This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

68589 

Vol. 79, No. 222 

Tuesday, November 18, 2014 

DEPARTMENT OF AGRICULTURE 

Commodity Credit Corporation 

7 CFR Part 1493 

RIN 0551–AA74 

CCC Export Credit Guarantee (GSM– 

102) Program and Facility Guarantee 

Program (FGP) 

AGENCY: Foreign Agricultural Service 

and Commodity Credit Corporation 

(CCC), USDA. 

ACTION: Final rule. 

SUMMARY: This final rule amends the 

regulations that administer the Export 

Credit Guarantee (GSM–102) Program 

and eliminates provisions for the 

Intermediate Export Credit Guarantee 

(GSM–103) Program, consistent with the 

repeal of authority to operate this 

program in the Food, Conservation, and 

Energy Act of 2008 (2008 Act). This 

final rule incorporates program 

operational changes and information 

from press releases and notices to 

participants that have been 

implemented since the publication of 

the current rule, and include other 

administrative revisions to enhance 

clarity and program integrity. It also 

incorporates certain comments received 

in response to proposed rules issued on 

July 27, 2011, and December 27, 2013. 

These changes should increase program 

availability to all program participants 

and enhance access and encourage sales 

for smaller U.S. exporters. Changes are 

also intended to improve CCC’s 

financial management of the program. 

DATES: Effective Date: This final rule is 

effective December 18, 2014. 

Applicability Date: The provisions of 

this final rule will be applied by CCC as 

follows: 

(1) For any payment guarantee 

associated with an application for 

payment guarantee received by CCC on 

or after December 18, 2014, the 

provisions of this final rule shall 

immediately apply in their entirety. 

(2) For any payment guarantee 

associated with an application for 

payment guarantee received by CCC 

prior to December 18, 2014, the 

provisions of the previous rule 

governing the Export Credit Guarantee 

(GSM–102) Program shall apply. 

(3) Notwithstanding (2) above, the 

provisions of §§ 1493.30, 1493.40, 

1493.50, 1493.60, and 1493.192 shall 

apply to all program participants as of 

December 18, 2014. 

FOR FURTHER INFORMATION CONTACT: 

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; telephone (202) 720–6211. 

SUPPLEMENTARY INFORMATION: 

Background 

The Commodity Credit Corporation’s 

(CCC) Export Credit Guarantee (GSM– 

102) Program 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, and through the issuance of 

‘‘Program Announcements’’ and 

‘‘Notices to Participants’’ that are 

consistent with this regulation. The 

previous regulation became effective on 

November 18, 1994. Since that time, 

CCC has implemented numerous 

operational changes to improve the 

efficiency of the program, including an 

automated, Internet-based system for 

participants and revised program 

controls to improve program quality, 

reduce costs, and protect against waste 

and fraud. Also since that time, 

agricultural trade and finance practices 

have evolved. This final rule is intended 

to reflect these changes and to enhance 

the overall clarity and integrity of the 

program. In addition, the 2008 Act 

repealed the authority to operate the 

GSM–103 Program, and this change is 

reflected in the final rule. 

On July 27, 2011, CCC published a 

Proposed Rule in the Federal Register 

(Vol. 76, No. 144, pages 44836–44855). 

In response to comments received, CCC 

made several significant changes and 

issued a second proposed rule on 

December 27, 2013 (Federal Register 

Vol. 78, No. 249, pages 79254–79282). 

The deadline for comments on the 

second proposed rule was January 27, 

2014. CCC received comments on the 

second proposed rule from seven 

parties, including U.S. exporters and 

U.S. banks. Comments received on the 

December 27, 2013, proposed rule and 

changes made by CCC are discussed 

below in the Section-by-Section 

Analysis. 

Section-by-Section Analysis 

The section-by-section analysis below 

includes a summary of comments 

received on the December 27, 2013, 

proposed rule (hereafter ‘‘proposed 

rule’’), CCC’s responses to those 

comments, and a discussion of any 

additional changes made by CCC. In 

some instances, the numbering systems 

differ between the proposed and final 

rules. For purposes of this discussion, 

the numbering system of the final rule 

will be used, except where otherwise 

indicated. Defined terms found in the 

final rule are capitalized. 

Subpart B—CCC Export Credit 

Guarantee (GSM–102) Program 

Operations 

Section 1493.20 Definition of Terms 

Eligible Export Sale 

One commenter expressed concern 

that the proposed rule preamble added 

requirements to the definition of 

Eligible Export Sale. Because the 

Exporter is required to certify that a 

GSM–102 transaction is an Eligible 

Export Sale, the commenter requested 

clarification regarding whether the 

preamble language constitutes 

additional conditions not contained in 

the body of the regulation. 

The language in the preamble to the 

proposed rule was intended to explain 

the reasons for the new requirement that 

a GSM–102 transaction be an Eligible 

Export Sale. The preamble itself does 

not impose additional conditions on 

participants. An Exporter certifying that 

a sale is an Eligible Export Sale is 

specifically certifying that the export 

sale meets the definition in the rule (i.e., 

that it is ‘‘an export sale of U.S. 

Agricultural Commodities in which the 

obligation of payment for the portion 

registered under the GSM–102 program 

arises solely and exclusively from a 

Foreign Financial Institution Letter of 

Credit or Terms and Conditions 

Document issued in connection with a 

Payment Guarantee.’’). The Exporter is 

not required to certify that a sale 


tkelley on DSK3SPTVN1PROD with RULES
68590 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

constitutes an expansion of U.S. exports 

or would not have occurred without the 

GSM–102 program, nor is this definition 

intended to preclude brokerage 

arrangements. CCC will provide 

clarification on a case-by-case basis to 

any Exporter as needed to determine 

whether a particular transaction meets 

this requirement. 

Firm Export Sales Contract 

CCC received two comments on the 

definition of Firm Export Sales Contract. 

One commenter understood CCC to be 

requiring the Importer to be the party 

taking physical possession of and 

nationalizing the U.S. Agricultural 

Commodities for customs clearance in 

the destination country or region. This 

understanding was based on language in 

the proposed rule and its preamble 

referencing the Importer (or Importer’s 

Representative) as ‘‘taking receipt’’ of 

the U.S. Agricultural Commodities 

shipped under the Payment Guarantee. 

The commenter noted that this 

requirement could dramatically reduce 

Exporters’ ability to utilize the program, 

as often the Exporter sells to a related 

entity (currently the Importer under the 

Payment Guarantee), who sells on to the 

final buyer taking physical possession of 

the goods. This structure enables the 

Exporter to pass on greater program 

benefits to the final buyer and enables 

multiple commodity shipments to be 

registered under a single Payment 

Guarantee, reducing administrative 

costs. The commenter suggested adding 

a definition of an ‘‘exporter’s 

representative’’—an entity related to the 

Exporter that sells the commodities to 

the final buyer in the destination 

country or region. This new term would 

meet CCC’s objective of requiring the 

Importer to be the party taking physical 

possession of the goods while retaining 

the Exporter’s ability to utilize the 

program. With this new term, the 

definition of Firm Export Sales Contract 

would be redefined as a contract 

between the Exporter and either the 

‘‘exporter’s representative’’ or the 

Importer. 

CCC does not intend to require that 

the Importer in a GSM–102 transaction 

be the final buyer taking physical 

possession of the commodities in the 

destination country or region. However, 

CCC agrees that certain language in the 

proposed rule and preamble, in 

particular reference to the Importer 

‘‘taking receipt of the goods,’’ could lead 

to a misunderstanding regarding CCC’s 

intent. To address this 

misunderstanding, CCC revised the 

definition of Importer and modified the 

provisions of § 1493.70(a)(2) and (3). 

Those changes are discussed in the 

relevant sections of this preamble. No 

changes are necessary to the definition 

of Firm Export Sales Contract in 

response to this comment. 

A second commenter expressed 

concern that a Firm Export Sales 

Contract must be physically signed by 

both the Exporter and Importer when 

the Exporter submits an application for 

a Payment Guarantee. A requirement for 

a physically signed document at time of 

application in accordance with 

§ 1493.70(a) could be problematic, as it 

can take several weeks to obtain final 

signatures. The commenter clarified that 

a firm sale always exists at the time of 

application for the Payment Guarantee 

as evidenced by acknowledgements or 

other documentation, but may not 

include signatures of both the Exporter 

and Importer at that point. 

CCC acknowledges this concern but 

notes that the definition of Firm Export 

Sales Contract does not require a 

physically signed document. The 

definition states that ‘‘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.’’ 

Provided the documentation 

demonstrates evidence of the sale and 

contains the minimum required 

information stated in the definition, 

such documentation need not be 

physically signed by both parties. No 

changes are needed to the rule in 

response to this comment. 

Foreign Financial Institution Letter of 

Credit or Letter of Credit 

CCC received one comment on the 

increasing use of electronic bills of 

lading (e-BLs) through providers such as 

Electronic Shipping Solutions (ESS) and 

Bolero, with a request that the GSM–102 

rule specifically allow for e-BLs. CCC 

agrees and made a number of 

modifications to the final rule to 

accommodate e-BLs. The definition of 

Foreign Financial Institution Letter of 

Credit requires the Letter of Credit to be 

subject to the current revision of the 

Uniform Customs and Practices for 

Documentary Credits (UCP). The current 

revision, UCP 600, includes a 

Supplement to the Uniform Customs 

and Practice for Documentary Credits 

for Electronic Presentation (eUCP) to 

accommodate presentation of electronic 

records alone or in combination with 

paper documents. CCC modified the 

Letter of Credit definition in the final 

rule to include that, if applicable (i.e., 

if electronic records are to be used 

under the Letter of Credit), the 

provisions of the current revision of 

eUCP shall apply. 

Importer 

One commenter suggested modifying 

this definition to allow the Importer to 

enter a Firm Export Sales Contract with 

an ‘‘exporter’s representative for onward 

sale to the Importer. . . .’’ This 

suggestion was made in conjunction 

with proposed modifications to the 

definition of Firm Export Sales Contract 

and addition of an ‘‘exporter’s 

representative.’’ As noted in the analysis 

of the definition of Firm Export Sales 

Contract, CCC determined that it is not 

necessary to add ‘‘exporter’s 

representative’’ to the rule, and this 

change is not needed to the Importer 

definition. However, CCC modified the 

definition of Importer in response to 

participant concerns that CCC is now 

requiring the Importer to be the final 

buyer in the destination country or 

region. The revised definition allows for 

the U.S. Agricultural Commodities ‘‘to 

be shipped from the United States to the 

destination country or region under the 

Payment Guarantee.’’ CCC believes this 

change will allow a final buyer other 

than the Importer to physically receive 

the goods in the destination country or 

region. 

Importer’s Representative 

One commenter noted that some 

countries do not require registration of 

an Importer’s Representative and 

requested the definition be modified to 

allow this entity to ‘‘be organized under 

the laws of’’ the destination country or 

region. CCC agrees and has modified 

this definition accordingly. 

Intervening Purchaser 

One commenter suggested modifying 

this definition to allow the Intervening 

Purchaser to enter a Firm Export Sales 

Contract with an Exporter and sell the 

same commodities to either an Importer 

or an ‘‘exporter’s representative.’’ This 

suggestion was made in conjunction 

with proposed modifications to the 

definition of Firm Export Sales Contract 

and addition of an ‘‘exporter’s 

representative.’’ As noted in the analysis 

of the definition of Firm Export Sales 

Contract, CCC determined that it is not 

necessary to add ‘‘exporter’s 

representative’’ to the rule, and this 

change is not needed to the Intervening 

Purchaser definition. 

OFAC (Office of Foreign Assets Control) 

The proposed rule required 

participants to make certifications in 

certain submissions that neither the 

Importer, the Intervening Purchaser, nor 

the Foreign Financial Institution is 

present on the OFAC or the U.S. 

Government’s System for Awards 

Management (SAM) Web site. SAM is 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68591 

the primary database of vendors doing 

business with the Federal Government, 

including entities that are excluded 

from doing business with the 

government. Since publication of the 

proposed rule, CCC determined that 

SAM fully incorporates all excluded 

entities from the OFAC list; therefore, it 

is not necessary for participants to 

check separately for entities on the 

OFAC list and certify that they have 

done so. Checking the SAM list is 

sufficient. CCC removed all references 

to OFAC in the final rule. 

SAM (System for Award Management) 

CCC clarified the certifications in 

§§ 1493.80(d), 1493.120(c)(1)(i) and 

(f)(2)(iii), and 1493.140(d) requiring 

confirmation that certain entities are not 

present on the SAM list. SAM not only 

includes entities that are excluded from 

doing business with the Federal 

Government, but also entities that are 

registered and eligible to do business 

with the Federal Government. An 

excluded entity is denoted in SAM as 

‘‘Exclusion.’’ The certifications were 

modified to state that the GSM–102 

participant has verified that the relevant 

entity ‘‘is not present as an excluded 

party on the SAM list.’’ 

One commenter asked for clarification 

regarding when Exporters are required 

to check SAM and what proof the 

Exporter should maintain to document 

this check. 

The Exporter must certify on the 

application for Payment Guarantee that 

neither the Importer nor the Intervening 

Purchaser is present on the SAM list 

(§ 1493.80(d)). To make this 

certification, the Exporter must perform 

this check immediately prior to 

submitting the application for Payment 

Guarantee. Similarly, the Exporter 

should perform this check, if required, 

just prior to submitting an Evidence of 

Export report, consistent with 

§ 1493.140(d). The Exporter need not 

maintain specific documentation that 

the SAM list has been checked. In 

accordance with government-wide 

suspension and debarment regulations 

found at 2 CFR Part 180, CCC will check 

SAM for all parties after receiving an 

application for Payment Guarantee, a 

notice of assignment, and an Evidence 

of Export report (if applicable). 

Sufficient information is available in 

SAM or through contact with other U.S. 

Government agencies to determine 

when an entity was excluded through 

SAM, and thus to determine whether 

the Exporter likely checked these lists as 

required. An Exporter wishing to 

maintain such documentation, however, 

might consider keeping printouts of 

SAM searches. 

Section 1493.50 Information Required 

for Foreign Financial Institution 

Participation 

In paragraph (d) of this section, CCC 

added that when a Foreign Financial 

Institution (FFI) submits annual yearend financial statements for CCC to 

determine continued eligibility, the FFI 

must also re-submit the certifications in 

§ 1493.60. This change is consistent 

with requirements on Exporters and 

U.S. Financial Institutions throughout 

the rule, who must re-certify the 

information provided at qualification 

when certain documents are submitted 

to CCC. CCC also added Foreign 

Financial Institutions to the provision in 

§ 1493.191(c) (Submission of documents 

by Principals), as CCC requires these 

certifications to be made by a Principal 

(or designee) of the Foreign Financial 

Institution. 

Section 1493.60 Certifications 

Required for Program Participation 

One commenter asked whether 

adherence (and documentation of 

adherence) to the Foreign Corrupt 

Practices Act is a requirement of Foreign 

Financial Institutions in addition to U.S. 

Financial Institutions and Exporters. 

The certification for program 

participation found in § 1493.60(b)(2), 

which must be made by all U.S. and 

Foreign Financial Institutions, states 

that ‘‘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.’’ 

Therefore, to the extent that a Foreign 

Financial Institution has U.S. operations 

and U.S. Principals, these operations 

and Principals are required to adhere to 

the Foreign Corrupt Practices Act and 

otherwise be in compliance with U.S. 

law as specified in this certification. 

There is no particular documentation 

required by the U.S. or Foreign 

Financial Institution to demonstrate 

such compliance. 

Section 1493.70 Application for 

Payment Guarantee 

One commenter suggested modifying 

paragraph (a)(2) of this section to 

require either the name of the Importer 

or the ‘‘exporter’s representative,’’ 

consistent with suggested changes to the 

Firm Export Sales Contract definition. 

As noted in the analysis of the Firm 

Export Sales Contract definition, CCC 

believes it is unnecessary to add 

‘‘exporter’s representative’’ to the rule 

and this change is not needed. However, 

CCC modified this provision in response 

to concerns that CCC is now requiring 

the Importer to be the final buyer in the 

destination country or region. 

Consistent with the change to the 

Importer definition, CCC removed the 

reference to the Importer or Importer’s 

Representative ‘‘taking receipt’’ of goods 

in the destination country or region. 

Instead, the Importer (or Importer’s 

Representative, if applicable) must be 

physically located in the country or 

region of destination. 

CCC received one comment on 

paragraph (a)(3) expressing concern that 

this statement lacks clarity, specifically 

with respect to regional programs. The 

commenter is concerned that if the 

Importer (or Importer’s Representative) 

under a regional program is located in 

a country other than where goods are 

discharged, the Importer (or Importer’s 

Representative) cannot take receipt of 

the goods. CCC agrees and modified this 

statement to reflect that the goods must 

be ‘‘shipped directly to the destination 

country or region.’’ This change 

eliminates the requirement that either 

the Importer or Importer’s 

Representative take physical receipt of 

the goods, and allows for these entities 

to be located anywhere in the 

destination country or region. This 

modification also accounts for cases 

where the final buyer of the goods—who 

may not be the Importer—may take 

physical receipt of the goods at 

destination. 

One commenter requested that 

because paragraph (a)(4) allows the 

Letter of Credit to be opened by a party 

other than the Importer, CCC consider 

modifying the current language on the 

GSM–102 Payment Guarantee, which 

states ‘‘The contractual obligation of the 

foreign importer to the exporter for the 

portion of the port value of the export 

sale(s) for which credit is extended to 

the foreign bank must be secured by an 

irrevocable letter of credit.’’ CCC agrees 

and will review the GSM–102 Payment 

Guarantee to determine whether other 

changes are needed as a result of new 

regulatory language. 

One commenter suggested modifying 

paragraph (a)(8) of this section to 

require either the name of the Importer 

or the ‘‘exporter’s representative,’’ 

consistent with suggested changes to the 

Firm Export Sales Contract definition. 

As noted in the analysis of the Firm 

Export Sales Contract definition, CCC 

believes it is unnecessary to add 

‘‘exporter’s representative’’ to the rule 

and this change is not needed. 

CCC received one comment 

requesting elimination of the 

requirement in paragraph (a)(9) for the 

Exporter to ensure the commodity grade 

and quality specified in the Exporter’s 


tkelley on DSK3SPTVN1PROD with RULES
68592 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

application for Payment Guarantee is 

consistent with the Firm Export Sales 

Contract and Letter of Credit. The 

commenter contended that this 

provision is inconsistent with standard 

banking practice and the UCP 600, and 

emphasized that the Exporter or Holder 

of the Payment Guarantee must be 

assured CCC will honor the payment 

guarantee if documents are accepted for 

payment under the Letter of Credit. 

CCC opted to maintain paragraph 

(a)(9) in the final rule. In response to 

comments received to the first proposed 

rule, CCC moved this provision from 

§ 1493.90 (Special Requirements of the 

Foreign Financial Institution Letter of 

Credit and the Terms and Conditions 

Document, if applicable). In doing so, 

CCC acknowledged that the sales 

contract is a separate transaction from 

the Letter of Credit, and therefore the 

U.S. Financial Institution should not be 

responsible for ensuring consistency of 

the Letter of Credit with the underlying 

sales contract. However, CCC believes 

this requirement is important to avoid 

defaults based on failure to comply with 

the underlying terms of the sale and will 

maintain the requirement in 

§ 1493.70(a)(9). CCC notes that 

§ 1493.191(b) requires all Exporters and 

U.S. and Foreign Financial Institutions 

to review and be fully acquainted with 

all GSM–102 program regulations. As 

the Exporter should be working with the 

Importer, U.S. and Foreign Financial 

Institutions, and other parties (such as 

the Letter of Credit applicant) prior to 

application for the Payment Guarantee, 

all parties to the transaction should be 

familiar with this requirement. 

CCC did modify paragraph (a)(9) in 

the final rule, changing ‘‘consistent 

with’’ to ‘‘correspond with.’’ Article 18 

of the UCP 600 uses this language, 

requiring that the ‘‘Description of the 

goods, services or performance in a 

commercial invoice must correspond 

with that appearing in the credit.’’ It is 

not CCC’s intent that the Letter of Credit 

contain every detail of a commodity 

description, as CCC acknowledges that 

certain commodities have very detailed 

and lengthy specifications. However, 

CCC expects commodity descriptions 

across the Firm Export Sales Contract, 

application for Payment Guarantee, and 

Letter of Credit to contain the 

commodity’s primary price determining 

characteristics and to correspond 

closely enough that they are reasonably 

considered the same grade and type of 

commodity. CCC also added a 

requirement that the commodity 

description include the six-digit 

Harmonized System commodity 

classification code utilized by the 

Exporter. This addition will assist CCC 

with better tracking of commodities 

under the program. 

The Agricultural Act of 2014 

eliminated authority for the Dairy 

Export Incentive Program. As a result, 

paragraph (a)(18) of this section was 

deleted and the final rule renumbered. 

Section 1493.80 Certification 

Requirements for Obtaining Payment 

Guarantee 

CCC received one comment on the 

certification in paragraph (b) of this 

section. The commenter is concerned 

that this certification might preclude 

transactions where the Exporter is 

obligated to pay a commission or other 

compensation to an agent of the 

Importer or final buyer. The commenter 

requested that CCC clarify that armslength payments to agents are not 

‘‘items extraneous to the transaction.’’ 

CCC previously issued clarification in 

a notice to participants that when an 

Importer requires an Exporter to employ 

and compensate a specified agent as a 

condition of concluding an export sale, 

such commissions/compensation are 

treated by CCC as Discounts and 

Allowances that must be reported in 

accordance with § 1493.70(a)(12) and 

deducted from both the Exported Value 

and Port Value in accordance with 

§ 1493.10. Such commissions/

compensation are therefore not 

considered by CCC to be ‘‘items 

extraneous to the transaction.’’ 

Although CCC understands the need for 

clarity, it is not possible to include in 

the rule all items that might constitute 

‘‘items extraneous to the transaction.’’ 

CCC is not making any changes to this 

certification but will examine specific 

items on a case-by-case basis. 

Section 1493.90 Special Requirements 

of the Foreign Financial Institution 

Letter of Credit and the Terms and 

Conditions Document, if Applicable 

CCC received three comments on the 

requirement that the Letter of Credit 

stipulate presentation of at least one 

original clean on board bill of lading as 

a required document (paragraph (a)(1) in 

the proposed rule). Two commenters 

noted that this requirement would 

jeopardize program utilization. Export 

sales to destinations with short transit 

times typically utilize copies of 

shipping documents for the Letter of 

Credit. Original documents are provided 

directly to the destination for safe 

keeping, to be released to the 

appropriate party once payment is 

received under the Letter of Credit. This 

process helps to avoid demurrage 

charges that could accrue if parties are 

waiting for the arrival of original 

documents. Requiring that an original 

bill of lading be presented under the 

Letter of Credit would slow import 

procedures and negate the potential 

value offered by the GSM–102 program. 

One commenter requested this 

provision be deleted. A third 

commenter agreed with CCC that 

requiring presentation of an original bill 

of lading in the Letter of Credit will help 

to prevent non-Eligible Export Sales, but 

noted there are legitimate cases when 

original clean on board bills of lading 

are not available due to time, technical 

or administrative constraints. This 

commenter suggested CCC make an 

exception to this requirement when the 

Exporter is indicated as the shipper on 

the clean onboard bill of lading. In this 

instance, the Letter of Credit could 

allow for copies of the bill of lading. 

CCC’s intent in requiring the Letter of 

Credit to stipulate presentation of an 

original bill of lading is to prevent nonEligible Export Sales. Although the final 

rule includes a provision specifically 

prohibiting non-Eligible Export Sales, 

CCC believes additional provisions are 

necessary. However, CCC agrees that 

where the Exporter is the shipper on the 

bill of lading, this would indicate that 

the GSM–102 transaction is an Eligible 

Export Sale and therefore an original 

bill of lading need not be required under 

the Letter of Credit. CCC has modified 

§ 1493.90(a) to allow for this exception, 

including when a company related to 

the Exporter (as reported in 

§ 1493.30(a)(5)) is indicated as the 

shipper on the bill of lading. 

CCC also modified paragraph (a) of 

this section to account for the use of 

electronic bills of lading (eBLs). CCC 

acknowledges that when utilizing eBLs, 

the only ‘‘original’’ bill of lading is the 

electronic version—which is only 

accessible to parties with access to the 

eBL vendor. Therefore, in cases where 

the Letter of Credit allows for 

presentation of electronic documents, 

the Letter of Credit may stipulate that a 

copy of the bill of lading is acceptable. 

CCC received one comment on 

paragraph (a)(3)(ii) of this section in the 

proposed rule, requesting that CCC 

modify this provision to clarify that the 

Terms and Conditions Document is 

between the Foreign and U.S. Financial 

Institutions, as the Exporter will not be 

a party to this document. No changes 

were made in response to this comment. 

There is no requirement that the 

Exporter assign a Payment Guarantee to 

a U.S. Financial Institution. If there is 

no assignment, the Exporter would 

remain the Holder of the Payment 

Guarantee and be a party to any Terms 

and Conditions Document. 

One commenter noted concern with 

§ 1493.90(b)(2) in the proposed rule, 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68593 

which requires a clause in the Letter of 

Credit regarding specific jurisdiction in 

any legal action or proceeding under the 

Letter of Credit. The commenter stated 

that the Exporter will not know when 

applying for the Payment Guarantee 

whether the Foreign Financial 

Institution is willing to include this 

language in the Letter of Credit, which 

could in turn cause delays in issuing the 

Letter of Credit. The commenter further 

asked that CCC refund the guarantee 

fees to the Exporter if the Foreign 

Financial Institution refuses to issue the 

Letter of Credit because of this language, 

or if the Letter of Credit cannot be 

issued within 30 days of the Date of 

Export due to this language. 

CCC believes that the Foreign 

Financial Institution should know in 

advance whether it is willing to include 

this language in the Letter of Credit, 

and, therefore, whether it is willing to 

participate in the transaction. Section 

1493.191(b) requires all Exporters and 

U.S. and Foreign Financial Institutions 

to review and be fully acquainted with 

all regulations related to the GSM–102 

program. All participating Foreign 

Financial Institutions should be aware 

of this requirement, and should not 

agree to participate in the transaction if 

unwilling to include this language in 

the Letter of Credit. CCC will not agree 

in advance to refund guarantee fees to 

an Exporter in cases where the Foreign 

Financial Institution cannot include the 

required language in the Letter of Credit 

or issue the Letter of Credit within the 

required timeframe. As specified in 

§ 1493.110(d), fees will only be 

refunded if the Director determines that 

a refund is in the best interest of CCC. 

All determinations on fee refunds will 

be made on a case-by-case basis. 

Section 1493.100 Terms and 

Requirements of the Payment Guarantee 

CCC received one comment on 

paragraph (e) of this section, requesting 

that the latest date to release reserves be 

amended to the latter of 45 days from 

the final date to export or 30 days from 

the date of issuance of the Letter of 

Credit. When bulk products are sold in 

one shipment for delivery to multiple 

buyers, the individual bills of lading are 

often not available until near the time 

the vessel reaches its destination, which 

could be 30–40 days from the time the 

vessel leaves the load port. Until all 

bills of lading are issued, the Exporter 

is unable to determine what reserve 

coverage is needed for a particular 

guarantee and cannot file the necessary 

amendment to the Payment Guarantee. 

Furthermore, the 21 calendar day 

requirement for filing for reserves is 

inconsistent with the 30 calendar days 

permitted for Letter of Credit issuance. 

CCC does not agree with the 

suggestion to allow 45 days from the 

final date to export (or 30 days from the 

date of issuance of the Letter of Credit) 

to file amendments for reserve coverage. 

As noted in the preamble to the 

proposed rule, reserve coverage permits 

an Exporter to hold program allocation 

that may not be utilized and could be 

made available to other Exporters. Given 

that CCC allows reserve coverage of up 

to ten percent of the Port Value of the 

sale, this reserve may be a substantial 

amount. However, CCC acknowledges 

that an Exporter may need more than 21 

calendar days from the final date to 

export to compile documents and 

determine reserves needed, and also 

that there is logic in having similar 

timeframes related to reserve coverage, 

evidence of export report, and Letter of 

Credit issuance timeframes. Therefore, 

CCC increased the timeframe for filing 

an amendment for reserve coverage to 

30 calendar days from the date of final 

export. CCC also changed the language 

in this paragraph to state that if the 

amendment to the guarantee and 

additional fee for reserves is not 

received within this 30 calendar days, 

CCC may (instead of ‘‘will’’) cancel the 

reserve coverage. This change will 

provide more flexibility in cases where 

unusual circumstances exist. 

CCC received one comment 

requesting that the timeframe for 

issuance of the Letter of Credit be 

extended to 60 days from the Date of 

Export under paragraph (g)(3) of this 

section. The commenter noted that the 

time needed to obtain bills of lading, the 

internal and external financial 

institution processes related to issuance 

and approval of the Letter of Credit, and 

new language required by CCC in the 

Letter of Credit or Terms and Conditions 

Document may result in delays in Letter 

of Credit issuance. The Exporter will be 

unable to predict these delays at the 

time of application for a Payment 

Guarantee. The commenter also 

questioned how a delay in issuance of 

the Letter of Credit increases CCC’s risk 

and expressed concern about forfeiture 

of guarantee fees when this timeframe 

cannot be met. 

CCC addressed these concerns in the 

preamble to the proposed rule in 

response to similar comments. This 

provision is intended to eliminate cases 

where Exporters clearly have not 

worked with the parties in the 

transaction before submitting an 

application for Payment Guarantee and 

where the Letter of Credit ultimately 

may not be issued. The ‘‘cost’’ of such 

cancellations is that other Exporters 

who may have utilized the allocation 

are unable to do so. This provision is 

not related to CCC’s risk profile, nor is 

it intended to reduce CCC’s risk. The 

final rule permits the Director to waive 

this requirement and/or to permit a 

refund of the guarantee fee if 

determined to be in CCC’s best interest. 

Furthermore, as previously noted, 

§ 1493.191(b) requires all Exporters and 

U.S. and Foreign Financial Institutions 

to review and be fully acquainted with 

all regulations and other documents 

related to the GSM–102 program. As the 

Exporter should be working with the 

Importer and U.S. and Foreign Financial 

Institutions prior to application for the 

Payment Guarantee, all parties to the 

transaction should be familiar with this 

requirement in advance of negotiation of 

the Letter of Credit. CCC made no 

changes to the final rule in response to 

this comment. 

CCC received one comment regarding 

§ 1493.100(f)(6) in the proposed rule, 

noting a perceived discrepancy between 

the language in the proposed rule 

(which prohibits coverage of an export 

sale that has been guaranteed by CCC 

under another Payment Guarantee) and 

language in the preamble to the 

proposed rule, which indicates CCC 

does not believe an exporter could 

certify that a particular transaction has 

not been registered by another entity. 

The commenter did not understand why 

CCC maintained a certification related 

to duplicate registrations when the 

preamble indicates an Exporter could 

not make such a certification. 

CCC believes there is confusion 

regarding § 1493.100(f)(6). This is not a 

certification required of the Exporter, 

but rather a statement that a particular 

type of transaction is prohibited under 

the program. CCC agrees that an 

Exporter registering a particular sale has 

no way to know if another Exporter has 

done the same. The introduction to 

paragraph (f) of this section states that 

‘‘An export sale (or portion thereof) is 

ineligible for Payment Guarantee 

coverage if at any time CCC determines 

that: . . . .’’ CCC would make a 

determination of duplicate registrations 

based on information that only CCC may 

have. For this reason, CCC is not asking 

the Exporter to make a certification to 

this effect. 

In reviewing this section, however, 

CCC determined that this provision is 

better suited to paragraph (g) of this 

section. Paragraph (g) defines particular 

exports that are ineligible under an 

otherwise valid Payment Guarantee. A 

single export (shipment) under a 

Payment Guarantee may be ineligible for 

coverage under paragraph (g), whereas 

other exports (shipments) under the 


tkelley on DSK3SPTVN1PROD with RULES
68594 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

same guarantee may remain eligible for 

coverage. CCC believes that it is possible 

for a particular export (shipment) to be 

registered more than once, even if the 

entire value of the Payment Guarantee is 

not. Paragraph (f)(6) in the proposed 

rule has therefore been moved to 

paragraph (g)(4) in the final rule. CCC 

has also added clarification that if such 

duplicate guarantees (or applications for 

guarantees) are found to exist, CCC will 

determine which guarantee (or 

application) constitutes an Eligible 

Export Sale. 

Section 1493.110 Guarantee Fees 

One commenter requested that CCC 

assure Exporters that if the requirements 

of § 1493.100(g)(3) or § 1493.90(b)(2) are 

not met, CCC will refund the guarantee 

fees paid by the Exporter. CCC will not 

make a ‘‘blanket’’ assurance that 

Exporters will receive a refund of 

guarantee fees if these requirements are 

not met. CCC will consider all requests 

for guarantee fee refunds on a case-bycase basis, granting them only if the 

Director determines in a particular case 

that a refund is in the best interest of 

CCC, consistent with § 1493.110(d). 

Section 1493.130 Evidence of Export 

The Agricultural Act of 2014 

eliminated authority for the Dairy 

Export Incentive Program. Paragraph 

(a)(11) of this section was deleted and 

the final rule renumbered. 

Similar to the addition in 

§ 1493.70(a)(9), CCC added a 

requirement that the commodity 

description reported on the evidence of 

export report include the six-digit 

Harmonized System commodity 

classification code utilized by the 

Exporter. This addition will assist CCC 

with better tracking of commodities 

under the program. 

CCC received one comment on 

paragraph (b)(1) of this section, 

requesting that CCC extend the 

timeframe for submitting evidence of 

export reports (EOEs) from 21 calendar 

days to the latter of 45 days from the 

final date to export or 30 days from the 

date of Letter of Credit issuance. The 

commenter noted that the issues 

applying to reserve coverage (discussed 

under § 1493.100) also apply to filing 

EOEs. As noted in the discussion of 

§ 1493.100(e), CCC acknowledges that 

Exporters may need more than 21 

calendar days from the Date of Export to 

compile documents and submit an EOE, 

and also that there is logic in having 

similar timeframes related to reserve 

coverage, EOE, and Letter of Credit 

issuance timeframes. Therefore, CCC 

increased the timeframe for submitting 

an EOE to 30 calendar days from the 

Date of Export. 

Section 1493.140 Certification 

Requirements for the Evidence of Export 

Similar to the change in 

§ 1493.70(a)(3), CCC modified the 

certification at § 1493.140(b) to reflect 

that the goods were ‘‘shipped directly to 

the country or region specified on the 

Payment Guarantee.’’ This change is 

explained in the discussion of § 1493.70 

(Application for Payment Guarantee). 

Section 1493.160 Notice of Default 

CCC received one comment on 

paragraph (c) of this section. The 

commenter expressed concern that an 

Exporter’s sales contract may be 

jeopardized if the Importer is unable to 

find a different Foreign Financial 

Institution (FFI) to issue the letter of 

credit (following a default by the 

original FFI on the Payment Guarantee). 

The commenter noted that CCC should 

honor any Payment Guarantees already 

issued, as CCC performs a financial 

analysis of each FFI, and should not 

issue a Payment Guarantee if there is 

doubt as to the FFI’s creditworthiness. 

As stated in the preamble to the 

proposed rule, CCC recognizes that this 

provision creates some risk for the 

exporter who may have conditioned the 

export sale upon the guarantee. In 

response to comments on the first 

proposed rule, CCC modified this 

provision to allow continued coverage if 

the Letter of Credit has already been 

issued. However, CCC has a 

responsibility to protect against 

additional loss of taxpayer resources 

following the default of an FFI on 

another CCC-guaranteed transaction. 

CCC does perform a financial analysis of 

each FFI and will not issue a payment 

guarantee if there is doubt as to the FFI’s 

creditworthiness, but the economic and 

financial situation of countries and 

financial institutions can change 

rapidly. CCC believes the need to 

protect taxpayer resources against a 

certain default is paramount in this case 

and made no changes in response to this 

comment. 

Section 1493.170 Claims for Default 

CCC received one comment 

requesting that the requirement for a 

‘‘negotiable’’ bill of lading as a claims 

document under paragraph (a)(3)(iii) of 

this section be eliminated, specifically 

to accommodate electronic bills of 

lading (copies of which are nonnegotiable). CCC determined that it is 

not necessary to require a ‘‘negotiable’’ 

bill of lading under any GSM–102 

transaction; therefore, the word 

‘‘negotiable’’ was eliminated. CCC 

maintained the provision that the bill of 

lading must be signed. As noted in 

elsewhere in the rule, when e-BLs (or 

other electronic documents) are utilized 

in the transaction, the Letter of Credit 

must so stipulate and is subject to the 

current version of eUCP. Because the 

eUCP allows for electronic signatures, 

CCC will accept e-BLs with electronic 

signature as ‘‘signed’’ bills of lading. 

CCC added a sentence specifying that if 

an e-BL is utilized, a print-out of the eBL from the electronic system with an 

electronic signature is acceptable. 

CCC received one comment 

requesting the addition of a provision 

that the Payment Guarantee is binding 

in cases where payments received by 

the Assignee from the Foreign Financial 

Institution (FFI) are subsequently 

required to be returned due to a law, 

provision or decree in the FFI’s country. 

Such a law or provision may 

particularly result from bankruptcy or 

insolvency proceedings. The commenter 

notes that although such ‘‘clawback’’ 

situations are rare, the absence of such 

a provision could undermine U.S. 

Financial Institutions’ faith in the CCC 

guarantee. 

The authorizing statute for the GSM– 

102 program (Section 202(a) of the 

Agricultural Trade Act of 1978, as 

amended (7 U.S.C. 5622(a)), provides 

that ‘‘the Commodity Credit Corporation 

may guarantee the repayment of credit 

made available to finance commercial 

export sales of agricultural 

commodities.’’ Under a ‘‘clawback’’ 

scenario, the FFI has already repaid the 

portion of the credit that an insolvency 

or bankruptcy proceeding subsequently 

seeks to recoup through law. It is CCC’s 

view that the authorizing statute does 

not extend to indemnification for all 

losses arising as a result of bankruptcy 

or insolvency law or proceedings; 

therefore, this provision was not added 

to the final rule. 

Section 1493.180 Payment for Default 

One commenter requested 

clarification on language in the 

proposed rule preamble related to 

paragraph (e) of this section. The 

preamble language stated that ‘‘If a 

prohibited transaction were registered 

under a payment guarantee, CCC would 

take action against the exporter, if 

warranted, but not against the assignee, 

provided the assignee had no 

knowledge that the transaction was 

prohibited.’’ The commenter asked if 

the Assignee must depend on CCC 

taking action against the Exporter in 

order to receive payment on a submitted 

claim. 

Per 1493.180(e), CCC’s determination 

that an Assignee is to be held harmless 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68595 

for any action, omission or statement by 

the Exporter is based on whether all 

required claim documents ‘‘appear on 

their face to confirm with the 

requirements’’ of § 1493.170 and 

whether the Assignee had any 

knowledge of the action, omission or 

statement by the Exporter. CCC’s 

decision to take action against an 

Exporter is wholly separate from a 

decision to hold the Assignee harmless 

and pay a claim. CCC does not believe 

any clarification is needed to paragraph 

(e) of this section. 

Section 1493.191 Additional 

Obligations and Requirements 

CCC modified paragraph (c) of this 

section to include Foreign Financial 

Institutions. All submissions by a 

Foreign Financial Institution must be 

signed by a Principal or authorized 

designee. 

Executive Order 12866 

This final 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 rule has been reviewed in 

accordance with Executive Order 12988. 

This rule would not preempt State or 

local laws, regulations, or policies 

unless they present an irreconcilable 

conflict with this rule. Before any 

judicial action may be brought 

concerning the provisions of this rule, 

the appeal provisions of 7 CFR part 

1493.192 would need to be exhausted. 

This rule 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 rule has been reviewed under 

Executive Order 13132, ‘‘Federalism.’’ 

The policies contained in this 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 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 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 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 rulemaking 

with respect to the subject matter of this 

rule. 

Environmental Assessment 

CCC has determined that this 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 

(NEPA), 40 CFR 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 was prepared. 

Unfunded Mandates 

This rule does not impose any 

enforceable duty or contain any 

unfunded mandate as described under 

Title II of the Unfunded Mandate 

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 

The information collection and record 

keeping requirements contained in this 

regulation have been approved by OMB 

in accordance with the Paperwork 

Reduction Act of 1995 under OMB 

Control Number 0551–0004. 

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 amends 7 CFR part 1493 

as follows: 

PART 1493—CCC EXPORT CREDIT 

GUARANTEE PROGRAMS 

■ 1. The authority citation for 7 CFR 

part 1493 continues to read as follows: 

Authority: 7 U.S.C. 5602, 5622, 5661, 5662, 

5663, 5664, 5676; 15 U.S.C. 714b(d), 714c(f). 

■ 2. Subpart A is revised to read as 

follows: 

Subpart A—Restrictions and Criteria for 

Export Credit Guarantee Program 

Sec. 

1493.1 General statement. 

1493.2 Purposes of programs. 

1493.3 Restrictions on programs and cargo 

preference statement. 

1493.4 Criteria for country and regional 

allocations. 

1493.5 Criteria for agricultural commodity 

allocations. 

Subpart A—Restrictions and Criteria 

for Export Credit Guarantee Programs 

§ 1493.1 General statement. 

This subpart sets forth the restrictions 

that apply to the issuance and use of 

Payment Guarantees under the 

Commodity Credit Corporation (CCC) 

Export Credit Guarantee (GSM–102) 

Program and Facility Guarantee Program 

(FGP), the criteria considered by CCC in 

determining the annual allocations of 

Payment Guarantees to be made 

available with respect to each 

participating country and region, and 

the criteria considered by CCC in the 

review and approval of proposed 

allocation levels for specific U.S. 

Agricultural Commodities to these 

countries and regions. 

§ 1493.2 Purposes of programs. 

CCC is authorized to issue Payment 

Guarantees: 

(a) To increase exports of U.S. 

Agricultural Commodities and expand 

access to trade finance; 

(b) To assist countries, particularly 

developing countries and emerging 

markets, in meeting their food and fiber 

needs; 

(c) To establish or improve facilities 

and infrastructure in emerging markets 


tkelley on DSK3SPTVN1PROD with RULES
68596 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

to expand exports of U.S. Agricultural 

Commodities; or 

(d) For such other purposes as the 

Secretary of Agriculture determines 

appropriate. 

§ 1493.3 Restrictions on programs and 

cargo preference statement. 

(a) Restrictions on use of Payment 

Guarantees. (1) Payment Guarantees 

authorized under these regulations shall 

not be used for foreign aid, foreign 

policy, or debt rescheduling purposes. 

(2) CCC shall not make Payment 

Guarantees available in connection with 

sales of U.S. Agricultural Commodities 

to any country that the Secretary 

determines cannot adequately service 

the debt associated with such sale. 

(3) CCC shall not make Payment 

Guarantees available in connection with 

sales of U.S. Agricultural Commodities 

financed by any Foreign Financial 

Institution that CCC determines cannot 

adequately service the debt associated 

with such sale. 

(b) Cargo preference laws. The 

provisions of the cargo preference laws 

do not apply to export sales with respect 

to which Payment Guarantees are issued 

under these programs. 

§ 1493.4 Criteria for country and regional 

allocations. 

The criteria considered by CCC in 

reviewing proposals for country and 

regional allocations will include, but 

not be limited to, the following: 

(a) Potential benefits that the 

extension of Payment Guarantees would 

provide for the development, expansion, 

or maintenance of the market for 

particular U.S. Agricultural 

Commodities in the importing country; 

(b) Financial and economic ability 

and/or willingness of the country of 

obligation to adequately service CCC 

guaranteed debt (‘‘country of obligation’’ 

is the country whose Foreign Financial 

Institution obligation is guaranteed by 

CCC); 

(c) Financial status of participating 

Foreign Financial Institutions in the 

country of obligation as it would affect 

their ability to adequately service CCC 

guaranteed debt; 

(d) Political stability of the country of 

obligation as it would affect its ability 

and/or willingness to adequately service 

CCC guaranteed debt; and 

(e) Current status of debt either owed 

by the country of obligation or by the 

participating Foreign Financial 

Institutions to CCC or to lenders 

protected by CCC’s Payment Guarantees. 

§ 1493.5 Criteria for agricultural 

commodity allocations. 

The criteria considered by CCC in 

determining U.S. Agricultural 

Commodity allocations within a specific 

country or regional allocation will 

include, but not be limited to, the 

following: 

(a) Potential benefits that the 

extension of Payment Guarantees would 

provide for the development, expansion 

or maintenance of the market in the 

importing country for the particular U.S. 

Agricultural Commodity under 

consideration; 

(b) The best use to be made of the 

Payment Guarantees in assisting the 

importing country in meeting its 

particular needs for food and fiber, as 

may be determined through 

consultations with private buyers and/

or representatives of the government of 

the importing country; and 

(c) Evaluation, in terms of program 

purposes, of the relative benefits of 

providing Payment Guarantee coverage 

for sales of the U.S. Agricultural 

Commodity under consideration 

compared to providing coverage for 

sales of other U.S. Agricultural 

Commodities. 

■ 3. Subpart B is revised to read as 

follows: 

Subpart B—CCC Export Credit Guarantee 

(GSM–102) Program Operations 

Sec. 

1493.10 General statement. 

1493.20 Definition of terms. 

1493.30 Information required for Exporter 

participation. 

1493.40 Information required for U.S. 

Financial Institution participation. 

1493.50 Information required for Foreign 

Financial Institution participation. 

1493.60 Certification requirements for 

program participation. 

1493.70 Application for Payment 

Guarantee. 

1493.80 Certification requirements for 

obtaining Payment Guarantee. 

1493.90 Special requirements of the Foreign 

Financial Institution Letter of Credit and 

the Terms and Conditions Document, if 

applicable. 

1493.100 Terms and requirements of the 

Payment Guarantee. 

1493.110 Guarantee fees. 

1493.120 Assignment of the Payment 

Guarantee. 

1493.130 Evidence of export. 

1493.140 Certification requirements for the 

evidence of export. 

1493.150 Proof of entry. 

1493.160 Notice of default. 

1493.170 Claims for default. 

1493.180 Payment for default. 

1493.190 Recovery of defaulted payments. 

1493.191 Additional obligations and 

requirements 

1493.192 Dispute resolution and appeals. 

1493.195 Miscellaneous provisions. 

Subpart B—CCC Export Credit 

Guarantee Program (GSM–102) 

Operations 

§ 1493.10 General statement. 

(a) Overview. The Export Credit 

Guarantee (GSM–102) Program 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 

of foreign purchases of U.S. Agricultural 

Commodities on credit terms. The 

Payment Guarantee issued under GSM– 

102 is an agreement by CCC to pay the 

Exporter, 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 export sale covered by the 

Payment Guarantee. Under the GSM– 

102 program, maximum repayment 

terms may vary based on risk of default, 

as determined by CCC. The program 

operates in a manner intended not to 

interfere with markets for cash sales and 

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 longterm market development for U.S. 

Agricultural Commodities. 

(b) Program administration. The 

GSM–102 program is administered 

under the direction of the General Sales 

Manager and Vice President of CCC, 

pursuant to this subpart, subpart A, and 

any Program Announcements issued by 

CCC. From time to time, CCC may issue 

a notice to participants on the USDA 

Web site to remind participants of the 

requirements of the GSM–102 program 

or to clarify the program requirements 

contained in these regulations in a 

manner not inconsistent with this 

subpart and subpart A. Program 

information, such as eligible U.S. 

Agricultural Commodities and 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 a GSM–102 program for a 

specific country or region. The Program 

Announcement for a country or region 

will designate specific U.S. Agricultural 

Commodities or products thereof, or 

designate that all eligible U.S. 

Agricultural Commodities are available 

under the announcement. The Program 

Announcement will contain any 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68597 

requirements applicable to that country 

or region as determined by CCC. 

§ 1493.20 Definition of terms. 

Terms set forth in this subpart, on the 

USDA Web site (including in Program 

Announcements and notices to 

participants), and in any CCC-originated 

documents pertaining to the GSM–102 

Program 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. 

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 § 1493.180(c). 

Cost and Freight (CFR). A customary 

trade term for sea and inland waterway 

transport only, as defined by the 

International Chamber of Commerce, 

Incoterms 2010 (or as superseded). 

Cost Insurance and Freight (CIF). A 

customary trade term for sea and inland 

waterway transport only, as defined by 

the International Chamber of Commerce, 

Incoterms 2010 (or as superseded). 

Date of Export. 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 Export Sales Contract 

exists between the Exporter, or an 

Intervening Purchaser, if applicable, and 

the Importer. 

Director. The Director, Credit 

Programs Division, Office of Trade 

Programs, Foreign Agricultural Service, 

or the Director’s designee. 

Discounts and Allowances. Any 

consideration provided directly or 

indirectly, by or on behalf of the 

Exporter or an Intervening Purchaser, to 

the Importer in connection with an 

Eligible Export Sale, above and beyond 

the commodity’s value, stated on the 

appropriate FOB, FAS, FCA, CFR or CIF 

basis (or other basis specified in 

Incoterms 2010, or as superseded), 

which includes, but is 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 Importer requires the 

Exporter to employ and compensate a 

specified agent as a condition of 

concluding the Eligible Export Sale; the 

whole or partial release of the Importer 

from any financial or contractual 

obligations; or settlements made in favor 

of the Importer for quality or weight. 

Eligible Export Sale. An export sale of 

U.S. Agricultural Commodities in which 

the obligation of payment for the 

portion registered under the GSM–102 

program 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 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 specified between 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. 

Exported Value. (1) Where CCC 

announces Payment Guarantee coverage 

on a FAS, FCA, or FOB basis and: 

(i) Where the U.S. Agricultural 

Commodity is sold on a FAS, FCA, or 

FOB basis, the value, FAS, FCA, or FOB 

basis, port of shipment, of the export 

sale, reduced by the value of any 

Discounts and Allowances granted to 

the Importer in connection with such 

sale; or 

(ii) Where the U.S. Agricultural 

Commodity was sold on a CFR or CIF 

basis, point of entry, the value of the 

export sale, FAS, FCA or FOB, port of 

shipment, is measured by the CFR or 

CIF value of the U.S. Agricultural 

Commodity less the cost of ocean 

freight, as determined at the time of 

application and, in the case of CIF sales, 

less the cost of marine and war risk 

insurance, as determined at the time of 

application, reduced by the value of any 

Discounts and Allowances granted to 

the Importer in connection with the sale 

of the commodity; or 

(2) Where CCC announces coverage 

on a CFR or CIF basis, and where the 

U.S. Agricultural Commodity is sold on 

a CFR or CIF basis, port of destination, 

the total value of the export sale, CFR 

or CIF basis, port of destination, 

reduced by the value of any Discounts 

and Allowances granted to the Importer 

in connection with the sale of the 

commodity; or 

(3) When a CFR or CIF U.S. 

Agricultural Commodity export sale 

involves the performance of non-freight 

services to be performed outside the 

United States (e.g., services such as 

bagging bulk cargo) which are not 

normally included in ocean freight 

contracts, the value of such services and 

any related materials not exported from 

the U.S. with the commodity must also 

be deducted from the CFR or CIF sales 

price in determining the Exported 

Value. 

Exporter. A seller of U.S. Agricultural 

Commodities that is both qualified in 

accordance with the provisions of 

§ 1493.30 and the applicant for the 

Payment Guarantee. 

Firm Export Sales Contract. The 

written sales contract entered into 

between the Exporter and the Importer 

(or, if applicable, the written sales 

contracts between the Exporter and the 

Intervening Purchaser and the 

Intervening Purchaser and the Importer) 

which sets forth the terms and 

conditions of an Eligible Export Sale of 

the eligible U.S. Agricultural 

Commodity from the Exporter to the 

Importer (or, if applicable, the sale of 

the eligible U.S. Agricultural 

Commodity from the Exporter to the 

Intervening Purchaser and from the 

Intervening Purchaser to the Importer). 

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 

written evidence of sale for the purposes 

of the GSM–102 program must, at a 

minimum, document the following 

information: The eligible U.S. 

Agricultural Commodity, quantity, 

quality specifications, delivery terms 

(FOB, C&F, FCA, etc.) to the eligible 

country or region, delivery period, unit 

price, payment terms, Date of Sale, and 

evidence of agreement between Importer 

(and Intervening Purchaser, if 

applicable) and Exporter. The Firm 

Export Sales Contract between the 

Exporter and the Importer (or, if 


tkelley on DSK3SPTVN1PROD with RULES
68598 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

applicable, between the Exporter and 

the Intervening Purchaser and between 

the Intervening Purchaser and the 

Importer) may be conditioned upon 

CCC’s approval of the Exporter’s 

application for a Payment Guarantee. 

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 Exporter by a CCC-approved 

Foreign Financial Institution. 

Free Alongside Ship (FAS). A 

customary trade term for sea and inland 

waterway transport only, as defined by 

the International Chamber of Commerce, 

Incoterms 2010 (or as superseded). 

Free Carrier (FCA). A customary trade 

term for all modes of transportation, as 

defined by the International Chamber of 

Commerce, Incoterms 2010 (or as 

superseded). 

Free on Board (FOB). A customary 

trade term for sea and inland waterway 

transport only, as defined by the 

International Chamber of Commerce, 

Incoterms 2010 (or as superseded). 

GSM. The General Sales Manager, 

Foreign Agricultural Service, 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. 

Holder of the Payment Guarantee. 

The Exporter 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. 

Importer. A foreign buyer that enters 

into a Firm Export Sales Contract with 

an Exporter or with an Intervening 

Purchaser for the sale of the U.S. 

Agricultural Commodities to be shipped 

from the United States to the destination 

country or region under the Payment 

Guarantee. 

Importer’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 Importer’s 

behalf with respect to the sale described 

in the Firm Export Sales Contract. 

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 seller in a sales 

contract. 

Intervening Purchaser. A party that is 

not located in the country or region of 

destination specified in the Payment 

Guarantee and that enters into a Firm 

Export Sales Contract to purchase U.S. 

Agricultural Commodities from an 

Exporter and sell the same U.S. 

Agricultural Commodities to an 

Importer. 

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 the GSM–102 program by which 

CCC, in consideration of a fee paid, and 

in reliance upon the statements and 

declarations of the Exporter, 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. 

Port Value. (1) Where CCC announces 

coverage on a FAS, FCA, or FOB basis 

and: 

(i) Where the U.S. Agricultural 

Commodity is sold on a FAS, FCA, or 

FOB basis, port of shipment, the value, 

FAS, FCA, or FOB basis, port of 

shipment, of the export sale, including 

the upward loading tolerance, if any, as 

provided by the Firm Export Sales 

Contract, reduced by the value of any 

Discounts and Allowances granted to 

the Importer in connection with such 

sale; or 

(ii) Where the U.S. Agricultural 

Commodity was sold on a CFR or CIF 

basis, port of destination, the value of 

the export sale, FAS, FCA, or FOB, port 

of shipment, including the upward 

loading tolerance, if any, as provided by 

the Firm Export Sales Contract, is 

measured by the CFR or CIF value of the 

U.S. Agricultural Commodity less the 

value of ocean freight and, in the case 

of CIF sales, less the value of marine 

and war risk insurance, reduced by the 

value of any Discounts and Allowances 

granted to the Importer in connection 

with the sale of the commodity. 

(2) Where CCC announces coverage 

on a CFR or CIF basis and where the 

U.S. Agricultural Commodity was sold 

on CFR or CIF basis, port of destination, 

the total value of the export sale, CFR 

or CIF basis, port of destination, 

including the upward loading tolerance, 

if any, as provided by the Firm Export 

Sales Contract, reduced by the value of 

any Discounts and Allowances granted 

to the Importer in connection with the 

sale of the commodity. 

(3) When a CFR or CIF U.S. 

Agricultural Commodity export sale 

involves the performance of non-freight 

services to be performed outside the 

United States (e.g., services such as 

bagging bulk cargo), which are not 

normally included in ocean freight 

contracts, the value of such services and 

any related materials not exported from 

the U.S. with the commodity must also 

be deducted from the CFR or CIF sales 

price in determining the Port Value. 

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 U.S. Agricultural Commodities 

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 an Exporter or U.S. Financial 

Institution on deferred payment terms 

consistent with those permitted under 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68599 

CCC’s Payment Guarantee. The 

Repayment Obligation must be 

documented using one of the methods 

specified in § 1493.90. 

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. 

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 

other special requirements specified in 

§ 1493.90. 

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— 

(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. 

USDA. United States Department of 

Agriculture. 

U.S. Financial Institution. A financial 

institution (including U.S. 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. 

Weighted Average Export Date. The 

mean Date of Export for all exports 

within a 30 calendar day period, 

weighted by the guaranteed portion of 

the Exported Value of each export. 

§ 1493.30 Information required for 

Exporter participation. 

Exporters must apply and be 

approved by CCC to be eligible to 

participate in the GSM–102 Program. 

(a) Qualification requirements. To 

qualify for participation in the GSM– 

102 program, 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 

GSM–102 export 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 and 

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 

(e.g., agricultural producer, commodity 

trader, consulting firm, etc.); 

(ii) Explanation of the applicant’s 

experience/history with U.S. 

Agricultural Commodities for the 

preceding three years, including a 

description of such commodities; 

(iii) Explanation of the applicant’s 

experience/history exporting U.S. 

Agricultural Commodities, including 

number of years involved in exporting, 

types of products exported, and 

destination of exports for the preceding 

three years; and 

(iv) 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 

1493.60(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 § 1493.60(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 

Exporter not submitting an application 

to CCC for a Payment Guarantee for two 

consecutive U.S. Government fiscal 

years must resubmit a qualification 

application containing the information 

specified in § 1493.30(a) to CCC to 


tkelley on DSK3SPTVN1PROD with RULES
68600 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

participate in the GSM–102 program. If 

at any time the information required by 

paragraph (a) of this section changes, 

the Exporter must promptly contact CCC 

to update this information and certify 

that the remainder of the information 

previously provided pursuant to 

paragraph (a) has not changed. 

(d) Ineligibility for program 

participation. An applicant may be 

ineligible to participate in the GSM–102 

program if such applicant cannot 

provide all of the information and 

certifications required by paragraph (a) 

of this section. 

§ 1493.40 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 GSM–102 Program. 

(a) Qualification requirements. To 

qualify for participation in the GSM– 

102 Program, 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 1493.60 

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 § 1493.60. 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 not participating in 

the GSM–102 program for two 

consecutive U.S. Government fiscal 

years must resubmit a qualification 

application containing the information 

specified in paragraph (a) of this section 

to CCC to participate in the GSM–102 

program. If at any time the information 

required by paragraph (a) of this section 

changes, the U.S. Financial Institution 

must promptly contact CCC to update 

this information and certify that the 

remainder of the information previously 

provided pursuant to paragraph (a) has 

not changed. 

(d) Ineligibility for program 

participation. A U.S. Financial 

Institution may be deemed ineligible to 

participate in the GSM–102 Program if 

such applicant cannot provide all of the 

information and certifications required 

by paragraph (a) of this section. 

§ 1493.50 Information required for Foreign 

Financial Institution participation. 

Foreign Financial Institutions must 

apply and be approved by CCC to be 

eligible to participate in the GSM–102 

Program. 

(a) Qualification requirements. To 

qualify for participation in the GSM– 

102 program, 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 1493.60 

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 § 1493.60. 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, 

CCC will establish a dollar participation 

limit for the institution. This limit will 

be the maximum amount of 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 

§ 1493.60 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 

should 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 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68601 

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 GSM–102 program 

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) has not 

changed. 

(e) Ineligibility for program 

participation. A Foreign Financial 

Institution may be deemed ineligible to 

participate in the GSM–102 program if: 

(1) Such applicant cannot provide all 

of the information and certifications 

required in paragraph (a) of this section; 

or 

(2) 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. 

§ 1493.60 Certifications required for 

program participation. 

(a) When making the statement 

required by §§ 1493.30(a)(7), 

1493.40(a)(9), or 1493.50(a)(6), each 

Exporter, 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 

statues 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 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 partiallyowned subsidiary which owes a debt). 

(b) Additional certifications for U.S. 

and Foreign Financial Institution 

applicants. When making the statement 

required by § 1493.40(a)(9) or 

§ 1493.50(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. 

§ 1493.70 Application for Payment 

Guarantee. 

(a) A Firm Export Sales Contract for 

an Eligible Export Sale must exist before 

an Exporter may submit an application 

for a Payment Guarantee. Upon request 

by CCC, the Exporter must provide 

evidence of a Firm Export Sales 

Contract. An application for a Payment 

Guarantee must be submitted in writing 

to CCC in the manner specified on the 

USDA Web site. An application must 

identify the name and address of the 

Exporter and include the following 

information: 

(1) Name of the destination country or 

region. If the destination is a region, 

indicate the country or countries within 

the region to which the U.S. 

Agricultural Commodity will be 

exported. 

(2) Name and address of the Importer. 

If the Importer is not physically located 

in the country or region of destination, 

it must have an Importer’s 

Representative in the country or region 

of destination. If applicable, provide the 

name and address of the Importer’s 

Representative. 

(3) A statement that the U.S. 

Agricultural Commodity will be 

shipped to the destination country or 

region. 

(4) Name and address of the party on 

whose request the Letter of Credit is 

issued, if other than the Importer. 

(5) Name and address of the 

Intervening Purchaser, if any. 

(6) Date of Sale. 

(7) Exporter’s sale number. 

(8) Delivery period as agreed between 

the Exporter and the Importer. 

(9) A full description of the U.S. 

Agricultural Commodity (including 

packaging, if any). The description must 

include the applicable six-digit 

Harmonized System commodity 

classification code. The commodity 

grade and quality specified in the 

Exporter’s application for the Payment 

Guarantee must correspond with the 

commodity grade and quality specified 

in the Firm Export Sales Contract and 

the Foreign Financial Institution Letter 

of Credit. 

(10) Mean quantity, contract loading 

tolerance and, if necessary, a request for 

CCC to reserve coverage up to the 

maximum quantity permitted. 

(11) Unit sales price of the U.S. 

Agricultural Commodity, or a 

mechanism to establish the price, as 

agreed between the Exporter and the 

Importer. If the commodity was sold on 

the basis of CFR or CIF, the actual (if 

known at the time of application) or 

estimated value of freight and, in the 

case of sales made on a CIF basis, the 

actual (if known at the time of 

application) or estimated value of 

marine and war risk insurance, must be 

specified. 

(12) Description and value of 

Discounts and Allowances, if any. 

(13) Port Value (includes upward 

loading tolerance, if any). 

(14) Guaranteed Value. 


tkelley on DSK3SPTVN1PROD with RULES
68602 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

(15) Guarantee fee, either as 

announced on the Web site per 

§ 1493.110(a)(1), or the competitive fee 

bid per § 1493.110(a)(2), depending on 

the type of fee charged by CCC for the 

country or region. 

(16) 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. 

(17) The term length for the credit 

being extended and the intervals 

between principal payments for each 

shipment to be made under the export 

sale. 

(18) The Exporter’s statement, ‘‘All 

certifications set forth in 7 CFR 1493.80 

are hereby being made by the Exporter 

in this application.’’ which, when 

included in the application by the 

Exporter, will constitute a certification 

that it is in compliance with all the 

requirements set forth in § 1493.80. 

(b) An application for a Payment 

Guarantee may be approved as 

submitted, approved with modifications 

agreed to by the Exporter, or rejected by 

the Director. In the event that the 

application is approved, the Director 

will cause a Payment Guarantee to be 

issued in favor of the Exporter. Such 

Payment Guarantee will become 

effective at the time specified in 

§ 1493.100(b). If, based upon a price 

review, the unit sales price of the 

commodity does not fall within the 

prevailing commercial market level 

ranges, as determined by CCC, the 

application will not be approved. 

§ 1493.80 Certification requirements for 

obtaining Payment Guarantee. 

By providing the statement in 

§ 1493.70(a)(18), the Exporter is 

certifying that the information provided 

in the application is true and correct 

and, further, that all requirements set 

forth in this section have been met. The 

Exporter will be required to provide 

further explanation or documentation 

with regard to applications that do not 

include this statement. If the Exporter 

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 commodities 

not yet exported and/or to commence 

legal action and/or administrative 

proceedings against the Exporter. The 

Exporter, in submitting an application 

for a Payment Guarantee and providing 

the statement set forth in 

§ 1493.70(a)(18), certifies that: 

(a) The commodity or product 

covered by the Payment Guarantee is a 

U.S. Agricultural Commodity; 

(b) 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; 

(c) If the U.S. Agricultural Commodity 

is vegetable oil or a vegetable oil 

product, that none of the agricultural 

commodity or product has been or will 

be used as a basis for a claim of a 

refund, as drawback, pursuant to section 

313 of the Tariff Act of 1930, 19 U.S.C. 

1313, of any duty, tax or fee imposed 

under Federal law on an imported 

commodity or product; 

(d) At the time of submission of the 

application for Payment Guarantee, 

neither the Importer nor the Intervening 

Purchaser, if applicable, is present as an 

excluded party on the SAM list; 

(e) The Exporter is fully in 

compliance with the requirements of 

§ 1493.130(b) for all existing Payment 

Guarantees issued to the Exporter or has 

requested and been granted an 

extension per § 1493.130(b)(3); and 

(f) The information provided pursuant 

to § 1493.30 has not changed and the 

Exporter still meets all of the 

qualification requirements of § 1493.30. 

§ 1493.90 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 export sale to which CCC’s Payment 

Guarantee pertains. 

(i) 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 Exporter, or a related 

company previously reported to CCC by 

the Exporter pursuant to § 1493.30(a)(5), 

is named as the shipper on the clean on 

board bill of lading. If the Exporter 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)(1)(ii) of this section. 

(ii) If the Letter of Credit will allow 

for presentation of electronic 

documents, the Letter of Credit must so 

stipulate. 

(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. 

§ 1493.100 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. (1) 

The Holder of the Payment Guarantee 

may, with respect to a series of 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68603 

shipments made within a 30 calendar 

day period, elect to have the Payment 

Guarantee coverage being on the 

Weighted Average Export Date for such 

shipments. The first allowable 30 

calendar day period for bundling of 

shipments to compute the Weighted 

Average Export Date for such shipments 

begins on the first Date of Export for 

transactions covered by the Payment 

Guarantee. Shipments within each 

subsequent 30 calendar day period may 

be bundled with other shipments made 

within the same 30 calendar period to 

determine the Weighted Average Export 

Date for such shipments. 

(2)(i) The period of coverage under 

the Payment Guarantee begins on the 

earlier of the following dates and will 

continue during the credit term 

specified on the Payment Guarantee or 

any amendments thereto: 

(A) The Date(s) of Export or the 

Weighted Average Export Date(s), as 

selected by the Holder of the Payment 

Guarantee consistent with paragraph 

(b)(1) of this section; or 

(B) The date when Ordinary Interest 

begins to accrue, or the weighted 

average date when interest begins to 

accrue. 

(ii) However, the Payment Guarantee 

becomes effective on the Date(s) of 

Export of the U.S. Agricultural 

Commodities specified in the Exporter’s 

application for the Payment Guarantee. 

(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 to export. The final date 

to export shown on the Payment 

Guarantee will be one month, as 

determined by CCC, after the 

contractual deadline for shipping. 

(e) Reserve coverage for loading 

tolerances. The Exporter may apply for 

a Payment Guarantee and, if coverage is 

available, pay the guarantee fee, based 

on the mean of the lower and upper 

loading tolerances of the Firm Export 

Sales Contract; however, the Exporter 

may also request that CCC reserve 

additional guarantee coverage to 

accommodate up to the amount of the 

upward loading tolerance specified in 

the Firm Export Sales Contract. The 

amount of coverage that can be reserved 

to accommodate the upward loading 

tolerance is limited to ten (10) percent 

of the Port Value of the sale. If such 

additional guarantee coverage is 

available at the time of application and 

the Director determines to make such 

reservation, CCC will so indicate to the 

Exporter. In the event that the Exporter 

ships a quantity greater than the amount 

on which the guarantee fee was paid 

(i.e., the mean of the upper and lower 

loading tolerances), it may obtain the 

additional coverage from CCC, up to the 

amount of the upward loading 

tolerance, by filing for an application for 

amendment to the Payment Guarantee, 

and by paying the additional amount of 

fee applicable. If such application for an 

amendment to the Payment Guarantee is 

not filed with CCC by the Exporter and 

the additional fee not received by CCC 

within 30 calendar days after the date of 

the last export against the Payment 

Guarantee, CCC may cancel the reserve 

coverage originally set aside for the 

Exporter. 

(f) Certain export sales are ineligible 

for GSM–102 Payment Guarantees. (1) 

An export sale (or any portion thereof) 

is ineligible for Payment Guarantee 

coverage if at any time CCC determines 

that: 

(1) The commodity is not a U.S. 

Agricultural Commodity; 

(2) The export sale includes corrupt 

payments or extra sales or services or 

other items extraneous to the 

transactions provided, financed, or 

guaranteed in connection with the 

export sale; 

(3) The export sale does not comply 

with applicable U.S. law, including the 

Foreign Corrupt Practices Act of 1977 

and other anti-bribery measures; 

(4) If the U.S. Agricultural Commodity 

is vegetable oil or a vegetable oil 

product, any of the agricultural 

commodity or product has been or will 

be used as a basis for a claim of a 

refund, as drawback, pursuant to section 

313 of the Tariff Act of 1930, 19 U.S.C. 

1313, of any duty, tax or fee imposed 

under Federal law on an imported 

commodity or product; 

(5) Either the Importer or the 

Intervening Purchaser, if any, is 

excluded or disqualified from 

participation in U.S. government 

programs; or 

(6) The sale is not an Eligible Export 

Sale. 

(g) Certain exports of U.S. 

Agricultural Commodities are ineligible 

for Payment Guarantee coverage. The 

following exports are ineligible for 

coverage under a GSM–102 Payment 

Guarantee except where it is determined 

by the Director to be in the best interest 

of CCC to provide guarantee coverage on 

such exports: 

(1) Exports of U.S. Agricultural 

Commodities with a Date of Export prior 

to the date of receipt by CCC of the 

Exporter’s written application for a 

Payment Guarantee; 

(2) Exports of U.S. Agricultural 

Commodities with a Date of Export later 

than the final date to export shown on 

the Payment Guarantee or any 

amendments thereof; 

(3) Exports of U.S. Agricultural 

Commodities where the date of issuance 

of a Foreign Financial Institution Letter 

of Credit is later than 30 calendar days 

after: 

(i) The Date of Export, or 

(ii) The Weighted Average Export 

Date, if the Holder of the Payment 

Guarantee has elected to have the 

Payment Guarantee coverage begin on 

the Weighted Average Export Date; or 

(4) Exports of U.S. Agricultural 

Commodities that have been guaranteed 

by CCC under another Payment 

Guarantee. If CCC determines that an 

export of U.S. Agricultural Commodities 

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. 

(h) 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 Exporter 

and the Assignee. 

(i) Amendments. A request for an 

amendment of a Payment Guarantee 

may be submitted only by the Exporter, 

with the written concurrence of the 

Assignee, if any. 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 

Exporter 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 certifications in 

§ 1493.120(c)(1)(i) or § 1493.140(d). 

§ 1493.110 Guarantee fees. 

(a) Guarantee fee rates. Payment 

Guarantee fee rates charged may be one 

of the following two types: 


tkelley on DSK3SPTVN1PROD with RULES
68604 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

(1) Those that are announced on the 

USDA Web site and are based upon the 

length of the payment terms provided 

for in the Firm Export Sales Contract, 

the degree of risk that CCC assumes, as 

determined by CCC, and any other 

factors which CCC determines 

appropriate for consideration. 

(2) Those where Exporters are invited 

to submit a competitive bid for 

coverage. If CCC determines to offer 

coverage on a competitive fee bid basis, 

instructions for bidding, and minimum 

fee rates, if applicable, will be made 

available on the USDA Web site. 

(b) Calculation of fee. The guarantee 

fee will be computed by multiplying the 

Guaranteed Value by the guarantee fee 

rate. 

(c) Payment of fee. The Exporter shall 

remit, with his application, the full 

amount of the guarantee fee. 

Applications will not be accepted until 

the guarantee fee has been received by 

CCC. The Exporter’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. 

(d) Refunds of fee. Guarantee fees 

paid in connection with applications 

that are accepted by CCC will ordinarily 

not be refundable. Once CCC notifies an 

Exporter of acceptance of an 

application, the fee for that application 

will not be refunded unless the Director 

determines that such refund will be in 

the best interest of CCC, even if the 

Exporter withdraws the application 

prior to CCC’s issuance of the Payment 

Guarantee. If CCC does not accept an 

application for a Payment Guarantee or 

accepts only part of the guarantee 

coverage requested, a full or pro rata 

refund of the fee will be made. 

§ 1493.120 Assignment of the Payment 

Guarantee. 

(a) Requirements for assignment. The 

Exporter 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 may 

not, unless approved in advance by 

CCC, 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 certification 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 

assignment, is not present as an 

excluded party on the SAM list; and 

(ii) To the best of my knowledge and 

belief, the information provided 

pursuant to § 1493.40 has not changed 

and [name of Assignee] still meets all of 

the qualification requirements of 

§ 1493.40.’’ 

(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 eligibility 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 Exporter 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 

1493.40(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 export sales of U.S. 

Agricultural Commodities to Importers 

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 the outstanding balance 

under the associated Repayment 

Obligation; 

(ii) In the event of a 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 §§ 1493.160 and 1493.170 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 1493.120(f)(1) and, 

prior to entering into this agreement, 

verified that [name of other party to the 

Repurchase Agreement] is not present 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 paragraph (f) of this 

section may result in CCC annulling 

coverage on the Foreign Financial 

Institution Letter of Credit and Terms 

and Conditions Document, if applicable, 

covered by the Payment Guarantee. 

§ 1493.130 Evidence of export. 

(a) Report of export. The Exporter is 

required to provide CCC an evidence of 

export report for each shipment made 

under the Payment Guarantee. This 

report must include the following 

information: 

(1) Payment Guarantee number; 

(2) Evidence of export report number 

(e.g., Report 1, Report 2) reflecting the 

report’s chronological order of 

submission under the particular 

Payment Guarantee; 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68605 

(3) Date of Export; 

(4) Destination country or region. If 

the sale was registered under a regional 

program, the Exporter must indicate the 

specific country or countries within the 

region to which the goods were shipped; 

(5) Exporter’s sale number; 

(6) Exported Value; 

(7) Quantity; 

(8) A full description of the 

commodity exported, including the 

applicable six-digit Harmonized System 

commodity classification code; 

(9) Unit sales price received for the 

commodity exported and the Incoterms 

2010 basis (e.g., FOB, CFR, CIF). Where 

the unit sales price at export differs 

from the unit sales price indicated in 

the Exporter’s application for a Payment 

Guarantee, the Exporter is also required 

to submit a statement explaining the 

reason for the difference; 

(10) Description and value of 

Discounts and Allowances, if any; 

(11) The Exporter’s statement, ‘‘All 

certifications set forth in 7 CFR 

1493.140 are hereby being made by the 

Exporter in this Evidence of Export.’’ 

which, when included in the evidence 

of export by the Exporter, will constitute 

a certification that it is in compliance 

with all the requirements set forth in 

§ 1493.140; and 

(12) In addition to all of the above 

information, the final evidence of export 

report for the Payment Guarantee must 

include the following: 

(i) The statement ‘‘Exports under the 

Payment Guarantee have been 

completed.’’ 

(ii) A statement summarizing the total 

quantity and value of the commodity 

exported under the Payment Guarantee 

(i.e., the cumulative totals on all 

numbered evidence of export reports). 

(b) Time limit for submission of 

evidence of export. (1) The Exporter 

must provide a written report to the 

CCC in the manner specified on the 

USDA Web site within 30 calendar days 

of the Date of Export. 

(2) If at any time the Exporter 

determines that no shipments are to be 

made under a Payment Guarantee, the 

Exporter is required to notify CCC in 

writing no later than the final date to 

export specified on the Payment 

Guarantee by furnishing the Payment 

Guarantee number and stating ‘‘no 

exports will be made under the Payment 

Guarantee.’’ 

(3) Requests for an extension of the 

time limit for submitting an evidence of 

export report must be submitted in 

writing by the Exporter 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 an Exporter under 

§ 1493.70 until the Exporter is fully in 

compliance with the requirements of 

paragraph (b) of this section for all 

existing Payment Guarantees issued to 

the Exporter or has requested and been 

granted an extension per paragraph 

(b)(3) of this section. 

(d) Export sales reporting. Exporters 

have a mandatory reporting 

responsibility under Section 602 of the 

Agricultural Trade Act of 1978 (7 U.S.C. 

5712), for exports of certain agricultural 

commodities and products thereof. 

§ 1493.140 Certification requirements for 

the evidence of export. 

By providing the statement contained 

in § 1493.130(a)(11), the Exporter is 

certifying that the information provided 

in the evidence of export report is true 

and correct and, further, that all 

requirements set forth in this section 

have been met. The Exporter will be 

required to provide further explanation 

or documentation with regard to reports 

that do not include this statement. If the 

Exporter 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 commodities 

not yet exported and/or to commence 

legal action and/or administrative 

proceedings against the Exporter. The 

Exporter, in submitting the evidence of 

export and providing the statement set 

forth in § 1493.130(a)(11), certifies that: 

(a) The agricultural commodity or 

product exported under the Payment 

Guarantee is a U.S. Agricultural 

Commodity; 

(b) The U.S. Agricultural Commodity 

was shipped directly to the country or 

region specified on the Payment 

Guarantee; 

(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 export sale, and 

that the export sale complies with 

applicable United States law, including 

the Foreign Corrupt Practices Act of 

1977 and other anti-bribery measures; 

(d) If the Exporter has not assigned 

the Payment Guarantee to a U.S. 

Financial Institution, the Exporter has 

verified that the Foreign Financial 

Institution, at the time of submission of 

the evidence of export report, is not 

present as an excluded party on the 

SAM list; 

(e) The transaction is an Eligible 

Export Sale; and 

(f) The information provided pursuant 

to §§ 1493.30 and 1493.70 has not 

changed (except as agreed to and 

amended by CCC) and the Exporter still 

meets all of the qualification 

requirements of § 1493.30. 

§ 1493.150 Proof of entry. 

(a) Diversion. The diversion of U.S. 

Agricultural Commodities covered by a 

Payment Guarantee to a country or 

region 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) 

Exporters must obtain and maintain 

records of an official or customary 

commercial nature that demonstrate the 

arrival of the U.S. Agricultural 

Commodities exported in connection 

with the GSM–102 program in the 

country or region that was the intended 

country or region of destination of such 

commodities. At the Director’s request, 

the Exporter 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 importing country, by an 

agent or representative of the vessel or 

shipline that delivered the U.S. 

Agricultural Commodity to the 

importing country, or by a private 

surveyor in the importing country, or 

other documentation deemed acceptable 

by the Director showing: 

(i) That the U.S. Agricultural 

Commodity entered the importing 

country or region; 

(ii) The identification of the export 

carrier; 

(iii) The quantity of the U.S. 

Agricultural Commodity; 

(iv) The kind, type, grade and/or class 

of the U.S. Agricultural Commodity; and 

(v) The date(s) and place(s) of 

unloading of the U.S. Agricultural 

Commodity in the importing country or 

region. 

(2) Where shipping documents (e.g., 

bills of lading) clearly demonstrate that 

the U.S. Agricultural Commodities were 

shipped to the destination country or 

region, proof of entry verification may 

be provided by the Importer. 

§ 1493.160 Notice of default. 

(a) Notice of default. If the Foreign 

Financial Institution issuing the Letter 


tkelley on DSK3SPTVN1PROD with RULES
68606 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

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 the Foreign Financial 

Institution’s refusal to pay, if applicable; 

(7) Reason for the 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, CCC may declare that such 

Foreign Financial Institution is no 

longer eligible to provide additional 

Letters of Credit under the GSM–102 

Program. If CCC determines that such 

defaulting Foreign Financial Institution 

is no longer eligible for the GSM–102 

Program, CCC shall provide written 

notice of such ineligibility to all 

Exporters 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 GSM–102 Program 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 Exporter (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 export sale 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 

Exporter’s guarantee fees corresponding 

to any unutilized portion of the 

Payment Guarantee. 

§ 1493.170 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 

include the following documents and 

information: 

(1) An original cover document 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 Exporter 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 scheduled 

payment 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 export 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 the 

claim for default is submitted, provide 

estimates of such rates); 

(ii)(A) The Foreign Financial 

Institution Letter of Credit securing the 

export sale; and 

(B) If applicable, the Terms and 

Conditions Document; 

(iii) 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 importing 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)(A) The Exporter’s invoice 

showing, as applicable, the FAS, FCA, 

FOB, CFR or CIF values; or 

(B) If there was an Intervening 

Purchaser, both the Exporter’s invoice to 

the Intervening Purchaser and the 

Intervening Purchaser’s invoice to the 

Importer; 

(v) The evidence of export report(s) 

previously submitted by the Exporter to 

CCC in conformity with the 

requirements of § 1493.130(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 § 1493.120(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 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68607 

covered transaction. For subsequent 

claims relating to failure of the Foreign 

Financial Institution to make scheduled 

installments on the same export 

shipment, 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) 

and (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. 

§ 1493.180 Payment for default. 

(a) Determination of CCC’s liability. 

Upon receipt in good order of the 

information and documents required 

under § 1493.170, 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 Exporter 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 Exporter or the Assignee); or 

(2) The guaranteed percentage (as 

indicated in the Payment Guarantee) of 

the Exported Value indicated in the 

evidence of export, plus Eligible 

Interest, less any payments received or 

funds realized from insurance, security 

or collateral arrangements prior to claim 

by the Exporter 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 Exporter 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 paragraphs (b)(1) and (2) 

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 

scheduled. CCC will not pay claims for 

amounts due under an accelerated 

payment clause in the Firm Export 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 Exporter, 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 § 1493.170, 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 1493.170 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 Exporter of which the 

Assignee has no knowledge. 

§ 1493.190 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 Exporter or 

the Assignee from or on behalf of the 

defaulting party, the Importer, or any 

source whatsoever (excluding payments 

among CCC, the Exporter, 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 

to CCC. If such monies are not received 

by CCC within 15 Business Days from 

the date of recovery by the Exporter or 

the Assignee, such party will owe to 

CCC interest from the date of recovery 

to the date of receipt by CCC. 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 

Exporter 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 


tkelley on DSK3SPTVN1PROD with RULES
68608 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 

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 a 

particular claim under a Payment 

Guarantee, CCC pro-rates 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 Exporter or the 

Assignee will be liable to CCC for any 

amounts paid by CCC under the 

Payment Guarantee: 

(1) The Exporter will be liable to CCC 

when and if it is determined by CCC 

that the Exporter has engaged in fraud, 

or has been or is in material breach of 

any contractual obligation, certification 

or warranty made by the Exporter for 

the purpose of obtaining the Payment 

Guarantee or for fulfilling obligations 

under the GSM–102 program; 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 Exporter will cooperate with CCC to 

effect recoveries from the Foreign 

Financial Institution and/or the 

Importer. 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 

§ 1493.180(d); and other actions that do 

not increase the obligation of the Holder 

of the Payment Guarantee or the 

Exporter under the Payment Guarantee. 

§ 1493.191 Additional obligations and 

requirements. 

(a) Maintenance of records, 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 Exporter 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 U.S. Agricultural 

Commodities exported in connection 

with a Payment Guarantee, including 

those records generated and maintained 

by agents, Intervening Purchasers, and 

related companies involved in special 

arrangements with the Exporter. 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 

Exporter 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 

Exporter’s, Assignee’s, agent’s, 

Intervening Purchaser’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 

Exporter and the Assignee may be 

required 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 Exporter in 

connection with the Payment 

Guarantee. 

(b) Responsibility of program 

participants. It is the responsibility of 

all Exporters 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 GSM–102 program, as applicable. 

All Exporters and U.S. and Foreign 

Financial Institutions participating in 

the GSM–102 program 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 Exporters, Assignees, 

or Foreign Financial Institutions under 

this subpart must be signed by a 

Principal of the Exporter, 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 Exporter, Assignee, 

or Foreign Financial Institution must 

ensure that all information and reports 

required under these regulations are 

timely submitted. 

(d) Misstatements or noncompliance 

by Exporter may lead to rescission of 

Payment Guarantee. CCC may cancel a 

Payment Guarantee in the event that an 

Exporter makes a willful misstatement 

in the certifications in §§ 1493.80(b) and 

1493.140(c) or if the Exporter fails to 

comply with the provisions of 

§ 1493.150 or paragraph (a) of this 

section. 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 Exporter’s 

misstatement or noncompliance at the 

time of assignment of the Payment 

Guarantee. 

§ 1493.192 Dispute resolution and appeals. 

(a) Dispute resolution. (1) The 

Director and the Exporter or the 

Assignee will attempt to resolve any 

disputes, including any adverse 

determinations made by CCC, arising 

under the GSM–102 program, this 

subpart, the applicable Program 

Announcements and notices to 

participants, or the Payment Guarantee. 

(2) The Exporter 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 Exporter or the Assignee of the 

determination. The Exporter 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 Exporter or 

the Assignee is received by the Director, 

whichever is later, unless the Director 

extends the time permitted for response. 

If the Exporter or the Assignee fails to 

request reconsideration of a 

determination by the Director, then the 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Rules and Regulations 68609 

determination of the Director will be 

deemed final. 

(3) If the Exporter or the Assignee 

requests reconsideration of a 

determination by the Director pursuant 

to paragraph (a)(2) of this section, and 

the Director upholds the original 

determination, then the Exporter 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 

Exporter or the Assignee fails to appeal 

the Director’s final determination within 

30 calendar days as provided in 

paragraph (b)(1) of this section, then the 

Director’s decision becomes the final 

determination of CCC. 

(b) Appeal procedures. (1) An 

Exporter or Assignee that has exhausted 

the procedures set forth in paragraph (a) 

of this section may appeal to the GSM 

for a determination of the Director. 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 

Exporter or 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 Exporter or Assignee does 

not request an administrative hearing, 

the Exporter or 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 Exporter or Assignee to the GSM. 

(3) If the Exporter 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 Exporter or 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 Exporter or 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 Exporter or 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 

Exporter or Assignee will be entitled to 

no further administrative appellate 

rights. 

(c) Failure to comply with 

determination. If the Exporter or 

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 

Exporter or Assignee has exhausted its 

rights under this section or has failed to 

exercise such rights, then CCC will have 

the right to take any measures available 

to CCC under applicable law. 

(d) Exporter’s obligation to perform. 

The Exporter 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. 

§ 1493.195 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 

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 0551–0004. 

Dated: June 4, 2014. 

Philip C. Karsting, 

Administrator, Foreign Agricultural Service, 

and Vice President, Commodity Credit 

Corporation. 

Editorial Note: This document was 

received for publication by the Office of the 

Federal Register on November 12, 2014. 

[FR Doc. 2014–27129 Filed 11–17–14; 8:45 am] 

BILLING CODE 3410–10–P 

DEPARTMENT OF COMMERCE 

Office of the Secretary 

15 CFR Part 4 

[Docket No. 140127076–4935–03] 

RIN 0605–AA33 

Public Information, Freedom of 

Information Act and Privacy Act 

Regulations; Correction 

AGENCY: Department of Commerce. 

ACTION: Final rule; correction. 

SUMMARY: The Department of Commerce 

(Department) is correcting a final rule, 

published on October 20, 2014, that 

revised the Department’s regulations 

under the Freedom of Information Act 

(FOIA) and Privacy Act. This final rule 

corrects the cross-references in the 

section describing the requirements for 

making FOIA requests. 

DATES: Effective November 19, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Mark R. Tallarico, Senior Counsel, (202) 

482–8156, Office of the General 

Counsel, 1401 Constitution Avenue 

NW., Washington, DC 20230. 

SUPPLEMENTARY INFORMATION: In FR Doc. 

2014–24598 appearing on page 62553 in 

the Federal Register of Monday, 

October 20, 2014 (79 FR 62553), the 

following correction is made: 

§ 4.4 [Corrected] 

■ On page 62559, in the second column, 

in § 4.4(c), the second to last sentence is 

corrected to read as follows: 

‘‘Such a notice constitutes an adverse 

determination under § 4.7(d) for which 

components shall follow the procedures 

for a denial letter under § 4.7(e).’’ 

Dated: November 13, 2014. 

Catrina D. Purvis, 

Chief Privacy Officer and Director of Open 

Government. 

[FR Doc. 2014–27265 Filed 11–17–14; 8:45 am] 

BILLING CODE 3510–17–P 


tkelley on DSK3SPTVN1PROD with RULES