[Federal Register Volume 59, Number 202 (Thursday, October 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25961]


[[Page Unknown]]

[Federal Register: October 20, 1994]


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DEPARTMENT OF AGRICULTURE
Agricultural Stabilization and Conservation Service

7 CFR Part 782

RIN 0560-AD77

 

End-Use Certificate Program

AGENCY: Agricultural Stabilization and Conservation Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule proposes to implement a U.S. end-use certificate 
program for wheat and barley imported from any foreign country or 
instrumentality that as of April 8, 1994, requires end-use certificates 
for imports of U.S.-produced wheat and barley, respectively, as 
required by section 321(f) of the North American Free Trade Agreement 
Implementation Act (the Act).
    A notice requesting comments regarding a U.S. end-use certificate 
system was published in the Federal Register on April 13, 1994, at 59 
FR 17495. Comments were solicited with respect to the alternatives and 
issues that need to be addressed in implementing such a program. These 
comments were taken into consideration by the Agricultural 
Stabilization and Conservation Service (ASCS) with respect to the 
development of this proposed rule.

DATES: Comments must be received by November 21, 1994 to be assured of 
consideration.

ADDRESSES: Comments must be mailed to Deputy Administrator, Commodity 
Operations, ASCS, P.O. Box 2415, Washington, DC 20013-2415. All written 
comments will be available for public inspection in room 5755, South 
Building, U.S. Department of Agriculture, 14th Street and Independence 
Avenue, SW., Washington, DC, between 8 a.m. and 5 p.m., Monday through 
Friday, except holidays.

FOR FURTHER INFORMATION CONTACT: Steve Gill, Chief, Inventory 
Management Branch, Commodity Operations Division, ASCS, P.O. Box 2415, 
Washington, DC 20013-2415; phone 202-720-6500 or FAX 202-690-2221.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be significant and was reviewed by 
the Office of Management and Budget (OMB) under Executive Order 12866.

Executive Order 12778

    This proposed rule has been reviewed in accordance with Executive 
Order 12778. The provisions of this proposed rule do not preempt State 
laws, are not retroactive, and do not involve administrative appeals.

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action will not have a significant impact on the quality of the human 
environment. Therefore, neither an Environmental Assessment nor an 
Environmental Impact Statement is needed.

Executive Order 12372

    This program/activity is not subject to the provisions of Executive 
Order 12372, which requires intergovernmental consultation with State 
and local officials. See notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Paperwork Reduction Act

    This proposed rule contains new reporting and recordkeeping 
requirements. The public reporting burden for the information 
collection contained in this proposed rule with respect to a U.S. end-
use certificate program is estimated to average 10 minutes for each 
end-use certificate and six and one-half hours for each quarterly 
report, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information. These new 
reporting and recordkeeping requirements will be submitted to OMB for 
expedited approval under the provisions of 44 U.S.C. 35 (see appendix 
A). Send comments regarding this collection of information to: 
Department of Agriculture, Clearance Office, Office of Information 
Resources Management, Room 404-W, Washington, DC 20250, and Regulatory 
Affairs of OMB, Attention: Desk Officer for USDA, Room 3201, New 
Executive Office Building, Washington, DC 20503.

Preliminary Regulatory Impact Analysis

    The Preliminary Regulatory Impact Analysis describing the options 
considered in developing this proposed rule and the impact of the 
implementation of each option is available on request from Craig 
Jagger, Grains Analysis Division, ASCS, P.O. Box 2415, Washington, DC 
20013-2415; phone 202-720-4418. The analysis can be summarized as 
follows:
    The North American Free Trade Agreement Implementation Act requires 
that end-use certificates be established for wheat and barley imported 
into the U.S. from any foreign country that requires end-use 
certificates for imports from the U.S. Currently, Canada is the only 
such country. Three options are considered for the implementation of 
end-use certificates:
    Option 1: Border Certificate. Importers would file these 
certificates to show the intended use of the grain. No additional 
reporting or storage and handling requirements would apply.
    Option 2: Identity Preserve and Track Commingled Grain. 
Certificates showing the intended use would accompany the grain to the 
end user. Imported grain could be commingled with U.S.-origin grain and 
the commingled grain would be treated as imported grain that would have 
to be stored separately from 100-percent U.S.-origin grain. Holders of 
grain would file quarterly reports with USDA.
    Option 3: Identity Preserve and Track Imported Grain. Certificates 
showing the in ended use would accompany the grain to the end user. 
Imported grain would not be allowed to be commingled with U.S.-origin 
grain. Imported grain would be identity preserved and holders of the 
grain would file quarterly reports with USDA. This option most closely 
matches the Canadian system.

The impacts of the options considered depend on import levels, the 
number of certificates issued, possible changes in import practices and 
the proportion of imported grain that is already identity preserved. 
Impacts would result from compliance costs for certificate filing, 
quarterly reporting, and storage and handling costs needed for identity 
preservation. Market impacts would result from reduced imports and 
higher domestic market prices. Because of differences among warehouses 
in storage capacity and involvement in government export assistance 
programs, it is not clear whether, in practice, costs would be higher 
or lower under Option 2 rather than Option 3 so costs are assumed to be 
similar under the two options. The potential impacts of the end-use 
certificate options considered are summarized below: 

----------------------------------------------------------------------------------------------------------------
                                                         Option 1                        Option 2 or 3          
----------------------------------------------------------------------------------------------------------------
Compliance Costs:                                                                                               
    Certificate Filing....................  $35,775 to $143,000..............  $4,450 to $143,000.              
    Quarterly Reporting...................  .................................  $39,000 to $117,000.             
    Maximum Storage and Handling..........  .................................  $800,000 to $3,900,000.          
Market Impacts: ($ Million)                                                                                     
    Producer Income.......................  .................................  12.5.                            
    Program Costs.........................  .................................  -46.5.                           
    Buyers' Loss \1\......................  .................................  -62.5.                           
----------------------------------------------------------------------------------------------------------------
\1\Buyers' Loss results from buyers purchasing less grain at higher prices.                                     

    Reduced program costs and higher producer income would almost 
offset the increased costs to buyers, for a net impact for Options 2 
and 3 of about $3.5 million.
    An Initial Regulatory Flexibility Analysis indicates that the 
compliance requirements of the program will disproportionately affect 
small entities. Option 1 would have the least impact because it does 
not require identity preservation.

Regulatory Flexibility Act

    It has been determined under the Regulatory Flexibility Act that 
this proposed rule will have an adverse effect on a substantial number 
of small businesses. The analysis discussing these impacts is available 
on request from Craig Jagger, at the address and telephone number noted 
above. The analysis can be summarized as follows:
    Warehousemen with average annual receipts of $12.5 million or less 
are considered small entities. Warehousemen in the states of Montana, 
North Dakota, South Dakota, Washington, Idaho, and Minnesota are most 
apt to be affected by an end-use certificate program. About 85 percent 
of the warehousemen located in these states are estimated to be small 
warehousemen. Of all small warehousemen, only those who import Canadian 
grain would be directly affected by an end-use certificate program.
    Because small warehousemen are likely to have a disproportionate 
share of truck-delivered imports and each entry would require an end-
use certificate, small warehousemen will likely need to file more end-
use certificates than large importers under all options considered. 
Because small warehousemen can be expected to have fewer separate 
storage and handling facilities and because they are less likely to be 
already identity preserving imported grain, costs of identity 
preservation under Options 2 and 3 will likely also affect a 
disproportionately large share of small warehousemen. And if identity-
preservation requirements under Options 2 and 3 reduce the quantity of 
grain imported, the resulting reduction in storage, handling, and 
merchandising income will likely be felt most heavily by small 
warehousemen.

Background

    This proposed rule establishes a new 7 CFR part 782 to set forth 
regulations with respect to a U.S. end-use certificate program. Section 
321(f) of the Act established an end-use certificate requirement for 
imports into the U.S. of wheat and barley from any foreign country or 
instrumentality that as of April 8, 1994, requires end-use certificates 
for imports of U.S.-produced wheat or barley, respectively. Canada 
currently is the only foreign country or instrumentality that requires 
such certificates. The Act is not otherwise specific regarding the type 
of end-use certificate program to be implemented or the particular 
information to be collected.
    A notice requesting comments on the implementation of an end-use 
certificate program was published on April 13, 1994, at 59 FR 17495. 
The notice:
    (1) Compared the U.S. and Canadian marketing systems,
    (2) Described the Canadian end-use system,
    (3) Identified three basic alternatives that ASCS could consider in 
implementing an end-use certificate program, and
    (4) Described current rules and policies used by ASCS to procure 
U.S.-produced commodities for donation or sale under domestic and 
export food assistance programs.
    Forty-one comments were received in response to the notice 
requesting comments.
    All 41 respondents commented on one or more of the three basic 
alternatives that ASCS could consider in implementing an end-use 
certificate program. The key issue separating the alternatives involves 
the issue of commingling vs. separate storage (i.e., identity 
preservation) of Canadian and U.S.-produced grain. In brief, the 
alternatives described in the notice are as follows:
    (1) Allow commingling of Canadian and U.S. grain. Require that a 
certificate which sets forth all relevant information be collected at 
the U.S. border on imported grain. Continue (or modify) current rules 
and policies used by ASCS to procure U.S.-produced commodities for U.S. 
Government-assisted programs;
    (2) Allow commingling of Canadian and U.S. grain. Require that such 
commingled grain be stored separately from U.S.-origin grain until 
delivered to the end-user; or
    (3) Prohibit commingling of Canadian and U.S. grain. Require that 
Canadian grain be stored separately from U.S.- origin grain until 
delivered to the end-user.
    Of 41 respondents, 34 respondents recommended that ASCS adopt 
alternative 3, which would prohibit the commingling of Canadian and 
U.S. grain. Three respondents recommended adoption of either 
alternative 2 or 3, but not alternative 1; two respondents recommended 
adoption of alternative 1; and two respondents did not recommend 
adoption of one alternative over another.
    After full consideration of all comments, this rule proposes to 
adopt a program similar to the actions now taken by Canada with respect 
to imports of U.S. wheat and barley. Therefore, this proposed rule 
would adopt alternative 3, requiring importers of Canadian wheat and 
barley to store such imported grain separately from U.S.-produced grain 
until delivered to the end-user. Presently only Canada requires end-use 
certificates on U.S. grain entering that country. Therefore, this 
requirement by the U.S. would be imposed only on imports of wheat and 
barley originating in Canada. Although ASCS would prefer to adopt its 
current rules and policies used to procure commodities for donation or 
sale under the Food for Progress Program; programs authorized by Titles 
II and III of Pub. L. 83-480; and foreign food assistance programs 
authorized by section 416(b) of the Agricultural Act of 1949, and 
amended, as well as for domestic food assistance programs (i.e., the 
physical commingling of U.S.-produced grain with non-U.S.-produced 
grain is allowed, provided that at the time of delivery to the 
Commodity Credit Corporation (CCC) the grain merchant has a sufficient 
quantity and quality of U.S.-produced grain available at the location 
where loading occurs to account for the grain sold to CCC and upon 
delivery to CCC such U.S. origin stocks are reduced by the quantity 
delivered to CCC), the Statement of Administrative Action approved by 
Congress with the Act states that the purpose of the U.S. end-use 
requirement is to ensure that foreign agricultural commodities do not 
benefit from U.S. export programs.
    Accordingly, in addition to the identity preservation requirement, 
this proposed rule would require importers to complete form ASCS-750, 
End-Use Certificate for Grain, for each entry of Canadian wheat and 
barley, and to submit the certificate to the Kansas City Commodity 
Office (KCCO), ASCS, within 10 days from the date of entry.
    These regulations allow the importation of Canadian wheat and 
barley for purposes of resale by the importer.
    Information collected on the certificate would include:
    (1) Name, address, and telephone number of the importer,
    (2) Commodity and the class of such commodity being imported,
    (3) Intended use of the commodity, including resale,
    (4) Quantity imported, in net metric tons, rounded to the nearest 
hundredth of a metric ton,
    (5) Storage location of the commodity,
    (6) Name, address, and telephone number of the end-user, if known,
    (7) Mode of transportation and name of the transportation company 
used to import the commodity, and
    (8) A certification.
    In addition to the information provided by the importer, the 
Commissioner of Customs would assist ASCS in administering an end-use 
certificate program by informing KCCO when Canadian wheat and barley is 
imported into the U.S.
    This proposed rule would make the importer responsible for ensuring 
that all applicable end-users and subsequent buyers are informed that 
the commodity being purchased originated in Canada. The importer must 
inform end-users, in writing, that the imported commodity must not be 
used for any purpose other than the use specified on the end-use 
certificate. The importer must provide the end-user with a photocopy of 
the end-use certificate. If the commodity is intended for resale, any 
sales contracts entered into between the importer and a subsequent 
buyer must contain terms that notify the subsequent buyer that:
    (1) The commodity being purchased originated in Canada;
    (2) The commodity being purchased is deemed ineligible for use 
under CCC and U.S. Department of Agriculture-assisted export programs;
    (3) The subsequent buyer shall preserve, on an origin-basis, the 
identity of the commodity being purchased;
    (4) The commodity may not be commingled or blended with U.S.-
produced commodities until such time as the commodity is delivered to 
an end-user;
    (5) The end-user or subsequent buyer must file quarterly reports as 
described below; and
    (6) Any sales contracts entered into between any subsequent buyers 
must contain the same terms specified herewith.

The importer must provide the subsequent buyer with a copy of the end-
use certificate.
    This proposed rule would also require the importer to submit to 
KCCO, within 10 workdays after delivery of the commodity to the end-
user, a copy of the bill of lading acknowledging receipt of the 
commodity by the end-user and the date the commodity was received at 
the end-user's facility. If the commodity is imported for purposes of 
resale, the importer must submit to KCCO, within 10 workdays from date 
of sale, its subsequent buyer's name, address, and telephone number, 
and the quantity sold.
    This proposed rule would require end-users to report to KCCO the 
status of the imported grain on form ASCS-751, End-Use Certificate for 
Grain Quarterly Report, until the commodity is fully used. Subsequent 
buyers would be required to report to KCCO the status of the imported 
grain on form ASCS-751, End-Use Certificate for Grain Quarterly Report, 
until the commodity is resold.
    Information called for on the quarterly report would include:
    (1) The name, address, and telephone number of the end-user or 
subsequent buyer,
    (2) The name and address of the importer,
    (3) The End-Use Certificate for Grain serial number,
    (4) The commodity and class of such commodity,
    (5) The storage location of the commodity,
    (6) The date the commodity was received at the end-user's or 
subsequent buyer's facility,
    (7) The quantity of the commodity received, in net metric tons, 
rounded to the nearest hundredth of a metric ton,
    (8) The quantity of the commodity used by the end-user or sold to a 
subsequent buyer,
    (9) The quantity remaining, and
    (10) A certification.
    Quarterly reports must be received in KCCO within 15 workdays 
following full consumption or resale of the commodity. For partial 
resales or partial consumption, submit form ASCS-751 to KCCO within 15 
workdays following:
    (1) March 31,
    (2) June 30,
    (3) September 30, and
    (4) December 31.
    Forms ASCS-750, End-Use Certificate for Grain, and ASCS-751, End-
Use Certificate for Grain Quarterly Report, may be obtained from KCCO. 
This proposed rule also incorporates the statutory requirement that it 
is a violation of 18 U.S.C. 1001 for an entity to engage in fraud with 
respect to or knowingly violate the provisions set forth in the 
regulations.

List of Subjects in 7 CFR Part 782

    Administrative practice and procedure, Barley, Reporting and 
recordkeeping requirements, Wheat.

    It is proposed that subchapter D, chapter VII of title 7 of the 
Code of Federal Regulations be amended by adding part 782 to read as 
follows:

PART 782--END-USE CERTIFICATE PROGRAM

Subpart A--General

Sec.
782.1  Basis and purpose.
782.2  Definitions.
782.3  Administration.
782.4  OMB control numbers assigned pursuant to the Paperwork 
Reduction Act.

Subpart B--Implementation of End-Use Certificate Program

782.10  Identification of commodities subject to end-use certificate 
regulations.
782.11  Extent to which commodities are subject to end-use 
certificate regulations.
782.12  Filing ASCS-750, End-Use Certificate for Grain.
782.13  Importer responsibilities.
782.14  Identity preservation.
782.15  Filing ASCS-751, End-Use Certificate for Grain Quarterly 
Report.
782.16  Intended use.
782.17  Commodities purchased for resale.
782.18  Penalty for noncompliance.

Subpart C--Records and Reports

782.20  Importer records and reports.
782.21  End-user records and reports.
782.22  Subsequent buyer records and reports.
782.23  Failure to file end-use certificates or quarterly reports.
782.24  Recordkeeping and examination of records.
782.25  Length of time records are to be kept.

    Authority: Section 321(f) of Pub. L. 103-182; 107 Stat. 2057 (19 
U.S.C. 3391(f)).

Subpart A--General


Sec. 782.1  Basis and purpose.

    The regulations contained in this part are issued pursuant to and 
in accordance with Section 321(f) of the North American Free Trade 
Agreement Implementation Act. These regulations govern the 
establishment of the end-use certificate program, the completion of 
end-use certificates, the identification of commodities requiring end-
use certificates, the submission of reports, and the keeping of records 
and making of reports incident thereto.


Sec. 782.2  Definitions.

    As used in this part and in all instructions, forms, and documents 
in connection therewith, the words and phrases defined in this section 
shall have the meanings herein assigned to them unless the context or 
subject matter requires otherwise. References contained herein to other 
parts of this chapter or title shall be construed as references to such 
parts and amendments now in effect or later issued.
    Date of entry means the effective time of entry of the merchandise, 
as defined in 19 CFR part 101.
    End-user means the entity that uses the commodities specified in 
Sec. 782.10(b) for milling, brewing, malting, distilling, 
manufacturing, or other use, except resale, as determined by ASCS.
    Entity means a legal entity including, but not limited to, an 
individual, joint stock company, corporation, association, partnership, 
cooperative, trust, and estate.
    Entry means that documentation required by 19 CFR part 142 to be 
filed with the appropriate U.S. Customs officer to secure the release 
of imported merchandise from U.S. Customs custody, or the act of filing 
that documentation.
    Importer means the person primarily liable for the payment of any 
duties on the merchandise, or an authorized agent acting on his behalf. 
The importer may be:
    (1) The consignee, or
    (2) The importer of record, or
    (3) The actual owner of the merchandise, if an actual owner's 
declaration and superseding bond has been filed in accordance with 19 
C.F.R. part 141, or
    (4) The transferee of the merchandise, if the right to withdraw 
merchandise in a bonded warehouse has been transferred in accordance 
with 19 CFR part 144.
    Intended use means the purpose for which the commodity is being 
imported, including milling, brewing, malting, distilling, 
manufacturing, or other use, including resale.
    Metric ton means a unit of measure that equals 2204.6 pounds.
    Origin basis is defined in Title 19, U.S.C.
    Subsequent buyer means an entity other than the end-user that 
purchases a commodity from an importer or subsequent buyer with the 
intent to resell the commodity.


Sec. 782.3  Administration.

    (a) The end-use certificate program will be administered under the 
general supervision and direction of the Administrator, Agricultural 
Stabilization and Conservation Service (ASCS), U.S. Department of 
Agriculture (USDA), through the Office of the Deputy Administrator, 
Commodity Operations (DACO), ASCS, Washington, D.C., and the Kansas 
City Commodity Office (KCCO), ASCS, Kansas City, MO, in coordination 
with the Commissioner of Customs.
    (b) DACO, or a designee, may waive or modify deadlines and other 
program requirements in cases where failure to meet requirements does 
not adversely affect the enforcement of the end-use certificate 
program.


Sec. 782.4  OMB control numbers assigned pursuant to the Paperwork 
Reduction Act.

    The information collection requirements contained in these 
regulations (7 CFR part 782) have been submitted to the Office of 
Management and Budget (OMB) in accordance with the provisions of 44 
U.S.C. 35 and will be assigned an OMB control number.

Subpart B--Implementation of the End-Use Certificate Program


Sec. 782.10  Identification of commodities subject to end-use 
certificate regulations.

    (a) These regulations are applicable to wheat and barley, 
respectively, imported into the U.S. from any foreign country or 
instrumentality that as of April 8, 1994, requires end-use certificates 
for imports of U.S.-produced wheat or barley.
    (b) The following foreign countries, instrumentalities, and 
commodities are affected by these regulations:
    (1) Wheat originating in Canada.
    (2) Barley originating in Canada.
    (c) The commodities specified in paragraph (b) of this section are 
ineligible for use under Commodity Credit Corporation (CCC) and USDA-
assisted export programs.


Sec. 782.11  Extent to which commodities are subject to end-use 
certificate regulations.

    (a) The provisions of these regulations apply to all commodities 
specified in Sec. 782.10(b).
    (b) To the extent that the foreign countries or instrumentalities 
specified in Sec. 782.10(b) eliminate the requirement for end-use 
certificates on imports from the U.S., the provisions of these 
regulations shall be suspended 30 calendar days following the date the 
foreign country or instrumentality eliminates its end-use certificate 
requirement.


Sec. 782.12  Filing ASCS-750, End-Use Certificate for Grain.

    (a) Each entity which imports any of the commodities specified in 
Sec. 782.10(b) shall, for each entry, obtain form ASCS-750, End-Use 
Certificate for Grain, from KCCO, P.O. Box 419205, Kansas City, MO 
64141-6205, and submit the original form ASCS-750 to KCCO within 10 
days from the date of entry. Each form ASCS-750 shall set forth, among 
other things, the:
    (1) Name, address, and telephone number of the importer,
    (2) Commodity and class of such commodity that is being imported,
    (3) Intended use of the commodity, including resale,
    (4) Quantity imported, in net metric tons, rounded to the nearest 
hundredth of a metric ton,
    (5) Storage location of the commodity,
    (6) Name, address, and telephone number of the end-user, if known,
    (7) Mode of transportation and the name of the transportation 
company used to import the commodity, and
    (8) A certification.
    (b) The original form ASCS-750 and one copy of form ASCS-750 shall 
be signed and dated by the importer.
    (c) Distribution of form ASCS-750 will be as follows:
    (1) The original shall be forwarded to KCCO, P.O. Box 419205, 
Kansas City, MO 64141-6205, by the importer,
    (2) One copy shall be retained by the importer,
    (3) The importer shall provide a photocopy to the end-user, or if 
the commodity is purchased for purposes of resale, the subsequent 
buyer(s).
    (d) The completion and filing of an end-use certificate does not 
relieve the importer of other legal requirements pertaining to the 
importation, such as those imposed by other U.S. agencies.


Sec. 782.13  Importer responsibilities.

    The importer shall:
    (a) Inform the end-user, in writing, that the imported commodity 
shall not be used for any purpose other than the use specified on the 
end-use certificate.
    (b) If the commodity is imported for purposes of resale, 
incorporate the provisions of Sec. 782.17 (b) and (c) into the sales 
contract entered into between the importer and subsequent buyer,
    (c) Submit to KCCO, within 10 workdays:
    (1) After delivery of the commodity to the end-user, a bill of 
lading acknowledging receipt of the commodity by the end-user and the 
date the commodity was received at the end-user's facility.
    (2) If the commodity is imported for purposes of resale, from the 
date of sale, its subsequent buyer's name, address, and telephone 
number, and the quantity sold.


Sec. 782.14  Identity preservation.

    (a) The importer and all subsequent buyers of the imported 
commodity shall preserve, on an origin-basis, the identity of the 
commodities specified in Sec. 782.10(b) and may not commingle or blend 
them with U.S.-produced commodities until such time as the imported 
commodity is delivered to an end-user.
    (b) Failure to meet the requirements in paragraph (a) of this 
section shall constitute noncompliance by the importer or subsequent 
buyer for the purposes of this part.


Sec. 782.15  Filing ASCS-751, End-Use Certificate for Grain Quarterly 
Report.

    (a) For purposes of providing information relating to the 
disposition of commodities specified in Sec. 728.10(b), a form ASCS-
751, End-Use Certificate for Grain Quarterly Report, shall be filed 
with KCCO by each:
    (1) Importer, if the importer has control of the commodity on the 
date specified in paragraph (c) of this section.
    (2) End-user.
    (3) Subsequent buyer.
    (b) The information required on form ASCS-751 is as follows:
    (1) The name, address, and telephone number of the end-user or 
subsequent buyer,
    (2) The name and address of the importer, if known,
    (3) The End-Use Certificate for Grain serial number,
    (4) The commodity and class of such commodity,
    (5) The storage location of the commodity,
    (6) The date the commodity was received at the end-user's or 
subsequent buyer's facility,
    (7) The quantity of the commodity received, in net metric tons, 
rounded to the nearest hundredth of a metric ton,
    (8) The quantity of the commodity used by the end-user or sold to a 
subsequent buyer,
    (9) The quantity remaining, and
    (10) A certification.
    (c) End-users and subsequent buyers shall submit form ASCS-751 to 
KCCO within 15 workdays following full consumption or resale of the 
commodity specified on the ASCS-750. For partial resales or partial 
consumption, submit form ASCS-751 to KCCO within 15 workdays following:
    (1) March 31,
    (2) June 30,
    (3) September 30, and
    (4) December 31.
    (d) The end-user shall continue to submit form ASCS-751 to KCCO 
until the commodity has been utilized in accordance with these 
regulations.
    (e) A subsequent buyer shall continue to submit form ASCS-751 to 
KCCO until the commodity has been resold.
    (f) Importers shall submit form ASCS-751 to KCCO within 15 workdays 
following March 31, June 30, September 30, and December 31, if the 
importer has control of the imported commodity on these dates.


Sec. 782.16  Intended use.

    (a) No entity shall knowingly use any commodities specified in 
Sec. 782.10(b) for any use other than the use specified on the 
applicable form ASCS-750.
    (b) If the use specified on the applicable form ASCS-750 is 
``Resale'', the imported commodity may continue to be resold until 
delivered to an end-user, at which time the end-user must use such 
commodity for one or more of the intended uses, except resale.


Sec. 782.17  Commodities purchased for resale.

    (a) This section applies to an importer or subsequent buyer who 
imports or purchases a commodity specified in Sec. 782.10(b) for the 
purpose of reselling the commodity.
    (b) Any sales contracts entered into between the importer and a 
subsequent buyer, or a contract entered into between subsequent buyers, 
must contain terms that notify the subsequent buyer that:
    (1) The commodity being purchased originated in Canada,
    (2) The commodity being purchased is deemed ineligible for use 
under CCC and USDA-assisted export programs,
    (3) The subsequent buyer shall preserve, on an origin-basis, the 
identity of the commodity being purchased,
    (4) The commodity may not be commingled or blended with U.S.-
produced commodities until such time as the commodity is delivered to 
an end-user, and
    (5) The subsequent buyer is responsible for filing form ASCS-751 in 
accordance with Sec. 782.15.
    (c) The importer or subsequent buyer shall submit to KCCO, within 
10 workdays from the date of sale, its subsequent buyer's name, 
address, and telephone number, and the quantity sold.
    (d) The subsequent buyer shall provide its purchaser with a 
photocopy of the form ASCS-750 submitted to KCCO by the importer in 
accordance with Sec. 782.12(a).


Sec. 782.18  Penalty for noncompliance.

    It shall be a violation of 18 U.S.C. 1001, which provides for a 
fine of not more than $10,000 or imprisonment for not more than 5 
years, or both, for any entity to engage in fraud with respect to or 
knowingly violate the provisions set forth in this part.

Subpart C--Records and Reports


Sec. 782.20  Importer records and reports.

    (a) The importer shall retain a copy of each form:
    (1) ASCS-750, End-Use Certificate for Grain, that is submitted to 
KCCO in accordance with Sec. 782.12(a).
    (2) ASCS-751, End-Use Certificate for Grain Quarterly Report, that 
is submitted to KCCO in accordance with Sec. 782.15(a)(1).
    (b) The importer shall retain a copy of:
    (1) Each bill of lading that is filed with KCCO in accordance with 
Sec. 782.13(c)(1).
    (2) The information with respect to subsequent buyers provided to 
KCCO in accordance with Sec. 782.13(c)(2).
    (c) The importer shall maintain records to verify that the 
commodity specified on the end-use certificate was identity-preserved 
until such time as the imported commodity was delivered to the end-user 
or a subsequent buyer.
    (d) Copies of the documents, information, and records required in 
paragraphs (a), (b), and (c) of this section shall be kept on file at 
the importer's headquarters office or other location designated by the 
importer for the period specified in Sec. 782.25.


Sec. 782.21  End-user records and reports.

    (a) The end-user shall retain a copy of each form ASCS-751, End-Use 
Certificate for Grain Quarterly Report, that is filed with KCCO in 
accordance with Sec. 782.15(a)(2).
    (b) The end-user shall retain a copy of each form ASCS-750, End-Use 
Certificate for Grain, and written notification on the intended use of 
the commodity provided to the end-user by the importer in accordance 
with Sec. 782.12(c)(3).
    (c) Copies of the documents required in paragraphs (a) and (b) of 
this section shall be kept on file at the end-user's headquarters 
office or other location designated by the end-user for the period 
specified in Sec. 782.25.


Sec. 782.22  Subsequent buyer records and reports.

    (a) The subsequent buyer shall retain a copy of each form ASCS-751, 
End-Use Certificate for Grain Quarterly Report, that is filed with KCCO 
in accordance with Sec. 782.15(a)(3).
    (b) The subsequent buyer shall retain a copy of each form ASCS-750, 
End-Use Certificate for Grain, provided to the subsequent buyer in 
accordance with Secs. 782.12(c)(3) or 782.17(d).
    (c) The subsequent buyer shall retain a copy of the sales contract 
which contains the terms of Sec. 782.17 (b) and (c) when the imported 
commodity is resold.
    (d) The subsequent buyer shall maintain records to verify that the 
commodity specified on the end-use certificate was identity-preserved 
during the time that the subsequent buyer maintained control of the 
imported commodity.
    (e) Copies of the documents and records required in paragraphs (a) 
through (d) of this section shall be kept on file at the subsequent 
buyer's headquarters office or other location designated by the 
subsequent buyer for the period specified in Sec. 782.25.


Sec. 782.23  Failure to file end-use certificates or quarterly reports.

    Failure by importers, end-users, and subsequent buyers to file form 
ASCS-750, End-Use Certificate for Grain, and form ASCS-751, End-Use 
Certificate for Grain Quarterly Report, as applicable, and retain or 
maintain related copies and records shall constitute noncompliance for 
the purposes of Sec. 782.18.


Sec. 782.24   Recordkeeping and examination of records.

    (a) Examination. For the purpose of verifying compliance with the 
requirements of this part, each importer, end-user, and subsequent 
buyer shall make available at one place at all reasonable times for 
examination by representatives of USDA, all books, papers, records, 
bills of lading, contracts, scale tickets, settlement sheets, invoices, 
written price quotations, or other documents related to the importation 
of the commodities specified in Sec. 782.10(b) that are within the 
control of such entity.
    (b) Orderly retention of records. To facilitate examination and 
verification of the records and reports required by this part, copies 
of form ASCS-750, End-Use Certificate for Grain, shall be filed in 
numerical order, and copies of form ASCS-751, End-Use Certificate for 
Grain Quarterly Report, shall be filed in chronological order.


Sec. 782.25  Length of time records are to be kept.

    The records required to be kept under this part shall be retained 
for 3 years following the filing date of the applicable record. Records 
shall be kept for such longer period of time as may be requested in 
writing by USDA representatives.

    [Note: The following appendix forms will not appear in the Code 
of Federal Regulations.]

    Signed at Washington, DC on October 14, 1994.
Alan King,
Acting Administrator, Agricultural Stabilization and Conservation 
Service.
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General Information

     The United States Department of Agriculture (USDA) 
provides end-use certificates for persons requiring these 
certificates for the importation of Canadian-produced wheat and 
barley into the United States.
     Regulations governing the End-Use Certificate Program 
can be found at 7 CFR Part 782.
     Wheat and barley covered by an end-use certificate is 
not eligible for use under CCC and USDA-assisted export programs.
     ASCS-750, End-Use Certificates are required for each 
entry of Canadian-produced wheat and barley, and must be submitted 
to the Kansas City Commodity Office within 10 days from the date of 
entry.
     Copies of forms ASCS-750 (End-Use Certificate for 
Grain) and ASCS-751 (End-Use Certificate for Grain Quarterly Report) 
can be obtained from the Kansas City Commodity Office, P.O. Box 
419205, Kansas City, MO 64141-6205
     For grain delivered to an end-user, the importer shall 
provide the Kansas City Commodity Office, within 10 workdays of 
delivery of the commodity to the end-user, a copy of the bill of 
lading on which the end-user's authorized representative has 
acknowledged receipt of the grain, and the date of receipt of the 
grain at the end-user's facility.
     For grain sold to a subsequent buyer, the importer 
shall provide the Kansas City Commodity Office, within 10 workdays 
of the date of sale, the subsequent buyer's name, address, telephone 
number, and the quantity sold.
     Importers, end-users and subsequent buyers are 
responsible for providing quarterly reports to the Kansas City 
Commodity Office until the grain is either resold or fully consumed 
at the end-user's facility.
     Follow these instructions when completing this form. 
Only those items requiring explanation are described below:
    Item 4--Enter the intended use by the end-user, if known. If 
``Other'' is marked, provide the intended use in the space provided.
    Item 7--If the commodity will be held in storage to be sold at a 
later date, enter the storage location.
    Items 8 and 9--If known at the time of importation, enter the 
end-user or subsequent buyer's name, address and telephone number. 
Otherwise, leave blank.

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[FR Doc. 94-25961 Filed 10-17-94; 1:50 pm]
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