[Federal Register Volume 63, Number 138 (Monday, July 20, 1998)]
[Rules and Regulations]
[Pages 38751-38752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19253]


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INTERNATIONAL DEVELOPMENT COOPERATION AGENCY

Agency for International Development

22 CFR Part 228

RIN 0412-AA37


Rules on Source, Origin and Nationality for Commodities and 
Services Financed by USAID: Miscellaneous Amendments

AGENCY: United States Agency for International Development (USAID), 
IDCA.

ACTION: Final rule.

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SUMMARY: USAID is amending its regulation on source, origin and 
nationality for commodities and services financed by USAID by revising 
two rules, one on system determinations for commodities and one on 
ocean transportation eligibility, and by clarifying waiver provisions.
    The final rule amends the coverage on systems determinations to 
allow components of a commodity system to be shipped to a cooperating 
country without first being shipped to and assembled in an eligible 
country. This should reduce the cost of these transactions by reducing 
unnecessary shipments. The rules on eligibility of transshipments are 
amended to require that suppliers obtain a determination from USAID 
that direct service on U.S. a flag vessel is not available before 
transshipment from a U.S. flag to a non-U.S. flag vessel will be 
eligible for USAID financing. This will ensure compliance with Cargo 
Preference requirements that direct U.S. flag service be used when 
available.

DATES: Effective September 18, 1998.

FOR FURTHER INFORMATION CONTACT: Kathleen O'Hara, Office of 
Procurement, Policy Division (M/OP/P) USAID, Washington, DC 20523-. 
Telephone: (202) 712-4759, facsimile: (202) 216-3395, e-mail address: 
[email protected].

SUPPLEMENTARY INFORMATION: The regulation at 22 CFR part 228 was 
published as a final rule September 15, 1996 (61 FR 53615). After 
operating under the regulation for a year a few areas have been 
identified that need some additional coverage or clarification. USAID 
published a proposed rule to amend 22 CFR part 228 on January 23, 1998 
(63 FR 3506). The only comment received was from the American Maritime 
Congress which affirmed its support for the revisions to the ocean 
transportation eligibility policy. The rule is being amended as 
proposed.

List of Subjects in 22 CFR Part 228

    Administrative practice and procedure, Commodity procurement, Grant 
programs--foreign relations.

    Accordingly 22 CFR part 228 is amended as follows:

PART 228--[AMENDED]

    1. The authority citation continues to read as follows:

    Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 
2381), as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 
1979 Comp., p. 435.

    2. In Sec. 228.11, paragraph (e) is revised as follows:


Sec. 228.11  Source and origin of commodities.

* * * * *
    (e) Systems determination. When a system consisting of more than 
one produced commodity is procured as a single separately priced item, 
USAID may determine that the system itself shall be considered a 
produced commodity. When a determination is made to treat a system as a 
produced commodity, component commodities which originate from other 
than an authorized source country may be shipped directly to, and the 
system assembled in, the cooperating country, unless USAID specifically 
determines that assembly and shipment take place in an authorized 
source country. Transportation costs must still meet the requirements 
in subpart C of this part in order for them to be eligible for USAID 
financing. USAID, or the importer in the case of a Commodity Import 
Program, shall inform the supplier of any system determination.
* * * * *
    3. Section 228.21 is amended by adding a sentence at the end of 
paragraph (a) and revising paragraph (c)(4) as follows:


Sec. 228.21  Ocean transportation.

    (a) * * * USAID's policy on implementation of the Cargo Preference 
Act is in USAID's Automated Directives System, Chapter 315.
* * * * *
    (c)* * *
    (4) USAID will finance costs incurred on vessels under flag 
registry of any Geographic Code 935 country if the costs are part of 
the total cost on a through bill of lading that is paid to a carrier 
for initial carriage on a vessel which is eligible in accordance with 
paragraphs (c)(1), (2) or (3) of this section; provided that for 
shipments originating on a U.S. flag vessel with transshipment to a 
non-U.S. flag vessel, the supplier must obtain a determination that 
direct serve on a U.S. flag vessel is not available from USAID's Office 
of Procurement, Transportation Division, 1300 Pennsylvania Avenue NW., 
Washington, DC 20523-7900.
    4. Section 228.51, paragraph (a) is amended by revising the 
introductory paragraph and paragraph (a)(1) as follows:


Sec. 228.51   Commodities.

    (a) Waiver criteria. Any waiver must be based upon one of the 
criteria listed in this section. Waivers to Geographic Code 899 or Code 
935 which are justified under paragraph (a)(2) or (3) of this section 
may only be authorized on a case-by-case basis. A waiver may be 
authorized when:
    (1) A commodity required for assistance is of a type that is not 
produced in or available for purchase in

[[Page 38752]]

the United States; in addition, for waivers to any country or 
Geographic code beyond Code 941 and the cooperating country, the 
commodity is of a type that is not produced in or available for 
purchase in any country in Code 941 or the cooperating country.
* * * * *
    5. Section 228.53 is amended by revising the introductory paragraph 
and paragraph (a) as follows:


Sec. 228.53  Suppliers of services--privately owned commercial 
suppliers and non-profit organizations.

    Waiver criteria. Any waiver must be based upon one of the criteria 
listed in this section. Waivers to Geographic Code 899 or Code 935 
which are justified under paragraph (b) or (c) of this section may only 
be authorized on a case-by-case basis. A waiver may be authorized when:
    (a) Services required for assistance are of a type that are not 
available for purchase in the United States; in addition, for waivers 
to any country or Geographic Code beyond Code 941 and the cooperating 
country, the services are of a type that are not available for purchase 
in any country in Code 941 or the cooperating country.
* * * * *
    Dated: May 26, 1998.
Marcus L. Stevenson,
Procurement Executive.
[FR Doc. 98-19253 Filed 7-17-98; 8:45 am]
BILLING CODE 6116-71-M