[Federal Register Volume 59, Number 30 (Monday, February 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3212]
[[Page Unknown]]
[Federal Register: February 14, 1994]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1499
Foreign Donation of Agricultural Commodities
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish regulations governing the
donation of agricultural commodities by Commodity Credit Corporation
for distribution in foreign countries pursuant to section 416(b) of the
Agricultural Act of 1949, or the Food for Progress Act of 1985.
DATES: Comments on the proposed rule must be submitted by March 16,
1994.
ADDRESSES: Comments should be submitted to: Director/PAD, Foreign
Agricultural Service, United States Department of Agriculture, 14th and
Independence Ave., SW., room 4079-S, Washington, DC 20250-1000.
All comments will be available for public inspection during regular
business hours in room 4079-S, U.S. Department of Agriculture, 14th and
Independence Avenue, SW., Washington, DC.
FOR FURTHER INFORMATION CONTACT:
Director/PAD, Foreign Agricultural Service, United States Department of
Agriculture, 14th and Independence Avenue, SW., Washington, DC 20250-
1000; telephone (202) 720-3573.
SUPPLEMENTARY INFORMATION: This proposed rule is issued in conformance
with Executive Order 12866. Based on information compiled by the
Department, it has been determined that this proposed rule:
(1) Would have an annual effect on the economy of less than $100
million;
(2) Would not adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities;
(3) Would not create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency;
(4) Would not alter the budgetary impact of entitlements, grants,
user fees, or loan programs or rights and obligations of recipients
thereof; and
(5) Would not raise novel legal or policy issues arising out of
legal mandates, the President's priorities, or principles set forth in
Executive Order 12866.
This proposed rule deals primarily with requirements imposed upon
foreign governments and non-profit entities distributing relief
supplies overseas. Therefore, the proposed rule does not have a
significant impact upon a substantial number of small business entities
and Regulatory Impact Statement was not prepared. A copy of this
proposed rule has been sent to the Chief Counsel, Office of Advocacy,
U.S. Small Business Administration.
Paperwork Reduction Act
This proposed rule contains information collections which are
subject to review by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1980 (44 U.S.C. chapter 35). The
sections requiring information collections are shown below with an
estimate of the annual reporting and recordkeeping burdens. Included in
the estimate is the time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed, and completing
and reviewing the collection of information.
------------------------------------------------------------------------
Estimated Estimated Estimated
annual Annual burden per annual
Section number of frequency response burden
respondents (hours) (hours)
------------------------------------------------------------------------
7 CFR 1499.5:
Existing\1\..... 35 N/A 56 1960
Incl. proposed
rule........... 30 N/A 40 1200
7 CFR 1499.8:
Existing........ 25 N/A 1 25
Incl. proposed
rule........... 25 N/A 1 25
7 CFR 1499.9:
Existing........ 25 N/A 8 200
Incl. proposed
rule........... 25 N/A 8 200
7 CFR 1499.11:
Existing........ 21 N/A 4 84
Incl. proposed
rule........... 21 N/A 4 84
7 CFR 1499.14:
Existing........ 5 N/A 2 10
Incl. proposed
rule........... 5 N/A 2 10
7 CFR 1499.16:
Existing........ 25 2 24 1200
Incl. proposed
rule........... 25 2 24 1200
Total Burden Hours Including Proposed Rule=2719
Total Existing Burden Hours=3479
Net Change in Burden Hours=(760)
------------------------------------------------------------------------
\1\Existing reporting and recordkeeping burdens refer to those
requirements that appear in the current standard form section 416(b)
and Food for Progress agreements.
As required by Section 3504(h) of the Paperwork Reduction Act of
1980, FAS has submitted a copy of this proposed rule to OMB for its
review of these information collection requirements. Other
organizations and individuals desiring to submit comments regarding
this burden estimate or any aspects of these information collection
requirements, including suggestions for reducing the burdens, should
direct them to the Acting General Sales Manager, FAS, USDA, at the
address above, and to the Office of Information and Regulatory Affairs,
OMB, New Executive Building, Washington, DC 20503, Attention: Desk
Officer for the Foreign Agricultural Service.
This rule 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 46 FR 29115 (June 24, 1983).
This proposed rule has been reviewed under the Executive Order
12778, Civil Justice Reform. The proposed rule would have pre-emptive
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 proposed rule would not have retroactive
effect. Administrative proceedings are not required before parties may
seek judicial review.
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. This principle
is articulated in Executive Orders 12291 and 12498. The Department
applies this principle to the full extent possible, consistent with
law.
The Department has developed and reviewed this regulatory proposal
in accordance with these principles. Nonetheless, the Department
believes that public input from all interested persons can be
invaluable to ensuring that the final regulatory product is minimally
burdensome and maximally efficient. Therefore, the Department
specifically seeks comments and suggestions from the public regarding
any less burdensome or more efficient alternative that would accomplish
the purposes described in the proposal. Comments suggesting less
burdensome or more efficient alternatives should be addressed to the
agency as provided in this Proposed Rule.
This proposed rule would govern the donation of agricultural
commodities overseas pursuant to section 416(b) of the Agricultural Act
of 1949 (7 U.S.C. 1431(b)) and the Food for Progress Act of 1985 (7
U.S.C. 1736o). These regulations contain many provisions that have been
standard terms of agreements with recipients, i.e., Cooperating
Sponsors, for a number of years. As of October 1, 1991, the Agency for
International Development no longer is a signatory to section 416(b)
program agreements and pursuant to E.O. 12752, 56 FR 8255, the
Secretary of Agriculture was delegated the President's responsibilities
under the Food for Progress Act. Accordingly, it is appropriate for the
Department of Agriculture to promulgate regulations to govern
operations under these two programs.
Generally, the regulatory provisions herein would apply equally to
both programs; however, certain provisions dealing with the sale of
commodities and the use of local currencies generated from such sales
apply only to the section 416(b) program.
Interested parties should carefully read the full proposed rule. Of
particular note are the following points:
1. Nominations of shipping agents for Cooperating Sponsors
participating in the Food for Progress Act will be made to USDA in
conformity with the conflict of interest provisions currently
applicable only to section 416(b) and of the Agricultural Trade
Development and Assistance Act of 1954 (Pub. L. 480). This will place
all USDA concessional export programs on the same basis regarding
conflict of interest reviews in connection with shipping agents. In
this regard, the proposed regulations include limitations on
commissions that may be paid to shipping agents that follow the
limitations currently proposed for shipping agents participating in the
title I, Public Law 480 program. See 57 FR 53607, November 12, 1992.
Comments received regarding these limitations are presently being
reviewed and will also be considered in relation to this proposed rule.
These proposed rules, however, would also limit the agents commission
to a percentage of the gross freight attributable to the ocean segment
of any movement that may be contracted on a through bill of lading or
involve obligations at discharge such as bagging grain. This limitation
is included because freight charges attributed to inland movements to
many destinations receiving section 416(b) and Food for Progress
commodities are relatively high due to various difficult conditions in
these countries. CCC does not have an effective mechanism to determine
the reasonableness of these charges.
2. These regulations apply only to agreements for the donation of
agricultural commodities and not to any sales to Cooperating Sponsors.
3. Specific criteria are established to govern the approval of
agreements or of activities under such agreements. Detailed information
is required in the Plan of Operation submitted in connection with a
section 416(b) agreement.
4. The proposed rule contains detailed procedures for the
procurement of ocean transportation including requirements for
competitive bidding in the fixture of vessels on charter terms.
5. The regulations include specific guidance for ocean carrier and
inland claims and for disposing of commodities unfit for intended use.
In this regard, the regulations would adopt procedures similar to those
in effect for title II, Public Law 480 shipments and should be familiar
to many Cooperating Sponsors.
6. Responsibility for section 416(b) program oversight in recipient
countries falls to the resident or regional Agricultural Attache/
Counselor or, in the absence thereof, a representative designated by
the United States Department of Agriculture.
List of Subjects in 7 CFR Part 1499
Agricultural commodities, Exports, Foreign aid.
Accordingly, title 7 of the Code of Federal Regulations is proposed
to be amended by adding a new part 1499 to read as follows:
PART 1499--FOREIGN DONATION PROGRAMS
Sec.
1499.1 Definitions.
1499.2 General purpose and scope.
1499.3 Eligibility requirements for cooperating sponsor.
1499.4 Availability of commodities from CCC inventory.
1499.5 Program agreements.
1499.6 Criteria for entering into program agreements.
1499.7 Apportionment of costs.
1499.8 Ocean transportation.
1499.9 Restrictions on commodity use and distribution.
1499.10 Agreement between Cooperating Sponsor and Recipient
Agencies.
1499.11 Liability of the Cooperating Sponsor.
1499.12 Sales, barter, and use of monetized proceeds and program
income.
1499.13 Usual marketing requirements.
1499.14 Processing, packaging and labeling of section 416(b)
commodities in the foreign country.
1499.15 Arrangements for entry and handling in the foreign country.
1499.16 Disposition of commodities unfit for authorized use.
1499.17 Liability for loss, damage, or improper distribution of
commodities--claims and procedures.
1499.18 Records and reporting requirements.
1499.19 Termination of program.
1499.20 Sample documents/guidelines for developing proposals and
reports.
Authority: 7 U.S.C. 1431(b); 7 U.S.C. 1736o; E.O. 12752.
Sec. 1499.1 Definitions.
Activity--An action undertaken by a Cooperating Sponsor involving
the use of agricultural commodities donated under Program Agreements or
the use of monetized proceeds.
Agricultural Counselor or Attache--A United States Department of
Agriculture representative stationed abroad responsible for the country
where agricultural commodities donated under Program Agreements are to
be distributed.
CCC--The Commodity Credit Corporation.
Commodities--Agricultural commodities or products donated under
Program Agreements.
Cooperating Sponsor--An entity with which CCC enters into a Program
Agreement, including both foreign government and private nongovernment
entities.
Director, P.L. 480-OD--The Director, Pub. L. 83-480 Operations
Division, Foreign Agricultural Service, USDA.
Director, PAD--The Director, Program Analysis Division, Foreign
Agricultural Service, USDA.
Director, PDD--The Director, Program Development Division, Foreign
Agricultural Service, USDA.
Food for Progress Program --The donation of commodities under the
authority of the Food for Progress Act of 1985.
General Sales Manager--General Sales Manager and Associate
Administrator, Foreign Agricultural Service, USDA, who is the Vice
President, CCC.
KCCO--Kansas City Commodity Office, Agricultural Stabilization and
Conservation Service, USDA, P.O. Box 419205, Kansas City, Missouri,
64141-6205.
KCFMO--Kansas City Financial Management Office, Agricultural
Stabilization and Conservation Service, USDA, P.O. Box 419205, Kansas
City, Missouri, 64141-6205.
Monetization--The sale of commodities by Cooperating Sponsors.
Monetized proceeds--The local currency proceeds generated from
monetization.
Plan of Operation--A description of the activities the Cooperating
Sponsor will undertake utilizing the donated commodities or monetized
proceeds.
Program income--Money received by the Cooperating Sponsor as a
result of carrying out approved activities, including voluntary
contributions from recipients of agricultural commodities in the
importing country or interest received on monetized proceeds.
Program Agreement--A foreign donation agreement entered into
between CCC and Cooperating Sponsors.
Recipient agency--An entity located in the importing country which
receives commodities or monetized proceeds from a Cooperating Sponsor
for the purpose of carrying out responsibilities of the Cooperating
Sponsor under a Program Agreement.
Shipping Agent--Any person engaged by a Cooperating Sponsor to
arrange for transportation services.
Section 416(b) program--The donation of agricultural commodities
under the authority of section 416(b) of the Agricultural Act of 1949.
USDA--The United States Department of Agriculture.
Sec. 1499.2 General purpose and scope.
This part contains the general terms governing agreements between
CCC and Cooperating Sponsors providing for the donation of agricultural
commodities to carry out programs of assistance outside the United
States under the authority of section 416(b) of the Agricultural Act of
1949, or support of developing countries and countries that have made
commitments to introduce or expand free enterprise elements in their
agricultural economies under the authority of the Food for Progress Act
of 1985. Program Agreements may contain other provisions when CCC
determines that such provisions are necessary to effectively carry out
a particular Program Agreement. Except as otherwise specified herein,
these regulations apply to only donations to Cooperating Sponsors under
both the section 416(b) and Food for Progress programs. However, these
regulations do not apply to donations to intergovernmental agencies
(such as the World Food Program) or organizations unless CCC and such
intergovernmental agency or organization enters into a Program
Agreement incorporating this part.
Sec. 1499.3 Eligibility requirements for Cooperating Sponsor.
All entities registered with the Agency for International
Development under 22 CFR part 203, are eligible to be Cooperating
Sponsors. Other entities may be requested to furnish CCC evidence
sufficient to demonstrate their capabilities to implement proposed
activities prior to entering into a Program Agreement.
Sec. 1499.4 Availability of commodities from CCC inventory.
CCC will, to the extent practicable, announce prior to the
beginning of each fiscal year the types and quantities of agricultural
commodities available for donation from CCC inventory. The quality of
agricultural commodities donated by CCC and packaging will be in
accordance with the specifications set forth in the Program Agreements.
Sec. 1499.5 Program Agreements.
(a) Agreements. The Cooperating Sponsor must enter into a written
Program Agreement with CCC which will incorporate by reference the
terms and conditions set forth in this Part.
(b) Section 416(b) Plan of Operation. Prior to entering into a
section 416(b) Program Agreement, each Cooperating Sponsor shall submit
to the Agricultural Counselor or Attache, and to the Director, PDD, a
Plan of Operation describing the activities it proposes to undertake.
When approved by CCC, the Plan of Operation will be incorporated into
the section 416(b) Program Agreement as Attachment A. In case of a
conflict between the approved Plan of Operation and other terms of the
Program Agreement, such other terms in the Program Agreement will
prevail. The Plan of Operation must follow the format and provide the
information as follows:
Appendix I to Sec. 1499.5--Section 416(b) Program Plan of Operation
(Attachment A)
1. Name and Address of Applicant:
2. Country:
3. Kind and Quantity of Commodities Requested:
4. Delivery Schedule:
5. Program Description:
a. Program objectives and expected outcomes, including a
description of opportunities and constraints to achieving program
objectives and criteria for measuring progress toward these
objectives.
b. Program recipients or participants and how they were chosen.
c. Detailed description of program methodology and approaches,
including, as appropriate:
--plans for distribution, selling commodities, how local
currencies will be spent, and administrative of technical persons
involved in each phase;
--transportation and storage systems that will be used to move
the agricultural products from the receiving port to the point of
distribution, or to where the product is reprocessed, packaged or
sold;
--any reprocessing or repackaging or the commodity;
--logistics plan demonstrating the adequacy of port,
transportation, and storage facilities to deliver commodities to
recipients or to sell the commodities, without undue risk of
spoilage or waste.
d. Governmental or nongovernmental institutions and entities
involved in the program and the extent to which the program will
strengthen or increase the capabilities of institutions or entities
in the recipient country.
e. Method of educating recipients or participants of donation
source, program requirements, and, where appropriate, preparation
and use of the commodity.
f. Describe records, accountability methods and supervisory
activities for controlling and monitoring distribution of products,
sales of commodities, and use of generated proceeds. Describe plans
for evaluating program outcome.
g. Information indicating that the host or local government
supports the program.
h. Detailed budget for program, including costs that will be
covered by the applicant, other organizations or local governments;
which activities monetized proceeds will cover; and any request for
USDA administrative funds. The budget should include how costs of
administration, storage, transportation, processing and repackaging
will be financed.
6. Use of Funds or Goods and Services Generated:
When the activity involves the use of monetized proceeds, the
receipt of goods or services from the barter of commodities, or
program income, the following information must be provided:
a. The quantity and type of commodities to be sold or bartered;
b. The amount of monetized proceeds anticipated to be generated
from the same, or the value of the goods or services anticipated to
be generated from the barter, of the donated agricultural
commodities; except that where such amount or value cannot be
estimated, the Cooperating Sponsor will describe the method to be
used to ensure that a fair return of cash, goods or services will be
received for the commodities;
c. The steps taken to use the private sector in the process of
selling commodities;
d. The amount of program income expected to be generated;
e. The specific uses of sale proceeds or program income and a
timetable for their expenditure;
f. Procedures for assuring the receipt and deposit of monetized
proceeds and program income into a separate special account and for
the disbursement of the proceeds and program income;
g. Information concerning the extent to which any sale or barter
of the donated agricultural commodities would displace or interfere
with any sales that may otherwise be made; and
h. The recipient agency, if any, that will be involved in the
program and a description of each recipient agency's capability to
perform its responsibilities as stated in the Plan of Operation.
7. Distribution Methods:
a. A thorough description of the transportation and storage
system which will be used to move the agricultural commodities from
the receiving port to the point at which distribution is made to the
recipient;
b. A thorough description of any reprocessing or repackaging of
the commodities that will take place; and
c. A logistics plan that demonstrates the adequacy of port,
transportation, storage, and warehouse facilities to handle the flow
of commodities to recipients without undue spoilage or waste.
8. Duty Free Entry:
Information indicating that commodities to be directly
distributed to recipients will be imported and distributed free from
all customs, duties, tolls, and taxes.
9. Economic Impact:
Information indicating that the commodities can be imported and
distributed without negative impact upon domestic production, prices
and marketing of same or like products.
Sec. 1499.6 Criteria for entering into Program Agreements.
(a) Section 416(b). (1) In determining whether to enter into a
section 416(b) Program Agreement, CCC will give priority consideration
to the donation of commodities to support activities designed to meet
emergency situations, followed by non-emergency humanitarian feeding
activities, and, finally, activities using monetized proceeds. Within
this prioritization, CCC will consider the following evaluation
criteria:
(i) Applicant Capability
(A) Organizational experience and current institutional capacity to
implement and manage the type of program proposed (targeted food
distribution, targeted food distribution and monetization, or
monetization for economic and other development activities).
(B) Experience working in the targeted country.
(C) Experience and capability level of personnel who will be
responsible for implementing and managing the program.
(ii) Quality and technical soundness of proposal
(A) Assessment of need and rationale are well presented and
demonstrate actual need.
(B) Program objectives and expected outcomes are reasonable and
realistic and show an understanding of the opportunities and
constraints to achieving the program objectives.
(C) Plan for achieving program objectives is completely and clearly
described and is logical for the type of program being implemented and
includes, where appropriate, the following:
(1) Description of transportation mechanisms, facilities, storage
and warehousing plans, distribution methods, recipients or
participants, and local institutions or entities involved with the
project.
(2) Description of how the commodity will be sold and any
reprocessing or repackaging.
(3) For the use of monetized proceeds, description of activities or
costs that will be paid for by the generated local currencies.
(4) Appropriateness and adequacy of organizational structure for
the management of the agreement, including the clear articulation of
lines of authority and relationships between the applicant and the
various institutions and entities it proposes to involve.
(D) Records and accountability methods for monitoring the program,
including the distribution of commodities or use of local currencies,
and the method by which the Cooperating Sponsor intends to evaluate the
success of the proposal are clearly described and appropriate.
(E) Demonstrates that the program will contribute to strengthening
institutions, entities, or capabilities in the recipient country.
(iii) USDA Management responsibilities
USDA assessment of commodity need and acceptability in terms of
cost, storability, acceptability, and nutritional impact of proposed
commodities.
(b) Food for Progress. In determining whether to enter into a Food
for Progress Foreign Donation Agreement, CCC will consider the extent
to which the recipient country is committed to carry out, or is
carrying out, policies that promote economic freedom, private domestic
production of food commodities for domestic consumption, and the
creation and expansion of efficient private domestic markets for the
purchase and sale of such commodities. CCC shall require Cooperating
Sponsors to submit a Plan of Operation similar to the Plan of Operation
described in Sec. 1499.5(b) when CCC determines such would be necessary
to identify specific activities to be undertaken by the Cooperating
Sponsor in order to accomplish the purposes of the Food for Progress
program. In such case, proposed activities will be evaluated in
accordance with the criteria set forth at Sec. 1499.6(a)(2).
Sec. 1499.7 Apportionment of costs.
(a) CCC will pay that costs of processing, packaging, transporting,
handling, and other incidental charges incurred in making commodities
available to Cooperating Sponsors.
(b)(1) Title to all commodities shall pass to the Cooperating
Sponsor at the time and place of delivery f.o.b. vessel at U.S. port in
the case of bulk grain shipments, or f.a.s. vessel at U.S. port or at
the intermodal point for all other commodities.
(2) The Cooperating Sponsor shall bear all costs and expenses
incurred subsequent to the transfer of title, except that, when
specifically provided in the Program Agreement or upon the
determination by CCC that it is the best interest of the program to do
so, CCC may pay or make reimbursement for all or a portion of the
reasonable transportation costs from U.S. ports to designated ports or
points of entry abroad, and in the case of urgent and extraordinary
relief requirements, all or a portion of the reasonable transportation
costs from designated points of entry abroad to storage and
distribution sites, and reasonable associated storage and distribution
costs.
(3) (i) In the case of countries receiving commodities under the
Food for Progress Program, CCC may agree to make payments to
Cooperating Sponsors to assist in the administration, sale, and
monitoring of food assistance programs to strengthen private sector
agriculture in such countries. The Program Agreement will specify the
maximum dollar amount of funding that CCC will pay the Cooperating
Sponsor for such costs. Payment of the above funds will only be made to
the Cooperating Sponsor in such amounts, and for such purposes, as may
be specifically approved in writing by the Controller, CCC and the
General Sales Manager.
(ii) CCC may, at its option, advance to the Cooperating Sponsor not
more than 85 percent of the total dollar amount specified in the
Program Agreement for the costs identified in paragraph (b)(3)(i) of
this section. Funds committed but not advanced will be paid on a
reimbursement basis. Prior to the advance of any funds by CCC, the
Cooperating Sponsor shall submit to the Director, PAD and to the
Controller, CCC, a Program Operations Budget detailing all storage,
distribution, monitoring and administrative costs to be incurred. The
budget line items must represent reasonable costs, for which written
approval from the Controller, CCC and the General Sales Manager was
obtained prior to program implementation. Any revisions of these
expenditures must also be approved by the Controller, CCC and the
General Sales Manager.
(iii) Unless otherwise specifically permitted by CCC, CCC will not
advance funds for expenditures by the Cooperating Sponsor that have
been incurred prior to the date of the Program Agreement, that will be
incurred earlier than 60 days following the date of any previous
advance, or that will be incurred after a date specified in the Program
Agreement.
(iv) The Cooperating Sponsor must submit to the Controller, CCC,
invoices supporting the charges incurred against the advance, or for
which reimbursement is claimed, within 60 days from the date the
service is received. All charges must be reasonable and foreign
currency transactions must be supported by evidence of the specific
exchange rate incurred. A delay in receipt, or non-receipt, of
supporting documentation by the Controller, CCC, may result in CCC's
refusal to release future advances. The Cooperating Sponsor shall
promptly refund to CCC all funds advanced, together with all interest
earned on such funds, if either not utilized within 180 days after the
advance for purposes for which the funds were advanced, or for which
documentation supporting the expenditure is not supplied to CCC.
(v) All CCC advances must be deposited in an interest bearing
account with interest earned on the funds advanced used for the purpose
for which the funds were advanced. The Cooperating Sponsor shall submit
a monthly Federal Funds Cash Report (SF-272) and a quarterly financial
statement to the Controller, CCC, 10 working days past the end of the
month or quarter, respectively, detailing the use and status (including
interest earned on funds not yet utilized) of all funds advanced by CCC
to Cooperating Sponsor.
(4) If the Program Agreement specifies that CCC will finance only
the ocean freight differential (``OFD'') on U.S. flag vessels, the
Director, Public Law 480-OD will compute OFD as follows:
(i) when non-U.S.-flag vessels are offered, the OFD will be the
difference between the weighted average freight rate(s) of non-U.S.
flag vessel(s) fixed or offered that could carry the quantity of cargo
absent the requirement to use U.S.-flag vessels, and the rate for the
U.S. flag vessel(s) fixed; or the rate(s) offered (including any lower
rates negotiated) by U.S.-flag vessels(s) which could have carried the
required tonnage and represents the lowest land cost (U.S. flag basis).
(ii) When non U.S. flag vessels are not offered, or when offered,
have specifications which preclude their use, the rate to be used in
computing OFD will be determined by using any market data deemed
relevant.
(iii) When the recipient country employs its own flag vessels or
other flag vessels under its control, the non-U.S. flag rate to be used
in computing OFD will be determined using any market data deemed
relevant.
Sec. 1499.8 Ocean transportation.
(a) Cargo Preference. Shipments of commodities donated under the
section 416(b) and Food for Progress programs are subject to the
requirements of sections 901(b) and 901b of the Merchant Marine Act,
1936, regarding carriage on U.S.-flag vessels. CCC will endeavor to
meet these requirements separately for each program for each 12-month
compliance period.
(b) Coordination between CCC and the Cooperating Sponsor. When the
Program Agreement specifies that the Cooperating Sponsor will arrange
ocean transportation:
(1) KCCO will furnish the Cooperating Sponsor with a Notice of
Commodity Availability (Form CCC-512) which will specify the receiving
country, commodity, quantity, and date at U.S. port or intermodal
delivery point.
(2) The Cooperating Sponsor will arrange ocean transportation in
accordance with the procedures specified in paragraph (c) of this
section and shall comply with the instructions of CCC regarding the
quantity of commodities that must be carried on U.S. flag vessels. U.S.
ports of export will be selected on the basis of the lowest cost to
CCC.
(3) The Cooperating Sponsor will complete the Form CCC-512
indicating name of steamship company, vessel name, vessel flag and
estimated time of arrival at U.S. port, sign and return the completed
form to KCCO, with a copy to the Director, Public Law 480-OD. For liner
cargoes, if CCC has agreed to pay any part of the ocean transportation,
the Form CCC-512 must also contain the ocean freight rate as stated in
the Federal Maritime Commission tariff, with tariff identification.
(4) KCCO will issue instructions to have the commodity shipped
f.a.s. or f.o.b. vessel, U.S. port of export, or to an intermodal
delivery point, and consigned to the Cooperating Sponsor specified in
the Form CCC-512.
(b) Shipping agents. (1) The Cooperating Sponsor may appoint a
shipping agent to assist in the procurement of ocean transportation. If
a shipping agent is to be used, the Cooperating Sponsor must nominate
the shipping agent in writing to the General Sales Manager, room 4071-
S, Foreign Agricultural Service, U.S. Department of Agriculture,
Washington, DC 20250-1000. The written nomination shall specify the
period of time to be covered by the nomination. A copy of the proposed
agency agreement must also be provided. A Cooperating Sponsor may
submit a single written nomination for a shipping agent for more than
one program or may submit separate written nominations for each
program.
(2) The shipping agent must submit the information and
certifications required by 7 CFR 17.5.
(3) A person may not act as shipping agent for a Cooperating
Sponsor unless the Assistant General Sales Manager has notified the
Cooperating Sponsor in writing that the nomination is accepted.
(c) Freight procurement requirements. The following requirements
apply when the Cooperating Sponsor arranges ocean transportation and
CCC is financing any portion of the ocean freight.
(1) Freight invitations for bids must be issued for the
solicitation of freight offers through the Transportation News Ticker
(TNT), New York, plus at least one other means of communication, to
assure the broadest possible market coverage and adequate notice to
interested parties.
(2) The Cooperating Sponsor must obtain approval of all invitations
for bids as specified in the Program Agreement prior to their issuance.
(3) Freight invitations for bids must provide: (i) That offers have
a canceling date no later than the last contract layday specified in
the invitation for bids;
(ii) that offered rates be quoted in U.S. dollars per metric ton,
and if destination bagging or transportation to a point beyond the
discharge port is required, offered rates shall separately state the
total rates and the portion of the rates attributable to the ocean
segment of the movement;
(iii) that any non-liner U.S. flag vessel 15 years or older must
furnish, in addition to any other offered rate, a one way rate to be
applicable in the event the vessel is scrapped or transferred to
foreign flag registry prior to the end of the return voyage to the
United States;
(iv) specify the procedures for payment of freight, including the
party responsible for the freight payments;
(v) require, in the case of packaged commodities, that U.S. flag
carriers specify whether delivery will be direct breakbulk shipment,
container shipment, or breakbulk transshipment and identify whether
transshipment (including container relays) will be via U.S. or foreign
flag vessel;
(vi) provide that vessels offered subject to Maritime
Administration approval will not be accepted; and
(vii) specify a closing time for the submission of offers and state
that late offers will not be accepted.
(4) In the case of shipments of bulk commodities, the Cooperating
Sponsor shall open offers in public in the United States at the time
and place specified in the invitation for bids and consider only offers
that are responsive to the invitation for bids without negotiation,
clarification, or submission of additional information. All responsive
offers received for both U.S. flag and foreign flag service must be
presented to KCCO which will determine the extent to which U.S.-flag
vessels will be used.
(5) The Director, Public Law 480-OD, or another official specified
in the Program Agreement, must approve all vessel fixtures. The
Cooperating Sponsor may fix vessels subject to that approval of the
Director, Public Law 480-OD, or such other official. The Cooperating
Sponsor shall not confirm a vessel fixture until the Director, Public
Law 480-OD, or such other official, advises the Cooperating Sponsor of
the required approval and the results of the Maritime Administration's
guideline rate review. The Cooperating Sponsor shall not request
guideline rate advice from the Maritime Administration.
(6) Non-Vessel Operating Common Carriers may not be employed to
carry U.S.-flag shipments.
(d) Commissions. (1) Total commissions earned on U.S. and foreign
flag bookings by all parties arranging vessel fixtures, when any
portion of the ocean freight is paid by CCC, shall not exceed 2\1/2\
percent of that portion of the gross freight attributable to the ocean
segment of the cargo movement.
(2) Total commissions to a shipping agent shall not exceed \2/3\ of
2\1/2\ percent of that portion of the gross freight attributable to the
ocean transportation segment of the movement.
(3) The Cooperating Sponsor shall require liner carriers to assure
that tariffs on file at the Federal Maritime Commission reflect the
maximum commissions payable under this paragraph.
(4) Address commissions are prohibited.
(e) Contract terms. (1) The Cooperating Sponsor shall assure that,
when CCC is paying any portion of the ocean freight, charter parties
and liner booking contracts contain clauses that implement the
following paragraphs:
(i) packaged commodities on liner vessels shall be shipped on the
basis of full berth terms with no demurrage or despatch;
(ii) bulk commodities shall be shipped on the basis of vessel load,
free out, with demurrage and despatch applicable at load and discharge
ports. Laytime accounts are to be settled between the ocean carrier and
export elevators at load port and between the ocean carrier and
charterers at discharge ports. CCC is not responsible for resolving
disputes involving the calculation of laytime or the payment of
demurrage or despatch.
(iii) if the Program Agreement requires the Cooperating Sponsor to
open an irrevocable letter of credit for ocean freight, the Cooperating
Sponsor shall be liable for detention of the vessel for loading delays
attributable solely to the decision of the ocean carrier not to
commence loading because of the failure of the Cooperating Sponsor to
establish such letter of credit. Charter parties and liner booking
contracts may not contain a specified detention rate. The ocean carrier
shall be entitled to reimbursement, as damages for detention, 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 charter
party or liner booking contract, and upon notification of the vessel's
readiness to load in accordance with the terms of the applicable
charter party or liner booking contract. The period of such delay shall
end at the time that operable irrevocable letters of credit have been
established for 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.
(iv) charges attributable to the failure of the vessel to present
before the canceling date including, but not limited to inspection,
fumigation, and carrying charges, will be for the account of the ocean
carrier.
(v) ocean freight is earned under a charter party when the vessel
and cargo arrive at the first port of discharge, Provided, That if a
force majeure as described in paragraph (f)(3) below prevents the
vessels arrival at the first port of discharge, 95% of the ocean
freight is payable or, if the charter party provides for completing
additional requirements after discharge such as bagging, stacking, or
inland transportation, 85% of the ocean freight is payable, at the time
the General Sales Manager determines that such force majeure was the
cause of nonarrival; and
(vi) when the ocean carrier offers delivery to destination ports on
U.S.-flag vessels, but foreign-flag vessels are used for any part of
the voyage to the destination port, without first obtaining the
approval of the Cooperating Sponsor, KCCO, and any other approval that
may be required by the Program Agreement, the ocean freight rate will
be reduced to the lowest responsive foreign-flag vessel rate offered in
response to the same invitation for bids and the carrier agrees to pay
CCC the difference between the contracted ocean freight rate and the
freight rate offered by such foreign-flag vessel.
(f) Freight Payment by CCC. When the Program Agreement provides
that CCC will pay any portion of the ocean freight:
(1) 100% of the ocean freight is payable upon receipt of the
documents specified in paragraph (g) of this section, unless the
charter party or liner booking note provides for completing additional
requirements after discharge such as bagging, stacking, or inland
transportation, in which case 85% of the ocean freight is payable. The
balance of freight remaining will be paid upon receipt of notification
from the Cooperating Sponsor that the vessel has fulfilled all the
requirements of the charter party or liner booking contract in a
successful manner.
(2) Demurrage will not be paid or reimbursed by CCC.
(3) CCC will waive the requirement in paragraph (g) of this section
for a notice of arrival if the General Sales Manager determines upon
submission of evidence on the part of the ocean carrier 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 (force majeure):
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 ocean carrier;
wars; public disorders; captures; or detention of public authority in
the interest of public safety. If the General sales Manager determines
that a force majeure prevents the vessels arrival at the first port of
discharge, 95% of the ocean freight is payable or, if the charter party
provides for completing additional requirements after discharge such as
bagging, stacking, or inland transportation, 85% of the ocean freight
is payable upon submission of the documents specified in paragraph (g)
of this section, except that the notice of arrival need not be
submitted. The balance of ocean freight shall not be due or payable.
(g) Documentation required for payment or reimbursement of freight
charges by CCC.
(1) One copy of completed Form CCC-512;
(2) Three copies of ``on board'' bills of lading indicating the
freight rate and signed by originating carrier;
(3) National Cargo Bureau vessel hold inspection and certificate of
loading as applicable;
(4) Two signed copies of liner booking note or charter party
covering ocean transportation of cargo;
(5) For charter movements, a notice of arrival at first discharge
point, to be submitted by the Cooperating Sponsor;
(6)(i) Request by the Cooperating Sponsor for reimbursement of
ocean freight indicating amount due, accompanied by a certification
from the ocean carrier that payment has been made;
(ii) Request for direct payment of ocean freight to the ocean
carrier, indicating amount due; or
(iii) Request for direct payment of ocean freight differential to
the ocean carrier, accompanied by a certification from the carrier that
payment of the Cooperating Sponsor's portion of the ocean freight has
been received.
Sec. 1499.9 Restrictions on commodity use and distribution.
(a) The Cooperating Sponsor may use the donated commodities only in
accordance with the terms of the Program Agreement.
(b) Donated commodities may not be distributed within the importing
country on the basis of political affiliation, geographic location, or
the ethnic, tribal or religious identify or affiliations of the
potential consumers or recipients.
(c) Donated commodities may not be distributed, handled or
allocated by military forces except where such activities are
specifically authorized by CCC.
Sec. 1499.10 Agreement between Cooperating Sponsor and Recipient
Agency(ies).
(a) The Cooperating Sponsor shall, prior to the transfer of any
donated commodities, monetized proceeds or program income, enter into
and formally execute an agreement with each recipient agency engaged
for the purpose of the distribution of commodities or for the
implementation of any other approved activity. Copies of such
agreements shall be provided to the appropriate Agricultural Counselor
or Attache. Such agreements shall include the following terms:
(1) a requirement that the recipient agency pay the Cooperating
Sponsor the value of any commodities, monetized proceeds or program
income that is used for purposes not expressly permitted under the Plan
of Operation;
(2) a requirement that the recipient agency pay the Cooperating
Sponsor for any commodities, monetized proceeds or program income that
is lost, damaged, or misused as result of the recipient agency's
failure to exercise reasonable care;
(3) a provision expressly incorporating the terms and conditions of
this part which govern the implementation of the approved Plan of
Operation, the use of funds, record keeping, inspection and audit.
(b) Upon request, CCC may, within its sole discretion, elect to
waive the requirement of paragraph (a) of this section where it
determines that such an agreement is not feasible or appropriate for
any reason, including the nature of the recipient agency, or the amount
of commodities, monetized proceeds or program income that may be
transferred to the recipient agency. In any case where waiver is
granted, however, such waiver shall not otherwise affect or diminish
the Cooperating Sponsor's obligations or responsibilities with respect
to program commodities, monetized proceeds or program income.
Sec. 1499.11 Liability of the Cooperating Sponsor.
(a) The Cooperating Sponsor shall be required to reimburse CCC for
all costs incurred by CCC, including the cost of acquisition of the
donated commodity where such Cooperating Sponsor has either:
(1) Failed to export the commodities from the United States;
(2) Been responsible for the reentry of the commodity into the
United States; or
(3) Used the commodities, monetized proceeds or sale profits in a
manner inconsistent with program requirements.
(b) [Reserved]
Sec. 1499.12 Sales, barter, and use of monetized proceeds and program
income.
(a) Section 416(b). (1) Except as provided in paragraph (a)(3) of
this section, commodities donated under a section 416(b) Program
Agreement may be sold or bartered only in accordance with an approved
Plan of Operation. Such sales or barters may be approved by CCC on a
case-by-case basis for the following purposes only:
(i) to finance the distribution, handling or processing costs of
the donated commodities in the importing country or in a country
through which the commodities must be transshipped, or other activities
in the importing country that are consistent with providing food
assistance to needy people;
(ii) in the case of sales of commodities furnished to nonprofit and
voluntary agencies, or cooperatives, to generate proceeds to be used to
transport, store, distribute and otherwise enhance the effectiveness of
the use of commodities, and to implement income generating community
development, health, nutrition, cooperative development, agricultural
program, and other development activities;
(iii) to cover expenses of the type identified in section 406 of
the Agricultural Trade Development and Assistance Act of 1954; or
(iv) for any other use specifically authorized by statute.
(2) Commodities may be sold or bartered only in the importing
country or other country specifically approved by CCC. Monetized
proceeds must be expended within either the country of origin or in
other countries as necessary to expedite transportation of commodities,
or in countries which generally accept the type of currency generated
by the sale. Monetized proceeds must be expended within one year of
acquisition unless CCC specifically agrees that a longer period is
necessary to achieve the purposes of paragraph (a)(1)(i) and (ii) of
section.
(3) Notwithstanding paragraphs (a) (1) and (2) of this section,
commodities may be sold or bartered without prior approval of CCC where
damage has occurred to the commodity rendering it unfit for the
intended program purposes, and sale or barter is necessary to mitigate
the loss of the value of the damaged commodity.
(4) Cooperating Sponsors who sell or barter commodities must enter
into a written agreement with the other party to the sale transaction.
A copy of the executed agreement must be provided to the Agricultural
Counselor or Attache.
(5) All monetized proceeds shall be deposited into a special
interest bearing account for control and monitoring unless interest
bearing accounts are prohibited by the laws or customs of the importing
country or such requirement would impose an undue burden on the
Cooperating Sponsor. Any accrued interest shall be used only for
approved activities.
(6) Cooperating Sponsors shall not be required to monitor, manage,
report on, or account for the distribution or use of such sold or
bartered commodities after all sales proceeds have been fully deposited
in a special account and title to the commodities has passed to buyers
or other third parties pursuant to a sale or barter transaction. The
sales proceeds and the uses thereof, however, must be monitored,
managed, reported and accounted for as provided in the relevant
sections of this part 1499.
(7) Commodities approved for sale or barter need not be imported
and sold free of all duties and taxes, but nongovernmental Cooperating
Sponsors may negotiate agreements with the host government permitting
the duty and tax-free import and sale of such commodities. Even where
the Cooperating Sponsor negotiates such exempt status, the prices at
which the Cooperating Sponsor sells the commodities to the purchaser
shall reflect prices that would be obtained in a competitive commercial
transaction, i.e., the prices would include the cost of duties and
taxes, so that the amounts normally paid for duties and taxes would
accrue for the benefit of the Cooperating Sponsor's approved program.
(8) No part of the proceeds or services realized from sales or
barters may be used for operating and overhead expenses, other than for
personnel and administrative costs of local cooperatives. Operating and
overhead expenses are costs attributable to the overall administration
and management expenses of the Cooperating Sponsor in its regional,
national, or U.S. offices, including rent, taxes, insurance, utilities,
telephone, office supplies, and depreciation, and in the case of
nonprofit private and voluntary agencies and cooperatives, costs of
monitoring, evaluation, auditing, and travel within the host country
except where such costs are directly related to a specific activity and
essential to the effective implementation of the activity.
(9) The Cooperating Sponsor shall use commercially reasonable
procurement practices in purchasing goods or services and in
construction activities using monetization proceeds or program income,
and shall employ procedures that prevent fraud, self-dealing, and
conflicts of interest and provide for free and open competition to the
maximum extent practicable. Title to real and personal property
acquired with monetization proceeds and program income shall be vested
in the Cooperating Sponsor, with the Cooperating Sponsor providing the
Controller, CCC with an inventory list of all assets valued at one
thousand dollars (USD) or more. The Cooperating Sponsor shall dispose
of such property as directed by the Agricultural Counselor or Attache
in the event the program terminates or is transferred to another
Cooperating Sponsor.
(10) Monetized proceeds and program income may not be used to
acquire, develop, construct, alter or upgrade land, buildings or other
real property improvements or structures that are either:
(i) owned or managed by a church or other organization engaged
exclusively in religious activity, or
(ii) used in whole or in part for sectarian purposes.
Notwithstanding the preceding sentence, monetized proceeds or program
income may be used to finance repair or rehabilitation of an existing
structure owned or managed by a church or organization engaged
exclusively in religious activity to the extent necessary to avoid
spoilage or loss of donated commodities, provided that the structure is
not used in whole or in part for any sectarian purpose while donated
commodities are stored in it. The use of monetized proceeds or program
income to finance construction of such a structure may be approved in
the operational plan or by the Agricultural Counselor or Attache if the
structure is needed and will be used for the storage of donated
commodities for a sufficient period of time to warrant the expenditure
of monetized proceeds or program income and the structure will not be
used for any sectarian purpose during this period.
(b) Food for Progress. Unless the Food for Progress Program
Agreement provides otherwise, commodities donated under Food for
Progress may be sold within the recipient country without restriction
or special procedural requirements.
Sec. 1499.13 Usual marketing requirements.
A foreign government Cooperating Sponsor shall provide data showing
commercial and non-commercial imports of the types of agricultural
commodities requested for the past five years, by country of origin,
and an estimate of expected imports of such commodities during the
current year. A Program Agreement with a foreign government may include
a usual marketing requirement and shall prohibit the re-export of
donated commodities, as well as of other related commodities specified
in the Program Agreement.
Sec. 1499.14 Processing, packaging and labeling of section 416(b)
commodities in the foreign country.
(a) Cooperating Sponsors may arrange for the processing of
commodities donated under a section 416(b) Program Agreement and for
packaging or repackaging prior to distribution. When a third party
provides such processing, packaging, or repackaging, the Cooperating
Sponsor shall enter into written agreements for such services. The
agreement shall require that the provider of such services (1) shall
fully account to the Cooperating Sponsor for all commodities delivered
or otherwise be liable for the value of all unaccounted commodities and
(2) shall maintain adequate records and submit periodic reports
pertaining to performance under the agreements. Copies of the executed
agreements shall be provided to the Agricultural Counselor or Attache.
(b) If, prior to distribution, the Cooperating Sponsor arranges for
packaging or repackaging commodities donated under section 416(b), the
cartons, sacks, or other containers in which the commodities are packed
shall be plainly labeled in the language of the country in which the
commodities are to be distributed with the name of the commodity and,
except where the donated commodities are to be sold or bartered
pursuant to an approved Plan of Operation after processing, packaging
or repackaging, that the commodity is furnished by the people of the
United States of America and not to be sold or exchanged. If the
commodities are not packaged, to the extent practicable, the
Cooperating Sponsor shall display banners, posters or other media and
provide individual identification cards containing the information
prescribed in this paragraph.
(c) If the packages of commodities donated under section 416(b) are
discharged from vessel in a damaged condition, and are repackaged to
ensure that the commodities arrive at the distribution point in
wholesome condition, CCC will reimburse Cooperating Sponsors who are
nonprofit private voluntary organizations and cooperatives for approved
expenses incurred for such repackaging. No prior approval is required
for such expenses equaling $500 or less. If such expense is estimated
to exceed $500, the authority to repackage and incur such expense must
be approved by the Agricultural Counselor or Attache in advance of
repackaging.
Sec. 1499.15 Arrangements for entry and handling in the foreign
country.
(a) The Cooperating Sponsor shall make all necessary arrangements
for receiving the donated commodities in the recipient country,
including obtaining appropriate approvals for entry and transit, and
shall ensure that agricultural commodities which are to be distributed
to recipients in direct feeding programs shall be admitted duty free
and exempt from all taxes. The Cooperating Sponsor shall be responsible
for storing and maintaining the commodities from time of delivery at
port of entry or point of receipt from originating carrier in such
manner as to ensure that the commodities remain in good condition until
their distribution, sale or barter.
(b) The Cooperating Sponsor may use either of the following methods
to arrange for the transport, storage, and distribution from designated
points of entry or ports of entry when CCC has agreed to pay costs of
such services:
(1) Through bill of lading; or
(2) Contract directly with suppliers of services, and submit a
billing, with supporting documentation, to CCC indicating actual costs
incurred. All supporting documentation must be sent to the Director,
Public Law 480-OD. Payment will be made, at the option of CCC, in
dollars at the exchange rate as of the date of payment by CCC, or in
foreign currency.
Sec. 1499.16 Disposition of commodities unfit for authorized use.
(a) Prior to delivery to Cooperating Sponsor at discharge port or
point of entry. If the commodity is damaged prior to delivery to a
governmental Cooperating Sponsor at discharge port or point of entry
overseas, the Agricultural Counselor or Attache, or CCC designated
representative, shall immediately arrange for inspection by a public
health official or other competent authority. A nongovernmental
Cooperating Sponsor shall arrange for such inspection of commodities
damaged prior to delivery. If the commodity is determined to be unfit
for the use authorized in the Program Agreement, the commodities shall
be disposed of in accordance with the priority set forth in paragraph
(b) of this section. Expenses incidental to the handling and
disposition of the damaged commodity shall be paid by CCC from the
sales proceeds or from an appropriate CCC account as determined by CCC.
The net proceeds of sales shall be deposited with the U.S. Disbursing
Officer American Embassy, for the credit of CCC in an appropriate CCC
account as determined by CCC. However, if the commodities were donated
for monetization programs, the net sales proceeds, after deducting
expenses incidental to handling and disposition of the damaged
commodity, shall be deposited to the special account established for
monetized proceeds, and the Cooperating Sponsor is responsible for
documenting the amount of the sales proceeds from the sale of damaged
commodities deposited to the special account. The Cooperating Sponsor
shall seek guidance from CCC regarding sales proceeds in the event the
Cooperating Sponsor executed a sales agreement under which title passed
to the purchaser prior to delivery.
(b) After delivery to Cooperating Sponsor. If after arrival in a
foreign country it appears that the commodity, or any part thereof, may
be unfit for the use authorized in the Program Agreement, the
Cooperating Sponsor shall immediately arrange for inspection of the
commodity by a public health official or other competent authority
approved by the Agricultural Counselor or Attache. If no competent
local authority is available, the Agricultural Counselor or Attache may
determine whether the commodities are unfit for the use authorized in
the Program Agreement, and, if so, may direct disposal in accordance
with paragraphs (b) (1) through (4) of this section. The Cooperating
Sponsor shall arrange for the recovery for authorized use of that part
designated during the inspection as suitable for authorized use. If,
after inspection, the commodity (or any part thereof) is determined to
be unfit for authorized use, the Cooperating Sponsor shall notify the
Agricultural Counselor or Attache of the circumstances pertaining to
the loss or damage. With the concurrence of the Agricultural Counselor
or Attache, the commodity determined to be unfit for authorized use
shall be disposed of in the following order of priority:
(1) By transfer to an approved section 416(b) program for use as
livestock feeding feed. CCC shall be advised promptly of any such
transfer so that shipments from the United States to the livestock
feeding program can be reduced by an equivalent amount;
(2) Sale for the most appropriate use, i.e., animal feed,
fertilizer, or industrial use, at the highest obtainable price. When
the commodity is sold, all U.S. Government markings shall be
obliterated or removed;
(3) By donation to a governmental or charitable organization for
use as animal feed or for other non-food use; or
(4) If the commodity is unfit for any use or if disposal in
accordance with paragraph (b)(1), (2) or (3) of this section is not
possible, the commodity shall be destroyed under the observation of a
representative of the Agricultural Counselor or Attache, if
practicable, in such manner as to prevent its use for any purpose.
Expenses incidental to the handling and disposition of the damaged
commodity shall be paid by the Cooperating Sponsor unless it is
determined by the Agricultural Counselor or Attache that the damage
could not have been prevented by the Cooperating Sponsor under the
terms of the Program Agreement. Actual expenses incurred, including
third party costs, in effecting any sale may be deducted from the sales
proceeds and, except for monetization programs, the net proceeds shall
be deposited with the U.S. Disbursing Officer, American Embassy, with
instructions to credit the deposit to an appropriate CCC account as
determined by CCC. In monetization programs, the gross proceeds shall
be deposited in the special interest bearing account and after approved
costs related to the handling and disposition of damaged commodities
are paid, remaining funds used for purposes of the approved program.
The Cooperating Sponsor shall promptly furnish to the Agricultural
Counselor or Attache a written report of all circumstances relating to
the loss and damage. The report and any supplemental report shall
include a certification by a public health official or other competent
authority of the exact quantity of the damaged commodity disposed of
because it was determined to be unfit for the use authorized in the
Program Agreement. A report must also be provided to the Chief, Debt
Management Division, KCFMO, of action taken to dispose of commodities
unfit for authorized use.
Sec. 1499.17 Liability for loss, damage, or improper distribution of
commodities--claims and procedures.
(a) Fault of Cooperating Sponsor prior to loading on ocean vessel.
If the Cooperating Sponsor fails to have a vessel for loading at the
U.S. port of export in accordance with the agreed shipping schedule,
the Cooperating Sponsor shall immediately notify KCCO, Chief, Export
Operations Division. CCC will determine whether the commodity shall be:
Moved to another available outlet; stored at the port for delivery to
the Cooperating Sponsor when a vessel is available for loading; or
disposed of as CCC may deem proper. The Cooperating Sponsor shall take
such action as directed by CCC and shall reimburse CCC for expenses
incurred.
(b) Fault of others prior to loading on ocean vessel. When any
damage or loss to the commodity occurs which is attributable to a
warehouseman, carrier, or other person between the time title is
transferred to a Cooperating Sponsor and the time the commodity is
loaded on board vessel at designated port of export, the Cooperating
Sponsor shall immediately notify KCFMO, Chief, Debt Management Office.
The Cooperating Sponsor shall promptly assign to CCC any rights to
claims which may accrue as a result of such loss or damage and shall
promptly forward to CCC all documents pertaining thereto. CCC shall
have the right to initiate, prosecute, and retain the proceeds of all
claims for such loss or damage.
(c) Survey and outturn reports. (1) Unless the Program Agreement
provides otherwise, CCC shall arrange for an independent cargo surveyor
to attend the discharge of the cargo and to report on the quantity and
condition of the commodities discharged and the probable cause of any
damage. All cargoes provided under an agreement shall be surveyed. If
practicable, the examination of the cargo shall be conducted jointly by
the surveyor, the consignee, and the ocean carrier, and the survey
report shall be signed by all parties.
(2) (i) If the Cooperating Sponsor arranges for an independent
cargo surveyor, the Cooperating Sponsor shall obtain a certification by
a public health official or similar competent authority as to the
condition of the commodity in any case where a damaged commodity
appears to be unfit for the use authorized in the Program Agreement;
and a certificate of disposition in the event the commodity is
determined to be unfit for its intended use. Such certificates shall be
obtained as soon as possible after discharge of the cargo. The
Cooperating Sponsor shall forward any narrative chronology or other
commentary it can provide to assist in the adjudication of ocean
transportation claims and shall prepare such a narrative in any case
where the loss is estimated to be in excess of $5,000.00. The
Cooperating Sponsor may, at its option, also engage the independent
surveyor to supervise clearance and delivery of the cargo from customs
or port areas to the Cooperating Sponsor or its agent and to issue
delivery survey reports thereon.
(ii) In the event of cargo loss and damage, the Cooperating Sponsor
shall provide the names and addresses of individuals who were present
at the time of discharge and during survey and who can verify the
quantity lost or damaged. For bulk grain shipments, in those cases
where the Cooperating Sponsor is responsible for survey and outturn
reports, the Cooperating Sponsor shall obtain the services of an
independent surveyor to:
(A) Observe the discharge of the cargo and report on discharging
methods including scale type, calibrations and any other factor which
may affect the accuracy of scale weights, and if scales are not used,
the reason should be stated and the method of weight determination
fully described;
(B) Estimate the quantity of cargo, if any, lost during discharge
through carrier negligence;
(C) Advise on the quality of sweepings;
(D) Obtain copies of port or vessel records, if possible, showing
quantity discharged; and
(E) Provide immediate notification to the Cooperating Sponsor if
additional services are necessary to protect cargo interests of if
surveyor has reason to believe that the correct quantity was not
discharged. In the case of shipments arriving in container vans,
Cooperating Sponsors shall require the independent surveyor to list the
container van numbers and seal numbers shown on the container vans, and
indicate whether the seals were intact at the time the container vans
were opened, and whether the container vans were in any way damaged. To
the extent possible, the independent surveyor should observe discharge
of container vans from the vessel to ascertain whether any damage to
the container van occurred and arrange for surveying the contents as
soon as possible after opening.
(iii) Cooperating Sponsors shall send copies to KCFMO, Chief, Debt
Management Office of all reports and documents pertaining to the
discharge of commodities.
(iv) CCC will reimburse the Cooperating Sponsor for incurred costs
upon receipt of the survey report and the surveyor's invoice or other
documents that establish the survey cost. CCC shall not reimburse a
Cooperating Sponsor for the costs of only a delivery survey, in the
absence of a discharge survey, or for any other survey not taken
contemporaneously with the discharge of the vessel, unless such
deviation is justified to the satisfaction of CCC.
(3) Survey contracts shall be let on a competitive bid basis unless
CCC determines that the use of competitive bids would not be
practicable. CCC may preclude the use of certain surveyors because of
conflicts of interest or lack of demonstrated capability to properly
carry out surveying responsibilities.
(d) Ocean carrier loss and damage. (1) Notwithstanding transfer of
title to the Cooperating Sponsor, the CCC shall have the right to file,
pursue, and retain the proceeds of collection from claims arising from
ocean transportation cargo loss and damage, including loss and damage
occurring between the time of transfer of title and loading aboard a
vessel. CCC assumes general average contributions and all valid general
average incidents which may arise from the movement of commodity to the
destination ports. CCC shall receive and retain all allowances in
general average. Where the Cooperating Sponsor pays the ocean freight
or a portion thereof, it shall be entitled to pro rata reimbursement
received from any claims related to ocean freight charged.
(2) The Cooperating Sponsor shall: File notice with the ocean
carrier immediately upon discovery of any cargo loss or damage,
promptly initiate claims against the ocean carriers for such loss and
damage, take all necessary action to obtain restitution for losses, and
provide CCC copies of all such claims. Notwithstanding the foregoing,
the Cooperating Sponsors need not file a claim when the cargo loss is
less than $100, or in any case when the loss is between $100 and $300
and the Cooperating Sponsors determine that the cost of filing and
collecting the claim will exceed the amount of the claim. Cooperating
Sponsors shall transmit to KCFMO, Chief, Debt Management Office
information and documentation on such lost or damaged shipments when no
claim is to be filed. When General Average has been declared,
Cooperating Sponsors need not file or collect claims for loss of, or
damage to, commodities.
(3) Amounts collected by Cooperating Sponsors on claims against
ocean carriers which are less than $200 may be retained by the
Cooperating Sponsor. On claims involving loss of damage of $200 or more
the Cooperating Sponsors may retain from collections received by them,
either $200 plus 10 percent of the difference between $200 and the
total amount collected on the claim, up to a maximum of $500; or the
actual administrative expenses incurred in collection of the claim,
provided retention of such administrative expenses is approved by CCC.
Allowable collection costs shall not to include attorneys fees, fees of
collection agencies, and similar costs. In no event will CCC pay
collection costs in excess of the amount collected on the claim.
(4) The Cooperating Sponsors also may retain from claim recoveries
remaining after allowable deductions for administrative expenses of
collection, the amount of any special charges, such as handling and
packing costs, which the Cooperating Sponsor has incurred on the lost
or damaged commodity and which are included in the claims and paid by
the liable party.
(5) The Cooperating Sponsor may redetermine claims on the basis of
additional documentation or information not considered when the claims
were originally filed when such documentation or information clearly
changes the ocean carrier's liability. Approval of such changes by CCC
is not required regardless of amount. However, copies of redetermined
claims and supporting documentation or information shall be furnished
to CCC.
(6) The Cooperating Sponsor may negotiate compromise settlements of
claims of any amount, provided that proposed compromise settlements of
claims having a value of $5,000 or more shall require prior approved in
writing by CCC. When a claim is compromised, the Cooperating Sponsor
may retain from the amount collected, the amounts authorized in
paragraph (d)(3) of this section, and in addition, an amount
representing such percentage of the special charges described in
paragraph (d)(4) of this section as compromised amount is to the full
amount of the claim. When a claim is less than $600, the Cooperating
Sponsor may terminate collection activity when it is determined that
pursuit of such claims will not be economically sound. Approval for
such termination by CCC is not required; however, the Cooperating
Sponsor shall notify KCFMO, Chief, Debt Management Division when
collection activity on a claim is terminated.
(7) All amounts collected in excess of the amounts authorized
herein to be retained shall be remitted to CCC. For the purpose of
determining the amount to be retained by the Cooperating Sponsor from
the proceeds of claims filed against ocean carriers, the word ``claim''
shall refer to the loss and damage to commodities which are shipped on
the same voyage of the same vessel to the same port destination,
irrespective of the kinds of commodities shipped or the number of
different bills of lading issued by the carrier.
(8) If a Cooperating Sponsor is unable to effect collection of a
claim or negotiate an acceptable compromise settlement within the
applicable period of limitation or any extension thereof granted in
writing by the liable party or parties, the rights of the Cooperating
Sponsor to the claim shall be assigned to CCC in sufficient time to
permit the filing of legal action prior to the expiration of the period
of limitation or any extension thereof. Generally, the Cooperating
Sponsor shall assign claim rights to CCC no later than 60 days prior to
the expiration of the period of limitation or any extension thereof. In
all cases, the Cooperating Sponsor, shall keep CCC informed of the
progress of its collection efforts and shall promptly assign their
claim rights to CCC upon request. Subsequently, if CCC collects on or
settles the claim, CCC shall, except as indicated below, pay to the
Cooperating Sponsor the amount to which it would have been entitled had
it collected on the claim. The additional 10 percent on amounts
collected in excess of $200 will be payable, however, only if CCC
determines that reasonable efforts were made to collect the claim prior
to the assignment, or if payment is determined to be commensurate with
the extra efforts exerted in further documenting the claim. If
documentation requirements have not been fulfilled and the lack of such
documentation has not been justified to the satisfaction of CCC, CCC
will deny payment of all allowances to the Cooperating Sponsor.
(9) When a Cooperating Sponsor fails to file a claim, permit a
claim to become time-barred, or fail to take timely actions to insure
the right of CCC to assert such claims, and CCC determines that the
Cooperating Sponsor failed to properly exercise its responsibilities
under the Agreement, the Cooperating Sponsor shall be liable to the
United States for the cost and freight value of the commodities lost to
the program.
(e) Fault of Cooperating Sponsor in country of distribution. The
Cooperating Sponsor shall pay to CCC the value of the commodities,
proceeds or program income lost, damaged, or misused (or may, with
prior Agricultural Counselor or Attache approval, replace such
commodities with similar commodities of equal value). If the
Cooperating Sponsor:
(1) improperly distributed a commodity;
(2) uses a commodity, monetized proceeds from the sale thereof or
program income for purposes not permitted under the Program Agreement,
the approved Plan of Operation or this part 1499;
(3) causes loss or damage to a commodity or loss of monetized
proceeds or program income through any act or omission; or
(4) fails to provide proper storage, care, and handling. The
Cooperating Sponsor may be excused of its obligations for such payment
or replacement if it is determined by CCC that such improper
distribution or use, or such loss or damage, could not have been
prevented by proper exercise of the Cooperating Sponsor's
responsibility under the terms of the Program Agreement. Normal
commercial practices in the country of distribution shall be considered
in determining whether there was a proper exercise of the Cooperating
sponsor's responsibility. Payment by the Cooperating Sponsor shall be
made in accordance with paragraph (g) of this section.
(f) Fault of others in country of distribution and in intermediate
country. (1) In addition to survey or outturn reports to determine
ocean carrier loss and damage, the Cooperating Sponsor shall, in the
case of landlocked countries, arrange for an independent survey at the
point of entry into the recipient country and make a report as set
forth in paragraph (c)(1) of this section. CCC will reimburse the
Cooperating Sponsor for the costs of survey as set forth in paragraph
(c)(2)(iv) of this section.
(2) Where any damage to or loss of the commodity or any loss of
monetized proceeds or program income is attributable to a warehouseman,
carrier or other person, the Cooperating Sponsor shall make every
reasonable effort to pursue collection of claims for such loss or
damage. The Cooperating Sponsor shall furnish a copy of the claim and
related documents to the Agricultural Counselor or Attache. Cooperating
Sponsors who fail to file or pursue such claims shall be liable to CCC
for the value of the commodities or loss of monetized proceeds or
program income is attributable to a warehouseman, carrier or other
person, the Cooperating Sponsor shall make every reasonable effort to
pursue collection of claims for such loss or damage. The Cooperating
Sponsor shall furnish a copy of the claim and related documents to the
Agricultural Counselor or Attache. Cooperating Sponsors who fail to
file or pursue such claims shall be liable to CCC for the value of the
commodities or monetized proceeds or program income lost, damaged, or
misused: Provided, however, that the Cooperating Sponsor may elect not
to file a claim if the loss is less than $500. The Cooperating Sponsor
may retain $150 of any amount collected on an individual claim. In
addition, Cooperating Sponsors may, with the written approval of the
Agricultural Counselor or Attache, retain amounts to cover special
costs of collection such as legal fees, or pay such collection costs
with monetized proceeds or program income. Any proposed settlement for
less than the full amount of the claim requires prior approval by the
Agricultural Counselor or Attache. When the Cooperating Sponsor has
exhausted all reasonable attempts to collect a claim, it shall request
the Agricultural Counselor or Attache to provide further instructions.
(3) At a minimum, the Cooperating Sponsor shall pursue any claim by
initial billings and with three progressively stronger demands at not
more than 30 day intervals. If these efforts fail to elicit a
satisfactory response, legal action in the judicial system of the
cooperating country shall be pursued unless:
(i) Liability of the third party is not provable,
(ii) The cost of pursuing the claim would exceed the amount of the
claim,
(iii) The third party would not have enough assets to satisfy the
claim after a judicial decision favorable to the cooperating sponsor,
or
(iv) Maintaining legal action in the country's judicial system
would seriously impair the Cooperating Sponsor's ability to conduct an
effective program in the country.
A Cooperating Sponsor's decisions not to take legal action, and
reasons therefore, must be submitted in writing to the Agricultural
Counselor or Attache for review and approval, and the Agricultural
Counselor or Attache may require the Cooperating Sponsor to obtain the
opinion of competent legal counsel to support its decision. A
Cooperating Sponsor may request approval to terminate legal action
after it has commenced for any of the exceptions described above or if
CCC determines that it is otherwise appropriate to terminate legal
action prior to judgment. In each instance the Agricultural Counsel or
Attache must provide the Cooperating Sponsor with a written explanation
of its decision. If the Agricultural Counselor or Attache approves a
Cooperating Sponsor's decision not to take further action on the claim
for reasons described in paragraph (f)(3)(iv) of this section, the
Cooperating Sponsor shall assign the claim to CCC and shall provide to
CCC all documentation relating to the claim.
(4) As an alternative to legal action in the judicial system of the
country with regard to claims against a public entity of the government
of the cooperating country, the Cooperating Sponsor and the cooperating
country may agree in writing to settle disputed claims by an
appropriate administrative procedure or arbitration.
(g) Determination of value. When payment is to be made for
commodities misused, lost or damaged, the value shall be determined on
the basis of the domestic market price at the time and place the
misuse, loss or damage occurred. When it is not feasible to determine
such market price, the value shall be the f.o.b. or f.a.s. commercial
export price of the commodity at the time and place of export, plus
ocean freight charges and other costs incurred by the U.S. Government
in making delivery to the Cooperating Sponsor. When the value is
determined on a cost basis, the Cooperating Sponsor may add to the
value any provable costs it has incurred prior to delivery by the ocean
carrier. In preparing the claim statement, these costs shall be clearly
segregated from costs incurred by the Government of the United States.
With respect to claims other than ocean carrier loss or damage claims,
the value of misused, lost or damaged commodities may be determined on
some other justifiable basis, at the request of the Cooperating Sponsor
or upon the recommendation of the Agricultural Counselor or Attache or
CCC designated representative. When replacement is made, the value of
commodities misused, lost or damaged shall be their value at the time
and place the misuse, loss, or damage occurred and the value of the
replacement commodities shall be their value at the time and place
replacement is made.
(h) Reporting losses to the Agricultural Counselor or Attache or
CCC designated representative. (1) The Cooperating Sponsor shall
promptly notify the Agricultural Counselor or Attache or CCC designated
representative, in writing, of the circumstances pertaining to any
loss, damage, or misuse of commodities valued at $500 or more occurring
within the country of distribution or intermediate country. The report
shall be made as soon as the Cooperating Sponsor has adequately
investigated the circumstances, but in no event more than ninety (90)
days from the date the loss became known to the Cooperating Sponsor.
The report shall identify the party in possession of the commodities
and the party responsible for the loss, damage or misuse; the kind and
quantities of commodities; the size and type of containers; the time
and place of misuse, loss, or damage; the current location of the
commodity; the Program Agreement number, the CCC contract numbers, or
if unknown, other identifying numbers printed on the commodity
containers; the action taken by the Cooperating Sponsor with respect to
recovery or disposal; and the estimated value of the commodity. The
Cooperating Sponsor shall explain the unavailability of any of the
above information. The Cooperating Sponsor shall also report the
details regarding any loss or misuse of monetized proceeds or program
income.
(2) The Cooperating Sponsor shall report quarterly to the
Agricultural Counselor or Attache any loss, damage to or misuse of
commodities resulting in loss of less than $500. The Cooperating
Sponsor shall inform the Agricultural Counselor or Attache or CCC
designated representative if it has reason to believe there is a
pattern or trend in the loss, damage, or misuse of such commodities and
submit a report on the basis described in paragraph (h)(1) of this
section together with such other information as the Cooperating Sponsor
has available to it. The Agricultural Counselor or Attache may require
additional information about any commodities lost, damaged or misused
if it believes such information is necessary in order to maintain the
integrity of the program.
(i) Handling claims proceeds. Claims against ocean carriers shall
be collected in U.S. dollars (or in currency in which freight is paid,
or a pro data share of either) and shall be remitted (less amounts
authorized to be retained) by Cooperation Sponsors to CCC. Claims
against Cooperating Sponsors shall be paid to CCC in U.S. dollars. With
respect to commodities lost, damaged or misused, amounts paid by
Cooperating Sponsors and third parties in the country of distribution
shall be deposited with the U.S. Disbursing Officer, American Embassy,
preferably, in U.S. dollars with instructions to credit the deposit to
an appropriate CCC account as determined by CCC, or in local currency
at the official exchange rate applicable to dollar imports at the time
of deposit with instructions to credit the deposit to an appropriate
CCC account as determined by CCC. With respect to monetized proceeds
and program income, amounts recovered may be deposited in the same
account as the monetized proceeds and may be used for purposes of the
program.
Sec. 1499.18 Records and reporting requirements.
(a) Records and reports--general requirements. (1) The Cooperating
Sponsor shall maintain records and documents in a manner which
accurately reflects all transactions pertaining to the receipt,
storage, distribution sale, inspection and use of commodities and the
receipt and disbursement of any monetized proceeds and program income,
including interest and fees. Such records shall be retained for a
period of three years from the close of the U.S. fiscal year to which
they pertain. The Cooperating Sponsor shall provide CCC with any
records, or copies thereof, requested by CCC.
(2) The Cooperating Sponsor shall cooperate with and assist to U.S.
government representatives to enable examination of any activities,
facilities or records of the Cooperating Sponsor pertaining to the
receipt, storage, distribution, sale, inspection and use of commodities
and the receipt and disbursement of any monetized proceeds and program
income, including interest and fees.
(b) Evidence of export. The Cooperating Sponsor shall, within
thirty (30) days after export, furnish evidence of export of the
agricultural commodities to the Director, P.L. 480-OD. If export is by
sea or air, two copies of the on board carrier's bill of lading or
consignee's receipt authenticated by a representative of the U.S.
Customs Service shall be furnished. The evidence of export must show
the kind and quantity of agricultural commodities exported, the date of
export, and the destination country.
(c) Special reports required under section 416(b). (1) The
Cooperating Sponsor shall submit a semiannual Logistics Report to the
Director, PAD, and to the Agricultural Counselor or Attache or CCC
designated representative. The first logistics report shall be
submitted on or before the date specified in the section 416(b) Program
Agreement and shall cover the full period since the date of that
agreement. Subsequent reports shall be made at six month intervals
during the period in which commodities received are being distributed
by the Cooperating Sponsor. The logistics report shall contain the
following information:
(i) Receipts of agricultural commodity including the name of each
vessel, discharge ports, the date discharge was completed, the
condition of the commodities on arrival, any significant loss or damage
in transit; advice of any claim for, or recovery of, or reduction of
freight charges due to loss or damage in transit on U.S. flag vessels;
(ii) Estimated commodity inventory at the end of the reporting
period;
(iii) Quantity of commodity on order and in transit during the
reporting period;
(iv) Status of claims for commodity losses both resolved and
unresolved during the reporting period; and
(v) Quantity of commodity damaged or declared unfit during the
reporting period.
(2) In the event that an approved program calls for the
monetization of all, or any portion of the donated agricultural
commodities, the Cooperating Sponsor shall also submit a semiannual
monetization report to the Director, PAD, containing the information
specified below, and a quarterly report to the Controller, CCC,
containing the information specified in paragraphs (c)(2)(i) through
(iv) of this section. The first monetization report shall be submitted
by the date specified in the section 416(b) Program Agreement and shall
cover the full period from the date of that agreement. Reports
thereafter should cover each subsequent semiannual or quarterly period
in which commodities received are being distributed, or monetized
proceeds are being held or disbursed, by the Cooperating Sponsor. The
monetization report must contain the following data:
(i) The quantity of each type of commodity furnished for the
purpose of sale or barter, and the actual amount sold or bartered;
(ii) The amount of funds and value of services generated from sales
and barter of the commodities, in both local currency and U.S. dollar
equivalent.
(iii) Deposits into and disbursements from the special account, the
total amount of funds used to date, and balance in special account, in
both local currencies and U.S. dollar equivalents.
(iv) The amount of generated currencies not yet programmed that
will be used and an estimate of when they will be disbursed.
(v) A thorough description of how the funds and services generated
were or will be used, including information regarding project goals,
accomplishments, and the number of beneficiaries.
(vi) Quantity of commodities as yet unsold, and an estimate of when
sales and barter will be completed.
(vii) A thorough description of the effectiveness of sales and
barter provisions in facilitating the distribution of commodities and
products to targeted recipients.
(viii) A description of the extent, if any, that sales, barter or
use of section 416(b) commodities:
(A) affected the usual marketing of the United States;
(B) displaced or interfered with commercial sales of the United
States;
(C) disrupted world commodity prices or normal patterns of trade
with friendly countries; and
(D) discouraged local production and marketing of commodities in
the recipient country;
(ix) An explanation of the extent to which agreement objectives
were achieved.
(x) Recommendations for improving sale, barter, or use provisions
of future section 416(b) programs.
Sec. 1499.19 Termination of program.
All or any part of the assistance provided under a Program
Agreement, including commodities in transit, may be suspended or
terminated by CCC if:
(a) The Cooperating Sponsor fails to comply with the provisions of
the Program Agreement or this part;
(b) It is determined by CCC that the continuation of such
assistance is no longer necessary or desirable; or
(c) CCC determines that storage facilities are inadequate to
prevent spoilage or waste or that distribution of commodities will
result in substantial disincentive to, or interfere with, domestic
production or marketing in the recipient country.
Sec. 1499.20 Sample documents and guidelines for developing proposals
and reports.
To assist with effective reporting on program logistics and
monetization, etc., guidelines have been developed. Examples of these
guidelines may be obtained from the Director, PAD.
Signed this 7th day of February 1994, in Washington, DC.
Christopher E. Goldthwait,
General Sales Manger, FAS, and Vice President, Commodity Credit
Corporation.
[FR Doc. 94-3212 Filed 2-11-94; 8:45 am]
BILLING CODE 3410-10-M