CCC Export Credit Guarantee Program (GSM-102) and CCC

[Title 7 CFR B]
[Code of Federal Regulations (annual edition) - January 1, 1999 Edition]
[Title 7 - AGRICULTURE]
[Subtitle B - Regulations of the Department of Agriculture--(Continued)]
[Chapter Xiv - COMMODITY CREDIT CORPORATION,]
[Subchapter C - EXPORT PROGRAMS]
[Part 1493 - CCC EXPORT CREDIT GUARANTEE PROGRAMS]
[Subpart B - CCC Export Credit Guarantee Program (GSM-102) and CCC]
[From the U.S. Government Printing Office]

7AGRICULTURE101999-01-011999-01-01falseCCC Export Credit Guarantee Program (GSM-102) and CCCBSubpart BAGRICULTURERegulations of the Department of Agriculture--(Continued)COMMODITY CREDIT CORPORATION,EXPORT PROGRAMSCCC EXPORT CREDIT GUARANTEE PROGRAMS
Subpart B--CCC Export Credit Guarantee Program (GSM-102) and CCC
Intermediate Export Credit Guarantee Program (GSM-103) Operations

Sec. 1493.10 General statement.

(a) Overview. (1) This subpart contains the regulations governing
the operations of the Export Credit Guarantee Program (GSM-102) and the
Intermediate Credit Guarantee Program (GSM-103). The GSM-102 and GSM-103
programs of the Commodity Credit Corporation (CCC) were developed to
expand U.S. agricultural exports by making available export credit
guarantees to encourage U.S. private sector financing of foreign
purchases of U.S. agricultural commodities on credit terms. Under GSM-
102, credit guarantees are issued for terms of up to three years. Under
GSM-103, credit guarantees are issued for terms of from three to ten
years.
(2) The programs operate in cases where credit is necessary to
increase or maintain U.S. exports to a foreign market and where private
U.S. financial institutions would be unwilling to provide financing
without CCC's guarantee. The programs are operated in a manner intended
not to interfere with markets for cash sales. The programs are targeted
toward those countries where the guarantees are necessary to secure
financing of the exports but which have sufficient financial strength so
that foreign exchange will be available for scheduled payments. In
providing this credit guarantee facility, CCC seeks to expand market
opportunities for U.S. agricultural exporters and assist long-term
market development for U.S. agricultural commodities.
(3) The credit facility created by these programs is the CCC payment
guarantee. The payment guarantee is an agreement by CCC to pay the
exporter, or the U.S. financial institution that may take assignment of
the exporter's right to proceeds, specified amounts of principal and
interest due from, but not paid by, the foreign bank issuing an
irrevocable letter of credit in connection with the export sale to which
CCC's guarantee coverage pertains. By approving an exporter's
application for a payment guarantee, CCC encourages private sector,
rather than governmental, financing and incurs a substantial portion of
the risk of default by the foreign bank. CCC assumes this risk, in order
to be able to operate the programs for the purposes specified in
Sec. 1493.2.
(b) Credit facility mechanism. Typically, in export sales of U.S.
agricultural commodities, payment by the importer is made under an
irrevocable letter of credit. For the purpose of the GSM-102 and GSM-103
programs, CCC will consider applications for payment guarantees only in
connection with export sales of U.S. agricultural commodities where the
payment for the agricultural commodities will be made in one of the two
following ways:
(1) An irrevocable foreign bank letter of credit, issued in favor of
the exporter, specifically stating the deferred payment terms under
which the foreign bank is obligated to make payments in U.S. dollars as
such payments become due; or
(2) An irrevocable foreign bank letter of credit, issued in favor of
the exporter, that is supported by a related obligation specifically
stating the deferred payment terms under which the

[[Page 582]]

foreign bank is obligated to make payment to the exporter, or the
exporter's assignee, in U.S. dollars as such payments become due. The
exporter may assign the right to proceeds under the letter of credit or
related obligation to a U.S. bank or other financial institution so that
the exporter may realize the proceeds of the sale prior to the deferred
payment date(s) as set forth in the irrevocable foreign bank letter of
credit or its related obligation. The GSM-102 and GSM-103 programs are
designed to protect the exporter or the exporter's assignee against
those losses specified in the payment guarantee resulting from defaults,
whether for commercial or noncommercial reasons, by the foreign bank
obligated under the letter of credit or related obligation.
(c) Program administration. The GSM-102 and GSM-103 programs will be
administered pursuant to this part and any Program Announcements and
Notices to Participants issued by CCC pursuant to, and not inconsistent
with, this part. These programs are under the general administrative
responsibility of the General Sales Manager (GSM), Foreign Agricultural
Service (FAS/USDA). The review and payment of claims for loss will be
administered by the Office of the Controller, CCC. Information regarding
specific points of contact for the public, including names, addresses,
and telephone and facsimile numbers of particular USDA or CCC offices,
will be announced by a public press release (see Sec. 1493.20(c),
``Contacts P/R'').
(d) Country allocations and program announcements. From time to
time, CCC will issue a Program Announcement to announce a GSM-102 and/or
GSM-103 program allocation for a specific country. The Program
Announcement for a country allocation will designate specific
allocations for U.S. agricultural commodities or products thereof.
Exporters may negotiate export sales to buyers in that country for one
of the commodities specified in the Program Announcement and seek
payment guarantee coverage within the dollar amounts of specified
coverage for that commodity. The Program Announcement will contain a
requirement that the exporter's sales contract contain a shipping
deadline within the applicable program year. The final date for a
contractual shipping deadline will be stated in the Program
Announcement. Program Announcements may also contain a specified
``undesignated'' or ``unallocated'' dollar amount for the purpose that
if dollar amounts specified for a specific commodity for a country
become fully used, an additional allocation from the ``unallocated'' or
``undesignated'' portion of the total country allocation may then be
designated for a specific commodity. Program Announcements that include
an ``allocated'' or ``undesignated'' dollar amount will contain further
information on the ``unallocated'' or ``undesignated'' portion of the
country allocation.

Sec. 1493.20 Definition of terms.

Terms set forth in this part, in CCC Program Announcements and
Notices to Participants, and in any CCC-originated documents pertaining
to the GSM-102 and GSM-103 programs will have the following meanings:
(a) Assignee. A financial institution in the United States which,
for adequate consideration given, has obtained the legal rights to
receive the payment of proceeds under the payment guarantee.
(b) CCC. The Commodity Credit Corporation, an agency and
instrumentality of the United States within the Department of
Agriculture, authorized pursuant to the Commodity Credit Corporation
Charter Act of 1948 (15 U.S.C. 714 et seq.), and subject to the general
supervision and direction of the Secretary of Agriculture.
(c) Contacts P/R. A notice issued by FAS/USDA by public press
release which contains specific names, addresses, and telephone and
facsimile numbers of contacts within FAS/USDA and CCC for use by persons
interested in obtaining information concerning the operations of the
GSM-102 or GSM-103 program. The Contacts P/R also contains details about
where to submit information required to qualify for program
participation, to apply for payment guarantees, to request amendments of
payment guarantees, to submit evidence of export reports, and to give
notices of default and file claims for loss.

[[Page 583]]

(d) Date of export. One of the following dates, depending upon the
method of shipment: the on-board date of an ocean bill of lading or the
on-board ocean carrier date of an intermodal bill of lading; the on-
board date of an airway bill; or, if exported by rail or truck, the date
of entry shown on an entry certificate or similar document issued and
signed by an official of the Government of the importing country.
(e) Date of sale. The earliest date on which a contractual
obligation exists between the exporter, or an intervening purchaser, if
applicable, and the importer under which a firm dollar-and-cent price
for the sale of agricultural commodities to the importer has been
established or a mechanism to establish such price has been agreed upon.
(f) Discounts and allowances. Any consideration provided directly or
indirectly, by or on behalf of the exporter or an intervening purchaser,
to the importer in connection with a sale of an agricultural commodity,
above and beyond the commodity's value, stated on the appropriate FOB,
FAS, CFR or CIF basis. Discounts and allowances include, but are not
limited to, the provision of additional goods, services or benefits; the
promise to provide additional goods, services or benefits in the future;
financial rebates; the assumption of any financial or contractual
obligations; the whole or partial release of the importer from any
financial or contractual obligations; or settlements made in favor of
the importer for quality or weight.
(g) Eligible interest. The maximum amount of interest, based on the
interest rate indicated in CCC's payment guarantee or any amendments to
such payment guarantee, which CCC agrees to pay the exporter or the
exporter's assignee in the event that CCC pays a claim for loss. The
maximum interest rate stated in the payment guarantee, when determined
or adjusted by CCC, will not exceed the average investment rate of the
most recent Treasury 52-week bill auction in effect at that time.
(h) Exported value. (1) Where CCC announces coverage on a FAS or FOB
basis and:
(i) Where the commodity is sold on a FAS or FOB basis, the value,
FAS or FOB basis, U.S. point of export, of the export sale, reduced by
the value of any discounts or allowances granted to the importer in
connection with such sale; or
(ii) Where the commodity was sold on a CFR or CIF basis, point of
entry, the value of the export sale, FAS or FOB, point of export, is
measured by the CFR or CIF value of the agricultural commodity less the
cost of ocean freight, as determined at the time of application and, in
the case of CIF sales, less the cost of marine and war risk insurance,
as determined at the time of application, reduced by the value of any
discounts or allowances granted to the importer in connection with the
sale of the commodity; or
(2) Where CCC announces coverage on a CFR or CIF basis, and where
the commodity is sold on a CFR or CIF basis, point of entry, the total
value of the export sale, CFR or CIF basis, point of entry, reduced by
the value of any discounts or allowances granted to the importer in
connection with the sale of the commodity.
(3) When a CFR or CIF commodity export sale involves the performance
of non-freight services to be performed outside the United States (e.g.,
services such as bagging bulk cargo) which are not normally included in
ocean freight contracts, the value of such services and any related
materials not exported from the U.S. with the commodity must also be
deducted from the CFR or CIF sales price in determining the exported
value.
(i) Exporter. A seller of U.S. agricultural commodities or products
thereof that has qualified in accordance with the provisions of
Sec. 1493.30.
(j) FAS/USDA. The Foreign Agricultural Service, U.S. Department of
Agriculture.
(k) Foreign bank letter of credit. An irrevocable commercial letter
of credit, subject to the current revision of the Uniform Customs and
Practices for Documentary Credits (International Chamber of Commerce
Publication No. 500, or latest revision), providing for payment in U.S.
dollars against stipulated documents and issued in favor of

[[Page 584]]

the exporter by a CCC-approved foreign banking institution.
(l) GSM. The General Sales Manager, FAS/USDA, acting in his capacity
as Vice President, CCC, or his designee.
(m) GSM-102. A CCC program, also referred to as the ``Export Credit
Guarantee Program,'' under which payment guarantees are approved for a
credit period not exceeding 3 years from the date(s) of export or from
the date interest begins to accrue, whichever is earlier.
(n) GSM-103. A CCC program, also referred to as the ``Intermediate
Export Credit Guarantee Program,'' under which payment guarantees are
approved for a credit period no less than 3 years but not exceeding 10
years from the date(s) of export or from the date interest begins to
accrue, whichever is earlier.
(o) Guaranteed value. The maximum amount, exclusive of interest,
that CCC agrees to pay the exporter or assignee under CCC's payment
guarantee, as indicated on the face of the payment guarantee.
(p) Importer. A foreign buyer that enters into a contract with an
exporter, or with an intervening purchaser, for an export sale of
agricultural commodities to be shipped from the U.S. to the foreign
buyer.
(q) Incoterms. The following customary terms, as defined by the
International Chamber of Commerce, Incoterms (current revision):
(1) Free Alongside Ship (FAS),
(2) Free on Board (FOB),
(3) Cost and Freight (CFR, or alternatively, C&F, C and F, or CNF),
and
(4) Cost Insurance and Freight (CIF).
(r) Intervening purchaser. A party that agrees to purchase U.S.
agricultural commodities from an exporter and sell the same agricultural
commodities to an importer.
(s) Late interest. Interest, in addition to the interest due under
the payment guarantee, which CCC agrees to pay in connection with a
claim for loss, accruing during the period beginning on the first day
after receipt of a claim which CCC has determined to be in good order
and ending on the day on which payment is made on such claim for loss.
(t) Payment guarantee. An agreement under which CCC, in
consideration of a fee paid, and in reliance upon the statements and
declarations of the exporter, subject to the terms set forth in the
written guarantee, this subpart, and any applicable Program
Announcements or Notices to Participants, agrees to pay the exporter or
the exporter's assignee in the event of a default by a foreign bank on
its payment obligation under the foreign bank letter of credit issued in
connection with a guaranteed sale or under the foreign bank's related
obligation.
(u) Notice to participants. A notice issued by CCC by public press
release which serves one or more of the following functions: to remind
participants of the requirements of the program; to clarify the program
requirements contained in these regulations in a manner which is not
inconsistent with the regulations; to instruct exporters to provide
additional information in applications for payment guarantees under
specific country and/or commodity allocations; and to supplement the
provisions of a payment guarantee, in a manner not inconsistent with
these regulations, before the exporter's application for such payment
guarantee is approved.
(v) Port value. (1) Where CCC announces coverage on a FAS or FOB
basis and:
(i) Where the commodity is sold on a FAS or FOB basis, U.S. point of
export, the value, FAS or FOB basis, U.S. point of export, of the export
sale, including the upward tolerance, if any, as provided by the export
sales contract, reduced by the value of any discounts or allowances
granted to the importer in connection with such sale; or
(ii) Where the commodity was sold on a CFR or CIF basis, point of
entry, the value of the export sale, FAS or FOB, point of export,
including the upward tolerance, if any, as provided by the export sales
contract, is measured by the CFR or CIF value of the agricultural
commodity less the value of ocean freight and, in the case of CIF sales,
less the value of marine and war risk insurance, reduced by the value of
any discounts or allowances granted to the importer in connection with
the sale of the commodity; or

[[Page 585]]

(2) Where CCC announces coverage on a CFR or CIF basis and where the
commodity was sold on CFR or CIF basis, point of entry, the total value
of the export sale, CFR or CIF basis, point of entry, including the
upward tolerance, if any, as provided by the export sales contract,
reduced by the value of any discounts or allowances granted to the
importer in connection with the sale of the commodity.
(3) When a CFR or CIF commodity export sale involves the performance
of non-freight services to be performed outside the United States (e.g.,
services such as bagging bulk cargo), which are not normally included in
ocean freight contracts, the value of such services and any related
materials not exported from the U.S. with the commodity must also be
deducted from the CFR or CIF sales price in determining the port value.
(w) Program announcement. An announcement issued by CCC which
provides information on specific country and commodity allocations and
may identify eligible agricultural commodities and countries, length of
credit periods which may be covered, specify dollar limitations for CCC
exposure in particular countries, and include other information and
requirements.
(x) Related obligation. A contractual commitment by the foreign bank
issuing the letter of credit in connection with an export sale to make
payment(s) on principal amount(s), plus any contractual interest, in
U.S. dollars, to a financial institution in the United States on
deferred payment terms consistent with those permitted under CCC's
credit guarantee programs. The U.S. financial institution is entitled to
such payments because it has financed the obligation arising under such
letter of credit.
(y) United States or U.S. All of the 50 states, the District of
Columbia, and the territories and possessions of the United States.
(z) U.S. agricultural commodity. (1) An agricultural commodity or
product entirely produced in the United States; or
(2) A product of an agricultural commodity--
(i) 90 percent or more of the agricultural components of which by
weight, excluding packaging and added water, is entirely produced in the
United States; and
(ii) That the Secretary determines to be a high value agricultural
product. For purposes of this definition, fish entirely produced in the
United States include fish harvested by a documented fishing vessel as
defined in title 46, United States Code, in waters that are not waters
(including the territorial sea) of a foreign country.
(aa) USDA. United States Department of Agriculture.

[59 FR 52876, Oct. 19, 1994, as amended at 62 FR 24561, May 6, 1997]

Sec. 1493.30 Information required for program participation.

Before CCC will accept an application for a payment guarantee under
either the GSM-102 program or the GSM-103 program, the applicant must
qualify for participation in these programs. Based upon the information
submitted by the applicant and other publicly available sources, CCC
will determine whether the applicant is eligible for participation in
the programs.
(a) Submission of documentation. In order to qualify for
participation in the GSM-102 and GSM-103 programs, an applicant must
submit to CCC, at the address specified in the Contacts P/R, the
following information:
(1) The address of the applicant's headquarters office and the name
and address of an agent in the U.S. for the service of process;
(2) The legal form of doing business of the applicant, e.g., sole
proprietorship, partnership, corporation, etc.
(3) The place of incorporation of the applicant, if the applicant is
a corporation;
(4) The name and U.S. address of the office(s) of the applicant, and
statement indicating whether the applicant is a U.S. domestic
corporation, a foreign corporation or another foreign entity. If the
applicant has multiple offices, the address included in the information
should be that which is pertinent to the particular GSM-102 or GSM-103
export sale contemplated by the applicant;
(5) A certified statement describing the applicant's participation,
if any, during the past three years in U.S.

[[Page 586]]

Government programs, contracts or agreements; and
(6) A certification that: ``I certify, to the best of my knowledge
and belief, that neither [name of applicant] 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 applicant] will
immediately notify CCC.''
(b) Previous qualification. Any exporter that has previously
qualified under this section may submit applications for GSM-102 or GSM-
103 payment guarantees. Each application must include the statement
required by Sec. 1493.40(a)(18) incorporating the certifications of
Sec. 1493.50, including the certification in Sec. 1493.50(e) that the
information previously provided pursuant to paragraph (a) of this
section has not changed. If the exporter is unable to provide such
certification, such exporter must update the information required by
paragraph (a) of this section which has changed and certify that the
remainder of the information previously provided has not changed.
(c) Additional submissions. CCC will promptly notify applicants that
have submitted information required by this section whether they have
qualified to participate in the program. Any applicant failing to
qualify will be given an opportunity to provide additional information
for consideration by CCC.
(d) Ineligibility for program participation. An applicant may be
ineligible to participate in the GSM-102 or GSM-103 programs if:
(1) Such applicant 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) Such applicant 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 any U.S. Government agency.

Sec. 1493.40 Application for payment guarantee.

(a) A firm export sale must exist before an exporter may submit an
application for a payment guarantee. An application for a payment
guarantee may be submitted in writing or may be made by telephone, but,
if made by telephone, it must be confirmed in writing to the office
specified in the Contacts P/R. An application must identify the name and
address of the exporter and include the following information:
(1) Name of the destination country.
(2) Name and address of the importer.
(3) Name and address of the intervening purchaser, if any, and a
statement that the commodity will be shipped directly to the importer in
the destination country.
(4) Date of sale.
(5) Exporter's sale number.
(6) Delivery period as agreed between the exporter and the importer.
(7) A full description of the commodity (including packaging, if
any).
(8) Mean quantity, contract loading tolerance and, if necessary, a
request for CCC to reserve coverage up to the maximum quantity permitted
by the contract loading tolerance.
(9) Unit sales price of the commodity, or a mechanism to establish
the price, as agreed between the exporter and the importer. If the
commodity was sold on the basis of CFR or CIF, the actual (if known at
the time of application) or estimated value of freight and, in the case
of sales made on a CIF basis, the actual (if known at the time of
application) or estimated value of marine and war risk insurance, must
be specified.
(10) Description and value of discounts and allowances, if any.
(11) Port value (includes upward loading tolerance, if any).
(12) Guaranteed value.
(13) Guarantee fee.
(14) Name and location of the foreign bank issuing the letter of
credit.

[[Page 587]]

(15) The term length for the credit being extended and the intervals
between principal payments for each shipment to be made under the export
sale.
(16) A statement indicating whether any portion of the export sale
for which the exporter is applying for a payment guarantee is also being
used as the basis for an application for participation in any of the
following CCC or USDA export programs: Export Enhancement Program, Dairy
Export Incentive Program, Sunflowerseed Oil Assistance Program, or
Cottonseed Oil Assistance Program. The number of the Agreement assigned
by USDA under one of these programs should be included, as applicable.
(17) Other information as specified in Notices to Participants, as
applicable.
(18) The exporter's statement, ``All Section 1493.50 Certifications
Are Being Made In This Application'' which, when included in the
application by the exporter, will constitute a certification that it is
in compliance with all the requirements set forth in Sec. 1493.50.
(b) An application for a payment guarantee may be approved as
submitted, approved with modifications agreed to by the exporter, or
rejected by the GSM. In the event that the application is approved, the
GSM will cause a payment guarantee to be issued in favor of the
exporter. Such payment guarantee will become effective at the time
specified in Sec. 1493.60(b). If, based upon a price review, the unit
sales price of the commodity does not fall within the prevailing
commercial market level ranges, as determined by CCC, the application
will not be approved.

Sec. 1493.50 Certification requirements for obtaining payment guarantee.

By providing the statement in Sec. 1493.40(a)(18), the exporter is
certifying that the information provided in the application is true and
correct and, further, that all requirements set forth in this section
have been or will be met. The exporter will be required to provide
further explanation or documentation with regard to applications that do
not include this statement. The exporter, in submitting an application
for a payment guarantee and providing the statement set forth in
Sec. 1493.40(a)(18), certifies that:
(a) The agricultural commodity or product to be exported under the
payment guarantee is a U.S. agricultural commodity as defined by
Sec. 1493.20(z).
(b) There have not been and will not be any corrupt payments or
extra sales services or other items extraneous to the transaction
provided, financed, or guaranteed in connection with the transaction,
and that the transaction complies with applicable United States law;
(c) If the agricultural commodity is vegetable oil or a vegetable
oil product, that none of the agricultural commodity or product has been
or will be used as a basis for a claim of a refund, as drawback,
pursuant to section 313 of the Tariff Act of 1930, 19 U.S.C. 1313, of
any duty, tax or fee imposed under Federal law on an imported commodity
or product;
(d) No person or selling agency has been employed or retained to
solicit or secure the payment guarantee, and that there is no agreement
or understanding for a commission, percentage, brokerage, or contingent
fee, except in the case of bona fide employees or bona fide established
commercial or selling agencies maintained by the exporter for the
purpose of securing business; and
(e) The information provided pursuant to Sec. 1493.30 has not
changed, the exporter still meets all of the qualification requirements
of Sec. 1493.30, and the exporter will immediately notify CCC if there
is a change of circumstances which would cause it to fail to meet such
requirements. If the exporter breaches or violates these certifications
with respect to a GSM-102 or GSM-103 payment guarantee, CCC will have
the right, notwithstanding any other rights provided under this subpart,
to annul guarantee coverage for any commodities not yet exported and/or
to proceed against the exporter.

[59 FR 52876, Oct. 19, 1994, as amended at 62 FR 24561, May 6, 1997]

Sec. 1493.60 Payment guarantee.

(a) CCC's obligation. The payment guarantee will provide that CCC
agrees to pay the exporter or the exporter's assignee an amount not to
exceed the

[[Page 588]]

guaranteed value, plus eligible interest, in the event that the foreign
bank fails to pay under the foreign bank letter of credit or the related
obligation. Payment by CCC will be in U.S. dollars.
(b) Period of guarantee coverage. The payment guarantee will apply
to the period beginning either on the date(s) of export(s) or on the
date when interest begins to accrue, whichever is earlier, and will
continue during the credit term specified in the payment guarantee or
amendments thereto. However, the payment guarantee becomes effective on
the date(s) of export(s) of the agricultural commodities or products
thereof specified in the exporter's application for a payment guarantee.
(c) Terms of the CCC payment guarantee. The terms of CCC's coverage
will be set forth in the payment guarantee, as approved by CCC, and will
include the provisions of this subpart, which may be supplemented by any
Program Announcements and/or Notices to Participants in effect at the
time the payment guarantee is approved by CCC.
(d) Final date to export. The final date to export shown on the
payment guarantee will be one month, as determined by CCC, after the
contractual deadline for shipping.
(e) Reserve coverage for loading tolerances. The exporter may apply
for a payment guarantee and, if coverage is available, pay the guarantee
fee, based at least on, the amount of the lower loading tolerance of the
export sales contract; however, the exporter may also request that CCC
reserve additional guarantee coverage to accommodate up to the amount of
the upward loading tolerance specified in the export sales contract. If
such additional guarantee coverage is available at the time of
application and CCC determines to make such reservation, it will so
indicate to the exporter. In the event that the exporter ships a
quantity greater than the amount on which the guarantee fee was paid
(i.e., lower loading tolerance), it may obtain the additional coverage
from CCC, up to the amount of the upward loading tolerance, by filing
for an amendment to the payment guarantee, and by paying the additional
amount of fee applicable. If such amendment to the payment guarantee is
not filed with CCC by the exporter within 30 days after the date of the
last export against the sales contract, CCC may determine not to reserve
the coverage originally set aside for the exporter.
(f) Ineligible exports. Commodities with a date of export prior to
the date of receipt by CCC of the exporter's telephonic or written
application for a payment guarantee, or with a date of export made after
the final date for export shown on the payment guarantee or any
amendments thereof, are ineligible for GSM-102 or GSM-103 guarantee
coverage, except where it is determined by the GSM to be in the best
interests of CCC to provide guarantee coverage on such commodities.
(g) Foreign agricultural component. CCC may approve payment
guarantees under this subpart only in connection with sales of United
States agricultural commodities as defined in Sec. 1493.20(z). CCC may
not provide guarantee coverage under this subpart on credit extended for
the value of any foreign agricultural component.
(h) Additional requirements. The payment guarantee may contain such
additional terms, conditions, and limitations as deemed necessary or
desirable by the GSM. Such additional terms, conditions or
qualifications, as stated in the payment guarantee are binding on the
exporter or the exporter's assignee.
(i) Amendments. A request for an amendment of a payment guarantee
may be submitted only by the exporter (with the concurrence of the
assignee, if any). CCC will consider such a request only if the
amendment sought is consistent with this subpart and any applicable
Program Announcements and Notices to Participants. Amendments may
include, but will not be limited to, a change in the credit period and
an extension of time to export. Any amendment to the payment guarantee,
particularly those that result in an increase in CCC's liability under
the payment guarantee, may result in an increase in the guarantee fee.
(Technical corrections or corrections of a clerical error which may be
submitted by the exporter or the exporter's assignee are not viewed as
amendments.)

[[Page 589]]

Sec. 1493.70 Guarantee rates and fees.

(a) Guarantee fee rates. The payment guarantee fee rates will be
based upon the length of the payment terms provided for in the export
sale contract, the degree of risk that CCC assumes, as determined by
CCC, and any other factors which CCC determines appropriate for
consideration. A current schedule of the guarantee fee rates charged by
CCC under GSM-102 and GSM-103 will be available upon request from the
FAS/USDA office specified in the Contacts P/R.
(b) Calculation of fee. The guarantee fee will be computed by
multiplying the guaranteed value by the guarantee fee rate.
(c) Payment of fee. The exporter shall remit, with his written
application, the full amount of the guarantee fee. Applications will not
be approved until the guarantee fee has been received by CCC. The
exporter's check for the guarantee fee shall be made payable to CCC and
mailed or delivered by courier to the office specified in the Contacts
P/R.
(d) Refunds of fee. Guarantee fees paid in connection with approved
applications will ordinarily not be refundable. CCC's approval of the
application will be final and refund of the guarantee fee will not be
made after approval unless the GSM determines that such refund will be
in the best interest of CCC. If the application for a payment guarantee
is not approved or is approved only for a part of the guarantee coverage
requested, a full or pro rata refund of the fee remittance will be made.

Sec. 1493.80 Evidence of export.

(a) Report of export. The exporter is required to provide CCC an
evidence of export report for each shipment made under the payment
guarantee. This report must include the following:
(1) Payment guarantee number
(2) Date of export
(3) Exporter's sale number
(4) Exported value
(5) Quantity
(6) A full description of the commodity exported
(7) Unit sales price received for the commodity exported and the
basis (e.g., FOB, CFR, CIF). Where the unit sales price at export
differs from the unit sales price indicated in the exporter's
application for a payment guarantee, the exporter is also required to
submit a statement explaining the reason for the difference.
(8) Description and value of discounts and allowances, if any.
(9) Number of the Agreement assigned by USDA under another program
if any portion of the export sale was also approved for participation in
the following CCC or USDA export programs: Export Enhancement Program,
Dairy Export Incentive Program, Sunflowerseed Oil Assistance Program, or
Cottonseed Oil Assistance Program.
(10) The exporter's statement, ``All Sec. 1493.90 Certifications Are
Being Made In This Evidence Of Export'' which, when included in the
evidence of export by the exporter, will constitute a certification that
it is in compliance with all the requirements set forth in Sec. 1493.90.
(b) Time limit for submission of evidence of export. The exporter
must provide a written report to the office specified in the Contacts P/
R within 60 calendar days if the export was by rail or truck; or 30
calendar days if the export was by any other carrier. The time period
for filing a report of export will commence upon each date of export of
the commodity covered under a payment guarantee. If the evidence of
export report is not received by CCC within the time period for filing,
the payment guarantee will become null and void only if and only to the
extent that failure to make timely filing resulted, or would be likely
to result, in:
(1) Significant financial harm to CCC;
(2) The undermining of an essential regulatory purpose of the
program;
(3) Obstruction of the fair administration of the program; or
(4) A threat to the integrity of the program. The time limit for
submission of an evidence of export report may be extended if such
extension is determined by the GSM to be in the best interests of CCC.
(c) Export sales reporting. Exporters may have a mandatory reporting
responsibility under Section 602 of the Agricultural Trade Act of 1978
(7 U.S.C. 5712), as amended by Section 1531 of the Food, Agriculture,
Conservation, and Trade Act of 1990 for exports of wheat

[[Page 590]]

and wheat flour, feed grains, oilseeds, cotton, and other agricultural
commodities and products thereof.

Sec. 1493.90 Certification requirements for the evidence of export.

By providing the statement contained in Sec. 1493.80(a)(10), the
exporter is certifying that the information provided in the evidence of
export report is true and correct and, further, that all requirements
set forth in this section have been or will be met. The exporter will be
required to provide further explanation or documentation with regard to
reports that do not include this statement. If the exporter breaches or
violates these certifications with respect to a GSM-102 or GSM-103
payment guarantee, CCC will have the right, notwithstanding any other
rights provided under this subpart, to annul guarantee coverage for any
commodities not yet exported and/or to proceed against the exporter. The
exporter, in submitting the evidence of export and providing the
statement set forth in Sec. 1493.80(a)(10), certifies that:
(a) The agricultural commodity or product exported under the payment
guarantee is a U.S. agricultural commodity as defined by
Sec. 1493.20(z).
(b) Agricultural commodities of the grade, quality and quantity
called for in the exporter's sales contract with the importer have been
exported to the country specified in the payment guarantee;
(c) A letter of credit has been opened in favor of the exporter by
the foreign bank shown in the payment guarantee to cover the port value
of the commodity exported;
(d) There have not been and will not be any corrupt payments or
extra sales services or other items extraneous to the transaction
provided, financed, or guaranteed in connection with the transaction,
and that the transaction complies with applicable United States law; and
(e) The information provided pursuant to Sec. 1493.30 has not
changed, the exporter still meets all of the qualification requirements
of Sec. 1493.30 and the exporter will immediately notify CCC if there is
a change of circumstances which would cause it to fail to meet such
requirements.

[59 FR 52876, Oct. 19, 1994, as amended at 62 FR 24561, May 6, 1997]

Sec. 1493.100 Proof of entry.

(a) Diversion. The diversion of commodities covered by a GSM-102 or
GSM-103 payment guarantee to a country other than that shown on the
payment guarantee is prohibited, unless expressly authorized by the GSM.
(b) Records of proof of entry. Exporters must obtain and maintain
records of an official or customary commercial nature and grant
authorized USDA officials access to such documents or records as may be
necessary to demonstrate the arrival of the agricultural commodities
exported in connection with the GSM-102 or GSM-103 programs in the
country that was the intended country of destination of such
commodities. Records demonstrating proof of entry must be in English or
be accompanied by a certified or other translation acceptable to CCC.
Records acceptable to meet this requirement include an original
certification of entry signed by a duly authorized customs or port
official of the importing country, by the importer, by an agent or
representative of the vessel or shipline which delivered the
agricultural commodity to the importing country, or by a private
surveyor in the importing country, or other documentation deemed
acceptable by the GSM showing:
(1) That the agricultural commodity entered the importing country;
(2) The identification of the export carrier;
(3) The quantity of the agricultural commodity;
(4) The kind, type, grade and/or class of the agricultural
commodity; and
(5) The date(s) and place(s) of unloading of the agricultural
commodity in the importing country. [Records of proof of entry need not
be submitted with a claim for loss, except as may be provided in
Sec. 1493.110(b)(4)(ii).]

Sec. 1493.110 Notice of default and claims for loss.

(a) Notice of default. If the foreign bank issuing the letter of
credit fails to make payment pursuant to the terms

[[Page 591]]

of the foreign bank letter of credit or related obligation, the exporter
or the exporter's assignee must submit a notice of default to CCC as
soon as possible, but not later than 10 calendar days after the date
that payment was due from the foreign bank (the due date). A notice of
default must be submitted in writing to the Treasurer, CCC, at the
address specified in the Contacts P/R. If the exporter or the exporter's
assignee fails to promptly notify CCC of defaults in accordance with
this paragraph, CCC may make the payment guarantee null and void with
respect to any payment(s) applicable to such default. This time limit
may be extended only under extraordinary circumstances and if such
extension is determined by the Controller, CCC, to be in the best
interests of CCC. The notice of default must include:
(1) Payment guarantee number;
(2) Name of the country;
(3) Name of the defaulting bank;
(4) Due date;
(5) Total amount of the defaulted payment due, indicating separately
the amounts for principal and interest;
(6) Date of foreign bank's refusal to pay, if applicable; and
(7) Reason for foreign bank's refusal to pay, if known.
(b) Filing a claim for loss. A claim for a loss by the exporter or
the exporter's assignee will not be paid if it is made later than six
months from the due date of the defaulted payment. A claim for loss must
be submitted in writing to the Treasurer, CCC, at the address specified
in the Contacts P/R. The claim for loss must include the following
information and documents:
(1) Payment guarantee number;
(2) A certification that the scheduled payment has not been
received;
(3) A certification of the amount of accrued interest in default,
the date interest began to accrue, and the interest rate on the foreign
bank obligation applicable to the claim;
(4) A copy of each of the following documents, with a cover document
containing a signed certification by the exporter or the exporter's
assignee that each page of each document is a true and correct copy:
(i)(A) The foreign bank letter of credit securing the export sale;
and
(B) If applicable, the document(s) evidencing the related obligation
owed by the foreign bank to the assignee financial institution which is
related to the foreign bank's letter of credit issued in favor of the
exporter. Such related obligation must be demonstrated in one of the
following ways:
(1) The related obligation, including a specific promise to pay on
deferred payment terms, may be contained in the letter of credit as a
special instruction from the issuing bank directly to the U.S. financial
institution to refinance the amounts paid by the U.S. financial
institution for obligations financed according to the tenor of the
letter of credit; or
(2) The related obligation may be memorialized in a separate
document(s) specifically identified and referred to in the letter of
credit as the agreement under which the foreign bank is obliged to repay
the U.S. financial institution on deferred payment terms; or
(3) The letter of credit payment obligations may be specifically
identified in a separate document(s) setting forth the related
obligation, or in a duly executed amendment thereto, as having been
financed by the U.S. financial institution pursuant to, and subject to
repayment in accordance with the terms of, such related obligation; or
(4) The related obligation may be memorialized in the form of a
promissory note executed by the foreign bank issuing the letter of
credit in favor of the U.S. financial institution submitting the claim;
(ii) Depending upon the method of shipment, the negotiable ocean
carrier or intermodal bill(s) of lading signed by the shipping company
with the onboard ocean carrier date for each shipment, the airway bill,
or, if shipped by rail or truck, the entry certificate or similar
document signed by an official of the importing country;
(iii)(A) The exporter's invoice showing, as applicable, the FAS,
FOB, CFR or CIF values; or
(B) If there was an intervening purchaser, both the exporter's
invoice to the intervening purchaser and the intervening purchaser's
invoice to the importer;

[[Page 592]]

(iv) An instrument, in form and substance satisfactory to CCC,
subrogating to CCC the respective rights of the exporter and the
exporter's assignee, if applicable, to the amount of payment in default
under the applicable export sale. The instrument must reference the
applicable foreign bank letter of credit and the related obligation, if
applicable; and
(v) A copy of the report(s) of export previously submitted by the
exporter to CCC pursuant to Sec. 1493.80(a).
(c) Subsequent claims for defaults on installments. If the initial
claim is found in good order, the exporter or an exporter's assignee
need only provide all of the required claims documents with the initial
claim relating to a covered transaction. For subsequent claims relating
to failure of the foreign bank to make scheduled installments on the
same export shipment, the exporter or the exporter's assignee need only
submit to CCC a notice of such failure containing the information stated
in paragraph (b)(1), (2), and (3) of this section; an instrument of
subrogation as per paragraph (b)(4)(iv) of this section, and including
the date the original claim was filed with CCC.

Sec. 1493.120 Payment for loss.

(a) Determination of CCC's liability. Upon receipt in good order of
the information and documents required under Sec. 1493.110, CCC will
determine whether or not a loss has occurred for which CCC is liable
under the applicable payment guarantee, this subpart and any applicable
supplemental Program Announcements and Notices to Participants. If CCC
determines that it is liable to the exporter and/or the exporter's
assignee, CCC will pay the exporter or the exporter's assignee in
accordance with paragraphs (b) and (c) of this section.
(b) Amount of CCC's liability. CCC's maximum liability for any
claims for loss submitted with respect to any payment guarantee, not
including any late interest payments due in accordance with paragraph
(c) of this section, will be limited to the lesser of:
(1) The guaranteed value as stated in the payment guarantee, plus
eligible interest; or
(2) The guaranteed percentage (as indicated in the payment
guarantee) of the exported value indicated in the evidence of export,
plus eligible interest.
(c) Late interest payment. If a claim is not paid within one day of
receipt of a claim which CCC has determined to be in good order, late
interest will accrue in favor of the exporter or the exporter's assignee
beginning with the first day after the day of reciept of a claim found
by CCC to be in good order and continuing until and including the date
that payment is made by CCC. Late interest will be paid on the
guaranteed amount, as determined by paragraphs (b)(1) and (2) of this
section, and will be calculated based on the average investment rate of
the most recent Treasury 91-day bill auction as announced by the
Department of Treasury as of the due date.
(d) Accelerated payments. CCC will pay claims only for losses on
amounts not paid as scheduled. CCC will not pay claims for amounts due
under an accelerated payment clause in the export sales contract, the
foreign bank's letter of credit, or any obligation owed by the foreign
bank to the assignee U.S. financial institution which is related to the
foreign bank's letter of credit issued in favor of the exporter, unless
it is determined to be in the best interests of CCC by the Controller,
CCC. Notwithstanding the foregoing, CCC at its option may declare the
entire amount of the unpaid balance, plus accrued interest, in default
and make payment to the exporter or the exporter's assignee in addition
to such other claimed amount as may be due from CCC.
(e) Action against the assignee. Notwithstanding any other provision
in this subpart to the contrary, with regard to commodities covered by a
payment guarantee, CCC will not hold the assignee responsible or take
any action or raise any defense against the assignee for any action,
omission, or statement by the exporter of which the assignee has no
knowledge, provided that:
(1) The exporter complies with the reporting requirements under
Sec. 1493.80 and Sec. 1493.90, excluding post-export adjustments (i.e.,
corrections to evidence of export reports); and

[[Page 593]]

(2) The exporter or the exporter's assignee furnishes the statements
and documents specified in Sec. 1493.110.

Sec. 1493.130 Recovery of losses.

(a) Notification. Upon payment of loss to the exporter or the
exporter's assignee, CCC will notify the foreign bank of CCC's rights
under the subrogation agreement to recover all moneys in default.
(b) Receipt of monies. (1) In the event that monies for a defaulted
payment are recovered by the exporter or the exporter's assignee from
the importer, the foreign bank, or any other source whatsoever, such
monies shall be immediately paid to the Treasurer, CCC. If such monies
are not received by CCC within 15 business days from the date of
recovery by the exporter or the exporter's assignee, the exporter or the
exporter's assignee will owe to CCC interest from the date of recovery
to the date of receipt by CCC. This interest will be calculated based on
the latest average investment rate of the most recent Treasury 91-day
bill auction, as announced by the Department of Treasury, in effect on
the date of recovery and will accrue from such date to the date of
payment by the exporter or the exporter's assignee to CCC. Such interest
will be charged only on CCC's share of the recovery.
(2) If CCC recovers monies that should be applied to a payment
guarantee for which a claim has been paid by CCC, CCC will pay the
holder of the payment guarantee its pro rata share immediately, provided
that the required information necessary for determining pro rata
distribution has been furnished. If payment is not made by CCC within 15
business days from the date of recovery or 15 business days from
receiving the required information for determining pro rata
distribution, whichever is later, CCC will pay interest calculated on
the latest average investment rate of the most recent Treasury 91-day
bill auction, as announced by the Department of Treasury, in effect on
the date of recovery and such interest will accrue from such date to the
date of payment by CCC. The interest will apply only to the portion of
the recovery payable to the holder of the payment guarantee.
(c) Allocation of recoveries. Recoveries made by CCC from the
importer or the foreign bank, and recoveries received by CCC from the
exporter, the exporter's assignee, or any other source whatsoever, will
be allocated by CCC to the exporter or the exporter's assignee and to
CCC on a pro rata basis determined by their respective interests in such
recoveries. The respective interest of each party will be determined on
a pro rata basis, based on the combined amount of principal and interest
in default. Once CCC has paid out a particular claim under a GSM-102 or
GSM-103 payment guarantee, CCC prorates any collections it receives and
shares these collections proportionately with the holder of the
guarantee until both CCC and the holder of the guarantee have been
reimbursed in full. Appendix A to Sec. 1493.130--Illustration of Pro
Rata Allocation of Recoveries--provides an example of the methodology
used by CCC in applying this paragraph (c).
(d) Liabilities to CCC. Notwithstanding any other terms of the
payment guarantee, the exporter may be liable to CCC for any amounts
paid by CCC under the payment guarantee when and if it is determined by
CCC that the exporter has engaged in fraud, or has been or is in
material breach of any contractual obligation, certification or warranty
made by the exporter for the purpose of obtaining the payment guarantee
or for fulfilling obligations under GSM-102 or GSM-103. Further, the
exporter's assignee may be liable to CCC for any amounts paid by CCC
under the payment guarantee when and if it is determined by CCC that the
exporter's assignee has engaged in fraud or otherwise violated program
requirements.
(e) Good faith. The violation by an exporter of the certifications
in Sec. 1493.50(b) and Sec. 1493.90(d) or the failure of an exporter to
comply with the provisions of Sec. 1493.100 or Sec. 1493.140(e) will not
affect the validity of any payment guarantee with respect to an assignee
which had no knowledge of such violation or failure to comply at the
time such exporter applied for the payment guarantee or at the time of
assignment of the payment guarantee.
(f) Cooperation in recoveries. Upon payment by CCC of a claim to the
exporter or the exporter's assignee, the exporter

[[Page 594]]

or the exporter's assignee will cooperate with CCC to effect recoveries
from the foreign bank and/or the importer.

Appendix A to Sec. 1493.130--Illustration of Pro Rata Allocation of
Recoveries

The following example illustrates CCC's policy, as set forth in
Sec. 1493.130(c), regarding pro rata sharing of recoveries made for
claims filed under the GSM-102 and GSM-103 programs. A typical case
might be as follows:
1. The U.S. bank enters into a $300,000 three-year credit
arrangement with the foreign bank calling for equal annual payments of
principal and annual payments of interest at a rate of 10 percent per
annum and a penalty interest rate of 12 percent per annum on overdue
amounts until the overdue amount is paid.
2. The foreign bank fails to make the final principal payment of
$100,000 and an interest payment of $10,000, both due on January 31.
3. On February 10, the U.S. bank files a claim in good order with
CCC.
4. CCC's guarantee states that CCC's maximum liability is limited to
98 percent of the principal amount due ($98,000) and interest at a rate
of 8 percent per annum (basis 365 days) on 98 percent of the principal
($7,840).
5. CCC pays the claim on February 22.
6. The latest bond equivalent rate of the 52-week Treasury bill
auction average which has been published by the Department of Treasury
in effect on the date of nonpayment (January 31) is 9 percent. The
latest investment rate of the 91-day Treasury Bill auction average which
has been published by the Department of Treasury in effect on the date
of nonpayment by CCC (February 11) is 7 percent.

Computation of Obligations

Using the above case, CCC's payment to the holder of the payment
guarantee would be computed as follows:
1. CCC's Obligation under the Payment Guarantee:

(a)............................. Principal coverage-- $98,000.00
(98% x $100,000).
(b)............................. Interest coverage-- $7,840.00
(8% x $98,000).
------------------
$105,840.00
(c)............................. Late interest due $223.28
from CCC (7% per
annum for 11 days
x $105,840).
------------------
(d)............................. Amount paid by CCC $106,063.28
on February 22.

2. Foreign Bank's Obligation under the Letter of Credit or the
Related Obligation:

(a)............................. Principal due $100,000.00
January 31.
Interest due $10,000.00
January 31 (10% x
$100,000).
------------------

Amount owed by $110,000.00
foreign bank as of
January 31.
(b)............................. Penalty interest $795.62
due (12% per annum
for 22 days x
$100,000).
------------------
(c)............................. Amount owed by $110,795.62
foreign bank as of
February 22.

3. Amount of Foreign Bank's Obligation Not Covered by CCC's Payment
Guarantee: $4,668.55

Computation of Pro Rata Sharing in Recovery of Losses

In establishing each party's respective interest in any recovery of
losses, the total amount due under the foreign bank obligation would be
determined as of the date the claim is paid by CCC (February 22). Using
the above example in which the amount owed by the foreign bank is
$110,000, CCC would be entitled to 95.75 percent ($106,063.07 divided by
$110,765.62) and the holder of the payment guarantee would be entitled
to 4.21 percent ($4,668.55 divided by $110,795.62) of any recoveries of
losses after settlement of the claim. Since in this example, the losses
were recovered after the claim has been paid by CCC, Sec. 1493.130(b)
would apply.

Sec. 1493.140 Miscellaneous provisions.

(a) Assignment. (1) The exporter may assign the proceeds which are,
or may become, payable by CCC under a payment guarantee or the right to
such proceeds only to a financial institution in the U.S. The assignment
must cover all amounts payable under the payment guarantee not already
paid, may not be made to more than one party, and may not, unless
approved in advance by CCC, be:
(i) Made to one party acting for two or more parties or
(ii) Subject to further assignment.
(2) An original and two copies of the written notice of assignment
signed by the parties thereto must be filed by the assignee with the
Treasurer, CCC, at the address specified in the Contacts P/R.
(3) Receipt of the notice of assignment will ordinarily be
acknowledged to the exporter and its assignee in writing by an officer
of CCC. In cases

[[Page 595]]

where a financial institution is determined to be ineligible to receive
an assignment, in accordance with paragraph (b) of this section, CCC
will provide notice thereof, to the financial institution and to the
exporter issued the payment guarantee, in lieu of an acknowledgment of
assignment.
(4) The name and address of the assignee must be included on the
written notice of assignment.
(b) Ineligibility of financial institutions to receive an
assignment. A financial institution will be ineligible to receive an
assignment of proceeds which may become payable under a payment
guarantee if, at the time of assignment, such financial institution:
(1) Is not in sound financial condition, as determined by the
Treasurer of CCC; or
(2) Is the financial institution issuing the letter of credit or
branch, agency, or subsidiary of such institution; or
(3) Is owned or controlled by an entity that owns or controls the
financial institution issuing the letter of credit; or
(4) Is the U.S. parent of the foreign bank issuing the letter of
credit.
(c) Ineligibility of financial institutions to receive proceeds. A
financial institution will be ineligible to receive proceeds payable
under a payment guarantee approved by CCC if such financial institution:
(1) At the time of assignment of a payment guarantee, is not in
sound financial condition, as determined by the Treasurer of CCC;
(2) Is the financial institution issuing the letter of credit or a
branch, agency, or subsidiary of such institution; or
(3) Is owned or controlled by an entity that owns or controls the
financial institution issuing the letter of credit; or
(4) Is the U.S. parent of the foreign bank issuing the letter of
credit.
(d) Alternative satisfaction of payment guarantees. CCC may, with
the agreement of the exporter (or if the right to proceeds payable under
the payment guarantee has been assigned, with the agreement of the
exporter's assignee), establish procedures, terms and/or conditions for
the satisfaction of CCC's obligations under a payment guarantee other
than those provided for in this subpart if CCC determines that those
alternative procedures, terms, and/or conditions are appropriate in
rescheduling the debts arising out of any transaction covered by the
payment guarantee and would not result in CCC paying more than the
amount of CCC's obligation.
(e) Maintenance of records and access to premises. (1) For a period
of five years after the date of expiration of the coverage of a payment
guarantee, the exporter or the exporter's assignee, as applicable, must
maintain and make available all records pertaining to sales and
deliveries of and extension of credit for agricultural commodities
exported in connection with a GSM-102 or GSM-103 payment guarantee,
including those records generated and maintained by agents, intervening
purchasers, and related companies involved in special arrangements with
the exporter. The Secretary of Agriculture and the Comptroller General
of the United States, through their authorized representatives, must be
given full and complete access to the premises of the exporter or the
exporter's assignee, as applicable, during regular business hours from
the effective date of the payment guarantee until the expiration of such
five-year period to inspect, examine, audit, and make copies of the
exporter's, exporter's assignee's, agent's, intervening purchaser's or
related company's books, records and accounts concerning transactions
relating to the payment guarantee, including, but not limited to,
financial records and accounts pertaining to sales, inventory,
processing, and administrative and incidental costs, both normal and
unforeseen. During such period, the exporter or the exporter's assignee
may be required to make available to the Secretary of Agriculture or the
Comptroller General of the United States, through their authorized
representatives, records that pertain to transactions conducted outside
the program, if, in the opinion of the GSM, such records would pertain
directly to the review of transactions undertaken by the exporter in
connection with the payment guarantee.
(2) The exporter must maintain the proof of entry required by
Sec. 1493.100(b),

[[Page 596]]

and must provide access to such documentation if requested by the
Secretary of Agriculture or his authorized representative for the five-
year period specified in paragraph (e)(1) of this section.
(f) Responsibility of program participants. It is the responsibility
of all program participants to review, and fully acquaint themselves
with, all regulations, Program Announcements, and Notices to
Participants relating to the GSM-102 or GSM-103 program, as applicable.
Applicants for payment guarantees under these programs are hereby on
notice that they will be bound by any terms contained in applicable
Program Announcements or Notices to Participants issued prior to the
date of approval of a payment guarantee.
(g) Submission of documents by principal officers. All required
submissions, including certifications, applications, reports, or
requests (i.e., requests for amendments), by exporters or exporters'
assignees under this subpart must be signed by a principal or officer of
the exporter or exporter's assignee or their authorized designee(s). In
cases where the designee is acting on behalf of the principal or the
officer, the signature must be accompanied by: wording indicating the
delegation of authority or, in the alternative, by a certified copy of
the delegation of authority; and the name and title of the authorized
person or officer. Further, the exporter or exporter's assignee must
ensure that all information/reports required under these regulations are
submitted within the required time limits. If requested in writing, CCC
will acknowledge receipt of a submission by the exporter or the
exporter's assignee. If acknowledgment of receipt is requested, the
exporter or exporter's assignee must submit an extra copy of each
document and a stamped self-addressed envelope for return by U.S. mail.
If courier services are desired for the return receipt, the exporter or
exporter's assignee must also submit a self-addressed courier service
order which includes the recipient's billing code for such service.
(h) Officials not to benefit. No member of or delegate to Congress,
or Resident Commissioner, shall be admitted to any share or part of the
payment guarantee or to any benefit that may arise therefrom, but this
provision shall not be construed to extend to the payment guarantee if
made with a corporation for its general benefit.
(i) OMB control number assigned pursuant to the Paperwork Reduction
Act. The information collection requirements contained in this part (7
CFR part 1493) have been approved by the Office of Management and Budget
(OMB) in accordance with the provisions of 44 U.S.C. Chapter 35 and have
been assigned OMB Control Number 0551-0004.