(3) "The Controller, CCC", shall mean the Controller, Commodity Credit Corporation, or his designee.

(4) "ASCS" shall mean the Agricultural Stabilization and Conservation Service, U.S. Department of Agriculture.

(5) "ASCS Offices" shall mean the ASCS Offices listed in § 11.16, and any other offices or agencies which may sucIceed to the functions of such offices.

(6) "FAS" shall mean the Foreign Agricultural Service, U.S. Department of Agriculture.

(7) "USDA" shall mean the U.S. Department of Agriculture and shall include all or any of the offices mentioned in subparagraphs (1) through (6) of this paragraph.

(8) "The Administrator" shall mean the Administrator of the Foreign Agricultural Service or his designee.

(9) "United States" shall mean the 50 States, the District of Columbia, and Puerto Rico.

(b) Terms relating to ocean transportation. (1) "Dry bulk carriers" are irregularly scheduled vessels commonly referred to as "tramps". They go where full cargoes are offered. Rates are negotiated by charter arrangements covering the movement of a specific commodity, a specific quantity, at a specific time from a specific port or ports to specific destination port or ports. Cargoes generally include grain, coal, fertilizers, lumber, pitch, salt, sugar, etc.

(2) "Dry cargo liners" are regularly scheduled vessels on specific trade routes. Any cargo can be shipped in this service including part-cargoes (parcels) of bulk items as grain, coal, etc., generally not exceeding 60 percent of the capacity of the vessel. Petroleum, vegetable oils, and similar bulk liquids carried in deep tanks of dry cargo liner vessels are classified as liner cargoes.

(3) "Tankers" are vessels which are designed to carry full cargoes of liquids. Because of compartmentation, tankers can carry a combination of such cargoes, including bulk grain. Rates are negotiated by charter arrangements in the same manner as with dry bulk carriers.

(4) "Form CCC 106" shall mean "Advice of Vessel Approval", Form CCC 106-1 (Supplier of Commodity), Form CCC 106-2 (Ocean Carrier), or Form CCC 106-3 (Cotton), or any or all of them, as applicable. Colors of the original form are: Form CCC 106-1 yellow; Form CCC 106-2 blue; and Form CCC 106-3 white.

(5) "Ocean bill of lading" shall mean a non-negotiable copy (or photostat) of an "On-Board" bill of lading or a bill of lading with an "On-Board" endorsement dated and signed or initialed on behalf of the carrier.

(6) "Ocean Transportation" shall mean, and is interchangeable with, the term "ocean freight".

(7) "Notice of Arrival" shall mean a written notice or copy of a cablegram acceptable to CCC reciting that the vessel has arrived at the first port of discharge.

(c) Other terms. (1) "Affiliate": A firm (corporation, partnership, individual, or other legal entity) is an "affiliate" of another firm, if either owns more than a 50 percent interest in or controls the other or if a third firm owns more than a 50 percent interest in, or controls, both.

(2) "Approved applicant" shall mean the bank in the importing country or any other agency designated by the importing country acceptable to USDA, named in any letter of commitment issued to a banking institution under this subpart. This term shall include any agent authorized to act on behalf of such an applicant.

(3) "Banking institution" shall mean a banking institution organized under the laws of the United States, any State, or the District of Columbia.

(4) "Form CCC 329" shall mean the signed original of Form CCC 329, Supplier's Certificate, with Invoice and Contract Abstract on the reverse.

(5) "Commodity” shall mean the surplus agricultural commodity or product thereof specified in the applicable purchase authorization.

(6) "Copy" shall mean a copy or photostat of an original document showing all data shown on the original, including signature or the name of the persor signing the original, or, if the signature or name is not shown on the copy, a statement that the original was signed.

(7) "Delivery" shall mean the transfer to or for the account of an importer of custody and right of possession of the commodity in export channels as specified in the purchase authorization.

(8) "Importer” shall mean any person or organization, governmental or otherwise, in the importing country who contracts with the supplier for the importation of the commodity.

(9) "Importing country" shall mean any nation with which an agreement has been negotiated pursuant to Title I, Public Law 480.

!

(10) "Letters of credit" shall mean irrevocable commercial letters of credit issued, confirmed, or advised by a banking institution on behalf of an approved applicant.

(11) "Purchase Authorization" shall mean FAS Form 480-A, "Authorization to Purchase Surplus Agricultural Commodities with Foreign Currency", or FAS Form 480-A (Ocean Transportation), "Authorization to Procure Ocean Transportation", issued to an importing country pursuant to this subpart.

(12) "Supplier" shall mean any firm (corporation, partnership, individual, or other legal entity) which sells any agricultural commodity or products thereof to an importer under the terms of a purchase authorization for delivery to such importer in export channels, or which sells ocean transportation to an importer or supplier of the commodity under the terms of a purchase authorization.

(13) "Selling Agent" shall mean any firm (corporation, partnership, individual, or other legal entity) which operates as a formally appointed sales agent for the supplier of the commodity and who is not affiliated with the importer or the importing country.

(14) "Foreign Currency" shall mean, and is interchangeable with the term "Local Currency", and refers to the currency of the country which signs an Agricultural Commodities Agreement with the United States and to which a purchase authorization is issued.

(15) "Title I" shall mean Title I of the Agricultural Trade Development and Assistance Act of 1954, as amended. [30 F.R. 15514, Dec. 16, 1965, as amended at 31 F.R. 3059, Feb. 24, 1966]

(b) Issuance of purchase authorizations. Upon approval of the application by the Administrator, appropriate purchase authorizations as described below will be issued to the importing country, and financing should be in accordance with such purchase authorization.

(1) Authorization to Purchase Surplus Agricultural Commodities with Foreign Currency, FAS Form 480-A.

(2) Authorization to Procure Ocean Transportation, FAS Form 480-A (Ocean Transportation).

(c) Provisions of purchase authorizations. Each purchase authorization will specify:

(1) Authorizations to purchase surplus agricultural commodities with foreign currency. (1) The commodity to be purchased, and the approximate quantity and maximum dollar value thereof;

(ii) Contracting requirements in addition to or in lieu of those enumerated in Appendix A of this subpart, if any;

(iii) The periods during which contracts between suppliers and importers may be entered into and during which deliveries may be made;

(iv) The terms of delivery to the importer in export channels of trade;

(v) Documentation required in support of drafts presented to banking institutions by suppliers, other than the documentation specified in this subpart; (vi) Provisions relating to local currency deposits;

(vii) The ASCS Office which will administer the financing operation on behalf of CCC;

(viii) The method of financing;

(ix) Any other provision deemed necessary by the Administrator.

(2) Authorization to procure Ocean Transportation, FAS Form 480-A. (1) The commodity to be shipped;

(ii) The delivery period;

(iii) The maximum dollar amount; (iv) Provisions relating to local currency deposits;

(v) Any other provisions deemed necessary by the Administrator.

(3) Applicability of this subpart. In addition to the provisions of the particular purchase authorization, each purchase authorization shall be subject to the provisions of the regulations in this subpart to the same extent as if they were fully set forth in the purchase authorization.

(d) Modification or revocation. The Administrator reserves the right at any time for any reason or cause whatsoever

to supplement, modify, or revoke any purchase authorization, including the termination of deliveries thereunder. CCC shall reimburse suppliers of commodities and ocean transportation who would otherwise be entitled to be financed, for costs incurred as a result of such action by the Administrator in connection with firm sales or shipping contracts, and not otherwise recovered after a reasonable effort to minimize such costs: Provided, however, That such reimbursement shall not be made to a supplier if the Administrator determines that his action was taken because the supplier failed to comply with the requirements of these regulations or the applicable purchase authorizations.

(e) Refund to CCC. The importing country shall pay in U.S. dollars promptly to CCC upon demand by the Administrator the entire amount financed by CCC (or such lesser amount as the Administrator may demand) whenever the Administrator determines that the importing country has failed to comply with any agreement or commitment made by it in connection with the transaction financed.

(f) Extension of delivery periods in purchase authorizations. Requests for extensions of delivery periods will be considered by the Administrator only if submitted by the importing country. Such requests should be submitted as far as possible in advance of the expiration of the delivery period and in any event as soon as the importing country has knowledge that there is a possibility that delivery will not be completed within the period specified in the purchase authorization. Requests for extension must establish to the satisfaction of the Administrator that failure to complete delivery was due to a cause other than the fault or negligence of the importer or the supplier. The Administrator may also approve requests for extension if he determines that such extensions would be in the interest of the United States.

a subauthorization has been issued by his Government must inform his supplier that the transaction is to be financed under Title I and must give to his supplier the purchase authorization number that has been given to him. Copies of purchase authorizations may be obtained from the Administrator. The importer must also inform his supplier of any special provisions which affect the supplier in carrying out the transactions.

§ 11.5 Eligible commodities.

(a) Surplus agricultural commodities. To be eligible for financing, the commodities must be agricultural commodities grown in the United States and, if processed, grown and processed in the United States, which are at the time of exportation in excess of domestic requirements, adequate carryover, and anticipated exports for dollars, as determined by the Secretary of Agriculture.

(b) Commodity description and specification. Only the commodity described and specified in the purchase authorization shall be eligible for financing.

(c) Payment-in-kind and cash payment-export programs. Any commodity exported under this subpart to which a payment-in-kind or cash export subsidy is applicable under any export subsidy program will be eligible for such subsidy payment if the terms and conditions of such export subsidy program are met. § 11.6 Contracts between suppliers and importers.

(a) Eligibility for financing. In order to be eligible for financing under Title I, contracts shall comply with the following requirements unless otherwise specified in the purchase authorization:

(1) Contracts between importers and commodity suppliers must be entered into within the contracting period specified in the purchase authorization and shall provide for deliveries to the importer in accordance with the delivery terms and during the delivery period specified in the purchase authorization, unless an extension of such contracting or delivery period is granted in writing by the Administrator;

(2) Any contracts for a commodity, under a purchase authorization which limits contracting to f.o.b. or f.a.s terms, must be separate and apart from the contract for ocean transportation on such commodity;

(3) The contracted price must not be on a cost plus-a-percentage-of cost basis;

(4) The supplier must be engaged in the business of selling for export, or furnishing ocean transportation, from the United States, must maintain a bona fide business office in the United States, and must have a person, principal or agent, upon whom service of judicial process may be had in the United States. A firm of which more than 50 percent is owned or which is controlled by a foreign government is not eligible to act as supplier.

(5) The Administrator reserves the right at any time to require of any supplier relevant information as to the supplier and his selling agents. The details of all sales contracts between the suppliers and importers are required to be stated in the notification of sale pursuant to Appendix A or in the purchase authorization and will be subject to prior approval by USDA.

(b) Invitation to bid. (1) Importers may make purchases through negotiation with a supplier or suppliers of the importer's choice or on the basis of invitations to submit competitive offers. If competitive offers are invited, such invitations shall not limit the right to submit offers to any specified group or class of suppliers but shall permit submission of offers by any supplier who meets the requirements of paragraph (a) (4) of this section.

(2) An importer's request for offers pursuant to which an export sales contract is entered into must not preclude such offers being made for shipment from any U.S. port(s). This requirement does not preclude the importer from accepting offers on the basis of shipment from port(s) which result in the lowest total landed cost of the commodity. The purchase authorization, however, may provide otherwise as to ports of shipment.

(c) Minimum offers. Requests by importers for offers shall not establish minimum quantities that will be eligible for consideration. All offers regardless of size must be considered and evaluated.

(d) Record of offers submitted by suppliers. The importing country shall maintain a record of all offers received from U.S. suppliers either as a result of public tenders or negotiation. The Administrator reserves the right to examine these records or to request specific in

formation in connection with the offers until the expiration of 3 years after final payment under contracts awarded pursuant to the purchase authorization.

(e) Shipment prior to letter of credit. If the supplier of the commodity permits shipment or the ocean carrier accepts the commodity before receipt of an acceptable letter of credit from a U.S. bank they take such action at their own risk. This action in itself does not affect eligibility for CCC financing provided acceptable documentation is presented within the time limitations prescribed in this subpart.

(f) Webb-Pomerene Law (Export Trade Act). A supplier who is a member of a Webb-Pomerene Association and who enters into contracts with importers as a member of such an association shall so indicate in Block 11 of Form CCC 329.

(g) Contract information. The supplier shall state in Block 21 of Form CCC 329 the contract delivery periods or dates and quantities covered by the entire contract.

(h) Affiliate clause. The supplier shall state in Block 21 of Form CCC 329 either: "I am an affiliate of the importer", or "I am not an affiliate of the importer".

(i) Contract disputes. Contracts between suppliers and importers should stipulate the responsibility of each party for payment of any costs not eligible for financing by CCC and should provide a method for amicable settlement of any dispute arising therefrom. Questions as to financing of such ineligible costs are to be resolved between the parties to the contract.

(j) Special contracting provisions. In addition to the general provisions for contracting set forth in paragraphs (a) through (i) of this section, additional special contracting provisions applicable to individual commodities are prescribed in Appendix A attached to this subpart. Each purchase authorization, unless it is otherwise provided therein, shall be subject to the special provisions of Appendix A, for the specific commodity named in the purchase authorization, as if such special provisions were fully set forth in the purchase authorizations.

(k) All contracts entered into for financing hereunder shall be deemed to include all terms and conditions required to be included in order to be eligible for financing hereunder.

§ 11.7 Commodity price provisions.

(a) Maximum price. The supplier's sales price must not exceed the prevailing range of export market prices as applied to the terms of sale at the time of sale, as determined by USDA, and, in addition, where the purchase authorization provides for a maximum price, expressed either in dollars or cents or to be computed on a stated basis, the supplier's sales price shall not exceed such maximum price. The "time of sale," unless otherwise defined for specific commodities in Appendix A, shall mean the day as of which the sale price is established in or pursuant to the contract between the importer and the supplier or the day of any amendment thereto if such amendment in any manner affects the sales price, as determined by USDA. In the event USDA is unable to ascertain the prevailing range of export market prices for a specific commodity, USDA will determine a maximum export market price, representing the top of the range of export market prices, for the commodity at the time of sale for the time and place of delivery provided for in the contract. In so determining a maximum export market price, USDA will utilize, as needed, available domestic or export market information for the same or other quality descriptions, packagings, locations, and dates; will apply appropriate market differentials where applicable and such other factors as would be reflected in the export market price at the time of sale for the time and place of delivery; and will take into account CCC export sales prices where appropriate.

(b) Prior approval of contract price. Prior approval by the Administrator, FAS, or his designee, of the contracted price of the commodity is required as a condition of eligibility for financing unless otherwise provided in the purchase authorization The detailed instructions for requesting and obtaining such prior approval are set forth in Appendix A, or will be stated in the purchase authorization.

(c) Maximum price for affiliates. In the event the importer procured the commodity through his affiliate, the copy of the invoice required by § 11.13 (c) (3) shall include an itemization of the amounts specified in this paragraph (c) or the supplier must furnish such information in a separate signed statement attached to the invoice to the ASCS Office named in the purchase authorization.

In addition to the maximum price provisions in section 11.7 (a) above, the sales price for the commodities sold to an affiliate of the supplier shall not be in excess of the aggregate amount of the following:

(1) The initial cost to the supplier in his acquisition from U.S. sources;

(2) The actual cost, if available, otherwise the average cost, incurred by the supplier for any handling, processing, and transportation to point of delivery; and

(3) Any markup regularly and customarily charged.

(d) Reduction for unauthorized selling agent's commissions. If it is established that (1) an agent employed or engaged by the supplier is not a selling agent as defined in § 11.2(c) (13) of this subpart or (2) a sales commission is in excess of the rate or percentage customarily and usually charged for the services performed and the commodity involved, the supplier's sales price, if otherwise eligible for financing, will be reduced for financing purposes in the case of subparagraph (1) of this paragraph by the amount of the commission to the ineligible agent and in the case of subparagraph (2) of this paragraph by the amount of excess commission. Such reductions in the supplier's sales price for the purpose of determining the amount which will be financed will be made even though the sales price meets the requirement of § 11.7.

(e) Refund of excess price. If the sale has been financed and it is determined that the sales price exceeds the maximum price permissible under paragraph (a) or (c) of this section, the supplier shall refund the amount of such excess to CCC promptly after determination and notification of the amount thereof by CCC. If not promptly refunded, such amount may be set-off by CCC against monies owed by it to the supplier. CCC will make appropriate refund of equivalent local currency to the importing country. The making of any such refund to CCC, or any set-off by CCC, shall not, however, prejudice the right of the supplier to challenge the correctness of such determination in a court action brought against CCC for recovery of the amount refunded or setoff.

[30 F.R. 15514, Dec. 16, 1965, as amended at 31 F.R. 3059, Feb. 24, 1966]