepare Form FAS-359, ``Declaration of
Sale,'' and submit it to Public Law 480 Operations Division promptly as
soon as FAS has provided the CCC Registration Number to the supplier.
The supplier or the supplier's authorized representative must sign the
form.
(3) Each Form FAS-359 shall cover only a single sale contract. If a
sale is made under two or more purchase authorizations, the supplier
will prepare separate forms for each purchase authorization.
(4) If any correction is needed to the Form FAS-359, the supplier
must immediately notify FAS. If a contract is amended, the supplier
should present the original Form FAS-359 for payment along with a copy
of the written USDA approval of the contract amendment.
(c) Sale disapproval. (1) Public Law 480 Operations Division, FAS,
will notify the supplier by telephone when a sale is disapproved for
financing. The related contract between the supplier and importer
shall, for purposes of financing, be considered null and void.
(2) On receipt of a notice of disapproval, the supplier shall
promptly notify the importer.
(d) Contract delivery period. Price approval is limited to exports
made during the delivery period stated in the notice of sale or any
contract amendment approved by the Public Law 480 Operations Division,
FAS. If the supplier cannot complete delivery by the terminal delivery
date of the contract delivery period, the supplier and the participant
or importer shall submit a notice of contract amendment as provided in
paragraph (e) of this section. If the supplier fails to comply,
Sec. 17.10(d) of the regulations shall apply.
(e) Contract amendments. (1) The supplier and the participant or
importer shall each submit a written notice of each contract amendment
to the Director immediately after the amendment to the contract is
made. This includes not only any change in the contract delivery period
or any other terms and conditions of the contract as provided in the
information given in the original notice of sale or any amendment
thereto, but also any change in any other terms and conditions of the
contract.
(2) The notice of contract amendment must contain the following:
(i) A request that USDA approve an amendment to the specifically
identified sale contract between (the participant or importer) and (the
commodity supplier).
(ii) A statement of what the amendment consists of (as, extension
of delivery period through (date)) and a detailed explanation of the
reasons for the amendment.
(iii) A statement that the contract amendment has been agreed to by
both buyer and seller.
(3) Public Law 480 Operations Division, FAS, will notify the
supplier as to whether the amendment is approved or disapproved.
(4) The supplier shall furnish a copy of the USDA approval of the
amendment with other documentation submitted to obtain payment.
(5) If the supplier fails to furnish notice of a contract amendment
to Public Law 480 Operations Division, FAS, within 3 working days after
the date of such amendment, CCC has the right to refuse to finance the
sale or any portion of the sale.
(6) Any amendment must be consistent with the provisions of the
purchase authorization and this subpart and must otherwise be
acceptable to Public Law 480 Operations Division, FAS.
Sec. 17.8 Ocean transportation.
(a) General. (1) This section applies to the financing of ocean
freight or ocean freight differential. Ocean freight will be financed
by CCC only to the extent specifically provided for in the purchase
authorization. The purchase authorization may provide requirements in
addition to or in lieu of those specified in this section.
(2) The supplier of ocean transportation must be engaged in the
business of furnishing ocean transportation from the United States and
must have a person, principal or agent, on whom service of judicial
process may be had in the United States.
(3) The quantity of the commodity which must be shipped on
privately owned U.S.-flag commercial vessels will be determined by the
Director.
(4) The supplier of ocean transportation shall release copies of
the ocean bills of lading to the supplier of the commodity promptly
upon completion of loading of the vessel.
(5) When CCC finances any part of the ocean freight or the ocean
freight
[[Page 3819]]
differential, the participant must open an operable irrevocable letter
of credit for the portion of the ocean freight not financed by CCC. The
amount of the letter of credit shall be computed using the information
provided in the Form CCC-106. The letter of credit shall provide for
sight payment or acceptance of a draft, payable in U.S. dollars, on the
basis of the quantities specified in the applicable ocean freight
contract. If the supplier of ocean transportation accepts the commodity
before receipt of an acceptable letter of credit from a bank, the
supplier takes such action at its own risk. This action in itself does
not affect eligibility for CCC financing.
(b) Contracting procedures.--(1) Invitations for Bids (IFB's). (i)
Public freight ``Invitations for Bids'' are required in the
solicitation of freight offers from all U.S. and non-U.S. flag vessels
when CCC is financing any portion of the ocean freight.
(ii) For non-U.S. flag vessels when CCC is not financing any
portion of the ocean freight, public freight IFB's are also required
unless otherwise authorized by the Director, or unless the participant
requires the use of vessels under its flag, the flag of the destination
country, or other non-U.S. flag vessels under its control. Vessels
considered to be under the control of the participant or the
destination country include vessels under time charters, bare boat
charters, consecutive voyage charters, or other contractual
arrangements for the carriage of commodities which provide guaranteed
access to vessels.
(iii) Prior to release to the trade, all freight IFB's must be
submitted to the Director for approval. Freight IFB's must be issued by
means of the Transportation News Ticker, New York, plus at least one
other means of communication.
(iv) All freight IFBs must:
(A) Specify a closing time for the receipt of offers and state that
late offers will not be considered;
(B) Provide that offers are required to have a canceling date no
later than the last contract layday specified in the IFB;
(C) Provide the same deadline for receipt of offers from both U.S.
flag vessels and non-U.S. flag vessels.
(2) Competitive bidding. When CCC is financing any portion of the
freight, all offers shall be opened in public in the United States at
the time and place specified in the IFB. Offers shall be opened prior
to receipt of offers for the sale of commodities as the Director
determines appropriate. Only offers which are responsive to the IFB may
be considered, and no negotiation shall be permitted.
(3) Records of offers. Copies of all offers received must be
promptly furnished to the Director, who may require the participant, or
its shipping agent, to submit a written certification to the GSM that
all offers received (with the times of receipt designated thereon) were
transmitted to the Department. For purposes of this paragraph ``time of
receipt'' shall be the time a hand-carried offer, mailed offer, or
telegram was received at the designated location for presentation or,
if transmitted electronically, the time the offer was received, as
supported by evidence satisfactory to the Director.
(4) Re-tenders. The Director may permit or require a participant to
refuse any and all bids, and in such case a participant may conduct a
re-tender with the approval of the Director. The Director shall not
approve or require freight re-tenders unless they will increase the
likelihood of meeting U.S. flag cargo preference requirements, will
permit the desired quantity to be shipped, will likely result in
reduced CCC expenditures, or are otherwise determined to be in the best
interest of the program.
(c) Request for vessel approval. The pertinent terms of all
proposed charters and all proposed liner bookings, regardless of
whether any portion of ocean freight is financed by CCC, must be
submitted to the Director for review and approval before fixture of the
vessel. Tentative advance vessel approvals may be obtained by telephone
provided Form CCC-105, Ocean Shipment Data--Pub. L. 480 (Request for
Vessel Approval), is furnished promptly confirming the information
supplied by telephone. The Form CCC-105 shall be submitted in duplicate
to the Director.
(d) Advice of vessel approval. (1) USDA will give written approval
of charters and liner bookings on Form CCC-106, ``Advice of Vessel
Approval.'' The Form CCC-106 will state whether CCC will finance any
part of the ocean freight. For f.a.s. or f.o.b. shipments, CCC will
issue a signed original of Form CCC-106 to the ocean carrier when CCC
finances any part of the ocean freight. For c.& f. or c.i.f. shipments,
CCC will issue Form CCC-106 to the supplier of commodity.
(2) If CCC agrees to finance any portion of the ocean freight, the
participant or its agent shall forward a copy of the ocean freight
contract immediately after execution to the Director for review and
approval prior to issuance of Form CCC-106.
(3) CCC may also require the supplier of ocean transportation to
submit copies of lightening, stevedoring, or bagging contracts for any
voyage for which CCC finances ocean freight or ocean freight
differential.
(e) Special charter party provisions required when any part of
ocean freight is financed by CCC. This paragraph applies when CCC
finances any part of the ocean freight for commodities booked on
charter terms. In the event of any conflict between the provisions of
the regulations in this subpart and the charter party or ocean bills of
lading issued pursuant thereto, the provisions of the regulations in
this subpart shall prevail. The charter party shall contain or, for the
purpose of financing pursuant to the regulations in this subpart, be
deemed to contain the following provisions:
(1) That if there is any failure on the part of the supplier of
ocean transportation to perform the charter party after the vessel has
tendered at the loading port, the charterer shall be entitled to incur
all expenses which in the judgment of the General Sales Manager are
required to enable the vessel to carry out her obligations under the
charter party including, but not limited to, expenses for lifting any
liens asserted against the vessel.
(2) That, notwithstanding any prior assignments of freight made by
the owner or operator, the expenses authorized in paragraph (e)(1) of
this section may be deducted from the freight earned under the charter
party.
(3) That ocean freight is earned and that 100% thereof is payable
by the charterers when the vessel and cargo arrive at the first port of
discharge, subject to paragraph (e)(4) of this section, and to the
further condition that if a force majeure as described in paragraph
(l)(1) of this section results in the loss of part of the vessel's
cargo, 100% of the ocean freight is payable on the part so lost. This
provision does not relieve the carrier of the obligation to carry to
other points of discharge if so required by the charter party.
(4) That if a force majeure as described in paragraph (l)(1) of
this section prevents the vessel's arrival at the first port of
discharge, the freight shall be payable by the charterer at the time
the General Sales Manager determines that such force majeure was the
cause of nonarrival.
(5) That laydays are non-reversible.
(6) That in a dispute involving any rights and obligations of CCC,
including rights and obligations as successor or assignee, which cannot
be settled by agreement, the dispute shall not be subject to
arbitration.
(f) Special charter party information required when any part of
ocean freight is financed by CCC. When CCC finances
[[Page 3820]]
any part of the ocean freight for commodities booked on charter terms,
the charter party shall contain the following information:
(1) The name of each party participating in the ocean freight
brokerage commission, if any, and the percentage thereof payable to
each party;
(2) The name of the vessel and the name of the substitute vessel,
if any.
(g) Notice of arrival. Each Form CCC-106 will indicate whether a
notice of arrival is required. A notice of arrival, when required, must
be furnished promptly by the participant or its designated agent or
other source acceptable to CCC (excluding the carrier or its agent) and
must include the name of the vessel, the purchase authorization number,
the first port of discharge, and the date of arrival. The notice of
arrival of the vessel also constitutes prima facie evidence of arrival
of the cargo.
(h) Foreign flag vessels. The cost of ocean transportation will be
financed by CCC on non-U.S. flag vessels only when, and to the extent,
specifically provided in the applicable purchase authorization.
(i) U.S.-flag vessels. When a commodity is required to be shipped
on a privately owned U.S.-flag commercial vessel, Form CCC-106 will set
forth:
(1) The rate of the ocean freight differential, if any, which the
Director determines to exist between the prevailing foreign-flag vessel
rate and the U.S.-flag vessel rate; and
(2) The approximate tonnage for which CCC will authorize
reimbursement of ocean freight or ocean freight differential, as
appropriate.
(j) Items not eligible for financing by CCC. The following costs
will not be financed by CCC, either separately or as part of the
commodity contract price:
(1) Loading, trimming, and other related shipping expenses unless
included in the ocean freight rate;
(2) Discharge costs unless included in the ocean freight rate;
(3) The cost of ``dead freight'';
(4) Cargo dues and taxes assessed by the importing or recipient
country;
(5) Surcharges assessed by steamship conferences or carriers,
unless specifically authorized by the Director;
(6) General average contributions;
(7) Stevedoring overtime and vessel crew overtime;
(8) Ship's disbursements;
(9) Ocean transportation brokerage commissions in excess of 2-1/2
percent of the freight;
(10) Any payments prohibited in Sec. 17.6(b) and (c); and
(11) Detention.
(k) General financing provisions. When any part of ocean freight
will be financed either separately or as part of the commodity contract
price, the following shall apply:
(1) Ocean freight contracts must show the ocean freight rate from
one loading port to one discharge port, and may provide for an increase
in rate for an additional port of loading or discharge, or other
option. CCC, however, will finance initially the lowest such rate or
OFD, as appropriate. Increased amounts due because of the exercise of
such option will be financed only after receipt of an ocean bill of
lading or other evidence showing that the option was exercised.
(2) In the case of transshipment to a foreign flag vessel, CCC
will finance the ocean freight or OFD, as appropriate, only to the
point of transshipment, at a rate determined by the GSM, and CCC will
not finance any part of the ocean freight beyond the point of
transshipment unless specifically approved by the GSM. If the commodity
was transported from a U.S. port and was transshipped at another U.S.
port, CCC will not finance, without prior approval of the GSM, any part
of the ocean freight incurred before transshipment.
(3) The ocean freight rate eligible for CCC financing and the rate
used for the U.S.--flag vessel in calculating ocean freight
differential shall not exceed the following rates for the category of
the vessel concerned:
(i) For commodities covered by published tariff rates--the
published conference contract rate;
(ii) For other commodities--the market rate prevailing at the time
of request for approval as determined by the Director, but in any event
not in excess of rates charged other shippers (irrespective of booking
dates) for like commodities on the voyage concerned.
(4) Payment will be made for ocean freight or OFD, as appropriate,
from loading points to discharge points at rates approved by the
Director on Form CCC-106 in conformity with paragraph (k)(3) of this
section.
(5) Freight for a vessel designated on Form CCC-106 as a U.S. flag
vessel shall not be eligible for financing unless such vessel complies
with the provisions of Public Law 87-266.
(6) Ocean freight contracts must specify that the participant
shall be liable for detention of the vessel for loading delays
attributable solely to the decision of the supplier of ocean
transportation not to commence loading because of the failure of the
participant to establish an ocean freight letter of credit in
accordance with paragraph (a)(4) of this section. However, ocean
freight contracts may not contain a specified detention rate. The ocean
transportation supplier shall be entitled to reimbursement for
detention costs for all time so lost, for each calendar day or any part
of the calendar day, including Saturdays, Sundays and holidays. The
period of such delay shall not commence earlier than upon presentation
of the vessel at the designated loading port within the laydays
specified in the ocean freight contract, and upon notification of the
vessel's readiness to load in accordance with the terms of the
applicable ocean freight contract. The period of such delay shall end
at the time that operable irrevocable letters of credit have been
established for the applicable ocean freight or the time the vessel
begins loading, whichever is earlier. Time calculated as detention
shall not count as laytime. Reimbursement for such detention shall be
payable no later than upon the vessel's arrival at the first port of
discharge.
(l) Force majeure. (1) The GSM will waive the requirement for the
notice of arrival required by Form CCC-106 by a written notice to the
supplier of ocean transportation on the receipt of evidence
satisfactory to the General Sales Manager that the vessel is lost or
unable to proceed to destination after completion of loading as a
result of one or more of the following causes: Damage caused by perils
of the sea or other waters; collisions; wrecks; stranding without the
fault of the carrier; jettison; fire from any cause; Act of God; public
enemies or pirates; arrest or restraint of princes, rulers or peoples
without the fault of the supplier of ocean transportation; wars; public
disorders; captures; or detention by public authority in the interest
of public safety. The supplier may substitute such waiver for the
notice of arrival.
(2) The determination of a force majeure by the GSM shall not
relieve the participant from its obligation under the Agricultural
Commodities Agreement to pay CCC, when due, the dollar amount of ocean
freight, plus interest (exclusive of ocean freight differential),
financed by CCC.
(m) Demurrage/despatch. CCC will not finance demurrage and CCC
will not share in despatch earnings. Owners and commodity suppliers
will settle laytime accounts at load port(s) and owners and charterers
will settle laytime accounts at discharge port(s). Under no
circumstances shall CCC be responsible for resolving disputes involving
calculation of laytime or the payment of demurrage or despatch.
(n) Ocean freight included in the commodity contract price. For
cost and freight or c.i.f. contracts the ocean
[[Page 3821]]
freight, or the ocean freight differential, as appropriate, will be
financed only to the extent specifically provided in the applicable
purchase authorization.
(o) Separate freight contracts. Contracts for ocean transportation,
under a purchase authorization which limits delivery terms to f.o.b. or
f.a.s., must be separate and apart from the contracts for the
commodity.
Sec. 17.9 CCC payment to suppliers.
(a) General. (1) The supplier shall request payment from CCC for
the amount of the commodity price or the ocean freight or ocean freight
differential to be financed by CCC.
(2) The supplier shall support such a request for payment by
presenting to CCC the documents required by this section, the purchase
authorization, and the IFB, unless such documents were previously
submitted to CCC. Such documents, however, need not be submitted when
and to the extent that the Controller determines that the intended
purpose of a document is served by documents otherwise available to or
under the control of CCC or by alternate documents specified in such
determination.
(3) CCC will examine each document with reasonable care to
ascertain that it appears on its face to be in accord with documentary
requirements. When CCC has determined that all required documents have
been submitted and that the documents are acceptable, CCC will pay the
supplier for the commodity price or the ocean freight or ocean freight
differential to be financed by CCC which is supported by the documents.
(b) General documentation requirements. The supplier must put the
appropriate purchase authorization number on all required documents
which are prepared under the supplier's control, and should arrange for
the appropriate purchase authorization number to be put on all other
required documents at the time of their preparation.
(c) Documents required for payment--commodity. The general
provisions relating to required documents are as follows. Additional
requirements for payment to commodity suppliers for c.& f. or c.i.f.
sales are contained in paragraph (c)(8) of this section.
(1) Supplier's certificate. A signed original of Form CCC-329
``Supplier's Certificate'' from the commodity supplier covering the net
invoice price for the commodity.
(2) Supplier's detailed invoice. Two copies of the supplier's
detailed invoice showing quantity, description, contracted price, net
total invoice price expressed in dollars, the amount for which
financing is requested from CCC, the amount not eligible for financing
by CCC, and basis of delivery of the commodity (e.g., f.o.b. vessel).
In arriving at the net invoice price there shall be deducted:
(i) All discounts from the supplier's contracted price through
payments, credits, or other allowances made or to be made to the
importer, the importer's agent or consignee;
(ii) All purchasing agents' commissions;
(iii) All other amounts not eligible for financing.
(3) Additional payment. A request for an additional payment
submitted for a transaction for which all or part of the required
documents have been previously submitted to CCC shall be supported by a
Form CCC-329 ``Supplier's Certificate'' and the supplier's detailed
invoice, covering the additional amount requested. The supplier's
invoice must show the date, serial number and the amount of the
original invoice and the basis for the additional amount claimed.
(4) Weight certificate. The weight certificate shall be issued by
or on authority of a State or other governmental weighing department,
Chamber of Commerce, Board of Trade, Grain Exchange, or other
independent organization or firm providing public weighing services.
Such organization or firm must have
(i) Qualified, impartial, paid employees who are stationed at the
port facility or, if authorized under the applicable purchase
authorization, other facility where weights customarily are determined,
one of whom performed the weighing covered by the certificate, or
(ii) Qualified, independent, impartial, supervised, weighmasters
stationed at the port facility or, if authorized under the applicable
purchase authorization, other facility where weights are customarily
determined, one of whom supervised the employee of such a facility in
the performance of the weighing covered by the certificate.
(5) Federal appeal inspection certificate. A Federal appeal
inspection certificate, when included in the documents presented for
payment, shall supersede any other inspection certificate required by
this subpart, the applicable purchase authorization, the IFB or the
contract.
(6) Form CCC-359. (i) Form FAS-359, ``Declaration of Sale,'' signed
for the GSM, is the written document by which USDA notified the
supplier that the sale was approved for financing. The supplier shall
submit Form FAS-359 to CCC with the documents covering the first
transaction under the contract. The unit price shown on the supplier's
invoice must not exceed the approved unit price shown on the Form FAS-
359.
(ii) For subsequent transactions under the same contract, the
supplier shall certify on the CCC copy of the detailed invoice as
follows:
I hereby certify that the applicable Form FAS-359 was submitted
to CCC with documents covering Invoice No.
________________ dated ________________________ for
$____________________.
(7) Bill of lading. Four copies of the ocean bill of lading.
(8) C.&.f. or c.i.f. sales. In addition to the above, the following
requirements apply for c.& f. or c.i.f. sales:
(i) Signed original of Form CCC-106.
(ii) The supplier's detailed invoice shall show a computation of
the dollar amount of ocean freight differential, whenever the Form CCC-
106 provides for an ocean freight rate differential on a cost and
freight or c.i.f. sale and authorizes financing of any portion of ocean
freight by CCC. In arriving at the net invoice price the supplier shall
deduct the ocean freight, or portion thereof which is not being
financed by CCC.
(iii) One nonnegotiable copy of the insurance certificate or policy
where the cost of insurance is included in the price of the commodity
to be financed by CCC.
(iv) A request for an additional payment shall also include a
statement signed by the ship's master or owner (or agent of either of
them) showing exercise of the higher-rated option, if the payment is
stated to be due because of the exercise of a higher-rated option
provided in an ocean freight contract.
(d) Documents required for payment--ocean freight financed
separately from commodity price.
(1) Supplier's certificate. A signed original of Form CCC-329,
``Supplier's Certificate'', to be executed by the carrier or its agent,
covering the dollar cost of ocean freight or ocean freight
differential.
(2) Ocean bill of lading. One copy of the ocean bill of lading and,
if required by the related Form CCC-106, a notice of arrival at the
first port of discharge of the vessel named in the Form CCC-106. In
lieu of a notice of arrival the carrier may present a waiver of the
notice of arrival signed by the GSM or Controller.
(3) Invoice. One copy of the carrier's invoice which shows the
total freight costs, the amount not eligible for financing by CCC, and
the amount for which payment is requested from CCC. If the invoice
relates to a U.S.-flag
[[Page 3822]]
vessel, such invoice shall contain the following typed or stamped
certification, executed by the supplier:
The undersigned hereby certifies that the vessel named herein
and for which ocean freight is claimed, qualifies as a privately
owned U.S.-flag commercial vessel within the requirements of Pub. L.
87-266 and is an eligible U.S.-flag vessel for the purposes of Pub.
L. 664, 83rd Congress.
(4) Form CCC-106. Signed original of Form CCC-106.
(5) Ocean freight contract. One copy of the ocean freight contract.
(6) Higher rated option. A request for payment of any amounts
claimed because of the exercise of a higher rated option following
payment of a lower rated option pursuant to Sec. 17.8(k)(1) shall be
supported by the following documents:
(i) One copy of the carrier's invoice as described in paragraph
(d)(3) of this section except for the certification required therein.
(ii) The Form CCC-329, Supplier's Certificate, for the balance
claimed.
(iii) A statement signed by the ship's master, owner, or owner's
agent, and signed laytime statements or other written concurrence of
charterer or the charterer's agent showing the exercise of the higher
rated option.
(e) Payment of freight by CCC prior to the vessel's arrival at the
discharge port.
(1) Upon request by the supplier, CCC may pay the ocean freight or
ocean freight differential to be financed by CCC before the vessel
arrives at the first port of discharge if the supplier furnishes CCC
financial coverage in the form of an acceptable letter of credit from a
U.S. bank.
(2) The amount of security required by CCC under paragraph (e)(1)
of this section may be computed by multiplying the ocean freight rate
or ocean freight differential rate financed by CCC as shown on the
related Form CCC-106 times either--
(i) The tonnage shown on the related bill of lading, if the bill of
lading is furnished to CCC; or
(ii) The tonnage stated in the ocean freight contract (without
tolerance).
(3) On receipt of an acceptable letter of credit, the Controller
will issue a waiver of the notice of arrival which is required under
paragraph (d)(2) of this section.
(f) Advice of amount financed. CCC will forward advice of payment
to the participant.
Sec. 17.10 Refunds and insurance.
(a) Participant--failure to comply. The participant shall pay in
U.S. dollars promptly to CCC on demand by the General Sales Manager the
entire amount financed by CCC (or such lesser amount as the GSM may
demand) whenever the GSM determines that the participant has failed to
comply with any agreement or commitment made by the participant in
connection with the transaction financed or with the applicable
Agricultural Commodities Agreement between the U.S. and the
participant.
(b) Adjustment refunds. All claims by importers for adjustment
refunds arising out of terms of the contract or out of the normal
customs of the trade, including arbitration and appeal awards,
allowances, and claims for overpayment of ocean transportation, if such
refunds relate to amounts financed by CCC, shall be settled by payment
in U.S. dollars and such payment shall be remitted by the supplier to
CCC. The remittance shall be identified with the date and amount of the
original payment and the applicable purchase authorization number.
(c) Insurance on c.i.f. sales. The provisions of this paragraph
apply only to transactions under purchase authorizations that
specifically authorize c.i.f. sales in which the cost of insurance is
included in the net c.i.f. invoice price of the commodity financed.
When the supplier furnishes insurance in favor of or for the account of
the importer, the policies or certificates of insurance shall include a
loss payable clause which provides that all claims shall be paid in
U.S. dollars to the Controller. Such payments shall be accompanied by
advice of the purchase authorization number, the names and addresses of
the supplier and importer, the nature of the claim, the quantity of the
commodity involved in the claim, the date of shipment, the bill of
lading number, and the name of the vessel. CCC will credit the account
of the participant or will refund local currency in accordance with
paragraph (e) of this section.
(d) Refund of ineligible amounts. If a sale has been financed and
CCC determines that the sales price exceeds the price permissible under
Sec. 17.5(b)(4), or that the sale is otherwise ineligible for
financing, in whole or in part, the supplier shall refund in dollars
such excess price or ineligible amount to CCC promptly on demand. If
not promptly refunded, such amount may be set off by CCC against monies
it owes to the supplier. The making of any such refund to CCC, or any
such setoff by CCC shall not prejudice the right of the supplier to
challenge such determination in a court action brought against CCC for
recovery of the amount refunded or set off.
(e) Refund of local currency or reduction of amount due.
Immediately after receipt by CCC of U.S. dollar payment from suppliers
or from or for the account of the participant under this section, CCC
will provide for payment to the participant of the local currency
equivalent of dollars received, if such local currency has been
deposited for the particular transaction or will credit the
participant's account as follows:
(1) For payments under this section, except paragraph (a), the
local currency refunded will be at the exchange rate agreed to by the
Government of the United States and the participant in effect at the
time the local currency is paid to or for the account of the importer
except that if there has been a change in the exchange system or
structure of the importing country or the destination country, such
payment shall be made at the agreed exchange rate which was in effect
on the date of dollar disbursement for the transaction financed, and
except further that local currency shall not be paid when the dollars
are to be reauthorized for replacement of the commodity.
(2) For payment under paragraph (a) of this section, the local
currency refunded will be at the agreed exchange rate in effect on the
date of the dollar disbursement for the transaction financed: Provided,
that local currency will not be refunded to the extent that deposits of
such currency have been made available to the participant on a grant
basis.
(3) For refunds received by CCC under long-term credit agreements
the participant's account shall be credited with the dollar amount
refunded or otherwise recovered, and the participant notified
accordingly.
Sec. 17.11 Recordkeeping and access to records.
Suppliers and agents of the participant or importer shall keep
accurate books, records and accounts with respect to all contracts
entered into hereunder, including those pertaining to ocean
transportation-related services and records of all payments by
suppliers to representatives of the importer or participant, if CCC
finances any part of the ocean freight. Suppliers and agents shall
permit authorized representatives of the U.S. Government to have access
to their premises during regular hours to inspect, examine, audit and
make copies of such books, records and accounts. Suppliers and agents
shall retain such records until the expiration of three years after
final payment under such contracts.
[[Page 3823]]
Signed at Washington, D.C. on September 13, 1996.
Christopher E. Goldthwait,
General Sales Manager, Foreign Agricultural Service and Vice-President,
Commodity Credit Corporation.
[FR Doc. 97-1736 Filed 1-24-97; 8:45 am]
BILLING CODE 3410-10-P
