[Federal Register Volume 77, Number 122 (Monday, June 25, 2012)]
[Notices]
[Pages 37871-37873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-15388]


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DEPARTMENT OF COMMERCE

International Trade Administration

[Application 12-00005]


Export Trade Certificate of Review

ACTION: Notice of Application for an Export Trade Certificate of Review 
from Colombia Rice Export Quota, Inc.

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SUMMARY: The Export Trading Company Affairs (``ETCA'') unit, Office of 
Competition and Economic Analysis, International Trade Administration, 
Department of Commerce, has received an application for an Export Trade 
Certificate of Review (``Certificate''). This notice summarizes the 
conduct for which certification is sought and requests comments 
relevant to whether the Certificate should be issued.

FOR FURTHER INFORMATION CONTACT: Joseph E. Flynn, Director, Office of 
Competition and Economic Analysis, International Trade Administration, 
by telephone at (202) 482-5131 (this is not a toll free number) or 
Email at [email protected].

SUPPLEMENTARY INFORMATION: Title III of the Export Trading Company Act 
of 1982 (15 U.S.C. 4001-21) authorizes the Secretary of Commerce to 
issue Export Trade Certificates of Review. An Export Trade Certificate 
of Review protects the holder and the members identified in the 
Certificate from state and federal government antitrust actions and 
from private, treble damage antitrust actions for the export conduct 
specified in the Certificate and carried out in compliance with its 
terms and conditions. Section 302(b)(1) of the Export Trading Company 
Act of 1982 and 15 CFR 325.6(a) require the Secretary to publish a 
notice in the Federal Register, identifying the applicant and 
summarizing its proposed export conduct.

Request for Public Comments

    Interested parties may submit written comments relevant to the 
determination whether a Certificate should be issued. If the comments 
include any privileged or confidential business information, it must be 
clearly marked and a nonconfidential version of the comments 
(identified as such) should be included. Any comments not marked 
``privileged'' or ``confidential business information'' will be deemed 
to be nonconfidential. An original and five (5) copies, plus two (2) 
copies of the nonconfidential version, should be submitted no later 
than 20 days after the date of this notice to: Export Trading Company 
Affairs, International Trade Administration, U.S. Department of 
Commerce, Room 7021X, Washington, DC 20230, or transmitted by Email at 
[email protected]. Information submitted by any person is exempt from 
disclosure under the Freedom of Information Act (5 U.S.C. 552). 
However, nonconfidential versions of the comments will be made 
available to the applicant if necessary for determining whether or not 
to issue the Certificate. Comments should refer to this application as 
``Export Trade Certificate of Review, application number 12-00005.'' A 
summary of the application follows.

Summary of the Application

    Applicant: Colombia Rice Export Quota, Inc. (``COLOM-RICE''),
    1700 Pennsylvania Avenue NW., Suite 200, Washington, DC 20006.
    Application No.: 12-00005.
    Date Deemed Submitted: June 5, 2012.

Members (in Addition to Applicant)

    Arkansas Rice Research and Promotion Board, P.O. Box 31, Little 
Rock, AR 72203-0031; California Rice Research Board, P.O. Box 507, Yuba 
City, CA 95992; Louisiana Rice Research Board, 1373 Caffey Road, Rayne, 
LA 70578; Mississippi Rice Promotion Board, 2538 Crosby Road, Marigold, 
MS 38759; Missouri Rice Research and Merchandising Council, P.O. Box 
77, Malden, MO 63863; Texas Rice Producers' Board, 301 W. Webb, El 
Campo, TX 77434; USA Rice, Merchants' Association, 2101 Wilson 
Boulevard, Arlington, VA 22201-3040; USA Rice Millers' Association, 
2101 Wilson Boulevard, Arlington, VA 22201-3040; and Federaci[oacute]n 
Nacional de Arroceros de Colombia (FEDEARROZ) Carrera 100 No. 25H--25, 
Bogot[aacute]--Colombia.
    COLOM-RICE seeks a Certificate to engage in the Export Trade 
Activities and Methods of Operation described below in the following 
Export Trade and Export Markets.

Export Trade

Products

    Rice classifiable for customs purposes under HTS Codes 1006.1090, 
1006.2000, 1006.3000 and 1006.4000. The rice products as described in 
the Agricultural Tariff Schedule of the Republic of Colombia, as 
appended to the U.S.-Colombia Trade Promotion Agreement (``TPA''), 
signed into law by the President on October 12, 2011, and including the 
following Colombian HTS Codes: 1006.1090--rice in hull, except for seed 
(arroz con cascara, excepto para siembra); 1006.2000--hulled rice--

[[Page 37872]]

rough rice or brown rice (arroz descascarillado, arroz cargo o arroz 
pardo); 1006.3000--rice semi-milled or milled, whether polished or 
glazed (arroz semiblanqueado o blanqueado, incluso pulido oglaseado); 
1006.4000--broken rice (arroz partido).

Export Markets

    Rice for which tariff-rate quotas (``TRQs'') awards will be made 
will be exported to the Republic of Colombia.

Export Trade Activities and Methods of Operation

    1. Purpose.
    Colombia Rice Export Quota, Inc. (``COL-RICE'') will manage on an 
open tender basis the TRQs for rice products granted by the Republic of 
Colombia to the United States under the terms of the TPA, or any 
amended or successor agreement providing for Colombia TRQs for rice 
from the United States of America. Specifically, the TRQs for rice 
products are set forth at Paragraph 20 of Appendix I of the General 
Notes of Colombia, Annex 2.3 to the TPA. COL-RICE also will provide for 
distributions of the proceeds received from the tender process based on 
exports of rice (``the TRQ System'') to support the operation and 
administration of COL-RICE and to fund research projects for the 
benefit of the rice industry of the United States and to fund market 
development and/or competitiveness projects for the benefit of the rice 
production sector of the Republic of Colombia, as established by 
paragraph 6 of Article 5 of Decree No. 0728 of 2012, issued by the 
Ministry of Agriculture and Rural Development of Colombia.
    2. Implementation.
    A. Administrator. COL-RICE shall contract with a neutral third 
party Administrator (i.e., a party who is not engaged in the 
production, sale, distribution or export of rice or rice products) who 
shall bear responsibility for administering the TRQ System, subject to 
general supervision and oversight by the Board of Directors of COL-
RICE.
    B. Membership. COL-RICE's members under this certificate are: 
Arkansas Rice Research and Promotion Board; California Rice Research 
Board; Louisiana Rice Research Board; Mississippi Rice Promotion Board; 
Missouri Rice Research and Merchandising Council; Texas Rice Producers' 
Board; USA Rice Merchants' Association; and USA Rice Millers' 
Association on behalf of the U.S. rice industry; and Federaci[oacute]n 
Nacional de Arroceros de Colombia (FEDEARROZ) on behalf of the rice 
production sector of the Republic of Colombia, as provided for in the 
letter of May 3, 2012, Radicado No. 20121100031363 issued by the 
Ministry of Agriculture and Rural Development according to paragraph 5 
of Article 5 of Decree No.0728 of 2012, issued by the Ministry of 
Agriculture and Rural Development of Colombia.
    C. Open Tender Process. COL-RICE shall offer TRQ Certificates for 
duty-free shipments of U.S. rice to the Republic of Colombia solely and 
exclusively through an open tender process with certificates awarded to 
the highest bidders (``TRQ Certificates''). COL-RICE shall hold tenders 
in accordance with tranches at least once each year. The award of TRQ 
Certificates under the open tender process shall be determined solely 
and independently by the Administrator in accordance with Section I 
without any participation by the Members of COL-RICE or the COL-RICE 
Board of Directors.
    D. Persons or Entities Eligible to Bid. Any person or entity 
incorporated or with a legal address in the United States of America 
shall be eligible to bid in the open tender process.
    E. Notice. The Administrator shall publish notice (``Notice'') of 
each open tender process to be held to award TRQ Certificates in the 
Journal of Commerce and, at the discretion of the Administrator, in 
other publications of general circulation within the U.S. rice 
industry; and in a publication of general circulation in Colombia. The 
Notice will invite independent bids and will specify (i) the total 
amount (in metric tons) that will be allocated pursuant to the 
applicable tender; (ii) the shipment period for which the TRQ 
Certificates will be valid; (iii) the date and time by which all bids 
must be received by the Administrator in order to be considered (the 
``Bid Date''); and (iv) a minimum bid amount per ton, as established by 
the Board of Directors, to ensure the costs of administering the 
auction are recovered. The Notice normally will be published not later 
than 30 business days prior to the first day of the shipment period and 
will specify a Bid Date that is at least 10 business days after the 
date of publication of the Notice. The Notice will specify the format 
for bid submissions. Bids must be received by the Administrator not 
later than 5:00 p.m. EST on the Bid Date.
    F. Contents of Bid. The bid shall be in a format established by the 
Administrator and shall state (i) the name, address, telephone and 
facsimile numbers, and email address of the bidder; (ii) the quantity 
of rice bid, in an amount stated in metric tons, or fractions thereof; 
(iii) the bid price in U.S. dollars per metric ton; and (iv) the total 
value of the bid. The bid form shall contain a provision, that must be 
signed by the bidder, agreeing that (i) any dispute that may arise 
relating to the bidding process or to the award of TRQ Certificates 
shall be settled by arbitration administered by the American 
Arbitration Association in accordance with its Commercial Arbitration 
Rules; and (ii) judgment on any award rendered by the arbitrator may be 
entered in any court having jurisdiction thereof.
    G. Performance Security. The bidder shall submit with each bid a 
performance bond, irrevocable letter of credit drawn on a U.S. bank, 
cashier's check, wire transfer or equivalent security, in a form 
approved and for the benefit of an account designated by the 
Administrator, in the amount of $50,000 or the total value of the bid, 
whichever is less. The bidder shall forfeit such performance security 
if the bidder fails to pay for any TRQ Certificates awarded within five 
(5) business days. The bidder may chose to apply the performance 
security to the price of any successful bid, or to retain the 
performance security for a subsequent open tender process. Promptly 
after the close of the open tender process, the Administrator shall 
return any unused or non-forfeited security to the bidder.
    H. Confidentiality of Bids. The Administrator shall treat all bids 
and their contents as confidential. The Administrator shall disclose 
information about bids only to another neutral third party, or 
authorized government official of the United States or of the Republic 
of Colombia and only as necessary to ensure the effective operation of 
the TRQ System or where required by law. However, after the issuance of 
all TRQ Certificates from an open tender process, the Administrator 
shall notify all bidders and shall disclose publicly (i) the total 
tonnage for which TRQ Certificates were awarded, and (ii) the average 
price and lowest price per metric ton of all successful bids.
    I. Award of TRQ Certificates. The Administrator shall award TRQ 
Certificates for the available tonnage to the bidders who have 
submitted the highest price conforming bids. If two or more bidders 
have submitted bids with identical prices, the Administrator shall 
divide the remaining available tonnage in proportion to the quantities 
of their bids, and offer each TRQ Certificates in the resulting 
tonnages. If any bidder declines all or part of the tonnage offered, 
the Administrator shall offer that tonnage first to the other tying 
bidders, and then to the next highest bidder.

[[Page 37873]]

    J. Payment for TRQ Certificates. Promptly after being notified of a 
TRQ award and within the time specified in the Notice, the bidder shall 
pay the full amount of the bid, either by wire transfer or by certified 
check, to an account designated by the Administrator. If the bidder 
fails to make payment within five (5) days, the Administrator shall 
revoke the award and award the tonnage to the next highest bidder(s).
    K. Delivery of TRQ Certificates. The Administrator shall establish 
an account for each successful bidder in the amount of tonnage 
available for TRQ Certificates. Upon request, the Administrator will 
issue TRQ Certificates in the tonnage designated by the bidder, 
consistent with the balance in that account.
    L. Transferability. TRQ Certificates shall be freely transferable 
except that (i) any TRQ Certificate holder who intends to sell, 
transfer or assign any rights under that Certificate shall publish such 
intention on a Web site maintained by the Administrator at least three 
(3) business days prior to any sale, transfer or assignment; and (ii) 
any TRQ holder that sells, transfers or assigns its rights under a TRQ 
Certificate shall provide the Administrator with notice and a copy of 
the sale, transfer or assignment within three (3) business days.
    M. Deposit of Proceeds: The Administrator shall cause all proceeds 
of the open tender process to be deposited in interest-bearing accounts 
in a financial institution approved by the COL-RICE Board of Directors.
    N. Disposition of Proceeds. The proceeds of the open tender process 
shall be applied and distributed as follows:
    i. The Administrator shall pay from tender proceeds, as they become 
available, all operating expenses of COL-RICE, including legal, 
accounting and administrative costs of establishing and operating the 
TRQ System, as authorized by the Board of Directors.
    ii. The legal, accounting and administrative expenses of the USA 
Rice Federation, the US Rice Producers Association, and FEDEARROZ 
directly related to establishing COL-RICE, shall be reimbursed from the 
proceeds of the COL-RICE as they become available and subject to the 
review of the Board.
    iii. Of the proceeds remaining at the end of each year of 
operations and after all costs described in (i) and (ii) above have 
been paid--1. In years one (1) through ten (10), fifty percent (50%) 
shall be distributed to each of the six (6) state chartered rice 
research boards named as members above on a pro rata basis, that share 
being each state's pro rata share of the average of the immediately 
preceding three (3) years U.S. rice production, to fund rice research 
projects as defined by each of the six (6) state chartered research 
boards to benefit the United States rice industry. The funds are to be 
used for direct research projects and not to be used for general 
administrative purposes.
    2. In years eleven (11) through eighteen (18), fifty percent (50%) 
shall be distributed to each of the six (6) state chartered rice 
research boards named as members above on a pro rata basis, that share 
being each state's pro rata share of the average of the immediately 
preceding three (3) years U.S. rice production, to fund research and 
promotion projects as defined by each of the six (6) state chartered 
research boards to benefit the United States rice industry as may be 
within the purview of each board. These funds are to be used for direct 
projects and are not to be used for general administrative purposes.
    3. In all years, fifty percent (50%) of the proceeds shall be 
distributed to the Colombian Member to fund market development and/or 
competitiveness projects for the benefit of the rice production sector 
of the Republic of Colombia, as established by paragraph 6 of Article 5 
of Decree No. 0728 of 2012, issued by the Ministry of Agriculture and 
Rural Development of Colombia.
    O. Arbitration of Disputes. Any dispute, controversy or claim 
arising out of or relating to the TRQ System or the breach thereof 
shall be settled by arbitration administered by the American 
Arbitration Association in accordance with its Commercial Arbitration 
Rules, and judgment on the award rendered by the arbitrator may be 
entered in any court having jurisdiction thereof.
    P. Confidential Information. The Administrator shall maintain as 
confidential all export documentation or other business sensitive 
information submitted in connection with application for COL-RICE 
membership, bidding in the open tender process or requests for 
distribution of proceeds, where such documents or information has been 
marked ``Confidential'' by the person making the submission. The 
Administrator shall disclose such information only to another neutral 
third party or authorized government official of the Government of the 
United States of America or an official of the Government of the 
Republic of Colombia; and only where necessary to ensure the effective 
operation of the TRQ System or where required by law (including 
appropriate disclosure in connection with the arbitration of a 
dispute).
    Q. Annual Reports. COL-RICE shall publish an annual report 
including a statement of its operating expenses and data on the 
distribution of proceeds, as reflected in the audited financial 
statement of the COL-RICE TRQ System. A copy of the certificate will be 
kept in the International Trade Administration's Freedom of Information 
Records Inspection Facility, Room 4100, U.S. Department of Commerce, 
14th Street and Constitution Avenue NW., Washington, DC 20230.

    Dated: June 19, 2012.
Joseph E. Flynn,
Director, Office of Competition and Economic Analysis.
[FR Doc. 2012-15388 Filed 6-22-12; 8:45 am]
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