80_FR_34194 80 FR 34080 - Facility Guarantee Program

80 FR 34080 - Facility Guarantee Program

DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation

Federal Register Volume 80, Issue 114 (June 15, 2015)

Page Range34080-34097
FR Document2015-14449

This proposed rule would revise and amend the regulations at 7 CFR 1493 subpart C used to administer the Facility Guarantee Program (FGP). Changes in this proposed rule incorporate statutory changes from the Food, Conservation, and Energy Act of 2008 and modifications intended to reduce burden on participants and improve program efficiency and effectiveness. Certain revisions will ensure the FGP is operated in compliance with the Organisation for Economic Cooperation and Development (OECD) Arrangement on Officially Supported Export Credits. Additionally, this proposed rule incorporates significant changes made to the regulations for the Export Credit Guarantee Program (GSM-102), that are also applicable to the FGP.

Federal Register, Volume 80 Issue 114 (Monday, June 15, 2015)
[Federal Register Volume 80, Number 114 (Monday, June 15, 2015)]
[Proposed Rules]
[Pages 34080-34097]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-14449]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / 
Proposed Rules

[[Page 34080]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1493

RIN 0551-AA73


Facility Guarantee Program

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

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would revise and amend the regulations at 7 
CFR 1493 subpart C used to administer the Facility Guarantee Program 
(FGP). Changes in this proposed rule incorporate statutory changes from 
the Food, Conservation, and Energy Act of 2008 and modifications 
intended to reduce burden on participants and improve program 
efficiency and effectiveness. Certain revisions will ensure the FGP is 
operated in compliance with the Organisation for Economic Cooperation 
and Development (OECD) Arrangement on Officially Supported Export 
Credits. Additionally, this proposed rule incorporates significant 
changes made to the regulations for the Export Credit Guarantee Program 
(GSM-102), that are also applicable to the FGP.

DATES: Comments concerning this proposed rule must be received by 
August 14, 2015 to be assured consideration.

ADDRESSES: Comments may be submitted by any of the following methods:
    [ssquf] Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions to submit comments.
    [ssquf] E-Mail: [email protected].
    [ssquf] Fax: (202) 720-2495, Attention: ``FGP Proposed Rule 
Comments''.
    [ssquf] Hand Delivery, Courier, or U.S. Postal delivery: Amy 
Slusher, Deputy Director, Credit Programs Division, Foreign 
Agricultural Service, U.S. Department of Agriculture, 1400 Independence 
Ave. SW., Stop 1025, Room 5509, Washington, DC 20250-1025.

Comments may be inspected at 1400 Independence Avenue SW., Washington, 
DC, between 8:00 a.m. and 4:30 p.m., Monday through Friday, except 
holidays. A copy of this proposed rule is available through the Foreign 
Agricultural Service (FAS) homepage at: http://www.fas.usda.gov/topics/export-financing.

FOR FURTHER INFORMATION CONTACT: Amy Slusher, Deputy Director, Credit 
Programs Division, by phone at (202) 720-6211, or by email at: 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Commodity Credit Corporation's (CCC) Facility Guarantee Program 
(FGP) is administered by the Foreign Agricultural Service (FAS) of the 
U.S. Department of Agriculture (USDA) on behalf of CCC, pursuant to 
program regulations codified at 7 CFR part 1493; through the issuance 
of ``Program Announcements'' and ``Notices to Participants'' that are 
consistent with this program regulation; and in compliance with the 
requirements of the Arrangement on Officially Supported Export Credits 
of the Organisation for Economic Cooperation and Development (OECD). 
Under the FGP, CCC provides payment guarantees to facilitate the 
financing of manufactured goods and U.S. services to improve or 
establish agriculture-related facilities in emerging markets. By 
supporting such facilities, the FGP is designed to enhance sales of 
U.S. Agricultural Commodities and products to emerging markets where 
the demand for such commodities and products may be limited due to 
inadequate storage, processing, handling, or distribution capabilities 
for such products.
    The current FGP regulations became effective on August 8, 1997. The 
Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246) (2008 Act) 
modified the program by including a ``construction waiver'' that allows 
the Secretary of Agriculture to waive requirements related to the use 
of U.S. goods in the construction of a proposed facility if the 
Secretary determines that ``(A) goods from the United States are not 
available; or (B) the use of goods from the United States is not 
practicable.''
    On August 6, 2009, CCC published an advance notice of proposed 
rulemaking (ANPR) in the Federal Register (74 FR 39240). This notice 
was intended to solicit comments on improvements and changes to be made 
in the implementation and operation of the FGP program, with the intent 
of improving the FGP's effectiveness and efficiency and lowering costs. 
CCC received comments to the ANPR from five entities. One of the key 
comments was that program requirements, particularly the application 
process, are too burdensome on participants and prohibit its use. 
Further, program fees were consistent with those charged by the U.S. 
Export-Import Bank for similar products but coverage was inferior.
    On November 18, 2014, CCC published a final rule for the Export 
Credit Guarantee (GSM-102) Program, found at 7 CFR 1493 subpart B. The 
GSM-102 and FGP Programs are similarly structured and many of the same 
requirements apply. For this reason, CCC completed the rulemaking 
process for the GSM-102 program prior to issuing this proposed rule so 
that relevant GSM-102 program changes could be incorporated into the 
FGP. The affected provisions include (but are not limited to) 
information and certifications required for program participation, 
letter of credit requirements, terms and requirements of the payment 
guarantee, assignments, notice of default and claims for default, 
payments and recoveries, additional obligations and requirements, 
dispute resolution and appeals, and miscellaneous provisions. 
Explanations of the changes incorporated in both the GSM-102 and FGP 
regulations can be found in the following documents:
    GSM-102 Proposed Rule (July 27, 2011): https://www.federalregister.gov/articles/2011/07/27/2011-18403/ccc-export-credit-guarantee-gsm-102-program.
    GSM-102 Proposed Rule (December 27, 2013): https://www.federalregister.gov/articles/2013/12/27/2013-29439/ccc-export-credit-guarantee-gsm-102-program-and-facility-guarantee-program-fgp.
    GSM-102 Final Rule (November 18, 2014): https://federalregister.gov/a/2014-27129.
    Key changes in the proposed rule are discussed below by topic. The 
numbering system of this proposed rule

[[Page 34081]]

differs from that in the current regulation. For the purposes of this 
discussion, the numbering of the proposed rule will be used. 
Capitalized terms are defined terms that are found in Sec.  1493.210, 
Definition of Terms.

Changes in Response to the 2008 Act

    The 2008 Act contains a ``construction waiver'' that allows the 
Secretary of Agriculture to waive requirements related to the use of 
U.S. goods in the construction of a proposed facility if the Secretary 
determines that ``(A) goods from the United States are not available; 
or (B) the use of goods from the United States is not practicable.''
    To implement this provision, CCC proposes to permit a Seller to 
request a Coverage Waiver in the application for Payment Guarantee. As 
described in Sec.  1493.290(f)(1), the Seller may request a Coverage 
Waiver to allow for coverage of non-U.S. Goods or to waive the U.S. 
Content Test. The U.S. Content Test states that CCC will issue a 
Payment Guarantee only if the value of Eligible Non-U.S. Goods and 
Eligible Imported Components are less than 50 percent of the sum of the 
Net Contract Value plus the value of approved Local Costs. CCC included 
criteria in Sec.  1493.290(f)(2) that will be the basis for CCC to 
issue a Coverage Waiver. A Seller must rely on one or more of these 
criteria as the basis for justifying a Coverage Waiver. By allowing the 
Seller to request a waiver and obtain coverage of non-U.S. Goods and/or 
imported components, CCC intends to provide maximum flexibility in 
approving goods, services and projects that will meet the requirement 
to primarily promote the export of U.S. Agricultural Commodities.

Changes To Reduce Burden and Improve Program Effectiveness and 
Efficiency

Application for Payment Guarantee

    CCC proposes to expand the current Payment Guarantee application 
process. This change is designed to reduce the burden on the Seller by 
allowing the Seller to supply information to CCC in stages and obtain 
conditional approval before moving to the next step of the application 
process. It also may expedite the application process by allowing CCC 
to focus its time on proposals meeting FGP criteria.
    In Sec.  1493.260(a), CCC added an optional ``letter of interest.'' 
Prior to submitting an initial application for a Payment Guarantee, the 
Seller may choose to submit a letter of interest to CCC describing a 
proposed transaction. CCC will review information submitted and provide 
preliminary feedback on whether the proposed transaction may be 
eligible for FGP coverage. In doing so, CCC hopes to reduce the burden 
on participants by ruling out ineligible projects prior to the Seller 
providing in-depth information required in the Payment Guarantee 
application. A short letter of interest form will be available on the 
FAS Web site and must be accompanied by a non-refundable fee that will 
be deducted from the final guarantee fee if the application results in 
a payment guarantee.
    The first required step in the application process is the 
submission of the initial application. Information submitted with the 
initial application will include the details of the proposed export, 
project or facility as specified in Sec.  1493.260(b), including a 
description of all goods and services for which coverage is sought and 
information about environmental impact. If applicable, the Seller will 
also request a Coverage Waiver. This stage of the application process 
will require an in-depth review and analysis by FAS to determine 
whether the proposal meets requirements for coverage. To avoid tying up 
the Seller's full guarantee fee during this time, CCC will not require 
the guarantee fee with the initial application. Instead, the Seller 
must submit a non-refundable initial application fee. If CCC determines 
to issue a Payment Guarantee for the transaction, this fee will be 
deducted from the final guarantee fee. Both the letter of intent and 
initial application fees are designed to ensure that the Seller is 
serious about the particular transaction and the associated Payment 
Guarantee before FAS expends resources on review and analysis.
    CCC will review the information submitted in the initial 
application and determine whether to approve the application as is or 
with amendments, and also whether to grant any requested coverage 
waiver. If CCC approves the initial application, the Seller will have 
30 calendar days in which to submit information in a final application 
(Sec.  1493.260(c)). The Seller needs CCC's feedback on the initial 
application to determine most of the elements in the final application. 
CCC will require the Seller to submit the full guarantee fee (less the 
letter of interest and initial application fees) with the final 
application.

Promoting the Export of U.S. Agricultural Commodities

    The Food, Agriculture, Conservation, and Trade Act of 1990, as 
amended, allows for the provision of export credit guarantees for ``(A) 
the establishment or improvement of facilities, or (B) the provision of 
services or United States products goods, in emerging markets by United 
States persons to improve handling, marketing, processing, storage, or 
distribution of imported agricultural commodities and products thereof 
if the Secretary of Agriculture determines that such guarantees will 
primarily promote the export of United States agricultural commodities 
. . .'' (emphasis added). To meet this requirement, the current FGP 
regulation requires significant information and analysis to be included 
in the Seller's application, including projected prices, quantities, 
and country of origin of the agricultural commodities that will benefit 
from the goods, services or facility over a five-year period.
    CCC determined that this requirement is too burdensome on Sellers 
whose expertise is more likely in constructing facilities or exporting 
equipment than in agricultural commodities. CCC modified the 
requirements of the Application for Payment Guarantee (Sec.  
1493.260(b)(7)) to now require the Seller to provide only a list of 
agricultural commodities or products to be used by the proposed project 
and a description of how the goods and/or Services will specifically 
benefit exporters of U.S. Agricultural Commodities. As part of the 
application review process, FAS will perform an analysis to determine 
whether the proposed project will primarily benefit U.S. Agricultural 
Commodity exporters. FAS will reach out to other areas of USDA and to 
relevant commodity organizations, state/regional trade groups, and 
exporters, as needed, for assistance in collecting data and conducting 
this analysis.

Qualification of Program Participants

    To reduce the burden on program participants, CCC proposes to ease 
or eliminate FGP qualification requirements on certain participants 
already qualified to participate in the GSM-102 Program. In accordance 
with Sec.  1493.220(c), Sellers who are qualified exporters under the 
GSM-102 program will only be required to submit additional information 
specific to the FGP in order to qualify as a Seller under the FGP. U.S. 
Financial Institutions qualified under the GSM-102 program are 
automatically qualified to participate in the FGP.
    Due to the longer tenors and corresponding higher risk under the 
FGP, Foreign Financial Institutions will be required to apply 
separately for participation, even if already qualified under the GSM-
102 Program. As explained in Sec.  1493.240, CCC will establish 
specific dollar participation

[[Page 34082]]

limits for Foreign Financial Institutions qualifying for the FGP. These 
participation limits will be separate from any participation limits 
that may be established under the GSM-102 program.

Compliance With the OECD Arrangement on Officially Supported Export 
Credits

    The United States is a participant in the OECD Arrangement on 
Officially Supported Export Credits (``the Arrangement''). The 
Arrangement seeks to foster a level playing field for official export 
credits and applies ``to all official support provided by or on behalf 
of a government for export of goods and/or services, including 
financial leases, which have a repayment term of two years or more.'' 
All FGP activity with a repayment term of two years or more, therefore, 
must comply with the provisions of the Arrangement. The Arrangement is 
updated periodically by OECD Participants. The most recent version can 
be found at http://www.oecd.org/tad/xcred/arrangement.htm.
    Aspects of the FGP that are governed by the Arrangement include, 
but are not limited to, the following:

Environmental and Social Impact Screening

    The OECD Common Approaches for Officially Supported Export Credits 
and Environmental and Social Due Diligence provides guidelines for 
addressing environmental and social issues related to exports of 
capital goods and/or services and the location for which they are 
destined. The primary purpose of these guidelines is to encourage OECD 
members to prevent and mitigate adverse environmental and social 
impacts of projects receiving official support. To support this goal, 
the OECD provides guidelines for screening applications for official 
support.
    CCC will screen all FGP Payment Guarantee applications for any 
negative environmental and social impact. In accordance with Sec.  
1493.260(b), Sellers must submit a completed environmental screening 
document with each initial application for a Payment Guarantee. The 
screening document will be available on the USDA Web site. CCC will 
review the screening document to determine whether the transaction is 
likely to have significant adverse environmental and/or social impacts. 
If CCC determines that a transaction has potential adverse impact, the 
transaction will be subject to an in-depth environmental and social 
review. CCC may reject an application based on the results of this 
review.

Guarantee Fees

    The Arrangement prescribes minimum fees to be charged based on 
country risk, obligor risk, tenor, percentage of cover, and other 
factors. Guarantee fees for the FGP will be available on the USDA Web 
site and will be consistent with rules of the Arrangement.

Initial Payment

    The Arrangement requires a minimum downpayment to be made by the 
Buyer prior to the start of the credit. The minimum amount of the 
required Initial Payment (as a percentage of the Net Contract Value) 
will be available on the USDA Web site. The current requirement under 
the Arrangement is 15 percent.

Local Costs

    The Arrangement prescribes a limit on the maximum amount of 
official support for local costs. Local Costs are defined in Sec.  
1493.210 as ``expenditures for goods in the Destination Country that 
are necessary for executing the Firm Sales Contract and that are within 
scope of the Firm Sales Contract.'' CCC will consider providing 
coverage for Local Costs within the limits of the Arrangement, but 
because Local Costs are non-U.S. Goods, the Seller must also request 
and receive from CCC a Coverage Waiver for these costs. The maximum 
amount of Local Costs permitted (as a percentage of the Net Contract 
Value) will be available on the USDA Web site. The current maximum 
under the Arrangement is 30 percent.

Maximum Tenor

    Maximum tenor (repayment term) under the Arrangement is determined 
by country of destination. Maximum tenors under FGP will be available 
on the USDA Web site and may be less than prescribed by the Arrangement 
as determined appropriate by CCC.

Executive Order 12866

    This proposed rule is issued in conformance with Executive Order 
12866. It has been determined to be not significant for the purposes of 
Executive Order 12866 and was not reviewed by OMB. A cost-benefit 
assessment of this rule was not completed.

Executive Order 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988. This proposed rule would not preempt State or local laws, 
regulations, or policies unless they present an irreconcilable conflict 
with this proposed rule. Before any judicial action may be brought 
concerning the provisions of this proposed rule, the appeal provisions 
of 7 CFR part 1493.200 would need to be exhausted. This rulemaking 
would not be retroactive.

Executive Order 12372

    This program is not subject to Executive Order 12372, which 
requires intergovernmental consultation with State and local officials. 
See the notice related to 7 CFR part 3015, subpart V, published at 48 
FR 29115 (June 24, 1983).

Executive Order 13132

    This proposed rule has been reviewed under Executive Order 13132, 
``Federalism.'' The policies contained in this proposed rule do not 
have any substantial direct effect on States, on the relationship 
between the Federal government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
nor does this proposed rule impose substantial direct compliance costs 
on State and local governments. Therefore, consultation with the States 
is not required.

Executive Order 13175

    The United States has a unique relationship with Indian Tribes as 
provided in the Constitution of the United States, treaties, and 
Federal statutes. On November 5, 2009, President Obama signed a 
Memorandum emphasizing his commitment to ``regular and meaningful 
consultation and collaboration with tribal officials in policy 
decisions that have tribal implications including, as an initial step, 
through complete and consistent implementation of Executive Order 
13175.'' This proposed rule has been reviewed for compliance with E.O. 
13175 and CCC worked directly with the Office of Tribal Relations in 
the rule's development. The policies contained in this proposed rule do 
not have tribal implications that preempt tribal law.

Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
CCC is not required by 5 U.S.C. 553 or any other law to publish a 
notice of proposed rulemaking with respect to the subject matter of 
this rule.

Environmental Assessment

    CCC has determined that this proposed rule does not constitute a 
major State or Federal action that would significantly affect the human 
or natural environment. Consistent with the National Environmental 
Policy Act

[[Page 34083]]

(NEPA), 40 CFR part 1502.4, ``Major Federal Actions Requiring the 
Preparation of Environmental Impact Statements'' and the regulations of 
the Council on Environmental Quality, 40 CFR parts 1500-1508, no 
environmental assessment or environmental impact statement will be 
prepared.

Unfunded Mandates

    This proposed rule does not impose any enforceable duty or contain 
any unfunded mandate as described under Title II of the Unfunded 
Mandates Reform Act of 1995 (UMRA). Therefore, this rule is not subject 
to the requirements of sections 202 and 205 of UMRA.

Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995, CCC is 
requesting comments from all interested individuals and organizations 
on a proposed revision to the currently approved information collection 
for this program. This revision includes the proposed change in 
information collection activities related to the regulatory changes in 
this proposed rule.
    Title: CCC Facility Guarantee Program (FGP).
    OMB Control Number: 0551-0032.
    Type of Request: Reinstatement, with change, of a previously 
approved collection for which approval has expired.
    Abstract: This information collection is required to support the 
existing regulations and proposed changes to 7 CFR part 1493, subpart 
C, ``CCC Facility Guarantee Program (FGP) Operations,'' which 
establishes the requirements for participation in CCC's FGP program. 
This revised collection incorporates changes in estimated burden to 
program participants as a result of certain revised requirements in 
this proposed rule for (1) seller and U.S. and foreign financial 
institution qualification; (2) applications for payment guarantees; (3) 
notices of assignment; (4) evidence of performance reports; and (5) 
appeals. This information collection is necessary for CCC to manage, 
plan and evaluate the program and to ensure the proper and judicious 
use of government resources.
    Estimate of Burden: The public reporting burden for this collection 
of information is estimated to average 0.819 hours per response.
    Respondents: U.S. exporters (sellers), U.S. financial institutions, 
and foreign financial institutions.
    Estimated Number of Respondents: 18 per year.
    Estimated Number of Responses per Respondent: 13.4 per year.
    Estimated Total Annual Burden on Respondents: 197.4 hours.
    Comments on this information collection may be submitted to CCC in 
accordance with the instructions for submitting comments to this 
proposed rule. All comments received in response to this notice will be 
a matter of public record.

E-Government Act Compliance

    CCC is committed to complying with the E-Government Act to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services and for other purposes. The forms, regulations, and other 
information collection activities required to be utilized by a person 
subject to this rule are available at: http://www.fas.usda.gov.

List of Subjects in 7 CFR Part 1493

    Agricultural commodities, Exports.

    For the reasons stated in the preamble, CCC proposes to amend 7 CFR 
part 1493 as follows:

Title 7--Agriculture

PART 1493--CCC EXPORT CREDIT GUARANTEE PROGRAMS

0
1. The authority citation for 7 CFR part 1493 continues to read as 
follows:

    Authority: 7 U.S.C. 5602, 5622, 5661-5664, 5676; 15 U.S.C. 
714b(d), 714c(f).

0
2. Subpart C is revised to read as follows:
Subpart C--CCC Facility Guarantee Program (FGP) Operations
Sec.
1493.200 General statement.
1493.210 Definition of terms.
1493.220 Information required for Seller participation.
1493.230 Information required for U.S. Financial Institution 
participation.
1493.240 Information required for Foreign Financial Institution 
participation.
1493.250 Certification requirements for program participation.
1493.260 Application for Payment Guarantee.
1493.270 Certifications required for obtaining Payment Guarantee.
1493.280 Special requirements of the Foreign Financial Institution 
Letter of Credit and Terms and Conditions Document, if applicable.
1493.290 Terms and requirements of the Payment Guarantee.
1493.300 Fees.
1493.310 Assignment of the Payment Guarantee.
1493.320 Evidence of performance.
1493.330 Certification requirements for the evidence of performance.
1493.340 Proof of entry.
1493.350 Notice of default.
1493.360 Claims for default.
1493.370 Payment for default.
1493.380 Recovery of defaulted payments.
1493.385 Additional obligations and requirements.
1493.390 Dispute resolution and appeals.
1493.395 Miscellaneous provisions.

Subpart C--CCC Facility Guarantee Program (FGP) Operations


Sec.  1493.200  General statement.

    (a) Overview. The FGP of the Commodity Credit Corporation (CCC) was 
developed to expand U.S. Agricultural Commodity exports by making 
available Payment Guarantees to encourage U.S. private sector financing 
to establish or improve facilities or provide Services or goods in 
emerging markets to improve handling, marketing, processing, storage, 
or distribution of imported agricultural commodities and products. Such 
guarantees will primarily promote the export of U.S. Agricultural 
Commodities. CCC will give priority to projects that encourage 
privatization of the agricultural sector or that benefit private farms 
and cooperatives in emerging markets, and for which nongovernmental 
persons agree to assume a relatively larger share of costs. The Payment 
Guarantee issued under FGP is an agreement by CCC to pay the Seller, or 
the U.S. Financial Institution that may take assignment of the Payment 
Guarantee, specified amounts of principal and interest in case of 
default by the Foreign Financial Institution that issued the Letter of 
Credit for the sale covered by the Payment Guarantee. The program is 
targeted toward those countries that have sufficient financial strength 
so that foreign exchange will be available for scheduled payments. In 
providing this program, CCC seeks to expand and/or maintain market 
opportunities for U.S. agricultural exporters and assist long-term 
market development for U.S. Agricultural Commodities.
    (b) Program administration. The FGP is administered under the 
direction of the General Sales Manager and Vice President, CCC, 
pursuant to this subpart, subpart A of this part, any Program 
Announcements issued by CCC, and, as applicable, the Organisation for 
Economic Cooperation and Development's (OECD) Arrangement on Officially 
Supported Export Credits. From time to time, CCC may issue a notice to 
participants on the USDA Web site to remind participants of the 
requirements of the FGP or to clarify the program requirements 
contained in these regulations in a

[[Page 34084]]

manner not inconsistent with this subpart and subpart A of this part. 
Program information, such as approved U.S. and Foreign Financial 
Institutions, is available on the USDA Web site.
    (c) Country and regional program announcements. From time to time, 
CCC will issue a Program Announcement on the USDA Web site to announce 
the FGP for a specific country or region. The Program Announcement will 
contain any requirements applicable to that country or region as 
determined by CCC.


Sec.  1493.21  Definition of terms.

    Terms set forth in this part, on the USDA Web site (including in 
Program Announcements and notices to participants), and in any CCC-
originated documents pertaining to the FGP will have the following 
meanings:
    Affiliate. Entities are affiliates of each other if, directly or 
indirectly, either one controls or has the power to control the other 
or a third person controls or has the power to control both. Control 
may include, but is not limited to: Interlocking management or 
ownership; identity of interests among family members; shared 
facilities and equipment; or common use of employees.
    Assignee. A U.S. Financial Institution that has obtained the legal 
right to make a claim and receive the payment of proceeds under the 
Payment Guarantee.
    Business Day. A day during which employees of the U.S. Department 
of Agriculture in the Washington, DC metropolitan area are on official 
duty during normal business hours.
    Buyer. A foreign purchaser that enters into a Firm Sales Contract 
with a Seller for the sale of goods to be shipped to the Destination 
Country and/or U.S. Services to be provided in the Destination Country.
    Buyer's Representative. An entity having a physical office and that 
is either organized under the laws of or registered to do business in 
the Destination Country or region specified in the Payment Guarantee 
and that is authorized to act on the Buyer's behalf with respect to the 
sale described in the Firm Sales Contract.
    CCC. The Commodity Credit Corporation, an agency and 
instrumentality of the United States within the Department of 
Agriculture, authorized pursuant to the Commodity Credit Corporation 
Charter Act (15 U.S.C. 714 et seq.).
    CCC Late Interest. Interest payable by CCC pursuant to Sec.  
1493.370(c).
    Contractual Event. A specific deliverable (activity or milestone) 
measured by objective or quantifiable methods within the Firm Sales 
Contract which, when met by the Seller, results in an obligation to 
make payment in accordance with the agreed contractual terms without 
recourse, and triggers the start of coverage under the Payment 
Guarantee. Such events may include, but are not limited to, exports of 
goods, completion of Services, or commissioning date of equipment or a 
facility.
    Cost of Services. The price for Services as stipulated in the Firm 
Sales Contract.
    Coverage Waiver. A determination by CCC, upon request of the 
Seller, to allow guarantee coverage of non-U.S. Goods and/or to waive 
the U.S. Content Test in Sec.  1493.290(e).
    Date of Performance. The date that a Contractual Event occurs in 
accordance with the Firm Sales Contract. The Date of Performance may 
be, but is not limited to, an installation date, the date of completion 
of the Service, the commissioning date of equipment or a facility, or 
the date of export of goods (one of the following dates, depending upon 
the method of shipment: The on-board date of an ocean bill of lading or 
the on-board ocean carrier date of an intermodal bill of lading; the 
on-board date of an airway bill; or, if exported by rail or truck, the 
date of entry shown on an entry certificate or similar document issued 
and signed by an official of the government of the importing country).
    Date of Sale. The earliest date on which a Firm Sales Contract 
exists between the Seller and the Buyer.
    Destination Country. The location (country) of the agricultural-
related facility that will use the goods and/or Services covered by the 
Payment Guarantee. If the Payment Guarantee covers goods not intended 
for a specific facility, then the country where the goods will be 
delivered and utilized.
    Director. The Director, Credit Programs Division, Office of Trade 
Programs, Foreign Agricultural Service, or designee.
    Discounts and allowances. Any consideration provided directly or 
indirectly, by or on behalf of the Seller, to the Buyer in connection 
with a sale of a good or Service, above and beyond its value. Discounts 
and allowances include, but are not limited to, the provision of 
additional goods, services or benefits; the promise to provide 
additional goods, services or benefits in the future; financial 
rebates; the assumption of any financial or contractual obligations; 
commissions where the Buyer requires the Seller to employ and 
compensate a specified agent as a condition of concluding the sale; the 
whole or partial release of the Buyer from any financial or contractual 
obligations; or settlements made in favor of the Buyer for quality or 
weight.
    Eligible Export Sale. A transaction in which the obligation of 
payment for the portion registered under the FGP arises solely and 
exclusively from a Foreign Financial Institution Letter of Credit or 
Terms and Conditions Document issued in connection with a Payment 
Guarantee.
    Eligible Imported Components. Imported components in U.S. Goods 
that are eligible for coverage because either:
    (1) The project meets the U.S. Content Test in Sec.  1493.290(e); 
or
    (2) A Coverage Waiver of the U.S. Content Test has been requested 
by the Seller and approved by CCC.
    Eligible Non-U.S. Goods. Goods, including Local Costs, that are not 
U.S. Goods but for which a Coverage Waiver has been requested by the 
Seller and approved by CCC.
    Eligible Interest. The amount of interest that CCC agrees to pay 
the Holder of the Payment Guarantee in the event that CCC pays a claim 
for default of Ordinary Interest. Eligible Interest shall be the lesser 
of:
    (1) The amount calculated using the interest rate agreed by the 
Holder of the Payment Guarantee and the Foreign Financial Institution; 
or
    (2) The amount calculated using the specified percentage of the 
Treasury bill investment rate set forth on the face of the Payment 
Guarantee.
    Firm Sales Contract. The written sales contract entered into 
between the Seller and the Buyer which sets forth the terms and 
conditions of an Eligible Export Sale from the Seller to the Buyer. 
Written evidence of a sale may be in the form of a signed sales 
contract, a written offer and acceptance between parties, or other 
documentary evidence of sale. The Firm Sales Contract between the 
Seller and the Buyer may be conditioned upon CCC's approval of the 
Seller's application for a Payment Guarantee. The written evidence of 
sale for the purposes of the FGP must, at a minimum, document the 
following information:
    (1) Date of sale;
    (2) A complete description of all goods associated with the 
project. For goods to be covered by the Payment Guarantee, include the 
brand name and model number, country where the good was manufactured 
and country from which the good will be exported (if applicable), 
quantity, value, and Incoterms (if applicable);
    (3) A complete description of all Services associated with the 
project. For Services to be covered by the Payment

[[Page 34085]]

Guarantee, include the supplier and cost;
    (4) The Date of Performance of each Contractual Event; and
    (5) The date and evidence of agreement between Buyer and Seller.
    Foreign Financial Institution. A financial institution (including 
foreign branches of U.S. financial institutions):
    (1) Organized and licensed under the laws of a jurisdiction outside 
the United States;
    (2) Not domiciled in the United States; and
    (3) Subject to the banking or other financial regulatory authority 
of a foreign jurisdiction (except for multilateral and sovereign 
institutions).
    Foreign Financial Institution Letter of Credit or Letter of Credit. 
An irrevocable documentary letter of credit, subject to the current 
revision of the Uniform Customs and Practices (UCP) for Documentary 
Credits (International Chamber of Commerce Publication No. 600, or 
latest revision), and if electronic documents are to be utilized, the 
current revision of the Supplement to the Uniform Customs and Practice 
for Documentary Credits for Electronic Presentation (eUCP) providing 
for payment in U.S. dollars against stipulated documents and issued in 
favor of the Seller by a CCC-approved Foreign Financial Institution.
    GSM. The General Sales Manager, Foreign Agricultural Service (FAS), 
USDA, acting in his or her capacity as Vice President, CCC, or 
designee.
    Guaranteed Value. The maximum amount indicated on the face of the 
Payment Guarantee, exclusive of interest, that CCC agrees to pay the 
Holder of the Payment Guarantee. The Guaranteed Value is calculated by 
deducting the Initial Payment and any Discounts and Allowances from the 
Net Contract Value and adding to that result the value of Local Costs 
that CCC has approved for coverage. The resulting figure is then 
multiplied by the guaranteed percentage (up to the maximum percentage 
allowable in the applicable country or regional Program Announcement).
    Holder of the Payment Guarantee. The Seller or the Assignee of the 
Payment Guarantee with the legal right to make a claim and receive the 
payment of proceeds from CCC under the Payment Guarantee in case of 
default by the Foreign Financial Institution.
    Incoterms. Trade terms developed by the International Chamber of 
Commerce in Incoterms 2010 (or latest revision), which define the 
respective obligations of the Buyer and the Seller in a sales contract.
    Initial Payment. The amount that the Buyer is required to pay the 
Seller prior to CCC's approval of the Payment Guarantee, expressed as a 
percentage (specified on the USDA Web site) of the Net Contract Value.
    Local Costs. Expenditures for goods in the Destination Country that 
are necessary for executing the Firm Sales Contract and that are within 
scope of the Firm Sales Contract.
    Net Contract Value. The aggregate Value of Goods and Cost of 
Services (exclusive of Local Costs) that are eligible for guarantee 
coverage and for which coverage is requested.
    North American Industry Classification System (NAICS). Standard 
used by Federal statistical agencies in classifying business 
establishments for the purpose of collecting, analyzing, and publishing 
statistical data related to the U.S. business economy.
    Ordinary Interest. Interest (other than Post Default Interest) 
charged on the principal amount identified in the Foreign Financial 
Institution Letter of Credit or, if applicable, the Terms and 
Conditions Document.
    Payment Guarantee. An agreement under which CCC, in consideration 
of a fee paid, and in reliance upon the statements and declarations of 
the Seller, subject to the terms set forth in the written guarantee, 
this subpart, and any applicable Program Announcements, agrees to pay 
the Holder of the Payment Guarantee in the event of a default by a 
Foreign Financial Institution on its Repayment Obligation under the 
Foreign Financial Institution Letter of Credit issued in connection 
with a guaranteed sale or, if applicable, under the Terms and 
Conditions Document.
    Post Default Interest. Interest charged on amounts in default that 
begins to accrue upon default of payment, as specified in the Foreign 
Financial Institution Letter of Credit or, if applicable, in the Terms 
and Conditions Document.
    Principal. A principal of a corporation or other legal entity is an 
individual serving as an officer, director, owner, partner, or other 
individual with management or supervisory responsibilities for such 
corporation or legal entity.
    Program Announcement. An announcement issued by CCC on the USDA Web 
site that provides information on specific country and regional 
programs and may identify eligible projects and countries, length of 
credit periods which may be covered, and other information.
    Repayment Obligation. A contractual commitment by the Foreign 
Financial Institution issuing the Letter of Credit in connection with 
an Eligible Export Sale to make payment(s) on principal amount(s), plus 
any Ordinary Interest and Post Default Interest, in U.S. dollars, to a 
Seller or U.S. Financial Institution on deferred payment terms 
consistent with those permitted under CCC's Payment Guarantee. The 
Repayment Obligation must be documented using one of the methods 
specified in Sec.  1493.280.
    Repurchase Agreement. A written agreement under which the Holder of 
the Payment Guarantee may from time to time enter into transactions in 
which the Holder of the Payment Guarantee agrees to sell to another 
party Foreign Financial Institution Letter(s) of Credit and, if 
applicable, Terms and Conditions Document(s) secured by the Payment 
Guarantee, and repurchase the same Foreign Financial Institution 
Letter(s) of Credit and Terms and Conditions Documents secured by the 
Payment Guarantee, on demand or date certain at an agreed upon price.
    SAM (System for Award Management). A Federal Government owned and 
operated free Web site that contains information on parties excluded 
from receiving Federal contracts or certain subcontracts and excluded 
from certain types of Federal financial and nonfinancial assistance and 
benefits.
    Seller. A supplier of goods and/or Services that is both qualified 
in accordance with the provisions of Sec.  1493.220 and the applicant 
for the Payment Guarantee.
    Service. Any business activity classified in any of the 13 NAICS 
Services sectors (NAICS chapters 22 and 48-49 through 81). For the 
shipment of goods, freight and insurance costs to the port of entry 
that are included in the price of the goods (in accordance with the 
specified Incoterms) are not considered Services under this subpart.
    Terms and Conditions Document. A document specifically identified 
and referred to in the Foreign Financial Institution Letter of Credit 
which may contain the Repayment Obligation and the special requirements 
specified in Sec.  1493.280.
    United States or U.S. Each of the States of the United States, the 
District of Columbia, Puerto Rico, and the territories and possessions 
of the United States.
    U.S. Agricultural Commodity or U.S. Agricultural Commodities.
    (1) (i) An agricultural commodity or product entirely produced in 
the United States; or
    (ii) A product of an agricultural commodity--

[[Page 34086]]

    (A) 90 percent or more of the agricultural components of which by 
weight, excluding packaging and added water, is entirely produced in 
the United States; and
    (B) That the Secretary determines to be a high value agricultural 
product.
    (2) For purposes of this definition, fish entirely produced in the 
United States include fish harvested by a documented fishing vessel as 
defined in title 46, United States Code, in waters that are not waters 
(including the territorial sea) of a foreign country.
    U.S. Content Test. A determination of the value of total Eligible 
Non-U.S. Goods and Eligible Imported Components as a percentage of the 
total Value of Goods and Cost of Services to be covered under the 
Payment Guarantee, as specified in Sec.  1493.290(e).
    USDA. United States Department of Agriculture.
    U.S. Financial Institution. A financial institution (including 
branches of Foreign Financial Institutions):
    (1) Organized and licensed under the laws of a jurisdiction within 
the United States;
    (2) Domiciled in the United States; and
    (3) Subject to the banking or other financial regulatory authority 
jurisdiction within the United States.
    U.S. Goods. Goods that are assembled, processed or manufactured in, 
and exported from, the United States, including goods which contain 
imported raw materials or imported components. Minor or cosmetic 
procedures (e.g., affixing labels, cleaning, painting, polishing) do 
not qualify as assembling, processing or manufacturing.
    U.S. Person. One of the following:
    (1) An individual who is a citizen or legal resident of the United 
States; or
    (2) An entity constituted or organized in the United States, 
including any corporation, trust partnership, sole proprietorship, 
joint venture, or other association with business activities in the 
United States.
    U.S. Services. Services performed by U.S. Persons, including those 
temporarily residing outside the United States. Costs for hotels, 
meals, transportation, and other similar Services incurred in the 
Destination Country are not U.S. Services.
    Value of Goods or Components in Goods. The price derived for goods 
or components in goods, determined by:
    (1) The price stipulated in the Firm Sales Contract or, if such 
price is not available;
    (2) The declared customs value or, if the customs value is not 
available; then
    (3) The fair market wholesale value in the United States.


Sec.  1493.220  Information required for Seller participation.

    Sellers must apply and be approved by CCC to be eligible to 
participate in the FGP.
    (a) Qualification requirements. To qualify for participation in the 
FGP, an applicant must submit the following information to CCC in the 
manner specified on the USDA Web site:
    (1) For the applicant:
    (i) The name and full U.S. address (including the full 9-digit zip 
code) of the applicant's office, along with an indication of whether 
the address is a business or private residence. A post office box is 
not an acceptable address. If the applicant has multiple offices, the 
address included in the information should be that which is pertinent 
to the FGP sales contemplated by the applicant;
    (ii) Dun and Bradstreet (DUNS) number;
    (iii) Employer Identification Number (EIN--also known as a Federal 
Tax Identification Number);
    (iv) Telephone and fax numbers;
    (v) Email address (if applicable);
    (vi) Business Web site (if applicable);
    (vii) Contact name;
    (viii) Statement indicating whether the applicant is a U.S. 
domestic entity or a foreign entity domiciled in the United States; and
    (ix) The form of business entity of the applicant, (e.g., sole 
proprietorship, partnership, corporation, etc.) and the U.S. 
jurisdiction under which such entity is organized and authorized to 
conduct business. Such jurisdictions are a U.S. State, the District of 
Columbia, Puerto Rico, and the territories or possessions of the United 
States. Upon request by CCC, the applicant must provide written 
evidence that such entity has been organized in a U.S. State, the 
District of Columbia, Puerto Rico, or a territory or possession of the 
United States.
    (2) For the applicant's headquarters office:
    (i) The name and full address of the applicant's headquarters 
office (a post office box is not an acceptable address); and
    (ii) Telephone and fax numbers.
    (3) For the applicant's agent for the service of process:
    (i) The name and full U.S. address of the applicant's agent's 
office, along with an indication of whether the address is a business 
or private residence;
    (ii) Telephone and fax numbers;
    (iii) Email address (if applicable); and
    (iv) Contact name.
    (4) A description of the applicant's business. Applicants must 
provide the following information:
    (i) Nature of the applicant's business (i.e., producer, Service 
provider, trader, consulting firm, etc.);
    (ii) Explanation of the applicant's experience/history selling the 
goods or Services to be sold under the FGP, including number of years 
involved in selling, types of goods or Services sold, and destination 
of sales for the preceding three years;
    (iii) Whether or not the applicant is a ``small or medium 
enterprise'' (SME) as defined on the USDA Web site.
    (5) A listing of any related companies (e.g., Affiliates, 
subsidiaries, or companies otherwise related through common ownership) 
currently qualified to participate in CCC export programs;
    (6) A statement describing the applicant's participation, if any, 
during the past three years in U.S. Government programs, contracts or 
agreements; and
    (7) A statement that: ``All certifications set forth in 7 CFR 
1493.250(a) are hereby made in this application'' which, when included 
in the application, will constitute a certification that the applicant 
is in compliance with all of the requirements set forth in Sec.  
1493.250(a). The applicant will be required to provide further 
explanation or documentation if not in compliance with these 
requirements or if the application does not include this statement.
    (b) Qualification notification. CCC will promptly notify applicants 
that have submitted information required by this section whether they 
have qualified to participate in the program or whether further 
information is required by CCC. Any applicant failing to qualify will 
be given an opportunity to provide additional information for 
consideration by the Director.
    (c) Previous qualification. Any Seller that is currently qualified 
under subpart B of this part, Sec.  1493.30 need only provide the 
information requested in Sec.  1493.220(a)(4). Once CCC receives that 
information, CCC will notify the Seller that the Seller is qualified 
under this section to submit applications for a FGP Payment Guarantee, 
and the other information provided by the Seller pursuant to Sec.  
1493.30 will be deemed to also have been provided under this section. 
Any Seller not submitting an application for a GSM-102 or FGP Payment 
Guarantee for two consecutive U.S. Government fiscal years must 
resubmit a qualification application containing the information 
specified in Sec.  1493.220(a) to CCC to participate in the FGP. If at 
any time the information required by paragraph (a) of this section 
changes, the Seller must promptly contact CCC to update this 
information and certify that the remainder of the

[[Page 34087]]

information previously provided under paragraph (a) of this section has 
not changed.
    (d) Ineligibility for program participation. An applicant may be 
ineligible to participate in the FGP if such applicant cannot provide 
all of the information and certifications required in Sec.  
1493.220(a).


Sec.  1493.230  Information required for U.S. Financial Institution 
participation.

    U.S. Financial Institutions must apply and be approved by CCC to be 
eligible to participate in the FGP.
    (a) Qualification requirements. To qualify for participation in the 
FGP, a U.S. Financial Institution must submit the following information 
to CCC in the manner specified on the USDA Web site:
    (1) Legal name and address of the applicant;
    (2) Dun and Bradstreet (DUNS) number;
    (3) Employer Identification Number (EIN--also known as a Federal 
Tax Identification Number);
    (4) Year-end audited financial statements for the applicant's most 
recent fiscal year;
    (5) Breakdown of the applicant's ownership as follows:
    (i) Ten largest individual shareholders and ownership percentages;
    (ii) Percentage of government ownership, if any; and
    (iii) Identity of the legal entity or person with ultimate control 
or decision making authority, if other than the majority shareholder.
    (6) Organizational structure (independent, or a subsidiary, 
Affiliate, or branch of another financial institution);
    (7) Documentation from the applicable United States Federal or 
State agency demonstrating that the applicant is either licensed or 
chartered to do business in the United States;
    (8) Name of the agency that regulates the applicant and the name 
and telephone number of the primary contact for such regulator; and
    (9) A statement that: ``All certifications set forth in 7 CFR 
1493.250 are hereby made in this application'' which, when included in 
the application, will constitute a certification that the applicant is 
in compliance with all of the requirements set forth in Sec.  1493.250. 
The applicant will be required to provide further explanation or 
documentation if not in compliance with these requirements or if the 
application does not include this statement.
    (b) Qualification notification. CCC will notify applicants that 
have submitted information required by this section whether they have 
qualified to participate in the program or whether further information 
is required by CCC. Any applicant failing to qualify will be given an 
opportunity to provide additional information for consideration by the 
Director.
    (c) Previous qualification. Any U.S. Financial Institution that is 
qualified under subpart B, Sec.  1493.40 is qualified under this 
section, and the information provided by the U.S. Financial Institution 
pursuant to Sec.  1493.40 will be deemed to also have been provided 
under this section. Any U.S. Financial Institution not participating in 
the GSM-102 or FGP programs for two consecutive U.S. Government fiscal 
years must resubmit the information and certifications specified in 
paragraph (a) of this section to CCC to participate in the FGP. If at 
any time the information required by paragraph (a) of this section 
changes, the U.S. Financial Institution must promptly notify CCC to 
update this information and certify that the remainder of the 
information previously provided under paragraph (a) of this section has 
not changed.
    (d) Ineligibility for program participation. A U.S. Financial 
Institution may be ineligible to participate in the FGP if such 
applicant cannot provide all of the information and certifications 
required in Sec.  1493.230(a).


Sec.  1493.240  Information required for Foreign Financial Institution 
participation.

    Foreign Financial Institutions must apply and be approved by CCC to 
be eligible to participate in the FGP.
    (a) Qualification requirements. To qualify for participation in the 
FGP, a Foreign Financial Institution must submit the following 
information to CCC in the manner specified on the USDA Web site:
    (1) Legal name and address of the applicant;
    (2) Year-end, audited financial statements in accordance with the 
accounting standards established by the applicant's regulators, in 
English, for the applicant's three most recent fiscal years. If the 
applicant is not subject to a banking or other financial regulatory 
authority, year-end, audited financial statements in accordance with 
prevailing accounting standards, in English, for the applicant's three 
most recent fiscal years;
    (3) Breakdown of applicant's ownership as follows:
    (i) Ten largest individual shareholders and ownership percentages;
    (ii) Percentage of government ownership, if any; and
    (iii) Identity of the legal entity or person with ultimate control 
or decision making authority, if other than the majority shareholder.
    (4) Organizational structure (independent, or a subsidiary, 
Affiliate, or branch of another legal entity);
    (5) Name of foreign government agency that regulates the applicant; 
and
    (6) A statement that: ``All certifications set forth in 7 CFR 
1493.250 are hereby made in this application'' which, when included in 
the application, will constitute a certification that the applicant is 
in compliance with all of the requirements set forth in Sec.  1493.250. 
The applicant will be required to provide further explanation or 
documentation if not in compliance with these requirements or if the 
application does not include this statement.
    (b) Qualification notification. CCC will notify applicants that 
have submitted information required by this section whether they have 
qualified to participate in the program or whether further information 
is required by CCC. Any applicant failing to qualify will be given an 
opportunity to provide additional information for consideration by the 
Director.
    (c) Participation limit. If, after review of the information 
submitted and other publicly available information, CCC determines that 
the Foreign Financial Institution is eligible for participation in the 
FGP, CCC will establish an FGP dollar participation limit for the 
institution. This limit will be the maximum amount of FGP exposure CCC 
agrees to undertake with respect to this Foreign Financial Institution 
at any point in time. CCC may change or cancel this dollar 
participation limit at any time based on any information submitted or 
any publicly available information.
    (d) Previous qualification and submission of annual financial 
statements. Each qualified Foreign Financial Institution shall submit 
annually to CCC the certifications in Sec.  1493.250 and its audited 
fiscal year-end financial statements in accordance with the accounting 
standards established by the applicant's regulators, in English, so 
that CCC may determine the continued ability of the Foreign Financial 
Institution to adequately service CCC guaranteed debt. If the Foreign 
Financial Institution is not subject to a banking or other financial 
regulatory authority, it must submit year-end, audited financial 
statements in accordance with prevailing accounting standards, in 
English, for the applicant's most recent fiscal year. Failure to submit 
this

[[Page 34088]]

information annually may cause CCC to decrease or cancel the Foreign 
Financial Institution's dollar participation limit. Any Foreign 
Financial Institution not participating in the FGP for two consecutive 
U.S. Government fiscal years may have its dollar participation limit 
cancelled. If this participation limit is cancelled, the Foreign 
Financial Institution must resubmit the information and certifications 
requested in paragraph (a) of this section to CCC when reapplying for 
participation. Additionally, if at any time the information required by 
paragraph (a) of this section changes, the Foreign Financial 
Institution must promptly contact CCC to update this information and 
certify that the remainder of the information previously provided under 
paragraph (a) of this section has not changed.
    (e) Ineligibility for program participation. A Foreign Financial 
Institution:
    (1) May be deemed ineligible to participate in the FGP if such 
applicant cannot provide all of the information and certifications 
required in Sec.  1493.240(a); and
    (2) Will be deemed ineligible to participate in the FGP if, based 
upon information submitted by the applicant or other publicly available 
sources, CCC determines that the applicant cannot adequately service 
the debt associated with the Payment Guarantees issued by CCC.


Sec.  1493.250  Certifications required for program participation.

    (a) When making the statement required by Sec. Sec.  
1493.220(a)(7), 1493.230(a)(9), or 1493.240(a)(6), each Seller, U.S. 
Financial Institution and Foreign Financial Institution applicant for 
program participation is certifying that, to the best of its knowledge 
and belief:
    (1) The applicant and any of its principals (as defined in 2 CFR 
180.995) or affiliates (as defined in 2 CFR 180.905) are not presently 
debarred, suspended, proposed for debarment, declared ineligible, or 
excluded from covered transactions by any U.S. Federal department or 
agency;
    (2) The applicant and any of its principals (as defined in 2 CFR 
180.995) or affiliates (as defined in 2 CFR 180.905) have not within a 
three-year period preceding this application been convicted of or had a 
civil judgment rendered against them for commission of fraud or a 
criminal offense in connection with obtaining, attempting to obtain, or 
performing a public (Federal, State, or local) transaction or contract 
under a public transaction; violation of Federal or State antitrust 
statutes or commission of embezzlement, theft, forgery, bribery, 
falsification or destruction of records, making false statements, or 
receiving stolen property;
    (3) The applicant and any of its principals (as defined in 2 CFR 
180.995) or affiliates (as defined in 2 CFR 180.905) are not presently 
indicted for or otherwise criminally or civilly charged by a 
governmental entity (Federal, State or local) with commission of any of 
the offenses enumerated in paragraph (a)(2) of this section;
    (4) The applicant and any of its principals (as defined in 2 CFR 
180.995) or affiliates (as defined in 2 CFR 180.905) have not within a 
three-year period preceding this application had one or more public 
transactions (Federal, State or local) terminated for cause or default;
    (5) The applicant does not have any outstanding nontax debt to the 
United States that is in delinquent status as provided in 31 CFR 
285.13;
    (6) The applicant is not controlled by a person owing an 
outstanding nontax debt to the United States that is in delinquent 
status as provided in 31 CFR 285.13 (e.g., a corporation is not 
controlled by an officer, director, or shareholder who owes such a 
debt); and
    (7) The applicant does not control a person owing an outstanding 
nontax debt to the United States that is in delinquent status as 
provided in 31 CFR 285.13 (e.g., a corporation does not control a 
wholly-owned or partially-owned subsidiary which owes such a debt).
    (b) Additional certifications for U.S. and Foreign Financial 
Institution applicants. When making the statement required by Sec.  
1493.230(a)(9) or Sec.  1493.240(a)(6), each U.S. and Foreign Financial 
Institution applicant for program participation is certifying that, to 
the best of its knowledge and belief:
    (1) The applicant and its Principals are in compliance with all 
requirements, restrictions and guidelines as established by the 
applicant's regulators; and
    (2) All U.S. operations of the applicant and its U.S. Principals 
are in compliance with U.S. anti-money laundering and terrorist 
financing statutes including, but not limited to, the USA Patriot Act 
of 2001, and the Foreign Corrupt Practices Act of 1977.


Sec.  1493.260  Application for Payment Guarantee.

    (a) Letter of interest. Prior to submitting an initial application 
for a Payment Guarantee in accordance with paragraph (b) of this 
section, the Seller may, solely at the Seller's option, submit a letter 
of interest to CCC describing a transaction for which FGP coverage may 
be sought. The letter of interest must contain all of the information 
specified on the USDA Web site. A letter of interest fee, which will be 
specified on the USDA Web site, must accompany the letter of interest. 
CCC will review the letter of interest and provide preliminary feedback 
to the Seller on whether the transaction may be eligible for coverage 
under the FGP. However, CCC's determination whether to issue a Payment 
Guarantee will be based on the Seller's applications submitted pursuant 
to paragraphs (b) and (d) of this section.
    (b) Initial application for Payment Guarantee. A Firm Sales 
Contract must exist before a Seller may submit an initial application 
for a Payment Guarantee. An initial application for a Payment Guarantee 
must be submitted in writing to CCC in the manner specified on the USDA 
Web site, and be accompanied by the application fee in accordance with 
Sec.  1493.300(b). Each initial application for a Payment Guarantee 
must also include a completed environmental screening document, which 
can be found on the USDA Web site. An initial application must identify 
the name and address of the Seller and include the following 
information:
    (1) Destination Country.
    (2) The name and address of the Buyer. If the Buyer is not 
physically located in the Destination Country or region, it must have a 
Buyer's Representative in the Destination Country or region taking 
receipt of the goods and Services covered by the Payment Guarantee. If 
applicable, provide the name and address of the Buyer's Representative.
    (3) The name and address of the party on whose request the Letter 
of Credit is issued, if other than the Buyer.
    (4) The name and address of the end-user of the goods or Services, 
if other than the Buyer.
    (5) The Seller's sales number pertinent to the application and a 
copy of the Firm Sales Contract.
    (6) A description (including location, i.e., address, city, port, 
and/or GPS coordinates, if available) of the agriculture-related 
facility that will use the goods and/or Services to be covered by the 
Payment Guarantee and an explanation of how the goods and/or Services 
will be used to improve handling, marketing, processing, storage, or 
distribution of U.S. Agricultural Commodities. If the Payment Guarantee 
covers goods not

[[Page 34089]]

intended for a specific facility, describe where the goods will be 
delivered in the Destination Country.
    (7) List of all agricultural commodities or products (inputs) to be 
handled, marketed, processed, stored, or distributed by the proposed 
project after completion, and an explanation of why and how the 
facility or goods and/or Services will specifically benefit exporters 
of U.S. Agricultural Commodities.
    (8) Total value of the Firm Sales Contract.
    (9) A full description of each good to be covered by the Payment 
Guarantee. The goods specified in the Seller's application for the 
Payment Guarantee must correspond with the description of the goods 
specified in the Firm Sales Contract and the Foreign Financial 
Institution Letter of Credit. The description must include each of the 
following:
    (i) Brand name and model number;
    (ii) Applicable 10-digit Harmonized System classification code;
    (iii) Description of the good;
    (iv) Country where the good was manufactured and from which the 
good will be exported;
    (v) For U.S. goods, the Value of imported Components used in the 
U.S. good's manufacture;
    (vi) For goods that are Local Costs, the name of the local 
supplier;
    (vii) Quantity;
    (viii) Value of the good; and
    (ix) Incoterms (if the sale of the goods is based on Incoterms 
delivery).
    (10) A full description of each U.S. Service to be covered by the 
Payment Guarantee. The U.S. Services specified in the Seller's 
application for the Payment Guarantee must correspond with the 
description of the U.S. Services specified in the Firm Sales Contract 
and the Foreign Financial Institution Letter of Credit. The description 
must include each of the following:
    (i) Description of the U.S. Service;
    (ii) Supplier of the U.S. Service;
    (iii) Cost of the U.S. Service; and
    (iv) NAICS classification number.
    (11) A description and Date of Performance of each Contractual 
Event, as specified in the Firm Sales Contract.
    (12) Indication of whether a Coverage Waiver is requested in 
accordance with Sec.  1493.290(f). If a Coverage Waiver is requested, 
the applicant must indicate the nature of the waiver requested per 
Sec.  1493.290(f)(1) and provide the justification and explanation 
required by Sec.  1493.290(f)(2).
    (13) Name and location of the Foreign Financial Institution issuing 
the Letter of Credit and, upon request by CCC, written evidence that 
the Foreign Financial Institution has agreed to issue the Letter of 
Credit.
    (14) The term length of the credit being extended and the intervals 
between principal payments for each Contractual Event under the Payment 
Guarantee.
    (15) If applicable, a description of any arrangements or 
understandings with other U.S. or foreign government agencies, or with 
financial institutions or entities, private or public, providing 
guarantees or financing to the Seller or other competing sellers in 
connection with this sale, whether or not the goods or Services are of 
U.S. origin or would otherwise qualify for a Payment Guarantee under 
this subpart. Copies of any documents relating to such arrangements 
must be provided.
    (16) A statement of how this project may encourage privatization of 
the agricultural sector, or benefit private farms or cooperatives, in 
the Destination Country. Include in the statement the share of any 
private sector ownership of the project.
    (17) An estimate of how many U.S. Persons will be or have been 
hired because of the Firm Sales Contract and/or how many U.S Persons 
are required to fulfill the Firm Sales Contract.
    (18) FGP tracking number assigned to previously submitted letter of 
interest, if applicable.
    (c) Review of initial application.
    (1) An initial application may receive conditional approval from 
CCC as submitted, be conditionally approved with modifications agreed 
to by the Seller, or be rejected by CCC. CCC's review will include, but 
not be limited to, the following criteria:
    (i) CCC will only consider an initial application in connection 
with a transaction that CCC determines will benefit primarily exports 
of U.S. Agricultural Commodities.
    (ii) If, based upon a price review, the unit sales price of any 
good(s) and/or Service(s) does not fall within the prevailing 
commercial market level ranges, as determined by CCC, the initial 
application will not be approved as submitted.
    (iii) All initial applications submitted will be screened to 
determine their potential environmental and social impacts. Any 
application determined to have potentially significant adverse 
environmental and/or social impacts will be subject to an environmental 
and social review consistent with the provisions of the OECD Common 
Approaches for Officially Supported Export Credits and Environmental 
and Social Due Diligence. CCC may reject an initial application for 
Payment Guarantee based on the results of this environmental and social 
review.
    (2) Once CCC indicates its approval of the initial application to 
the Seller, the Seller must submit a final application as specified in 
paragraph (d) of this section before CCC will make a final 
determination of whether to issue a Payment Guarantee.
    (d) Final application for Payment Guarantee. CCC must receive the 
Seller's final application for a Payment Guarantee within 30 calendar 
days of CCC's approval of the initial application, unless a longer 
timeframe is agreed to by CCC in writing. The final application for 
Payment Guarantee must be submitted in writing to CCC in the manner 
specified on the USDA Web site, and be accompanied by the full 
guarantee fee (less the letter of interest fee, if applicable, and the 
initial application fee). The final application must identify the name 
and address of the Seller and include the following information:
    (1) FGP tracking number assigned by CCC.
    (2) Destination country.
    (3) The name and address of the Buyer.
    (4) A description of each good and U.S. Service, along with the 
Value of the Good and Cost of the Service, for which guarantee coverage 
is requested, based on CCC's feedback on the Seller's initial 
application. If CCC approved a coverage waiver to provide guarantee 
coverage of only the U.S. components used in the assembly of U.S. 
Goods, provide the Value of the U.S. Components.
    (5) Net Contract Value.
    (6) Amount of the Initial Payment and evidence that the Initial 
Payment has been made by the Buyer to the Seller.
    (7) Description and value of any discounts and allowances.
    (8) Guaranteed Value.
    (9) Guarantee fee.
    (10) The Seller's statement, ``All certifications set forth in 
Sec.  1493.270 are hereby being made by the Seller in this 
application'' which, when included in the application by the Seller, 
will constitute a certification that it is in compliance with all the 
requirements set forth in Sec.  1493.270 with respect to both the 
initial and final applications.
    (e) A final application for a Payment Guarantee may be approved as 
submitted, approved with modifications agreed to by the Seller, or 
rejected by CCC. CCC shall have the right to request the Seller to 
furnish any other information and documentation it deems pertinent to 
the evaluation of the Seller's application. In the event that the final 
application is approved, the Director will cause a Payment Guarantee

[[Page 34090]]

to be issued in favor of the Seller. Such Payment Guarantee will become 
effective at the time specified in Sec.  1493.290(b).


Sec.  1493.270  Certification requirements for obtaining Payment 
Guarantee.

    By providing the statement in Sec.  1493.260(d)(10), the Seller is 
certifying that the information provided in the initial and final 
applications is true and correct and, further, that all requirements 
set forth in this section have been met. The Seller will be required to 
provide further explanation or documentation with regard to final 
applications that do not include this statement. If the Seller makes 
false certifications with respect to a Payment Guarantee, CCC will have 
the right, in addition to any other rights provided under this subpart 
or otherwise as a matter of law, to revoke guarantee coverage for any 
goods not yet exported and Services not yet performed and/or to 
commence legal action and/or administrative proceedings against the 
Seller. The Seller, in submitting an application for a Payment 
Guarantee and providing the statement set forth in Sec.  
1493.260(d)(10), certifies that:
    (a) There have not been any corrupt payments or extra sales 
services or other items extraneous to the transaction provided, 
financed, or guaranteed in connection with the transaction, and the 
transaction complies with applicable United States law, including the 
Foreign Corrupt Practices Act of 1977 and other anti-bribery measures;
    (b) At the time of submission of the final application for Payment 
Guarantee, the Buyer does not appear as an excluded party on the SAM 
list;
    (c) The Seller is fully in compliance with the requirements of 
Sec.  1493.320(b) for all existing Payment Guarantees issued to the 
Seller or has requested and been granted an extension per Sec.  
1493.320(b)(3); and
    (d) The information provided pursuant to Sec.  1493.220 has not 
changed and the Seller still meets all of the qualification 
requirements of Sec.  1493.220.


Sec.  1493.280  Special requirements of the Foreign Financial 
Institution Letter of Credit and the Terms and Conditions Document, if 
applicable.

    (a) Permitted mechanisms to document special requirements. (1) A 
Foreign Financial Institution Letter of Credit is required in 
connection with the sale to which CCC's Payment Guarantee pertains.
    (i) If the obligation to pay by the Foreign Financial Institution 
is conditioned on shipment documentation, the Letter of Credit must 
stipulate presentation of at least one original clean on board bill of 
lading as a required document, unless:
    (A) The Seller, or a related company previously reported to CCC by 
the Seller pursuant to 1493.220(a)(5), is named as the shipper on the 
clean, on-board bill of lading. If the Seller or a related company is 
named the shipper on the bill of lading, the Letter of Credit may 
stipulate a copy or photocopy of an original, clean, on-board bill of 
lading; or
    (B) The Letter of Credit stipulates presentation of electronic 
documents per paragraph (a)(ii) of this section.
    (ii) If the Letter of Credit will allow for presentation of 
electronic documents, the Letter of Credit must so stipulate.
    (iii) If the obligation to pay by the Foreign Financial Institution 
is conditioned on a Contractual Event requiring other than shipment 
documentation, the Contractual Event must be clearly stipulated in 
either the Letter of Credit or the Terms and Conditions Document.
    (2) The use of a Terms and Conditions Document is optional. The 
Terms and Conditions Document, if any, must be specifically identified 
and referred to in the Foreign Financial Institution Letter of Credit.
    (3) The special requirements in paragraph (b) of this section must 
be documented in one of the two following ways:
    (i) The special requirements may be set forth in the Foreign 
Financial Institution Letter of Credit as a special instruction from 
the Foreign Financial Institution; or
    (ii) The special requirements may be set forth in a separate Terms 
and Conditions Document.
    (b) Special requirements. The following provisions are required and 
must be documented in accordance with paragraph (a) of this section:
    (1) The terms of the Repayment Obligation, including a specific 
promise by the Foreign Financial Institution issuing the Letter of 
Credit to pay the Repayment Obligation;
    (2) The following language: ``In the event that the Commodity 
Credit Corporation (``CCC'') is subrogated to the position of the 
obligee hereunder, this instrument shall be governed by and construed 
in accordance with the laws of the State of New York, excluding its 
conflict of laws principles. In such case, any legal action or 
proceeding arising under this instrument will be brought exclusively in 
the U.S. District Court for the Southern District of New York or the 
U.S. District Court for the District of Columbia, as determined by CCC, 
and such parties hereby irrevocably consent to the personal 
jurisdiction and venue therein.'';
    (3) A provision permitting the Holder of the Payment Guarantee to 
declare all or any part of the Repayment Obligation, including accrued 
interest, immediately due and payable, in the event a payment default 
occurs under the Letter of Credit or, if applicable, the Terms and 
Conditions Document; and
    (4) Post Default Interest terms.


Sec.  1493.290  Terms and requirements of the Payment Guarantee.

    (a) CCC's obligation. The Payment Guarantee will provide that CCC 
agrees to pay the Holder of the Payment Guarantee an amount not to 
exceed the Guaranteed Value, plus Eligible Interest, in the event that 
the Foreign Financial Institution fails to pay under the Foreign 
Financial Institution Letter of Credit and, if applicable, the Terms 
and Conditions Document. Payment by CCC will be in U.S. dollars.
    (b) Period of guarantee coverage. The Payment Guarantee becomes 
effective on the Date(s) of Performance. For goods, the period of 
coverage will apply from the date on which interest begins to accrue, 
if earlier than the Date of Performance. The Payment Guarantee will 
apply to the period beginning with the Date(s) of Performance and will 
continue during the credit term specified in the Payment Guarantee or 
amendments thereto.
    (c) Terms of the CCC Payment Guarantee. The terms of CCC's coverage 
will be set forth in the Payment Guarantee, as approved by CCC, and 
will include the provisions of this subpart, which may be supplemented 
by any Program Announcements and notices to participants in effect at 
the time the Payment Guarantee is approved by CCC.
    (d) Final Date of Performance. The final allowable Date of 
Performance will be specified on the Payment Guarantee.
    (e) U.S. Content Test. Except as allowed under Sec.  1493.290(f), 
CCC will issue a Payment Guarantee only if the following items 
collectively represent less than 50 percent of the sum of the Net 
Contract Value and the value of approved Local Costs:
    (1) The value of Eligible Non-U.S. Goods; and
    (2) The value of Eligible Imported Components.
    (f) Coverage Waiver.
    (1) The Seller may request a Coverage Waiver for any of the 
following:
    (i) To allow for guarantee coverage of non-U.S. Goods;

[[Page 34091]]

    (ii) The U.S. Content Test, electing for guarantee coverage of only 
the U.S. components used in the assembly of U.S. Goods; and/or
    (iii) The U.S. Content Test, allowing for guarantee coverage of 
non-U.S. Goods and imported components in U.S. Goods in excess of the 
value permitted under the U.S. Content Test.
    (2) To request a Coverage Waiver on any of the bases specified in 
paragraph (1) of this sub-section, the Seller must submit with the 
initial application for a Payment Guarantee a justification of why the 
non-U.S. Goods and/or imported components in U.S. Goods are essential 
to the completion of the FGP project. This justification must be based 
on one of the following:
    (i) The goods and/or components are no longer manufactured in or 
provided by the United States;
    (ii) The use of U.S. Goods and/or components is not cost effective; 
or
    (iii) U.S. Goods and/or components are not compatible with the 
existing infrastructure in the Destination Country.
    (g) Certain transactions are ineligible for Payment Guarantees. A 
transaction (or any portion thereof) is ineligible for Payment 
Guarantee coverage if at any time CCC determines that:
    (1) The sale includes corrupt payments or extra sales or services 
or other items extraneous to the transactions provided, financed, or 
guaranteed in connection with the transaction;
    (2) The sale does not comply with applicable U.S. law, including 
the Foreign Corrupt Practices Act of 1977 and other anti-bribery 
measures;
    (3) The Buyer is excluded or disqualified from participation in 
U.S. government programs;
    (4) The goods, Services, and/or facility being financed will not 
primarily benefit U.S. Agricultural Commodity exports;
    (5) The sale is not an Eligible Export Sale.
    (h) Certain Contractual Events are ineligible for Payment Guarantee 
coverage. The following Contractual Events are ineligible for coverage 
under an FGP Payment Guarantee, except where it is determined by the 
Director to be in the best interest of CCC to provide guarantee 
coverage on such Contractual Events:
    (1) Contractual Events with a Date of Performance prior to the date 
of receipt by CCC of the Seller's written application for a Payment 
Guarantee;
    (2) Contractual Events with a Date of Performance later than the 
final Date of Performance shown on the Payment Guarantee or any 
amendments thereof;
    (3) Contractual Events where the date of issuance of a Foreign 
Financial Institution Letter of Credit is later than the Date of 
Performance; or
    (4) Contractual Events that have been guaranteed by CCC under 
another Payment Guarantee. If CCC determines that the Contractual Event 
has been guaranteed under multiple Payment Guarantees (or coverage has 
been requested under multiple Payment Guarantees), CCC will determine 
which Payment Guarantee (or application for Payment Guarantee), if any, 
corresponds to an Eligible Export Sale.
    (i) Additional requirements. The Payment Guarantee may contain such 
additional terms, conditions, and limitations as deemed necessary or 
desirable by the Director. Such additional terms, conditions or 
qualifications as stated in the Payment Guarantee are binding on the 
Seller and the Assignee.
    (j) Amendments to the Firm Sales Contract. Any amendments to the 
Firm Sales Contract that impact Contractual Event(s) covered by the 
Payment Guarantee must be submitted to CCC for approval for coverage 
prior to the Date of Performance of the Contractual Event.
    (k) Amendments to the Payment Guarantee. A request for an amendment 
of a Payment Guarantee may be submitted only by the Seller, with the 
written concurrence of the Assignee, if any, and must be accompanied by 
the revised Firm Sales Contract, if applicable. The Director will 
consider such a request only if the amendment sought is consistent with 
this subpart and any applicable Program Announcements and sufficient 
budget authority exists. Any amendment to the Payment Guarantee, 
particularly those that result in an increase in CCC's liability under 
the Payment Guarantee, may result in an increase in the guarantee fee. 
CCC reserves the right to request additional information from the 
Seller to justify the request and to charge a fee for amendments. Such 
fees will be announced and available on the USDA Web site. Any request 
to amend the Foreign Financial Institution on the Payment Guarantee 
will require that the Holder of the Payment Guarantee resubmit to CCC 
the certification in Sec.  1493.310(c)(1)(i) or Sec.  1493.330(e).


Sec.  1493.300  Fees.

    (a) Letter of interest fee. A letter of interest fee, as specified 
on the USDA Web site, must be received by CCC before CCC will consider 
the Seller's letter of interest.
    (b) Initial application fee. An initial application fee, as 
specified on the USDA Web site, must be received by CCC before CCC will 
consider the Seller's initial application for a Payment Guarantee.
    (c) Guarantee fee rates. Guarantee fee rates will be based upon the 
length of the payment terms provided for in the Firm Sales Contract, 
the degree of risk that CCC assumes, as determined by CCC, and any 
other factors that CCC determines appropriate for consideration.
    (d) Calculation of guarantee fee. The guarantee fee will be 
computed by multiplying the Guaranteed Value by the guarantee fee rate.
    (e) Payment of guarantee fee. The Seller shall remit, with his 
final application, the full amount of the guarantee fee, less the 
letter of interest fee, if applicable, and the initial application fee. 
CCC will not issue a Payment Guarantee until the full amount of the 
guarantee fee has been received by CCC. The Seller's wire transfer or 
check for the guarantee fee shall be made payable to CCC and be 
submitted in the manner specified on the USDA Web site.
    (f) Refunds of fees. Letter of interest fees, initial application 
fees, and guarantee fees will ordinarily not be refundable unless the 
Director determines that such refund will be in the best interest of 
CCC.


Sec.  1493.310  Assignment of the Payment Guarantee.

    (a) Requirements for assignment. The Seller may assign the Payment 
Guarantee only to a U.S. Financial Institution approved for 
participation by CCC. The assignment must cover all amounts payable 
under the Payment Guarantee not already paid, may not be made to more 
than one party, and, unless approved in advance by CCC, may not be:
    (1) Made to one party acting for two or more parties; or
    (2) Subject to further assignment.
    (b) CCC to receive notice of assignment of Payment Guarantee. A 
notice of assignment signed by the parties thereto must be filed with 
CCC by the Assignee in the manner specified on the USDA Web site. The 
name and address of the Assignee must be included on the written notice 
of assignment. The notice of assignment should be received by CCC 
within 30 calendar days of the date of assignment.
    (c) Required certifications.
    (1) The U.S. Financial Institution must include the following 
certifications on the notice of assignment: ``I certify, that:
    (i) [Name of Assignee] has verified that the Foreign Financial 
Institution, at the time of submission of the notice of

[[Page 34092]]

assignment, does not appear as an excluded party on the SAM list; and
    (ii) To the best of my knowledge and belief, the information 
provided pursuant to Sec.  1493.230 has not changed and [name of 
Assignee] still meets all of the qualification requirements of Sec.  
1493.230.''
    (2) If the Assignee makes a false certification with respect to a 
Payment Guarantee, CCC may, in its sole discretion, in addition to any 
other action available as a matter of law, rescind and cancel the 
Payment Guarantee, reject the assignment of the Payment Guarantee, and/
or commence legal action and/or administrative proceedings against the 
Assignee.
    (d) Notice of ineligibility to receive assignment. In cases where a 
U.S. Financial Institution is determined to be ineligible to receive an 
assignment, in accordance with paragraph (e) of this section, CCC will 
provide notice thereof to the U.S. Financial Institution and to the 
Seller issued the Payment Guarantee.
    (e) Ineligibility of U.S. Financial Institutions to receive an 
assignment and proceeds. A U.S. Financial Institution will be 
ineligible to receive an assignment of a Payment Guarantee or the 
proceeds payable under a Payment Guarantee if such U.S. Financial 
Institution:
    (1) At the time of assignment of a Payment Guarantee, is not in 
compliance with all requirements of Sec.  1493.230(a); or
    (2) Is the branch, agency, or subsidiary of the Foreign Financial 
Institution issuing the Letter of Credit; or
    (3) Is owned or controlled by an entity that owns or controls the 
Foreign Financial Institution issuing the Letter of Credit; or
    (4) Is the U.S. parent of the Foreign Financial Institution issuing 
the Foreign Financial Institution Letter of Credit; or
    (5) Is owned or controlled by the government of a foreign country 
and the Payment Guarantee has been issued in connection with sales of 
goods or Services to Buyers located in such foreign country.
    (f) Repurchase agreements.
    (1) The Holder of the Payment Guarantee may enter into a Repurchase 
Agreement, to which the following requirements apply:
    (i) Any repurchase under a Repurchase Agreement by the Holder of 
the Payment Guarantee must be for the entirety of outstanding balance 
under the associated Repayment Obligation;
    (ii) In the event of default with respect to the Repayment 
Obligation subject to a Repurchase Agreement, the Holder of the Payment 
Guarantee must immediately effect such repurchase; and
    (iii) The Holder of the Payment Guarantee must file all 
documentation required by Sec. Sec.  1493.350 and 1493.360 in case of a 
default by the Foreign Financial Institution under the Payment 
Guarantee.
    (2) The Holder of the Payment Guarantee shall, within five Business 
Days of execution of a transaction under the Repurchase Agreement, 
notify CCC of the transaction in writing in the manner specified on the 
USDA Web site. Such notification must include the following 
information:
    (i) Name and address of the other party to the Repurchase 
Agreement;
    (ii) A statement indicating whether the transaction executed under 
the Repurchase Agreement is for a fixed term or if it is terminable 
upon demand by either party. If fixed, provide the purchase date and 
the agreed upon date for repurchase. If terminable on demand, provide 
the purchase date only; and
    (iii) The following written certification: ``[Name of Holder of the 
Payment Guarantee] has entered into a Repurchase Agreement that meets 
the provisions of 7 CFR Sec.  1493.310(f)(1) and, prior to entering 
into this agreement, verified that [name of other party to the 
Repurchase Agreement] does not appear as an excluded party on the SAM 
list.''
    (3) Failure of the Holder of the Payment Guarantee to comply with 
any of the provisions of Sec.  1493.310(f) may result in CCC annulling 
coverage on the Foreign Financial Institution Letter of Credit and 
Terms and Condition Document, if applicable, covered by the Payment 
Guarantee.


Sec.  1493.320  Evidence of performance.

    (a) Report of performance. The Seller is required to provide CCC an 
evidence of performance report for each Contractual Event occurring 
under the Payment Guarantee. This report must include the following 
information:
    (1) Payment Guarantee number;
    (2) Evidence of performance report number (e.g., Report 1, Report 
2) reflecting the report's chronological order of submission under the 
particular Payment Guarantee;
    (3) Date of Performance;
    (4) Seller's Firm Sales Contract number;
    (5) Detailed description of the Contractual Event. For goods, 
include the applicable 10-digit Harmonized System classification code 
and the quantity;
    (6) Value of the Contractual Event covered by the Payment 
Guarantee;
    (7) Description and value of Discounts and Allowances, if any;
    (8) The Seller's statement, ``All certifications set forth in Sec.  
1493.330 are hereby made by the Seller in this evidence of 
performance'' which, when included in the evidence of performance by 
the Seller, will constitute a certification that it is in compliance 
with all the requirements set forth in Sec.  1493.330; and
    (9) In addition to all of the above information, the final evidence 
of performance report for the Payment Guarantee must include the 
following:
    (i) The statement ``All Contractual Events under the Payment 
Guarantee have been completed.''
    (ii) A statement summarizing the total value of all Contractual 
Events covered under the Payment Guarantee (i.e., the cumulative totals 
on all numbered reports).
    (b) Time limit for submission of evidence of performance.
    (1) The Seller must provide a written report to CCC in the manner 
specified on the USDA Web site within 30 calendar days from the Date of 
Performance.
    (2) If at any time the Seller determines that no Contractual Events 
are to occur under a Payment Guarantee, the Seller is required to 
notify CCC in writing no later than the final Date of Performance 
specified on the Payment Guarantee by furnishing the Payment Guarantee 
number and stating ``No Contractual Events will occur under the Payment 
Guarantee.''
    (3) Requests for an extension of the time limit for submitting an 
evidence of performance report must be submitted in writing by the 
Seller to the Director and must include an explanation of why the 
extension is needed. An extension of the time limit may be granted if 
such extension is requested prior to the expiration of the time limit 
for filing and is determined by the Director to be in the best 
interests of CCC.
    (c) Failure to comply with time limits for submission. CCC will not 
accept any new applications for Payment Guarantees from a Seller under 
Sec.  1493.260 until the Seller is fully in compliance with the 
requirements of Sec.  1493.320(b) for all existing Payment Guarantees 
issued to that Seller or has requested and been granted an extension in 
accordance with Sec.  1493.320(b)(3).


Sec.  1493.330  Certification requirements for the evidence of 
performance.

    By providing the statement contained in Sec.  1493.320(a)(8), the 
Seller is certifying that the information provided in the evidence of 
performance report is

[[Page 34093]]

true and correct and, further, that all requirements set forth in this 
section have been met. The Seller will be required to provide further 
explanation or documentation with regard to reports that do not include 
this statement. If the Seller makes false certifications with respect 
to a Payment Guarantee, CCC will have the right, in addition to any 
other rights provided under this subpart or otherwise as a matter of 
law, to annul guarantee coverage for any Contractual Events that have 
not yet occurred and/or to commence legal action and/or administrative 
proceedings against the Seller. The Seller, in submitting the evidence 
of performance and providing the statement set forth in Sec.  
1493.230(a)(8), certifies that:
    (a) The specifications and/or quantity of the Contractual Event 
conform with the information contained in the Seller's application for 
Payment Guarantee and Firm Sales Contract, or if different, CCC has 
approved such changes;
    (b) A Foreign Financial Institution Letter of Credit has been 
opened in favor of the Seller by the Foreign Financial Institution 
shown on the Payment Guarantee to cover the dollar amount of the 
Contractual Event covered by the Payment Guarantee, less the Initial 
Payment and less Discounts and Allowances;
    (c) There have not been any corrupt payments or extra sales 
services or other items extraneous to the transaction provided, 
financed, or guaranteed in connection with the transaction, and that 
the transaction complies with applicable United States law, including 
the Foreign Corrupt Practices Act of 1977 and other anti-bribery 
measures;
    (d) If the Seller has not assigned the Payment Guarantee to a U.S. 
Financial Institution, the Seller has verified that the Foreign 
Financial Institution, at the time of submission of the evidence of 
performance report, does not appear as an excluded party on the SAM 
list; and
    (e) The information provided pursuant to Sec. Sec.  1493.220 and 
1493.260 has not changed (except as agreed to and amended by CCC) and 
the Seller still meets all of the qualification requirements of Sec.  
1493.220.


Sec.  1493.340  Proof of entry.

    (a) Diversion. The diversion of goods covered by an FGP Payment 
Guarantee to a country other than that shown on the Payment Guarantee 
is prohibited, unless expressly authorized in writing by the Director.
    (b) Records of proof of entry.
    (1) Sellers must obtain and maintain records of an official or 
customary commercial nature that demonstrate the arrival of the goods 
sold in connection with the FGP in the Destination Country. At the 
Director's request, the Seller must submit to CCC records demonstrating 
proof of entry. Records demonstrating proof of entry must be in English 
or be accompanied by a certified or other translation acceptable to 
CCC. Records acceptable to meet this requirement include an original 
certification of entry signed by a duly authorized customs or port 
official of the Destination Country, by an agent or representative of 
the vessel or shipline that delivered the goods to the Destination 
Country, or by a private surveyor in the Destination Country, or other 
documentation deemed acceptable by the Director showing:
    (i) That the good(s) entered the Destination Country;
    (ii) The identification of the export carrier;
    (iii) The quantity of the good(s);
    (iv) A description of the good(s); and
    (v) The date(s) and place(s) of unloading of the good(s) in the 
Destination Country.
    (2) Where shipping documents (e.g., bills of lading) clearly 
demonstrate that the goods were shipped to the Destination Country, 
proof of entry verification may be provided by the Buyer.


Sec.  1493.350  Notice of default.

    (a) Notice of default. If the Foreign Financial Institution issuing 
the Letter of Credit fails to make payment pursuant to the terms of the 
Letter of Credit or the Terms and Conditions Document, the Holder of 
the Payment Guarantee must submit a notice of default to CCC as soon as 
possible, but not later than 5 Business Days after the date that 
payment was due from the Foreign Financial Institution (the due date). 
A notice of default must be submitted in writing to CCC in the manner 
specified on the USDA Web site and must include the following 
information:
    (1) Payment Guarantee number;
    (2) Name of the country or region as shown on the Payment 
Guarantee;
    (3) Name of the defaulting Foreign Financial Institution;
    (4) Payment due date;
    (5) Total amount of the defaulted payment due, indicating 
separately the amounts for principal and Ordinary Interest, and 
including a copy of the repayment schedule with due dates, principal 
amounts and Ordinary Interest rates for each installment;
    (6) Date of Foreign Financial Institution's refusal to pay, if 
applicable;
    (7) Reason for Foreign Financial Institution's refusal to pay, if 
known, and copies of any correspondence with the Foreign Financial 
Institution regarding the default.
    (b) Failure to comply with time limit for submission. If the Holder 
of the Payment Guarantee fails to notify CCC of a default within 5 
Business Days, CCC may deny the claim for that default.
    (c) Impact of a default on other existing Payment Guarantees.
    (1) In the event that a Foreign Financial Institution defaults 
under a Repayment Obligation under this subpart or under 7 CFR 1493, 
subpart B, CCC may declare that such Foreign Financial Institution is 
no longer eligible to provide additional Letters of Credit under the 
FGP. If CCC determines that such defaulting Foreign Financial 
Institution is no longer eligible for the FGP, CCC shall provide 
written notice of such ineligibility to all Sellers and Assignees, if 
any, having Payment Guarantees covering transactions with respect to 
which the defaulting Foreign Financial Institution is expected to issue 
a Letter of Credit. Receipt of written notice from CCC that a 
defaulting Foreign Financial Institution is no longer eligible to 
provide additional Letters of Credit under the FGP shall constitute 
withdrawal of coverage of that Foreign Financial Institution under all 
Payment Guarantees with respect to any Letter of Credit issued on or 
after the date of receipt of such written notice. CCC will not withdraw 
coverage of the defaulting Foreign Financial Institution under any 
Payment Guarantee with respect to any Letter of Credit issued before 
the date of receipt of such written notice.
    (2) If CCC withdraws coverage of the defaulting Foreign Financial 
Institution, CCC will permit the Seller (with concurrence of the 
Assignee, if any) to utilize another approved Foreign Financial 
Institution, and will consider other requested amendments to the 
Payment Guarantee, for the balance of the transaction covered by the 
Payment Guarantee. If no alternate Foreign Financial Institution is 
identified to issue the Letter of Credit within 30 calendar days, CCC 
will cancel the Payment Guarantee and refund the Seller's guarantee 
fees corresponding to any unutilized portion of the Payment Guarantee.


Sec.  1493.360  Claims for default.

    (a) Filing a claim. A claim by the Holder of the Payment Guarantee 
for a defaulted payment will not be paid if it is made later than 180 
calendar days from the due date of the defaulted payment. A claim must 
be submitted in writing to CCC in the manner specified on the USDA Web 
site. The claim must

[[Page 34094]]

include the following documents and information:
    (1) An original cover letter signed by the Holder of the Payment 
Guarantee and containing the following information:
    (i) Payment Guarantee number;
    (ii) A description of:
    (A) Any payments from or on behalf of the defaulting party or 
otherwise related to the defaulted payment that were received by the 
Seller or the Assignee prior to submission of the claim; and
    (B) Any security, insurance, or collateral arrangements, whether or 
not any payment has been realized from such security, insurance, or 
collateral arrangement as of the time of claim, from or on behalf of 
the defaulting party or otherwise related to the defaulted payment.
    (iii) The following certifications:
    (A) A certification that the defaulted payment has not been 
received (or, alternatively, specifying the portion of the scheduled 
payment that has not been received), listing separately scheduled 
principal and Ordinary Interest;
    (B) A certification of the amount of the defaulted payment, 
indicating separately the amounts for defaulted principal and Ordinary 
Interest;
    (C) A certification that all documents submitted under paragraph 
(a)(3) of this section are true and correct copies; and
    (D) A certification that all documents conforming with the 
requirements for payment under the Foreign Financial Institution Letter 
of Credit have been submitted to the negotiating bank or directly to 
the Foreign Financial Institution under such Letter of Credit.
    (2) An original instrument, in form and substance satisfactory to 
CCC, subrogating to CCC the respective rights of the Holder of the 
Payment Guarantee to the amount of payment in default under the 
applicable sale. The instrument must reference the applicable Foreign 
Financial Institution Letter of Credit and, if applicable, the Terms 
and Conditions Document; and
    (3) A copy of each of the following documents:
    (i) The repayment schedule with due dates, principal amounts and 
Ordinary Interest rates for each installment (if the Ordinary Interest 
rates for future payments are unknown at the time of the claim for 
default is submitted, provide estimates of such rates);
    (ii) (A) The Foreign Financial Institution Letter of Credit 
securing the sale; and
    (B) If applicable, the Terms and Conditions Document;
    (iii) For goods, depending upon the method of shipment, the ocean 
carrier or intermodal bill(s) of lading signed by the shipping company 
with the onboard ocean carrier date for each shipment, the airway bill, 
or, if shipped by rail or truck, the bill of lading and the entry 
certificate or similar document signed by an official of the 
Destination Country. If the transaction utilizes electronic bill(s) of 
lading (e-BL), a print-out of the e-BL from electronic system with an 
electronic signature is acceptable;
    (iv) The Seller's invoice. For shipment of goods, the invoice must 
show the applicable Incoterms;
    (v) The evidence of performance report(s) previously submitted by 
the Seller to CCC in conformity with the requirements of Sec.  
1493.320(a); and
    (vi) If the defaulted payment was part of a transaction executed 
under a Repurchase Agreement, written evidence that the repurchase 
occurred as required under Sec.  1493.310(f)(1)(ii).
    (b) Additional documents. If a claim is denied by CCC, the Holder 
of the Payment Guarantee may provide further documentation to CCC to 
establish that the claim is in good order.
    (c) Subsequent claims for defaults on installments. If the initial 
claim is found in good order, the Holder of the Payment Guarantee need 
only provide all of the required claims documents with the initial 
claim relating to a covered transaction. For subsequent claims relating 
to failure of the Foreign Financial Institution to make scheduled 
installments on the same Contractual Event, the Holder of the Payment 
Guarantee need only submit to CCC a notice of such failure containing 
the information stated in paragraph (a)(1)(i), (a)(1)(ii), and 
(a)(1)(iii)(A) and (B) of this section; an instrument of subrogation as 
per paragraph (a)(2) of this section, and the date the original claim 
was filed with CCC.
    (d) Alternative satisfaction of Payment Guarantees. CCC may 
establish procedures, terms and/or conditions for the satisfaction of 
CCC's obligations under a Payment Guarantee other than those provided 
for in this subpart if CCC determines that those alternative 
procedures, terms, and/or conditions are appropriate in rescheduling 
the debts arising out of any transaction covered by the Payment 
Guarantee and would not result in CCC paying more than the amount of 
CCC's obligation.


Sec.  1493.370  Payment for default.

    (a) Determination of CCC's liability. Upon receipt in good order of 
the information and documents required under Sec.  1493.360, CCC will 
determine whether or not a default has occurred for which CCC is liable 
under the applicable Payment Guarantee. Such determination shall 
include, but not be limited to, CCC's determination that all 
documentation conforms to the specific requirements contained in this 
subpart, and that all documents submitted for payment conform to the 
requirements of the Letter of Credit and, if applicable, the Terms and 
Conditions Document. If CCC determines that it is liable to the Holder 
of the Payment Guarantee, CCC will pay the Holder of the Payment 
Guarantee in accordance with paragraphs (b) and (c) of this section.
    (b) Amount of CCC's liability. CCC's maximum liability for any 
claims submitted with respect to any Payment Guarantee, not including 
any CCC Late Interest Payments due in accordance with paragraph (c) of 
this section, will be limited to the lesser of:
    (1) The Guaranteed Value as stated in the Payment Guarantee, plus 
Eligible Interest, less any payments received or funds realized from 
insurance, security or collateral arrangements prior to claim by the 
Seller or the Assignee from or on behalf of the defaulting party or 
otherwise related to the obligation in default (other than payments 
between CCC, the Seller or the Assignee); or
    (2) The guaranteed percentage (as indicated in the Payment 
Guarantee) of the value of the Contractual Event indicated in the 
evidence of performance, plus Eligible Interest, less any payments 
received or funds realized from insurance, security or collateral 
arrangements prior to claim by the Seller or the Assignee from or on 
behalf of the defaulting party or otherwise related to the obligation 
in default (other than payments between CCC, the Seller or the 
Assignee).
    (c) CCC Late Interest. If CCC does not pay a claim within 15 
Business Days of receiving the claim in good order, CCC Late Interest 
will accrue in favor of the Holder of the Payment Guarantee beginning 
with the sixteenth Business Day after the day of receipt of a complete 
and valid claim found by CCC to be in good order and continuing until 
and including the date that payment is made by CCC. CCC Late Interest 
will be paid on the guaranteed amount, as determined by paragraph (b) 
of this section, and will be calculated at a rate equal to the average 
investment rate of the most recent Treasury 91-day bill auction as 
announced by the Department of Treasury as of the due date. If there 
has been no 91-day auction within 90 calendar days of the date CCC Late 
Interest begins to accrue, CCC will apply an alternative rate in a 
manner to be described on the USDA Web site.
    (d) Accelerated payments. CCC will pay claims only on amounts not 
paid as

[[Page 34095]]

scheduled. CCC will not pay claims for amounts due as a result of the 
claimant invoking an accelerated payment clause in the Firm Sales 
Contract, the Foreign Financial Institution Letter of Credit, the Terms 
and Conditions Document (if applicable), or any obligation owed by the 
Foreign Financial Institution to the Holder of the Payment Guarantee 
that is related to the Letter of Credit issued in favor of the Seller, 
unless it is determined to be in the best interests of CCC. 
Notwithstanding the foregoing, CCC at its option may declare up to the 
entire amount of the unpaid balance, plus accrued Ordinary Interest, in 
default, require the Holder of the Payment Guarantee to invoke the 
acceleration provision in the Foreign Financial Institution Letter of 
Credit or, if applicable, in the Terms and Conditions Document, require 
submission of all claims documents specified in Sec.  1493.360, and 
make payment to the Holder of the Payment Guarantee in addition to such 
other claimed amount as may be due from CCC.
    (e) Action against the Assignee. If an Assignee submits a claim for 
default pursuant to Section Sec.  1493.360 and all documents submitted 
appear on their face to conform with the requirements of such section, 
CCC will not hold the Assignee responsible or take any action or raise 
any defense against the Assignee for any action, omission, or statement 
by the Seller of which the Assignee has no knowledge.


Sec.  1493.380  Recovery of defaulted payments.

    (a) Notification. Upon claim payment to the Holder of the Payment 
Guarantee, CCC will notify the Foreign Financial Institution of CCC's 
rights under the subrogation agreement to recover all monies in 
default.
    (b) Receipt of monies.
    (1) In the event that monies related to the obligation in default 
are recovered by the Seller or the Assignee from or on behalf of the 
defaulting party, the Buyer, or any source whatsoever (excluding 
payments between CCC, the Seller and the Assignee), such monies shall 
be immediately paid to CCC. Any monies derived from insurance or 
through the liquidation of any security or collateral after the claim 
is filed with CCC shall be deemed recoveries that must be paid by the 
Seller and/or Assignee to CCC. If such monies are not received by CCC 
within 15 Business Days from the date of recovery by the Seller or the 
Assignee, such party will also owe to CCC interest from the date of 
recovery of such funds to the date of CCC's receipt of such funds. This 
interest will be calculated at a rate equal to the latest average 
investment rate of the most recent Treasury 91-day bill auction, as 
announced by the Department of Treasury, in effect on the date of 
recovery and will accrue from such date to the date of payment by the 
Seller or the Assignee to CCC. Such interest will be charged only on 
CCC's share of the recovery. If there has been no 91-day auction within 
90 calendar days of the date interest begins to accrue, CCC will apply 
an alternative rate in a manner to be described on the USDA Web site.
    (2) If CCC recovers monies that should be applied to a Payment 
Guarantee for which a claim has been paid by CCC, CCC will pay the 
Holder of the Payment Guarantee its pro rata share if any, provided 
that the required information necessary for determining pro rata 
distribution has been furnished. If a required payment is not made by 
CCC within 15 Business Days from the date of recovery or 15 Business 
Days from receiving the required information for determining pro rata 
distribution, whichever is later, CCC will pay interest calculated at a 
rate equal to the latest average investment rate of the most recent 
Treasury 91-day bill auction, as announced by the Department of 
Treasury, in effect on the date of recovery, and interest will accrue 
from such date to the date of payment by CCC. The interest will apply 
only to the portion of the recovery payable to the Holder of the 
Payment Guarantee.
    (c) Allocation of recoveries. Recoveries received by CCC from any 
source whatsoever that are related to the obligation in default will be 
allocated by CCC to the Holder of the Payment Guarantee and to CCC on a 
pro rata basis determined by their respective interests in such 
recoveries. The respective interest of each party will be determined on 
a pro rata basis, based on the combined amount of principal and 
interest in default on the date the claim is paid by CCC. Once CCC has 
paid out a particular claim under a Payment Guarantee, CCC prorates any 
collections it receives and shares these collections proportionately 
with the Holder of the Payment Guarantee until both CCC and the Holder 
of the Payment Guarantee have been reimbursed in full.
    (d) Liabilities to CCC. Notwithstanding any other terms of the 
Payment Guarantee, under the following circumstances the Seller or the 
Assignee will be liable to CCC for any amounts paid by CCC under the 
Payment Guarantee:
    (1) The Seller will be liable to CCC when and if it is determined 
by CCC that the Seller has engaged in fraud, or has been or is in 
material breach of any contractual obligation, certification or 
warranty made by the Seller for the purpose of obtaining the Payment 
Guarantee or for fulfilling obligations under the FGP; and
    (2) The Assignee will be liable to CCC when and if it is determined 
by CCC that the Assignee has engaged in fraud or otherwise violated 
program requirements.
    (e) Cooperation in recoveries. Upon payment by CCC of a claim to 
the Holder of the Payment Guarantee, the Holder of the Payment 
Guarantee and the Seller will cooperate with CCC to effect recoveries 
from the Foreign Financial Institution and/or the Buyer. Cooperation 
may include, but is not limited to, submission of documents to the 
Foreign Financial Institution (or its representative) to establish a 
claim; participation in discussions with CCC regarding the appropriate 
course of action with respect to a default; actions related to 
accelerated payments as specified in Sec.  1493.370(d); and other 
actions that do not increase the obligation of the Holder of the 
Payment Guarantee or the Seller under the Payment Guarantee.


Sec.  1493.385  Additional obligations and requirements.

    (a) Maintenance of records and access to premises, and responding 
to CCC inquiries. For a period of five years after the date of 
expiration of the coverage of a Payment Guarantee, the Seller and the 
Assignee, if applicable, must maintain and make available all records 
and respond completely to all inquiries pertaining to sales and 
deliveries of and extension of credit for goods and Services sold in 
connection with a Payment Guarantee, including those records generated 
and maintained by agents and related companies involved in special 
arrangements with the Seller. The Secretary of Agriculture and the 
Comptroller General of the United States, through their authorized 
representatives, must be given full and complete access to the premises 
of the Seller and the Assignee, as applicable, during regular business 
hours from the effective date of the Payment Guarantee until the 
expiration of such five-year period to inspect, examine, audit, and 
make copies of the Seller's, Assignee's, agent's, or related company's 
books, records and accounts concerning transactions relating to the 
Payment Guarantee, including, but not limited to, financial records and 
accounts pertaining to sales, inventory, processing, and administrative 
and incidental costs, both normal and unforeseen. During such period, 
the Seller and the Assignee may be required

[[Page 34096]]

to make available to the Secretary of Agriculture or the Comptroller 
General of the United States, through their authorized representatives, 
records that pertain to transactions conducted outside the program, if, 
in the opinion of the Director, such records would pertain directly to 
the review of transactions undertaken by the Seller in connection with 
the Payment Guarantee.
    (b) Responsibility of program participants. It is the 
responsibility of all Sellers and U.S. and Foreign Financial 
Institutions to review, and fully acquaint themselves with, all 
regulations, Program Announcements, and notices to participants 
relating to the FGP, as applicable. All Sellers and U.S. and Foreign 
Financial Institutions participating in the FGP are hereby on notice 
that they will be bound by this subpart and any terms contained in the 
Payment Guarantee and in applicable Program Announcements.
    (c) Submission of documents by Principals. All required 
submissions, including certifications, applications, reports, or 
requests (i.e., requests for amendments), by Sellers, Assignees, or 
Foreign Financial Institutions under this subpart must be signed by a 
Principal of the Seller, Assignee, or Foreign Financial Institution or 
their authorized designee(s). In cases where the designee is acting on 
behalf of the Principal, the signature must be accompanied by wording 
indicating the delegation of authority or, in the alternative, by a 
certified copy of the delegation of authority, and the name and title 
of the authorized person or officer. Further, the Seller, Assignee, or 
Financial Institution must ensure that all information and reports 
required under these regulations are timely submitted.
    (d) Misstatements or noncompliance by Seller may lead to rescission 
of Payment Guarantee. CCC may cancel a Payment Guarantee in the event 
that a Seller makes a willful misstatement in the certifications in 
Sec. Sec.  1493.270(a) and 1493.330(d) or if the Seller fails to comply 
with the provisions of Sec.  1493.340 or Sec.  1493.385(a). However, 
notwithstanding the foregoing, CCC will not cancel its Payment 
Guarantee if it determines, in its sole discretion, that an Assignee 
had no knowledge of the Seller's misstatement or noncompliance at the 
time of assignment of the Payment Guarantee.


Sec.  1493.390  Dispute resolution and appeals.

    (a) Dispute resolution. (1) The Director and the Seller or the 
Assignee will attempt to resolve any disputes, including any adverse 
determinations made by CCC, arising under the FGP, this subpart, the 
applicable Program Announcements and notices to participants, or the 
Payment Guarantee.
    (2) The Seller or the Assignee may seek reconsideration of a 
determination made by the Director by submitting a letter requesting 
reconsideration to the Director within 30 calendar days of the date of 
the determination. For the purposes of this section, the date of a 
determination will be the date of the letter or other means of 
notification to the Seller or the Assignee of the determination. The 
Seller or the Assignee may include with the letter requesting 
reconsideration any additional information that it wishes the Director 
to consider in reviewing its request. The Director will respond to the 
request for reconsideration within 30 calendar days of the date on 
which the request or the final documentary evidence submitted by the 
Seller or the Assignee is received by the Director, whichever is later, 
unless the Director extends the time permitted for response. If the 
Seller or the Assignee fails to request reconsideration of a 
determination by the Director within 30 calendar days of the date of 
the determination, then the determination of the Director will be 
deemed final.
    (3) If the Seller or the Assignee requests reconsideration of a 
determination by the Director pursuant to subparagraph (a)(2) of this 
section, and the Director upholds the original determination, then the 
Seller or the Assignee may appeal the Director's final determination to 
the GSM in accordance with the procedures set forth in paragraph (b) of 
this section. If the Seller or the Assignee fails to appeal the 
Director's final determination within 30 calendar days, as provided in 
section Sec.  1493.390(b)(1), then the Director's decision becomes the 
final determination of CCC.
    (b) Appeal procedures. (1) A Seller or Assignee that has exhausted 
the procedures set forth in paragraph (a) of this section may appeal a 
final determination of the Director to the GSM. An appeal to the GSM 
must be made in writing and filed with the office of the GSM no later 
than 30 calendar days following the date of the final determination by 
the Director. If the Seller or the Assignee requests an administrative 
hearing in its appeal letter, it shall be entitled to a hearing before 
the GSM or the GSM's designee.
    (2) If the Seller or the Assignee does not request an 
administrative hearing, the Seller or the Assignee must indicate in its 
appeal letter whether or not it will submit any additional written 
information or documentation for the GSM to consider in acting upon its 
appeal. This information or documentation must be submitted to the GSM 
within 30 calendar days of the date of the appeal letter to the GSM. 
The GSM will make a decision regarding the appeal based upon the 
information contained in the administrative record. The GSM will issue 
his or her written decision within 60 calendar days of the latter of 
the date on which the GSM receives the appeal or the date that final 
documentary evidence is submitted by the Seller or the Assignee to the 
GSM.
    (3) If the Seller or the Assignee has requested an administrative 
hearing, the GSM will set a date and time for the hearing that is 
mutually convenient for the GSM and the Seller or the Assignee. This 
date will ordinarily be within 60 calendar days of the date on which 
the GSM receives the request for a hearing. The hearing will be an 
informal procedure. The Seller or the Assignee and/or its counsel may 
present any relevant testimony or documentary evidence to the GSM. A 
transcript of the hearing will not ordinarily be prepared unless the 
Seller or the Assignee bears the costs involved in preparing the 
transcript, although the GSM may decide to have a transcript prepared 
at the expense of the Government. The GSM will make a decision 
regarding the appeal based upon the information contained in the 
administrative record. The GSM will issue his or her written decision 
within 60 calendar days of the latter of the date of the hearing or the 
date of receipt of the transcript, if one is to be prepared.
    (4) The decision of the GSM will be the final determination of CCC. 
The Seller or the Assignee will be entitled to no further 
administrative appellate rights.
    (c) Failure to comply with determination. If the Seller or the 
Assignee has violated the terms of this subpart or the Payment 
Guarantee by failing to comply with a determination made under this 
section, and the Seller or the Assignee has exhausted its rights under 
this section or has failed to exercise such rights, then CCC will have 
the right to exercise any remedies available to CCC under applicable 
law.
    (d) Seller's obligation to perform. The Seller will continue to 
have an obligation to perform pursuant to the provisions of these 
regulations and the terms of the Payment Guarantee pending the 
conclusion of all procedures under this section.


Sec.  1493.395  Miscellaneous provisions.

    (a) Officials not to benefit. No member of or delegate to Congress, 
or Resident Commissioner, shall be admitted to any share or part of the 
Payment Guarantee

[[Page 34097]]

or to any benefit that may arise therefrom, but this provision shall 
not be construed to extend to the Payment Guarantee if made with a 
corporation for its general benefit.
    (b) OMB control number assigned pursuant to the Paperwork Reduction 
Act. The information collection requirements contained in this part (7 
CFR part 1493) have been approved by the Office of Management and 
Budget (OMB) in accordance with the provisions of 44 U.S.C. chapter 35 
and have been assigned OMB Control Number 0551-0032.

     Dated: April 29, 2015.
Philip Karsting,
Administrator, Foreign Agricultural Service, and Vice President, 
Commodity Credit Corporation.
[FR Doc. 2015-14449 Filed 6-12-15; 8:45 am]
 BILLING CODE 3410-10-P



                                                      34080

                                                      Proposed Rules                                                                                                 Federal Register
                                                                                                                                                                     Vol. 80, No. 114

                                                                                                                                                                     Monday, June 15, 2015



                                                      This section of the FEDERAL REGISTER                    Room 5509, Washington, DC 20250–                          On August 6, 2009, CCC published an
                                                      contains notices to the public of the proposed          1025.                                                  advance notice of proposed rulemaking
                                                      issuance of rules and regulations. The                  Comments may be inspected at 1400                      (ANPR) in the Federal Register (74 FR
                                                      purpose of these notices is to give interested          Independence Avenue SW.,                               39240). This notice was intended to
                                                      persons an opportunity to participate in the                                                                   solicit comments on improvements and
                                                      rule making prior to the adoption of the final
                                                                                                              Washington, DC, between 8:00 a.m. and
                                                      rules.                                                  4:30 p.m., Monday through Friday,                      changes to be made in the
                                                                                                              except holidays. A copy of this                        implementation and operation of the
                                                                                                              proposed rule is available through the                 FGP program, with the intent of
                                                      DEPARTMENT OF AGRICULTURE                               Foreign Agricultural Service (FAS)                     improving the FGP’s effectiveness and
                                                                                                              homepage at: http://www.fas.usda.gov/                  efficiency and lowering costs. CCC
                                                      Commodity Credit Corporation                            topics/export-financing.                               received comments to the ANPR from
                                                                                                              FOR FURTHER INFORMATION CONTACT:                       five entities. One of the key comments
                                                      7 CFR Part 1493                                         Amy Slusher, Deputy Director, Credit                   was that program requirements,
                                                      RIN 0551–AA73                                           Programs Division, by phone at (202)                   particularly the application process, are
                                                                                                              720–6211, or by email at: Amy.Slusher@                 too burdensome on participants and
                                                      Facility Guarantee Program                              fas.usda.gov.                                          prohibit its use. Further, program fees
                                                                                                              SUPPLEMENTARY INFORMATION:                             were consistent with those charged by
                                                      AGENCY:  Foreign Agricultural Service                                                                          the U.S. Export-Import Bank for similar
                                                      and Commodity Credit Corporation,                       Background                                             products but coverage was inferior.
                                                      USDA.                                                      The Commodity Credit Corporation’s                     On November 18, 2014, CCC
                                                      ACTION: Proposed rule.                                  (CCC) Facility Guarantee Program (FGP)                 published a final rule for the Export
                                                                                                              is administered by the Foreign                         Credit Guarantee (GSM–102) Program,
                                                      SUMMARY:   This proposed rule would                     Agricultural Service (FAS) of the U.S.                 found at 7 CFR 1493 subpart B. The
                                                      revise and amend the regulations at 7                   Department of Agriculture (USDA) on                    GSM–102 and FGP Programs are
                                                      CFR 1493 subpart C used to administer                   behalf of CCC, pursuant to program                     similarly structured and many of the
                                                      the Facility Guarantee Program (FGP).                   regulations codified at 7 CFR part 1493;               same requirements apply. For this
                                                      Changes in this proposed rule                           through the issuance of ‘‘Program                      reason, CCC completed the rulemaking
                                                      incorporate statutory changes from the                  Announcements’’ and ‘‘Notices to                       process for the GSM–102 program prior
                                                      Food, Conservation, and Energy Act of                   Participants’’ that are consistent with                to issuing this proposed rule so that
                                                      2008 and modifications intended to                      this program regulation; and in                        relevant GSM–102 program changes
                                                      reduce burden on participants and                       compliance with the requirements of the                could be incorporated into the FGP. The
                                                      improve program efficiency and                          Arrangement on Officially Supported                    affected provisions include (but are not
                                                      effectiveness. Certain revisions will                   Export Credits of the Organisation for                 limited to) information and
                                                      ensure the FGP is operated in                           Economic Cooperation and                               certifications required for program
                                                      compliance with the Organisation for                    Development (OECD). Under the FGP,                     participation, letter of credit
                                                      Economic Cooperation and                                CCC provides payment guarantees to                     requirements, terms and requirements of
                                                      Development (OECD) Arrangement on                       facilitate the financing of manufactured               the payment guarantee, assignments,
                                                      Officially Supported Export Credits.                    goods and U.S. services to improve or                  notice of default and claims for default,
                                                      Additionally, this proposed rule                        establish agriculture-related facilities in            payments and recoveries, additional
                                                      incorporates significant changes made                   emerging markets. By supporting such                   obligations and requirements, dispute
                                                      to the regulations for the Export Credit                facilities, the FGP is designed to                     resolution and appeals, and
                                                      Guarantee Program (GSM–102), that are                   enhance sales of U.S. Agricultural                     miscellaneous provisions. Explanations
                                                      also applicable to the FGP.                             Commodities and products to emerging                   of the changes incorporated in both the
                                                      DATES: Comments concerning this                         markets where the demand for such                      GSM–102 and FGP regulations can be
                                                      proposed rule must be received by                       commodities and products may be                        found in the following documents:
                                                      August 14, 2015 to be assured                           limited due to inadequate storage,                        GSM–102 Proposed Rule (July 27,
                                                      consideration.                                          processing, handling, or distribution                  2011): https://www.federalregister.gov/
                                                      ADDRESSES:   Comments may be                            capabilities for such products.                        articles/2011/07/27/2011-18403/ccc-
                                                      submitted by any of the following                          The current FGP regulations became                  export-credit-guarantee-gsm-102-
                                                      methods:                                                effective on August 8, 1997. The Food,                 program.
                                                         D Federal eRulemaking Portal: Go to                  Conservation, and Energy Act of 2008                      GSM–102 Proposed Rule (December
                                                      http://www.regulations.gov. Follow the                  (Pub. L. 110–246) (2008 Act) modified                  27, 2013): https://
                                                      online instructions to submit comments.                 the program by including a                             www.federalregister.gov/articles/2013/
asabaliauskas on DSK5VPTVN1PROD with PROPOSALS




                                                         D E-Mail: GSMregs@fas.usda.gov.                      ‘‘construction waiver’’ that allows the                12/27/2013-29439/ccc-export-credit-
                                                         D Fax: (202) 720–2495, Attention:                    Secretary of Agriculture to waive                      guarantee-gsm-102-program-and-
                                                      ‘‘FGP Proposed Rule Comments’’.                         requirements related to the use of U.S.                facility-guarantee-program-fgp.
                                                         D Hand Delivery, Courier, or U.S.                    goods in the construction of a proposed                   GSM–102 Final Rule (November 18,
                                                      Postal delivery: Amy Slusher, Deputy                    facility if the Secretary determines that              2014): https://federalregister.gov/a/
                                                      Director, Credit Programs Division,                     ‘‘(A) goods from the United States are                 2014-27129.
                                                      Foreign Agricultural Service, U.S.                      not available; or (B) the use of goods                    Key changes in the proposed rule are
                                                      Department of Agriculture, 1400                         from the United States is not                          discussed below by topic. The
                                                      Independence Ave. SW., Stop 1025,                       practicable.’’                                         numbering system of this proposed rule


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                                                                               Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                           34081

                                                      differs from that in the current                        and provide preliminary feedback on                    improvement of facilities, or (B) the
                                                      regulation. For the purposes of this                    whether the proposed transaction may                   provision of services or United States
                                                      discussion, the numbering of the                        be eligible for FGP coverage. In doing                 products goods, in emerging markets by
                                                      proposed rule will be used. Capitalized                 so, CCC hopes to reduce the burden on                  United States persons to improve
                                                      terms are defined terms that are found                  participants by ruling out ineligible                  handling, marketing, processing,
                                                      in § 1493.210, Definition of Terms.                     projects prior to the Seller providing in-             storage, or distribution of imported
                                                                                                              depth information required in the                      agricultural commodities and products
                                                      Changes in Response to the 2008 Act                     Payment Guarantee application. A short                 thereof if the Secretary of Agriculture
                                                         The 2008 Act contains a                              letter of interest form will be available              determines that such guarantees will
                                                      ‘‘construction waiver’’ that allows the                 on the FAS Web site and must be                        primarily promote the export of United
                                                      Secretary of Agriculture to waive                       accompanied by a non-refundable fee                    States agricultural commodities . . .’’
                                                      requirements related to the use of U.S.                 that will be deducted from the final                   (emphasis added). To meet this
                                                      goods in the construction of a proposed                 guarantee fee if the application results               requirement, the current FGP regulation
                                                      facility if the Secretary determines that               in a payment guarantee.                                requires significant information and
                                                      ‘‘(A) goods from the United States are                     The first required step in the                      analysis to be included in the Seller’s
                                                      not available; or (B) the use of goods                  application process is the submission of               application, including projected prices,
                                                      from the United States is not                           the initial application. Information                   quantities, and country of origin of the
                                                      practicable.’’                                          submitted with the initial application                 agricultural commodities that will
                                                         To implement this provision, CCC                     will include the details of the proposed               benefit from the goods, services or
                                                      proposes to permit a Seller to request a                export, project or facility as specified in            facility over a five-year period.
                                                      Coverage Waiver in the application for                  § 1493.260(b), including a description of                 CCC determined that this requirement
                                                      Payment Guarantee. As described in                      all goods and services for which                       is too burdensome on Sellers whose
                                                      § 1493.290(f)(1), the Seller may request                coverage is sought and information                     expertise is more likely in constructing
                                                      a Coverage Waiver to allow for coverage                 about environmental impact. If                         facilities or exporting equipment than in
                                                      of non-U.S. Goods or to waive the U.S.                  applicable, the Seller will also request a             agricultural commodities. CCC modified
                                                      Content Test. The U.S. Content Test                     Coverage Waiver. This stage of the                     the requirements of the Application for
                                                      states that CCC will issue a Payment                    application process will require an in-                Payment Guarantee (§ 1493.260(b)(7)) to
                                                      Guarantee only if the value of Eligible                 depth review and analysis by FAS to                    now require the Seller to provide only
                                                      Non-U.S. Goods and Eligible Imported                    determine whether the proposal meets                   a list of agricultural commodities or
                                                      Components are less than 50 percent of                  requirements for coverage. To avoid                    products to be used by the proposed
                                                      the sum of the Net Contract Value plus                  tying up the Seller’s full guarantee fee               project and a description of how the
                                                      the value of approved Local Costs. CCC                  during this time, CCC will not require                 goods and/or Services will specifically
                                                      included criteria in § 1493.290(f)(2) that              the guarantee fee with the initial                     benefit exporters of U.S. Agricultural
                                                      will be the basis for CCC to issue a                    application. Instead, the Seller must                  Commodities. As part of the application
                                                      Coverage Waiver. A Seller must rely on                  submit a non-refundable initial                        review process, FAS will perform an
                                                      one or more of these criteria as the basis              application fee. If CCC determines to                  analysis to determine whether the
                                                      for justifying a Coverage Waiver. By                    issue a Payment Guarantee for the                      proposed project will primarily benefit
                                                      allowing the Seller to request a waiver                 transaction, this fee will be deducted                 U.S. Agricultural Commodity exporters.
                                                      and obtain coverage of non-U.S. Goods                   from the final guarantee fee. Both the                 FAS will reach out to other areas of
                                                      and/or imported components, CCC                         letter of intent and initial application               USDA and to relevant commodity
                                                      intends to provide maximum flexibility                  fees are designed to ensure that the                   organizations, state/regional trade
                                                      in approving goods, services and                        Seller is serious about the particular                 groups, and exporters, as needed, for
                                                      projects that will meet the requirement                 transaction and the associated Payment                 assistance in collecting data and
                                                      to primarily promote the export of U.S.                 Guarantee before FAS expends                           conducting this analysis.
                                                      Agricultural Commodities.                               resources on review and analysis.
                                                                                                                 CCC will review the information                     Qualification of Program Participants
                                                      Changes To Reduce Burden and                            submitted in the initial application and                  To reduce the burden on program
                                                      Improve Program Effectiveness and                       determine whether to approve the                       participants, CCC proposes to ease or
                                                      Efficiency                                              application as is or with amendments,                  eliminate FGP qualification
                                                                                                              and also whether to grant any requested                requirements on certain participants
                                                      Application for Payment Guarantee                                                                              already qualified to participate in the
                                                                                                              coverage waiver. If CCC approves the
                                                         CCC proposes to expand the current                   initial application, the Seller will have              GSM–102 Program. In accordance with
                                                      Payment Guarantee application process.                  30 calendar days in which to submit                    § 1493.220(c), Sellers who are qualified
                                                      This change is designed to reduce the                   information in a final application                     exporters under the GSM–102 program
                                                      burden on the Seller by allowing the                    (§ 1493.260(c)). The Seller needs CCC’s                will only be required to submit
                                                      Seller to supply information to CCC in                  feedback on the initial application to                 additional information specific to the
                                                      stages and obtain conditional approval                  determine most of the elements in the                  FGP in order to qualify as a Seller under
                                                      before moving to the next step of the                   final application. CCC will require the                the FGP. U.S. Financial Institutions
                                                      application process. It also may                        Seller to submit the full guarantee fee                qualified under the GSM–102 program
                                                      expedite the application process by                     (less the letter of interest and initial               are automatically qualified to
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                                                      allowing CCC to focus its time on                       application fees) with the final                       participate in the FGP.
                                                      proposals meeting FGP criteria.                         application.                                              Due to the longer tenors and
                                                         In § 1493.260(a), CCC added an                                                                              corresponding higher risk under the
                                                      optional ‘‘letter of interest.’’ Prior to               Promoting the Export of U.S.                           FGP, Foreign Financial Institutions will
                                                      submitting an initial application for a                 Agricultural Commodities                               be required to apply separately for
                                                      Payment Guarantee, the Seller may                          The Food, Agriculture, Conservation,                participation, even if already qualified
                                                      choose to submit a letter of interest to                and Trade Act of 1990, as amended,                     under the GSM–102 Program. As
                                                      CCC describing a proposed transaction.                  allows for the provision of export credit              explained in § 1493.240, CCC will
                                                      CCC will review information submitted                   guarantees for ‘‘(A) the establishment or              establish specific dollar participation


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                                                      34082                    Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules

                                                      limits for Foreign Financial Institutions               Guarantee Fees                                         provisions of this proposed rule, the
                                                      qualifying for the FGP. These                             The Arrangement prescribes                           appeal provisions of 7 CFR part
                                                      participation limits will be separate                   minimum fees to be charged based on                    1493.200 would need to be exhausted.
                                                      from any participation limits that may                  country risk, obligor risk, tenor,                     This rulemaking would not be
                                                      be established under the GSM–102                        percentage of cover, and other factors.                retroactive.
                                                      program.                                                Guarantee fees for the FGP will be                     Executive Order 12372
                                                      Compliance With the OECD                                available on the USDA Web site and
                                                                                                              will be consistent with rules of the                     This program is not subject to
                                                      Arrangement on Officially Supported                                                                            Executive Order 12372, which requires
                                                      Export Credits                                          Arrangement.
                                                                                                                                                                     intergovernmental consultation with
                                                        The United States is a participant in                 Initial Payment                                        State and local officials. See the notice
                                                      the OECD Arrangement on Officially                        The Arrangement requires a minimum                   related to 7 CFR part 3015, subpart V,
                                                      Supported Export Credits (‘‘the                         downpayment to be made by the Buyer                    published at 48 FR 29115 (June 24,
                                                      Arrangement’’). The Arrangement seeks                   prior to the start of the credit. The                  1983).
                                                      to foster a level playing field for official            minimum amount of the required Initial
                                                      export credits and applies ‘‘to all official                                                                   Executive Order 13132
                                                                                                              Payment (as a percentage of the Net
                                                      support provided by or on behalf of a                   Contract Value) will be available on the                  This proposed rule has been reviewed
                                                      government for export of goods and/or                   USDA Web site. The current                             under Executive Order 13132,
                                                      services, including financial leases,                   requirement under the Arrangement is                   ‘‘Federalism.’’ The policies contained in
                                                      which have a repayment term of two                      15 percent.                                            this proposed rule do not have any
                                                      years or more.’’ All FGP activity with a                                                                       substantial direct effect on States, on the
                                                      repayment term of two years or more,                    Local Costs                                            relationship between the Federal
                                                      therefore, must comply with the                           The Arrangement prescribes a limit                   government and the States, or on the
                                                      provisions of the Arrangement. The                      on the maximum amount of official                      distribution of power and
                                                      Arrangement is updated periodically by                  support for local costs. Local Costs are               responsibilities among the various
                                                      OECD Participants. The most recent                      defined in § 1493.210 as ‘‘expenditures                levels of government, nor does this
                                                      version can be found at http://                         for goods in the Destination Country                   proposed rule impose substantial direct
                                                      www.oecd.org/tad/xcred/                                 that are necessary for executing the Firm              compliance costs on State and local
                                                      arrangement.htm.                                        Sales Contract and that are within scope               governments. Therefore, consultation
                                                        Aspects of the FGP that are governed                  of the Firm Sales Contract.’’ CCC will                 with the States is not required.
                                                      by the Arrangement include, but are not                 consider providing coverage for Local
                                                      limited to, the following:                                                                                     Executive Order 13175
                                                                                                              Costs within the limits of the
                                                      Environmental and Social Impact                         Arrangement, but because Local Costs                      The United States has a unique
                                                      Screening                                               are non-U.S. Goods, the Seller must also               relationship with Indian Tribes as
                                                                                                              request and receive from CCC a                         provided in the Constitution of the
                                                         The OECD Common Approaches for                                                                              United States, treaties, and Federal
                                                                                                              Coverage Waiver for these costs. The
                                                      Officially Supported Export Credits and                                                                        statutes. On November 5, 2009,
                                                                                                              maximum amount of Local Costs
                                                      Environmental and Social Due Diligence                                                                         President Obama signed a Memorandum
                                                                                                              permitted (as a percentage of the Net
                                                      provides guidelines for addressing                                                                             emphasizing his commitment to
                                                                                                              Contract Value) will be available on the
                                                      environmental and social issues related                                                                        ‘‘regular and meaningful consultation
                                                                                                              USDA Web site. The current maximum
                                                      to exports of capital goods and/or                                                                             and collaboration with tribal officials in
                                                                                                              under the Arrangement is 30 percent.
                                                      services and the location for which they                                                                       policy decisions that have tribal
                                                      are destined. The primary purpose of                    Maximum Tenor                                          implications including, as an initial
                                                      these guidelines is to encourage OECD                     Maximum tenor (repayment term)                       step, through complete and consistent
                                                      members to prevent and mitigate                         under the Arrangement is determined                    implementation of Executive Order
                                                      adverse environmental and social                        by country of destination. Maximum                     13175.’’ This proposed rule has been
                                                      impacts of projects receiving official                  tenors under FGP will be available on                  reviewed for compliance with E.O.
                                                      support. To support this goal, the OECD                 the USDA Web site and may be less                      13175 and CCC worked directly with
                                                      provides guidelines for screening                       than prescribed by the Arrangement as                  the Office of Tribal Relations in the
                                                      applications for official support.                      determined appropriate by CCC.                         rule’s development. The policies
                                                         CCC will screen all FGP Payment                                                                             contained in this proposed rule do not
                                                      Guarantee applications for any negative                 Executive Order 12866                                  have tribal implications that preempt
                                                      environmental and social impact. In                       This proposed rule is issued in                      tribal law.
                                                      accordance with § 1493.260(b), Sellers                  conformance with Executive Order
                                                      must submit a completed environmental                   12866. It has been determined to be not                Regulatory Flexibility Act
                                                      screening document with each initial                    significant for the purposes of Executive                The Regulatory Flexibility Act does
                                                      application for a Payment Guarantee.                    Order 12866 and was not reviewed by                    not apply to this rule because CCC is not
                                                      The screening document will be                          OMB. A cost-benefit assessment of this                 required by 5 U.S.C. 553 or any other
                                                      available on the USDA Web site. CCC                     rule was not completed.                                law to publish a notice of proposed
                                                      will review the screening document to                                                                          rulemaking with respect to the subject
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                                                      determine whether the transaction is                    Executive Order 12988
                                                                                                                                                                     matter of this rule.
                                                      likely to have significant adverse                         This proposed rule has been reviewed
                                                      environmental and/or social impacts. If                 in accordance with Executive Order                     Environmental Assessment
                                                      CCC determines that a transaction has                   12988. This proposed rule would not                      CCC has determined that this
                                                      potential adverse impact, the                           preempt State or local laws, regulations,              proposed rule does not constitute a
                                                      transaction will be subject to an in-                   or policies unless they present an                     major State or Federal action that would
                                                      depth environmental and social review.                  irreconcilable conflict with this                      significantly affect the human or natural
                                                      CCC may reject an application based on                  proposed rule. Before any judicial                     environment. Consistent with the
                                                      the results of this review.                             action may be brought concerning the                   National Environmental Policy Act


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                                                                               Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                            34083

                                                      (NEPA), 40 CFR part 1502.4, ‘‘Major                       Estimated Total Annual Burden on                     1493.350 Notice of default.
                                                      Federal Actions Requiring the                           Respondents: 197.4 hours.                              1493.360 Claims for default.
                                                      Preparation of Environmental Impact                       Comments on this information                         1493.370 Payment for default.
                                                      Statements’’ and the regulations of the                 collection may be submitted to CCC in                  1493.380 Recovery of defaulted payments.
                                                                                                                                                                     1493.385 Additional obligations and
                                                      Council on Environmental Quality, 40                    accordance with the instructions for                       requirements.
                                                      CFR parts 1500–1508, no environmental                   submitting comments to this proposed                   1493.390 Dispute resolution and appeals.
                                                      assessment or environmental impact                      rule. All comments received in response                1493.395 Miscellaneous provisions.
                                                      statement will be prepared.                             to this notice will be a matter of public
                                                                                                              record.                                                Subpart C—CCC Facility Guarantee
                                                      Unfunded Mandates
                                                        This proposed rule does not impose                    E-Government Act Compliance                            Program (FGP) Operations
                                                      any enforceable duty or contain any                       CCC is committed to complying with                   § 1493.200   General statement.
                                                      unfunded mandate as described under                     the E-Government Act to promote the                       (a) Overview. The FGP of the
                                                      Title II of the Unfunded Mandates                       use of the Internet and other                          Commodity Credit Corporation (CCC)
                                                      Reform Act of 1995 (UMRA). Therefore,                   information technologies to provide                    was developed to expand U.S.
                                                      this rule is not subject to the                         increased opportunities for citizen                    Agricultural Commodity exports by
                                                      requirements of sections 202 and 205 of                 access to Government information and                   making available Payment Guarantees to
                                                      UMRA.                                                   services and for other purposes. The                   encourage U.S. private sector financing
                                                                                                              forms, regulations, and other                          to establish or improve facilities or
                                                      Paperwork Reduction Act of 1995
                                                                                                              information collection activities                      provide Services or goods in emerging
                                                         In accordance with the Paperwork                     required to be utilized by a person                    markets to improve handling,
                                                      Reduction Act of 1995, CCC is                           subject to this rule are available at:                 marketing, processing, storage, or
                                                      requesting comments from all interested                 http://www.fas.usda.gov.                               distribution of imported agricultural
                                                      individuals and organizations on a
                                                                                                              List of Subjects in 7 CFR Part 1493                    commodities and products. Such
                                                      proposed revision to the currently
                                                                                                                                                                     guarantees will primarily promote the
                                                      approved information collection for this                  Agricultural commodities, Exports.
                                                                                                                                                                     export of U.S. Agricultural
                                                      program. This revision includes the                       For the reasons stated in the                        Commodities. CCC will give priority to
                                                      proposed change in information                          preamble, CCC proposes to amend 7                      projects that encourage privatization of
                                                      collection activities related to the                    CFR part 1493 as follows:                              the agricultural sector or that benefit
                                                      regulatory changes in this proposed
                                                                                                              Title 7—Agriculture                                    private farms and cooperatives in
                                                      rule.
                                                         Title: CCC Facility Guarantee Program                                                                       emerging markets, and for which
                                                      (FGP).                                                  PART 1493—CCC EXPORT CREDIT                            nongovernmental persons agree to
                                                         OMB Control Number: 0551–0032.                       GUARANTEE PROGRAMS                                     assume a relatively larger share of costs.
                                                         Type of Request: Reinstatement, with                                                                        The Payment Guarantee issued under
                                                                                                              ■ 1. The authority citation for 7 CFR                  FGP is an agreement by CCC to pay the
                                                      change, of a previously approved
                                                                                                              part 1493 continues to read as follows:                Seller, or the U.S. Financial Institution
                                                      collection for which approval has
                                                      expired.                                                  Authority: 7 U.S.C. 5602, 5622, 5661–5664,           that may take assignment of the
                                                         Abstract: This information collection                5676; 15 U.S.C. 714b(d), 714c(f).                      Payment Guarantee, specified amounts
                                                      is required to support the existing                     ■ 2. Subpart C is revised to read as                   of principal and interest in case of
                                                      regulations and proposed changes to 7                   follows:                                               default by the Foreign Financial
                                                      CFR part 1493, subpart C, ‘‘CCC Facility                                                                       Institution that issued the Letter of
                                                                                                              Subpart C—CCC Facility Guarantee                       Credit for the sale covered by the
                                                      Guarantee Program (FGP) Operations,’’                   Program (FGP) Operations
                                                      which establishes the requirements for                                                                         Payment Guarantee. The program is
                                                                                                              Sec.                                                   targeted toward those countries that
                                                      participation in CCC’s FGP program.                     1493.200 General statement.
                                                      This revised collection incorporates                                                                           have sufficient financial strength so that
                                                                                                              1493.210 Definition of terms.
                                                      changes in estimated burden to program                  1493.220 Information required for Seller
                                                                                                                                                                     foreign exchange will be available for
                                                      participants as a result of certain revised                  participation.                                    scheduled payments. In providing this
                                                      requirements in this proposed rule for                  1493.230 Information required for U.S.                 program, CCC seeks to expand and/or
                                                      (1) seller and U.S. and foreign financial                    Financial Institution participation.              maintain market opportunities for U.S.
                                                      institution qualification; (2) applications             1493.240 Information required for Foreign              agricultural exporters and assist long-
                                                      for payment guarantees; (3) notices of                       Financial Institution participation.              term market development for U.S.
                                                                                                              1493.250 Certification requirements for                Agricultural Commodities.
                                                      assignment; (4) evidence of performance
                                                                                                                   program participation.                               (b) Program administration. The FGP
                                                      reports; and (5) appeals. This                          1493.260 Application for Payment
                                                      information collection is necessary for                                                                        is administered under the direction of
                                                                                                                   Guarantee.
                                                      CCC to manage, plan and evaluate the                    1493.270 Certifications required for
                                                                                                                                                                     the General Sales Manager and Vice
                                                      program and to ensure the proper and                         obtaining Payment Guarantee.                      President, CCC, pursuant to this
                                                      judicious use of government resources.                  1493.280 Special requirements of the                   subpart, subpart A of this part, any
                                                         Estimate of Burden: The public                            Foreign Financial Institution Letter of           Program Announcements issued by
                                                      reporting burden for this collection of                      Credit and Terms and Conditions                   CCC, and, as applicable, the
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                                                      information is estimated to average                          Document, if applicable.                          Organisation for Economic Cooperation
                                                      0.819 hours per response.                               1493.290 Terms and requirements of the                 and Development’s (OECD)
                                                                                                                   Payment Guarantee.                                Arrangement on Officially Supported
                                                         Respondents: U.S. exporters (sellers),
                                                                                                              1493.300 Fees.                                         Export Credits. From time to time, CCC
                                                      U.S. financial institutions, and foreign                1493.310 Assignment of the Payment
                                                      financial institutions.                                      Guarantee.
                                                                                                                                                                     may issue a notice to participants on the
                                                         Estimated Number of Respondents: 18                  1493.320 Evidence of performance.                      USDA Web site to remind participants
                                                      per year.                                               1493.330 Certification requirements for the            of the requirements of the FGP or to
                                                         Estimated Number of Responses per                         evidence of performance.                          clarify the program requirements
                                                      Respondent: 13.4 per year.                              1493.340 Proof of entry.                               contained in these regulations in a


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                                                      34084                    Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules

                                                      manner not inconsistent with this                       methods within the Firm Sales Contract                 Buyer from any financial or contractual
                                                      subpart and subpart A of this part.                     which, when met by the Seller, results                 obligations; or settlements made in favor
                                                      Program information, such as approved                   in an obligation to make payment in                    of the Buyer for quality or weight.
                                                      U.S. and Foreign Financial Institutions,                accordance with the agreed contractual                    Eligible Export Sale. A transaction in
                                                      is available on the USDA Web site.                      terms without recourse, and triggers the               which the obligation of payment for the
                                                         (c) Country and regional program                     start of coverage under the Payment                    portion registered under the FGP arises
                                                      announcements. From time to time,                       Guarantee. Such events may include,                    solely and exclusively from a Foreign
                                                      CCC will issue a Program                                but are not limited to, exports of goods,              Financial Institution Letter of Credit or
                                                      Announcement on the USDA Web site                       completion of Services, or                             Terms and Conditions Document issued
                                                      to announce the FGP for a specific                      commissioning date of equipment or a                   in connection with a Payment
                                                      country or region. The Program                          facility.                                              Guarantee.
                                                      Announcement will contain any                              Cost of Services. The price for                        Eligible Imported Components.
                                                      requirements applicable to that country                 Services as stipulated in the Firm Sales               Imported components in U.S. Goods
                                                      or region as determined by CCC.                         Contract.                                              that are eligible for coverage because
                                                                                                                 Coverage Waiver. A determination by                 either:
                                                      § 1493.21   Definition of terms.                        CCC, upon request of the Seller, to allow                 (1) The project meets the U.S. Content
                                                         Terms set forth in this part, on the                 guarantee coverage of non-U.S. Goods                   Test in § 1493.290(e); or
                                                      USDA Web site (including in Program                     and/or to waive the U.S. Content Test in                  (2) A Coverage Waiver of the U.S.
                                                      Announcements and notices to                            § 1493.290(e).                                         Content Test has been requested by the
                                                      participants), and in any CCC-originated                   Date of Performance. The date that a                Seller and approved by CCC.
                                                      documents pertaining to the FGP will                    Contractual Event occurs in accordance                    Eligible Non-U.S. Goods. Goods,
                                                      have the following meanings:                            with the Firm Sales Contract. The Date                 including Local Costs, that are not U.S.
                                                         Affiliate. Entities are affiliates of each           of Performance may be, but is not                      Goods but for which a Coverage Waiver
                                                      other if, directly or indirectly, either one            limited to, an installation date, the date             has been requested by the Seller and
                                                      controls or has the power to control the                of completion of the Service, the                      approved by CCC.
                                                      other or a third person controls or has                 commissioning date of equipment or a                      Eligible Interest. The amount of
                                                      the power to control both. Control may                  facility, or the date of export of goods               interest that CCC agrees to pay the
                                                      include, but is not limited to:                         (one of the following dates, depending                 Holder of the Payment Guarantee in the
                                                      Interlocking management or ownership;                   upon the method of shipment: The on-                   event that CCC pays a claim for default
                                                      identity of interests among family                      board date of an ocean bill of lading or               of Ordinary Interest. Eligible Interest
                                                      members; shared facilities and                          the on-board ocean carrier date of an                  shall be the lesser of:
                                                      equipment; or common use of                             intermodal bill of lading; the on-board                   (1) The amount calculated using the
                                                      employees.                                              date of an airway bill; or, if exported by             interest rate agreed by the Holder of the
                                                         Assignee. A U.S. Financial Institution               rail or truck, the date of entry shown on              Payment Guarantee and the Foreign
                                                      that has obtained the legal right to make               an entry certificate or similar document               Financial Institution; or
                                                      a claim and receive the payment of                      issued and signed by an official of the                   (2) The amount calculated using the
                                                      proceeds under the Payment Guarantee.                   government of the importing country).                  specified percentage of the Treasury bill
                                                         Business Day. A day during which                        Date of Sale. The earliest date on                  investment rate set forth on the face of
                                                      employees of the U.S. Department of                     which a Firm Sales Contract exists                     the Payment Guarantee.
                                                      Agriculture in the Washington, DC                       between the Seller and the Buyer.                         Firm Sales Contract. The written sales
                                                      metropolitan area are on official duty                     Destination Country. The location                   contract entered into between the Seller
                                                      during normal business hours.                           (country) of the agricultural-related                  and the Buyer which sets forth the terms
                                                         Buyer. A foreign purchaser that enters               facility that will use the goods and/or                and conditions of an Eligible Export
                                                      into a Firm Sales Contract with a Seller                Services covered by the Payment                        Sale from the Seller to the Buyer.
                                                      for the sale of goods to be shipped to the              Guarantee. If the Payment Guarantee                    Written evidence of a sale may be in the
                                                      Destination Country and/or U.S.                         covers goods not intended for a specific               form of a signed sales contract, a written
                                                      Services to be provided in the                          facility, then the country where the                   offer and acceptance between parties, or
                                                      Destination Country.                                    goods will be delivered and utilized.                  other documentary evidence of sale. The
                                                         Buyer’s Representative. An entity                       Director. The Director, Credit                      Firm Sales Contract between the Seller
                                                      having a physical office and that is                    Programs Division, Office of Trade                     and the Buyer may be conditioned upon
                                                      either organized under the laws of or                   Programs, Foreign Agricultural Service,                CCC’s approval of the Seller’s
                                                      registered to do business in the                        or designee.                                           application for a Payment Guarantee.
                                                      Destination Country or region specified                    Discounts and allowances. Any                       The written evidence of sale for the
                                                      in the Payment Guarantee and that is                    consideration provided directly or                     purposes of the FGP must, at a
                                                      authorized to act on the Buyer’s behalf                 indirectly, by or on behalf of the Seller,             minimum, document the following
                                                      with respect to the sale described in the               to the Buyer in connection with a sale                 information:
                                                      Firm Sales Contract.                                    of a good or Service, above and beyond                    (1) Date of sale;
                                                         CCC. The Commodity Credit                            its value. Discounts and allowances                       (2) A complete description of all
                                                      Corporation, an agency and                              include, but are not limited to, the                   goods associated with the project. For
                                                      instrumentality of the United States                    provision of additional goods, services                goods to be covered by the Payment
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                                                      within the Department of Agriculture,                   or benefits; the promise to provide                    Guarantee, include the brand name and
                                                      authorized pursuant to the Commodity                    additional goods, services or benefits in              model number, country where the good
                                                      Credit Corporation Charter Act (15                      the future; financial rebates; the                     was manufactured and country from
                                                      U.S.C. 714 et seq.).                                    assumption of any financial or                         which the good will be exported (if
                                                         CCC Late Interest. Interest payable by               contractual obligations; commissions                   applicable), quantity, value, and
                                                      CCC pursuant to § 1493.370(c).                          where the Buyer requires the Seller to                 Incoterms (if applicable);
                                                         Contractual Event. A specific                        employ and compensate a specified                         (3) A complete description of all
                                                      deliverable (activity or milestone)                     agent as a condition of concluding the                 Services associated with the project. For
                                                      measured by objective or quantifiable                   sale; the whole or partial release of the              Services to be covered by the Payment


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                                                                               Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                             34085

                                                      Guarantee, include the supplier and                        Initial Payment. The amount that the                Institution issuing the Letter of Credit in
                                                      cost;                                                   Buyer is required to pay the Seller prior              connection with an Eligible Export Sale
                                                         (4) The Date of Performance of each                  to CCC’s approval of the Payment                       to make payment(s) on principal
                                                      Contractual Event; and                                  Guarantee, expressed as a percentage                   amount(s), plus any Ordinary Interest
                                                         (5) The date and evidence of                         (specified on the USDA Web site) of the                and Post Default Interest, in U.S.
                                                      agreement between Buyer and Seller.                     Net Contract Value.                                    dollars, to a Seller or U.S. Financial
                                                         Foreign Financial Institution. A                        Local Costs. Expenditures for goods in              Institution on deferred payment terms
                                                      financial institution (including foreign                the Destination Country that are                       consistent with those permitted under
                                                      branches of U.S. financial institutions):               necessary for executing the Firm Sales                 CCC’s Payment Guarantee. The
                                                         (1) Organized and licensed under the                 Contract and that are within scope of                  Repayment Obligation must be
                                                      laws of a jurisdiction outside the United               the Firm Sales Contract.                               documented using one of the methods
                                                      States;                                                    Net Contract Value. The aggregate                   specified in § 1493.280.
                                                         (2) Not domiciled in the United                      Value of Goods and Cost of Services                       Repurchase Agreement. A written
                                                      States; and                                             (exclusive of Local Costs) that are                    agreement under which the Holder of
                                                         (3) Subject to the banking or other                  eligible for guarantee coverage and for                the Payment Guarantee may from time
                                                      financial regulatory authority of a                     which coverage is requested.                           to time enter into transactions in which
                                                      foreign jurisdiction (except for                           North American Industry                             the Holder of the Payment Guarantee
                                                      multilateral and sovereign institutions).               Classification System (NAICS). Standard                agrees to sell to another party Foreign
                                                         Foreign Financial Institution Letter of              used by Federal statistical agencies in                Financial Institution Letter(s) of Credit
                                                      Credit or Letter of Credit. An irrevocable              classifying business establishments for                and, if applicable, Terms and
                                                      documentary letter of credit, subject to                the purpose of collecting, analyzing, and              Conditions Document(s) secured by the
                                                      the current revision of the Uniform                     publishing statistical data related to the             Payment Guarantee, and repurchase the
                                                      Customs and Practices (UCP) for                         U.S. business economy.                                 same Foreign Financial Institution
                                                      Documentary Credits (International                         Ordinary Interest. Interest (other than             Letter(s) of Credit and Terms and
                                                      Chamber of Commerce Publication No.                     Post Default Interest) charged on the                  Conditions Documents secured by the
                                                      600, or latest revision), and if electronic             principal amount identified in the                     Payment Guarantee, on demand or date
                                                      documents are to be utilized, the current               Foreign Financial Institution Letter of                certain at an agreed upon price.
                                                      revision of the Supplement to the                       Credit or, if applicable, the Terms and                   SAM (System for Award
                                                      Uniform Customs and Practice for                        Conditions Document.                                   Management). A Federal Government
                                                      Documentary Credits for Electronic                         Payment Guarantee. An agreement                     owned and operated free Web site that
                                                      Presentation (eUCP) providing for                       under which CCC, in consideration of a                 contains information on parties
                                                      payment in U.S. dollars against                         fee paid, and in reliance upon the                     excluded from receiving Federal
                                                      stipulated documents and issued in                      statements and declarations of the                     contracts or certain subcontracts and
                                                      favor of the Seller by a CCC-approved                   Seller, subject to the terms set forth in              excluded from certain types of Federal
                                                      Foreign Financial Institution.                          the written guarantee, this subpart, and               financial and nonfinancial assistance
                                                         GSM. The General Sales Manager,                      any applicable Program                                 and benefits.
                                                      Foreign Agricultural Service (FAS),                     Announcements, agrees to pay the                          Seller. A supplier of goods and/or
                                                      USDA, acting in his or her capacity as                  Holder of the Payment Guarantee in the                 Services that is both qualified in
                                                      Vice President, CCC, or designee.                       event of a default by a Foreign Financial              accordance with the provisions of
                                                         Guaranteed Value. The maximum                        Institution on its Repayment Obligation                § 1493.220 and the applicant for the
                                                      amount indicated on the face of the                     under the Foreign Financial Institution                Payment Guarantee.
                                                      Payment Guarantee, exclusive of                         Letter of Credit issued in connection                     Service. Any business activity
                                                      interest, that CCC agrees to pay the                    with a guaranteed sale or, if applicable,              classified in any of the 13 NAICS
                                                      Holder of the Payment Guarantee. The                    under the Terms and Conditions                         Services sectors (NAICS chapters 22 and
                                                      Guaranteed Value is calculated by                       Document.                                              48–49 through 81). For the shipment of
                                                      deducting the Initial Payment and any                      Post Default Interest. Interest charged             goods, freight and insurance costs to the
                                                      Discounts and Allowances from the Net                   on amounts in default that begins to                   port of entry that are included in the
                                                      Contract Value and adding to that result                accrue upon default of payment, as                     price of the goods (in accordance with
                                                      the value of Local Costs that CCC has                   specified in the Foreign Financial                     the specified Incoterms) are not
                                                      approved for coverage. The resulting                    Institution Letter of Credit or, if                    considered Services under this subpart.
                                                      figure is then multiplied by the                        applicable, in the Terms and Conditions                   Terms and Conditions Document. A
                                                      guaranteed percentage (up to the                        Document.                                              document specifically identified and
                                                      maximum percentage allowable in the                        Principal. A principal of a corporation             referred to in the Foreign Financial
                                                      applicable country or regional Program                  or other legal entity is an individual                 Institution Letter of Credit which may
                                                      Announcement).                                          serving as an officer, director, owner,                contain the Repayment Obligation and
                                                         Holder of the Payment Guarantee.                     partner, or other individual with                      the special requirements specified in
                                                      The Seller or the Assignee of the                       management or supervisory                              § 1493.280.
                                                      Payment Guarantee with the legal right                  responsibilities for such corporation or                  United States or U.S. Each of the
                                                      to make a claim and receive the                         legal entity.                                          States of the United States, the District
                                                      payment of proceeds from CCC under                         Program Announcement. An                            of Columbia, Puerto Rico, and the
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                                                      the Payment Guarantee in case of                        announcement issued by CCC on the                      territories and possessions of the United
                                                      default by the Foreign Financial                        USDA Web site that provides                            States.
                                                      Institution.                                            information on specific country and                       U.S. Agricultural Commodity or U.S.
                                                         Incoterms. Trade terms developed by                  regional programs and may identify                     Agricultural Commodities.
                                                      the International Chamber of Commerce                   eligible projects and countries, length of                (1) (i) An agricultural commodity or
                                                      in Incoterms 2010 (or latest revision),                 credit periods which may be covered,                   product entirely produced in the United
                                                      which define the respective obligations                 and other information.                                 States; or
                                                      of the Buyer and the Seller in a sales                     Repayment Obligation. A contractual                    (ii) A product of an agricultural
                                                      contract.                                               commitment by the Foreign Financial                    commodity—


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                                                      34086                    Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules

                                                         (A) 90 percent or more of the                        § 1493.220 Information required for Seller                (i) Nature of the applicant’s business
                                                      agricultural components of which by                     participation.                                         (i.e., producer, Service provider, trader,
                                                      weight, excluding packaging and added                      Sellers must apply and be approved                  consulting firm, etc.);
                                                      water, is entirely produced in the                      by CCC to be eligible to participate in                   (ii) Explanation of the applicant’s
                                                      United States; and                                      the FGP.                                               experience/history selling the goods or
                                                         (B) That the Secretary determines to                    (a) Qualification requirements. To                  Services to be sold under the FGP,
                                                      be a high value agricultural product.                   qualify for participation in the FGP, an               including number of years involved in
                                                         (2) For purposes of this definition,                 applicant must submit the following                    selling, types of goods or Services sold,
                                                      fish entirely produced in the United                    information to CCC in the manner                       and destination of sales for the
                                                      States include fish harvested by a                      specified on the USDA Web site:                        preceding three years;
                                                      documented fishing vessel as defined in                    (1) For the applicant:                                 (iii) Whether or not the applicant is a
                                                      title 46, United States Code, in waters                    (i) The name and full U.S. address                  ‘‘small or medium enterprise’’ (SME) as
                                                      that are not waters (including the                      (including the full 9-digit zip code) of               defined on the USDA Web site.
                                                      territorial sea) of a foreign country.                  the applicant’s office, along with an                     (5) A listing of any related companies
                                                         U.S. Content Test. A determination of                indication of whether the address is a                 (e.g., Affiliates, subsidiaries, or
                                                      the value of total Eligible Non-U.S.                    business or private residence. A post                  companies otherwise related through
                                                      Goods and Eligible Imported                             office box is not an acceptable address.               common ownership) currently qualified
                                                      Components as a percentage of the total                 If the applicant has multiple offices, the             to participate in CCC export programs;
                                                      Value of Goods and Cost of Services to                  address included in the information                       (6) A statement describing the
                                                      be covered under the Payment                            should be that which is pertinent to the               applicant’s participation, if any, during
                                                      Guarantee, as specified in § 1493.290(e).               FGP sales contemplated by the                          the past three years in U.S. Government
                                                         USDA. United States Department of                    applicant;                                             programs, contracts or agreements; and
                                                      Agriculture.                                               (ii) Dun and Bradstreet (DUNS)                         (7) A statement that: ‘‘All
                                                         U.S. Financial Institution. A financial              number;                                                certifications set forth in 7 CFR
                                                      institution (including branches of                         (iii) Employer Identification Number                1493.250(a) are hereby made in this
                                                      Foreign Financial Institutions):                        (EIN—also known as a Federal Tax                       application’’ which, when included in
                                                         (1) Organized and licensed under the                 Identification Number);                                the application, will constitute a
                                                      laws of a jurisdiction within the United                   (iv) Telephone and fax numbers;                     certification that the applicant is in
                                                      States;                                                    (v) Email address (if applicable);                  compliance with all of the requirements
                                                         (2) Domiciled in the United States;                     (vi) Business Web site (if applicable);             set forth in § 1493.250(a). The applicant
                                                      and                                                        (vii) Contact name;                                 will be required to provide further
                                                         (3) Subject to the banking or other                     (viii) Statement indicating whether                 explanation or documentation if not in
                                                      financial regulatory authority                          the applicant is a U.S. domestic entity                compliance with these requirements or
                                                      jurisdiction within the United States.                                                                         if the application does not include this
                                                                                                              or a foreign entity domiciled in the
                                                         U.S. Goods. Goods that are assembled,                                                                       statement.
                                                                                                              United States; and
                                                      processed or manufactured in, and                                                                                 (b) Qualification notification. CCC
                                                                                                                 (ix) The form of business entity of the
                                                      exported from, the United States,                                                                              will promptly notify applicants that
                                                                                                              applicant, (e.g., sole proprietorship,
                                                      including goods which contain                                                                                  have submitted information required by
                                                                                                              partnership, corporation, etc.) and the
                                                      imported raw materials or imported                                                                             this section whether they have qualified
                                                                                                              U.S. jurisdiction under which such
                                                      components. Minor or cosmetic                                                                                  to participate in the program or whether
                                                      procedures (e.g., affixing labels,                      entity is organized and authorized to
                                                                                                              conduct business. Such jurisdictions are               further information is required by CCC.
                                                      cleaning, painting, polishing) do not                                                                          Any applicant failing to qualify will be
                                                      qualify as assembling, processing or                    a U.S. State, the District of Columbia,
                                                                                                              Puerto Rico, and the territories or                    given an opportunity to provide
                                                      manufacturing.                                                                                                 additional information for consideration
                                                         U.S. Person. One of the following:                   possessions of the United States. Upon
                                                                                                              request by CCC, the applicant must                     by the Director.
                                                         (1) An individual who is a citizen or                                                                          (c) Previous qualification. Any Seller
                                                      legal resident of the United States; or                 provide written evidence that such
                                                                                                              entity has been organized in a U.S.                    that is currently qualified under subpart
                                                         (2) An entity constituted or organized
                                                                                                              State, the District of Columbia, Puerto                B of this part, § 1493.30 need only
                                                      in the United States, including any
                                                                                                              Rico, or a territory or possession of the              provide the information requested in
                                                      corporation, trust partnership, sole
                                                                                                              United States.                                         § 1493.220(a)(4). Once CCC receives that
                                                      proprietorship, joint venture, or other
                                                                                                                 (2) For the applicant’s headquarters                information, CCC will notify the Seller
                                                      association with business activities in
                                                      the United States.                                      office:                                                that the Seller is qualified under this
                                                         U.S. Services. Services performed by                    (i) The name and full address of the                section to submit applications for a FGP
                                                      U.S. Persons, including those                           applicant’s headquarters office (a post                Payment Guarantee, and the other
                                                      temporarily residing outside the United                 office box is not an acceptable address);              information provided by the Seller
                                                      States. Costs for hotels, meals,                        and                                                    pursuant to § 1493.30 will be deemed to
                                                      transportation, and other similar                          (ii) Telephone and fax numbers.                     also have been provided under this
                                                      Services incurred in the Destination                       (3) For the applicant’s agent for the               section. Any Seller not submitting an
                                                      Country are not U.S. Services.                          service of process:                                    application for a GSM–102 or FGP
                                                                                                                 (i) The name and full U.S. address of               Payment Guarantee for two consecutive
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                                                         Value of Goods or Components in
                                                      Goods. The price derived for goods or                   the applicant’s agent’s office, along with             U.S. Government fiscal years must
                                                      components in goods, determined by:                     an indication of whether the address is                resubmit a qualification application
                                                         (1) The price stipulated in the Firm                 a business or private residence;                       containing the information specified in
                                                      Sales Contract or, if such price is not                    (ii) Telephone and fax numbers;                     § 1493.220(a) to CCC to participate in
                                                      available;                                                 (iii) Email address (if applicable); and            the FGP. If at any time the information
                                                         (2) The declared customs value or, if                   (iv) Contact name.                                  required by paragraph (a) of this section
                                                      the customs value is not available; then                   (4) A description of the applicant’s                changes, the Seller must promptly
                                                         (3) The fair market wholesale value in               business. Applicants must provide the                  contact CCC to update this information
                                                      the United States.                                      following information:                                 and certify that the remainder of the


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                                                                               Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                              34087

                                                      information previously provided under                   submitted information required by this                    (iii) Identity of the legal entity or
                                                      paragraph (a) of this section has not                   section whether they have qualified to                 person with ultimate control or decision
                                                      changed.                                                participate in the program or whether                  making authority, if other than the
                                                        (d) Ineligibility for program                         further information is required by CCC.                majority shareholder.
                                                      participation. An applicant may be                      Any applicant failing to qualify will be                  (4) Organizational structure
                                                      ineligible to participate in the FGP if                 given an opportunity to provide                        (independent, or a subsidiary, Affiliate,
                                                      such applicant cannot provide all of the                additional information for consideration               or branch of another legal entity);
                                                      information and certifications required                 by the Director.                                          (5) Name of foreign government
                                                      in § 1493.220(a).                                          (c) Previous qualification. Any U.S.                agency that regulates the applicant; and
                                                                                                              Financial Institution that is qualified                   (6) A statement that: ‘‘All
                                                      § 1493.230 Information required for U.S.                under subpart B, § 1493.40 is qualified                certifications set forth in 7 CFR
                                                      Financial Institution participation.                                                                           1493.250 are hereby made in this
                                                                                                              under this section, and the information
                                                         U.S. Financial Institutions must apply               provided by the U.S. Financial                         application’’ which, when included in
                                                      and be approved by CCC to be eligible                   Institution pursuant to § 1493.40 will be              the application, will constitute a
                                                      to participate in the FGP.                              deemed to also have been provided                      certification that the applicant is in
                                                         (a) Qualification requirements. To                   under this section. Any U.S. Financial                 compliance with all of the requirements
                                                      qualify for participation in the FGP, a                 Institution not participating in the                   set forth in § 1493.250. The applicant
                                                      U.S. Financial Institution must submit                  GSM–102 or FGP programs for two                        will be required to provide further
                                                      the following information to CCC in the                 consecutive U.S. Government fiscal                     explanation or documentation if not in
                                                      manner specified on the USDA Web                        years must resubmit the information                    compliance with these requirements or
                                                      site:                                                   and certifications specified in paragraph              if the application does not include this
                                                         (1) Legal name and address of the                    (a) of this section to CCC to participate              statement.
                                                      applicant;                                              in the FGP. If at any time the                            (b) Qualification notification. CCC
                                                         (2) Dun and Bradstreet (DUNS)                        information required by paragraph (a) of               will notify applicants that have
                                                      number;                                                                                                        submitted information required by this
                                                                                                              this section changes, the U.S. Financial
                                                         (3) Employer Identification Number                                                                          section whether they have qualified to
                                                                                                              Institution must promptly notify CCC to
                                                      (EIN—also known as a Federal Tax                                                                               participate in the program or whether
                                                                                                              update this information and certify that
                                                      Identification Number);                                                                                        further information is required by CCC.
                                                                                                              the remainder of the information
                                                         (4) Year-end audited financial                                                                              Any applicant failing to qualify will be
                                                                                                              previously provided under paragraph (a)
                                                      statements for the applicant’s most                                                                            given an opportunity to provide
                                                                                                              of this section has not changed.
                                                      recent fiscal year;                                                                                            additional information for consideration
                                                                                                                 (d) Ineligibility for program
                                                         (5) Breakdown of the applicant’s                                                                            by the Director.
                                                                                                              participation. A U.S. Financial
                                                      ownership as follows:                                                                                             (c) Participation limit. If, after review
                                                                                                              Institution may be ineligible to                       of the information submitted and other
                                                         (i) Ten largest individual shareholders
                                                                                                              participate in the FGP if such applicant               publicly available information, CCC
                                                      and ownership percentages;
                                                                                                              cannot provide all of the information                  determines that the Foreign Financial
                                                         (ii) Percentage of government
                                                                                                              and certifications required in                         Institution is eligible for participation in
                                                      ownership, if any; and
                                                                                                              § 1493.230(a).                                         the FGP, CCC will establish an FGP
                                                         (iii) Identity of the legal entity or
                                                      person with ultimate control or decision                § 1493.240 Information required for                    dollar participation limit for the
                                                      making authority, if other than the                     Foreign Financial Institution participation.           institution. This limit will be the
                                                      majority shareholder.                                      Foreign Financial Institutions must                 maximum amount of FGP exposure CCC
                                                         (6) Organizational structure                         apply and be approved by CCC to be                     agrees to undertake with respect to this
                                                      (independent, or a subsidiary, Affiliate,               eligible to participate in the FGP.                    Foreign Financial Institution at any
                                                      or branch of another financial                             (a) Qualification requirements. To                  point in time. CCC may change or
                                                      institution);                                           qualify for participation in the FGP, a                cancel this dollar participation limit at
                                                         (7) Documentation from the                           Foreign Financial Institution must                     any time based on any information
                                                      applicable United States Federal or                     submit the following information to                    submitted or any publicly available
                                                      State agency demonstrating that the                     CCC in the manner specified on the                     information.
                                                      applicant is either licensed or chartered               USDA Web site:                                            (d) Previous qualification and
                                                      to do business in the United States;                       (1) Legal name and address of the                   submission of annual financial
                                                         (8) Name of the agency that regulates                applicant;                                             statements. Each qualified Foreign
                                                      the applicant and the name and                             (2) Year-end, audited financial                     Financial Institution shall submit
                                                      telephone number of the primary                         statements in accordance with the                      annually to CCC the certifications in
                                                      contact for such regulator; and                         accounting standards established by the                § 1493.250 and its audited fiscal year-
                                                         (9) A statement that: ‘‘All                          applicant’s regulators, in English, for the            end financial statements in accordance
                                                      certifications set forth in 7 CFR                       applicant’s three most recent fiscal                   with the accounting standards
                                                      1493.250 are hereby made in this                        years. If the applicant is not subject to              established by the applicant’s
                                                      application’’ which, when included in                   a banking or other financial regulatory                regulators, in English, so that CCC may
                                                      the application, will constitute a                      authority, year-end, audited financial                 determine the continued ability of the
                                                      certification that the applicant is in                  statements in accordance with                          Foreign Financial Institution to
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                                                      compliance with all of the requirements                 prevailing accounting standards, in                    adequately service CCC guaranteed debt.
                                                      set forth in § 1493.250. The applicant                  English, for the applicant’s three most                If the Foreign Financial Institution is
                                                      will be required to provide further                     recent fiscal years;                                   not subject to a banking or other
                                                      explanation or documentation if not in                     (3) Breakdown of applicant’s                        financial regulatory authority, it must
                                                      compliance with these requirements or                   ownership as follows:                                  submit year-end, audited financial
                                                      if the application does not include this                   (i) Ten largest individual shareholders             statements in accordance with
                                                      statement.                                              and ownership percentages;                             prevailing accounting standards, in
                                                         (b) Qualification notification. CCC                     (ii) Percentage of government                       English, for the applicant’s most recent
                                                      will notify applicants that have                        ownership, if any; and                                 fiscal year. Failure to submit this


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                                                      34088                    Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules

                                                      information annually may cause CCC to                   violation of Federal or State antitrust                paragraph (b) of this section, the Seller
                                                      decrease or cancel the Foreign Financial                statutes or commission of                              may, solely at the Seller’s option,
                                                      Institution’s dollar participation limit.               embezzlement, theft, forgery, bribery,                 submit a letter of interest to CCC
                                                      Any Foreign Financial Institution not                   falsification or destruction of records,               describing a transaction for which FGP
                                                      participating in the FGP for two                        making false statements, or receiving                  coverage may be sought. The letter of
                                                      consecutive U.S. Government fiscal                      stolen property;                                       interest must contain all of the
                                                      years may have its dollar participation                    (3) The applicant and any of its                    information specified on the USDA Web
                                                      limit cancelled. If this participation                  principals (as defined in 2 CFR 180.995)               site. A letter of interest fee, which will
                                                      limit is cancelled, the Foreign Financial               or affiliates (as defined in 2 CFR                     be specified on the USDA Web site,
                                                      Institution must resubmit the                           180.905) are not presently indicted for                must accompany the letter of interest.
                                                      information and certifications requested                or otherwise criminally or civilly                     CCC will review the letter of interest
                                                      in paragraph (a) of this section to CCC                 charged by a governmental entity                       and provide preliminary feedback to the
                                                      when reapplying for participation.                      (Federal, State or local) with                         Seller on whether the transaction may
                                                      Additionally, if at any time the                        commission of any of the offenses                      be eligible for coverage under the FGP.
                                                      information required by paragraph (a) of                enumerated in paragraph (a)(2) of this                 However, CCC’s determination whether
                                                      this section changes, the Foreign                       section;                                               to issue a Payment Guarantee will be
                                                      Financial Institution must promptly                        (4) The applicant and any of its                    based on the Seller’s applications
                                                      contact CCC to update this information                  principals (as defined in 2 CFR 180.995)               submitted pursuant to paragraphs (b)
                                                      and certify that the remainder of the                   or affiliates (as defined in 2 CFR                     and (d) of this section.
                                                      information previously provided under                   180.905) have not within a three-year                     (b) Initial application for Payment
                                                      paragraph (a) of this section has not                   period preceding this application had                  Guarantee. A Firm Sales Contract must
                                                      changed.                                                one or more public transactions                        exist before a Seller may submit an
                                                        (e) Ineligibility for program                         (Federal, State or local) terminated for               initial application for a Payment
                                                      participation. A Foreign Financial                      cause or default;                                      Guarantee. An initial application for a
                                                      Institution:                                               (5) The applicant does not have any                 Payment Guarantee must be submitted
                                                        (1) May be deemed ineligible to                       outstanding nontax debt to the United                  in writing to CCC in the manner
                                                      participate in the FGP if such applicant                States that is in delinquent status as                 specified on the USDA Web site, and be
                                                      cannot provide all of the information                   provided in 31 CFR 285.13;                             accompanied by the application fee in
                                                      and certifications required in                             (6) The applicant is not controlled by              accordance with § 1493.300(b). Each
                                                      § 1493.240(a); and                                      a person owing an outstanding nontax                   initial application for a Payment
                                                        (2) Will be deemed ineligible to                      debt to the United States that is in                   Guarantee must also include a
                                                      participate in the FGP if, based upon                   delinquent status as provided in 31 CFR                completed environmental screening
                                                      information submitted by the applicant                  285.13 (e.g., a corporation is not                     document, which can be found on the
                                                      or other publicly available sources, CCC                controlled by an officer, director, or                 USDA Web site. An initial application
                                                      determines that the applicant cannot                    shareholder who owes such a debt); and                 must identify the name and address of
                                                      adequately service the debt associated                     (7) The applicant does not control a                the Seller and include the following
                                                      with the Payment Guarantees issued by                   person owing an outstanding nontax                     information:
                                                      CCC.                                                    debt to the United States that is in                      (1) Destination Country.
                                                                                                              delinquent status as provided in 31 CFR                   (2) The name and address of the
                                                      § 1493.250 Certifications required for                  285.13 (e.g., a corporation does not                   Buyer. If the Buyer is not physically
                                                      program participation.                                                                                         located in the Destination Country or
                                                                                                              control a wholly-owned or partially-
                                                        (a) When making the statement                         owned subsidiary which owes such a                     region, it must have a Buyer’s
                                                      required by §§ 1493.220(a)(7),                          debt).                                                 Representative in the Destination
                                                      1493.230(a)(9), or 1493.240(a)(6), each                    (b) Additional certifications for U.S.              Country or region taking receipt of the
                                                      Seller, U.S. Financial Institution and                  and Foreign Financial Institution                      goods and Services covered by the
                                                      Foreign Financial Institution applicant                 applicants. When making the statement                  Payment Guarantee. If applicable,
                                                      for program participation is certifying                 required by § 1493.230(a)(9) or                        provide the name and address of the
                                                      that, to the best of its knowledge and                  § 1493.240(a)(6), each U.S. and Foreign                Buyer’s Representative.
                                                      belief:                                                 Financial Institution applicant for                       (3) The name and address of the party
                                                        (1) The applicant and any of its                      program participation is certifying that,              on whose request the Letter of Credit is
                                                      principals (as defined in 2 CFR 180.995)                to the best of its knowledge and belief:               issued, if other than the Buyer.
                                                      or affiliates (as defined in 2 CFR                         (1) The applicant and its Principals                   (4) The name and address of the end-
                                                      180.905) are not presently debarred,                    are in compliance with all requirements,               user of the goods or Services, if other
                                                      suspended, proposed for debarment,                      restrictions and guidelines as                         than the Buyer.
                                                      declared ineligible, or excluded from                   established by the applicant’s                            (5) The Seller’s sales number
                                                      covered transactions by any U.S.                        regulators; and                                        pertinent to the application and a copy
                                                      Federal department or agency;                              (2) All U.S. operations of the                      of the Firm Sales Contract.
                                                        (2) The applicant and any of its                      applicant and its U.S. Principals are in                  (6) A description (including location,
                                                      principals (as defined in 2 CFR 180.995)                compliance with U.S. anti-money                        i.e., address, city, port, and/or GPS
                                                      or affiliates (as defined in 2 CFR                                                                             coordinates, if available) of the
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                                                                                                              laundering and terrorist financing
                                                      180.905) have not within a three-year                   statutes including, but not limited to,                agriculture-related facility that will use
                                                      period preceding this application been                  the USA Patriot Act of 2001, and the                   the goods and/or Services to be covered
                                                      convicted of or had a civil judgment                    Foreign Corrupt Practices Act of 1977.                 by the Payment Guarantee and an
                                                      rendered against them for commission                                                                           explanation of how the goods and/or
                                                      of fraud or a criminal offense in                       § 1493.260 Application for Payment                     Services will be used to improve
                                                      connection with obtaining, attempting                   Guarantee.                                             handling, marketing, processing,
                                                      to obtain, or performing a public                         (a) Letter of interest. Prior to                     storage, or distribution of U.S.
                                                      (Federal, State, or local) transaction or               submitting an initial application for a                Agricultural Commodities. If the
                                                      contract under a public transaction;                    Payment Guarantee in accordance with                   Payment Guarantee covers goods not


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                                                                               Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                             34089

                                                      intended for a specific facility, describe              Financial Institution has agreed to issue              Guarantee based on the results of this
                                                      where the goods will be delivered in the                the Letter of Credit.                                  environmental and social review.
                                                      Destination Country.                                       (14) The term length of the credit                     (2) Once CCC indicates its approval of
                                                         (7) List of all agricultural commodities             being extended and the intervals                       the initial application to the Seller, the
                                                      or products (inputs) to be handled,                     between principal payments for each                    Seller must submit a final application as
                                                      marketed, processed, stored, or                         Contractual Event under the Payment                    specified in paragraph (d) of this section
                                                      distributed by the proposed project after               Guarantee.                                             before CCC will make a final
                                                      completion, and an explanation of why                      (15) If applicable, a description of any            determination of whether to issue a
                                                      and how the facility or goods and/or                    arrangements or understandings with                    Payment Guarantee.
                                                      Services will specifically benefit                      other U.S. or foreign government                          (d) Final application for Payment
                                                      exporters of U.S. Agricultural                          agencies, or with financial institutions               Guarantee. CCC must receive the
                                                      Commodities.                                            or entities, private or public, providing              Seller’s final application for a Payment
                                                         (8) Total value of the Firm Sales                    guarantees or financing to the Seller or               Guarantee within 30 calendar days of
                                                      Contract.                                               other competing sellers in connection                  CCC’s approval of the initial
                                                         (9) A full description of each good to               with this sale, whether or not the goods               application, unless a longer timeframe is
                                                      be covered by the Payment Guarantee.                    or Services are of U.S. origin or would                agreed to by CCC in writing. The final
                                                      The goods specified in the Seller’s                     otherwise qualify for a Payment                        application for Payment Guarantee must
                                                      application for the Payment Guarantee                   Guarantee under this subpart. Copies of                be submitted in writing to CCC in the
                                                      must correspond with the description of                 any documents relating to such                         manner specified on the USDA Web
                                                      the goods specified in the Firm Sales                   arrangements must be provided.                         site, and be accompanied by the full
                                                      Contract and the Foreign Financial                         (16) A statement of how this project                guarantee fee (less the letter of interest
                                                      Institution Letter of Credit. The                       may encourage privatization of the                     fee, if applicable, and the initial
                                                      description must include each of the                    agricultural sector, or benefit private                application fee). The final application
                                                      following:                                              farms or cooperatives, in the Destination              must identify the name and address of
                                                         (i) Brand name and model number;                     Country. Include in the statement the                  the Seller and include the following
                                                         (ii) Applicable 10-digit Harmonized                  share of any private sector ownership of               information:
                                                      System classification code;                             the project.                                              (1) FGP tracking number assigned by
                                                         (iii) Description of the good;                          (17) An estimate of how many U.S.                   CCC.
                                                         (iv) Country where the good was                      Persons will be or have been hired                        (2) Destination country.
                                                      manufactured and from which the good                    because of the Firm Sales Contract and/                   (3) The name and address of the
                                                      will be exported;                                       or how many U.S Persons are required                   Buyer.
                                                         (v) For U.S. goods, the Value of                                                                               (4) A description of each good and
                                                                                                              to fulfill the Firm Sales Contract.
                                                      imported Components used in the U.S.                                                                           U.S. Service, along with the Value of the
                                                                                                                 (18) FGP tracking number assigned to
                                                      good’s manufacture;                                                                                            Good and Cost of the Service, for which
                                                                                                              previously submitted letter of interest, if
                                                         (vi) For goods that are Local Costs, the                                                                    guarantee coverage is requested, based
                                                                                                              applicable.
                                                      name of the local supplier;                                                                                    on CCC’s feedback on the Seller’s initial
                                                                                                                 (c) Review of initial application.
                                                         (vii) Quantity;                                                                                             application. If CCC approved a coverage
                                                         (viii) Value of the good; and                           (1) An initial application may receive
                                                                                                                                                                     waiver to provide guarantee coverage of
                                                         (ix) Incoterms (if the sale of the goods             conditional approval from CCC as
                                                                                                                                                                     only the U.S. components used in the
                                                      is based on Incoterms delivery).                        submitted, be conditionally approved
                                                                                                                                                                     assembly of U.S. Goods, provide the
                                                         (10) A full description of each U.S.                 with modifications agreed to by the
                                                                                                                                                                     Value of the U.S. Components.
                                                      Service to be covered by the Payment                    Seller, or be rejected by CCC. CCC’s                      (5) Net Contract Value.
                                                      Guarantee. The U.S. Services specified                  review will include, but not be limited                   (6) Amount of the Initial Payment and
                                                      in the Seller’s application for the                     to, the following criteria:                            evidence that the Initial Payment has
                                                      Payment Guarantee must correspond                          (i) CCC will only consider an initial               been made by the Buyer to the Seller.
                                                      with the description of the U.S. Services               application in connection with a                          (7) Description and value of any
                                                      specified in the Firm Sales Contract and                transaction that CCC determines will                   discounts and allowances.
                                                      the Foreign Financial Institution Letter                benefit primarily exports of U.S.                         (8) Guaranteed Value.
                                                      of Credit. The description must include                 Agricultural Commodities.                                 (9) Guarantee fee.
                                                      each of the following:                                     (ii) If, based upon a price review, the                (10) The Seller’s statement, ‘‘All
                                                         (i) Description of the U.S. Service;                 unit sales price of any good(s) and/or                 certifications set forth in § 1493.270 are
                                                         (ii) Supplier of the U.S. Service;                   Service(s) does not fall within the                    hereby being made by the Seller in this
                                                         (iii) Cost of the U.S. Service; and                  prevailing commercial market level                     application’’ which, when included in
                                                         (iv) NAICS classification number.                    ranges, as determined by CCC, the                      the application by the Seller, will
                                                         (11) A description and Date of                       initial application will not be approved               constitute a certification that it is in
                                                      Performance of each Contractual Event,                  as submitted.                                          compliance with all the requirements
                                                      as specified in the Firm Sales Contract.                   (iii) All initial applications submitted            set forth in § 1493.270 with respect to
                                                         (12) Indication of whether a Coverage                will be screened to determine their                    both the initial and final applications.
                                                      Waiver is requested in accordance with                  potential environmental and social                        (e) A final application for a Payment
                                                      § 1493.290(f). If a Coverage Waiver is                  impacts. Any application determined to                 Guarantee may be approved as
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                                                      requested, the applicant must indicate                  have potentially significant adverse                   submitted, approved with modifications
                                                      the nature of the waiver requested per                  environmental and/or social impacts                    agreed to by the Seller, or rejected by
                                                      § 1493.290(f)(1) and provide the                        will be subject to an environmental and                CCC. CCC shall have the right to request
                                                      justification and explanation required                  social review consistent with the                      the Seller to furnish any other
                                                      by § 1493.290(f)(2).                                    provisions of the OECD Common                          information and documentation it
                                                         (13) Name and location of the Foreign                Approaches for Officially Supported                    deems pertinent to the evaluation of the
                                                      Financial Institution issuing the Letter                Export Credits and Environmental and                   Seller’s application. In the event that the
                                                      of Credit and, upon request by CCC,                     Social Due Diligence. CCC may reject an                final application is approved, the
                                                      written evidence that the Foreign                       initial application for Payment                        Director will cause a Payment Guarantee


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                                                      34090                    Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules

                                                      to be issued in favor of the Seller. Such               documentation, the Letter of Credit                    U.S. District Court for the District of
                                                      Payment Guarantee will become                           must stipulate presentation of at least                Columbia, as determined by CCC, and
                                                      effective at the time specified in                      one original clean on board bill of                    such parties hereby irrevocably consent
                                                      § 1493.290(b).                                          lading as a required document, unless:                 to the personal jurisdiction and venue
                                                                                                                 (A) The Seller, or a related company                therein.’’;
                                                      § 1493.270 Certification requirements for               previously reported to CCC by the Seller                 (3) A provision permitting the Holder
                                                      obtaining Payment Guarantee.
                                                                                                              pursuant to 1493.220(a)(5), is named as                of the Payment Guarantee to declare all
                                                         By providing the statement in                        the shipper on the clean, on-board bill                or any part of the Repayment
                                                      § 1493.260(d)(10), the Seller is certifying             of lading. If the Seller or a related                  Obligation, including accrued interest,
                                                      that the information provided in the                    company is named the shipper on the                    immediately due and payable, in the
                                                      initial and final applications is true and              bill of lading, the Letter of Credit may               event a payment default occurs under
                                                      correct and, further, that all                          stipulate a copy or photocopy of an                    the Letter of Credit or, if applicable, the
                                                      requirements set forth in this section                  original, clean, on-board bill of lading;              Terms and Conditions Document; and
                                                      have been met. The Seller will be                       or                                                       (4) Post Default Interest terms.
                                                      required to provide further explanation                    (B) The Letter of Credit stipulates
                                                      or documentation with regard to final                   presentation of electronic documents                   § 1493.290 Terms and requirements of the
                                                      applications that do not include this                                                                          Payment Guarantee.
                                                                                                              per paragraph (a)(ii) of this section.
                                                      statement. If the Seller makes false                       (ii) If the Letter of Credit will allow                (a) CCC’s obligation. The Payment
                                                      certifications with respect to a Payment                for presentation of electronic                         Guarantee will provide that CCC agrees
                                                      Guarantee, CCC will have the right, in                  documents, the Letter of Credit must so                to pay the Holder of the Payment
                                                      addition to any other rights provided                   stipulate.                                             Guarantee an amount not to exceed the
                                                      under this subpart or otherwise as a                       (iii) If the obligation to pay by the               Guaranteed Value, plus Eligible Interest,
                                                      matter of law, to revoke guarantee                      Foreign Financial Institution is                       in the event that the Foreign Financial
                                                      coverage for any goods not yet exported                 conditioned on a Contractual Event                     Institution fails to pay under the Foreign
                                                      and Services not yet performed and/or                   requiring other than shipment                          Financial Institution Letter of Credit
                                                      to commence legal action and/or                         documentation, the Contractual Event                   and, if applicable, the Terms and
                                                      administrative proceedings against the                  must be clearly stipulated in either the               Conditions Document. Payment by CCC
                                                      Seller. The Seller, in submitting an                    Letter of Credit or the Terms and                      will be in U.S. dollars.
                                                      application for a Payment Guarantee                     Conditions Document.                                      (b) Period of guarantee coverage. The
                                                      and providing the statement set forth in                   (2) The use of a Terms and Conditions               Payment Guarantee becomes effective
                                                      § 1493.260(d)(10), certifies that:                      Document is optional. The Terms and                    on the Date(s) of Performance. For
                                                         (a) There have not been any corrupt                  Conditions Document, if any, must be                   goods, the period of coverage will apply
                                                      payments or extra sales services or other               specifically identified and referred to in             from the date on which interest begins
                                                      items extraneous to the transaction                     the Foreign Financial Institution Letter               to accrue, if earlier than the Date of
                                                      provided, financed, or guaranteed in                    of Credit.                                             Performance. The Payment Guarantee
                                                      connection with the transaction, and the                   (3) The special requirements in                     will apply to the period beginning with
                                                      transaction complies with applicable                    paragraph (b) of this section must be                  the Date(s) of Performance and will
                                                      United States law, including the Foreign                documented in one of the two following                 continue during the credit term
                                                      Corrupt Practices Act of 1977 and other                 ways:                                                  specified in the Payment Guarantee or
                                                      anti-bribery measures;                                     (i) The special requirements may be                 amendments thereto.
                                                         (b) At the time of submission of the                 set forth in the Foreign Financial                        (c) Terms of the CCC Payment
                                                      final application for Payment Guarantee,                Institution Letter of Credit as a special              Guarantee. The terms of CCC’s coverage
                                                      the Buyer does not appear as an                         instruction from the Foreign Financial                 will be set forth in the Payment
                                                      excluded party on the SAM list;                         Institution; or                                        Guarantee, as approved by CCC, and
                                                         (c) The Seller is fully in compliance                   (ii) The special requirements may be                will include the provisions of this
                                                      with the requirements of § 1493.320(b)                  set forth in a separate Terms and                      subpart, which may be supplemented by
                                                      for all existing Payment Guarantees                     Conditions Document.                                   any Program Announcements and
                                                      issued to the Seller or has requested and                  (b) Special requirements. The                       notices to participants in effect at the
                                                      been granted an extension per                           following provisions are required and                  time the Payment Guarantee is approved
                                                      § 1493.320(b)(3); and                                   must be documented in accordance with                  by CCC.
                                                         (d) The information provided                         paragraph (a) of this section:                            (d) Final Date of Performance. The
                                                      pursuant to § 1493.220 has not changed                     (1) The terms of the Repayment                      final allowable Date of Performance will
                                                      and the Seller still meets all of the                   Obligation, including a specific promise               be specified on the Payment Guarantee.
                                                      qualification requirements of                           by the Foreign Financial Institution                      (e) U.S. Content Test. Except as
                                                      § 1493.220.                                             issuing the Letter of Credit to pay the                allowed under § 1493.290(f), CCC will
                                                                                                              Repayment Obligation;                                  issue a Payment Guarantee only if the
                                                      § 1493.280 Special requirements of the                     (2) The following language: ‘‘In the                following items collectively represent
                                                      Foreign Financial Institution Letter of Credit          event that the Commodity Credit                        less than 50 percent of the sum of the
                                                      and the Terms and Conditions Document, if               Corporation (‘‘CCC’’) is subrogated to                 Net Contract Value and the value of
                                                      applicable.                                             the position of the obligee hereunder,                 approved Local Costs:
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                                                        (a) Permitted mechanisms to                           this instrument shall be governed by                      (1) The value of Eligible Non-U.S.
                                                      document special requirements. (1) A                    and construed in accordance with the                   Goods; and
                                                      Foreign Financial Institution Letter of                 laws of the State of New York,                            (2) The value of Eligible Imported
                                                      Credit is required in connection with                   excluding its conflict of laws principles.             Components.
                                                      the sale to which CCC’s Payment                         In such case, any legal action or                         (f) Coverage Waiver.
                                                      Guarantee pertains.                                     proceeding arising under this                             (1) The Seller may request a Coverage
                                                        (i) If the obligation to pay by the                   instrument will be brought exclusively                 Waiver for any of the following:
                                                      Foreign Financial Institution is                        in the U.S. District Court for the                        (i) To allow for guarantee coverage of
                                                      conditioned on shipment                                 Southern District of New York or the                   non-U.S. Goods;


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                                                                               Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                            34091

                                                         (ii) The U.S. Content Test, electing for                (3) Contractual Events where the date               CCC before CCC will consider the
                                                      guarantee coverage of only the U.S.                     of issuance of a Foreign Financial                     Seller’s initial application for a Payment
                                                      components used in the assembly of                      Institution Letter of Credit is later than             Guarantee.
                                                      U.S. Goods; and/or                                      the Date of Performance; or                               (c) Guarantee fee rates. Guarantee fee
                                                         (iii) The U.S. Content Test, allowing                   (4) Contractual Events that have been               rates will be based upon the length of
                                                      for guarantee coverage of non-U.S.                      guaranteed by CCC under another                        the payment terms provided for in the
                                                      Goods and imported components in                        Payment Guarantee. If CCC determines                   Firm Sales Contract, the degree of risk
                                                      U.S. Goods in excess of the value                       that the Contractual Event has been                    that CCC assumes, as determined by
                                                      permitted under the U.S. Content Test.                  guaranteed under multiple Payment                      CCC, and any other factors that CCC
                                                         (2) To request a Coverage Waiver on                  Guarantees (or coverage has been                       determines appropriate for
                                                      any of the bases specified in paragraph                 requested under multiple Payment                       consideration.
                                                      (1) of this sub-section, the Seller must                Guarantees), CCC will determine which                     (d) Calculation of guarantee fee. The
                                                      submit with the initial application for a               Payment Guarantee (or application for                  guarantee fee will be computed by
                                                      Payment Guarantee a justification of                    Payment Guarantee), if any, corresponds                multiplying the Guaranteed Value by
                                                      why the non-U.S. Goods and/or                           to an Eligible Export Sale.                            the guarantee fee rate.
                                                      imported components in U.S. Goods are                      (i) Additional requirements. The                       (e) Payment of guarantee fee. The
                                                      essential to the completion of the FGP                  Payment Guarantee may contain such                     Seller shall remit, with his final
                                                      project. This justification must be based               additional terms, conditions, and                      application, the full amount of the
                                                      on one of the following:                                limitations as deemed necessary or                     guarantee fee, less the letter of interest
                                                         (i) The goods and/or components are                  desirable by the Director. Such                        fee, if applicable, and the initial
                                                      no longer manufactured in or provided                   additional terms, conditions or                        application fee. CCC will not issue a
                                                      by the United States;                                   qualifications as stated in the Payment                Payment Guarantee until the full
                                                         (ii) The use of U.S. Goods and/or                    Guarantee are binding on the Seller and                amount of the guarantee fee has been
                                                      components is not cost effective; or                    the Assignee.                                          received by CCC. The Seller’s wire
                                                         (iii) U.S. Goods and/or components                      (j) Amendments to the Firm Sales                    transfer or check for the guarantee fee
                                                      are not compatible with the existing                    Contract. Any amendments to the Firm                   shall be made payable to CCC and be
                                                      infrastructure in the Destination                       Sales Contract that impact Contractual                 submitted in the manner specified on
                                                      Country.                                                Event(s) covered by the Payment                        the USDA Web site.
                                                         (g) Certain transactions are ineligible              Guarantee must be submitted to CCC for                    (f) Refunds of fees. Letter of interest
                                                      for Payment Guarantees. A transaction                   approval for coverage prior to the Date                fees, initial application fees, and
                                                      (or any portion thereof) is ineligible for              of Performance of the Contractual Event.               guarantee fees will ordinarily not be
                                                      Payment Guarantee coverage if at any                       (k) Amendments to the Payment                       refundable unless the Director
                                                      time CCC determines that:                               Guarantee. A request for an amendment                  determines that such refund will be in
                                                         (1) The sale includes corrupt                        of a Payment Guarantee may be                          the best interest of CCC.
                                                      payments or extra sales or services or                  submitted only by the Seller, with the
                                                      other items extraneous to the                           written concurrence of the Assignee, if                § 1493.310 Assignment of the Payment
                                                      transactions provided, financed, or                     any, and must be accompanied by the                    Guarantee.
                                                      guaranteed in connection with the                       revised Firm Sales Contract, if                          (a) Requirements for assignment. The
                                                      transaction;                                            applicable. The Director will consider                 Seller may assign the Payment
                                                         (2) The sale does not comply with                    such a request only if the amendment                   Guarantee only to a U.S. Financial
                                                      applicable U.S. law, including the                      sought is consistent with this subpart                 Institution approved for participation by
                                                      Foreign Corrupt Practices Act of 1977                   and any applicable Program                             CCC. The assignment must cover all
                                                      and other anti-bribery measures;                        Announcements and sufficient budget                    amounts payable under the Payment
                                                         (3) The Buyer is excluded or                         authority exists. Any amendment to the                 Guarantee not already paid, may not be
                                                      disqualified from participation in U.S.                 Payment Guarantee, particularly those                  made to more than one party, and,
                                                      government programs;                                    that result in an increase in CCC’s                    unless approved in advance by CCC,
                                                         (4) The goods, Services, and/or                      liability under the Payment Guarantee,                 may not be:
                                                      facility being financed will not                        may result in an increase in the                         (1) Made to one party acting for two
                                                      primarily benefit U.S. Agricultural                     guarantee fee. CCC reserves the right to               or more parties; or
                                                      Commodity exports;                                      request additional information from the                  (2) Subject to further assignment.
                                                         (5) The sale is not an Eligible Export               Seller to justify the request and to                     (b) CCC to receive notice of
                                                      Sale.                                                   charge a fee for amendments. Such fees                 assignment of Payment Guarantee. A
                                                         (h) Certain Contractual Events are                   will be announced and available on the                 notice of assignment signed by the
                                                      ineligible for Payment Guarantee                        USDA Web site. Any request to amend                    parties thereto must be filed with CCC
                                                      coverage. The following Contractual                     the Foreign Financial Institution on the               by the Assignee in the manner specified
                                                      Events are ineligible for coverage under                Payment Guarantee will require that the                on the USDA Web site. The name and
                                                      an FGP Payment Guarantee, except                        Holder of the Payment Guarantee                        address of the Assignee must be
                                                      where it is determined by the Director                  resubmit to CCC the certification in                   included on the written notice of
                                                      to be in the best interest of CCC to                    § 1493.310(c)(1)(i) or § 1493.330(e).                  assignment. The notice of assignment
                                                      provide guarantee coverage on such                                                                             should be received by CCC within 30
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                                                      Contractual Events:                                     § 1493.300    Fees.                                    calendar days of the date of assignment.
                                                         (1) Contractual Events with a Date of                   (a) Letter of interest fee. A letter of               (c) Required certifications.
                                                      Performance prior to the date of receipt                interest fee, as specified on the USDA                   (1) The U.S. Financial Institution
                                                      by CCC of the Seller’s written                          Web site, must be received by CCC                      must include the following
                                                      application for a Payment Guarantee;                    before CCC will consider the Seller’s                  certifications on the notice of
                                                         (2) Contractual Events with a Date of                letter of interest.                                    assignment: ‘‘I certify, that:
                                                      Performance later than the final Date of                   (b) Initial application fee. An initial               (i) [Name of Assignee] has verified
                                                      Performance shown on the Payment                        application fee, as specified on the                   that the Foreign Financial Institution, at
                                                      Guarantee or any amendments thereof;                    USDA Web site, must be received by                     the time of submission of the notice of


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                                                      34092                    Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules

                                                      assignment, does not appear as an                       the Payment Guarantee must                                (7) Description and value of Discounts
                                                      excluded party on the SAM list; and                     immediately effect such repurchase; and                and Allowances, if any;
                                                         (ii) To the best of my knowledge and                    (iii) The Holder of the Payment                        (8) The Seller’s statement, ‘‘All
                                                      belief, the information provided                        Guarantee must file all documentation                  certifications set forth in § 1493.330 are
                                                      pursuant to § 1493.230 has not changed                  required by §§ 1493.350 and 1493.360 in                hereby made by the Seller in this
                                                      and [name of Assignee] still meets all of               case of a default by the Foreign                       evidence of performance’’ which, when
                                                      the qualification requirements of                       Financial Institution under the Payment                included in the evidence of performance
                                                      § 1493.230.’’                                           Guarantee.                                             by the Seller, will constitute a
                                                         (2) If the Assignee makes a false                       (2) The Holder of the Payment                       certification that it is in compliance
                                                      certification with respect to a Payment                 Guarantee shall, within five Business                  with all the requirements set forth in
                                                      Guarantee, CCC may, in its sole                         Days of execution of a transaction under               § 1493.330; and
                                                      discretion, in addition to any other                    the Repurchase Agreement, notify CCC                      (9) In addition to all of the above
                                                      action available as a matter of law,                    of the transaction in writing in the                   information, the final evidence of
                                                      rescind and cancel the Payment                          manner specified on the USDA Web                       performance report for the Payment
                                                      Guarantee, reject the assignment of the                 site. Such notification must include the               Guarantee must include the following:
                                                      Payment Guarantee, and/or commence                      following information:                                    (i) The statement ‘‘All Contractual
                                                      legal action and/or administrative                         (i) Name and address of the other                   Events under the Payment Guarantee
                                                      proceedings against the Assignee.                       party to the Repurchase Agreement;                     have been completed.’’
                                                         (d) Notice of ineligibility to receive                  (ii) A statement indicating whether                    (ii) A statement summarizing the total
                                                      assignment. In cases where a U.S.                       the transaction executed under the                     value of all Contractual Events covered
                                                      Financial Institution is determined to be               Repurchase Agreement is for a fixed                    under the Payment Guarantee (i.e., the
                                                      ineligible to receive an assignment, in                 term or if it is terminable upon demand                cumulative totals on all numbered
                                                      accordance with paragraph (e) of this                   by either party. If fixed, provide the                 reports).
                                                      section, CCC will provide notice thereof                purchase date and the agreed upon date                    (b) Time limit for submission of
                                                      to the U.S. Financial Institution and to                for repurchase. If terminable on                       evidence of performance.
                                                      the Seller issued the Payment                           demand, provide the purchase date                         (1) The Seller must provide a written
                                                      Guarantee.                                              only; and                                              report to CCC in the manner specified
                                                         (e) Ineligibility of U.S. Financial                     (iii) The following written                         on the USDA Web site within 30
                                                      Institutions to receive an assignment                   certification: ‘‘[Name of Holder of the                calendar days from the Date of
                                                      and proceeds. A U.S. Financial                          Payment Guarantee] has entered into a                  Performance.
                                                      Institution will be ineligible to receive               Repurchase Agreement that meets the                       (2) If at any time the Seller determines
                                                      an assignment of a Payment Guarantee                    provisions of 7 CFR § 1493.310(f)(1)                   that no Contractual Events are to occur
                                                      or the proceeds payable under a                         and, prior to entering into this                       under a Payment Guarantee, the Seller
                                                      Payment Guarantee if such U.S.                          agreement, verified that [name of other                is required to notify CCC in writing no
                                                      Financial Institution:                                  party to the Repurchase Agreement]                     later than the final Date of Performance
                                                         (1) At the time of assignment of a                   does not appear as an excluded party on                specified on the Payment Guarantee by
                                                      Payment Guarantee, is not in                            the SAM list.’’                                        furnishing the Payment Guarantee
                                                      compliance with all requirements of                        (3) Failure of the Holder of the                    number and stating ‘‘No Contractual
                                                      § 1493.230(a); or                                       Payment Guarantee to comply with any                   Events will occur under the Payment
                                                         (2) Is the branch, agency, or                        of the provisions of § 1493.310(f) may                 Guarantee.’’
                                                      subsidiary of the Foreign Financial                     result in CCC annulling coverage on the                   (3) Requests for an extension of the
                                                      Institution issuing the Letter of Credit;               Foreign Financial Institution Letter of                time limit for submitting an evidence of
                                                      or                                                      Credit and Terms and Condition                         performance report must be submitted
                                                         (3) Is owned or controlled by an entity              Document, if applicable, covered by the                in writing by the Seller to the Director
                                                      that owns or controls the Foreign                       Payment Guarantee.                                     and must include an explanation of why
                                                      Financial Institution issuing the Letter                                                                       the extension is needed. An extension of
                                                      of Credit; or                                           § 1493.320    Evidence of performance.                 the time limit may be granted if such
                                                         (4) Is the U.S. parent of the Foreign                   (a) Report of performance. The Seller               extension is requested prior to the
                                                      Financial Institution issuing the Foreign               is required to provide CCC an evidence                 expiration of the time limit for filing
                                                      Financial Institution Letter of Credit; or              of performance report for each                         and is determined by the Director to be
                                                         (5) Is owned or controlled by the                    Contractual Event occurring under the                  in the best interests of CCC.
                                                      government of a foreign country and the                 Payment Guarantee. This report must                       (c) Failure to comply with time limits
                                                      Payment Guarantee has been issued in                    include the following information:                     for submission. CCC will not accept any
                                                      connection with sales of goods or                          (1) Payment Guarantee number;                       new applications for Payment
                                                      Services to Buyers located in such                         (2) Evidence of performance report                  Guarantees from a Seller under
                                                      foreign country.                                        number (e.g., Report 1, Report 2)                      § 1493.260 until the Seller is fully in
                                                         (f) Repurchase agreements.                           reflecting the report’s chronological                  compliance with the requirements of
                                                         (1) The Holder of the Payment                        order of submission under the particular               § 1493.320(b) for all existing Payment
                                                      Guarantee may enter into a Repurchase                   Payment Guarantee;                                     Guarantees issued to that Seller or has
                                                      Agreement, to which the following                          (3) Date of Performance;
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                                                                                                                                                                     requested and been granted an
                                                      requirements apply:                                        (4) Seller’s Firm Sales Contract                    extension in accordance with
                                                         (i) Any repurchase under a                           number;                                                § 1493.320(b)(3).
                                                      Repurchase Agreement by the Holder of                      (5) Detailed description of the
                                                      the Payment Guarantee must be for the                   Contractual Event. For goods, include                  § 1493.330 Certification requirements for
                                                      entirety of outstanding balance under                   the applicable 10-digit Harmonized                     the evidence of performance.
                                                      the associated Repayment Obligation;                    System classification code and the                       By providing the statement contained
                                                         (ii) In the event of default with respect            quantity;                                              in § 1493.320(a)(8), the Seller is
                                                      to the Repayment Obligation subject to                     (6) Value of the Contractual Event                  certifying that the information provided
                                                      a Repurchase Agreement, the Holder of                   covered by the Payment Guarantee;                      in the evidence of performance report is


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                                                                                 Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                             34093

                                                      true and correct and, further, that all                   with the FGP in the Destination                        the Foreign Financial Institution
                                                      requirements set forth in this section                    Country. At the Director’s request, the                regarding the default.
                                                      have been met. The Seller will be                         Seller must submit to CCC records                         (b) Failure to comply with time limit
                                                      required to provide further explanation                   demonstrating proof of entry. Records                  for submission. If the Holder of the
                                                      or documentation with regard to reports                   demonstrating proof of entry must be in                Payment Guarantee fails to notify CCC
                                                      that do not include this statement. If the                English or be accompanied by a certified               of a default within 5 Business Days,
                                                      Seller makes false certifications with                    or other translation acceptable to CCC.                CCC may deny the claim for that
                                                      respect to a Payment Guarantee, CCC                       Records acceptable to meet this                        default.
                                                      will have the right, in addition to any                   requirement include an original                           (c) Impact of a default on other
                                                      other rights provided under this subpart                  certification of entry signed by a duly                existing Payment Guarantees.
                                                      or otherwise as a matter of law, to annul                 authorized customs or port official of                    (1) In the event that a Foreign
                                                      guarantee coverage for any Contractual                    the Destination Country, by an agent or                Financial Institution defaults under a
                                                      Events that have not yet occurred and/                    representative of the vessel or shipline               Repayment Obligation under this
                                                      or to commence legal action and/or                        that delivered the goods to the                        subpart or under 7 CFR 1493, subpart B,
                                                      administrative proceedings against the                    Destination Country, or by a private                   CCC may declare that such Foreign
                                                      Seller. The Seller, in submitting the                     surveyor in the Destination Country, or                Financial Institution is no longer
                                                      evidence of performance and providing                     other documentation deemed acceptable                  eligible to provide additional Letters of
                                                      the statement set forth in                                by the Director showing:                               Credit under the FGP. If CCC determines
                                                      § 1493.230(a)(8), certifies that:                           (i) That the good(s) entered the                     that such defaulting Foreign Financial
                                                         (a) The specifications and/or quantity                 Destination Country;                                   Institution is no longer eligible for the
                                                      of the Contractual Event conform with                       (ii) The identification of the export                FGP, CCC shall provide written notice
                                                      the information contained in the Seller’s                 carrier;                                               of such ineligibility to all Sellers and
                                                      application for Payment Guarantee and                       (iii) The quantity of the good(s);                   Assignees, if any, having Payment
                                                      Firm Sales Contract, or if different, CCC                   (iv) A description of the good(s); and               Guarantees covering transactions with
                                                      has approved such changes;                                  (v) The date(s) and place(s) of                      respect to which the defaulting Foreign
                                                         (b) A Foreign Financial Institution                    unloading of the good(s) in the                        Financial Institution is expected to issue
                                                      Letter of Credit has been opened in                       Destination Country.                                   a Letter of Credit. Receipt of written
                                                      favor of the Seller by the Foreign                          (2) Where shipping documents (e.g.,                  notice from CCC that a defaulting
                                                      Financial Institution shown on the                        bills of lading) clearly demonstrate that              Foreign Financial Institution is no
                                                      Payment Guarantee to cover the dollar                     the goods were shipped to the                          longer eligible to provide additional
                                                      amount of the Contractual Event                           Destination Country, proof of entry                    Letters of Credit under the FGP shall
                                                      covered by the Payment Guarantee, less                    verification may be provided by the                    constitute withdrawal of coverage of
                                                      the Initial Payment and less Discounts                    Buyer.                                                 that Foreign Financial Institution under
                                                      and Allowances;                                                                                                  all Payment Guarantees with respect to
                                                                                                                § 1493.350    Notice of default.                       any Letter of Credit issued on or after
                                                         (c) There have not been any corrupt
                                                      payments or extra sales services or other                   (a) Notice of default. If the Foreign                the date of receipt of such written
                                                      items extraneous to the transaction                       Financial Institution issuing the Letter               notice. CCC will not withdraw coverage
                                                      provided, financed, or guaranteed in                      of Credit fails to make payment                        of the defaulting Foreign Financial
                                                      connection with the transaction, and                      pursuant to the terms of the Letter of                 Institution under any Payment
                                                      that the transaction complies with                        Credit or the Terms and Conditions                     Guarantee with respect to any Letter of
                                                      applicable United States law, including                   Document, the Holder of the Payment                    Credit issued before the date of receipt
                                                      the Foreign Corrupt Practices Act of                      Guarantee must submit a notice of                      of such written notice.
                                                      1977 and other anti-bribery measures;                     default to CCC as soon as possible, but                   (2) If CCC withdraws coverage of the
                                                         (d) If the Seller has not assigned the                 not later than 5 Business Days after the               defaulting Foreign Financial Institution,
                                                      Payment Guarantee to a U.S. Financial                     date that payment was due from the                     CCC will permit the Seller (with
                                                      Institution, the Seller has verified that                 Foreign Financial Institution (the due                 concurrence of the Assignee, if any) to
                                                      the Foreign Financial Institution, at the                 date). A notice of default must be                     utilize another approved Foreign
                                                      time of submission of the evidence of                     submitted in writing to CCC in the                     Financial Institution, and will consider
                                                      performance report, does not appear as                    manner specified on the USDA Web site                  other requested amendments to the
                                                      an excluded party on the SAM list; and                    and must include the following                         Payment Guarantee, for the balance of
                                                         (e) The information provided                           information:                                           the transaction covered by the Payment
                                                      pursuant to §§ 1493.220 and 1493.260                        (1) Payment Guarantee number;                        Guarantee. If no alternate Foreign
                                                      has not changed (except as agreed to                        (2) Name of the country or region as                 Financial Institution is identified to
                                                      and amended by CCC) and the Seller                        shown on the Payment Guarantee;                        issue the Letter of Credit within 30
                                                      still meets all of the qualification                        (3) Name of the defaulting Foreign                   calendar days, CCC will cancel the
                                                      requirements of § 1493.220.                               Financial Institution;                                 Payment Guarantee and refund the
                                                                                                                  (4) Payment due date;                                Seller’s guarantee fees corresponding to
                                                      § 1493.340       Proof of entry.                            (5) Total amount of the defaulted                    any unutilized portion of the Payment
                                                        (a) Diversion. The diversion of goods                   payment due, indicating separately the                 Guarantee.
                                                      covered by an FGP Payment Guarantee                       amounts for principal and Ordinary
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                                                      to a country other than that shown on                     Interest, and including a copy of the                  § 1493.360   Claims for default.
                                                      the Payment Guarantee is prohibited,                      repayment schedule with due dates,                        (a) Filing a claim. A claim by the
                                                      unless expressly authorized in writing                    principal amounts and Ordinary Interest                Holder of the Payment Guarantee for a
                                                      by the Director.                                          rates for each installment;                            defaulted payment will not be paid if it
                                                        (b) Records of proof of entry.                            (6) Date of Foreign Financial                        is made later than 180 calendar days
                                                        (1) Sellers must obtain and maintain                    Institution’s refusal to pay, if applicable;           from the due date of the defaulted
                                                      records of an official or customary                         (7) Reason for Foreign Financial                     payment. A claim must be submitted in
                                                      commercial nature that demonstrate the                    Institution’s refusal to pay, if known,                writing to CCC in the manner specified
                                                      arrival of the goods sold in connection                   and copies of any correspondence with                  on the USDA Web site. The claim must


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                                                      34094                    Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules

                                                      include the following documents and                     or intermodal bill(s) of lading signed by              applicable Payment Guarantee. Such
                                                      information:                                            the shipping company with the onboard                  determination shall include, but not be
                                                         (1) An original cover letter signed by               ocean carrier date for each shipment,                  limited to, CCC’s determination that all
                                                      the Holder of the Payment Guarantee                     the airway bill, or, if shipped by rail or             documentation conforms to the specific
                                                      and containing the following                            truck, the bill of lading and the entry                requirements contained in this subpart,
                                                      information:                                            certificate or similar document signed                 and that all documents submitted for
                                                         (i) Payment Guarantee number;                        by an official of the Destination                      payment conform to the requirements of
                                                         (ii) A description of:                               Country. If the transaction utilizes                   the Letter of Credit and, if applicable,
                                                         (A) Any payments from or on behalf                   electronic bill(s) of lading (e-BL), a                 the Terms and Conditions Document. If
                                                      of the defaulting party or otherwise                    print-out of the e-BL from electronic                  CCC determines that it is liable to the
                                                      related to the defaulted payment that                   system with an electronic signature is                 Holder of the Payment Guarantee, CCC
                                                      were received by the Seller or the                      acceptable;                                            will pay the Holder of the Payment
                                                      Assignee prior to submission of the                        (iv) The Seller’s invoice. For shipment             Guarantee in accordance with
                                                      claim; and                                              of goods, the invoice must show the                    paragraphs (b) and (c) of this section.
                                                         (B) Any security, insurance, or                      applicable Incoterms;                                     (b) Amount of CCC’s liability. CCC’s
                                                      collateral arrangements, whether or not                    (v) The evidence of performance                     maximum liability for any claims
                                                      any payment has been realized from                      report(s) previously submitted by the                  submitted with respect to any Payment
                                                      such security, insurance, or collateral                 Seller to CCC in conformity with the                   Guarantee, not including any CCC Late
                                                      arrangement as of the time of claim,                    requirements of § 1493.320(a); and                     Interest Payments due in accordance
                                                      from or on behalf of the defaulting party                  (vi) If the defaulted payment was part              with paragraph (c) of this section, will
                                                      or otherwise related to the defaulted                   of a transaction executed under a                      be limited to the lesser of:
                                                      payment.                                                Repurchase Agreement, written                             (1) The Guaranteed Value as stated in
                                                         (iii) The following certifications:                  evidence that the repurchase occurred                  the Payment Guarantee, plus Eligible
                                                         (A) A certification that the defaulted                                                                      Interest, less any payments received or
                                                                                                              as required under § 1493.310(f)(1)(ii).
                                                      payment has not been received (or,                         (b) Additional documents. If a claim                funds realized from insurance, security
                                                      alternatively, specifying the portion of                is denied by CCC, the Holder of the                    or collateral arrangements prior to claim
                                                      the scheduled payment that has not                      Payment Guarantee may provide further                  by the Seller or the Assignee from or on
                                                      been received), listing separately                      documentation to CCC to establish that                 behalf of the defaulting party or
                                                      scheduled principal and Ordinary                        the claim is in good order.                            otherwise related to the obligation in
                                                      Interest;                                                  (c) Subsequent claims for defaults on               default (other than payments between
                                                         (B) A certification of the amount of                 installments. If the initial claim is found            CCC, the Seller or the Assignee); or
                                                      the defaulted payment, indicating                       in good order, the Holder of the                          (2) The guaranteed percentage (as
                                                      separately the amounts for defaulted                                                                           indicated in the Payment Guarantee) of
                                                                                                              Payment Guarantee need only provide
                                                      principal and Ordinary Interest;                                                                               the value of the Contractual Event
                                                                                                              all of the required claims documents
                                                         (C) A certification that all documents                                                                      indicated in the evidence of
                                                      submitted under paragraph (a)(3) of this                with the initial claim relating to a
                                                                                                              covered transaction. For subsequent                    performance, plus Eligible Interest, less
                                                      section are true and correct copies; and                                                                       any payments received or funds realized
                                                         (D) A certification that all documents               claims relating to failure of the Foreign
                                                                                                              Financial Institution to make scheduled                from insurance, security or collateral
                                                      conforming with the requirements for
                                                                                                              installments on the same Contractual                   arrangements prior to claim by the
                                                      payment under the Foreign Financial
                                                                                                              Event, the Holder of the Payment                       Seller or the Assignee from or on behalf
                                                      Institution Letter of Credit have been
                                                                                                              Guarantee need only submit to CCC a                    of the defaulting party or otherwise
                                                      submitted to the negotiating bank or
                                                                                                              notice of such failure containing the                  related to the obligation in default (other
                                                      directly to the Foreign Financial
                                                                                                              information stated in paragraph (a)(1)(i),             than payments between CCC, the Seller
                                                      Institution under such Letter of Credit.
                                                         (2) An original instrument, in form                  (a)(1)(ii), and (a)(1)(iii)(A) and (B) of this         or the Assignee).
                                                                                                              section; an instrument of subrogation as                  (c) CCC Late Interest. If CCC does not
                                                      and substance satisfactory to CCC,
                                                                                                              per paragraph (a)(2) of this section, and              pay a claim within 15 Business Days of
                                                      subrogating to CCC the respective rights
                                                                                                              the date the original claim was filed                  receiving the claim in good order, CCC
                                                      of the Holder of the Payment Guarantee
                                                                                                              with CCC.                                              Late Interest will accrue in favor of the
                                                      to the amount of payment in default
                                                                                                                 (d) Alternative satisfaction of                     Holder of the Payment Guarantee
                                                      under the applicable sale. The
                                                      instrument must reference the                           Payment Guarantees. CCC may establish                  beginning with the sixteenth Business
                                                      applicable Foreign Financial Institution                procedures, terms and/or conditions for                Day after the day of receipt of a
                                                      Letter of Credit and, if applicable, the                the satisfaction of CCC’s obligations                  complete and valid claim found by CCC
                                                      Terms and Conditions Document; and                      under a Payment Guarantee other than                   to be in good order and continuing until
                                                         (3) A copy of each of the following                  those provided for in this subpart if CCC              and including the date that payment is
                                                      documents:                                              determines that those alternative                      made by CCC. CCC Late Interest will be
                                                         (i) The repayment schedule with due                  procedures, terms, and/or conditions are               paid on the guaranteed amount, as
                                                      dates, principal amounts and Ordinary                   appropriate in rescheduling the debts                  determined by paragraph (b) of this
                                                      Interest rates for each installment (if the             arising out of any transaction covered by              section, and will be calculated at a rate
                                                      Ordinary Interest rates for future                      the Payment Guarantee and would not                    equal to the average investment rate of
                                                                                                                                                                     the most recent Treasury 91-day bill
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                                                      payments are unknown at the time of                     result in CCC paying more than the
                                                      the claim for default is submitted,                     amount of CCC’s obligation.                            auction as announced by the
                                                      provide estimates of such rates);                                                                              Department of Treasury as of the due
                                                         (ii) (A) The Foreign Financial                       § 1493.370    Payment for default.                     date. If there has been no 91-day auction
                                                      Institution Letter of Credit securing the                 (a) Determination of CCC’s liability.                within 90 calendar days of the date CCC
                                                      sale; and                                               Upon receipt in good order of the                      Late Interest begins to accrue, CCC will
                                                         (B) If applicable, the Terms and                     information and documents required                     apply an alternative rate in a manner to
                                                      Conditions Document;                                    under § 1493.360, CCC will determine                   be described on the USDA Web site.
                                                         (iii) For goods, depending upon the                  whether or not a default has occurred                     (d) Accelerated payments. CCC will
                                                      method of shipment, the ocean carrier                   for which CCC is liable under the                      pay claims only on amounts not paid as


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                                                                               Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                             34095

                                                      scheduled. CCC will not pay claims for                  be calculated at a rate equal to the latest            contractual obligation, certification or
                                                      amounts due as a result of the claimant                 average investment rate of the most                    warranty made by the Seller for the
                                                      invoking an accelerated payment clause                  recent Treasury 91-day bill auction, as                purpose of obtaining the Payment
                                                      in the Firm Sales Contract, the Foreign                 announced by the Department of                         Guarantee or for fulfilling obligations
                                                      Financial Institution Letter of Credit, the             Treasury, in effect on the date of                     under the FGP; and
                                                      Terms and Conditions Document (if                       recovery and will accrue from such date                   (2) The Assignee will be liable to CCC
                                                      applicable), or any obligation owed by                  to the date of payment by the Seller or                when and if it is determined by CCC
                                                      the Foreign Financial Institution to the                the Assignee to CCC. Such interest will                that the Assignee has engaged in fraud
                                                      Holder of the Payment Guarantee that is                 be charged only on CCC’s share of the                  or otherwise violated program
                                                      related to the Letter of Credit issued in               recovery. If there has been no 91-day                  requirements.
                                                      favor of the Seller, unless it is                       auction within 90 calendar days of the                    (e) Cooperation in recoveries. Upon
                                                      determined to be in the best interests of               date interest begins to accrue, CCC will               payment by CCC of a claim to the
                                                      CCC. Notwithstanding the foregoing,                     apply an alternative rate in a manner to               Holder of the Payment Guarantee, the
                                                      CCC at its option may declare up to the                 be described on the USDA Web site.                     Holder of the Payment Guarantee and
                                                      entire amount of the unpaid balance,                       (2) If CCC recovers monies that should              the Seller will cooperate with CCC to
                                                      plus accrued Ordinary Interest, in                      be applied to a Payment Guarantee for                  effect recoveries from the Foreign
                                                      default, require the Holder of the                      which a claim has been paid by CCC,                    Financial Institution and/or the Buyer.
                                                      Payment Guarantee to invoke the                         CCC will pay the Holder of the Payment                 Cooperation may include, but is not
                                                      acceleration provision in the Foreign                   Guarantee its pro rata share if any,                   limited to, submission of documents to
                                                      Financial Institution Letter of Credit or,              provided that the required information                 the Foreign Financial Institution (or its
                                                      if applicable, in the Terms and                         necessary for determining pro rata                     representative) to establish a claim;
                                                      Conditions Document, require                            distribution has been furnished. If a                  participation in discussions with CCC
                                                      submission of all claims documents                      required payment is not made by CCC                    regarding the appropriate course of
                                                      specified in § 1493.360, and make                       within 15 Business Days from the date                  action with respect to a default; actions
                                                      payment to the Holder of the Payment                    of recovery or 15 Business Days from                   related to accelerated payments as
                                                      Guarantee in addition to such other                     receiving the required information for                 specified in § 1493.370(d); and other
                                                      claimed amount as may be due from                       determining pro rata distribution,                     actions that do not increase the
                                                      CCC.                                                    whichever is later, CCC will pay interest              obligation of the Holder of the Payment
                                                         (e) Action against the Assignee. If an               calculated at a rate equal to the latest               Guarantee or the Seller under the
                                                      Assignee submits a claim for default                    average investment rate of the most                    Payment Guarantee.
                                                      pursuant to Section § 1493.360 and all                  recent Treasury 91-day bill auction, as
                                                                                                                                                                     § 1493.385 Additional obligations and
                                                      documents submitted appear on their                     announced by the Department of
                                                                                                                                                                     requirements.
                                                      face to conform with the requirements                   Treasury, in effect on the date of
                                                                                                              recovery, and interest will accrue from                   (a) Maintenance of records and access
                                                      of such section, CCC will not hold the                                                                         to premises, and responding to CCC
                                                      Assignee responsible or take any action                 such date to the date of payment by
                                                                                                              CCC. The interest will apply only to the               inquiries. For a period of five years after
                                                      or raise any defense against the                                                                               the date of expiration of the coverage of
                                                      Assignee for any action, omission, or                   portion of the recovery payable to the
                                                                                                              Holder of the Payment Guarantee.                       a Payment Guarantee, the Seller and the
                                                      statement by the Seller of which the                                                                           Assignee, if applicable, must maintain
                                                      Assignee has no knowledge.                                 (c) Allocation of recoveries.
                                                                                                              Recoveries received by CCC from any                    and make available all records and
                                                      § 1493.380 Recovery of defaulted                        source whatsoever that are related to the              respond completely to all inquiries
                                                      payments.                                               obligation in default will be allocated by             pertaining to sales and deliveries of and
                                                         (a) Notification. Upon claim payment                 CCC to the Holder of the Payment                       extension of credit for goods and
                                                      to the Holder of the Payment Guarantee,                 Guarantee and to CCC on a pro rata                     Services sold in connection with a
                                                      CCC will notify the Foreign Financial                   basis determined by their respective                   Payment Guarantee, including those
                                                      Institution of CCC’s rights under the                   interests in such recoveries. The                      records generated and maintained by
                                                      subrogation agreement to recover all                    respective interest of each party will be              agents and related companies involved
                                                      monies in default.                                      determined on a pro rata basis, based on               in special arrangements with the Seller.
                                                         (b) Receipt of monies.                               the combined amount of principal and                   The Secretary of Agriculture and the
                                                         (1) In the event that monies related to              interest in default on the date the claim              Comptroller General of the United
                                                      the obligation in default are recovered                 is paid by CCC. Once CCC has paid out                  States, through their authorized
                                                      by the Seller or the Assignee from or on                a particular claim under a Payment                     representatives, must be given full and
                                                      behalf of the defaulting party, the Buyer,              Guarantee, CCC prorates any collections                complete access to the premises of the
                                                      or any source whatsoever (excluding                     it receives and shares these collections               Seller and the Assignee, as applicable,
                                                      payments between CCC, the Seller and                    proportionately with the Holder of the                 during regular business hours from the
                                                      the Assignee), such monies shall be                     Payment Guarantee until both CCC and                   effective date of the Payment Guarantee
                                                      immediately paid to CCC. Any monies                     the Holder of the Payment Guarantee                    until the expiration of such five-year
                                                      derived from insurance or through the                   have been reimbursed in full.                          period to inspect, examine, audit, and
                                                      liquidation of any security or collateral                  (d) Liabilities to CCC.                             make copies of the Seller’s, Assignee’s,
                                                      after the claim is filed with CCC shall                 Notwithstanding any other terms of the                 agent’s, or related company’s books,
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                                                      be deemed recoveries that must be paid                  Payment Guarantee, under the following                 records and accounts concerning
                                                      by the Seller and/or Assignee to CCC. If                circumstances the Seller or the Assignee               transactions relating to the Payment
                                                      such monies are not received by CCC                     will be liable to CCC for any amounts                  Guarantee, including, but not limited to,
                                                      within 15 Business Days from the date                   paid by CCC under the Payment                          financial records and accounts
                                                      of recovery by the Seller or the                        Guarantee:                                             pertaining to sales, inventory,
                                                      Assignee, such party will also owe to                      (1) The Seller will be liable to CCC                processing, and administrative and
                                                      CCC interest from the date of recovery                  when and if it is determined by CCC                    incidental costs, both normal and
                                                      of such funds to the date of CCC’s                      that the Seller has engaged in fraud, or               unforeseen. During such period, the
                                                      receipt of such funds. This interest will               has been or is in material breach of any               Seller and the Assignee may be required


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                                                      34096                      Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules

                                                      to make available to the Secretary of                     this subpart, the applicable Program                   appeal. This information or
                                                      Agriculture or the Comptroller General                    Announcements and notices to                           documentation must be submitted to the
                                                      of the United States, through their                       participants, or the Payment Guarantee.                GSM within 30 calendar days of the
                                                      authorized representatives, records that                     (2) The Seller or the Assignee may                  date of the appeal letter to the GSM. The
                                                      pertain to transactions conducted                         seek reconsideration of a determination                GSM will make a decision regarding the
                                                      outside the program, if, in the opinion                   made by the Director by submitting a                   appeal based upon the information
                                                      of the Director, such records would                       letter requesting reconsideration to the               contained in the administrative record.
                                                      pertain directly to the review of                         Director within 30 calendar days of the                The GSM will issue his or her written
                                                      transactions undertaken by the Seller in                  date of the determination. For the                     decision within 60 calendar days of the
                                                      connection with the Payment                               purposes of this section, the date of a                latter of the date on which the GSM
                                                      Guarantee.                                                determination will be the date of the                  receives the appeal or the date that final
                                                         (b) Responsibility of program                          letter or other means of notification to               documentary evidence is submitted by
                                                      participants. It is the responsibility of                 the Seller or the Assignee of the                      the Seller or the Assignee to the GSM.
                                                      all Sellers and U.S. and Foreign                          determination. The Seller or the                          (3) If the Seller or the Assignee has
                                                      Financial Institutions to review, and                     Assignee may include with the letter                   requested an administrative hearing, the
                                                      fully acquaint themselves with, all                       requesting reconsideration any                         GSM will set a date and time for the
                                                      regulations, Program Announcements,                       additional information that it wishes the              hearing that is mutually convenient for
                                                      and notices to participants relating to                   Director to consider in reviewing its                  the GSM and the Seller or the Assignee.
                                                      the FGP, as applicable. All Sellers and                   request. The Director will respond to the              This date will ordinarily be within 60
                                                      U.S. and Foreign Financial Institutions                   request for reconsideration within 30                  calendar days of the date on which the
                                                      participating in the FGP are hereby on                    calendar days of the date on which the                 GSM receives the request for a hearing.
                                                      notice that they will be bound by this                    request or the final documentary                       The hearing will be an informal
                                                      subpart and any terms contained in the                    evidence submitted by the Seller or the                procedure. The Seller or the Assignee
                                                      Payment Guarantee and in applicable                       Assignee is received by the Director,                  and/or its counsel may present any
                                                      Program Announcements.                                    whichever is later, unless the Director                relevant testimony or documentary
                                                         (c) Submission of documents by                         extends the time permitted for response.               evidence to the GSM. A transcript of the
                                                      Principals. All required submissions,                     If the Seller or the Assignee fails to                 hearing will not ordinarily be prepared
                                                      including certifications, applications,                   request reconsideration of a                           unless the Seller or the Assignee bears
                                                      reports, or requests (i.e., requests for                  determination by the Director within 30                the costs involved in preparing the
                                                      amendments), by Sellers, Assignees, or                    calendar days of the date of the                       transcript, although the GSM may
                                                      Foreign Financial Institutions under this                 determination, then the determination                  decide to have a transcript prepared at
                                                      subpart must be signed by a Principal of                  of the Director will be deemed final.                  the expense of the Government. The
                                                      the Seller, Assignee, or Foreign                             (3) If the Seller or the Assignee                   GSM will make a decision regarding the
                                                      Financial Institution or their authorized                 requests reconsideration of a                          appeal based upon the information
                                                      designee(s). In cases where the designee                  determination by the Director pursuant                 contained in the administrative record.
                                                      is acting on behalf of the Principal, the                 to subparagraph (a)(2) of this section,                The GSM will issue his or her written
                                                      signature must be accompanied by                          and the Director upholds the original                  decision within 60 calendar days of the
                                                      wording indicating the delegation of                      determination, then the Seller or the                  latter of the date of the hearing or the
                                                      authority or, in the alternative, by a                    Assignee may appeal the Director’s final               date of receipt of the transcript, if one
                                                      certified copy of the delegation of                       determination to the GSM in accordance                 is to be prepared.
                                                      authority, and the name and title of the                  with the procedures set forth in                          (4) The decision of the GSM will be
                                                      authorized person or officer. Further,                    paragraph (b) of this section. If the                  the final determination of CCC. The
                                                      the Seller, Assignee, or Financial                        Seller or the Assignee fails to appeal the             Seller or the Assignee will be entitled to
                                                      Institution must ensure that all                          Director’s final determination within 30               no further administrative appellate
                                                      information and reports required under                    calendar days, as provided in section                  rights.
                                                      these regulations are timely submitted.                   § 1493.390(b)(1), then the Director’s                     (c) Failure to comply with
                                                         (d) Misstatements or noncompliance                     decision becomes the final                             determination. If the Seller or the
                                                      by Seller may lead to rescission of                       determination of CCC.                                  Assignee has violated the terms of this
                                                      Payment Guarantee. CCC may cancel a                          (b) Appeal procedures. (1) A Seller or              subpart or the Payment Guarantee by
                                                      Payment Guarantee in the event that a                     Assignee that has exhausted the                        failing to comply with a determination
                                                      Seller makes a willful misstatement in                    procedures set forth in paragraph (a) of               made under this section, and the Seller
                                                      the certifications in §§ 1493.270(a) and                  this section may appeal a final                        or the Assignee has exhausted its rights
                                                      1493.330(d) or if the Seller fails to                     determination of the Director to the                   under this section or has failed to
                                                      comply with the provisions of                             GSM. An appeal to the GSM must be                      exercise such rights, then CCC will have
                                                      § 1493.340 or § 1493.385(a). However,                     made in writing and filed with the office              the right to exercise any remedies
                                                      notwithstanding the foregoing, CCC will                   of the GSM no later than 30 calendar                   available to CCC under applicable law.
                                                      not cancel its Payment Guarantee if it                    days following the date of the final                      (d) Seller’s obligation to perform. The
                                                      determines, in its sole discretion, that                  determination by the Director. If the                  Seller will continue to have an
                                                      an Assignee had no knowledge of the                       Seller or the Assignee requests an                     obligation to perform pursuant to the
                                                                                                                administrative hearing in its appeal
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                                                      Seller’s misstatement or noncompliance                                                                           provisions of these regulations and the
                                                      at the time of assignment of the Payment                  letter, it shall be entitled to a hearing              terms of the Payment Guarantee
                                                      Guarantee.                                                before the GSM or the GSM’s designee.                  pending the conclusion of all
                                                                                                                   (2) If the Seller or the Assignee does              procedures under this section.
                                                      § 1493.390       Dispute resolution and appeals.          not request an administrative hearing,
                                                        (a) Dispute resolution. (1) The                         the Seller or the Assignee must indicate               § 1493.395   Miscellaneous provisions.
                                                      Director and the Seller or the Assignee                   in its appeal letter whether or not it will              (a) Officials not to benefit. No member
                                                      will attempt to resolve any disputes,                     submit any additional written                          of or delegate to Congress, or Resident
                                                      including any adverse determinations                      information or documentation for the                   Commissioner, shall be admitted to any
                                                      made by CCC, arising under the FGP,                       GSM to consider in acting upon its                     share or part of the Payment Guarantee


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                                                                               Federal Register / Vol. 80, No. 114 / Monday, June 15, 2015 / Proposed Rules                                            34097

                                                      or to any benefit that may arise                           • Mail: M. Irene Omade, GIPSA,                      been made to Section 201.56. This
                                                      therefrom, but this provision shall not                 USDA, 1400 Independence Avenue                         amendment revised the Office of
                                                      be construed to extend to the Payment                   SW., Room 2542A–S, Washington, DC                      Management and Budget control
                                                      Guarantee if made with a corporation                    20250–3613.                                            number [68 FR 75388, December 31,
                                                      for its general benefit.                                   • Fax: (202) 690–2173.                              2003]. GIPSA is considering whether to
                                                        (b) OMB control number assigned                          • Hand Delivery or Courier: M. Irene                update paragraph (c).
                                                      pursuant to the Paperwork Reduction                     Omade, GIPSA, USDA, 1400                                  Section 201.56(c) of the regulations
                                                      Act. The information collection                         Independence Avenue SW., Room                          recognizes ‘‘auctioneers,’’
                                                      requirements contained in this part (7                  2542A–S, Washington, DC 20250–3613.                    ‘‘weighmasters,’’ and ‘‘salesmen’’ as key
                                                      CFR part 1493) have been approved by                       • Internet: http://                                 employees of market agencies. Key
                                                      the Office of Management and Budget                     www.regulations.gov. Follow the on-line                employees are those market agency
                                                      (OMB) in accordance with the                            instructions for submitting comments.                  employees whose duties involve
                                                      provisions of 44 U.S.C. chapter 35 and                     Instructions: All comments should                   performing key functions (i.e., functions
                                                      have been assigned OMB Control                          make reference to the date and page                    involving determinations or decisions
                                                      Number 0551–0032.                                       number of this issue of the Federal                    directly affecting the interests of
                                                                                                              Register. Regulatory analyses and other                consignors).
                                                        Dated: April 29, 2015.                                                                                          Individuals performing key functions
                                                                                                              documents relating to this action will be
                                                      Philip Karsting,                                                                                               for a market agency are restricted to a
                                                                                                              available for public inspection in Room
                                                      Administrator, Foreign Agricultural Service,            2542A–S, 1400 Independence Avenue                      greater degree as to the purchases they
                                                      and Vice President, Commodity Credit                                                                           may make from consignments to the
                                                                                                              SW., Washington, DC 20250–3613
                                                      Corporation.                                                                                                   market. Section 201.56(c) of the
                                                                                                              during regular business hours. All
                                                      [FR Doc. 2015–14449 Filed 6–12–15; 8:45 am]                                                                    regulations currently states that key
                                                                                                              comments will be available for public
                                                      BILLING CODE 3410–10–P
                                                                                                              review in the above office during regular              employees may not purchase livestock
                                                                                                              business hours (7 CFR 1.27(b)). Please                 out of consignment for their own
                                                                                                              call the Management and Budget                         account (personal or business) for any
                                                      DEPARTMENT OF AGRICULTURE                                                                                      purpose. Key employees may still
                                                                                                              Services staff of GIPSA at (202) 720–
                                                                                                              7486 to arrange a viewing of comments.                 purchase livestock in the name of the
                                                      Grain Inspection, Packers and                                                                                  market agency; for example, key
                                                      Stockyards Administration                               FOR FURTHER INFORMATION CONTACT:
                                                                                                                                                                     employees can bid in the name of the
                                                                                                              S. Brett Offutt, Director, Policy and
                                                                                                                                                                     market agency to make market support
                                                      9 CFR Part 201                                          Litigation Division, P&SP, GIPSA, 1400
                                                                                                                                                                     purchases. Market support purchases
                                                                                                              Independence Ave. SW., Washington,
                                                      Market Agencies Selling on                                                                                     are purchases made in the name of the
                                                                                                              DC 20250–3646, (202) 720–7363,
                                                      Commission; Purchases From                                                                                     market agency when the market agency
                                                                                                              s.brett.offutt@usda.gov.
                                                                                                                                                                     believes that the highest bid does not
                                                      Consignment                                             SUPPLEMENTARY INFORMATION: GIPSA                       reflect the true market value of the
                                                      AGENCY:  Grain Inspection, Packers and                  enforces the P&S Act. Under the                        livestock being offered for sale. Key
                                                      Stockyards Administration, USDA.                        authority granted to the Secretary of                  employees may also purchase livestock
                                                                                                              Agriculture (Secretary) and delegated to               in the market agency’s name for the
                                                      ACTION: Request for information.                        GIPSA, the Packers & Stockyards                        market agency’s livestock dealer
                                                      SUMMARY:    The United States Department                Program (P&SP) is authorized (7 U.S.C.                 account. Market agencies and their
                                                      of Agriculture’s (USDA) Grain                           228) to make regulations necessary to                  owners, officers, agents, non-key
                                                      Inspection, Packers and Stockyards                      carry out the provisions of the P&S Act.               employees, and firms in which these
                                                      Administration (GIPSA) is seeking                       Section 312 (7 U.S.C. 213) of the P&S                  individuals have an ownership or
                                                      comments from the public regarding                      Act makes it unlawful for markets to                   financial interest may purchase
                                                      regulations issued under the Packers                    engage in or use any unfair, unjustly                  livestock out of consignments for any
                                                      and Stockyards Act, 1921, as amended                    discriminatory, or deceptive practice or               purpose. Only those employees
                                                      and supplemented (P&S Act). GIPSA                       device in connection with the                          designated as key employees may not
                                                      regulations address circumstances                       marketing, buying, or selling of                       purchase livestock for their own
                                                      under which a market agency is allowed                  livestock on a commission basis.                       accounts.
                                                      to sell livestock on a commission basis                 Section 307 (7 U.S.C. 208) of the P&S                     In forty different locations within the
                                                      to its owners, officers, and employees.                 Act makes it the duty of every stockyard               regulations promulgated under the P&S
                                                      There may be some need to update this                   owner and market agency to establish,                  Act, GIPSA refers to the livestock scale
                                                      regulation to address current marketing                 observe, and enforce just, reasonable,                 operator as the ‘‘weigher.’’ The
                                                      practices. GIPSA would like to                          and nondiscriminatory regulations and                  regulations refer to the scale operator as
                                                      determine whether additional                            practices with respect to the furnishing               the ‘‘weighmaster,’’ only twice. Section
                                                      information is needed in clarifying the                 of stockyard services and makes every                  201.56(c) is one of the two exceptions.
                                                      circumstances under which key                           unjust, unreasonable, or discriminatory                To our knowledge there is no difference
                                                      employees of the market agency, those                   regulation or practice prohibited and                  meant or intended between the two
                                                      designated as an auctioneer,                            unlawful. Section 201.56 (9 CFR 201.56)                terms. For the sake of consistency,
                                                                                                              of the regulations issued under the P&S                GIPSA is considering changing
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                                                      weighmaster, or salesman, may
                                                      purchase livestock.                                     Act explains when and under what                       ‘‘weighmaster’’ to ‘‘weigher’’ in the list
                                                                                                              circumstances market agencies,                         of key employees.
                                                      DATES: We will consider comments we                     individuals, or firms affiliated with a                   GIPSA is also considering the need to
                                                      receive by August 14, 2015.                             market agency, may purchase consigned                  retain ‘‘salesmen’’ on the list of key
                                                      ADDRESSES: We invite you to submit                      livestock from sales conducted by the                  employees. Historically, salesmen have
                                                      comments on this request for                            market agency.                                         been owners or employees of market
                                                      information. You may submit comments                       Section 201.56 was amended in                       agencies engaged in selling livestock on
                                                      by any of the following methods:                        October 1993 [58 FR 52886]. Since then                 a commission basis in privately
                                                        • E-Mail: comments.gipsa@usda.gov.                    only a minor technical amendment has                   negotiated sales. Presently we know of


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Document Created: 2015-12-15 15:14:01
Document Modified: 2015-12-15 15:14:01
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesComments concerning this proposed rule must be received by August 14, 2015 to be assured consideration.
ContactAmy Slusher, Deputy Director, Credit Programs Division, by phone at (202) 720-6211, or by email at: [email protected]
FR Citation80 FR 34080 
RIN Number0551-AA73
CFR AssociatedAgricultural Commodities and Exports

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