[Federal Register Volume 60, Number 83 (Monday, May 1, 1995)]
[Rules and Regulations]
[Pages 21037-21039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10600]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 1494
Export Bonus Programs
AGENCY: Commodity Credit Corporation (CCC), USDA.
ACTION: Final rule.
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SUMMARY: CCC is issuing this final rule to amend its regulations to:
(1) Delete the export experience requirement for qualification to
participate in the Export Enhancement Program (EEP) and the Dairy
Export Incentive Program (DEIP) and (2) establish the time at which new
program participants would be eligible to receive bonus payments. These
amendments are intended to provide the opportunity for a greater number
of U.S. exporters to participate in the EEP and the DEIP. The final
rule also amends several provisions of the regulations to make them
clearer, easier to read, and more consistent with the regulations that
apply to some of the other CCC export programs.
EFFECTIVE DATE: May 31, 1995.
FOR FURTHER INFORMATION CONTACT: L.T. McElvain, Director, CCC
Operations Division, Foreign Agricultural Service, U.S. Department of
Agriculture, AG Box 1035, Washington D.C., 20250-1035; Fax (202) 720-
2949; Telephone (202) 720-6211. The U.S. Department of Agriculture
(USDA) prohibits discrimination in its programs on the basis of race,
color, national origin, sex, religion, age, disability, political
beliefs, and marital or familial status. Persons with disabilities who
require alternative means for communication of program information
(braille, large print, audiotape, etc.) should contact the USDA Office
of Communications at (202) 720-5881 (voice) or (202) 720-7808 (TDD).
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This final rule is issued in conformance with Executive Order
12866. It has been determined to be neither significant nor
economically significant for the purposes of E.O. 12866 and, therefore,
has not been reviewed by the Office of Management and Budget (OMB).
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable to this final rule since CCC is not required by 5 U.S.C. 553
or any other provision of law to publish a notice of rulemaking with
respect to the subject matter of this rule.
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 notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115 (June 24, 1983).
Environmental Evaluation
It has been determined by an environmental evaluation that this
action will not have a significant impact on the quality of the human
environment. Therefore, neither an Environmental Assessment nor an
Environmental Impact Statement is needed.
Paperwork Reduction Act
The information collection requirements contained in this rule have
previously been submitted to OMB for review under the Paperwork
Reduction Act and were assigned OMB control numbers 0551-0028 and 0551-
0029.
Executive Order 12778
This final rule has been reviewed under Executive Order 12778,
Civil Justice Reform. This final rule will have preemptive effect with
respect to any [[Page 21038]] state or local laws, regulations, or
policies which conflict with such provisions or which otherwise impede
their full implementation. The rule will not have retroactive effect.
The regulations currently require that certain administrative remedies
be exhausted before suit may be filed, and this final rule does not
change this requirement.
The Department of Agriculture is committed to carrying out its
statutory and regulatory mandates in a manner that best serves the
public interest. Therefore, where legal discretion permits, the
Department actively seeks to promulgate regulations that promote
economic growth, create jobs, are minimally burdensome, and are easy
for the public to understand, use or comply with. In short, the
Department is committed to issuing regulations that maximize net
benefits to society and minimize costs imposed by those regulations.
Background
CCC published a proposed rule in the Federal Register of January
18, 1995 (60 FR 3564) that would amend 7 CFR part 1494 to delete the
export experience requirement for qualification to participate in the
EEP and the DEIP and establish the time at which new program
participants would be eligible to receive bonus payments. In addition,
CCC proposed that changes be made to the regulations to require a
certification from exporters seeking to qualify for program
participation; to delete unnecessary or redundant language; and to
inform qualified exporters in a more direct fashion that they have a
duty to update information they have provided to CCC pursuant to 7 CFR
1494.301(a) to ensure that it is current and accurate. The proposed
rule also contained other minor, non-substantive changes intended to
make the rule clearer, easier to read, and more consistent with the
regulations that apply to some of the other CCC export programs.
Comments
The deadline for submitting comments on the proposed rule was March
20, 1995. CCC received comments from six U.S. exporters, two producer
associations, and one U.S. trade association. These nine parties made
approximately 12 separate and significant comments regarding the
proposed rule.
Five commenters expressed support for CCC's proposal to delete the
export experience requirement. One commenter stated that the export
experience requirement has seriously limited participation in the DEIP
by certain exporters. Another commenter felt that this requirement has
had the effect of creating a monopoly which reduced the competitive
edge of U.S. exports. Furthermore, this respondent felt that the
experience requirement has forced novice exporters to have to deal with
export sales agents qualified under the EEP or DEIP. This additional
layer, in the view of the commenter, decreases the efficiency of the
export sale. One commenter felt that a firm that has the contacts and
resources to do business overseas should be allowed the opportunity to
do international business, through its participation in the programs,
in the same way that it has the opportunity to do business in the
domestic market.
Another commenter felt that the experience requirement has
restricted the ability of many U.S. dairy product companies to export
and that dispensing with this requirement will broaden the potential
exporter base for U.S. dairy products. This respondent, however, was
opposed to CCC's proposal to defer payment of bonuses to new program
participants until they have demonstrated their ability to participate
successfully in a program. This commenter expressed the opinion that
this provision of the proposed rule is discriminatory because the
timing of the receipt of the export bonus and the performance security
requirements work to the competitive disadvantage of novice exporters
and the advantage of experienced exporters.
Four commenters disagreed with the proposal to delete the export
experience requirement. These commenters were concerned that removal of
this requirement would, in some way, threaten the integrity of the EEP
and DEIP and the image of the United States as a reliable export
supplier. One commenter felt that the qualification requirements in the
current DEIP regulations are not onerous and can be readily satisfied
by parties who are seriously interested in developing export business.
One commenter expressed the opinion that the deletion of the experience
requirement could encourage export transactions by parties that lack
the experience and financial standing to successfully execute such
transactions. One commenter felt that removal of the experience
requirement would open the programs to potential fraud. This commenter
advocated that even more controls be placed on program participation.
Another respondent felt that, if the experience requirement is
deleted, the market would be plagued with companies and brokers that
are inexperienced and perhaps less than honest. Program particiaption
by inexperienced companies would, in the long run, cause small domestic
producers to shy away from the international market, because of bad
experiences, and foreign buyers to buy solely from large companies.
However, this commenter did express support for the change in the
proposed rule such that an exporter would simply qualify one time to be
eligible for a program and could thereafter export any eligible
commodity under that program.
CCC did not receive comments on any of the other proposed changes
to 7 CFR part 1494.
Discussion
After considering all of the significant comments, CCC has
determined to make the changes to 7 CFR 1494.201 and 1494.301 as
proposed. CCC agrees with those commenters that expressed the view that
the deletion of the export experience requirement will permit
additional companies to participate in the EEP and DEIP and increase
competition for export business.
CCC does not agree with those commenters that felt that the
additional exporters that will participate in the EEP and DEIP as a
result of this change will present an increased threat to the programs
as a result of abuse or fraud. CCC will continue to require performance
security from exporters and take aggressive action in the face of any
apparent program violations. In addition, CCC does not agree with the
commenters' views that allowing inexperienced exporters to participate
in the programs will adversely affect other small exporters'
participation or domestic suppliers' relationships with exporters,
because domestic suppliers can take steps to evaluate individual
exporters and to protect themselves from nonperformance and other
potential exporter problems.
The proposed timing of the bonus payments to new program
participants will provide a means of allowing exporters to gain
experience within the program, yet protect CCC from paying a bonus
until the product arrives in the eligible country. CCC's intention, in
adopting this bonus mechanism, is to address the types of concerns
about potential program abuse raised by some commenters. Furthermore,
while the timing of the bonus payment is different for qualified
exporters and those without proven program participation, the amount of
performance security required and the timing of the release of the
performance security for both categories of exporters will be the same.
Therefore, CCC has designed a mechanism which will impose the minimal
additional burden on new [[Page 21039]] program participants necessary
to protect CCC's interests.
List of Subjects in 7 CFR Part 1494
Administrative practice and procedure, Agricultural commodities,
Exports, Government contracts, Reporting and recordkeeping
requirements.
Accordingly, 7 CFR part 1494 is amended to read as follows:
PART 1494--EXPORT BONUS PROGRAMS
Subpart B--Export Enhancement Program Operations
1. The authority citation for 7 CFR part 1494, subpart B, continues
to read as follows:
Authority: 7 U.S.C. 5602, 5651, 5661, 5662, 5676; 15 U.S.C.
714c.
2. Paragraph (q) of Sec. 1494.201 is revised to read as follows:
Sec. 1494.201 Definitions of terms.
* * * * *
(q) Eligible exporter. A person that has been notified by CCC that
such person is qualified to submit offers in response to Invitations.
* * * * *
3. Section 1494.301 is amended by revising the section introductory
text and the paragraph (a) introductory text; by removing paragraph
(a)(1) and redesignating paragraphs (a)(2) through (a)(6) as paragraphs
(a)(1) through (a)(5), respectively; by adding a new paragraph (a)(6);
by removing paragraph (b) and redesignating paragraphs (c) through (g)
as paragraphs (b) through (f), respectively; by revising newly
designated paragraphs (b), (d), (e) and (f); and by adding a new
paragraph (g) to read as follows:
Sec. 1494.301 Information required for program participation.
Before CCC will consider an offer from an interested person, such
person must qualify for participation in the program. Based upon
information submitted by the interested person and available from
public sources, CCC will determine whether the interested person is
eligible for participation in the program.
(a) Submission of documentation. An interested person that wishes
to qualify as an eligible exporter must furnish the following
information or documentation to CCC at the address referenced in the
Notice to Exporters--EEP Contacts:
* * * * *
(6) The following certification: ``I certify, to the best of my
knowledge and belief, that neither [name of interested person] nor any
of its principals has been debarred, suspended, or proposed for
debarment from contracting with or participating in programs
administered by any U.S. Government agency. [``Principals,'' for the
purpose of this certification, means officers; directors; owners of
five percent or more of stock; partners; and persons having primary
management or supervisory responsibility within a business entity
(e.g., general manager, plant manager, head of a subsidiary division or
business segment, and similar positions).] I further agree that, should
any such debarment, suspension, or notice of proposed debarment occur
in the future, [name of interested person] will immediately notify
CCC.''
(b) Necessity to qualify. An interested person may not submit an
offer, and CCC will not consider any such offer, until CCC has notified
the interested person that such person has qualified as an eligible
exporter.
* * * * *
(d) Previous performance. CCC may request additional information
with respect to the interested person's performance under any U.S.
Government programs or in connection with any contracts or agreements
with the U.S. Government during the past three years.
(e) Ineligibility for program participation. A person may be
ineligible to participate in the EEP if such person:
(1) Is currently debarred, suspended or proposed for debarment from
contracting with or participating in any program administered by a U.S.
Government agency; or
(2) Is controlled or can be controlled, in whole or in part, by any
individuals or entities currently debarred, suspended or proposed for
debarment from contracting with or participating in programs
administered by a U.S. Government agency.
(f) Duty to update information provided to CCC. An eligible
exporter is under a continuing obligation to inform CCC of any changes
in the information or documentation submitted to CCC pursuant to
paragraph (a) of this section and to provide current and accurate
information to CCC.
(g) Payment of bonus to exporters without proven EEP participation.
An eligible exporter that has not yet demonstrated its ability to
participate successfully in the EEP will be eligible to receive a bonus
payment(s) only after the eligible commodity specified in an EEP
Agreement has entered into the eligible country. Such an exporter must
furnish performance security under ``Option B'' of the applicable
Invitation and follow the procedure specified in Sec. 1494.701(d) to
request the payment of the bonus. An eligible exporter may demonstrate
its ability to participate successfully in the EEP by entering or
causing to be entered into the eligible country at least 95% of the
quantity of the eligible commodity specified in any one EEP Agreement.
CCC will consider that an exporter has proven its ability to
participate successfully in the EEP as of the date on which CCC pays to
the exporter a bonus for entry of a quantity that brings the total
entered quantity for any one EEP Agreement to at least 95%. For all EEP
Agreements that such exporter enters into with CCC subsequent to that
date, the exporter may furnish performance security under ``Option A''
of the applicable Invitation and will be eligible to receive bonus
payments in accordance with Sec. 1494.701(c).
Signed this 25th day of April, 1995 at Washington, DC.
Christopher E. Goldthwait,
General Sales Manager and Vice President, Commodity Credit Corporation.
[FR Doc. 95-10600 Filed 4-28-95; 8:45am]
BILLING CODE 3410-10-F
