[Federal Register Volume 85, Number 6 (Thursday, January 9, 2020)]
[Rules and Regulations]
[Pages 1083-1096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27964]



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 Rules and Regulations
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
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  Federal Register / Vol. 85, No. 6 / Thursday, January 9, 2020 / Rules 
and Regulations  

[[Page 1083]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1484

RIN 0551-AA96


Foreign Market Development Program

AGENCY: Commodity Credit Corporation and Foreign Agricultural Service, 
USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule revises the Foreign Market Development (FMD) program 
regulations to incorporate changes that conform the operation of the 
program to the requirements in the ``Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards'' (Uniform Guidance) and Federal grant-making best practices.

DATES: This rule is effective on January 9, 2020.

FOR FURTHER INFORMATION CONTACT: Curt Alt, (202) 690-4784, 
[email protected].

SUPPLEMENTARY INFORMATION: 

Background

    The FMD is authorized under Section 203 of the Agricultural Trade 
Act of 1978 (7 U.S.C. 5623), as amended. The FMD program regulations 
appear at 7 CFR part 1484.
    This rule updates the FMD program regulations to bring the 
operation of the program into conformance with the requirements in the 
Uniform Guidance (2 CFR part 200). Additional changes, such as the 
flexibility to announce program funding opportunities on the Grants.gov 
portal and edits to bring more consistency between the Market Access 
Program (MAP) and FMD program regulations, are desirable to bring the 
administration of the program into line with the current best practices 
in Federal grant-making.

Notice and Comment

    This rule is being issued as a final rule without prior notice and 
opportunity for comment. The Administrative Procedure Act (5 U.S.C. 
553) exempts rules ``relating . . . to public property, loans, grants, 
benefits, or contracts'' from the statutory requirements for prior 
notice and opportunity for comment and publication of the rule not less 
than 30 days before its effective date (5 U.S.C. 553(a)(2)). 
Accordingly, this final rule is effective when published in the Federal 
Register.

Catalog of Federal Domestic Assistance

    The program covered by this regulation is listed in the Catalog of 
Federal Domestic Assistance (CFDA) under the following the Foreign 
Agricultural Service (FAS) CFDA number: 10.600, Foreign Market 
Development Cooperator Program.

E-Government Act Compliance

    FAS is committed to complying with the E-Government Act of 2002 (44 
U.S.C. chapter 36), to promote the use of the internet and other 
information technologies to provide increased opportunities for 
citizens' access to Government information and services, and for other 
purposes.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988, ``Civil Justice Reform.'' This rule does not preempt State or 
local laws, regulations, or policies unless they present an 
irreconcilable conflict with this rule. This rule will not be 
retroactive.

Executive Order 12372

    Executive Order 12372, ``Intergov- ernmental Review of Federal 
Programs,'' requires consultation with officials of State and local 
governments that would be directly affected by the proposed Federal 
financial assistance. The objectives of the Executive order are to 
foster an intergovernmental partnership and a strengthened federalism 
by relying on State and local processes for the State and local 
government coordination and review of proposed Federal financial 
assistance and direct Federal development. This rule will not directly 
affect State or local governments, and, for this reason, it is excluded 
from the scope of Executive Order 12372.

Executive Order 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This final rule has been determined to be not significant 
and was not reviewed by the Office of Management and Budget (OMB) in 
conformance with Executive Order 12866.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs has designated this 
rule as not a major rule, as defined by 5 U.S.C. 804(2).

Executive Order 13175

    This rule has been reviewed for compliance with Executive Order 
13175, ``Consultation and Coordination with Indian Tribal 
Governments.'' Executive Order 13175 requires Federal agencies to 
consult and coordinate with tribes on a government-to-government basis 
on policies that have tribal implications, including regulations, 
legislative comments, proposed legislation, and other policy statements 
or actions that have substantial direct effects on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes or on the distribution of power and responsibilities between the 
Federal Government and Indian tribes. FAS has assessed the impact of 
this rule on Indian tribes and determined that this rule does not, to 
the knowledge of FAS, have tribal implications that require tribal 
consultation under Executive Order 13175. If a tribe requests 
consultation, FAS will work with USDA Office of Tribal Relations to 
ensure meaningful consultation is provided where changes, additions, 
and modifications identified herein are not expressly mandated by 
Congress.

[[Page 1084]]

Executive Order 13771

    Executive Order 13771 directs agencies to reduce regulation and 
control regulatory costs and provides that for every new regulation 
issued, at least two prior regulations be identified for elimination, 
and that the cost of planned regulations be prudently managed and 
controlled through a budgeting process. This rule is not an Executive 
Order 13771 regulatory action because this rule is not significant 
under Executive Order 12866.

List of Subjects in 7 CFR Part 1484

    Agricultural commodities, Exports.

0
For the reasons discussed in the preamble, 7 CFR part 1484 is revised 
to read as follows:

PART 1484--PROGRAMS TO HELP DEVELOP FOREIGN MARKETS FOR 
AGRICULTURAL COMMODITIES

Sec.
Subpart A--General Information
1484.10 General purpose and scope.
1484.11 Definitions.
1484.12 Participation eligibility.
Subpart B--Application and Funding Allocation
1484.20 Application process.
1484.21 Application review and formation of agreements.
1484.22 Allocation factors.
Subpart C--Program Operations
1484.30 Approval decision.
1484.31 Signature cards.
1484.32 Employment practices.
1484.33 Financial management.
1484.34 Ethical conduct.
1484.35 Contracting procedures.
1484.36 Property.
1484.37 Federal Travel Regulations.
1484.38 Program income.
1484.39 Changes to activities and funding.
Subpart D--Contribution and Reimbursements
1484.50 Contribution rules.
1484.51 Ineligible contribution.
1484.52 Reimbursement rules.
1484.53 Expenditures not reimbursed under the Cooperator program.
1484.54 Reimbursement procedures.
1484.55 Advances.
Subpart E--Reporting, Evaluation, and Compliance
1484.70 Reports.
1484.71 Disclosure of program information.
1484.72 Evaluation.
1484.73 Failure to make required contribution.
1484.74 Compliance reviews and notices.
1484.75 Cooperator response to compliance report.
1484.76 Cooperator appeals of CCC determinations.
1484.77 Submissions.
1484.78 Amendments.
1484.79 Subrecipients.
1484.80 Audit requirements.
1484.81 Suspension and termination of agreements.
1484.82 Noncompliance with an agreement.

    Authority:  7 U.S.C. 5623, 5662-5663.

Subpart A--General Information


Sec.  1484.10  General purpose and scope.

    (a) This part sets forth the general terms and conditions governing 
the Commodity Credit Corporation's (CCC) operation of the Foreign 
Market Development (FMD) Cooperator program.
    (b)(1) The Office of Management and Budget (OMB) issued guidance on 
``Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards'' in 2 CFR part 200. In 2 CFR 400.1, 
the U.S. Department of Agriculture (USDA) adopted OMB's guidance in 
subparts A through F of 2 CFR part 200, as supplemented by 2 CFR part 
400, as USDA policies and procedures for uniform administrative 
requirements, cost principles, and audit requirements for Federal 
awards.
    (2) The OMB guidance at 2 CFR part 200, as supplemented by 2 CFR 
part 400 and this subpart, applies to the Cooperator program.
    (3) In addition to the provisions of this part, other regulations 
that are generally applicable to grants and cooperative agreements of 
USDA, including the applicable regulations set forth in 2 CFR chapters 
I, II, and IV, also apply to the Cooperator program, to the extent that 
these regulations do not directly conflict with the provisions of this 
part. The provisions of the CCC Charter Act (15 U.S.C. 714 et seq.) and 
any other statutory or regulatory provisions that are generally 
applicable to CCC also apply to the Cooperator program.
    (c) Under the Cooperator program, CCC enters into agreements with 
eligible nonprofit U.S. trade organizations to share the costs of 
certain overseas marketing and promotion activities that are intended 
to create, maintain, or expand foreign markets for U.S. agricultural 
commodities. When considering eligible nonprofit U.S. trade 
organizations, CCC generally gives priority to organizations that are 
nationwide in membership and scope and have the broadest producer 
representation and affiliated industry participation of the commodity 
being promoted. Agreements involve the promotion of agricultural 
commodities on a generic basis. CCC does not provide brand promotion 
assistance to Cooperators under this program. Agreements may not 
involve activities targeted directly toward consumers purchasing as 
individuals. Activities must contribute to the creation, maintenance, 
or growth of demand for U.S. agricultural commodities and must 
generally address long-term foreign import constraints and export 
growth opportunities by focusing on matters such as reducing 
infrastructural or historical market impediments, improving processing 
capabilities, modifying codes and standards, and identifying new 
markets or new applications or uses for the agricultural commodity in 
the foreign market.
    (d) The Cooperator program generally operates on a reimbursement 
basis.
    (e) CCC policy is to ensure that benefits generated by Cooperator 
agreements are broadly available throughout the relevant agricultural 
sector and no one entity gains an undue advantage or sole benefit from 
program activities. CCC also endeavors to enter into Cooperator 
agreements covering a broad array of agricultural commodity sectors. 
The Cooperator program is administered by the Foreign Agricultural 
Service (FAS) on behalf of CCC.
    (f) The paperwork and recordkeeping requirements imposed by this 
part have been approved by OMB under the Paperwork Reduction Act of 
1980. OMB has assigned control number 0551-0026 for this information 
collection.


Sec.  1484.11  Definitions.

    For purposes of this part the following definitions apply:
    Activity means a specific foreign market development effort 
undertaken by a Cooperator to address a constraint or opportunity.
    Administrative expenses or costs means expenses or costs of 
administering, directing, and controlling an organization that is a 
Cooperator. Generally, this would include expenses or costs such as 
those related to:
    (1) Maintaining a physical office (including, but not limited to: 
Rent, office equipment, office supplies, office d[eacute]cor, office 
furniture, computer hardware and software, maintenance, extermination, 
parking, and business cards);
    (2) Personnel (including, but not limited to: Salaries, benefits, 
payroll taxes, individual insurance, and training);
    (3) Communications (including, but not limited to: Phone expenses, 
internet, mobile phones, personal digital assistants, email, mobile 
email devices, postage, courier services, television, radio, and walkie 
talkies);

[[Page 1085]]

    (4) Management of an organization or unit of an organization 
(including, but not limited to: Planning, supervision, supervisory 
travel, teambuilding, recruiting, and hiring);
    (5) Utilities (including, but not limited to: Sewer, water, and 
energy); and
    (6) Professional services (including, but not limited to: 
Accounting expenses, financial services, and investigatory services).
    Affiliate means any partnership, association, company, corporation, 
trust, or any other such party in which the Cooperator has an 
investment, other than a mutual fund.
    Agreement means a document entered into between CCC and a 
Cooperator setting forth the terms and conditions of approved 
activities under the Cooperator program, including any subsequent 
amendments to such agreement.
    Approval letter means a document by which CCC informs an applicant 
that its FMD application for a program year has been approved for 
funding. This letter may also approve specific activities and contain 
terms and conditions in addition to the agreement. This letter requires 
a countersignature by the Cooperator before it becomes effective.
    Attach[eacute]/Counselor means the FAS employee representing USDA 
interests in the foreign country in which promotional activities are 
conducted.
    Constraint means a condition in a particular country or region that 
needs to be addressed in order to develop, expand, or maintain exports 
of a specific eligible commodity.
    Consumer promotion means activities that are designed to directly 
influence consumers by changing attitudes or purchasing behaviors 
towards eligible commodities and that involve activities targeted 
directly toward consumers purchasing as individuals.
    Cooperator means a nonprofit U.S. agricultural trade organization 
that has entered into a foreign market development agreement with CCC.
    Cooperator program means the Foreign Market Development Cooperator 
program.
    Contribution means the funds, e.g., money, personnel, materials, 
services, facilities, or supplies, provided by an FMD Cooperator, State 
agency, or entities in the FMD Cooperator's industry (``U.S. 
industry'') in support of an approved activity as well as funds 
provided by the FMD Cooperator, U.S. industry, or State agency in 
support of related promotion activities in the markets covered by the 
FMD Cooperator's agreement.
    Credit memo means a commercial document, also known as a credit 
memorandum, issued by the Cooperator to a commercial entity that owes 
the Cooperator a certain sum. A credit memo is used when the Cooperator 
owes the commercial entity a sum less than the amount the entity owes 
the Cooperator. The credit memo reflects an offset of the amount the 
Cooperator owes the entity against the amount the entity owes to the 
Cooperator.
    Demonstration projects means activities involving the erection or 
construction of a structure or facility or the installation of 
equipment.
    Eligible commodity means any agricultural commodity or product 
thereof, excluding tobacco, that is comprised of at least 50 percent by 
weight, exclusive of added water, of agricultural commodities grown or 
raised in the United States.
    Expenditure means either payment via the transfer of funds or 
offset reflected in a credit memo in lieu of a transfer of funds.
    Foreign subrecipient means a foreign entity that a Cooperator works 
with, in accordance with this part, to promote the export of an 
eligible commodity under the Cooperator program.
    Generic promotion means a promotion that does not involve the 
exclusive or predominant use of a single company name, logo, or brand 
name, or the brand of a U.S. agricultural cooperative, but rather 
promotes an eligible commodity generally. A generic promotion activity 
may include the promotion of a foreign brand (i.e., a brand owned 
primarily by foreign interests and being used to market an agricultural 
commodity in a foreign market), if the foreign brand uses the promoted 
eligible commodity from multiple U.S. suppliers. A generic promotion 
activity may also involve the use of specific U.S. company names, 
logos, or brand names. However, in that case, the Cooperator must 
ensure that all U.S. companies seeking to promote such eligible 
commodity in the market have an equal opportunity to participate in the 
activity and that at least two U.S. companies participate. In addition, 
an activity that promotes separate items from multiple U.S. companies 
will be considered a generic promotion only if the promotion of the 
separate items maintains a unified theme (i.e., a dominant idea or 
motif) and style and is subordinate to the promotion of the generic 
theme.
    Market means a country or region targeted by an activity.
    Notification means a document from the Cooperator by which the 
Cooperator proposes to CCC changes to the activities and/or funding 
levels in an approved agreement and/or approval letter.
    Project funds means the funds made available to a Cooperator under 
an agreement and authorized for expenditure in accordance with this 
part.
    Program notice means documents that CCC issues for informational 
purposes. These notices are currently made available electronically 
through the FAS website. These notices have no legal effect. They are 
intended to alert Cooperators of various aspects of CCC's current 
administration of the FMD program. For example, CCC issues notices to 
alert Cooperators of applicable Federal pay scale rates and lists of 
economic and trade sanctions against certain foreign countries.
    Program year means, unless otherwise agreed to in writing between 
CCC and a Cooperator, a 12-month period during which a Cooperator can 
undertake activities consistent with this part and its agreement and 
approval letter with CCC. This is also known as a project period, which 
in multiple year awards will be divided into budget periods.
    Sales and trade relations expenditures (STRE) means expenditures 
made on breakfast, lunch, dinner, receptions, and refreshments at 
approved activities; miscellaneous courtesies such as checkroom fees, 
taxi fares, and tips for approved activities; and decorations for a 
special promotional occasion that is part of an approved activity.
    Trade team means a group of individuals engaged in an approved 
activity intended to promote the interests of an entire agricultural 
sector rather than to result in specific sales by any of its members.
    Unified Export Strategy (UES) means a holistic marketing plan that 
outlines an applicant's proposed foreign market development activities 
and requested funding under each of the FAS market development 
programs.
    Unified Export Strategy (UES) system means an online internet 
system maintained by FAS through which applicants may apply to the 
Cooperator program and other FAS market development programs. The 
system is currently accessible at https://apps.fas.usda.gov/ues/webapp/. FAS may prescribe a different system through which applicants 
may apply to the FMD program and will announce such system in the 
applicable Notice of Funding Opportunity (NOFO).
    U.S. agricultural commodity means any agricultural commodity of 
U.S. origin, including food, feed, fiber, forestry product, livestock, 
insects, and

[[Page 1086]]

fish harvested from a U.S. aquaculture farm or harvested by a vessel 
(as defined in Title 46 of the United States Code) in waters that are 
not waters (including the territorial sea) of a foreign country, and 
any product thereof.


Sec.  1484.12  Participation eligibility.

    (a) To participate in the Cooperator program, an entity must be a 
nonprofit U.S. agricultural trade organization that promotes the 
exports of one or more U.S. agricultural commodities, does not have a 
business interest in or receive remuneration from specific sales of 
agricultural commodities, and contributes at least 50 percent of the 
value of resources reimbursed by CCC for activities conducted under the 
agreement.
    (b) CCC may require that an agreement include a contribution level 
greater than that specified in paragraph (a) of this section. In 
requiring a higher contribution level, CCC will take into account such 
factors as past Cooperator contribution level, previous Cooperator 
program funding levels, the length of time an entity participates in 
the program, and the entity's ability to increase its contribution 
level.
    (c) CCC will enter into agreements only for the promotion of 
eligible commodities.

Subpart B--Application and Funding Allocation


Sec.  1484.20  Application process.

    (a) General application requirements. CCC will periodically 
announce through a NOFO that it is accepting applications for 
participation in the Cooperator program for a specified program year. 
This announcement will be posted on the U.S. Government website for 
grant opportunities. Applications shall be submitted in accordance with 
the terms and requirements specified in the announcement and in this 
part. Currently, applicants are encouraged to submit applications 
through the UES system but are not required to do so.
    (b) Universal identifier and System for Award Management (SAM). In 
accordance with 2 CFR part 25, each entity that applies to the 
Cooperator program and does not qualify for an exemption under 2 CFR 
25.110 must:
    (1) Be registered in the SAM prior to submitting an application or 
plan;
    (2) Maintain an active SAM registration with current information at 
all times during which it has an active Federal award or an application 
or plan under consideration by CCC; and
    (3) Provide its DUNS number, or a unique identifier designated as a 
DUNS replacement, in each application or plan it submits to CCC.
    (c) Reporting subaward and executive compensation information. In 
accordance with 2 CFR part 170, each entity that applies to the 
Cooperator program and does not qualify for an exception under 2 CFR 
170.110(b) must ensure it has the necessary processes and systems in 
place to comply with the applicable reporting requirements of 2 CFR 
part 170 should it receive Cooperator program funding.


Sec.  1484.21  Application review and formation of agreements.

    (a) General. CCC will, subject to the availability of funds, 
approve those applications that it considers to present the best 
opportunity for creating, maintaining, or expanding export markets for 
U.S. agricultural commodities. CCC will review all proposals for 
eligibility and completeness. CCC will evaluate and score each proposal 
against the factors described in the NOFO. The purpose of this review 
is to identify meritorious proposals, recommend an appropriate funding 
level for each proposal, and submit the proposals and funding 
recommendations to appropriate officials for decision. CCC may, when 
appropriate to the subject matter of the proposal, request the 
assistance of other U.S. Government experts in evaluating the merits of 
a proposal. When considering eligible nonprofit U.S. trade 
organizations, CCC may weigh which organizations have the broadest 
producer representation and affiliated industry participation of the 
commodity being promoted. All reviewers will be required to sign a 
conflict of interest form, and when conflicts of interests are 
identified the reviewer will be recused from the objective review 
process.
    (b) Approval review criteria. CCC follows results-oriented 
management principles and considers the following criteria when 
assessing the likelihood of success of the applications it receives, 
determining which applications to recommend for approval, and 
developing preliminary recommended funding levels:
    (1) Strategic planning (25%);
    (2) Program implementation (25%); and
    (3) Program results and evaluation (50%).


Sec.  1484.22  Allocation factors.

    CCC determines final funding levels after allocating available 
funds to approved applications on the basis of criteria that will be 
fully described in each program year's Cooperator program announcement. 
Generally, extensions will not be allowable.

Subpart C--Program Operations


Sec.  1484.30  Approval decision.

    CCC will notify each applicant in writing of the final disposition 
of its application. CCC will send an agreement, an approval letter, and 
a signature card to each approved applicant. The agreement and the 
approval letter will outline which activities and budgets are approved 
and will specify any special terms and conditions applicable to a 
Cooperator's program, including the required level of Cooperator 
contribution and program evaluations. An applicant that decides to 
accept the terms and conditions contained in the agreement and approval 
letter must so indicate by having its Chief Executive Officer (CEO) or 
designee sign the agreement and approval letter and submit them to CCC. 
Final agreement shall occur when the agreement and approval letter are 
signed by both parties. The agreement, the approval letter, and this 
part shall establish the terms and conditions of a Cooperator agreement 
between CCC and the approved applicant. CCC will provide each 
Cooperator with IDs and passwords for the UES, as necessary. 
Cooperators shall protect these IDs and passwords in accordance with 
USDA's information technology policies. Cooperators shall immediately 
notify CCC whenever a person who possesses the ID and password 
information no longer needs such information or a person who is not 
authorized gains such information.


Sec.  1484.31  Signature cards.

    The Cooperator shall designate at least two individuals in its 
organization to sign agreements and amendments, approval letters, 
reimbursement claims, and advance requests. The Cooperator shall submit 
the signature card signed by those designated individuals and by the 
Cooperator's CEO to CCC prior to the start of the program year. The 
Cooperator shall immediately notify CCC of any changes in signatories 
(e.g., removal or addition of individuals, name changes, etc.), and 
shall submit a revised signature card accordingly.


Sec.  1484.32  Employment practices.

    (a) A Cooperator shall enter into written contracts with all 
overseas employees who are paid in whole or in part with project funds 
and shall ensure that all terms, conditions, and related formalities of 
such contracts conform to governing local law.
    (b) A Cooperator shall, in its overseas offices, conform its office 
hours, work week, and holidays to local law and to the custom generally 
observed by U.S.

[[Page 1087]]

commercial entities in the local business community.
    (c) A Cooperator may pay salaries or fees in any currency (U.S. or 
foreign) in conformance with contract specifications. Cooperators 
should consult local laws regarding currency restrictions.


Sec.  1484.33  Financial management.

    (a) A Cooperator shall implement and maintain a financial 
management system that conforms to generally accepted accounting 
principles and complies with the standards in 2 CFR part 200.
    (b) A Cooperator shall institute internal controls and provide 
written guidance to commercial entities participating in its activities 
to ensure their compliance with this part.
    (c) Each Cooperator shall retain all records relating to program 
activities for three calendar years from the date of submission of the 
final financial report and permit authorized officials of the U.S. 
Government to have full and complete access, for such three-year 
period, to such records.
    (d) A Cooperator shall also maintain all documents related to 
employment of any employees whose salaries are reimbursed in whole or 
in part with project funds, such as employment applications, contracts, 
position descriptions, leave records, salary changes, and all records 
pertaining to contractors, whether such employees or contractors are 
based in the United States or overseas.
    (e) A Cooperator shall also maintain adequate documentation related 
to the proper disposition of all personal property having a useful life 
of over one year and an acquisition cost of $500 or more purchased by 
the Cooperator and for which the Cooperator is reimbursed, in whole or 
in part, with project funds.
    (f) A Cooperator shall maintain its records of expenditures and 
contribution in a manner that allows it to provide information by 
program year, country or region, activity number, and cost category (as 
applicable). Such records shall include copies of:
    (1) Receipts for all STRE (actual vendor invoices or restaurant 
checks, rather than credit card receipts);
    (2) Receipts for any other program-related expenditure in excess of 
a minimum level that CCC shall determine and announce in writing to all 
Cooperators via a program notice issued on the FAS website. Receipts 
for all actual meal and incidental expenses (M&IE) reimbursements must 
be maintained, regardless of the amount;
    (3) The exchange rate used to calculate the dollar equivalent of 
each expenditure made in a foreign currency and the basis for such 
calculation;
    (4) Reimbursement claims;
    (5) An itemized list of claims charged to the Cooperator's FMD 
account;
    (6) Documentation, with accompanying English translation, 
supporting each reimbursement claim, including evidence to support the 
financial transactions, such as canceled checks, receipted paid bills, 
contracts, purchase orders, per diem calculations, travel vouchers, and 
credit memos; and
    (7)(i) Each Cooperator must keep records documenting all claimed 
contribution, to include:
    (A) Copies of invoices or receipts for expenses paid by the U.S. 
industry or State agency and not reimbursed by the Cooperator for the 
joint activity; or
    (B) If invoices are not available, an itemized statement from the 
U.S. industry or State agency as to what costs it incurred; or
    (C) If neither of the foregoing is available, a statement from the 
U.S. industry or State agency as to what goods and services it 
provided; or
    (D) If none of the foregoing are available, a memo to the files of 
the Cooperator's estimate of what contribution was made by the U.S. 
industry or State agency, item by item, and the method used to assign a 
value to each.
    (ii) Documentation supporting contribution must include the 
date(s), purpose, and location(s) of each activity for which cash or 
in-kind items were claimed as a contribution; who conducted the 
activity; the participating groups or individuals; and the method of 
computing the claimed contribution. Cooperators must retain and make 
available for compliance reviews and audits documentation related to 
claimed contribution.
    (g) Upon request, a Cooperator shall provide to CCC copies of the 
documents that support the Cooperator's reimbursement claims. CCC may 
deny a claim for reimbursement if the claim is not supported by 
adequate documentation.


Sec.  1484.34  Ethical conduct.

    (a) A Cooperator shall conduct its business in accordance with the 
laws and regulations of the country(s) in which each activity is 
carried out and in accordance with applicable U.S. Federal, state, and 
local laws and regulations. A Cooperator shall conduct its business in 
the United States in accordance with applicable Federal, state, and 
local laws and regulations.
    (b) Neither a Cooperator nor its affiliates shall make export sales 
of eligible commodities covered under the terms of an agreement. 
Neither a Cooperator nor its affiliates shall charge a fee for 
facilitating an export sale. A Cooperator may collect check-off funds 
and membership fees that are required for membership in the 
Cooperator's organization.
    (c) The Cooperator shall not use program activities or project 
funds to promote private self-interests or conduct private business, 
except as members of trade teams.
    (d) A Cooperator shall not limit participation in its FMD 
activities to members of its organization. Cooperators shall ensure 
that their FMD-funded programs and activities are open to all otherwise 
qualified individuals and entities on an equal basis and without regard 
to any non-merit factors.
    (e) A Cooperator shall select U.S. agricultural industry 
representatives to participate in activities such as trade teams or 
trade fairs based on criteria that ensure participation on an equitable 
basis by a broad cross section of the U.S. industry. If requested by 
CCC, a Cooperator shall submit such selection criteria to CCC for 
approval.
    (f) All Cooperators should endeavor to ensure fair and accurate 
fact-based advertising. Deceptive or misleading promotions may result 
in cancellation or termination of an agreement and recovery of CCC 
funds related to such promotions from the Cooperator.
    (g) The Cooperator must report any actions or circumstances that 
may have a bearing on the propriety of program activities to the 
appropriate Attach[eacute]/Counselor, and the Cooperator's U.S. office 
shall report such actions or circumstances in writing to CCC.


Sec.  1484.35  Contracting procedures.

    (a) Cooperators have full and sole responsibility for the legal 
sufficiency of all contracts and assume financial liability for any 
costs or claims resulting from suits, challenges, or other disputes 
based on contracts entered into by the Cooperator. Neither CCC nor any 
other agency of the United States Government nor any official or 
employee of CCC, FAS, USDA, or the United States Government has any 
obligation or responsibility with respect to Cooperator contracts with 
third parties.
    (b) Cooperators are responsible for ensuring to the greatest extent 
possible that the terms, conditions, and costs of contracts constitute 
the most economical and effective use of project funds.
    (c) All fees for professional and technical services paid in any 
part with project funds must be covered by written contracts.

[[Page 1088]]

    (d) A Cooperator shall:
    (1) Ensure that no employee, officer, board member, agent, or the 
employee's, officer's, board member's, or agent's family, partners, or 
an organization that employs or is about to employ any of the parties 
indicated in this paragraph (d)(1) participates in the review, 
selection, award, or administration of a contract in which such 
entities or their affiliates have a financial or other interest;
    (2) Conduct all contracting in an openly competitive manner. 
Individuals who develop or draft specifications, requirements, 
statements of work, invitations for bids, or requests for proposals for 
procurement of any goods or services, and such individuals' families or 
partners, or an organization that employs or is about to employ any of 
the aforementioned, shall be excluded from competition for such 
procurement;
    (3) Base each solicitation for professional or technical services 
on a clear and accurate description of and requirements related to the 
services to be procured;
    (4) Perform and document some form of price or cost analysis, such 
as a comparison of price quotations to market prices or other price 
indicia, to determine the reasonableness of the offered prices for 
procurements in excess of the simplified acquisition threshold in 2 CFR 
200.88; and
    (5) Document the decision-making process.


Sec.  1484.36  Property.

    (a) A Cooperator shall maintain an inventory of all personal 
property having a useful life of more than one year and an acquisition 
cost of $500 or more that was acquired in furtherance of program 
activities. The inventory shall list and number each item and include 
the date of purchase or acquisition, cost of purchase, replacement 
value, serial number, make, model, and electrical requirements, as 
applicable.
    (b) The Cooperator shall insure all real property and equipment 
that was acquired, in whole or in part, with project funds at a level 
minimally equal to the equivalent insurance coverage for property owned 
by the Cooperator. The Cooperator shall safeguard such property and 
equipment against theft, damage, and unauthorized use. The Cooperator 
shall promptly report any loss, theft, or damage of such property and 
equipment to the insurance company.
    (c) Personal property having a useful life of more than one year 
and an acquisition cost of $500 or more purchased by the Cooperator, 
and for which the Cooperator is reimbursed, in whole or in part, with 
project funds, that is unusable, unserviceable, or no longer needed for 
project purposes shall be disposed of in one of the following ways. The 
Cooperator may:
    (1) Exchange or sell the property, provided that it applies any 
exchange allowance, insurance proceeds, or sales proceeds toward the 
purchase of other property needed in the project;
    (2) With CCC approval, transfer the property to other Cooperators 
for their activities, or to a foreign subrecipient; or
    (3) Upon Attach[eacute]/Counselor approval, donate the property to 
a local charity, or convey the property to the Attach[eacute]/
Counselor, along with an itemized inventory list and any documents of 
title.
    (d) The Cooperator is responsible for reimbursing CCC for the value 
of any uninsured property at the time of the loss or theft of the 
property.


Sec.  1484.37  Federal Travel Regulations.

    Except as otherwise provided in this part, travel funded by the 
Cooperator program shall conform to the U.S. Federal Travel Regulations 
(41 CFR parts 300 through 304) and 2 CFR part 200, and FMD-funded air 
travel shall conform to the requirements of the Fly America Act (49 
U.S.C. 40118). The Cooperator shall notify the Attach[eacute]/Counselor 
in the destination countries in writing in advance of any proposed 
travel. The timing of such notice should be far enough in advance to 
enable the Attach[eacute]/Counselor to schedule appointments, make 
preparations, or otherwise provide any assistance being requested. 
Failure to provide advance notification of travel generally will result 
in disallowance of the expenses related to the travel, unless CCC 
determines it was impractical to provide such notification.


Sec.  1484.38  Program income.

    Program income is gross income earned by the non-Federal entity 
that is directly generated by a supported activity or earned as a 
result of the Federal award during the period of performance. Any 
income generated from an activity, the expenditures for which have been 
wholly or partially reimbursed with FMD funds, shall be used by the FMD 
Cooperator in furtherance of its approved FMD activities in the program 
year during which the FMD funds are available for obligation by the FMD 
Cooperator, or must be returned to CCC. The use of such income shall be 
governed by this subpart. Interest earned on funds advanced by CCC is 
not program income. Reasonable activity fees or registration fees, if 
identified as such in a project budget, may be charged for approved 
activities. The intent to charge a fee must be part of the original 
proposal, along with an explanation of how such fees are to be used. 
Any activity fees charged must be used to offset activity expenses or 
returned to FAS. Such fees may not be used as profit or counted as 
contribution.


Sec.  1484.39  Changes to activities and funding.

    (a) Adding a new activity. (1) A Cooperator may not conduct a new 
activity without first obtaining an approved activity budget for such 
change. To request approval of such activity budget, the Cooperator 
shall submit a notification to CCC.
    (2) A notification for a new activity shall provide an activity 
justification and identify any related adjustments to the approved 
strategic plan, including changes in the market, constraint, or 
opportunity that the activity proposes to address. The notification 
shall contain the activity description, the proposed budget, and a 
justification for the transfer of funds.
    (3) After receipt of the notification, CCC will inform the 
Cooperator via the UES system whether the requested budget is approved.
    (b) Modifying existing activities and their funding levels. (1) A 
Cooperator desiring to increase the funding level for existing, 
approved activities addressing a single constraint or opportunity by 
more than $25,000 or 25 percent of the approved funding level, 
whichever is greater, must first submit a notification explaining the 
adjustment to CCC before making such change.
    (2) A Cooperator may make significant adjustments below the 
threshold in paragraph (b)(1) of this section to the funding levels for 
existing, approved activities without prior notification to CCC, but 
only if it submits a notification explaining the adjustments to CCC no 
later than 30 calendar days after the change. Minor adjustments to 
existing, approved activities and/or funding levels do not require 
notification.
    (3) Notifications shall describe the activity and any changes to 
the activity, the existing funding level, or the proposed funding level 
and shall include a justification for the transfer of funds, if 
applicable.

Subpart D--Contribution and Reimbursements


Sec.  1484.50  Contribution rules.

    (a) A Cooperator must use its own funds and may not use FMD program 
funds to pay any administrative costs of

[[Page 1089]]

the Cooperator's U.S. office(s), including legal fees, except as set 
forth in this subpart. Where the Cooperator uses its own funds to pay 
for administrative costs, such costs may be counted in calculating the 
amount of contribution the Cooperator contributes to its FMD program. 
The contribution amount will be reflected in the award budget.
    (b) In calculating the amount of contribution that it will make and 
the contribution that a U.S. industry or a State or local agency will 
make, a Cooperator program applicant may include the costs (or such 
prorated costs) listed under paragraph (c) of this section if:
    (1) Expenditures are necessary and reasonable for accomplishment of 
the Cooperator's overall foreign market development program;
    (2) Expenditures are not included as cost share for any other 
Federal award;
    (3) Expenditures are not paid by the Federal Government under 
another Federal award, except where the Federal statute authorizing a 
program specifically provides that Federal funds made available for 
such program can be applied to matching or cost sharing requirements of 
other Federal programs; and
    (4) The contribution is made during the period covered by the 
agreement.
    (c) Subject to paragraph (b) of this section, as well as the cost 
principles in 2 CFR part 200, to the extent these principles do not 
directly conflict with the provisions of this part, the following are 
eligible contribution:
    (1) Cash;
    (2) Compensation paid to personnel;
    (3) The cost of acquiring materials, supplies, or services;
    (4) The cost of office space, including legal fees;
    (5) A reasonable and justifiable proportion of general 
administrative costs and overhead;
    (6) Payments for indemnity and fidelity bond expenses;
    (7) The cost of business cards that target a foreign audience;
    (8) Fees for office parking;
    (9) The cost of subscriptions to publications that are of a 
technical, economic, or marketing nature and that are relevant to the 
approved activities of the Cooperator's program;
    (10) The cost of activities conducted overseas;
    (11) Credit card fees;
    (12) The cost of any independent evaluation or audit that is not 
required by CCC to ensure compliance with agreement or regulatory 
requirements;
    (13) The cost of giveaways, awards, prizes, and gifts;
    (14) The cost of product samples;
    (15) Fees for participating in U.S. Government sponsored or 
endorsed export promotion activities;
    (16) The cost of air and local travel in the United States related 
to a foreign market development effort;
    (17) Transportation and shipping costs;
    (18) The cost of displays and promotional materials;
    (19) Advertising costs;
    (20) Reasonable travel costs and expenses related to undertaking a 
foreign market development activity;
    (21) The costs associated with trade shows, seminars, and STRE 
conducted in the United States, and costs associated with entertainment 
conducted in the United States where such entertainment costs have a 
programmatic purpose and are authorized in the agreement and/or 
approval letter or are authorized by prior written approval of CCC;
    (22) Product research that is undertaken to benefit an industry and 
has a specific export application;
    (23) Consumer promotions; and
    (24) The cost of any activity expressly listed as reimbursable in 
this part.


Sec.  1484.51  Ineligible contribution.

    (a) The following are not eligible contribution:
    (1) Any portion of salary or compensation of an individual who is 
the target of a promotional activity;
    (2) Any expenditure, including that portion of salary and time 
spent, related to promoting membership in the Cooperator's 
organization;
    (3) Any land costs other than allowable costs for office space;
    (4) The cost of refreshments and related equipment provided to 
office staff;
    (5) The cost of insuring articles owned by private individuals;
    (6) The cost of any arrangement that has the effect of reducing the 
selling price of a U.S. agricultural commodity;
    (7) The cost of product development or product modifications;
    (8) Slotting fees or similar sales expenditures;
    (9) Funds, services, capital goods, or personnel provided by any 
U.S. Government agency;
    (10) The value of any services generated by a Cooperator or third 
party that involve no expenditure by the Cooperator or third party, 
e.g., free publicity;
    (11) Membership fees in clubs and social organizations; and
    (12) Any expenditure for an activity prior to CCC's approval of 
that activity.
    (b) CCC shall determine, at CCC's discretion, whether any cost not 
expressly listed in this section may be included by the Cooperator as 
eligible contribution.


Sec.  1484.52  Reimbursement rules.

    (a) A Cooperator may seek reimbursement for an eligible expenditure 
if:
    (1) The expenditure was necessary and reasonable for the 
performance of an approved activity; and
    (2) The Cooperator has not been and will not be reimbursed for such 
expenditure by any other source.
    (b) Subject to paragraph (a) of this section and Sec.  1484.53, as 
well as the cost principles in 2 CFR part 200 to the extent these 
principles do not directly conflict with the provisions of this part, 
CCC will reimburse, in whole or in part, the cost of:
    (1) Production and placement of advertising, including in print, 
electronic media, billboards, or posters. Electronic media includes, 
but is not limited to, radio, television, electronic mail, internet, 
telephone, text messaging, and podcasting;
    (2) Production and distribution of banners, recipe cards, table 
tents, shelf talkers, and similar point of sale materials;
    (3) Direct mail advertising;
    (4) Food service promotions, product demonstrations to the trade, 
and distribution of product samples (but not the purchase of the 
product samples);
    (5) Temporary displays and rental of space for temporary displays;
    (6) Subject to paragraph (b)(7) of this section, non-travel 
expenditures, including participation fees, booth construction, 
transportation of related materials, rental of space and equipment, and 
duplication of related printed materials, associated with retail and 
trade exhibits and shows, whether held outside or inside the United 
States. However, non-travel expenditures associated with retail and 
trade exhibits and shows held inside the United States are reimbursable 
only if the exhibit or show is included on the list of approved U.S. 
exhibits and shows announced via a program notice issued on FAS' 
website and the exhibit or show is one that the Cooperator has not 
participated in within the last three calendar years using funds from a 
source other than FMD. Retail and trade exhibits and shows held inside 
the United States may be considered for inclusion on the list of 
approved exhibits and shows if they are:
    (i) A food or agricultural exhibit or show with no less than 30% of 
exhibitors selling food or agricultural products; and

[[Page 1090]]

    (ii) An international exhibit or show that targets buyers, 
distributors, and the like from more than one foreign country and no 
less than 15% of its visitors are from countries other than the host 
country;
    (7) Where USDA has sponsored or endorsed a U.S. pavilion at a 
retail or trade exhibit or show, whether held outside or inside the 
United States, project funds may be used to reimburse the travel and/or 
non-travel expenditures of only those Cooperators located within the 
U.S. pavilion. Such expenditures must also adhere to the standard terms 
and conditions of the U.S. pavilion organizer. Upon written request, 
CCC may temporarily waive this paragraph (b)(7), on a case by case 
basis, where the trade show is segregated into product pavilions or a 
company's distributor or importer is located outside the U.S. pavilion. 
Such waiver will be provided to the Cooperator in writing;
    (8) Expenditures, other than travel expenditures, associated with 
seminars and educational training, whether conducted in the United 
States or outside the United States, including space rental, equipment 
rental, and duplication of seminar materials;
    (9) Production and distribution of publications;
    (10) Demonstrators, interpreters, translators, receptionists, and 
similar temporary workers who help with the implementation of 
individual promotional activities, such as trade shows, food service 
promotions, and trade seminars;
    (11) Giveaways, awards, prizes, gifts, and other similar 
promotional materials, subject to such reimbursement limitation as CCC 
may determine and announce in writing to Cooperators via a program 
notice issued on FAS' website. Reimbursement is available only when:
    (i) The items are described in detail with a per unit cost in an 
approved strategic plan; and
    (ii) Distribution of the promotional item is not contingent upon 
the target audience purchasing a good or service to receive the 
promotional item;
    (12) Compensation and allowances for housing, educational tuition, 
and cost of living adjustments paid to U.S. citizen employees or U.S. 
citizen contractors stationed overseas, provided such benefits are 
granted under established written policies, subject to the limitation 
that CCC shall not reimburse that portion of:
    (i) The total of compensation and allowances that exceed 125 
percent of the level of a GS-15, Step 10 salary for U.S. Government 
employees; or
    (ii) Allowances that exceed the rate authorized for U.S. Embassy 
personnel;
    (13) Foreign transfer, temporary lodging, and post hardship 
differential allowances for U.S. citizen employees, provided such 
benefits are granted under established written policies;
    (14) Approved salaries or compensation for non-U.S. citizen 
employees and non-U.S. contractors stationed overseas. Generally, CCC 
will not reimburse any portion of a non-U.S. citizen employee's 
compensation that exceeds the compensation prescribed for the most 
comparable position in the Foreign Service National (FSN) salary plan 
applicable to the country in which the employee works. However, if the 
local FSN salary plan is inappropriate, a Cooperator may request a 
higher level of reimbursement for a non-U.S. citizen in accordance with 
the annual program announcement;
    (15) Temporary contractor fees for contractors stationed overseas, 
except CCC will not reimburse any portion of any such fee that exceeds 
the daily gross GS-15, Step 10 salary for U.S. Government employees in 
effect on the date the fee is earned, unless a bidding process revels 
that such a contractor is not available at or below that salary rate;
    (16) A retroactive salary adjustment for non-U.S. citizen staff 
employees or non-U.S. contractors stationed overseas that conforms to a 
change in FSN salary plans, effective as of the date of such change;
    (17) Accrued annual leave as of the time employment is terminated 
or as of such time as required by local law;
    (18) Overtime paid to clerical staff of approved FMD-funded 
overseas offices;
    (19) Fees for professional and consultant services;
    (20) Subject to paragraph (b)(7) of this section, international 
travel expenditures, including per diem and any fees for passports, 
visas, inoculations, and modifying the originally purchased airline 
ticket, for activities held outside the United States or in the United 
States, as allowed under the U.S. Federal Travel Regulations (41 CFR 
parts 300 through 304), except that if the activity is participation in 
a retail or trade exhibit or show held inside the United States, 
international travel expenditures are reimbursable only if the exhibit 
or show is included on the list of approved U.S. exhibits and shows 
announced via a program notice issued on FAS' website and the exhibit 
or show is one that the Cooperator has not participated in within the 
last three calendar years using funds from a source other than FMD. 
Retail and trade exhibits and shows held inside the United States may 
be considered for inclusion on the list of approved exhibits and shows 
if they are: A food or agricultural exhibit or show with no less than 
30% of exhibitors selling food or agricultural products, and an 
international exhibit or show that targets buyers, distributors, and 
the like from more than one foreign country and no less than 15% of its 
visitors are from countries other than the host country;
    (i) CCC generally will not reimburse any portion of air travel, 
including any fees for modifying the originally purchased ticket, in 
excess of the full fare economy rate. If a traveler flies in business 
class or a different premium class, the basis for reimbursement will be 
the full fare economy class rate for the same flight and the Cooperator 
shall provide documentation establishing such full fare economy class 
rate to support its reimbursement claim. If economy class is not 
offered for the same flight or if the traveler flies on a charter 
flight, the basis for reimbursement will be the average of the full 
fare economy class rate for flights offered by three different airlines 
between the same points on the same date and the Cooperator shall 
provide documentation establishing such average of the full fare 
economy class rates to support its reimbursement claim;
    (ii) In very limited circumstances, the Cooperator may be 
reimbursed for air travel up to the business class rate (i.e., a 
premium class rate other than the first-class rate). Such circumstances 
are:
    (A) Regularly scheduled flights between origin and destination 
points do not offer economy class (or equivalent) airfare and the 
Cooperator receives written documentation to that effect at the time 
the tickets are purchased;
    (B) Business class air travel is necessary to accommodate an 
eligible traveler's disability. Such disability must be substantiated 
in writing by a physician; or
    (C) An eligible traveler's origin and/or destination are outside of 
the continental United States and the scheduled flight time, beginning 
with the scheduled departure time and ending with the scheduled arrival 
time, including stopovers and changes of planes, exceeds 14 hours. In 
such cases, per diem and other allowable expenses will also be 
reimbursable for the day of arrival. However, no expenses will be 
reimbursable for a rest period or for any non-work days (e.g., 
weekends, holidays, personal leave, etc.) immediately following the 
date of arrival. A stopover is the time a traveler spends at an 
airport, other than the

[[Page 1091]]

originating or destination airport, which is a normally scheduled part 
of a flight. A change of planes is the time a traveler spends at an 
airport, other than the originating or destination airport, to 
disembark from one flight and embark on another. All travel should 
follow a direct or usually traveled route. Under no circumstances 
should a traveler select flights in a manner that extends the scheduled 
flight time to beyond 14 hours in part to secure eligibility for 
reimbursement of business class travel; and
    (iii) Alternatively, in lieu of reimbursing up to the business 
class rate in such circumstances, CCC will reimburse economy class 
airfare plus per diem and other allowable travel expenses related to a 
rest period of up to 24 hours, either en route or upon arrival at the 
destination. For a trip with multiple destinations, each origin/
destination combination will be considered separately when applying the 
14-hour rule for eligibility of reimbursement of business class travel 
or rest period expenses;
    (21) Automobile mileage at the local U.S. Embassy rate, or rental 
cars while in travel status;
    (22) Subject to Sec.  1484.37 and paragraph (b)(7) of this section, 
other allowable expenditures while in travel status;
    (23) Organization costs for overseas offices approved in 
agreements. Such costs include incorporation fees, brokers' fees, fees 
to attorneys, accountants, or investment counselors, whether or not 
employees of the organization, incurred in connection with the 
establishment or reorganization of the overseas office, and rent, 
utilities, communications originating overseas, office supplies, 
accident liability insurance premiums (provided the types and extent 
and cost of coverage are in accordance with the Cooperator's policy and 
sound business practice), and routine accounting and legal services 
required to maintain the overseas office;
    (24) With prior CCC approval, the purchase, lease, or repair of, or 
insurance premiums for capital goods that have an expected useful life 
of at least one year, such as furniture, equipment, machinery, 
removable fixtures, draperies, blinds, floor coverings, computer 
hardware and software, and portable electronic communications devices 
(including mobile phones, wireless email devices, and personal digital 
assistants);
    (25) Premiums for health or accident insurance or other benefits 
for foreign national employees that the employer is required by law to 
pay, provided that such benefits are granted under established written 
policies;
    (26) Accident liability insurance premiums for facilities used 
jointly with third party participants for Cooperator program 
activities, or such insurance premiums for Cooperator program-funded 
travel of non-Cooperator personnel, provided the types and extent and 
cost of coverage are in accordance with the Cooperator's policy and 
sound business practice;
    (27) Market research, including research to determine the types of 
products that are desired in a market;
    (28) Independent evaluations and audits, if not otherwise required 
by CCC, to ensure compliance with program requirements;
    (29) Legal fees to obtain advice on the host country's labor laws;
    (30) Employment agency fees;
    (31) STRE incurred outside of the United States, and STRE incurred 
in conjunction with an approved activity taking place within the United 
States with prior written approval from CCC. Cooperators are required 
to use the appropriate American Embassy representational funding 
guidelines for breakfasts, lunches, dinners, and receptions. 
Cooperators may exceed Embassy guidelines only when they have received 
written authorization from the FAS Attach[eacute]/Counselor at the 
Embassy. The amount of unauthorized STRE expenses that exceed the 
guidelines will not be reimbursed. Cooperators must pay the difference 
between the total cost of STRE events and the appropriate amount as 
determined by the guidelines. For STRE incurred in the United States, 
the Cooperator should provide, in its request for approval, the basis 
for determining its proposed expenses;
    (32) Travel costs for dependents as allowed in 2 CFR part 200 
(e.g., for travel of duration of six months or more with prior approval 
of CCC);
    (33) Evacuation payments (safe haven) and shipment and storage of 
household goods and motor vehicles for relocations lasting at least 12 
months;
    (34) Approved demonstration projects;
    (35) Purchase of trade and business periodicals containing material 
related to market development activities for use by overseas staffs;
    (36) Training expenses in the United States for FSNs;
    (37) Language training for U.S. citizen employees at the foreign 
post of assignment;
    (38) Forward year financial obligations required by local law or 
custom, such as severance pay, attributable to employment of foreign 
nationals, or forfeiture of rent or deposits, attributable to the 
closure of an office;
    (39) Rental or lease expenditures for storage space for program-
related materials;
    (40) Shipment of samples or other program materials from the United 
States to foreign countries;
    (41) That portion of airtime for wireless phones that is devoted to 
program activities and monthly service fees prorated at the proportion 
of program-related airtime to total airtime;
    (42) Non-travel expenditures associated with conducting 
international staff conferences held either in or outside the United 
States;
    (43) An audit of a Cooperator as required by 2 CFR part 200, 
subpart F, if the Cooperator program is the Cooperator's largest source 
of Federal funding;
    (44) The translation of written materials as necessary to carry out 
approved activities;
    (45) Business cards that target a foreign audience;
    (46) Expenditures associated with developing, updating, and 
servicing websites on the internet that: Contain a message related to 
exporting or international trade, include a discernible ``link'' to the 
FAS/Washington homepage or an FAS overseas homepage, and have been 
specifically approved by FAS. Expenditures related to websites or 
portions of websites that are accessible only to an organization's 
members are not reimbursable. Reimbursement claims for websites that 
include any sort of ``members only'' sections must be prorated to 
exclude the costs associated with those areas subject to restricted 
access;
    (47) Expenditures related to copyright, trademark, or patent 
registration, including attorney fees;
    (48) Expenditures not otherwise prohibited from reimbursement that 
are associated with activities held in the United States or abroad 
designed to improve market access by specifically addressing temporary, 
permanent, or impending technical barriers to trade that prohibit or 
threaten U.S. exports of agricultural commodities;
    (49) Membership fees in professional, industry-related 
organizations; and
    (50) Contracts with U.S.-based organizations when the only 
contracted service such organizations provide to a Cooperator is 
carrying out a specific market promotion activity in the United States 
directed to a foreign audience (e.g., a trade mission of foreign buyers 
coming to the United States to visit U.S. exporters). Such contracts 
may be

[[Page 1092]]

reimbursable as a direct promotional expense. If a U.S.-based 
organization provides administrative services to the Cooperator's 
domestic home office during a program year, any direct promotional 
services such organization provides to the Cooperator, whether for the 
Cooperator's domestic or overseas offices, during the same program year 
are not reimbursable.


Sec.  1484.53  Expenditures not reimbursed under the Cooperator 
program.

    (a) CCC will not reimburse unreasonable expenditures or any cost 
of:
    (1) Expenses, fines, settlements, judgements, or payments relating 
to legal suits, challenges, or disputes, except as otherwise allowed in 
2 CFR part 200;
    (2) Product development, product modification, or product research;
    (3) Product samples;
    (4) Slotting fees or similar sales expenditures;
    (5) The purchase, construction, or lease of space for permanent, 
non-mobile displays, i.e., displays that are constructed to remain 
permanently in the same location beyond one program year. However, CCC 
may, at its discretion, reimburse the construction or purchase of 
permanent displays on a case-by-case, if the Cooperator sought and 
received prior written approval from CCC of such construction or 
purchase;
    (6) Rental, lease, or purchase of warehouse space, except for 
storage space for program-related materials;
    (7) Office parking fees;
    (8) Coupon redemption or price discounts;
    (9) Refundable deposits or advances;
    (10) Giveaways, awards, prizes, gifts, and other similar 
promotional materials in excess of the limitation that CCC will 
determine. Such determination will be announced in writing via a 
program notice issued on FAS' website;
    (11) Alcoholic beverages that are not a promoted commodity and part 
of an approved promotional activity;
    (12) The purchase, lease (except for use in authorized travel 
status), or repair of motor vehicles;
    (13) Travel of applicants for employment interviews;
    (14) Unused non-refundable airline tickets or associated penalty 
fees, except where travel was restricted by U.S. Government action or 
advisory;
    (15) Independent evaluations or audits, including evaluations or 
audits of the activities of a subcontractor, if CCC determines that 
such a review is needed in order to confirm past or to ensure future 
agreement or regulatory compliance;
    (16) Any arrangement that has the effect of reducing the selling 
price of an agricultural commodity;
    (17) Any expenditure on an activity that includes any derogatory 
reference or comparison to other U.S. agricultural commodities;
    (18) Goods, services, and salaries of personnel provided by a third 
party;
    (19) Membership fees in clubs and social organizations;
    (20) Indemnity and fidelity bonds, except as otherwise allowed in 2 
CFR part 200;
    (21) Fees for participating in U.S. Government sponsored 
activities, other than trade fairs, shows, and exhibits;
    (22) Business cards that target a U.S. domestic audience;
    (23) Seasonal greeting cards;
    (24) Subscriptions to publications that are not of a technical, 
economic, or marketing nature or that are not relevant to the approved 
activities of the Cooperator;
    (25) Credit card fees;
    (26) Refreshments, or related equipment, for office staff;
    (27) Insurance on household goods and personal effects, including 
privately-owned automobiles, whether overseas or stored in the United 
States, belonging to U.S. citizen employees;
    (28) Home office domestic administrative expenses, including 
communication costs;
    (29) Payment of a U.S. or foreign employee's or contractor's share 
of personal taxes, except where a foreign country's laws require the 
Cooperator to pay such employee's or contractor's share;
    (30) STRE expenses incurred in the United States, except as 
otherwise provided in Sec.  1484.52(b)(31);
    (31) Entertainment (e.g., amusements, diversions, cover charges, 
personal gifts, or tickets to theatrical or sporting events);
    (32) Functions (including receptions and meals at Cooperator staff 
conferences) at which target groups, such as members of the overseas 
trade, opinion leaders, foreign government officials, and other similar 
groups, are not present;
    (33) Promotions directed at consumers purchasing in their 
individual capacity; and
    (34) Any expenditure made for an activity prior to CCC's approval 
of that activity.
    (b) The CCC may determine, at CCC's discretion, whether any cost 
not expressly listed in this section will be reimbursed.
    (c) CCC will reimburse for expenditures made after the conclusion 
of the program year provided:
    (1) The activity was approved by CCC prior to the end of the 
program year;
    (2) The activity was completed within 30 calendar days following 
the end of the program year; and
    (3) All expenditures were made for the activity within 6 months 
following the end of the program year.
    (d) A Cooperator shall not use project funds for any activity, or 
any expenses incurred by the Cooperator prior to the date specified in 
the approval letter or after the date the agreement is suspended or 
terminated, except as otherwise permitted by CCC.


Sec.  1484.54  Reimbursement procedures.

    (a) Following the implementation of a project for which CCC has 
agreed to provide funding, a Cooperator may submit claims for 
reimbursement of eligible expenses incurred in implementing FMD 
activities, to the extent that CCC has agreed to pay such expenses. Any 
changes to approved activities must be approved in writing by CCC 
before any reimbursable expenses associated with the change can be 
incurred. A Cooperator will be reimbursed after CCC reviews the claim 
and determines that it is complete.
    (b) All claims for reimbursement shall be submitted by the FMD 
Cooperator's U.S. office to CCC. CCC will make all payments to 
Cooperators in U.S. dollars. FAS will initiate payment within 30 days 
after receipt of the billing, unless the billing is improper.
    (c) Cooperators will be authorized to submit requests for 
reimbursement or advance at least monthly when electronic fund 
transfers (EFTs) are not used, and as frequently as desired when 
electronic transfers are used, in accordance with the provisions of the 
Electronic Fund Transfer Act (15 U.S.C. 1693-1693r).
    (d) CCC will not reimburse claims submitted later than 6 months 
after the end of an FMD Cooperator's program year.
    (e) If CCC overpays a reimbursement claim, the FMD Cooperator shall 
repay CCC within 30 calendar days of such overpayment the amount of the 
overpayment either by submitting a check payable to CCC or by 
offsetting its next reimbursement claim. The FMD Cooperator shall make 
such payment in U.S. dollars, unless otherwise approved in advance by 
CCC.
    (f) If a Cooperator receives a reimbursement or offsets an advanced 
payment which is later disallowed, the Cooperator shall repay CCC 
within 30 calendar days of such disallowance the amount disallowed 
either by submitting a check payable to CCC or by offsetting its next 
reimbursement claim. The

[[Page 1093]]

Cooperator shall make such payment in U.S. dollars, unless otherwise 
approved in advance by CCC.
    (g) FMD funds may be expended by FMD Cooperators only on 
legitimate, approved activities as set forth in the agreement and 
approval letter. If a Cooperator discovers that FMD funds have not been 
properly spent, it shall notify CCC and shall within 30 calendar days 
of its discovery repay CCC the amount owed either by submitting a check 
payable to CCC or by offsetting its next reimbursement claim. The FMD 
Cooperator shall make such payment in U.S. dollars, unless otherwise 
approved in advance by CCC.
    (h) The FMD Cooperator shall report any actions that may have a 
bearing on the propriety of any claims for reimbursement in writing to 
the appropriate Attach[eacute]/Counselor and its U.S. office shall 
report such actions in writing to the appropriate FAS Division 
Director.


Sec.  1484.55  Advances.

    (a) Policy. In general, CCC operates the Cooperator program on a 
reimbursable basis.
    (b) Exception. Upon request, CCC may make two types of advance 
payments to a Cooperator. The first is a revolving fund operating 
advance provided by CCC only to Cooperators with foreign offices 
supported with project funds. The second is a special advance payment 
used to pay an impending large cost item. CCC will provide this type of 
advance expense payment in lieu of direct payments by CCC to vendors or 
other third parties. All Cooperators, with or without project fund-
supported foreign offices, are eligible to request special advance 
payments. CCC will not make any special advance payment to a Cooperator 
where a special advance is outstanding from a prior program year. When 
approving a request for an advance, CCC may require the Cooperator to 
carry adequate fidelity bond coverage when the absence of such coverage 
is considered to create an unacceptable risk to the interests of the 
Cooperator program. Whether an ``unacceptable risk'' exists in a 
particular situation will depend on a number of factors, such as, the 
Cooperator's history of performance in the Cooperator program, the 
Cooperator's perceived financial stability and resources, and any other 
factors presented in the particular situation that may reflect on the 
Cooperator's responsibility or the riskiness of its activities.
    (c) Interest. A Cooperator shall deposit and maintain in an insured 
account in the United States all funds advanced by CCC. The account 
shall be interest-bearing, unless the exceptions in 2 CFR part 200 
apply. Interest earned by the Cooperator on funds advanced by CCC is 
not program income. Up to $500 of interest earned per year may be 
retained by the Cooperator for administrative expenses. Any additional 
interest earned on Federal advance payments shall be remitted annually 
to the appropriate entity as required in 2 CFR part 200.
    (d) Refunds due CCC. A Cooperator shall fully expend all advances 
on approved activities within 90 calendar days after the date of 
disbursement by CCC. By the end of the 90 calendar days, the Cooperator 
must submit reimbursement claims to offset the advance and submit a 
check made payable to CCC for any unexpended balance. The Cooperator 
shall make such payment in U.S. dollars, unless otherwise approved in 
advance by CCC.

Subpart E--Reporting, Evaluation, and Compliance


Sec.  1484.70  Reports.

    (a) Cooperators are required to submit regular financial and 
performance reports in accordance with their agreement. Reporting 
requirements and formats for the required financial and performance 
reports will be specified in the agreement between CCC and the 
Cooperator.
    (b)(1) In addition to the information required in 2 CFR 
200.328(b)(2), a Cooperator's performance reports must include 
pertinent information regarding the Cooperator's progress, measured 
against established indicators, baselines, and targets, towards 
achieving the expected results specified in the agreement. This 
reporting must include, for each performance indicator, a comparison of 
actual accomplishments with the baseline and the targets established 
for the period. When actual accomplishments deviate significantly from 
targeted goals, the Cooperator must provide an explanation in the 
report.
    (2) A Cooperator must ensure the accuracy and reliability of the 
performance data submitted to FAS in performance reports. At any time 
during the period of performance of the agreement, FAS may review the 
Cooperator's performance data to determine whether it is accurate and 
reliable. The Cooperator must comply with all requests made by FAS or 
an entity designated by FAS in relation to such reviews.
    (c) All final performance reports will be made available to the 
public.
    (d) Not later than 45 calendar days after the completion of travel 
(other than local travel), a Cooperator shall submit a trip report. The 
report must be submitted to the appropriate Attach[eacute]/Counselor(s) 
and must include the name(s) of the traveler(s), purpose of travel, 
itinerary, names and affiliations of contacts, and a brief summary of 
findings, conclusions, recommendations, and specific accomplishments.
    (e) Not later than 90 calendar days after the end of its program 
year, a Cooperator shall submit a report on any research conducted 
pursuant to the approved FMD program.
    (f) If requested by FAS, a Cooperator must provide to FAS 
additional information or reports relating to the agreement.
    (g) If a Cooperator requires an extension of a reporting deadline, 
it must ensure that FAS receives an extension request at least five 
business days prior to the reporting deadline. FAS may decline to 
consider a request for an extension that it receives after this time 
period. FAS will consider requests for reporting deadline extensions on 
a case by case basis and will make a decision based on the merits of 
each request. FAS will consider factors such as unforeseen or 
extenuating circumstances and past performance history when evaluating 
requests for extensions.


Sec.  1484.71  Disclosure of program information.

    (a) Documents submitted to CCC by Cooperators are subject to the 
provisions of the Freedom of Information Act (FOIA), 5 U.S.C. 552, 7 
CFR part 1, subpart A, and, specifically, 7 CFR 1.12.
    (b) Upon request, a Cooperator shall provide to any person a copy 
of any document in its possession or control containing market 
information that is developed and produced under the terms of its 
agreement. The Cooperator may charge a fee not to exceed the costs for 
assembling, duplicating, and distributing the materials.
    (c) Any research conducted by a Cooperator pursuant to an agreement 
and/or approval letter shall be subject to the provisions relating to 
intangible property in 2 CFR part 200.


Sec.  1484.72  Evaluation.

    (a) The Government Performance and Results Act (GPRA) of 1993 (5 
U.S.C. 306, 31 U.S.C. 1105, 1115-1119, 3515, 9703-9704) requires 
performance measurement of Federal programs, including the Cooperator 
program. Evaluation of the Cooperator program's effectiveness will 
depend on a clear

[[Page 1094]]

statement by each Cooperator of the constraints and opportunities 
facing U.S. exports, goals to be met within a specified time, a 
schedule of measurable milestones for gauging success, a plan for 
achievement, and reports of activity results at regular intervals. The 
overall goal of Cooperators' programming is to achieve or maintain 
sales that would not have occurred in the absence of FMD funding. A 
Cooperator that can demonstrate such sales, taking into account 
extenuating factors beyond the Cooperator's control, will have met the 
overall objective of the GPRA and the need for evaluation.
    (b) Evaluation is an integral element of program planning and 
implementation, providing the basis for the strategic plan. The 
evaluation results guide the development and scope of a Cooperator's 
program, contribute to program accountability, and provide evidence of 
program effectiveness.
    (c) Cooperators shall complete at least one program evaluation each 
year. A program evaluation is a review of the Cooperator's entire 
program, or an appropriate portion of the program as agreed to by the 
Cooperator and CCC, to determine the effectiveness of the Cooperator's 
strategy in meeting specified goals. The actual scope and timing of the 
program evaluation shall be determined by the Cooperator and CCC and 
specified in the Cooperator's approval letter. A Cooperator may 
contract with an independent evaluator to satisfy this requirement, 
although CCC reserves the right to have direct input and control over 
the design, scope, and methodology of any such evaluation, including 
direct contact with and provision of guidance to the independent 
evaluator. In addition to the requirements set forth in 2 CFR part 200, 
a program evaluation shall contain:
    (1) The name of the party conducting the evaluation;
    (2) The activities covered by the evaluation;
    (3) A concise statement of the constraint(s) and opportunities and 
the goals specified in the approved agreement;
    (4) A description of the evaluation methodology;
    (5) A description of additional export sales achieved, including 
the ratio of additional export sales in relation to Cooperator program 
funding received;
    (6) A summary of the findings, including an analysis of the 
strengths and weaknesses of the program(s); and
    (7) Recommendations for future programs.
    (d) A Cooperator shall submit, via a cover letter to CCC, an 
executive summary that assesses the program evaluation's findings and 
recommendations and proposed changes in program strategy or design as a 
result of the evaluation.
    (e) On an annual basis, or more often when appropriate or required 
by CCC, a Cooperator shall complete and submit program success stories. 
CCC will announce to all Cooperators the detailed requirements for 
completing and submitting program success stories.


Sec.  1484.73  Failure to make required contribution.

    A Cooperator's required contribution will be specified in the 
Cooperator's approval letter. If a Cooperator fails to contribute the 
amount specified in its approval letter, the Cooperator shall pay to 
CCC in U.S. dollars the difference between the amount it has 
contributed, and the amount specified in the approval letter. If the 
Cooperator's required contribution is specified as a percentage of the 
total amount reimbursed by CCC, the Cooperator may either return to CCC 
the necessary amount of funds reimbursed by CCC to increase its actual 
contribution percentage to the required level or pay to CCC in dollars 
the difference between the amount actually contributed and the amount 
of funds necessary to increase its actual contribution percentage to 
the required level. A Cooperator shall remit such payment within six 
months after the end of its program year. The Cooperator shall make 
such payment in U.S. dollars, unless otherwise approved in advance by 
CCC.


Sec.  1484.74  Compliance reviews and notices.

    (a) USDA staff may conduct compliance reviews of a Cooperator's 
activities under this program to ensure compliance with this part, 
applicable Federal laws and regulations, and the terms of the 
agreements and approval letters. Cooperators shall cooperate fully with 
relevant USDA staff conducting compliance reviews and shall comply with 
all requests from USDA staff to facilitate the conduct of such reviews. 
Program funds spent inappropriately or on unapproved activities must be 
returned to CCC.
    (b) Any project or activity funded under the program is subject to 
review or audit at any time during the course of implementation or 
after the completion of the project.
    (c) Upon conclusion of the compliance review, USDA staff will 
provide a written compliance report to the Cooperator. The compliance 
report will detail any instances where it appears that the Cooperator 
is not complying with any of the terms or conditions of the agreement, 
approval letter, or the applicable laws and regulations. The report 
will also specify if it appears that CCC may be entitled to recover 
funds from the Cooperator and will explain the basis for any recovery 
of funds from the Cooperator. If, as a result of a compliance review, 
CCC determines that further review is needed in order to ensure 
compliance with the requirements of the Cooperator program, CCC may 
require the Cooperator to contract for an independent audit.
    (d) In addition, CCC may notify a Cooperator in writing at any time 
if CCC determines that CCC may be entitled to recover funds from the 
Cooperator. CCC will explain the basis for any recovery of funds from 
the Cooperator in the written notice. The Cooperator shall, within 30 
calendar days of the date of the notice, repay CCC the amount owed 
either by submitting a check payable to CCC or by offsetting its next 
reimbursement claim. The Cooperator shall make such payment in U.S. 
dollars, unless otherwise approved in advance by CCC. If, however, a 
Cooperator notifies CCC within 30 calendar days of the date of the 
written notice that the Cooperator intends to file an appeal pursuant 
to the provisions of this part, the amount owed to CCC by the 
Cooperator is not due until the appeal procedures are concluded and CCC 
has made a final determination as to the amount owed.
    (e) The fact that a compliance review has been conducted by USDA 
staff does not signify that a Cooperator is in full compliance with its 
agreement, approval letter, and/or applicable laws and regulations.


Sec.  1484.75  Cooperator response to compliance report.

    (a) A Cooperator shall, within 60 calendar days of the date of the 
issuance of a compliance report, submit a written response to CCC. The 
response may include additional documentation for consideration or a 
request for reconsideration of any finding along with supporting 
justification. If the Cooperator does not wish to contest the 
compliance report, the response shall include any money owed to CCC, 
which may be returned by submitting a check payable to CCC or by 
offsetting a reimbursement claim. The Cooperator shall make any 
payments in U.S. dollars, unless otherwise approved in advance by CCC. 
CCC, at its discretion, may extend the period for response.
    (b) After reviewing the response, CCC shall determine whether the 
Cooperator owes any funds to CCC and will inform the Cooperator in 
writing of the basis for the determination. CCC may initiate

[[Page 1095]]

action to collect such amount by providing the Cooperator a written 
demand for payment of the debt pursuant to debt settlement policies and 
procedures in 7 CFR part 1403.


Sec.  1484.76  Cooperator appeals of CCC determinations.

    (a) Within 30 calendar days of the date of the issuance of a 
determination, the Cooperator may appeal the determination by making a 
request in writing that includes the basis for such reconsideration. 
The Cooperator may also request a hearing.
    (b) If the Cooperator requests a hearing, CCC will set a date and 
time for the hearing. The hearing will be an informal proceeding. A 
transcript will not ordinarily be prepared unless the Cooperator bears 
the cost of a transcript; however, CCC may, at its discretion, have a 
transcript prepared at CCC's expense.
    (c) CCC will base its final determination upon information 
contained in the administrative record. The Cooperator must exhaust all 
administrative remedies contained in this section before pursuing 
judicial review of a determination by CCC.


Sec.  1484.77  Submissions.

    For all permissible methods of delivery, submissions required by 
this part shall be deemed submitted as of the date received by CCC.


Sec.  1484.78  Amendments.

    An agreement may be amended in writing with the consent of CCC and 
the Cooperator. All requests for program amendments must be submitted 
to CCC in writing and contain a justification for why the amendment is 
necessary. All amendment requests must be reviewed and approved by CCC 
before an amendment can be issued.


Sec.  1484.79  Subrecipients.

    (a) A Cooperator may utilize the services of a subrecipient to 
implement activities under the agreement if this is provided for in the 
agreement. The subrecipient may receive CCC-provided funds, program 
income, or other resources from the Cooperator for this purpose. The 
Cooperator must enter in to a written subaward with the subrecipient 
and comply with the applicable provisions of 2 CFR 200.331 and/or the 
Federal Acquisition Regulation (FAR), if applicable. If required by the 
agreement, the Cooperator must provide a copy of such subaward to FAS, 
in the manner set forth in the agreement, prior to the transfer of CCC-
provided funds or program income to the subrecipient.
    (b) A Cooperator must include the following requirements in a 
subaward:
    (1) The subrecipient is required to comply with the applicable 
provisions of this part and 2 CFR parts 200 and 400 and/or the FAR, if 
applicable. The applicable provisions are those that relate 
specifically to subrecipients, as well as those relating to non-Federal 
entities that impose requirements that would be reasonable to pass 
through to a subrecipient because they directly concern the 
implementation by the subrecipient of one or more activities under the 
agreement. If there is a question about whether a particular provision 
is applicable, FAS will make the determination.
    (2) The subrecipient must pay to the Cooperator the value of CCC-
provided funds, interest, or program income that are not used in 
accordance with the subaward, or that are lost, damaged, or misused as 
a result of the subrecipient's failure to exercise reasonable care.
    (3) In accordance with 2 CFR 200.501(h), subawards must include a 
description of the applicable compliance requirements and the 
subrecipient's compliance responsibility. Methods to ensure compliance 
may include pre-award audits, monitoring during the agreement, and 
post-award audits.
    (c) A Cooperator must monitor the actions of a subrecipient as 
necessary to ensure that CCC-provided funds and program income provided 
to the subrecipient are used for authorized purposes in compliance with 
applicable U.S. Federal laws and regulations and the subaward and that 
performance indicator targets are achieved for both activities and 
results under the agreement.


Sec.  1484.80  Audit requirements.

    (a) Subpart F of 2 CFR part 200 applies to all Cooperators and 
subrecipients under this part other than those that are for-profit 
entities, foreign public entities, or foreign organizations.
    (b) A Cooperator or subrecipient that is a for-profit entity or a 
subrecipient that is a foreign organization and that expends, during 
its fiscal year, a total of at least the audit requirement threshold in 
2 CFR 200.501 in Federal awards, is required to obtain an audit. Such a 
Cooperator or subrecipient has the following two options to satisfy 
this requirement:
    (1)(i) A financial audit of the agreement or subaward, in 
accordance with the Government Auditing Standards issued by the United 
States Government Accountability Office (GAO), if the Cooperator or 
subrecipient expends Federal awards under only one FAS program during 
such fiscal year; or
    (ii) A financial audit of all Federal awards from FAS, in 
accordance with GAO's Government Auditing Standards, if the Cooperator 
or subrecipient expends Federal awards under multiple FAS programs 
during such fiscal year; or
    (2) An audit that meets the requirements contained in subpart F of 
2 CFR part 200.
    (c) A Cooperator or subrecipient that is a for-profit entity or a 
subrecipient that is a foreign organization and that expends, during 
its fiscal year, a total that is less than the audit requirement 
threshold in 2 CFR 200.501 in Federal awards, is exempt from 
requirements under this section for an audit for that year, except as 
provided in paragraphs (d) and (f) of this section, but it must make 
records available for review by appropriate officials of Federal 
agencies.
    (d) FAS may require an annual financial audit of an agreement or 
subaward when the audit requirement threshold in 2 CFR 200.501 is not 
met. In that case, FAS must provide funds under the agreement for this 
purpose, and the Cooperator or subrecipient, as applicable, must 
arrange for such audit and submit it to FAS.
    (e) When a Cooperator or subrecipient that is a for-profit entity 
or a subrecipient that is a foreign organization is required to obtain 
a financial audit under this section, it must provide a copy of the 
audit to FAS within 60 days after the end of its fiscal year.
    (f) FAS, the USDA Office of Inspector General, or GAO may conduct 
or arrange for additional audits of any Cooperators or subrecipients, 
including for-profit entities and foreign organizations. Cooperators 
and subrecipients must promptly comply with all requests related to 
such audits. If FAS conducts or arranges for an additional audit, such 
as an audit with respect to a particular agreement, FAS will fund the 
full cost of such an audit, in accordance with 2 CFR 200.503(d).


Sec.  1484.81  Suspension and termination of agreements.

    (a) An agreement or subaward may be suspended or terminated in 
accordance with 2 CFR 200.338 or 200.339. FAS may suspend or terminate 
an agreement if it determines that:
    (1) One of the bases in 2 CFR 200.338 or 200.339 for termination or 
suspension by FAS has been satisfied; or
    (2) The continuation of the assistance provided under the agreement 
is no longer necessary or desirable.

[[Page 1096]]

    (b) If an agreement is terminated, the Cooperator:
    (1) Is responsible for using or returning any CCC-provided funds, 
interest, or program income that have not been disbursed, as agreed to 
by FAS; and
    (2) Must comply with any closeout and post-closeout procedures 
specified in the agreement and 2 CFR 200.343 and 200.344.


Sec.  1484.82  Noncompliance with an agreement.

    (a) If a Cooperator fails to comply with any term in its agreement, 
approval letter, or this part, CCC may take one or more of the 
enforcement actions in 2 CFR part 200 and, if appropriate, initiate a 
claim against the Cooperator, following the procedures set forth in 
this part. CCC may also initiate a claim against a Cooperator if 
program income or CCC-provided funds are lost due to an action or 
omission of the Cooperator. If any Cooperator has engaged in fraud with 
respect to the Cooperator program, or has otherwise violated program 
requirements under this part, CCC may:
    (1) Hold such Cooperator liable for any and all losses to CCC 
resulting from such fraud or violation;
    (2) Require a refund of any assistance provided to such Cooperator 
plus interest as determined by FAS; and
    (3) Collect liquidated damages from such Cooperator in an amount 
determined appropriate by FAS.
    (b) The provisions of this section shall be without prejudice to 
any other remedy that is available under any other provision of law.

    Dated: December 6, 2019.
Robert Stephenson,
Executive Vice President, Commodity Credit Corporation.

In concurrence with:

    Dated: December 6, 2019
Ken Isley,
Administrator, Foreign Agricultural Service.
[FR Doc. 2019-27964 Filed 1-8-20; 8:45 am]
 BILLING CODE 3410-10-P