This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

44836 

Vol. 76, No. 144 

Wednesday, July 27, 2011 

DEPARTMENT OF AGRICULTURE 

Commodity Credit Corporation 

7 CFR Part 1493 

RIN 0551–AA74 

CCC Export Credit Guarantee (GSM– 

102) Program 

AGENCY: Foreign Agricultural Service 

and Commodity Credit Corporation, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

revise and amend the regulations that 

administer the Export Credit Guarantee 

(GSM–102) Program. Changes in this 

proposed rule incorporate 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. These 

changes should increase program 

availability to all participants and 

enhance access and encourage sales for 

smaller U.S. exporters. The proposed 

rule would eliminate 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). 

DATES: Comments concerning this 

proposed rule must be received by 

September 26, 2011 to be assured 

consideration. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions to submit comments. 

• E-Mail: GSMregs@fas.usda.gov. 

• Fax: (202) 720–2495, Attention: 

‘‘GSM102 Proposed Rule Comments’’. 

• Hand Delivery, Courier, or U.S. 

Postal delivery: Amy Slusher, Deputy 

Director, Credit Programs Division, c/o 

Public Affairs Division, Foreign 

Agricultural Service, U.S. Department of 

Agriculture, 1400 Independence Ave., 

SW., Stop 1004, Room 5076, 

Washington, DC 20250–1004. 

Comments may be inspected at 1400 

Independence Avenue, SW., 

Washington, DC, between 8 a.m. and 

4:30 p.m., Monday through Friday, 

except holidays. A copy of this 

proposed rule is available through the 

Foreign Agricultural Service (FAS) 

homepage at: http://www.fas.usda.gov/ 

excredits/exp-cred-guar-new.asp. 

FOR FURTHER INFORMATION CONTACT: 

Amy Slusher, Deputy Director, Credit 

Programs Division; by phone at (202) 

720–6211; or by e-mail at: 

Amy.Slusher@fas.usda.gov. 

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 program regulation. 

The current regulations 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 proposed 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 proposed rule. 

On December 17, 2008, CCC 

published an advance notice of 

proposed rulemaking (ANPR) in the 

Federal Register (73 FR 76568). This 

notice was intended to solicit comments 

on improvements and changes to be 

made in the implementation and 

operation of the GSM–102 program, 

with the intent of improving the GSM– 

102 program’s effectiveness and 

efficiency. In addition to incorporating 

some of the comments received in 

response to the ANPR, this proposed 

rule incorporates several previous 

operational requirements announced by 

FAS through notices to participants. 

Other supplemental notices to 

participants were issued as reminders of 

various program requirements or 

contained informational requirements 

for specific commodities. These notices 

are not appropriate for inclusion in the 

regulations for the GSM–102 program 

but nevertheless remain in effect. 

Section-by-Section Analysis 

The numbering system of this 

proposed rule differs from that in the 

current regulation. Several sections have 

been added, some sections have been 

deleted and others have been reordered. 

For the purposes of this discussion, the 

numbering of the proposed rule will be 

used, except where otherwise indicated. 

Subpart A—Restrictions and Criteria 

for Export Credit Guarantee Programs 

In accordance with section 202 of the 

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

5622), as amended by section 3101 of 

the 2008 Act, this proposed rule would 

eliminate provisions for intermediateterm credit guarantees, also known as 

the GSM–103 program. Reference has 

been added to the Facility Guarantee 

Program (FGP), authorized by section 

1542 of the Food, Agriculture, 

Conservation, and Trade Act of 1990 (7 

U.S.C. 5622 note) (as amended), to 

reflect the fact that the restrictions and 

criteria in subpart A apply to the FGP. 

The regulations for the FGP are found at 

subpart C of 7 CFR Part 1493. 

In section 1493.4, ‘‘Criteria for 

country and regional allocations,’’ CCC 

proposes to include regional allocations. 

CCC currently announces allocations by 

both country and region. The addition 

of the regional program concept to the 

proposed rule is therefore reflective of 

current program operations and appears 

throughout the proposed rule. 

Subpart B—CCC Export Credit 

Guarantee (GSM–102) Program 

Operations 

Section 1493.20 Definition of Terms 

Numerous definitions are proposed to 

be added to this section. Certain 

definitions would be added to provide 

greater clarity to program participants, 

and other definitions appearing in this 

section have been moved from other 

parts of the regulation. 

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Federal Register / Vol. 76, No. 144 / Wednesday, July 27, 2011 / Proposed Rules 44837 

In section 1493.20(j), a definition of 

‘‘Director’’ has been added. In certain 

sections throughout the proposed rule, 

‘‘CCC’’ has been changed to ‘‘Director.’’ 

This change was made to provide 

participants transparency regarding the 

specific official authorized to make 

certain program decisions. 

Section 1493.20(l) would modify the 

definition of ‘‘eligible interest’’ 

contained in the current rule to be 

consistent with the interest coverage 

currently specified on the payment 

guarantee. CCC’s coverage of interest 

will always be limited to the lesser of 

the amount calculated using the interest 

rate specified between the exporter or 

exporter’s assignee and the foreign 

financial institution or the amount 

calculated using the Treasury bill 

investment rate specified on the face of 

the payment guarantee. In addition, to 

clarify the various types of interest 

associated with CCC’s coverage, 

definitions have been added for ‘‘CCC 

late interest’’ (e), ‘‘ordinary interest’’ 

(dd), and ‘‘post-default interest’’ (gg). 

A definition of the ‘‘FAS Web site’’ 

would be added in section 1493.20(p). 

This Web site will contain all programrelated information and details on 

where and by what means participants 

must submit information required by 

this subpart. CCC proposes no longer to 

announce these details through a Notice 

to Participants. The ‘‘Contacts P/R’’ 

found in section 1493.20(c) of the 

current rule would be deleted. 

Section 1493.20(r) would add a 

definition of a ‘‘firm export sales 

contract.’’ The current rule, at section 

1493.40, requires that ‘‘a firm export 

sale must exist before an exporter may 

submit an application for a payment 

guarantee.’’ CCC proposes to add this 

definition to clarify to participants both 

what constitutes a ‘‘firm export sale’’ 

and the specific information needed to 

meet this requirement. 

A new definition of ‘‘foreign financial 

institution’’ would be added in section 

1493.20(s). A foreign financial 

institution is not defined in the current 

rule, but is referenced throughout the 

current rule as a ‘‘foreign bank’’ that is 

able to issue an irrevocable letter of 

credit. The new definition would clarify 

the basic requirements for foreign 

institutions to be eligible to apply for 

participation in the program, and also 

would permit non-bank foreign 

institutions to apply. 

The definition of ‘‘importer’’ would 

be revised in section 1493.20(y) to 

require that the importer be physically 

located in the country or region of 

destination. Although not specified in 

the current rule, CCC now permits an 

importer to have a ‘‘presence of 

business’’ in the country or region to 

meet the requirement that the 

‘‘agricultural commodities * * * be 

shipped from the United States to the 

foreign buyer.’’ Under this ‘‘presence of 

business’’ concept, the importer need 

not be located in the country or region 

but may contract with another party 

(such as an agent) in the country or 

region of destination to receive and sell 

the goods. Due to the difficulty in 

confirming whether an importer has a 

legitimate ‘‘presence of business’’ to act 

on its behalf, CCC proposes to eliminate 

this practice and would now require the 

importer to be physically located in the 

country or region of destination. 

CCC proposes to add a definition for 

‘‘letter of credit account party’’ in 

section 1493.20(aa). CCC currently 

permits an entity other than the 

importer to request the foreign financial 

institution letter of credit be opened, but 

in such cases the exporter is required to 

notify CCC on the application for 

payment guarantee. The ‘‘letter of credit 

account party’’ would now be added as 

a required field on the application for 

payment guarantee (section 

1493.70(a)(3)), if this entity is other than 

the importer. 

Section 1493.30 Information Required 

for Exporter Participation 

An exporter seeking to participate in 

the GSM–102 program would be 

required to submit with its application 

for program participation, pursuant to 

section 1493.30(a)(ii) and (iii), its Dun 

and Bradstreet (DUNS) number and its 

Employer Identification Number (EIN) 

issued by the Internal Revenue Service. 

The DUNS number would be utilized by 

CCC to report on entities that are 

awarded federal grants, loans, contracts, 

and other forms of assistance as 

required by the Federal Funding 

Accountability and Transparency Act 

(FFATA). CCC would utilize the EIN to 

confirm that the exporter, as a recipient 

of Federal financial assistance, does not 

owe an outstanding Federal nontax debt 

that is in delinquent status, consistent 

with the Debt Collection Improvement 

Act of 1996 and the associated 

requirements found in 31 CFR 285.13. 

Pursuant to section 1493.30(a)(4), 

each exporter would be required to 

provide a description of the exporter’s 

business. The exporter would also be 

required to advise CCC whether or not 

it meets the definition of a small or 

medium enterprise (SME), as defined on 

the FAS Web site. Although this 

information will not be utilized to 

determine an exporter’s eligibility for 

program participation, CCC will utilize 

it to help target specific countries, 

regions and commodities under the 

program, and to track new-to-export 

businesses and the number of SMEs 

assisted by the program. This 

information will assist in justifying 

budgetary requests and targeting 

outreach efforts. 

Pursuant to section 1493.30(c), 

exporters that have previously qualified 

to participate but have not submitted an 

application for a payment guarantee for 

two consecutive fiscal years would be 

required to resubmit all information 

required for participation. This 

requirement will assist CCC in 

maintaining accurate exporter records. 

Section 1493.40 Information Required 

for U.S. Financial Institution 

Participation and Section 1493.50

Information Required for Foreign 

Financial Institution Participation 

Under the proposed rule, these 

sections would be new provisions. 

Currently, requirements for U.S. and 

foreign financial institutions are 

specified on the FAS Web site; however, 

CCC has determined that these 

requirements are more appropriately 

addressed in the rulemaking process. 

Similar to the requirements for exporter 

participation, both U.S. and foreign 

financial institutions would be required 

to re-apply if they do not utilize the 

program for two consecutive fiscal 

years. U.S. financial institutions, like 

exporters, would be required to provide 

their DUNS and EIN numbers for 

purposes of compliance with FFATA 

and the Debt Collection Improvement 

Act of 1996. 

Section 1493.60 Certifications 

Required for Program Participation 

This section would revise the 

certifications required of all exporters 

and U.S. and foreign financial 

institution program participants, to 

make them consistent with U.S. 

Government requirements. OMB 

Guidelines to Agencies on Governmentwide Debarment and Suspension 

(Nonprocurement) (2 CFR 180.335) 

require all participants in the primary 

tier of a covered transaction to provide 

certain information to a Federal agency 

before entering into a transaction with 

that agency. Such required information 

would now be reflected in the 

certifications set forth in section 

1493.60(a)(1) through (4). Proposed new 

certifications in section 1493.60(a)(5) 

through (7) would assist in meeting the 

requirements of 31 CFR 285.13 

(‘‘Barring delinquent debtors from 

obtaining Federal loans or loan 

insurance or guarantees’’). Exporters 

and U.S. and foreign financial 

institutions would certify that they do 

not have any outstanding nontax debt to 

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44838 Federal Register / Vol. 76, No. 144 / Wednesday, July 27, 2011 / Proposed Rules 

the United States that is in delinquent 

status, nor do any persons controlling or 

controlled by the applicant. 

Under the proposed rule, U.S. and 

foreign financial institutions would be 

required to make two additional 

certifications (section 1493.60(b)) 

asserting their compliance with all 

regulatory requirements and U.S. antimoney laundering and terrorist 

financing statutes. The purpose of these 

certifications is to ensure that CCC is 

dealing only with responsible entities 

that are in compliance with all relevant 

U.S. laws and regulations. 

Exporters and U.S. and foreign 

financial institution program 

participants would also be required to 

re-assert these certifications when 

submitting documentation to CCC under 

this subpart. 

Section 1493.80 Certification 

Requirements for Obtaining the 

Payment Guarantee 

The proposed rule sets forth a new 

certification at section 1493.80(d) to 

require the exporter to confirm that the 

importer (and intervening purchaser, if 

applicable) in the transaction is not 

excluded or disqualified from 

participation in U.S. government 

programs through either the Excluded 

Parties List System (EPLS) or the 

Specially Designated Nationals list of 

the Office of Foreign Assets Control 

(OFAC) of the U.S. Department of the 

Treasury. These lists are defined 

(including Web site addresses) at 

sections 1493.20(m) and (cc), 

respectively, and contain individuals 

and entities that are not eligible to 

participate in U.S. government 

procurement and non-procurement 

programs or are otherwise excluded 

based on applicable federal laws. 

Pursuant to 2 CFR 417.222(a), 

concerning U.S. Department of 

Agriculture nonprocurement debarment 

and suspension, ‘‘the U.S. exporter or 

U.S. financial institution would be 

prohibited from entering into, at the first 

lower tier, an agreement with an 

importer (or intervening purchaser) or 

foreign bank * * * with an entity that 

appears on the EPLS as excluded or 

disqualified.’’ To meet this requirement, 

and to ensure that the exporter or U.S. 

financial institution does not enter into 

a transaction with a prohibited entity on 

the OFAC list, the exporter must certify 

at the time of application that neither 

the importer nor intervening purchaser 

is excluded by either list. This will 

necessarily require the exporter to check 

both the EPLS and OFAC lists to ensure 

these entities are not listed. 

Section 1493.90 Terms and 

Requirements of the Foreign Financial 

Institution Letter of Credit and Related 

Obligation 

Under the proposed rule, this section 

would be a new provision. In section 

1493.90(a), CCC describes requirements 

applicable to the foreign financial 

institution letter of credit. In recent 

foreign financial institution defaults, 

CCC’s ability to recover has, on 

occasion, been adversely affected 

because GSM–102 guaranteed debt was 

determined, in foreign jurisdictions of 

certain defaulting obligors, not to be 

‘‘trade finance’’ and therefore subject to 

less favorable restructuring terms. In an 

attempt to bolster CCC’s position in 

future restructurings, section 

1493.90(a)(1) would now require the 

letter of credit to contain a specific 

statement describing the obligation as 

trade finance debt. Similar language has 

been adopted by export credit agencies 

in other countries that have faced 

similar treatment in recent foreign bank 

debt restructurings. 

Additionally, it has been necessary for 

CCC to accelerate claims payment to 

U.S. financial institutions and exporters 

so that CCC could negotiate 

restructuring terms for all GSM–102 

debt directly with the foreign obligors. 

To ensure that there is no future issue 

affecting CCC’s ability to accelerate 

claims payments, the letter of credit or 

related obligation would now be 

required to include an acceleration 

clause, as provided in section 

1493.90(a)(2). 

CCC has determined that the 

documents submitted for payment 

under the foreign financial institution 

letter of credit and/or related obligation 

should be consistent with the 

requirements of such foreign financial 

institution letter of credit and/or related 

obligation, to ensure that the default 

was not based on failure to comply with 

the underlying terms of the sale. CCC 

has added this requirement in section 

1493.90(a)(3). 

Section 1493.100 Terms and 

Requirements of the Payment Guarantee 

Several modifications have been made 

to this section in the proposed rule. The 

reference to ‘‘final date to export’’ has 

been converted to a definition and now 

appears in section 1493.20(q). CCC 

proposes to eliminate the ‘‘grace period’’ 

that currently extends this date one 

month past the contractual shipping 

deadline. Over the past several years, 

CCC has reduced the maximum 

shipping period allowed in an attempt 

to reduce the problem of exporters overregistering immediately after allocations 

are announced. By reducing the 

shipping period CCC hopes to maintain 

availability of allocations throughout 

the fiscal year, thus increasing program 

availability to all participants. In this 

context, CCC believes the one month 

grace period is unnecessary, and it 

would be eliminated. 

In section 1493.100(d), CCC proposes 

to limit reserve coverage to a maximum 

of five (5) percent of the transaction’s 

port value to accommodate the upward 

loading tolerance. Exporters have 

increasingly been reserving coverage for 

larger amounts, which encumbers the 

allocation and reduces the amount 

available to other participants. Further, 

the delay in determining whether 

reserve coverage will be utilized or 

released back to the allocations creates 

delays in determining CCC’s exact 

liability under a guarantee. Therefore, in 

addition to capping the amount of 

reserve coverage that will be granted, 

CCC proposes to require exporters to file 

an amendment to the payment 

guarantee to utilize such coverage 

within 15 calendar days of the last 

export under the payment guarantee. If 

such amendment is not filed within this 

timeframe, CCC would automatically 

cancel the reserve coverage. 

The proposed rule would add new 

section 1493.100(e) on ‘‘Prohibited 

transactions.’’ In general, these 

prohibitions follow the certification 

requirements found in section 1493.80. 

The purpose of this new section is to 

give additional legal recourse to CCC if 

an exporter violates any of the required 

certifications. CCC would specifically 

prohibit coverage of transactions that 

have already been guaranteed by CCC 

under another payment guarantee 

(section 1493.100(e)(6)). Although this 

prohibition is implicit in the current 

rule, CCC has determined to make such 

prohibition explicit. If a default were to 

occur under this scenario, CCC could 

receive identical claims for payment 

from multiple exporters or assignees. 

Section 1493.100(e)(6) is specifically 

intended to avoid this result. 

Section 1493.100(f) would institute a 

new requirement that the foreign 

financial institution letter of credit be 

issued within 30 calendar days 

following the date of export under a 

payment guarantee. It has become an 

increasingly common practice under the 

GSM–102 Program for exporters to 

obtain a payment guarantee without a 

foreign financial institution letter of 

credit in place in connection with the 

sale for an extended period of time after 

exports have occurred. This is often an 

indication that an exporter has not 

confirmed that the foreign financial 

institution is willing to issue the letter 

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Federal Register / Vol. 76, No. 144 / Wednesday, July 27, 2011 / Proposed Rules 44839 

of credit underlying the transaction, and 

is instead submitting the registration to 

garner a portion of the allocation. CCC 

expects that prior to registering an 

export sale the exporter has worked 

with the importer and foreign financial 

institution on the details of the 

financing, even though the letter of 

credit may not be in place at that time. 

CCC has surveyed financial institutions 

on this issue and has determined that 30 

calendar days from the date of export is 

a reasonable timeframe for issuance of 

the letter of credit. CCC would annul 

coverage for any exports where this 

requirement is not met. 

In response to the large number of 

amendment requests routinely 

submitted to CCC, section 1493.100(h) 

has been modified to permit CCC to 

charge a fee for amendments over and 

above the normal guarantee fee to offset 

the administrative costs of processing 

amendments. CCC also may, at its 

discretion, request documentation from 

the exporter to justify the amendment, 

with a view to reducing what CCC 

considers unwarranted amendment 

requests. Additionally, consistent with 

the new certification requirements 

related to the EPLS and OFAC lists, 

exporters (or their assignees) will be 

required to resubmit these certifications 

any time the payment guarantee is 

amended to change the foreign financial 

institution. 

Section 1493.110 Guarantee Fees 

In response to the problems 

associated with high demand for certain 

GSM–102 country and region 

allocations, several participants have 

suggested that CCC implement a 

competitive process, akin to an auction, 

whereby exporters would be required to 

bid on coverage. CCC agrees that such 

a process may be an economically 

efficient way to allocate coverage when 

demand for coverage exceeds supply. 

Therefore, proposed section 

1493.110(a)(2) would include this 

option for determining fees. If 

operational, details of this process 

would be made available on the FAS 

Web site. CCC could implement this 

option at its discretion and would notify 

participants via the FAS Web site if it 

chose to apply this optional method. 

CCC also proposes to modify its 

policy on fee refunds. Currently, once 

CCC advises an exporter of acceptance 

of its application(s) (prior to processing 

the applications and providing the 

exporter a GSM number), the exporter 

can determine not to utilize the 

coverage and CCC will refund the 

exporter’s fees. It has become 

increasingly common for exporters to 

apply for coverage and then 

subsequently cancel large portions of 

their submitted applications. In such 

instances this coverage could have been 

utilized by other exporters, and CCC 

loses the opportunity to support 

additional export sales. In an attempt to 

curtail this practice, once CCC has 

notified an exporter that its application 

has been accepted, CCC will not refund 

the fees on such application if the 

exporter elects to withdraw it. 

Section 1493.120 Assignment of the 

Payment Guarantee 

Under section 1493.120(c), assignees 

would now be required to make two 

certifications when submitting the 

notice of assignment: (1) The foreign 

financial institution is not excluded or 

otherwise disqualified from program 

participation, and (2) the information 

provided to CCC at the time of 

qualification as an assignee has not 

changed. The certification on the foreign 

financial institution found in section 

1493.120(c)(1) is consistent with the 

requirement of the exporter to make a 

similar certification related to the 

importer (see discussion of section 

1493.80). Further, as is the case with the 

requirement for exporters, CCC believes 

it is appropriate that the U.S. financial 

institution certify with each assignment 

that the information and certifications 

provided to CCC at time of approval for 

participation are accurate. 

CCC proposes to modify some of the 

bases for a determination that a U.S. 

financial institution may be ineligible to 

receive assignment of a payment 

guarantee. The proposed rule would 

delete the current provision of section 

1493.140(b)(1) that requires the 

financial institution to be in sound 

financial condition. The underlying 

statutory requirement imposing such 

ineligibility was repealed in the Federal 

Agriculture Improvement and Reform 

Act of 1996 (Pub. L. 104–127). CCC 

proposes to make a U.S. financial 

institution ineligible to receive an 

assignment if it does not meet the 

qualification requirements found in 

section 1493.40(a) and certified in 

1493.120(c)(2) at the time of the 

assignment. 

At the request of U.S. financial 

institution participants, CCC proposes 

to add a provision to allow the assignee 

(or exporter, if the payment guarantee is 

unassigned) to include obligations 

guaranteed by CCC in a repurchase 

agreement (section 1493.120(f) and as 

defined in section 1493.20(kk)). 

Permitting the sale of these obligations 

as part of a repurchase agreement would 

allow the assignee to temporarily 

improve its liquidity position and thus 

increase the amount of credit available 

for the assignee to support additional 

U.S. exports. Although CCC will not 

approve repurchase agreements, the 

assignee (or exporter) must notify CCC 

when CCC-guaranteed obligations are 

included in a repurchase agreement by 

supplying the information specified in 

section 1493.120(f)(2). Failure of the 

assignee (or exporter) to comply with 

the requirements in section 1493.120(f) 

will result in CCC annulling coverage 

under the payment guarantee. 

Section 1493.130 Evidence of Export 

CCC proposes to make several 

modifications to the requirements for 

evidence of export (EOE) reports. 

Several items that are currently 

contained in notices to participants 

have been incorporated into section 

1493.130(a). CCC also proposes to add 

‘‘destination country’’ as required 

information in the EOE. Collection of 

this information will provide CCC data 

on the specific countries to which 

GSM–102 commodities are shipped 

under regional programs, thus assisting 

in targeting of programming and 

prioritizing of CCC activities. 

The time limit for submission of EOE 

reports would be modified, and CCC 

proposes to add new rules regarding 

failure to submit EOEs on time. It has 

become increasingly important for CCC 

to receive EOEs in a timely manner for 

both budgetary and policy purposes. 

However, it has also become 

increasingly common for exporters to 

fail to submit EOEs within the 

timeframe specified in the current 

regulations. Therefore, CCC would now 

require that all EOEs be submitted to 

CCC within 10 calendar days of the date 

of export (section 1493.130(b)(1)). CCC 

also proposes to add a requirement that 

the exporter must notify CCC no later 

than the final date to export if the 

exporter determines not to make any 

shipments under the payment guarantee 

(section 1493.130(b)(2)). Because there 

are sometimes legitimate circumstances 

that prevent an exporter from meeting 

these filing deadlines, CCC proposes in 

section 1493.130(b)(3) to allow the 

exporter to request an extension of the 

filing deadline. Any extension must be 

requested prior to the filing deadline 

and must be accompanied by an 

explanation as to why the extension is 

needed. 

Given the importance of CCC 

receiving EOEs in a timely manner, CCC 

proposes to impose new consequences 

for failure to submit EOEs within the 

required timeframe. Under section 

1493.130(c), exporters who do not 

submit EOE reports as required would 

be prohibited from receiving any new 

payment guarantees until they are fully 

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44840 Federal Register / Vol. 76, No. 144 / Wednesday, July 27, 2011 / Proposed Rules 

in compliance with the requirements of 

section 1493.130(b). 

Section 1493.140 Certification 

Requirements for the Evidence of Export 

CCC proposes several changes to the 

certifications required with submission 

of the evidence of export report (EOE). 

The certification found in section 

1493.90(b) of the current regulation, to 

attest that ‘‘agricultural commodities of 

the grade, quality and quantity called 

for in the exporter’s contract with the 

importer have been exported to the 

country specified on the payment 

guarantee’’ would be removed, and as 

noted in the explanation of section 

1493.90, a requirement added that the 

commodity grade and quality specified 

in the foreign financial institution letter 

of credit be consistent with the 

commodity grade and quality specified 

in the firm export sales contract. CCC 

would also eliminate the certification 

currently in section 1493.90(c) 

specifying that ‘‘a letter of credit has 

been opened in favor of the exporter by 

the foreign bank shown in the payment 

guarantee to cover the port value of the 

commodity exported.’’ This certification 

often keeps exporters from submitting 

EOEs on time, if the letter of credit has 

not been opened and therefore the 

exporter cannot make this certification. 

CCC has removed this certification to 

avoid delays in submitting EOE reports. 

As explained previously, CCC proposes 

no longer to provide coverage of any 

exports where the foreign financial 

institution letter of credit is issued more 

than 30 calendar days after the date of 

export (section 1493.100(f)(3)). Given 

this new requirement, the certification 

related to the letter of credit would no 

longer be necessary. 

CCC proposes to add a new 

certification in section 1493.140(c): if 

the payment guarantee has not been 

assigned to an approved U.S. financial 

institution by the time of submission of 

the EOE, the exporter would be required 

to certify that the foreign financial 

institution issuing the letter of credit is 

not excluded or disqualified from 

participation in U.S. government 

programs through either the EPLS or 

OFAC Specially Designated Nationals 

(SDN) lists. There is no requirement for 

an exporter to assign the payment 

guarantee. Because this certification is 

required of the U.S. financial institution 

when submitting the notice of 

assignment, including it with the EOE 

certifications will ensure that this 

certification is made even when the 

exporter determines not to assign the 

payment guarantee. 

Section 1493.160 Notice of Default 

CCC proposes to change the 

timeframe for the exporter or exporter’s 

assignee to submit a notice of default 

(NOD) to CCC, reducing it from the 

current ten (10) calendar days to five (5) 

business days. By reducing this 

timeframe CCC hopes to mitigate the 

impact of any defaults, as the primary 

purpose of the NOD is to allow CCC to 

immediately prohibit additional 

transactions with the foreign financial 

institution in default. CCC also proposes 

to require two additional pieces of 

information with the notice of default: 

(1) A copy of the foreign financial 

institution’s repayment schedule 

(section 1493.160(a)(5)) and (2) any 

correspondence with the foreign 

financial institution regarding the 

default (section 1493.160(a)(7)). The 

repayment schedule will give CCC an 

accurate accounting of when future 

payments are coming due (and hence, 

when additional defaults may be 

expected), and the correspondence may 

provide CCC additional information that 

is helpful in restructuring the debt with 

the defaulting institution. 

Under the proposed rule, CCC would 

add new section 1493.160(c), ‘‘Impact of 

a default on other existing payment 

guarantees.’’ The existing regulation is 

silent on potential CCC actions related 

to outstanding payment guarantees once 

a foreign financial institution defaults. 

As a result, exporters may obtain a letter 

of credit or continue to export under an 

existing guarantee even after the foreign 

financial institution issuing the letter of 

credit has defaulted, thus potentially 

increasing CCC’s exposure. The 

proposed rule therefore would prescribe 

a specific policy that CCC will notify the 

impacted exporters and withdraw 

coverage of any shipments that occur 

after the exporter receives this 

notification where the letter of credit 

has been or will be issued by the 

defaulting foreign financial institution. 

The exporter will be given the option to 

find another foreign financial institution 

to issue a letter of credit for the balance 

of the guarantee, or CCC would cancel 

that portion of the guarantee allocable to 

unshipped amounts and refund that 

portion of the guarantee fee to the 

exporter. 

Section 1493.170 Claims for Default 

As would similarly be required in 

conjunction with a notice of default, 

CCC also proposes to require, under 

section 1493.170(a)(3), a copy of the 

foreign financial institution’s repayment 

schedule as a claims document. Under 

section 1493.170(a)(4), CCC would also 

require the claimant to provide a 

description of any payments received 

prior to claim and any insurance 

proceeds, securities or collateral 

arrangements that may be realized upon 

that are in any way associated with the 

debt with respect to which the claim is 

filed. Because any such payments or 

instruments are deemed recoveries and 

must be remitted to CCC for pro-rata 

sharing, CCC proposes to require them 

to be declared concurrently with 

submission of any claim. 

Proof of entry, as defined in section 

1493.150, would be added as a required 

claims document. Although CCC 

already has the authority to request 

proof of entry documentation from the 

exporter, the proliferation of regional 

programs under GSM–102 has raised 

concerns as to the entry point of the 

commodities covered by the payment 

guarantee. Rather than request this 

documentation from exporters on an ad 

hoc basis, CCC proposes to require it 

with all submitted claims. Failure to 

demonstrate proof of entry into the 

country or region specified on the 

payment guarantee would result in 

denial of the claim by CCC. 

CCC also proposes to add new section 

1493.170(b), ‘‘Additional documents.’’ 

At times, the required claims documents 

may not provide sufficient information 

for CCC to determine that a claim is in 

‘‘good order,’’ and the claim may 

therefore be denied. This provision 

would give the exporter or the 

exporter’s assignee the right to submit 

additional documentation to CCC to 

support a claim if the claim has been 

denied. 

Section 1493.180 Payment for Default 

In section 1493.180(b), CCC would 

clarify that its liability with respect to 

any defaulted payments will be reduced 

by any payments received or funds 

realized from insurance, security or 

collateral arrangements prior to claim by 

the exporter or the exporter’s assignee. 

Although this is inherent under the 

current terms of the guarantee, it is not 

specifically stated in the current 

regulation. 

In section 1493.180(c), CCC proposes 

to modify the time requirement for 

making claims payments. The proposed 

rule would allow CCC 15 business days 

(from the date of receiving a claim in 

good order) to make a claim payment 

before late interest would begin to 

accrue in favor of the exporter or the 

exporter’s assignee. Upon receipt of a 

claim, CCC must review all of the claims 

documents to ensure they are compliant 

with the program regulations; enter the 

claims data into CCC’s GSM System; 

provide final claims documents to a 

CCC Certifying Officer for review and 

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certification; and disburse the payment 

to the claimant. It is not possible for 

CCC to complete all of these tasks 

within the one day currently required in 

the regulations—resulting in payment of 

late interest by CCC on every claim. The 

U.S. Office of Management and Budget’s 

final rule on, and codification of, 

Prompt Payment Act regulations (5 CFR 

Part 1315), only requires, unless 

otherwise specified, Federal agencies to 

pay their bills within 30 days of the date 

of receipt of a proper invoice. 

CCC proposes to modify the provision 

on accelerated payments in section 

1493.180(d). In order for CCC to 

accelerate a claim payment to the 

exporter or assignee, the exporter or 

assignee must accelerate the payments 

due from the foreign financial 

institution and file all claims documents 

required in section 1493.170(a). 

Although this is currently understood 

and practiced by claimants, CCC 

believes it is appropriate to specify 

these requirements as part of the 

regulation. 

Section 1493.190 Recovery of 

Defaulted Payments 

In section 1493.190(b), CCC proposes 

to exclude from the meaning of the term 

‘‘recoveries’’ the transfer of funds 

between CCC, the exporter and the 

exporter’s assignee. Under certain 

circumstances, the U.S. financial 

institution taking assignment of the 

GSM–102 payment guarantee may be 

unwilling to take risk on the uncovered 

portion of the transaction. As a result, 

under such circumstances, the exporter 

may retain this risk. The current 

regulation, by use of the phrase ‘‘or any 

source whatsoever,’’ dictates that the 

flow of funds between the exporter and 

the assignee under such an arrangement 

must occur prior to a default, because 

any transfer of funds after a default is 

considered a ‘‘recovery.’’ 

CCC’s primary interest is in 

maintaining a risk-share partner in the 

GSM–102 transaction such that either 

the exporter or exporter’s assignee 

carries the risk for the uncovered 

portion of the export sale. It is irrelevant 

to CCC when any proceeds are shared 

between these parties. Therefore, CCC 

proposes to add a clarification that 

payments between CCC, the exporter, or 

the exporter’s assignee are not 

considered recoveries and therefore 

need not be paid to CCC. This change 

would allow the exporter and the 

assignee greater flexibility in structuring 

the transaction between themselves in 

instances where the assignee does not 

wish to take risk on the uncovered 

portion of the transaction. 

Consistent with the proposed new 

section 1493.170(a)(4), which would 

require the claimant to provide a 

description of any payments received 

prior to claim or any insurance, 

securities or collateral arrangements that 

may be realized upon that are in any 

way associated with the debt with 

respect to which the claim is filed. CCC 

proposes to clarify in section 

1493.190(b)(1) that any monies derived 

through payments of insurance or the 

liquidation of any securities or collateral 

are also considered recoveries and must 

be paid to CCC. 

CCC has added examples of what 

actions by the exporter or the exporter’s 

assignee constitute ‘‘cooperation’’ in 

recoveries in section 1493.190(f). 

Although these actions are not 

precluded under the current regulation, 

they have been added in the proposed 

rule to provide exporters and assignees 

an illustration of possible cooperative 

efforts that may be required of 

participants in the course of recoveries. 

Section 1493.200 Dispute Resolution 

and Appeals 

CCC proposes to add this new section. 

As previously noted, the proposed rule 

would clarify instances throughout the 

regulation in which the Director of the 

Credit Programs Division, FAS, is 

authorized to make determinations with 

respect to the GSM–102 program. In 

conjunction with this change, CCC 

proposes to add specific procedures 

pursuant to which program participants 

may appeal decisions made by the 

Director. In addition to affording 

specific appeal rights to participants, 

this section also specifies certain 

responsibilities of participants during 

and after the appeal process. The 

addition of these procedures will 

provide clarity to participants regarding 

their rights to appeal adverse decisions. 

Executive Order 12866 

This proposed rule is issued in 

conformance with Executive Order 

12866. It has been determined to be not 

significant for the purposes of Executive 

Order 12866 and was not reviewed by 

OMB. A cost-benefit assessment of this 

rule was not completed. 

Executive Order 12988 

This 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 1493.200 

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 proposed rule has been reviewed 

under Executive Order 13132, 

‘‘Federalism.’’ The policies contained in 

this proposed rule do not have any 

substantial direct effect on States, on the 

relationship between the Federal 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, nor does this 

proposed rule impose substantial direct 

compliance costs on State and local 

governments. Therefore, consultation 

with the States is not required. 

Executive Order 13175 

The United States has a unique 

relationship with Indian Tribes as 

provided in the Constitution of the 

United States, treaties, and Federal 

statutes. On November 5, 2009, 

President Obama signed a Memorandum 

emphasizing his commitment to 

‘‘regular and meaningful consultation 

and collaboration with tribal officials in 

policy decisions that have tribal 

implications including, as an initial 

step, through complete and consistent 

implementation of Executive Order 

13175.’’ This proposed rule has been 

reviewed for compliance with E.O. 

13175 and CCC worked directly with 

the Office of Tribal Relations in the 

rule’s development. The policies 

contained in this proposed rule do not 

have tribal implications that preempt 

tribal law. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act does 

not apply to this rule because CCC is not 

required by 5 U.S.C. 553 or any other 

law to publish a notice of proposed 

rulemaking with respect to the subject 

matter of this rule. 

Environmental Assessment 

CCC has determined that this 

proposed rule does not constitute a 

major State or Federal action that would 

significantly affect the human or natural 

environment. Consistent with the 

National Environmental Policy Act 

(NEPA), 40 CFR 1502.4, ‘‘Major Federal 

Actions Requiring the Preparation of 

Environmental Impact Statements’’ and 

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44842 Federal Register / Vol. 76, No. 144 / Wednesday, July 27, 2011 / Proposed Rules 

the regulations of the Council on 

Environmental Quality, 40 CFR Parts 

1500–1508, no environmental 

assessment or environmental impact 

statement will be prepared. 

Unfunded Mandates 

This proposed rule does not impose 

any enforceable duty or contain any 

unfunded mandate as described under 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA). Therefore, 

this rule is not subject to the 

requirements of sections 202 and 205 of 

UMRA. 

Paperwork Reduction Act of 1995 

In accordance with the Paperwork 

Reduction Act of 1995, CCC is 

requesting comments from all interested 

individuals and organizations on a 

proposed revision to the currently 

approved information collection for this 

program. This revision includes the 

proposed change in information 

collection activities related to the 

regulatory changes in this proposed 

rule. 

Title: CCC Export Credit Guarantee 

Program (GSM–102). 

OMB Control Number: 0551–0004. 

Type of Request: Revision of a 

currently approved information 

collection. 

Abstract: This information collection 

is required to support the existing 

regulations and proposed changes to 7 

CFR Part 1493, subpart B, ‘‘CCC Export 

Credit Guarantee (GSM–102) Program 

Operations,’’ which establishes the 

requirements for participation in CCC’s 

GSM-102 program. This revised 

collection incorporates the additional 

estimated burden to program 

participants as a result of certain new 

requirements in this proposed rule for 

(1) Exporter, U.S. and foreign financial 

institution qualification; (2) applications 

for payment guarantees; (3) notices of 

assignment; (4) repurchase agreements; 

(5) evidence of export reports; (6) 

submission of claims for default; and (7) 

appeals. This revision also reflects an 

increase in program activity since the 

last approval. This information 

collection is necessary for CCC to 

manage, plan and evaluate the program 

and to ensure the proper and judicious 

use of government resources. 

Estimate of Burden: The public 

reporting burden for this collection of 

information is estimated to average 0.47 

hours per response. 

Respondents: U.S. exporters, U.S. 

financial institutions, and foreign 

financial institutions. 

Estimated Number of Respondents: 

180 per year. 

Estimated Number of Responses per 

Respondent: 40 per year. 

Estimated Total Annual Burden on 

Respondents: 3,377 hours. 

Comments on this information 

collection may be submitted to CCC in 

accordance with the instructions for 

submitting comments to this proposed 

rule. All comments received in response 

to this notice will be a matter of public 

record. 

E-Government Act Compliance 

CCC is committed to complying with 

the E-Government Act to promote the 

use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services and for other purposes. The 

forms, regulations, and other 

information collection activities 

required to be utilized by a person 

subject to this rule are available at: 

http://www.fas.usda.gov. 

Title 7—Agriculture 

List of Subjects in 7 CFR Part 1493 

Agricultural commodities, Exports. 

For the reasons stated in the 

preamble, CCC proposes to amend 7 

CFR Part 1493 as follows: 

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– 

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 may use payment guarantees: 

(a) To increase exports of U.S. 

agricultural commodities and expand 

access to trade finance; 

(b) To compete against foreign 

agricultural exports; 

(c) To assist countries, particularly 

developing countries and emerging 

markets, in meeting their food and fiber 

needs; 

(d) To establish or improve facilities 

and infrastructure in emerging markets 

to expand exports of U.S. agricultural 

commodities; and 

(e) 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 agricultural commodities to any 

country that the Secretary determines 

cannot adequately service the debt 

associated with such sales. 

(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 this program. 

§ 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 whose 

financial institution obligation is 

guaranteed by CCC (‘‘country of 

obligation’’) to adequately service CCC 

guaranteed debt; 

(c) Financial status of participating 

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 

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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 guarantees. 

§ 1493.5 Criteria for agricultural 

commodity allocations. 

The criteria considered by CCC in 

determining U.S. 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; 

(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 Terms and requirements of the 

foreign financial institution letter of 

credit and related obligation. 

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. 

1493.192 Dispute resolution and appeals. 

1493.195 Miscellaneous provisions. 

Subpart B—CCC Export Credit 

Guarantee Program (GSM–102) 

Operations 

§ 1493.10 General statement. 

(a) Overview. This subpart contains 

the regulations governing the operations 

of the Export Credit Guarantee (GSM– 

102) Program. The GSM–102 program of 

the Commodity Credit Corporation 

(CCC) was developed to expand U.S. 

agricultural 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 GSM–102, 

payment guarantees are issued for terms 

of up to three years. 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 will be administered 

under the direction of the General Sales 

Manager and Vice President, CCC, 

pursuant to this part and any Program 

Announcements issued by CCC 

pursuant to, and not inconsistent with, 

this part. From time to time, CCC may 

issue a Notice to Participants on the 

FAS Web site reminding participants of 

the requirements of this subpart, or 

clarifying provisions of this subpart. 

Information regarding specific points of 

contact for the public, including names, 

addresses, and telephone and facsimile 

numbers of particular USDA or CCC 

offices, will be available on the Foreign 

Agricultural Service (FAS) Web site. 

(c) Country and regional program 

announcements. From time to time, 

CCC will issue a Program 

Announcement on the FAS 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 commodities 

are available under the announcement. 

The Program Announcement will 

contain any requirements applicable to 

that country or region as determined by 

CCC. 

§ 1493.20 Definition of terms. 

Terms set forth in this part, on the 

FAS 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: 

(a) Affiliate. Entities or persons 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; common use 

of employees; or a business entity which 

has been organized following the 

exclusion of a person from eligibility to 

enter into certain procurement or nonprocurement transactions with the U.S. 

Government that has the same or similar 

management, ownership, or principal 

employees as the excluded person. 

(b) Assignee. A U.S. financial 

institution that has obtained the legal 

right to make claim and receive the 

payment of proceeds under the payment 

guarantee. 

(c) Business day. Days during which 

employees of the U.S. Department of 

Agriculture in the Washington, DC., 

metropolitan area are on official duty 

during normal business hours. 

(d) 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.), further specifically 

authorized to carry out the GSM–102 

Program pursuant to section 202 of the 

Agricultural Trade Act of 1978, as 

amended, and subject to the general 

supervision and direction of the 

Secretary of Agriculture. 

(e) CCC late interest. Interest payable 

by CCC pursuant to § 1493.180(c). 

(f) Cost and Freight (CFR). A 

customary trade term, as defined by the 

International Chamber of Commerce, 

Incoterms (current revision), indicating 

that the seller delivers when the goods 

pass the ship’s rail in the port of 

shipment, and the seller pays the cost 

and freight necessary to bring the goods 

to the named port of destination. 

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(g) Cost Insurance and Freight (CIF). 

A customary trade term, as defined by 

the International Chamber of Commerce, 

Incoterms (current revision), indicating 

that the seller delivers when the goods 

pass the ship’s rail in the port of 

shipment, and the seller pays the cost 

and freight necessary to bring the goods 

to the named port of destination, as well 

as the marine insurance. 

(h) 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 onboard 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. 

(i) 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. 

(j) Director. The Director, Credit 

Programs Division, Office of Trade 

Programs, Foreign Agricultural Service, 

or designee. 

(k) 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 a sale 

of an agricultural commodity, above and 

beyond the commodity’s value, stated 

on the appropriate FOB, FAS, CFR or 

CIF basis. Discounts and allowances 

include, but are not limited to, the 

provision of additional goods, services 

or benefits; the promise to provide 

additional goods, services or benefits in 

the future; financial rebates; the 

assumption of any financial or 

contractual obligations; commissions 

where the buyer requires the exporter to 

employ and compensate a specified 

agent as a condition of concluding the 

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. 

(l) Eligible interest. The amount of 

interest that CCC agrees to pay the 

exporter or the exporter’s assignee in the 

event that CCC pays a claim for default 

of ordinary interest. Such amount of 

interest that CCC agrees to pay equals 

the lesser of: 

(1) The amount calculated using the 

interest rate specified between the 

exporter or exporter’s assignee 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. 

(m) EPLS (Excluded Parties List 

System). The electronic version of the 

Lists of Parties Excluded from Federal 

Procurement and Nonprocurement 

Programs, which identifies those parties 

excluded throughout the U.S. 

Government (unless otherwise noted) 

from receiving Federal contracts or 

certain subcontracts and excluded from 

certain types of Federal financial and 

nonfinancial assistance and benefits. 

The EPLS can be found at www.epls.gov. 

(n) Exported value. (1) Where CCC 

announces coverage on a FAS or FOB 

basis and: 

(i) Where the commodity is sold on a 

FAS or FOB basis, the value, FAS or 

FOB basis, U.S. point of export, of the 

export sale, reduced by the value of any 

discounts or allowances granted to the 

importer in connection with such sale; 

or 

(ii) Where the commodity was sold on 

a CFR or CIF basis, point of entry, the 

value of the export sale, FAS or FOB, 

point of export, is measured by the CFR 

or CIF value of the 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 or 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 

commodity is sold on a CFR or CIF 

basis, point of entry, the total value of 

the export sale, CFR or CIF basis, point 

of entry, reduced by the value of any 

discounts or allowances granted to the 

importer in connection with the sale of 

the commodity. 

(3) When a CFR or CIF 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. 

(o) Exporter. A seller of U.S. 

agricultural commodities or products 

thereof that is both qualified in 

accordance with the provisions of 

§ 1493.30 and the applicant for the 

payment guarantee. 

(p) FAS Web site. Location of 

information related to the GSM–102 

program, including program 

announcements, press releases, notices 

to participants, program contact 

information, eligible U.S. and foreign 

financial institutions, eligible 

commodities, etc. The Web site also 

provides details on where and by what 

method participants may submit 

documentation required by this subpart. 

The current Web site is http:// 

www.fas.usda.gov/excredits/exp-credguar-new.asp. 

(q) Final date to export. The final 

allowable date to export as shown on 

the payment guarantee. 

(r) 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 a sale of the eligible 

commodity from the exporter to the 

importer (or, if applicable, the sale of 

the eligible commodity from the 

exporter to the intervening purchaser 

and the intervening purchaser and 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 

commodity, quantity, quality 

specifications, delivery terms (FOB, 

C&F, etc.) to the eligible country or 

region, delivery period, unit price, 

payment terms, date of sale, and 

evidence of agreement between buyer 

and seller. The sales contract between 

the exporter and the importer (or, if 

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 

payment guarantee application. 

(s) Foreign financial institution. A 

financial institution: 

(1) Organized 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. 

(t) Foreign financial institution letter 

of credit. An irrevocable documentary 

letter of credit, subject to the current 

revision of the Uniform Customs and 

Practices for Documentary Credits 

(International Chamber of Commerce 

Publication No. 600, or latest revision), 

providing for payment in U.S. dollars 

against stipulated documents and issued 

in favor of the exporter by a CCCapproved foreign financial institution. 

For the purpose of the GSM–102 

program, CCC will consider applications 

for payment guarantees to finance 

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export sales of U.S. agricultural 

commodities where the payment for the 

agricultural commodities will be made 

in one of the two following ways: 

(1) An irrevocable documentary letter 

of credit issued by a foreign financial 

institution specifically stating the 

deferred payment terms under which 

the foreign financial institution is 

obligated to make payments to the 

exporter, or the exporter’s assignee, in 

U.S. dollars as such payments become 

due; or 

(2) An irrevocable documentary letter 

of credit issued by a foreign financial 

institution that is supported by a related 

obligation specifically stating the 

deferred payment terms under which 

the foreign financial institution is 

obligated to make payment to the 

exporter, or the exporter’s assignee, in 

U.S. dollars as such payments become 

due. 

(u) Free Alongside Ship (FAS). A 

customary trade term, as defined by the 

International Chamber of Commerce, 

Incoterms (current revision), indicating 

that the seller delivers when the goods 

are placed alongside the vessel at the 

named port of shipment, and the buyer 

bears all costs and risks of loss of or 

damage to the goods from that moment. 

(v) Free on Board (FOB). A customary 

trade term, as defined by the 

International Chamber of Commerce, 

Incoterms (current revision), indicating 

that the seller delivers when the goods 

pass the ship’s rail at the named port of 

shipment, and the buyer bears all costs 

and risks of loss of or damage to the 

goods from that moment. 

(w) GSM. The General Sales Manager, 

Foreign Agricultural Service (FAS), 

USDA, acting in his or her capacity as 

Vice President, CCC, or designee. 

(x) Guaranteed value. The maximum 

amount, exclusive of interest, that CCC 

agrees to pay the exporter or assignee 

under CCC’s payment guarantee, as 

indicated on the face of the payment 

guarantee. 

(y) Importer. A foreign buyer, 

physically located in the country or 

region of destination specified in the 

payment guarantee that enters into a 

firm export sales contract with an 

exporter or with an intervening 

purchaser for an export sale of 

agricultural commodities to be shipped 

from the United States to the foreign 

buyer. A foreign buyer that is not 

physically located in the country or 

region of destination but has an agent or 

other entity in the country or region of 

destination to act on the foreign buyer’s 

behalf does not satisfy the criteria of this 

definition. 

(z) 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 agricultural 

commodities to an importer. 

(aa) Letter of credit account party. An 

entity on whose behalf a foreign 

financial institution letter of credit is 

opened in favor of the exporter. 

(bb) Notice to participants. A notice 

issued by CCC on the FAS Web site to 

remind participants of the requirements 

of the program or to clarify the program 

requirements contained in these 

regulations in a manner not inconsistent 

with this subpart. 

(cc) OFAC. The Office of Foreign 

Assets Control of the U.S. Department of 

Treasury, which administers and 

enforces economic sanctions programs 

primarily against countries and groups 

of individuals such as terrorists and 

narcotics traffickers. OFAC’s Specially 

Designated National’s list can be found 

at http://www.ustreas.gov/offices/ 

enforcement/ofac/sdn/index.shtml. 

(dd) Ordinary interest. Interest 

charged on the principal amount 

identified in the foreign financial 

institution’s letter of credit or related 

obligation, other than post default 

interest. 

(ee) Payment guarantee. An 

agreement under 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 exporter or the 

exporter’s assignee in the event of a 

default by a foreign financial institution 

on its payment obligation under the 

foreign financial institution letter of 

credit issued in connection with a 

guaranteed sale or under the foreign 

financial institution’s related obligation. 

(ff) Port value. (1) Where CCC 

announces coverage on a FAS or FOB 

basis and: 

(i) Where the commodity is sold on a 

FAS or FOB basis, U.S. point of export, 

the value, FAS or FOB basis, U.S. point 

of export, of the export sale, including 

the upward loading tolerance, if any, as 

provided by the export sales contract, 

reduced by the value of any discounts 

or allowances granted to the importer in 

connection with such sale; or 

(ii) Where the commodity was sold on 

a CFR or CIF basis, point of entry, the 

value of the export sale, FAS or FOB, 

point of export, including the upward 

loading tolerance, if any, as provided by 

the export sales contract, is measured by 

the CFR or CIF value of the 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 or 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 

commodity was sold on CFR or CIF 

basis, point of entry, the total value of 

the export sale, CFR or CIF basis, point 

of entry, including the upward loading 

tolerance, if any, as provided by the 

export sales contract, reduced by the 

value of any discounts or allowances 

granted to the importer in connection 

with the sale of the commodity. 

(3) When a CFR or CIF 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. 

(gg) Post default interest. Interest 

charged on amounts in default, as 

specified in the foreign financial 

institution letter of credit or related 

obligation that begins to accrue upon 

default of payment. 

(hh) Principal. An officer, director, 

owner of five percent or more of stock, 

partner, or person having primary 

management or supervisory 

responsibility within a business entity 

(e.g., general manager, plant manager, 

head of a subsidiary division, or 

business segment). 

(ii) Program announcement. An 

announcement issued by CCC on the 

FAS Web site that provides information 

on specific country and regional 

programs and may identify eligible 

agricultural commodities and countries, 

length of credit periods which may be 

covered, and other information. 

(jj) Related obligation. A contractual 

commitment by the foreign financial 

institution issuing the letter of credit in 

connection with an export sale to make 

payment(s) on principal amount(s), plus 

any ordinary 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 CCC’s payment 

guarantee. The U.S. financial institution 

(or exporter) is entitled to such 

payments because it has financed the 

obligation arising under such letter of 

credit. 

(kk) Repurchase agreement. A written 

agreement under which the holder of 

CCC’s payment guarantee, either the 

exporter or exporter’s assignee, 

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whichever is applicable, may from time 

to time enter into transactions in which 

the exporter or exporter’s assignee 

agrees to sell to another party foreign 

financial institution letter(s) of credit 

and/or related obligation(s) secured by 

CCC’s payment guarantee, and 

repurchase the same foreign financial 

institution letter(s) of credit and/or 

related obligation(s) secured by CCC’s 

payment guarantee, on demand or date 

certain at an agreed upon price. 

(ll) United States or U.S. Each of the 

States, the District of Columbia, Puerto 

Rico, and the territories and possessions 

of the United States. 

(mm) U.S. agricultural commodity. 

(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. 

(nn) USDA. United States Department 

of Agriculture. 

(oo) U.S. financial institution. A 

financial institution: 

(1) Organized 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. 

§ 1493.30 Information required for exporter 

participation. 

Before CCC will accept an application 

for a payment guarantee under the 

GSM–102 program, the applicant must 

qualify for participation in this 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 FAS 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) E-mail 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 legal form of doing business 

of the applicant, e.g., sole 

proprietorship, partnership, 

corporation, etc. and the place of 

incorporation or State where legally 

registered or, if not registered, the 

address of legal residence. Upon request 

by CCC, the applicant must provide 

documentation showing its registration 

or licensing in the State where 

incorporated or established as a 

business entity. 

(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; 

(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) E-mail address (if applicable); and 

(iv) Contact name. 

(4) A description of the applicant’s 

business. Applicants must provide the 

following information: 

(i) Nature of the applicant’s business 

(i.e., agricultural producer, commodity 

trader, consulting firm, etc.); 

(ii) Explanation of the applicant’s 

experience/history with agricultural 

commodities or products for the 

preceding three years, including 

description of 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; 

(iv) Whether or not the applicant is a 

‘‘small or medium enterprise’’ (SME) as 

defined on the FAS 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 section 

1493.60(a) certifications are being 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 

for a GSM–102 payment guarantee for 

two consecutive fiscal years must 

resubmit a qualification application to 

CCC. 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 under 

paragraph (a) has not changed. 

(d) Ineligibility for program 

participation. An applicant may be 

ineligible to participate in the GSM–102 

program at time of application or any 

time thereafter if such applicant cannot 

provide all of the information and 

certifications required in § 1493.30(a). 

§ 1493.40 Information required for U.S. 

financial institution participation. 

Before CCC will permit a U.S. 

financial institution to participate under 

the GSM–102 program, the U.S. 

financial institution must qualify for 

participation in this program. 

(a) Qualification requirements. In 

order 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 FAS 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; and 

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(5) Breakdown of the U.S. financial 

institution’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 § 1493.60 

certifications are being 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 U.S. financial 

institution will be required to provide 

further explanation or documentation 

with regard to applications that do 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 fiscal years must resubmit 

the information and certifications 

requested by paragraph (a) of this 

section to CCC. If at any time the 

information required by paragraph (a) of 

this section changes, the U.S. financial 

institution must promptly notify CCC to 

update this information and certify that 

the remainder of the information 

previously provided under paragraph (a) 

has not changed. 

(d) Ineligibility for program 

participation. A U.S. financial 

institution may be ineligible to 

participate in the GSM–102 program at 

time of application or any time 

thereafter if such applicant cannot 

provide all of the information and 

certifications required in 1493.40(a). 

§ 1493.50 Information required for foreign 

financial institution participation. 

Before CCC will permit a foreign 

financial institution to participate under 

the GSM–102 program, the foreign 

financial institution must qualify for 

participation in this program. 

(a) Qualification requirements. In 

order 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 FAS Web site: 

(1) Legal name and address of the 

applicant; 

(2) Year end, audited financial 

statements 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 § 1493.60 

certifications are being 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 foreign 

financial institution will be required to 

provide further explanation or 

documentation with regard to 

applications that do 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 its audited fiscal yearend financial statements so that CCC 

may determine the continued ability of 

the foreign financial institution to 

adequately service CCC guaranteed debt. 

Failure to submit this information 

annually may cause CCC to decrease or 

cancel the foreign financial institution’s 

dollar participation limit. 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 ineligible to 

participate in the GSM–102 program at 

time of application or any time 

thereafter if: 

(1) Such applicant cannot provide all 

of the information and certifications 

required in § 1493.50(a); 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 or affiliates 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 or affiliates 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, 

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making false statements, or receiving 

stolen property; 

(3) The applicant and any of its 

principals or affiliates 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 or affiliates 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 any of 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 any of 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. 

§ 1493.70 Application for payment 

guarantee. 

(a) A firm export sales contract 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 

FAS 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. 

(2) Name and address of the importer. 

(3) Name and address of the letter of 

credit account party, if other than the 

importer. 

(4) Name and address of the 

intervening purchaser, if any, and a 

statement that the commodity will be 

shipped directly to the importer in the 

destination country or region. 

(5) Date of sale. 

(6) Exporter’s sale number. 

(7) Delivery period as agreed between 

the exporter and the importer. 

(8) A full description of the 

commodity (including packaging, if 

any). 

(9) Mean quantity, contract loading 

tolerance and, if necessary, a request for 

CCC to reserve coverage up to the 

maximum quantity permitted. 

(10) Unit sales price of the 

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. 

(11) Description and value of 

discounts and allowances, if any. 

(12) Port value (includes upward 

loading tolerance, if any). 

(13) Guaranteed value. 

(14) 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. 

(15) 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. 

(16) The term length for the credit 

being extended and the intervals 

between principal payments for each 

shipment to be made under the export 

sale. 

(17) A statement indicating whether 

any portion of the export sale for which 

the exporter is applying for a payment 

guarantee is also being used as the basis 

for an application for participation in 

USDA’s Dairy Export Incentive Program 

(DEIP). The number of the Agreement 

assigned by USDA under the DEIP 

should be included, as applicable. 

(18) The exporter’s statement, ‘‘ALL 

§ 1493.80 CERTIFICATIONS ARE 

BEING MADE 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 GSM–102 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 

proceed 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 agricultural 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 

that the transaction complies with 

applicable United States law, including 

the Foreign Corrupt Practices Act of 

1977 and other anti-bribery measures; 

(c) If the 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; 

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(d) At the time of submission of the 

application for payment guarantee, the 

importer and the intervening purchaser, 

if applicable, are not excluded or 

disqualified from participation in U.S. 

government programs through either the 

EPLS or OFAC Specially Designated 

Nationals (SDN) lists; and 

(e) 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 Terms and requirements of the 

foreign financial institution letter of credit 

and related obligation. 

(a) Foreign financial institution letter 

of credit. (1) The foreign financial 

institution letter of credit must contain 

the following language: ‘‘Issuer 

acknowledges that issuer has arranged 

funding for the purpose of financing the 

trade transaction covered by this Letter 

of Credit. Issuer confirms the underlying 

transaction is a bona fide trade 

transaction and, consequently, this 

Letter of Credit will be booked by issuer 

as trade finance debt.’’ 

(2) The foreign financial institution 

letter of credit or related obligation must 

also contain a provision permitting the 

exporter and the exporter’s assignee, if 

any, to declare all or any part of the 

debt, including accrued interest, 

immediately due and payable, in the 

event a payment default occurs under 

the obligation to which the payment 

guarantee(s) applies. 

(3) The commodity grade and quality 

specified in the foreign financial 

institution letter of credit must be 

consistent with the commodity grade 

and quality specified in the firm export 

sales contract. 

(b) Related obligation. The related 

obligation must be demonstrated in one 

of the following ways: 

(1) The related obligation, including a 

specific promise to pay on deferred 

payment terms, may be contained in the 

letter of credit as a special instruction 

from the issuing financial institution 

directly to the U.S. financial institution 

to refinance the amounts paid by the 

U.S. financial institution for obligations 

financed according to the tenor of the 

letter of credit; or 

(2) The related obligation may be 

memorialized in a separate document(s) 

specifically identified and referred to in 

the letter of credit as the agreement 

under which the foreign financial 

institution is obliged to repay the 

exporter or U.S. financial institution on 

deferred payment terms; or 

(3) The foreign financial institution 

letter of credit payment obligations may 

be specifically identified in a separate 

document(s) setting forth the related 

obligation, or in a duly executed 

amendment thereto, as having been 

financed by the U.S. financial 

institution pursuant to, and subject to 

repayment in accordance with the terms 

of, such related obligation; or 

(4) The related obligation may be 

memorialized in the form of a 

promissory note executed by the foreign 

financial institution issuing the foreign 

financial institution letter of credit in 

favor of the U.S. financial institution. 

§ 1493.100 Terms and requirements of the 

payment guarantee. 

(a) CCC’s obligation. The payment 

guarantee will provide that CCC agrees 

to pay the exporter or the exporter’s 

assignee 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 or 

the related obligation. Payment by CCC 

will be in U.S. dollars. 

(b) Period of guarantee coverage. The 

payment guarantee becomes effective on 

the date(s) of export(s) of the 

agricultural commodities or products 

thereof specified in the exporter’s 

application for a payment guarantee. 

The payment guarantee will apply to the 

period beginning with the date(s) of 

export(s) and will continue during the 

credit term specified in the payment 

guarantee or amendments thereto. 

(c) Terms of the CCC payment 

guarantee. The terms of CCC’s coverage 

will be set forth in the payment 

guarantee, as approved by CCC, and will 

include the provisions of this subpart, 

which may be supplemented by any 

Program Announcements and Notices to 

Participants in effect at the time the 

payment guarantee is approved by CCC. 

(d) Reserve coverage for loading 

tolerances. The exporter may apply for 

a payment guarantee and, if coverage is 

available, pay the guarantee fee, based at 

least on, the amount of the lower 

loading tolerance of the 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 export sales 

contract. The amount of coverage that 

can be reserved to accommodate the 

upward loading tolerance is limited to 

five (5) 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., lower loading 

tolerance), 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 or the additional 

fee not received by CCC within 15 

calendar days after the date of the last 

export against the sales contract, CCC 

will cancel the reserve coverage 

originally set aside for the exporter. 

(e) Prohibited transactions. An export 

transaction is ineligible for GSM–102 

coverage if at any time it is determined 

that: 

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

agricultural commodity; or 

(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 

transaction; or 

(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; or 

(4) If the 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; or 

(5) Either the importer or the 

intervening purchaser, if applicable, is 

excluded or disqualified from 

participation in U.S. government 

programs; or 

(6) The export transaction has been 

guaranteed by CCC under another 

payment guarantee. 

(f) Ineligible exports. The following 

exports are ineligible for GSM–102 

guarantee coverage except where it is 

determined by the Director to be in the 

best interest of CCC to provide 

guarantee coverage on such 

commodities: 

(1) 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) Commodities with a date of export 

made after the final date to export 

shown on the payment guarantee or any 

amendments thereof; or 

(3) Commodities where the date of 

issuance of a foreign financial 

institution letter of credit is more than 

30 calendar days after the date of export. 

(g) Additional requirements. The 

payment guarantee may contain such 

additional terms, conditions, and 

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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 or 

the exporter’s assignee. 

(h) 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 

amendment requests. Such fees will be 

announced and available on the FAS 

Web site. Any amendment to the foreign 

financial institution will require that the 

exporter or the exporter’s assignee, if 

applicable, resubmit to CCC the 

certifications in § 1493.120(c)(1) or 

§ 1493.140(c). 

§ 1493.110 Guarantee fees. 

(a) Guarantee fee rates. Payment 

guarantee fee rates charged may be one 

of the following two types: 

(1) Those that are announced on the 

FAS Web site and are based upon the 

length of the payment terms provided 

for in the export sale 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 FAS Web site. Under a 

competitive bidding process, the final 

guarantee fee rate will be determined by 

CCC and will be advised to the exporter. 

(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 FAS 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 to 

another U.S. financial institution 

approved by CCC. 

(b) Submission of assignment. A 

notice of assignment signed by the 

parties thereto must be filed by the 

assignee with CCC in the manner 

specified on the FAS Web site. The 

name and address of the assignee must 

be included on the written notice of 

assignment. 

(c) Required certifications. (1) The 

U.S. financial institution must include 

the following certification on the notice 

of assignment: ‘‘I certify, to the best of 

my knowledge and belief, that: 

(i) [Name of assignee] has verified that 

the foreign financial institution, at the 

time of submission of the notice of 

assignment, is not excluded or 

disqualified from participation in U.S. 

government programs through either the 

EPLS or OFAC Specially Designated 

Nationals (SDN) lists; and 

(ii) 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 false 

certifications with respect to a GSM–102 

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 

the assignment and/or to proceed 

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 approved by CCC 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 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 

agricultural commodities to importers 

located in such foreign country. 

(f) Repurchase agreements. An 

exporter who holds a CCC payment 

guarantee or an assignee may enter into 

a repurchase agreement. 

(1) The exporter or exporter’s assignee 

in the repurchase agreement must 

comply with the following: 

(i) Any repurchase under a repurchase 

agreement by the exporter or exporter’s 

assignee must be for the entirety of 

outstanding balance under the GSM– 

102 related foreign financial institution 

letter of credit and/or related obligation; 

(ii) In the event of default with respect 

to the obligation subject to a repurchase 

agreement, the exporter or exporter’s 

assignee, as applicable, must 

immediately effect such repurchase; 

(iii) The exporter or exporter’s 

assignee must maintain full servicing of 

the foreign financial institution letter of 

credit and/or related obligation covered 

by the CCC payment guarantee at all 

times; and 

(iv) The exporter or exporter’s 

assignee must file all documentation 

required by § 1493.160 and 1493.170 in 

case of default by the foreign financial 

institution under the payment 

guarantee; and 

(v) The exporter or exporter’s assignee 

must include the following clause in the 

repurchase agreement: ‘‘If during the 

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tenor of this repurchase agreement the 

foreign financial institution issuing the 

underlying letter of credit in the GSM– 

102 transaction fails to make payment 

pursuant to the terms of such letter of 

credit and/or related obligation, [Name 

of exporter or exporter’s assignee, 

whichever is applicable] shall 

repurchase the same letter of credit and/ 

or related obligation transferred to 

[name of other party to the repurchase 

agreement] under this repurchase 

agreement prior to filing a notice of 

default to the Commodity Credit 

Corporation, pursuant to 7 CFR part 

1493.160.’’ 

(2) An exporter who holds a CCC 

payment guarantee or an assignee shall, 

within five business days of execution 

of the repurchase agreement, notify CCC 

of the repurchase agreement in writing 

in the manner specified on the FAS Web 

site. Such notification must include the 

following information: 

(i) Name and address of the other 

party to the repurchase agreement; and 

(ii) A statement indicating whether 

the repurchase agreement is for a fixed 

tenor or if it is terminable upon 

demand. If fixed, provide the purchase 

date and repurchase date agreed to in 

the repurchase agreement. If terminable 

on demand, provide the purchase date 

only; and 

(iii) The following written 

certification: ‘‘[Name of exporter or 

assignee] 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 excluded 

or disqualified from participation in 

U.S. government programs through 

either the EPLS or OFAC Specially 

Designated Nationals (SDN) lists.’’ 

(3) Failure of the exporter or assignee 

to comply with any of the provisions of 

§ 1493.120(f) will result in CCC 

annulling coverage on the foreign 

financial institution letter of credit and/ 

or related obligation 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; 

(3) Date of export; 

(4) Destination country. If the sale was 

registered under a regional program, 

indicate the specific country 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; 

(9) Unit sales price received for the 

commodity exported and the 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) Number of the Agreement 

assigned by USDA under the Dairy 

Export Incentive Program (DEIP) if any 

portion of the export sale was also 

approved for participation in the DEIP; 

(12) The exporter’s statement, ‘‘ALL 

§ 1493.140 CERTIFICATIONS ARE 

BEING MADE 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 

(13) 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 FAS 

Web site within 10 calendar days from 

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 only 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 

§ 1493.130(b) for all existing payment 

guarantees issued to that exporter or has 

requested and been granted an 

extension per § 1493.130(b)(3). 

(d) Export sales reporting. Exporters 

may have a mandatory reporting 

responsibility under Section 602 of the 

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

5712), for exports of wheat and wheat 

flour, feed grains, oil seeds, cotton, beef, 

beef products and other agricultural 

commodities and products thereof. 

§ 1493.140 Certification requirements for 

the evidence of export. 

By providing the statement contained 

in § 1493.130(a)(12), 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 GSM–102 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 proceed against the 

exporter. The exporter, in submitting 

the evidence of export and providing 

the statement set forth in 

§ 1493.130(a)(12), certifies that: 

(a) The agricultural commodity or 

product exported under 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 

that the transaction complies with 

applicable United States law, including 

the Foreign Corrupt Practices Act of 

1977 and other anti-bribery measures; 

(c) 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 excluded or 

disqualified from participation in U.S. 

government programs through either the 

EPLS or OFAC Specially Designated 

Nationals (SDN) lists; and 

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(d) 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 

commodities covered by a GSM–102 

payment guarantee to a country or 

region other than that shown on the 

payment guarantee is prohibited, unless 

expressly authorized 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 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. 

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 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 agricultural commodity 

entered the importing country or region; 

(ii) The identification of the export 

carrier; 

(iii) The quantity of the agricultural 

commodity; 

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

of the agricultural commodity; and 

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

unloading of the agricultural commodity 

in the importing country or region. 

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

bills of lading) clearly demonstrate that 

the 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 of 

credit fails to make payment pursuant to 

the terms of the foreign financial 

institution letter of credit or related 

obligation, the exporter or the exporter’s 

assignee 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 FAS Web site and must include 

the following information: 

(1) Payment guarantee number; 

(2) Name of the country or region as 

shown on the payment guarantee; 

(3) Name of the defaulting foreign 

financial institution; 

(4) Payment due date; 

(5) Total amount of the defaulted 

payment due, indicating separately the 

amounts for principal and ordinary 

interest, and including a copy of the 

repayment schedule with due dates, 

principal amounts and ordinary interest 

rates for each installment; 

(6) Date of foreign financial 

institution’s refusal to pay, if applicable; 

(7) Reason for foreign financial 

institution’s refusal to pay, if known, 

and copies of any correspondence with 

the foreign financial institution 

regarding the default. 

(b) Failure to comply with time limit 

for submission. If the exporter or the 

exporter’s assignee 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) If a 

foreign financial institution defaults 

under a CCC payment guarantee, upon 

receipt of notice by the exporter from 

CCC, CCC will immediately withdraw 

coverage of any shipments where: 

(i) The foreign financial institution 

letter of credit has been or will be issued 

by the foreign financial institution in 

default, and 

(ii) The date of export is to be later 

than the date of receipt of CCC’s 

notification to the exporter. 

(2) If CCC withdraws coverage for any 

such shipments, CCC will permit the 

exporter (with concurrence of the 

assignee, if any) to utilize another 

approved foreign financial institution 

for the balance of the transaction 

covered by the payment guarantee. If no 

alternate foreign financial institution 

can be found, CCC will cancel the 

portion of the payment guarantee 

corresponding to any unshipped 

amounts plus any shipped amounts 

with a date of export later than the date 

of the first default by the foreign 

financial institution and refund the 

guarantee fees corresponding to these 

amounts. 

§ 1493.170 Claims for default. 

(a) Filing a claim. A claim by the 

exporter or the exporter’s assignee 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 FAS Web site. The claim must 

include the following information and 

documents: 

(1) Payment guarantee number; 

(2) A certification that the scheduled 

payment has not been received; 

(3) A certification of the 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; 

(4) A description of: 

(i) 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 

exporter’s assignee prior to submission 

of the claim (excluding scheduled 

payments received under the letter of 

credit and/or related obligation prior to 

the initial default); and 

(ii) 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. 

(5) A copy of each of the following 

documents, with a cover document 

containing a signed certification by the 

exporter or the exporter’s assignee that 

all documents are true and correct 

copies: 

(i)(A) the foreign financial institution 

letter of credit securing the export sale; 

and 

(B) If applicable, the document(s) 

evidencing the related obligation owed 

by the foreign financial institution to the 

exporter or the exporter’s assignee. 

(ii) Depending upon the method of 

shipment, the negotiable 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; 

(iii) Proof of entry documentation as 

required by § 1493.150; 

(iv)(A) the exporter’s invoice showing, 

as applicable, the FAS, 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) An instrument, in form and 

substance satisfactory to CCC, 

subrogating to CCC the respective rights 

of the exporter and the exporter’s 

assignee, if applicable, to the amount of 

payment in default under the applicable 

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export sale. The instrument must 

reference the applicable foreign 

financial institution letter of credit and 

the related obligation, if applicable; and 

(vi) A copy of the evidence of export 

report(s) previously submitted by the 

exporter to CCC pursuant to 

§ 1493.130(a), or evidence that the 

report was submitted to CCC 

electronically. 

(b) Additional documents. If a claim 

is denied by CCC, the exporter or 

exporter’s assignee 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 exporter or an 

exporter’s assignee need only provide 

all of the required claims documents 

with the initial claim relating to a 

covered transaction. For subsequent 

claims relating to failure of the foreign 

financial institution to make scheduled 

installments on the same export 

shipment, the exporter or the exporter’s 

assignee need only submit to CCC a 

notice of such failure containing the 

information stated in paragraph (a)(1), 

(2), and (3) of this section; an 

instrument of subrogation as per 

paragraph (a)(5)(v) of this section, and 

including 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/or related 

obligation. If CCC determines that it is 

liable to the exporter and/or the 

exporter’s assignee, CCC will pay the 

exporter or the exporter’s assignee 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 exporter’s 

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 exporter’s 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 exporter’s 

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 exporter’s assignee). 

(c) CCC late interest. If CCC does not 

pay a claim within 15 business days of 

receiving the claim in good order, late 

interest will accrue in favor of the 

exporter or the exporter’s assignee 

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 FAS 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 export sales 

contract, the foreign financial 

institution’s letter of credit, or any 

obligation owed by the foreign financial 

institution to the exporter and/or the 

exporter’s assignee which is related to 

the foreign financial institution’s 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 U.S. financial 

institution (or exporter) to invoke the 

acceleration provision in the foreign 

financial institution letter of credit, 

require submission of all claims 

documents specified in § 1493.170, and 

make payment to the exporter or the 

exporter’s assignee in addition to such 

other claimed amount as may be due 

from CCC. 

(e) Action against the assignee. 

Notwithstanding any other provision in 

this subpart to the contrary, with regard 

to commodities covered by a payment 

guarantee, 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, provided that: 

(1) The exporter complies with the 

reporting requirements under 

§ 1493.130 and § 1493.140, excluding 

post-export adjustments (i.e., 

corrections to evidence of export 

reports); and 

(2) The exporter or the exporter’s 

assignee furnishes the statements and 

documents specified in § 1493.160 and 

§ 1493.170. 

§ 1493.190 Recovery of defaulted 

payments. 

(a) Notification. Upon claim payment 

to the exporter or the exporter’s 

assignee, 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 exporter’s assignee from or on behalf 

of the defaulting party, the importer, or 

any source whatsoever (excluding 

payments between CCC, the exporter 

and the exporter’s 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 

exporter’s assignee, the exporter or the 

exporter’s assignee 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 

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or the exporter’s 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, will apply an alternative rate in 

a manner to be described on the FAS 

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 

immediately, provided that the required 

information necessary for determining 

pro rata distribution has been furnished. 

If 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 such interest will accrue 

from such date to the date of payment 

by CCC. The interest will apply only to 

the portion of the recovery payable to 

the holder of the payment guarantee. 

(c) Allocation of recoveries. 

Recoveries made by CCC from the 

importer or the foreign financial 

institution, and recoveries received by 

CCC from the exporter, the exporter’s 

assignee, or any source whatsoever that 

are related to the obligation in default 

will be allocated by CCC to the exporter 

or the exporter’s assignee 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. Once 

CCC has paid out a particular claim 

under a GSM–102 payment guarantee, 

CCC pro rates any collections it receives 

and shares these collections 

proportionately with the holder of the 

guarantee until both CCC and the holder 

of the 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 

exporter’s 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 GSM–102; 

(2) The exporter’s assignee will be 

liable to CCC when and if it is 

determined by CCC that the exporter’s 

assignee has engaged in fraud or 

otherwise violated program 

requirements. 

(e) Good faith. The willful violation 

by an exporter of the certifications in 

§ 1493.80(b) and § 1493.140(b) or the 

failure of an exporter to comply with the 

provisions of § 1493.150 or 

§ 1493.210(a) will not affect the validity 

of any payment guarantee with respect 

to an assignee which had no knowledge 

of such violation or failure to comply at 

the time such exporter applied for the 

payment guarantee or at the time of 

assignment of the payment guarantee. 

(f) Cooperation in recoveries. Upon 

payment by CCC of a claim to the 

exporter or the exporter’s assignee, the 

exporter or the exporter’s assignee will 

cooperate with CCC to affect 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 exporter or exporter’s 

assignee under the payment guarantee. 

§ 1493.192 Dispute resolution and appeals. 

(a) Dispute resolution. (1) The 

Director and the exporter or the 

exporter’s 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 exporter’s 

assignee may seek reconsideration of a 

determination 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 

exporter’s assignee of the determination. 

The exporter or the exporter’s 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 exporter’s 

assignee is received by him or her, 

whichever is later, unless the Director 

extends the time permitted for response. 

If the exporter or the exporter’s assignee 

fails to request reconsideration of a 

determination by the Director, then the 

determination of the Director is final. 

(3) If the exporter or the exporter’s 

assignee requested reconsideration of a 

determination by the Director pursuant 

to subparagraph (a)(2) of this section, 

and the Director upheld the original 

determination, then the exporter or the 

exporter’s 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 exporter’s assignee 

fails to appeal the Director’s final 

determination within 30 calendar days, 

as provided in section 1493.200(b)(1), 

then the Director’s decision becomes the 

final determination of CCC. 

(b) Appeal procedures. (1) An 

exporter or exporter’s assignee that has 

exhausted the procedures set forth in 

paragraph (a) of this section may appeal 

to the GSM a determination of the 

Director. An appeal to the GSM must be 

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 the exporter’s 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 the exporter’s 

assignee does not request an 

administrative hearing, the exporter or 

the exporter’s 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 endeavor to issue his or 

her written decision within 60 calendar 

days of the date on which the GSM 

receives the appeal or the date that final 

documentary evidence is submitted by 

the exporter or the exporter’s assignee to 

the GSM, whichever is later. 

(3) If the exporter or the exporter’s 

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 the exporter’s assignee. 

This date will ordinarily be within 60 

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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 the 

exporter’s 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 the exporter’s 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 endeavor to issue his or 

her written decision within 60 calendar 

days of the date of the hearing or the 

date of receipt of the transcript, if one 

is to be prepared, whichever is later. 

(4) The decision of the GSM will be 

the final determination of CCC. The 

exporter or the exporter’s assignee will 

be entitled to no further administrative 

appellate rights. 

(c) Failure to comply with 

determination. If the exporter or the 

exporter’s 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 the exporter’s 

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) Maintenance of records and access 

to premises. For a period of five years 

after the date of expiration of the 

coverage of a payment guarantee, the 

exporter or the exporter’s assignee, as 

applicable, must maintain and make 

available all records pertaining to sales 

and deliveries of and extension of credit 

for agricultural commodities exported in 

connection with a GSM–102 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 or the exporter’s 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, 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 or the exporter’s 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, 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, U.S. and foreign financial 

institutions participating in this 

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 

principal officers. All required 

submissions, including certifications, 

applications, reports, or requests (i.e., 

requests for amendments), by exporters 

or exporters’ assignees under this 

subpart must be signed by a principal of 

the exporter or exporter’s assignee 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 or 

exporter’s assignee must ensure that all 

information/reports required under 

these regulations are submitted within 

the required time limits. 

(d) 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 there from, but this provision 

shall not be construed to extend to the 

payment guarantee if made with a 

corporation for its general benefit. 

(e) 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 24, 2011. 

Suzanne E. Heinen, 

Acting Executive Vice President, Commodity 

Credit Corporation and Acting Administrator, 

Foreign Agricultural Service. 

[FR Doc. 2011–18403 Filed 7–26–11; 8:45 am] 

BILLING CODE 3410–10–P 

DEPARTMENT OF AGRICULTURE 

Food Safety and Inspection Service 

9 CFR Parts 319 and 381 

[Docket No. FSIS–2010–0012] 

RIN 0583–AD41 

Common or Usual Name for Raw Meat 

and Poultry Products Containing 

Added Solutions 

AGENCY: Food Safety and Inspection 

Service, USDA. 

ACTION: Proposed rule. 

SUMMARY: The Food Safety and 

Inspection Service (FSIS) is proposing 

to amend its regulations to establish a 

common or usual name for raw meat 

and poultry products that do not meet 

standard of identity regulations and to 

which solutions have been added. 

Products with added solutions are 

sometimes referred to as ‘‘enhanced 

products.’’ The Agency is proposing that 

the common or usual name for such 

products include an accurate 

description of the raw meat or poultry 

component, the percentage of added 

solution incorporated into the raw meat 

or poultry product, and the individual 

ingredients or multi-ingredient 

components in the solution listed in the 

descending order of predominance by 

weight. FSIS is also proposing that the 

print for all words in the common or 

usual name appear in a single font size, 

color, and style of print and that the 

name appear on a single-color 

contrasting background. In addition, the 

Agency is proposing to remove the 

standard of identity regulation for 

‘‘ready-to-cook poultry products to 

which solutions are added.’’ 

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