**[united states government]{.smallcaps}**

**[and]{.smallcaps}**

**[the world food programme]{.smallcaps}**

######## Standard Provisions for title ii grant agreements

#### [January 9, 2003]{.smallcaps}

**I. General Purpose and Scope**

A. [Terms and conditions]{.underline}. These Standard Provisions
prescribe the terms and conditions governing the transfer of
agricultural commodities, and related funds, by the U.S Agency for
International Development (USAID) to the World Food Program (WFP)
pursuant to Title II of the Agricultural Trade Development and
Assistance Act of 1954, as amended (P.L. 480).

**II. Contributed Commodities**

A. [Availability]{.underline}.

1\. The donation of agricultural commodities, and the payment of related
costs, are subject to the availability of commodities and appropriations
and to the mutual agreement of USAID and WFP to proceed. USAID\'s Office
of Food for Peace (DCHA/FFP) shall provide WFP with a list of
agricultural commodities that are available for transfer under the Title
II program and inform WFP about changes in the commodity list as they
occur.

2\. USAID makes Title II commodities available to WFP in two ways:

\(a\) under the Pledge Transfer Authorization (Pledge TA), for specific
directed projects, Emergency Operations (EMOPs) and Protracted Relief
and Recovery Operations (PRROs) and activities funded multilaterally,
all of which are approved by WFP\'s Executive Board or by WFP, in
accordance with the policies established by the Board (henceforth
referred to as WFP\'s Executive Board in this document) and are
identified in shipping instructions (SIs); (b) for other programs (such
as EMOPs, PRROs or Country Programs) which are furnished through
Transfer Authorizations (TAs) between WFP and USAID that describe the
program and the support provided by USAID.

B.  [Processing, Handling, Transportation and Other Costs.]{.underline}
    The United States will procure, process, handle, transport, and pay
    for other incidental costs incurred in making commodities available
    to WFP f.o.b. or f.a.s. vessel at U.S. ports, or bridge and
    internodal points in the United States.

All costs and expenses incurred subsequent to the transfer of title to
the WFP shall be borne by the WFP, except as provided herein, or in the
TAs.

C. [Losses Prior to Transfer of Title.]{.underline} Prior to transfer of
Title, the Commodity Credit Corporation (CCC) of the United States
Department of Agriculture (USDA) retains authority to make or authorize
any disposition of damaged or lost commodities and to receive and retain
any monetary proceeds resulting from such disposition.

# D. Resourcing Proposal and Procurement Plan. FFP may provide to WFP direction on the use of \$150 million dollars of pledge resources. WFP shall prepare a preliminary resource proposal for multilateral Title II contributions and directed contributions, which identifies the proposed commodity mix to be accessed under the Pledge by country and by program category. FFP will review the proposed resource proposal to determine (a) amounts of commodities requested for resourcing by WFP; (b) adherence to applicable legislated Title II mandates regarding value-added, processed, fortified and bagged commodities for development programs; (c) program resource requests which are directed to LDC or LIFDC countries. USAID may reject commodity requests for monetization purposes if the request has been determined to be in conflict with Usual Marketing Requirements (UMR). FFP will advise WFP in writing as to any concerns associated with the preliminary resource proposal within 30 days of receipt. 

WFP shall finalize its annual resource proposal to include any directed
contributions and submit a new WFP resource proposal to FFP within 30
days of receipt of FFP written comments on the preliminary resource
proposal. WFP reserves the right to amend the multilateral portion of
the resource proposal, when and where required, in consultation with
FFP. FFP reserves the right to amend the directed portion of the
resource proposal, when and where required and will inform WFP of the
changes. The new resource proposal should include WFP estimates of
commodity costs, ocean freight, inland freight, ITSH, and direct and
indirect support costs associated with the specified commodities. ITSH
costs for Country Programs (development programs) are only allowable for
those programs in LDCs. Commodity requests for tonnage to be monetized
must also be denoted. The resource proposal shall also include a
preliminary estimate of Title II 202(e) funding required for emergency,
development and PRRO program support.

WFP shall include with the new resource proposal a [Procurement
Plan,]{.underline} subject to amendment, which portrays the timing of
Shipping Instruction (SI) issuance by WFP for the procurement for each
commodity by month over the October to September period.

WFP shall certify in each SI that there is adequate storage available
for the commodities in the country of destination and that the provision
of the commodities will not result in a disincentive to or interference
with local production or marketing. DCHA/FFP shall notify WFP within 15
days of receipt of the SI if there will be a delay in approval.

Except as otherwise provided in the TA or when USAID contracts for ocean
transportation, title to the commodity shall pass to WFP at the time and
place of delivery free on board (f.o.b.) or free along side (f.a.s.)
vessels at U.S. ports.

E. [Related Costs]{.underline}

\(1\) At the beginning of each United States fiscal year (upon the
submission of WFP\'s final resourcing proposal and procurement plan and
subject to the availability of funds), USAID will issue a Procurement
Authorization (PA) to WFP authorizing the expenditure of U.S. funds for
approved ocean freight and inland transportation costs, subject to the
terms and conditions herein and of the Pledge or other TAs for
commodities to which the funds relate. USAID shall amend the PAs on a
quarterly basis to provide estimated inland and ocean costs associated
with USAID approved shipping instructions (SIs) or TAs to date. WFP will
be responsible for requesting, in writing, any increase to the transport
funding approved under the PAs when it is determined that actual costs
will exceed the level approved. For all Title II shipments for which
reimbursement is sought, WFP (or its designated agent) will submit to
USAID/DCHA/FFP/POD: (i) U.S. Treasury Form 1034 (Public Voucher for
Purchases and Services Other Than Personal); (ii) copies of freighted
Bills of Lading and completed Form CCC-512; and (iii) signed charter
parties, booking notes or other transportation agreements. Upon
administrative approval of this documentation by FFP, funds will be
released directly to the WFP (or its designated agent).

Address: U.S. Agency for International Development

DCHA/FFP/POD

Ronald W. Reagan Building

1300 Pennsylvania Avenue

Washington, D.C. 20523-0209

\(2\) (a) When the first project with an approved ITSH component under
the Pledge TA is approved in any fiscal year, USAID shall issue a
Purchase Authorization/Procurement Request (PA/PR) to WFP authorizing
the expenditure of U.S. funds, subject to appropriations, for authorized
ITSH costs. USAID may revise the annual PA/PR to reflect the amount of
ITSH approved by USAID for WFP projects to which the U.S has donated
commodities. The PA/PR will establish the letter of credit mechanism
that uses a direct deposit transfer system (Automated Clearing House \--
ACH) to deliver federal funds to WFP through an Agency-issued letter of
credit (LOC) arrangement with USAID. As long as the LOC is in effect,
WFP shall comply with the terms and conditions of the LOC and any
instructions issued by USAID/M/FM/CMP.

\(b\) In establishing a level of funding under the first PA/PR for a
fiscal year or any subsequent amendments, FFP will advise the WFP of the
cost categories and allowable charges that are eligible for funding
using amounts donated by USAID for ITSH. WFP may not utilize ITSH funds
to finance charges under cost categories that have not been reviewed and
approved, in advance, by FFP. In addition, WFP shall not expend U.S.
pledged funds in excess of the limits provided in the PA/PR without
authorization from USAID.

(c) If WFP earns interest on Federal funds advanced by USAID prior to
    expending the funds for program purposes, WFP shall remit the
    interest annually to USAID.

**III. Shipping**

A. [Forwarding and Contracting]{.underline}. WFP shall make all
arrangements for forwarding and contracting for ocean and inland
transportation in accordance with USAID published \"booking guidelines\"
unless USAID determines that it is in the best interest of the U.S.
Government for USAID or another U.S. Government agency to make
transportation arrangements to selected destinations.

1\. In the event that WFP contracts for transportation, the following
shall apply:

\(a\) WFP will choose a shipping agent to assist in the procurement of
ocean transportation of Title II commodities. By accepting such an
appointment, a shipping agent becomes subject to the conflict of
interest provisions under section 407 (b) (4) of P.L. 480, as amended,
and USDA regulations issued thereunder (see Annex C). The appointment of
a U.S. licensed freight forwarder and U.S. charter broker(s) shall be
subject to USAID/M/OP/TC approval.

\(b\) WFP may contract for ocean freight on other than full berth terms
if such terms will increase the efficiency of WFP activities and result
in a greater tonnage of Title II commodities being procured and
delivered. Such terms may include vessel load/free out, free in/free
out, or other ocean freight contract terms, with the associated costs
such as discharge or demurrage including bagging and stacking being
reimbursable under the PA. Deviation from full berth terms are subject
to approval by USAID/M/OP/TC. If at any time during the duration of an
agreement to donate commodities it becomes apparent to USAID that
freight contracting terms being used by the WFP are having an adverse
effect on the level of Title II commodities being made available, USAID
may, on written notice to WFP, restrict WFP\'s contracting terms to full
berth terms.

\(c\) WFP shall maintain records of freight cost comparisons and make
them available to USAID/M/OP/TC on a quarterly basis.

\(d\) WFP shall pursue claims for losses during transit and retain
amounts recovered with respect to commodities for which title has passed
to WFP.

2\. In the event that USAID contracts for transportation, the following
shall apply:

\(a\) WFP/Rome shall submit SIs to FFP. Shipments will be booked by
M/OP/TC, which will then, through cables or letters to WFP/Rome and
USAID or Diplomatic Posts, provide names of vessels, expected time of
arrival (ETAs), and other pertinent information on those shipments. At
the time of exportation of commodities, applicable ocean bills of lading
shall be sent via courier, or by the fastest means available to the
consignee in sufficient time to clear the shipment before arrival and
copy to WFP, Rome.

\(b\) USAID shall retain title to commodities and USAID will arrange for
ocean carriage and inland transportation, as necessary, and discharge
onto the quay or at selected inland destination sites, at which time
title to the commodity will pass to the WFP. USAID or another government
agency shall pursue claims for losses occurring during transit prior to
passage of title to WFP; the U.S. credit in satisfaction of the pledge
shall be reduced in the amount collected with respect to items
previously credited to the pledge.

\(c\) USAID/M/OP/TC will provide WFP, Ocean Transportation Service, with
regular advice of commodity transport status including: basic ocean
contract details, commodity lifting report, and 14, 10, 7, and 2 days
pre‑advisement of vessel\'s arrival at discharge port. In addition,
USAID will provide WFP with shipping documentation in a timely fashion
to ensure the proper clearance of the cargo at the destination.

\(d\) USAID will arrange for a survey on discharge or arrival at the
inland destination, as appropriate, and will provide a copy of the
survey report to WFP. The USAID-designated surveyors will coordinate
with WFP superintendents, and WFP will provide to USAID the reports of
WFP\'s superintendents.

\(e\) Any reconditioning of cargo damaged prior to the passage of title
will be the responsibility of USAID. The cost of any such reconditioning
which has to be undertaken by the WFP will be repaid to the WFP by CCC.
Any reconditioning costs incurred will be covered from funds made
available under the pledge to WFP.

\(f\) A transportation authorization will be issued to cover the ocean
freight paid directly by USAID. When USAID/M/OP/TC contracts for ocean
carriage, disbursement to the carriers shall be made by M/OP/TC upon
presentation of Standard Form 1034, and three copies of 1034A (Public
Voucher for Transportation Charges), together with three copies of the
related on-board ocean bill of lading, one copy of which must contain
the following certification signed by an authorized representative of
the steamship company:

> I CERTIFY THAT THIS DOCUMENT IS A TRUE AND CORRECT COPY OF THE
> ORIGINAL ON-BOARD OCEAN BILL OF LADING UNDER WHICH THE GOODS HEREIN
> DESCRIBED WERE LOADED ON THE ABOVE-NAMED VESSEL AND THAT THE ORIGINAL
> AND ALL OTHER COPIES THEREOF HAVE BEEN CLEARLY MARKED AS NOT TO BE
> CERTIFIED FOR BILLING.

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

  (Name of Steamship Company)

  By:

  (Authorized Representative)
  -----------------------------------------------------------------------

Such vouchers should be submitted to:

Director, FM/CMP/DCB

United States Agency for International Development

Ronald W. Reagan Building

1300 Pennsylvania Avenue

Washington, D.C. 20523-0209

\(g\) Ocean and inland transportation costs will be charged to the USAID
pledge to WFP, where appropriate.

B. [Cargo Preference]{.underline}. WFP shall ensure timely, coordinated
movement of all WFP cargoes subject to these Standard Provisions in
accordance with United States legal requirements (P.L. 480, as Amended)
and policies related to lowest-landed-cost contracting, and with the
United States Cargo Preference Act. Details of these requirements are
set forth below:

1\. Ocean transportation of commodities provided under Title II, PL 480
shall be procured by WFP in compliance with the United States policies
on cargo preference requirements which is that at least 75 percent of
P.L. 480 tonnage is to be transported on U.S. flag vessels.

2\. Compliance with Cargo Preference requirements is on the basis of a
preference year (April 1 - March 31) on shipments worldwide regardless
of sponsor which may require that WFP ship more or less than the
mandated 75 percent of their commodities on U.S. flag vessels.

3\. In accordance with current USAID policy, WFP shall provide USAID and
USDA/KCCO with freight offers. USAID will then determine the flag on
which bookings are to be made and advise WFP and USDA/KCCO.

4\. When Title II commodities provided under any agreement between USAID
and WFP are to be transported in full or in part by chartered vessel,
WFP shall, in accordance with established ocean transportation
procedures, inform USAID/M/OP/TC and ensure that the U.S. market is
informed through the Transportation News Ticker and on USAID\'s
electronic transportation bulletin board.

5\. Liner shipments are defined as shipments booked on vessels operating
regularly between fixed points or countries, running on a fixed and
predetermined schedule, and owned and/or operated by a recognized liner
company. Charter shipments are defined as full or part cargoes, booked
on tramp vessels, operating exclusively on a worldwide basis, and not in
a regular or quasi-regular trade.

6\. In accordance with cargo preference requirements, WFP will seek the
approval of USAID/M/OP/TC prior to concluding charter arrangements. WFP
will, by fax or e-mail, seek such approval stating the vessel\'s name,
dead-weight tonnage, commodity, tonnage, bagged/bulk, load and discharge
ports, discharge rate, freight rate, demurrage/dispatch rates, lay-days,
and terms. USAID/M/OP/TRANS\' determination will be provided to WFP by
fax or e-mail within 48 hours.

C. [Tolerances]{.underline}. Delivery by USAID to WFP at point of
transfer of title within a tolerance of 5 percent plus or minus (2
percent in the case of quantities over 10,000 metric tons), of the
quantity ordered for shipment shall be regarded as completion of
delivery. There shall be no tolerance with respect to the ocean
carrier\'s responsibility to deliver the entire cargo shipped, and the
United States assumes no obligation for failure by an ocean carrier to
complete delivery to port of discharge.

D. [Documentation]{.underline}

1\. WFP shall also submit all necessary documentation required by the
United States for monitoring and authorizing transportation
expenditures, including the following:

\(a\) Documentation necessary for general record keeping, traffic
management and compliance assurance with the United States Cargo
Preference requirements and lowest-landed-cost procedures. Within 15
calendar days of vessel loading, WFP agrees to supply the USAID/M/OP/TC
and USDA/FSA/KCCO each with (A) one copy of the completed Form CCC-512;
(B) two copies each of all freighted Bills of Lading that record the
transportation of commodities furnished through WFP under Title II; and
(C) one copy of signed charter parties, booking notes or other ocean
transportation agreements.

Addresses:

USAID/Management Bureau/

Office of Procurement/Transportation Division

7th Floor

Ronald W. Reagan Building

Washington, D.C. 20523-0209

USDA/FSA/KCCO

P.O. Box 419205

Kansas City, MO 64141-6205

b.  A detailed listing of all transactions related to the transportation
    of Title II commodities including shipping instruction (S.I.)
    number, recipient country, commodity, net metric tons, vessel name,
    flag, and costs (U.S. dollars) to the Office of Food for Peace
    Program Operations Division (USAID/DCHA/FFP/POD) in a bi-monthly
    report.

This report may be submitted through the WFP\'s U.S.-based freight
forwarder or through electronic transfer.

Address:

USAID/Bureau for Humanitarian Response/

Office of Food for Peace/Program Operations Division

7th Floor

Ronald W. Reagan Building

Washington, D.C. 20523-0209

\(c\) WFP and DCHA/FFP will confer on a quarterly basis about drawdowns
against the pledge and any emergency TAs that might be outstanding at
that time.

**IV. Obligations of WFP**

A. [Plan of operation.]{.underline} WFP agrees to use commodities and
funds contributed by USAID under the pledge in accordance with the terms
and conditions for the activity for which the commodities and funds are
donated as approved by the WFP Executive Board. WFP agrees to use
commodities and funds donated by the U.S. for other specific emergency
programs as mutually agreed by WFP and USAID in the TA for the program.

B. [Program supervision.]{.underline} WFP shall be represented by a
person appointed by and responsible to WFP for supervision and control
of the program in the country of distribution in accordance with the
provisions of the agreement under which the commodities and funds were
donated to WFP. The WFP representative may be resident or regional. WFP
will require the government or other implementing partner to distribute
commodities in accordance with the agreed upon program plan and to
provide WFP reports regarding commodity distribution and use by
beneficiaries. WFP field staff will undertake periodic monitoring
missions at food distribution sites to ensure that WFP-supplied
commodities are distributed according to an agreed upon plan.

C. [Determination of eligibility]{.underline}. WFP shall be responsible
for verifying the eligibility of recipient organizations to whom WFP
provides commodities, in accordance with the terms and conditions of the
agreement through which the commodities are donated. WFP shall impose
upon recipient organizations responsibility for determining that the
beneficiaries to whom they distribute commodities are eligible.

D. [Use]{.underline}.

1\. Commodities and related funding (ocean freight, surveys,
loading/discharging expenses including bagging and stacking, inland
freight, where appropriate, transportation costs incurred in moving the
commodities from designated ports or points of entry to storage and
distribution sites and associated storage and distribution (ITSH) costs)
provided under the Pledge TA shall be used in accordance with WFP\'s
final resourcing proposal and procurement plan as agreed to by DCHA/FFP.
Commodities and related funding provided by USAID for WFP programs shall
be used in accordance with the terms and conditions of the governing
program documentation and TA for the program.

2\. WFP shall not take any action that would result in the distribution
of Title II commodities within the recipient country on the basis of
political affiliation, geographic location, ethnic, tribal, or religious
identity of beneficiaries, or other factors extraneous to need.

3\. Military forces shall not handle, distribute or allocate Title II
agricultural commodities unless FFP otherwise agrees in writing.

4\. WFP shall not permit the resale, diversion in transit, or
transshipment to other countries of agricultural commodities donated
under this Agreement, except as specifically approved under the Pledge
TA or by USAID with respect to commodities donated by USAID for other
emergency programs.

E. [Monetization]{.underline}.

\(1\) Foreign currency realized through the sale of Title II
agricultural commodities (monetized proceeds) shall be used for the
project as approved by the Executive Board with respect to commodities
donated under the pledge and must be used as described in the EMOP and
TA for other emergency programs. Program income earned with respect to
Title II commodities, such as funds received on the sale of containers
or charges made in feeding programs on the basis of ability to pay, may
be used for the same purposes as monetized proceeds.

\(2\) Monetized proceeds may not be used to pay for the performance of
abortions as a method of family planning or to motivate or coerce any
person to practice abortions.

\(3\) Monetized proceeds may not be used to finance the production of
agricultural commodities for export, or products thereof, that would
compete in the world market with similar agricultural commodities, or
products thereof, if such competition would cause substantial injury to
United States producers, as determined by FFP.

F. [Public recognition]{.underline}. To the maximum extent practicable,
and with the cooperation of the host government, adequate public
recognition shall be given by the press, radio, and other media that the
commodities have been furnished by the people of the United States. To
the extent feasible, the information prescribed for containers in
Section IV.(G) should be publicized at distribution centers by display
banners, posters or similar media.

G. [Containers]{.underline}.

1\. [Markings]{.underline}: Unless otherwise specified in the relevant
shipping instruction, when commodities are packaged for shipment from
the United States, bags and other containers shall be marked with the
CCC Contract Number or other identification, the USAID emblem, and the
following information stated in English:

· Name of the commodity

· Furnished by the people of the United States of America

· Not to be sold or exchanged (where applicable).

2\. [Disposal of containers]{.underline}. WFP may dispose of containers,
other than containers provided by carriers, in which Title II
commodities are received in countries having approved WFP programs. Such
disposal may be by sale, exchange, or free distribution to eligible
beneficiaries for personal use. If the containers are to be used
commercially, WFP must arrange for the removal or obliteration of U.S.
Government markings from the containers prior to such use.

H. [No displacement of sales]{.underline}. The donation of commodities
furnished for WFP programs shall not result in increased availability
for export by the recipient country of the same or like commodities and
shall not interfere with or displace sales in the recipient country
which might otherwise take place. This requirement may be waived by FFP
to meet emergency or disaster situations.

I. [Commodities borrowed or exchanged]{.underline}. After the date
USAID/W has approved an SI issued by WFP, but before Title II
commodities arrive at the foreign destination, WFP may, with prior
approval of USAID/W, borrow the same or similar commodities from any
local sources to meet program requirements provided that:

1\. such commodities are used in accordance with the terms approved by
the WFP Executive Board if donated under the pledge or the terms of the
applicable TA, and will be replaced on an equivalent value basis at the
time and place that the exchange takes place, as determined by mutual
agreement between the WFP and other party to the exchange;

2\. wherever practicable packaged commodities which are borrowed shall
be appropriately identified in the language of the country of
distribution as having been furnished by the people of the United
States; and

3\. suitable publicity shall be given to the exchange of commodities as
provided in paragraph (F) of this section, and containers for borrowed
commodities shall be marked to the extent practicable in accordance with
paragraph (G) 1, of this section. Transfers of commodities may be made
between approved Title II programs to meet emergency disaster
requirements or to improve efficiency of operation (for example, to meet
temporary shortages due to delays in ocean shipments or inland
transportation, or to provide for more rapid distribution of stocks in
danger of deterioration). Except as USAID may otherwise agree in
writing, such transfers must be made at no cost to USAID and with the
concurrence of WFP and the approval of the USAID Mission. Commodities
transferred as described above shall not be replaced by USAID unless
DCHA/FFP authorized such replacement in advance.

J. [Disposal of excessive stock of commodities]{.underline}. If
commodities are on hand which cannot be utilized in accordance with the
terms and conditions approved by the WFP Executive Board if donated
under the pledge or the applicable TA if used in emergency programs, WFP
shall promptly advise USAID/W of the quantities, location, and condition
of such commodities, and, where possible shall propose an alternate use
of the excess stocks. USAID/W shall determine the most appropriate use
of the excess stocks, and shall issue instructions for disposition.
Transportation cost and other charges attributable to transferring
commodities from one program to another within the country shall be the
responsibility of the agencies involved.

K. [Labeling Processed or Repackaged Commodities]{.underline}. If prior
to distribution, WFP arranges for packaging or repackaging donated
commodities, the containers in which the commodities are packed shall be
plainly labeled with the USAID emblem and, in the language of the
country in which the commodities are to be distributed, with the
following information:

· Name of commodity;

· Furnished by the people of the United States of America; and

· Not to be sold or exchanged (where applicable).

When the usual practice in a country is not to enclose the end product
in a container, WFP shall, to the extent practicable, display banners,
posters, or use other media similar to that prescribed in paragraph (B)
of this section.

**V. Arrangements for Entry and Handling in Recipient Country**

A. [Costs at discharge ports]{.underline}. Except as otherwise agreed in
writing by FFP, WFP shall be responsible for all costs beyond ocean
contract (i.e., from Free out or under tackle or ex-bagging line) and
for demurrage (except when specifically allowed according to the terms
of section III), detention and overtime.

Except as otherwise agreed in writing by FFP, WFP also shall be
responsible for wharfage, taxes, dues, and port charges assessed against
the cargo whenever stated separately in the applicable tariff or
shipping contract, and for lighterage (when not a custom of the port)
when assessed as a charge separate from the freight rate.

B. [Duties, taxes and consular invoices]{.underline}. Commodities for
use other than monetization shall be admitted duty free and exempt from
all taxes. Consular invoices shall not be required unless specific
provision is made in the WFP Project Agreement. If required, they shall
be issued without cost to WFP or to USAID.

C. [Storage facilities and transportation in recipient
countries]{.underline}. WFP shall make all necessary arrangements for
receiving the commodities and assume full responsibility for storage and
maintenance of commodities from time of delivery at port of entry
abroad, and shall be responsible for the maintenance of commodities in
such manner as to assure distribution of the commodities in good
condition to recipient agency or beneficiaries.

D. [Inland transportation in intermediate countries]{.underline}. In the
case of landlocked countries, transportation in the intermediate country
to designated inland point of entry in the recipient country shall be
arranged by WFP, which shall report all loss and damage in the
intermediate country. USAID shall reimburse direct transportation costs,
such as trucking, loading/unloading, reasonable survey costs and
short-term storage (less than 45 days). Other charges associated with
inland transportation\--such as agency fees, insurance and
miscellaneous\--shall not be eligible for reimbursement unless
specifically approved in advance by FFP.

E. [Distribution in recipient country]{.underline}. Except as otherwise
agreed by FFP, WFP shall be responsible for all costs related to
distributing donated commodities to end users as provided in the program
approved by the Executive Board with respect to commodities donated
under the pledge or as mutually agreed by WFP and USAID with respect to
other Title II commodities donated by USAID to WFP for other programs.

**VI. Liability for Loss and Damage or Improper Distribution of
Commodities**

A. [Ocean carrier loss and damage, general average and
salvage]{.underline}

1\. [Outturn reports for claims against ocean carriers]{.underline}. WFP
shall obtain an outturn report immediately following each vessel\'s
discharge. The report shall show the quantity and condition of the
commodities delivered and the amount of shortage or damage, if any.
Wherever possible, reports showing damage or short outturn must be
certified by an independent cargo surveyor. WFP shall obtain a
certification by a public health official or similar competent authority
of the condition of the commodity in any case where a damaged commodity
appears to be unfit for its intended use and a certificate of
disposition of any commodity determined to be unfit for its intended
use.

2\. [Claims against ocean carriers]{.underline}

\(i\) WFP shall initiate, prosecute and collect for its own use all
claims against ocean carriers for cargo loss and damage on shipments for
which WFP contracted for ocean freight and will not look to the U.S.
Government for replacement under the pledge.

\(ii\) In order that claims against ocean carriers may be filed promptly
by WFP, USDA shall furnish to the WFP:

\(A\) Copy of Form CCC‑512, Notice of Commodity Availability, stating
the export value per pound, f.o.b. or f.a.s. vessel at the U.S. port of
export, of the commodity delivered to WFP.

\(B\) In the event the U.S. Government contracts for transportation,
USAID or another U.S. Government agency shall pursue claims for losses
during transit prior to passage of title to WFP; the U.S. credit in
satisfaction of the pledge shall be reduced in the amount collected with
respect to items previously credited to the pledge.

Where USAID/M/OP/TC contracts the booking of pledged commodities, the
pledge will be charged accordingly.

\(3\) [General average and salvage]{.underline}. WFP shall be
responsible for settling and paying any general average and marine
salvage claims and shall receive and retain any allowance in general
average and any salvage proceeds.

VII. **Requirements for Record Keeping, Report, and Reports, and
     Audits;\
     Terminal Disbursement Dates:**

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A.  [Reports]{.underline}

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1.  WFP shall furnish to USAID an annual report on each activity for
    which Title II commodities and funds are provided under the
    governing Transfer Authorization (TA).

\(2\) Within fifteen (15) months after the end of each U.S. Government
fiscal year during which funds were appropriated and provided under the
governing TA, WFP shall provide to USAID information on the status of
the liquidation of obligations for ocean freight, inland freight, and
ITSH in such detail as WFP may deem appropriate. No later than eighteen
(18) months after the end of the applicable U.S. fiscal year, USAID and
WFP shall consult and reach agreement on the amount of funds available
for liquidation or deobligation. No later than twenty-four (24) months
after the end of each U.S. Government fiscal year for which funds are
appropriated and provided, WFP shall submit a final financial report for
all ocean freight, inland freight, and ITSH financed thereunder, which
will include accounting for commodities and funds in sufficient detail
to enable USAID to liquidate these expenditures under the TA.

B. [Terminal Disbursement Dates.]{.underline} Except as USAID may
otherwise agree in writing, USAID will not authorize disbursement of
funds for expenditures or activities for which a final financial report
was not received within twenty-four (24) months after the end of the
U.S. Government fiscal year during which the funds were appropriated and
provided to WFP. After such twenty-four (24) month period, USAID may
reduce the amount of funds obligated for activities covered by the
governing TA by all or any part thereof for which requests for
disbursement and final financial reports were not received before the
expiration of such period. WFP may request, for good cause shown, that
USAID refrain from reducing the amount of the obligation, in order to
cover expenditures properly incurred. USAID shall give due consideration
to any such request. For activities for which implementation has been
delayed but is continuing, USAID and WFP may agree to obligate current
year funds.

C. [Record Keeping and Audits.]{.underline} WFP shall maintain financial
books and records, consistent with all requirements of these standard
provisions, including documentation to substantiate charges against the
Title II donation under the governing TA, in accordance with WFP's usual
accounting procedures, which shall follow U.N. Common Accounting
Practices. All such books and records shall be maintained for at least
three years after final delivery of commodities or disbursement of funds
for an activity supported by the TA. WFP confirms that the commodities
and funds furnished by USAID under each TA will be subject to audit in
accordance with WFP's usual auditing procedures, which adhere to Common
Auditing Standards of the Panel of External Auditors of the United
Nations, the Specialized Agencies and the International Atomic Energy
Agency.

D. [Consultation.]{.underline} WFP shall ensure that the all commodities
provided by USAID are distributed and utilized in a manner consistent
with the provisions set forth in the governing TA and these Standard
Provisions. WFP shall obtain FFP concurrence in writing prior to making
Title II commodities available for use in WFP programs or other PRRO
components not specified on the associated SI. WFP shall endeavor to
ensure that losses due to improper actions or mishandling within the
recipient country are mitigated or avoided. If special circumstances
arise which appear to USAID to warrant additional review of an activity
financed under a particular TA, USAID may consult with WFP regarding the
appropriate action to be taken by WFP. To facilitate such joint
consultation, USAID may request, and WFP may provide, consistent with
its governing rules and regulations, additional information related to
review of each activity.

**VIII. Waiver, Amendment, or Termination**

A. Representatives of the parties to this Agreement shall meet as needed
to confer with respect to any operational and administrative problems
that develop. This document may be amended in writing by mutual
agreement of the parties. USAID may waive or withdraw, at any time, any
or all of the provisions of this document that impose requirements on
WFP, if such provision is not statutory, and if USAID determines it is
in the best interest of the U.S. Government to do so.

B.  All or any part of the assistance provided under the program,
    including commodities in transit, may be terminated by USAID at its
    discretion if WFP fails to comply with the provisions of this
    Agreement, or if it is determined by USAID that the continuation of
    such assistance is no longer necessary or desirable. Under such
    circumstances title to commodities which have been transferred to
    WFP shall, at the written request of FFP, be re-transferred to the
    U.S. Government by WFP. Any excess commodities on hand at the time
    the program is terminated shall be disposed of as USAID and WFP
    shall agree. If it is determined that any commodity to be supplied
    under the program agreement is no longer available for projects,
    such authorization shall terminate with respect to any commodities
    which, as of the date of such determination, have not been delivered
    f.o.b. or f.a.s. vessel.

The terms and conditions of these Standard Provisions governing the
donation of agricultural commodities by USAID to the World Food
Programme pursuant to Title II of P.L. 480, as amended, are hereby
agreed to as of the date signed by the Director of the Office of Food
for Peace.

+-----------------------------------+-----------------------------------+
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| For the United States             | For the World Food Programme      |
+-----------------------------------+-----------------------------------+
| [\_\_\_\_\_\_\_\_\_               | [\_\_\_\_\_\_\_\_\_               |
| \_\_\_\_\_\_\_\_\_\_]{.underline} | \_\_\_\_\_\_\_\_\_\_]{.underline} |
+-----------------------------------+-----------------------------------+
| Lauren Landis                     | James T. Morris                   |
+-----------------------------------+-----------------------------------+
| [Director, Office of Food for     | [Executive Director]{.underline}  |
| Peace]{.underline}                |                                   |
+-----------------------------------+-----------------------------------+
| Title                             | ##### Title                       |
+-----------------------------------+-----------------------------------+
| [\_\_\_\_\_                       | [\_\_\_\_\_\_\_\_\_               |
| \_\_\_\_\_\_\_\_]{.underline}     | \_                                |
|                                   | \_\_\_\_\_\_\_\_\_\_]{.underline} |
+-----------------------------------+-----------------------------------+
| Date                              | Date                              |
+-----------------------------------+-----------------------------------+

P:\\DCHA.PUB\\DCHA.FFP.PUB\\ProgramOperationsDivision\\DOCS\\Correspondence

\\WFPPledge\\wfpstandard.doc

Revised: JThompson 6Nov2002

Cleared: DGressett 17Oct2002