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Export Credit Sales Program in either and of a grade named in the Universal the CCC Monthly Sales List or other an- Standards for American Upland Cotton. nouncement by CCC in effect for the (Reginned or repacked cotton, unless calendar month in which the financing proof of export includes an acceptable approval is issued. Commodities which classification record, cotton shorter in have been purchased from CCC are eligi- staple length than 1316-inch, below grade ble for export as private stocks. Com- cotton, byproducts of cotton such as cotmodities shall not be eligible for financ- ton mill waste, motes, and linters, and ing under this program if they are any cotton that contains any byproduct exported under a barter contract or of cotton are not eligible for export herearrangement.

under.) CCC's determination as to the (j) "Eligible cotton" means: (1) Extra eligibility of cotton hereunder shall be long staple cotton grown in the United final. States of Grade No. 9 or better under the (k) "Eligible exporter” or “exporter" Oficial Cotton Standards of the United means a person (1) who is regularly enStates for Grades of American-Egyptian gaged in the business of buying or sellCotton (§ 28.501 et seq. of this title), or ing commodities and for this purpose Grade No. 5 or better under the Official maintains a bona fide business office in Cotton Standards of the United States the United States, its territories or posfor Grades of Sea Island Cotton ($ 28.551 sessions, and has someone on whom et seq. of this title), and having a staple service of judicial process may be had length of 1%8 inches or longer: Provided, within the United States, (2) who is fihowever, That, all (i) reginned or re- nancially responsible, and (3) who is packed cotton, as defined in regulations not suspended or debarred from conof the Department of Agriculture under tracting with or participating in any the U.S. Cotton Standards Act (§ 28.40 program financed by CCC on the date of of this title), and (ii) cotton which the issuance of his financing approval. exporter has any reason to believe may (1) "Eligible destination" means the be shorter in staple length than 138 country which is named in the financing inches or below grade, shall be eligible approval and which meets the licensing for export hereunder only if a Form A requirements of the U.S. Department of certificate or other classification record Commerce. acceptable to CCC issued by a board of (m) “Financing agreement” means the cotton examiners of the U.S. Department financing approval issued by either the of Agriculture covering each such bale Assistant Sales Manager for Export shows that all such cotton exported was Credit, EMS, or the Director, ASCS of138 inches or longer in staple length and fice, including the terms and conditions of Grade No. 9 or better for American- of the regulations in this subpart and Egyptian Cotton or Grade No. 5 or better any amendments thereto in effect on the for Sea Island Cotton. CCC's determina- date of the issuance of the letter of tion as to the eligibility of cotton here- credit. under shall be final. (2) Upland cotton (n) "Financing approval” means (1) grown in the United States, of a grade the exporter's written application for finamed in the Universal Standards for nancing as approved by the Assistant American Upland Cotton (§ 28.401 et seq. Sales Manager for Export Credit or by of this title), and having a staple length the Director, ASCS office, or (2) the of 1346-inch or longer: Provided, how- written confirmation by the Director, ever, That, all (i) reginned or repacked ASCS office, of a telephonic application cotton, as defined in regulations of the approved by the Director, ASCS office. U.S. Department of Agriculture under (0) "Financing period” means the the U.S. Cotton Standards Act ($ 28.40 number of months specified in the financof this title), and (ii) cotton which the ing approval. Such period shall start on exporter has any reason to believe may the date of delivery, or the weighted be shorter in staple length than 1346-inch average delivery date, of the commodities or below grade, shall be eligible for ex- to be exported under the financing port hereunder only if a Form A, Form agreement. B, or Form M certificate or other classi- (p) "Foreign bank” means a bank fication record acceptable to CCC issued which is neither a U.S. bank nor an by a board of cotton examiners of the agency or branch bank, and includes a U.S. Department of Agriculture covering foreign branch of a U.S. bank. each such bale shows that all such cotton (q) "Foreign importer" or "importer" exported was 1316-inch or longer in staple means the foreign buyer who purchases the commodities to be exported under a (X) "Vice President, CCC" means the financing agreement and who executes Vice President who is the General Sales the instruments or other documents evi- Manager. Export Marketing Service. dencing the account receivable assigned [34 FR. 19706, Dec. 18. 1969, as amended by to CCC

Amdt. 1. 35 F.R. 19687, Dec. 24. 1970) (r) "GSM-4" means the regulations contained in this subpart setting forth

$ 1488.3 Submission of applications for

financing. the terms and conditions governing the CCC Export Credit Sales Program.

(a) An eligible exporter may submit (s) "Monthly Sales List" means the an application for financing. Except as CCC Monthly Sales List which is pub

otherwise provided in this paragraph, lished monthly in the FEDERAL REGISTER. all applications for financing shall be (t) "Political risk" means risk of loss

submitted to the Assistant Sales Mandue to (1) inability of the foreign bank ager for Export Credit, Export Marketthrough no fault of its own to convert

ing Service, U.S. Department of Agriforeign currency to dollars, or (2) non- culture, Washington, D.C. 20250. An delivery into the eligible destination of

application for financing export sales of the commodity covered by a financing cotton under which the financing period agreement through no fault of the for- will not exceed 12 months, the amount eign bank or importer or exporter be

of financing will not exceed $4 million, cause of the cancellation by the gov- and the bank obligation will be issued by ernment of the eligible destination of

a U.S. bank may be submitted to the previously issued valid authority to im- Director, ASCS office, as provided in port such shipment into the eligible des

paragraph (e) of this section. tination or because of the imposition of

(b) CCC reserves the right to reject any law or of any order, decree, or regu

any and all applications. lation having the force of law which

(C) Applications submitted to the As. prevents the import of such shipment

sistant Sales Manager for Export Credit into the eligible destination, or (3) in

shall be in writing and shall refer to ability of the foreign bank to make pay

GSM-4, thereby incorporating by referment due to war, hostilities, civil war,

ence into the application all the terms rebellion, revolution, insurrection, civil

and conditions of GSM-4. On approval. commotion, or other like disturbance

the Assistant Sales Manager for Export occurring in the eligible destination, ex

Credit shall assign a financing approval propriation, confiscation, or other ac

number and issue the financing approval. tion by the government of the eligible

The following information shall be indestination.

cluded in the exporter's application: (U) “Port value” means the net

(1) The name of the commodity to be amount of the exporter's sales price of exported, the class, grade, or quality, as the commodity to be exported under the

applicable, and the quantity.

(2) The country of destination. financing agreement, basis f.a.s. or f.o.b.

(3) The approximate port value of the export carrier at U.S. ports, at U.S. bor

commodity to be exported. der points of exit or, if transshipped (4) The financing period. through Canada via the Great Lakes, at (5) Justification for a financing period ports on the St. Lawrence River. The in excess of 12 months. port value shall not include the ocean (6) Whether the bank obligation asfreight for a c. & 1. sale or ocean freight

suring payment of the account receive and marine and war risk insurance for

able will be issued by a U.S. bank, an a c.i.f. sale. The net amount of the ex

agency or branch bank, or a foreign porter's sales price means the contract

bank, and if by a foreign bank or an price for the commodities less any pay

agency or branch bank, its name and

address. ments made by the importer and less any discounts, credits, or allowances to

(7) The name and address of the for

eign importer. the importer. (V) "United States" means the 50

(8) If delivery of the commodity to be

exported is before export, the name and States, the District of Columbia, and address of the warehouse to which dePuerto Rico.

livery is to be made. (W) “U.S. bank" means a bank organ- (9) If delivery of the commodity to be Ized under the laws of the United States, exported is before export, the period for a State, or the District of Columbia. export.

(d) A financing period in excess of 12 interest of CCC not inconsistent with months but not in excess of 36 months GSM-4. may be approved by the Assistant Sales (h) The official who approved the Manager for Export Credit when such financing application may, on written longer period will achieve one or more application of the exporter, amend the of the following results:

financing approval provided the provi(1) Permit U.S. exporters to meet sions of such amendment are in concredit terms offered by competitors from formity with the regulations in this subother Free World countries.

part at the time of such amendment and (2) Prevent a loss or decline in estab- are determined by such official to be in lished U.S. commercial export sales the interest of CCC. Such amendments caused by noncommercial factors. may include an extension of the period

(3) Permit U.S. exporters to establish for delivery required by $ 1488.7(a) proor retain U.S. markets in the face of vided the exporter furnishes to CCC acpenetration by Communist suppliers. ceptable evidence of an export sale con

(4) Substitute commercial dollar sales tract requiring deliveries during a longer for sales for local currencies and sales on period, as well as an extension of the long-term credits.

period for export. CCC may prescribe (5) Result in a new use of the im- such additional conditions to such exported agricultural commodities in the tensions as it determines to be in its importing country.

interests. A new or amended bank ob(6) Permit expanded consumption of ligation may be required by CCC if the agricultural commodities in an import- financing approval is amended after the ing country and thereby increase total issuance of the related bank obligation. commercial sales of agricultural commodities to the importing country by

§ 1488.4 Coverage of bank obligations. the United States and other exporting (a) U.S. banks and agency or branch countries.

banks shall be liable without regard to In considering applications involving risks for payment of bank obligations export of commodities to countries in a issued by them. good financial and balance of payments

(b) If the obl ion is issued by a situation, principal reliance will be foreign bank, it must be confirmed and placed on subparagraphs (1), (2), and advised as provided in paragraphs (c), (3) of this paragraph.

(d), and (e) of this section. (e) Applications submitted to the (c) A U.S. bank must confirm the full ASCS office shall designate that the com- account of an obligation issued by its modity is cotton and shall specify the fi- foreign branch. CCC will look to the nancing period, the country of destina- U.S. bank for payment without regard tion, the approximate port value of the to risks. commodity and the name and address of (d) If an agency or branch bank conthe foreign importer. Application may be firms an obligation issued by a bank in made by phone or in writing. On ap- the country in which the home office of proval of an application, the ASCS office the agency or branch bank is located, it shall assign a financing approval number must confirm the full amount thereof. and issue the financing approval which CCC will look to the agency or branch shall refer to GSM-4, thereby incorpo- bank for payment without regard to rating by reference into the approval all risks. the terms and conditions of GSM-4. For (e) Except as provided above in parfinancing approvals issued by the ASCS agraphs (c) and (d) of this section, if a office, bank obligations must be irrevo- U.S. bank or an agency or branch bank cable letters of credit. Obligations issued confirms an obligation issued by a forby foreign banks or by agency or branch eign bank, it must confirm at least 10 banks are not acceptable under this percent pro rata and must advise the paragraph.

remainder of the foreign bank obliga(f) If the Assistant Sales Manager for tion. For the confirmed amount, CCC Export Credit or the ASCS office requires will hold the U.S. bank or the agency or additional information, the applicant branch bank liable for commercial risks shall furnish it on request.

but not for political risks. For the ad(g) The financing approval may con- vised amount, CCC will not hold the tain such terms and conditions as the U.S. bank or the agency or branch bank Assistant Sales Manager for Export liable for commercial or political risks. Credit or the ASCS office deems in the CCC will hold the foreign bank liable

without regard to risks for all amounts $ 1488.6 Interest charges. not recovered from the U.S. bank or the

The account receivable assigned to agency or branch bank. (f) Under special circumstances, on

CCC and the related bank obligation(s)

shall bear interest until paid. The Vice application in writing, the Vice Presi

President, CCC, or his designee, shall dent, CCC, may reduce or waive the requirement for 10 percent confirmation

from time to time establish rates of inter

est applicable to financing agreements, by a U.8. bank or agency or branch bank,

which shall be announced in the CCC but a bank will not be relieved from an

Monthly Sales List. The interest rate apobligation once it has been undertaken.

plicable to a particular financing agree(8) Any bank obligation which provides for a bank acceptance of a time

ment shall be specified in the financing draft drawn by CCC (banker's accept

approval. The interest rate applicable to ance) shall not be acceptable to CCC.

that portion of an account receivable, the

payment of which is assured by a bank (h) CCC will consent to cancellation or reduction of a bank obligation to the

obligation issued by a U.8. bank or an extent that it receives payment from

agency or branch bank, or by a pro rata other sources of amounts otherwise pay

confirmation of a U.S. bank or an agency able under such bank obligation.

or branch bank, shall be 1 percent (1) Collection of accounts receivable

lower than the interest rate established

for the remainder of the account receivpurchased under this program will be

able. The criteria to be used in determineffected through the issuance by CCC of

ing the rate of interest will be those essight drafts against the bank obliga

tablished on consultation with and after tions, but this method of collection shall not be exclusive of any other collection

approval by the National Advisory Coun

cil on International Monetary and Fiprocedures or rights available to CCC.

nancial Policies. Interest shall accrue on & 1488.5 CCC drafts.

the account receivable and the related Under those bank obligations which

bank obligation(s) from the date of deare partially confirmed, CCC will draw

livery, or the weighted average delivery separate drafts for the amounts con

date, of the agricultural commodities defirmed and the amounts not confirmed,

livered under the financing agreement to to which CCC will attach any related

the date of expiration of the financing instruments evidencing the account re

period or of the bank obligation, whichceivable, endorsed to the U.S. bank or

ever occurs first, and shall be payable as agency or branch bank. If a CCC draft

specified in the financing approval. is dishonored, the U.S. bank or agency

Thereafter, interest shall accrue on any or branch bank shall return the dis

unpaid part of both the principal and honored draft together with any related

interest due as of such expiration date. instruments and its statement of the § 1488.7 Expiration of period for deliv. reasons for nonpayment. For confirmed ery and export. amounts, a U.S. bank or agency or branch

(a) Unless delivery by the exporter to bank may request refund from CCC of the amount paid if It certifies to CCC

the importer is made within such pe

riod as may be provided in the financing that it is unable to recover funds from the foreign bank due to a stipulated

approval or in any amendment thereof,

or under paragraph (b) of this section, political risk which existed on the date

or, if no such period is so provided, payment was made to CCC under the

within a period of 90 days from the date draft. On approval by CCC of such re- of the financing approval, the financing quest, the refund shall be promptly approval will no longer be valid. made, together with interest at the Fed- (b) If the Vice President, CCC, or his eral Reserve Bank of New York dis- designee, determines that delay in decount rate from the date payment was livery was due solely to causes without originally made to CCC to but not in- the fault or negligence of the exporter, cluding the date of refund by CCC, and the period of delivery may be extended by any related instruments shall be re- CCC to include the period of such delay. turned to CCC. For unconfirmed (c) If delivery is made before export amounts, remittance to CCC shall be under the terms of the financing agreeconsidered final, and the U.S. bank or ment, failure to export within the peagency or branch bank shall not there- riod specified therefor in the financing after have recourse to CCC,

approval shall constitute a breach of the

financing agreement, the account receivable and the bank obligation assuring the account receivable shall, at the option of CCC, become immediately due and payable if full payment thereunder has not been received, and liquidated damages shall be payable in accordance with $ 1488.13. $ 1488.8 Advance payment.

If, before expiration of the financing period, the exporter or the U.S. bank or the agency or branch bank accepts payment from or on behalf of the foreign importer of any part of the account receivable, it shall be remitted promptly to CCC. Such prepayment shall be applied first to interest on the unpaid balance of the account receivable to the date CCC receives such prepayment and then to the principal. $ 1488.9 Documents required after de

livery. (a) Within 45 days after date of delivery of the commodities exported or to be exported under the financing agreement, the exporter shall submit the following documents to the Treasurer, Commodity Credit Corporation, Washington, D.C. 20250, telephone number DU 8–4042.

(1) A written application for disbursement, showing the financing approval number and the port value of the commodity delivered.

(2) An assignment of the account receivable arising from the export sale, in form and substance acceptable to CCC. When the account receivable is evidenced by documents other than instruments, in accordance with § 1488.2(a), such documents shall be submitted with the assignment.

(3) A copy of the sales invoice to the foreign importer.

(4) If delivery is at point of export, a copy of the document evidencing export as provided in $ 1488.10, and, if the consignee is other than the foreign importer, such additional information as CCC may request to show that export was made in accordance with the instructions of, or the export sale contract with, the foreign importer. If delivery is before export, documents acceptable to CCC evidencing delivery of the commodity to the importer or his agent.

(5) A certification by the exporter that the agricultural commodities of the grade, quality, and quantity called for in the exporter's sale to the foreign importer have been delivered and that the

exporter knows of no defenses to the account receivable assigned to CCC.

(6) A bank obligation or obligations in accordance with $ 1488.4, paragraphs (d), (e), and (f) of this section, and § 1488.11, payable to CCC, in form and substance acceptable to CCC, covering the financing agreement and including interest in accordance with $ 1488.6.

(7) When the account receivable is evidenced by instruments, in accordance with § 1488.2(a), two (2) separate instruments evidencing the account receivable, one for the confirmed amount and one for the unconfirmed amount. If installment payments under the bank obligation are required by the financing approval, there shall be furnished two (2) such separate instruments for each such installment. Each instrument evidencing all or a part of the account receivable shall provide that it is assignable free of defenses and that in event of default by the importer or of the bankruptcy, insolvency, or other inability of the importer to meet its obligations or to continue in business on an unrestricted basis, the account receivable shall become immediately due and payable.

(b) On timely receipt of the documents described in paragraph (a) (1) through (6) of this section, the Treasurer, CCC, will pay promptly to the exporter the port value of the commodity delivered, or 110 percent of the amount specified in the financing approval, whichever is the lesser.

(c) If an acceptable application for disbursement and the supporting documents described in paragraph (a) (1) through (6) of this section have not been received by CCC within 45 days from the date of delivery, or any extension thereof approved by the Treasurer, CCC, or his designee, the financing agreement shall be void.

(d) If the instruments described in paragraph (a) (7) of this section are not received by CCC within 60 days after date of delivery, and payment has been made by CCC, the account receivable and the bank obligation assuring the account receivable shall at the option of CCC become due and payable. However, if the use of a weighted average delivery date has been approved for starting the financing period, the 60 days will begin with the date of the last delivery.

(e) If, under the financing agreement, delivery is made before export, documents evidencing export as provided in

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