17.21 FSA Offices.

17.22 Supplier's records. 17.23 Effective date.

APPENDIX A TO PART 17-CONTRACTING REQUIREMENTS

APPENDIX B TO PART 17-DOCUMENTARY REQUIREMENTS

AUTHORITY: 7 U.S.C. 1701-1705, 1736a, 1736c, 5676; E.O. 12220, 45 FR 44245.

SOURCE: 51 FR 47409, Dec. 31, 1986, unless otherwise noted.

EDITORIAL NOTE: Nomenclature changes affecting part 17 appear at 51 FR 47417, Dec. 31, 1986, and at 60 FR 62706, Dec. 7, 1995, effective January 8, 1996,

Subpart A-Regulations Governing the Financing of Commercial Sales of Agricultural Commodities

817.1 General.

(a) What this subpart covers. This subpart contains the regulations governing the financing of the sale and exportation of agricultural commodities by the Commodity Credit Corporation, through private trade channels to the maximum extent practicable, under the authority of title I of the Agricultural Trade Development and Assistance Act of 1954, as amended (hereinafter called "the Act").

(b) Agricultural commodities agreements. (1) Under the Act, the Government of the United States enters into Agricultural Commodities Agreements with governments of friendly foreign countries or with private trade entities. These agreements cover financing of the sale and exportation of agricultural commodities, including certain ocean transportation costs.

(2)(i) Government-to-government Agricultural Commodities Agreements may provide for (A) sales for dollars on credit terms, (B) sales for foreign currencies on credit terms which permit conversion to dollars, and (C) sales for Foreign currencies.

(ii) Agreements with private trade entities are limited to sales for dollars on credit terms.

(c) Purchase authorizations. These regulations cover, among other things, the issuance by the General Sales Manager of purchase authorizations which authorize the participant to (1) purchase agricultural commodities and (2) procure ocean transportation therefor.

(d) Financing. Following issuance of a purchase authorization, and on application, the Controller, Commodity Credit Corporation, will issue letters of commitment to banking institutions designated by the participant and acceptable to CCC, unless the participant elects to procure the commodities under the reimbursement method of financing. The cost of ocean freight or ocean freight differential will be financed by CCC only when specifically provided for in the purchase authorization.

(1) Under the letter of commitment method of financing, the U.S. supplier of agricultural commodities will receive payment as provided in the regulations in this subpart under irrevocable letters of credit issued, confirmed or advised by a banking institution for the commodities and, when authorized in the purchase authorization and included as a part of the commodity cost, for the ocean freight or the ocean freight differential, and marine insurance.

(2) Notwithstanding any other provision of these regulations, if authorized by the purchase authorization, ocean freight or ocean freight differential shall be financed by CCC under the letter of commitment method of financing in cases where ocean freight is not included as a part of the commodity cost, subject to the applicable provisions of these regulations and such other provisions as may be specified in the purchase authorization. In such case, the supplier of ocean freight will receive payment for ocean freight or ocean freight differential as provided in these regulations and the purchase authorization under irrevocable letters of credit issued, confirmed or advised by a banking institution.

(3) Under the reimbursement method of financing, the U.S. supplier will obtain payment from the participant or

its assignee as provided in the regulations in this subpart for the cost of commodities and, when authorized in the purchase authorization and included as a part of the commodity cost, for the ocean freight or the ocean freight differential, and marine insurance. When ocean freight or ocean freight differential is approved for financing on Form CCC-106 and is to be financed separately from the commodity cost, the supplier of ocean transportation will obtain payment from the participant or its assignee.

(4) To the extent provided in the regulations in this subpart, CCC will reimburse banking institutions for payments made under letters of commitment and CCC will reimburse the participant or its assignee for freight or ocean freight differential financed separately from the commodity and for the commodities procured under the reimbursement method of financing.

ocean

(e) Advice of amount financed. Under the letter of commitment method of financing, the banking institutions will forward documents and advice of the amount financed by CCC to the approved applicant or to the bank or agency authorized by the approved applicant to open related letters of credit. Under the reimbursement method of financing, CCC will forward advice of payment to the participant or its assignee.

(f) Where information is available. The Foreign Agricultural Service issues a press release whenever a purchase authorization is issued. General information about purchase authorizations and operations under these regulations is available from the Director, Public Law 480 Operations Division, Foreign Agricultural Service, U.S. Department of Agriculture, Washington, DC 202501033. Information about financing operations under these regulations, including forms prescribed for use thereunder, is available from the Controller, Commodity Credit Corporation, U.S. Department of Agriculture, P.O. Box 2415, Washington, DC 20013. A copy of each press release is made available to the Small Business Administration to assist small business firms to have an

adequate and a fair opportunity to participate as suppliers.

[51 FR 47409, Dec. 31, 1986, as amended at 54 FR 21931, May 22, 1989; 60 FR 62705, Dec. 7, 1995]

EFFECTIVE DATE NOTE: At 60 FR 62705, Dec. 7, 1995, §17.1(f) was amended by revising the zip code 20250-1000 to read 20250-1033, effective January 8, 1996.

§ 17.2 Definition of terms.

Terms used in the regulations in this subpart are defined or identified as follows, subject to amplification in subsequent sections:

(a) Terms relating to the United States, its agencies and officials.

AMS means the Agricultural Marketing Service, U.S. Department of Agriculture.

CCC means the Commodity Credit Corporation, U.S. Department of Agriculture.

Controller means the Controller, Commodity Credit Corporation, or the Controller's designee.

FAS means the Foreign Agricultural Service, U.S. Department of Agriculture.

FGIS means the Federal Grain Inspection Service, U.S. Department of Agriculture.

FSA means the Farm Service Agency, U.S. Department of Agriculture.

FSA Offices means the FSA offices listed in §17.21 and any other offices or agencies which may succeed to the functions of these offices.

General Sales Manager and GSM mean the General Sales Manager, FAS, or the General Sales Manager's designee.

Secretary means the Secretary of Agriculture of the United States, or the Secretary's designee.

USDA means the U.S. Department of Agriculture and includes all or any of the agencies mentioned in this paragraph (a).

United States means the 50 States, the District of Columbia, and Puerto Rico. (b) Terms relating to ocean transportation.

Dry bulk carrier means a non-common carrier vessel, other than a tanker, commonly referred to as a "tramp." Rates are negotiated covering the movement of a specific quantity of a specific commodity, at a specific time

from a specific port or ports to a specific destination port or ports.

Dry cargo liners and liners are interchangeable terms meaning regularly scheduled vessels on specific trade routes.

Form CCC-106 means the various forms entitled "Advice of Vessel Approval,” and refers to either the Form CCC-106-1 (Supplier of Commodity); Form CCC-106-2 (Ocean Carrier); Form CCC-106-3 (Cotton); or any or all of them, as applicable. Colors of the original forms are: Form CCC-106-1, yellow; Form CCC 106-2, blue; Form CCC-106-3, white.

Notice of arrival means a written notice or copy of a cablegram in accordance with §17.14(g) stating that the vessel has arrived at the first port of discharge.

Ocean bill of lading means

(1) In the case of cargo carried on a vessel other than LASH or Seabee barges: An "on-board" bill of lading, or a bill of lading with an "on-board" endorsement, which is dated and signed or initialed on behalf of the carrier, or

(2) In the case of cargo carried in a LASH or Seabee barge:

(i) For the purpose of financing commodity price, an "on-board" bill of lading showing the date the commodity was loaded on board barges, which is dated and signed or initialed on behalf of the carrier, or a bill of lading or a LASH or Seabee barge bill of lading with an "on-board barge" endorsement which is dated and signed or initialed on behalf of the carrier.

(ii) For the purpose of financing ocean freight or ocean freight differential, (A) an "on-board" bill of lading which is dated and signed or initialed on behalf of the carrier indicating that the barge containing the cargo was placed aboard the vessel named in the Form CCC-106 not later than eight (8) running days after the last LASH or Seabee barge loading date (contract layday) specified in the Form CCC-106, or (B) a bill of lading or a LASH or Seabee barge bill of lading with an "onboard ocean vessel" endorsement which is dated and signed or initialed on behalf of the carrier indicating that the barge containing the cargo was placed aboard the vessel named in the Form CCC-106 not later than eight (8) run

ning days after the last LASH or Seabee barge loading date (contract layday) specified in the Form CCC-106.

(3) Documentary requirements for a copy of an "ocean bill of lading" refer to a non-negotiable copy thereof.

Ocean transportation means and is interchangeable with the term "ocean freight".

Tanker means a vessel which is designed to carry full cargoes of liquids. Because of compartmentation, tankers can carry a combination of cargoes, including bulk grain. Rates are negotiated in the same manner as with dry bulk carriers.

(c) Other terms.

Affiliate and associated company mean any legal entity which owns or controls, or is owned or controlled by, another legal entity. For a corporation, ownership of the voting stock is the controlling criterion. A legal entity is considered to own or control a second legal entity if

(1) The legal entity owns an interest of 50 percent or more in the second legal entity, or

(2) The legal entity and one or more other legal entities, in which it owns an interest of 50 percent or more, together own an interest of 50 percent or more in the second legal entity, or

(3) The legal entity owns an interest of 50 percent or more in another legal entity which in turn owns an interest of 50 percent or more in the second legal entity.

Approved applicant means the bank in the importing country, or other agency acceptable to CCC, designated by the participant and named in a letter of commitment issued to a banking institution. This term includes any agent authorized to act on behalf of the approved applicant.

Banking institution means a banking institution organized under the laws of the United States, any State, or the District of Columbia.

Commodity means an agricultural commodity produced in the United States, or product thereof produced in the United States, as specified in the applicable purchase authorization.

Copy means a photocopy or other type of copy of an original document showing all data shown on the original, including signature or the name of the

person signing the original, or, if the signature or name is not shown on the copy, a statement that the original was signed.

Delivery means the transfer to or for the account of an importer of custody and right of possession of the commodity at U.S. ports or Canadian transshipment points in accordance with the delivery terms of the contract and purchase authorization. For purposes of financing, delivery is deemed to occur as of the on-board date shown on the ocean bill of lading.

Destination country means the foreign country to which the commodity is exported.

Expediting services means services provided to the vessel owner at the discharge port in order to facilitate the discharge and sailing of the vessel; this may include assisting with paperwork, obtaining permits and inspections, supervision and consultation.

Foreign currency and local currency are interchangeable terms and mean the currency of the importing country. Foreign currency sale means a sale for the currency of the importing country. Form CCC-329 means the signed original of Form CCC-329, "Supplier's Certificate."

Importer means the person which contracts with the supplier for the importation of the commodity. The importer may be the participant or any person to which a participant has issued a subauthorization.

Importing country means any nation with which an agreement has been signed under the Act.

Invitation for bids and IFB mean a publicly advertised request for offers.

Legal entity includes, but is not limited to, an individual (except that an individual and his or her spouse and their minor children are considered as one legal entity), partnership, association, company, corporation and trust.

Letter of credit means an irrevocable commercial letter of credit issued, confirmed, or advised by a banking institution on behalf of an approved applicant.

Long-term credit sale is the collective term used to denote either or both of the following: (i) Sales to an importing country or a private trade entity for dollars on credit terms or (ii) sales to

an importing country for local currency on credit terms and on terms which permit conversion to dollars.

Ocean transportation brokerage means services provided by shipping agents related to their engagement to arrange ocen transportation and services provided by ships brokers related to their engagement to arrange employment of vessels.

Ocean transportation-related services means furninshing the following services: lightening, stevedoring, and bagging (whether these services are performed at load or discharge), and inland transportation, i.e., transportation from the discharge port to the designated inland point of entry in the destination country, if the discharge port is not located in the destination country.

Participant is the collective term used to denote the importing country or the private trade entity with which agreement has been negotiated under the Act.

an

Person means an individual or other legal entity.

Purchase authorization means Form FAS 480 (Commodity), “Authorization to Purchase Agricultural Commodities," issued to a participant under these regulations.

Purchasing agent means any person engaged by a participant to procure agricultural commodities.

Private trade entity means the individual or other nongovernmental legal entity with which an agreement has been negotiated under the Act.

Selling agent means any person who operates as a bona fide representative for the supplier of the commodity and who is not employed by or otherwise connected with the importer or the importing country.

Shipping agent means any person engaged by a participant to arrange ocean transportation.

Ships broker means any person engaged by a supplier of ocean transportation to arrange employment of vessels.

Supplier means any person who sells a commodity to an importer under the terms of a purchase authorization, or who sells ocean transportation to an importer or supplier of the commodity

under the terms of a purchase authorization.

[51 FR 47409, Dec 31, 1986; 52 FR 1623, Jan. 15, 1987, as amended at 54 FR 21931, May 22, 1989; 60 FR 62705, Dec. 7, 1995]

EFFECTIVE DATE NOTE: At 60 FR 62705, Dec. 7, 1995, §17.2 was amended by removing the definitions for ASCS and ASCS offices in paragraph (a) and by adding in alphabetical order the definitions for FSA, FSA offices, in paragraph (a), and Expediting services, Ocean transportation brokerage, and Ocean transportation-related services in paragraph (c), effective January 8, 1996. For the convenience of the reader, the superseded text is set forth as follows:

§ 17.3 Eligible commodities.

(a) General. Commodities eligible for financing are those commodities determined by the Secretary to be available for disposition under the Act.

(b) Commodity description and specification. The commodity and quantity thereof to be financed shall be as described and specified in the relevant purchase authorization.

(c) Cotton textiles. (1) Except as provided in paragraph (c)(2) of this section, financing of textiles under these regulations is limited to cotton yarns and fabrics processed up to and including the dyed and printed state, and preshrinking. Any processing of such yarns and fabrics beyond this stage will be at the expense of the participant.

(2) Purchase authorizations may permit cotton textiles processed beyond the stage described in paragraph (c)(1) of this section to be purchased, but the maximum financing by CCC is limited to the equivalent value of the cotton

yarns and fabrics described in paragraph (c)(1) of this section, contained in the textiles, plus eligible ocean transportation costs.

(3) Financing is available only for textiles manufactured entirely of U.S. cotton in the United States. The General Sales Manager will not issue a purchase authorization for a textile of a specification not produced in the United States, but may issue a purchase authorization for the financing of a textile produced in the United States which has a specification reasonably close to that requested by the participant.

§ 17.4 Purchase authorizations.

(a) Request. For each purchase authorization, the participant shall submit to the General Sales Manager a written request for issuance, specifying the commodity and including any other information required by the General Sales Manager.

(b) Issuance of purchase authorization. When the request has been approved by the General Sales Manager, the GSM shall issue a purchase authorization to the participant. The form used is Form FAS 480 (Commodity), "Authorization to Purchase Agricultural Commodities."

(c) Purchase authorizations. Each purchase authorization includes the following information:

(1) The commodity to be purchased, approximate quantity and maximum dollar value;

(2) Contracting requirements in addition to or in lieu of those in appendix A of this subpart, if any;

(3) The contracting period, during which suppliers and importers must enter into contracts; and the delivery period, during which the commodity must be delivered;

(4) The terms of delivery to the importer;

(5) Documentation required in support of drafts presented to banks by suppliers in addition to or in lieu of the documentation specified in appendix B of this subpart;

(6) Provisions relating to payment to CCC, if applicable;

(7) The FSA office which administers the financing operation on behalf of CCC;