[Federal Register Volume 62, Number 153 (Friday, August 8, 1997)]
[Rules and Regulations]
[Pages 42651-42664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20761]


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

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1493

RIN 0551-AA35


CCC Facility Guarantee Program (FGP)

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule with request for comment.

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

SUMMARY: This interim rule provides for facility payment guarantees to 
be issued by the Commodity Credit Corporation (CCC). The guarantees are 
to be issued in connection with sales of goods or services to establish 
or improve agricultural-related facilities in emerging markets to 
expand exports of U.S. agricultural commodities or products.

DATES: Effective date: August 8, 1997. Comment date: Comments due on or 
before October 7, 1997.

ADDRESSES: Comments must be submitted in writing to L.T. McElvain,

[[Page 42652]]

Director, CCC Operations Division, Foreign Agricultural Service, U.S. 
Department of Agriculture (USDA), Stop 1035, Washington, DC 20250-1035; 
FAX (202) 720-2949. All comments received will be available for public 
inspection at the U.S. Department of Agriculture, Room 4523-S, 1400 
Independence Avenue, SW, Washington, DC 20250 during regular business 
hours.

FOR FURTHER INFORMATION CONTACT: William S. Hawkins, Branch Chief, or 
Mark A. Rasmussen, Agricultural Marketing Specialist, Export Programs 
Survey & Review Branch, CCC Operations Division, Foreign Agricultural 
Service, U.S. Department of Agriculture (USDA), Stop 1035, Washington, 
DC 20250-1035; telephone (202) 720-3241 or 720-1537; FAX (202) 720-
0938.

SUPPLEMENTARY INFORMATION:

Executive Order 12291

    This rule has been determined to be significant and was reviewed by 
the Office of Management and Budget (OMB) under Executive Order 12866.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this interim rule since CCC is not required by 5 U.S.C. 
553 or any other provision of law to publish a notice of rulemaking 
with respect to the subject matter of this rule.

Executive Order 12372

    This program is not subject to the provisions of 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).

Environmental Evaluation

    The Foreign Agricultural Service (FAS) is excluded from the 
requirements of preparing procedures to implement the National 
Environmental Policy Act and is categorically excluded from the 
preparation of an Environmental Assessment or Environmental Impact 
Statement unless the Administrator of FAS determines that an action may 
have a significant environmental effect. 7 CFR 1b.4(b)(7). The 
Administrator has made no such determination with respect to this 
action.

Paperwork Reduction Act

    In accordance with provisions of the Paperwork Reduction Act of 
1995, CCC will submit an emergency information collection request (ICR) 
for the reinstatement of the Facility Guarantee Program (FGP) 
submission.
    Title: The Facility Guarantee Program.
    OMB Control Number: 0551-0032.
    Type of Request: Reinstatement, with change, of previously-approved 
collection for which approval has expired.
    Abstract: The information to be collected under the Office of 
Management and Budget (OMB) Number 0551-0032 is needed to enable the 
CCC to effectively administer the FGP. The information collection will 
be used by the CCC to determine the eligibility of applications. CCC 
considers this information to be essential to prudent eligibility 
determinations. Failure to make sound decisions in providing payment 
guarantees for the sale of goods and services may negatively impact 
exports of U.S. agricultural commodities and products.
    The FGP information collection is similar to those for the Export 
Credit Guarantee (GSM-102) Program and the Intermediate Export Credit 
Guarantee (GSM-103) Program (OMB control number 0551-004). The 
information collection for the FGP differs primarily as follows:
    (1) The applicant, in order to receive a payment guarantee, 
provides information evidencing that the exported goods and services 
used to develop improved infrastructure will primarily benefit exports 
of U.S. agricultural commodities and products; (2) The applicant is 
required to certify that the value of non-U.S. components of goods and 
services is less than 50 percent of the contract value covered under 
the payment guarantee.
    Estimate of Burden: The public reporting burden for this 
information collection is estimated to average 0.6 hours per response.
    Respondents: Agricultural equipment manufacturers and exporters.
    Estimated Number of Respondents: 25.
    Estimated Number of Responses per Respondent: 11.
    Estimated Total Annual Burden on Respondents: 159.
    Topics for comments include: (a) Whether the collection of 
information is necessary for the proper performance of the functions of 
the CCC, including whether the information will have practical utility; 
(b) the accuracy of the CCC's estimate of burden including the validity 
of the methodology and assumptions used; (c) ways to enhance the 
quality, utility and clarity of the information to be collected; and 
(d) ways to minimize the burden of the collection of information on 
those who are to respond, including the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology.
    Comments should be submitted in accordance with the Dates section 
above and sent to the Desk Officer for Agriculture, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Washington, D.C. 20503; and to L.T. McElvain, Director, CCC Operations 
Division, Foreign Agricultural Service, U.S. Department of Agricultural 
(USDA), Stop 1035, Washington, DC 20250-1035. Copies of this 
information collection can be obtained from Valerie Countiss, Agency 
Information Collection Coordinator, at telephone (202) 720-6713.
    OMB is required to make a decision concerning the collection(s) of 
information contained in these interim regulations between 30 and 60 
days after the publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment to the Department of Agriculture 
on the FGP regulations.
    All responses will be summarized and included in the request for 
OMB approval. All comments will also become a matter of public record.

Executive Order 12778

    This interim rule has been reviewed under Executive Order 12778. 
Civil Justice Reform. The interim rule has preemptive effect with 
respect to any state or local laws, regulations, or policies which 
conflict with the provisions of this rule. The rule does not have a 
retroactive effect. The interim rule requires that certain 
administrative remedies be exhausted before suit may be filed.

Summary of Benefit-Cost Analysis

    The benefit-cost analysis identifies and estimates potential 
benefits and costs attributed to provisions of this interim rule, which 
has been designated as ``Significant.'' These provisions include 
application requirements and program procedures. The changes in the 
program made by this rule are expected to have only limited economic 
effect and are not expected to increase administrative workload of the 
Federal Government. Provisions of the Federal Agriculture Improvement 
and Reform Act of 1996 (the 1996 Act) which target emerging markets 
lower estimated subsidy costs by $2.5 million in FY 1997. Proposed 
foreign content

[[Page 42653]]

provisions will provide participants with fewer restrictions when 
negotiating terms and conditions of a sales transaction.

Request for Public Comment

    The need for immediate action by CCC is predicated by two of the 
1996 Act's amendments to the Food, Agriculture, Conservation, and Trade 
Act of 1990, as amended (1990 Act). The 1996 Act (1) expanded the field 
of eligible countries to include emerging markets and (2) provided the 
Secretary of Agriculture the authority to determine and select the 
emerging markets. These changes reflect the importance of CCC being 
able to quickly respond to fleeting opportunities for increasing U.S. 
agricultural exports to emerging market countries, often in volatile 
and unpredictable circumstances, while at the same time enhancing and 
helping stabilize the rural business systems of those countries whose 
economies are in transition.
    In addition, in order to implement a program to make available such 
credit in a timely manner and in a manner that will provide a more 
uniform distribution of funds in each fiscal year, it has been 
determined that this rule shall become effective upon publication in 
the Federal Register. However, comments are requested with respect to 
the provisions of this rule and will be taken into consideration in the 
development of the final rule. Comments should be submitted to the 
person indicated in the section titled ADDRESSES.

Background

A. Statutory Authority

    CCC provides export credit guarantees for export sales of U.S. 
agricultural commodities under the Export Credit Guarantee (GSM-102) 
program and the Intermediate Export Credit Guarantee (GSM-103) program. 
The programs are authorized by section 202 of the Agricultural Trade 
Act of 1978 as amended (1978 Act). Section 1542(a) of the 1990 Act 
provides that CCC make available, for fiscal years 1996 through 2002, 
not less than $1 billion in direct credits or export credit guarantees 
for agricultural exports to emerging markets available under the 1978 
Act. A portion of such credit guarantees must, in accordance with 
section 1542(b) of the 1990 Act, be made available for the export of 
goods and services for agricultural facilities. Guarantees are to be 
made available if the Secretary of Agriculture determines that such 
guarantees will primarily promote the export of United States 
agricultural commodities and products thereof. Specifically, eligible 
projects must provide for (1) the establishment or improvement of 
agricultural facilities in emerging markets, or (2) for the provision 
of goods or services in emerging markets, by U.S. persons to improve 
handling, marketing, processing, storage, or distribution of imported 
agricultural commodities or products in such markets. The phrase 
``establishment or improvement of facilities'' allows for varied types 
of projects ranging from the sale of equipment (e.g., refrigeration, 
processing, transportation) and other goods needed to alleviate 
impediments to increasing export sales of U.S. agricultural 
commodities, to providing services, such as equipment installation, 
testing, and training to facilitate achievement of the same purposes.
    Section 1542(b) further requires CCC to give priority to projects 
that (1) encourage the privatization of the agricultural sector in 
emerging markets, (2) benefit private farms or cooperatives in emerging 
markets, and (3) are supported by nongovernmental persons who agree to 
assume a relatively larger share of the costs.
    Section 1542(f) of the 1990 Act defines ``emerging market'' as any 
country that the Secretary of Agriculture determines (1) is taking 
steps towards a market-oriented economy through food, agriculture, or 
rural business sectors of the economy of the country and (2) has the 
potential to provide a viable and significant market for United States 
agricultural commodities or their products.

B. Legislative History

    CCC published an FGP interim rule on March 1, 1993, (58 FR 11786) 
in response to the 1990 Act. The 1990 Act required CCC to develop an 
export credit guarantee program for facilities in countries that were 
determined by the President to be emerging democracies. However, the 
FGP was not made operational before the authority expired on September 
31, 1995. Congress changed the targeting of the FGP in the 1996 Act to 
countries determined by the Secretary of Agriculture to be emerging 
markets. The interim rule was deleted effective November 18, 1994 when 
CCC revised 7 CFR part 1493 and issued a final rule on the GSM-102 and 
GSM-103 programs.

C. Summary of Comments--1993 Interim Rule

    The Commodity Credit Corporation (CCC) received eleven comments 
from eight different sources in response to the Facility Guarantee 
Program (FGP) Interim Rule published March 1, 1993 in the Federal 
Register. The commenters included three equipment manufacturers, three 
animal health product manufacturers, the Office of the Inspector 
General, and a market research firm which submitted three separate 
responses.
    Three comments were project proposals that did not comment on the 
regulatory aspects of the rule.
    Three comments addressed the definition of ``acceptable 
substitute.'' This definition was required by law in the 1990 Farm Act 
to be included in the FGP rule. The commenters' believed that CCC 
misinterpreted the intent of the law and requested that CCC change the 
definition of acceptable substitute. This recommendation now is 
unnecessary. The term acceptable substitute was deleted from the 1996 
Farm Act. Accordingly, CCC has dropped the definition from the rule 
under consideration.
    One commenter suggested that CCC explain in the preamble of the 
regulation how CCC arrived at defining ``close geographical location of 
countries'' to be 1,000 miles from the target country. The law states 
that CCC may not provide credit guarantees to projects that may 
primarily benefit countries in close geographical location to the 
target country. CCC believes this definition does not improve the 
program and has dropped this definition from the interim rule. The 
objective of the FGP is to primarily benefit U.S. agricultural exports. 
In meeting this objective, no country, except the U.S., without regard 
to geographic proximity to the targeted emerging market, may primarily 
benefit from a FGP project.
    One commenter requested that CCC provide 100 percent guarantee 
coverage on principal and interest for letters of credit extended by a 
foreign bank. CCC disagrees. If CCC provides 100 percent coverage on 
principal and interest it loses the risk sharing mechanism inherent in 
CCC's export credit programs. Risk sharing is necessary because CCC 
does not have the resources required to perform project specific 
financial and risk analysis. Therefore, to keep CCC's default rate at 
acceptable levels, risk sharing is essential. CCC believes that risk 
sharing in the FGP results in more efficient use of its limited 
resources.
    One commenter requested CCC provide a statement in the regulations 
to include grain/food processing equipment as eligible projects under 
the FGP. The commenter indicated that the interim rule was unclear on 
this point. CCC disagrees. The regulations provide

[[Page 42654]]

that the FGP may guarantee credit extended for sales of equipment and 
services that improve handling, processing, storage or distribution of 
imported agricultural commodities. This program purpose clearly 
addresses sales of grain/food processing equipment.
    One commenter also suggested that CCC qualify Russian banks other 
than those qualified to participate under the U.S. Export Import Bank 
(Eximbank) programs. CCC reviews foreign banks against an established 
set of eligibility criteria. These criteria may include financial and 
economic factors similar to those reviewed by Eximbank. CCC qualifies 
all foreign banks expressing a desire to participate in our programs if 
they meet these criteria.
    One commenter recommended that CCC reach out to the food processing 
industries and agribusiness sector in target countries to promote the 
use of the program. The commenter pointed out that linking agricultural 
equipment sales to commodity sales may benefit the U.S. equipment 
manufacturers and agricultural export industries. CCC agrees and will 
endeavor to promote the FGP to these sectors in targeted emerging 
markets.
    One commenter suggested that CCC adopt a competitive bidding 
process for projects to ensure the most cost effective bidder on a 
project receives the guarantee. CCC disagrees. This suggestion 
indicates a fundamental misunderstanding of the program. CCC does not 
plan to solicit FGP applications for specific types of projects. FGP 
applicants will propose projects and CCC will determine if such 
projects meet the criteria of the program.
    One commenter suggested that project requirements (the information 
requested by CCC to determine if a FGP guarantee will be approved) be 
published in the regulation and not the program announcement. CCC 
agrees and has included such requirements in the regulation (7 CFR 
1493.240 and 1493.250).
    One commenter suggested that CCC explain why the application fee is 
$200 in the preamble of the interim rule. CCC agrees. Simply, the $200 
application fee serves as a disincentive to the submission of 
speculative applications, and a means to defray a portion of CCC's 
administrative costs.
    One commenter requested the FGP application include detailed 
financial information on the buyer. The commenter also specifically 
recommended the application require plans for servicing the guaranteed 
loan through field inspections, obtaining periodic financial 
statements, a description of any liens against the buyer, information 
concerning litigation against and defaults by the buyer, and the use of 
consultants in preparing the application. The commenter suggested 
further that the application require a description of planned insurance 
coverage (i.e. life, hazard, flood) and the names of foreign regulatory 
agencies that would require permits, licenses, or other clearances that 
would impact the facility. CCC disagrees. The commenter's concern 
appears to be in regard to assessing buyer or project risk. Assessing 
the ability of the buyer to successfully manage a facility or whether 
the facility will succeed financially is the role of the foreign bank. 
CCC's guarantee covers the risk of default of the foreign bank on the 
repayment obligation to the exporter or their U.S. bank assignee.
    Two commenters referred to the application requirements concerning 
evidence of primary benefits to U.S. agricultural exports. One 
commenter recommended that the application requirements concerning 
primary benefit not overburden the applicant. The commenter recommended 
that CCC streamline paperwork requirements and reduce project approval 
lead time. The second commenter recommended that the interim rule 
require applicants to provide evidence of how a project proposal will 
benefit U.S. agricultural exports. CCC believes that the overall goal 
of the FGP is to promote U.S. agricultural exports. Sufficient 
information must be required from applicants in order for CCC to fully 
evaluate project proposals and the effects projects will have on U.S. 
agricultural exports. CCC has made many improvements in the interim 
rule to streamline the application process in comparison to the process 
outlined by the 1993 interim rule. However, CCC remains open to 
recommendations that specifically address how CCC may streamline the 
application review procedures and reduce project proposal lead time.
    One commenter suggested that CCC request information from the 
applicant regarding the procurement funding or guarantees from sources 
outside of CCC. CCC agrees and has included this recommendation in the 
regulation (Sec. 1493.240(a)(22)).
    One commenter recommended that the application include the names of 
attorneys, accountants and other parties engaged in preparing the 
application. CCC disagrees. Applications submitted under all CCC export 
programs are required to be signed by a principal of the company 
applying for a guarantee. CCC believes this is sufficient in addressing 
any concerns regarding the veracity of the information contained in the 
application.
    One commenter suggested CCC expand the definition of a ``U.S. 
person'' so that CCC may determine if the applicant fulfills this 
criteria without seeking additional information. CCC believes that 
program qualifications respond to the commenter's concern. CCC 
qualifies applicants following a review of documents such as the 
articles of incorporation, partnership or registration of 
proprietorship that may permit CCC to determine if an applicant is a 
legally registered U.S. business entity.

D. The FGP Addresses a Market Failure

    The FGP is designed to address a specific market failure. Many 
emerging markets lack sufficient infrastructure to support expansion of 
agricultural commodity imports. The demand for capital financing in 
emerging markets is significant. Agri-business projects must compete 
with other infrastructure development for the limited capital 
available. The market failure that arises is that private sector 
financial institutions may be unwilling to provide credit to agri-
business projects, at a reasonable cost. This market failure may be 
more pervasive for small and medium size enterprises than for larger 
companies. The availability of CCC's guarantee under the FGP provides 
an opportunity for U.S. private sector financial institutions to 
provide credit to a foreign bank that will, in-turn, finance 
infrastructure projects at a reasonable cost. Such credit extension is 
unlikely to occur without the benefit of CCC's credit guarantee.
    The market failure that FGP addresses, particularly for small and 
medium size enterprises, is viewed as normally being below the 
threshold level for multi-lateral and the regional development banks to 
consider extending financing or guarantees.

E. Exporter and Project Eligibility

    CCC will make export credit guarantees available in the form of 
facility payment guarantees. Section 1542(b) of the 1990 Act provides 
that an exporter must be a ``U.S. person'' to be eligible for a 
facility payment guarantee. Under this interim rule, exporters must 
also furnish certain information and certifications to CCC in order to 
be eligible to receive payment guarantees.
    Eligible projects must establish or improve agriculture-related 
facilities in an emerging market. For CCC to approve a facility payment 
guarantee such projects must primarily promote the export of U.S. 
agricultural commodities or products. For CCC to make such a

[[Page 42655]]

determination, the exporter must convince CCC that the issuance of a 
facility payment guarantee will cause exports of U.S. agricultural 
commodities or products to the emerging market to increase:
    (1) To a greater degree than similar exports from other countries;
    (2) To levels significantly above those expected in the absence of 
providing the facility payment guarantee; and
    (3) For five years or until the facility payment guarantee expires, 
whichever comes first.

F. Program Implementation

    The FGP will be administered by the Office of the General Sales 
Manager (GSM), Foreign Agricultural Service, U.S. Department of 
Agriculture, on behalf of CCC. Initially, CCC will consider projects of 
limited size in a limited number of emerging markets. The effectiveness 
of the program will be assessed in view of the comments received on the 
interim rule and after a number of facility payment guarantees have 
been issued. The GSM will periodically issue program announcements 
inviting submissions by exporters of applications for facility payment 
guarantees. These program announcements will identify emerging markets, 
indicate maximum guarantee coverage, and provide other pertinent 
information.
    CCC will review applications and provide to the exporter a 
preliminary commitment letter if an application meets the standards of 
the regulations and appears to represent the best use of CCC's 
resources. CCC may also request additional information to clarify or 
supplement an application. CCC may reject applications that do not 
appear to meet program objectives or for other sufficient reasons.
    Upon receiving a letter of preliminary commitment from CCC, the 
exporter has six months to submit a final application. Such final 
application must contain information confirming, updating, and 
supplementing information previously provided. If CCC approves the 
final application, it will issue a letter of final commitment requiring 
the exporter to pay an exposure fee before a facility payment guarantee 
is issued. CCC will issue a facility payment guarantee when the amount 
of the exposure fee has been paid in full.

G. Credit Terms and Risk Coverage

    The terms of CCC's coverage will be set forth in each facility 
payment guarantee. These will conform to pertinent rules of the 
Organization for Economic Cooperation and Development (OECD) 
Arrangement on Guidelines for Officially Supported Export Credits 
(Arrangement). Copies of the OECD Arrangement and classification of 
country categories are available from: The Director, Office of Trade 
Finance, Department of Treasury, Room 4448, 1500 Pennsylvania Avenue, 
NW, Washington DC 20220. The OECD Arrangement sets out the most 
favorable terms allowable for government credits and guarantees. For 
example, pursuant to the Arrangement, the exporter must oblige the 
importer to comply with CCC's initial payment requirement 
(Sec. 1493.230(c)). This requires the importer to pay the exporter at 
least 15 percent of the net contract value. The net contract value is 
equal to the contract value minus (a) the value of goods that are not 
U.S. goods; and (b) the cost of services that are not U.S. services 
(except those services the exporter requests CCC to determine are vital 
to the success of the project and approved to be included in the net 
contract value (Sec. 1493.260(b)(1))).
    CCC will initially offer facility payment guarantee coverage of 95 
percent of the facility base value. This value is the amount of the net 
contract value that remains after deducting the amount paid in 
accordance with the initial payment requirement, and the value of any 
discounts or allowances (Sec. 1493.260(b)(2)). CCC will also cover 
interest on a variable rate basis. The method of determining the 
variable interest rate coverage will be indicated in program 
announcements and in each payment guarantee. The interim rule also 
provides that the maximum interest rate, when determined by CCC, will 
not exceed the average investment rate of the most recent Treasury 52-
week bill auction in effect at that time.

H. Guidelines for U.S. Content

    CCC used certain guidelines relating to the inclusion and valuation 
of goods that are not U.S. goods, services that are not U.S. services, 
and imported components of U.S. goods in sales transactions covered 
under this program. The most important of these guidelines are 
summarized below:
    1. FGP payment guarantees are derived only from that portion of an 
exporter's sales contract that represents (a) U.S. goods, (b) U.S. 
services, and (c) any services that are not U.S. services that CCC 
determines are vital to the success of the project and are approved by 
CCC for coverage. This derived value is called net contract value 
(Sec. 1493.260(b)(1)). Any other goods or services included in the 
exporter's contract (e.g., foreign goods that are not components of 
U.S. goods, goods not exported from the U.S., and foreign services not 
approved by CCC) cannot be included in net contract value.
    2. U.S. goods may include imported components that are assembled, 
processed or manufactured into goods within, and exported from, the 
U.S. Services that are not U.S. services (e.g., foreign flag freight 
(e.g., ocean, air), and related insurance, ship discharge operations, 
inland transportation) provided by persons who are not citizens or 
legal residents of the U.S. may receive guarantee coverage only if 
approved by CCC. Most likely CCC will approve such services if they are 
determined to be vital to the success of the project.
    3. In addition to the above requirements, CCC will issue a facility 
payment guarantee only if the value of covered imported components, 
combined with the cost of covered services that are not U.S. services, 
meet the 50 percent minimum U.S. content test (Sec. 1493.260(d)). This 
means that those components and services must represent less than 50 
percent of the net contract value. The 50 percent determination is made 
on an aggregate or cumulative basis as exports of goods and services 
occur, not item by item. For example, more than 50 percent of the value 
of a single piece of equipment may be comprised of imported components 
so long as the total value of covered imported components and cost of 
services that are not U.S. services remain less than 50 percent of net 
contract value for all goods and services.
    To make the above 50 percent determination, imported components are 
valued at their declared customs value or, in the absence of specific 
information regarding declared customs value, the fair wholesale market 
value of the components in the U.S. at the time they are acquired by 
the exporter. The costs of services that are not U.S. services are the 
actual amounts paid by the exporter for the services in an arms-length 
transaction, or, in the absence of such a transaction, the fair market 
value of the services at the time the services were provided.
    4. Imported raw materials (such as iron, steel, nuts, and bolts) 
which are processed, assembled or manufactured in the U.S. are 
automatically included in CCC's coverage and are not counted as 
imported components for the purpose of the 50 percent minimum U.S. 
content test (Sec. 1493.260(d)). CCC will rely on commercial practice 
and communication with participants to resolve issues that may arise 
regarding raw materials.

[[Page 42656]]

I. CCC's Payment Guarantee Mechanism and Claims Procedure

    CCC guarantees the exporter, or the exporter's assignee, against 
defaults by a foreign bank under its irrevocable letter of credit or 
related obligation. In the event of such a default, the exporter or the 
exporter's assignee must notify CCC within a ten day period, and may 
file a claim with CCC within six months. CCC will pay the guaranteed 
amount of the claim plus eligible interest if all required claims 
documentation has been received, including an instrument subrogating to 
CCC the rights of the exporter and, if applicable, the exporter's 
assignee, to the amount of payment in default. Recoveries made by CCC 
pursuant to the subrogated rights, or from any source whatsoever, are 
shared between CCC and the exporter or exporter's assignee on a pro 
rata basis determined by their respective interests in such recoveries. 
In the event that monies are recovered by the exporter or the 
exporter's assignee from any source whatsoever, these must be paid to 
CCC which will include them in pro rata sharing. The Appendix to 
Sec. 1493.320 contains an example of pro rata sharing of recoveries.

J. Example: Typical Transaction

    A typical transaction eligible for coverage under a facility 
payment guarantee could be as follows: CCC issues a program 
announcement inviting U.S. persons to apply for facility payment 
guarantees in connection with eligible projects in a specified emerging 
market. The program announcement states that the terms of coverage will 
be 95 percent of the facility base value (Sec. 1493.260(b)(2)). An 
exporter responds by submitting an application for the export sale of 
goods and services to an importer in the emerging market. The goods and 
services have a contract value of $2.2 million, of which $200,000 
represents goods that are not U.S. goods which are not further 
processed, assembled, or manufactured into U.S. goods and services that 
are not U.S. services for which no CCC coverage is sought. Those goods 
and services are subtracted from the contract value to provide the net 
contract value of $2.0 million (Sec. 1493.260(b)(1)). The exporter does 
not expect any discounts and allowances to be provided.
    The combined value or cost of covered imported components contained 
in U.S. goods and services that are not U.S. services for which CCC 
coverage is requested is $650,000. This represents 32.5 percent of the 
net contract value. Because this is less than 50 percent, the sale 
meets the U.S. content test (Sec. 1493.260(d)). The exporter indicates 
that the importer, in order to comply with the initial payment 
requirement (15 percent of the net contract value), will pay the 
exporter $300,000.
    The net contract value ($2 million) minus the initial payment 
requirement ($300,000), minus discounts and allowances (zero), equals 
the facility base value ($1,700,000) to which CCC's rate of coverage 
applies. The payment guarantee would thus show a guaranteed value of 95 
percent of $1,700,000, or $1,615,000 as shown below. The facility 
payment guarantee would also indicate how eligible interest would be 
covered on a variable rate basis, consistent with relevant program 
announcements.

                                 Example                                
(1) Contract Value.........................................   $2,200,000
    (a) minus: Goods and services that are not U.S. goods               
     and services and are not approved for coverage by CCC.      200,000
(2) Equals: Net Contract Value.............................    2,000,000
                                                            ------------
    (a) minus: Initial Payment (15% of net contract value).      300,000
    (b) minus: Discounts and Allowances....................            0
                                                            ------------
(3) equals: Facility Base Value............................    1,700,000
(4) Guaranteed Value (95 percent of $1,700,000)............    1,615,000
                                                                        

    Exporters should recognize that the maximum liability for a claim 
(Sec. 1493.310(b)), under certain circumstances, may turn out to be 
less than $1,615,000. Under Sec. 1493.310(b), CCC's liability is 
limited to the lesser of: (1) The guaranteed value as provided in the 
facility payment guarantee, plus eligible interest, or (2) the 
guaranteed percentage of a value called the exported value indicated in 
the evidence of export report(s), plus eligible interest. The exported 
value is the net contract value of the goods or services exported minus 
(a) the initial payment and (b) the dollar amount of any discounts and 
allowances (Sec. 1493.280(a)(7)). Thus, if for any reason, the exported 
value decreases, the dollar amount of coverage would decrease. For 
example, the exported value would be less if fewer goods and services 
are exported; if the value of goods and services exported decreases 
from the value originally reported to CCC; if discounts or allowances, 
not foreseen at the time of application, are provided; or if payments 
by the importer exceed the initial payment requirement.

List of Subjects in 7 CFR Part 1493

    Administrative practice and procedures, Agricultural commodities, 
Agriculture, Banks, Banking, Business and industry, Credit, Exports, 
Finance, Foreign banks, Guaranteed loans, Reporting and recordkeeping 
requirements.

    Accordingly, Part 1493 of Title 7 is amended as follows:

PART 1493--[AMENDED]

    1. The authority citation for Part 1493 continues to read as 
follows:

    Authority: 7 U.S.C. 5602, 5622, 5661, 5662, 5663, 5664, 5676, 15 
U.S.C. 714b(d), 714c(f).

    2. By adding a new subpart C to read as follows:

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

Sec.
1493.200  General statement.
1493.210  Definition of terms.
1493.220  Exporter eligibility.
1493.230  Eligible transactions.
1493.240  Initial application and letter of preliminary commitment.
1493.250  Final application and issuance of a facility payment 
guarantee
1493.260  Facility payment guarantee.
1493.270  Certifications.
1493.280  Evidence of export report.
1493.290  Proof of entry.
1493.300  Notice of default and claims for loss.
1493.310  Payment for loss.
1493.320  Recovery of losses.
1493.330  Miscellaneous provisions.

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


Sec. 1493.200  General statement.

    This subpart governs the Commodity Credit Corporation's (CCC) 
Facility Guarantee Program (FGP). CCC will issue facility payment 
guarantees for project applications meeting the terms and conditions of 
the Facility Guarantee Program (FGP) and where private sector financing 
is otherwise not available. This subpart describes the criteria and 
procedures for applying for a facility payment guarantee, and contains 
the general terms and conditions of such a guarantee. These general 
terms and conditions may be supplemented by special terms and 
conditions specified in program announcements or notices to 
participants published prior to the issuance of a facility payment 
guarantee and, if so, will be incorporated by reference on the face of 
the facility payment guarantee issued by CCC.


Sec. 1493.210  Definition of terms.

    Terms set forth in this subpart will have the following meaning:

[[Page 42657]]

    Assignee. A financial institution in the United States which, for 
adequate consideration given, has obtained the legal rights to receive 
payment under the facility payment guarantee.
    CCC. The Commodity Credit Corporation, an agency and 
instrumentality of the United States within the U.S. Department of 
Agriculture, authorized pursuant to the Commodity Credit Corporation 
Charter Act of 1948, as amended, 15 U.S.C. 714 et seq., and subject to 
the general supervision and direction of the Secretary of Agriculture.
    Contacts P/R. A notice issued by Foreign Agricultural Service, U.S. 
Department of Agriculture (FAS/USDA) by public press release which 
contains specific names, addresses, and telephone and facsimile numbers 
of contacts within FAS/USDA and CCC. The Contacts P/R also contains 
details about where to submit information required to qualify for 
program participation, to apply for payment guarantees, to request 
amendments of facility payment guarantees, to submit evidence of export 
reports, and to give notices of default and file claims for loss.
    Contract value. The total negotiated dollar amount for the export 
sale of goods and services to emerging markets.
    Date of export for goods. The on-board date of an ocean bill of 
lading or an airway bill, the on-board ocean carrier date of an 
intermodal bill of lading; or, if exported by rail or truck, the date 
of entry shown on an entry certificate or similar document issued and 
signed by an official of the government of the importing country.
    Date of export for services. The date interest begins to accrue on 
credit extended to cover payment for services, except for freight and 
marine insurance where the date of export is the same date as for the 
goods exported.
    Discounts and allowances. Any consideration provided directly or 
indirectly, by or on behalf of an exporter, to an importer in 
connection with a sale of goods or services, in excess of the value of 
such goods or services. Discounts or 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 obligation; or the whole or partial release of the importer 
from any financial or contractual obligation.
    Facility. An opportunity or project that improves the handling, 
marketing, processing, storage, or distribution of imported 
agricultural commodities or products.
    GSM. The General Sales Manager, Foreign Agricultural Service, U.S. 
Department of Agriculture, acting in his capacity as Vice President, 
CCC; or his designee.
    U.S. goods. Goods that are assembled, processed or manufactured in, 
and exported from, the United States including goods which contain 
imported raw materials or imported components.
    U.S. services. Services performed by citizens or legal residents of 
the United States, including those temporarily residing outside the 
United States.


Sec. 1493.220  Exporter eligibility.

    An exporter may apply for a facility payment guarantee if such 
exporter:
    (a) Is a citizen or legal resident of the United States or is a 
business organized under the laws of any state of the United States or 
the District of Columbia;
    (b) Has an established place of business in the United States;
    (c) Has a registered agent for service of process in the United 
States; and
    (d) Is not suspended or debarred, or owned or controlled by a 
person who is suspended or debarred, from contracting with, or 
participating in programs administered by, a U.S. Government agency.


Sec. 1493.230  Eligible transactions.

    (a) Program announcements. From time to time CCC will issue program 
announcements indicating the availability of facility payment 
guarantees in connection with sales of goods or services to emerging 
markets. The announcements will specify the emerging markets, the 
maximum amount, in U.S. dollars, of guarantee exposure that CCC will 
undertake, and may specify special terms or conditions that will be 
applicable.
    (b) Sale requirements. CCC will issue facility payment guarantees 
only in connection with projects that CCC determines will benefit 
primarily exports of U.S. agricultural commodities and products, and 
only where there is a firm contract for the sale of goods or services 
for the establishment or improvement of an agriculture-related 
facility. The contract may be contingent, however, on the issuance of a 
CCC facility payment guarantee.
    (c) Initial payment requirement. The contract for sale of goods or 
services between the exporter and the importer shall oblige the 
importer to make an initial payment(s) to the exporter of at least 15 
percent of the net contract value in Sec. 1493.260(b)(1). Such initial 
payment(s) shall be in U.S. dollars or instruments having a definite 
value in U.S. dollars, and shall be made prior to the export of the 
goods or services.
    (d) Required method of payment. CCC will issue a facility payment 
guarantee only in connection with a sale in which payment will be made 
under either:
    (1) An irrevocable foreign bank letter of credit specifically 
stating the deferred payment terms under which the foreign bank is 
obligated to make payments in U.S. dollars as payments become due; or
    (2) An irrevocable foreign bank letter of credit supported by a 
related obligation specifically stating the deferred payment terms 
under which the foreign bank is obligated to make payment in U.S. 
dollars as such payments become due.
    (e) Form of letter of credit. The foreign bank letter of credit 
referred to in paragraph (d) of this section shall be an irrevocable 
commercial letter of credit, subject to the revision of the 
International Chamber of Commerce Uniform Customs and Practices for 
Documentary Credits<Copyright> in effect when the letter of credit is 
issued, providing for payment in U.S. dollars against stipulated 
documents and issued in favor of the exporter by a CCC-approved foreign 
banking institution.
    (f) Form of related obligation. The related obligation referred to 
in paragraph (d) of this section shall be in one of the following 
forms:
    (1) A letter of credit including a specific promise to pay on 
deferred payment terms as a special instruction from the issuing bank 
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;
    (2) A separate document specifically identified and referred to in 
the letter of credit as the agreement under which the foreign bank is 
obligated to repay the U.S. financial institution on deferred payment 
terms;
    (3) A separate document setting forth the related obligation, or in 
a duly executed amendment thereto, as having been financed by a U.S. 
financial institution pursuant to, and subject to, repayment in 
accordance with the terms of such related obligation; or
    (4) A promissory note executed by a foreign bank issuing the letter 
of credit in favor of the financial institution.


Sec. 1493.240  Initial application and letter of preliminary 
commitment.

    (a) Initial Application. An exporter may apply for a facility 
payment guarantee by submitting the following information:

[[Page 42658]]

    (1) A cover sheet with the title: ``Application for a Facility 
Payment Guarantee--Preliminary Commitment'';
    (2) The program announcement number;
    (3) The emerging market;
    (4) The name, contact person, address, and telephone number and, if 
applicable, facsimile number and E-mail address of:
    (i) The exporter;
    (ii) The exporter's registered agent for service of process in the 
United States;
    (iii) The exporter's assignee, if applicable;
    (iv) The importer;
    (v) The end-user of the goods or services if other than the 
importer;
    (vi) The foreign bank expected to issue the letter of credit or 
related obligation; and
    (vii) The financial institution in the United States expected to 
provide financing;
    (5) A statement on letterhead from a:
    (i) Foreign bank indicating an interest in guaranteeing payment, in 
U.S. dollars, for goods or services to be exported under the facility 
payment guarantee at least equal to the net contract value listed in 
paragraph (a)(14) of this section, less the initial payment requirement 
listed in paragraph (a)(15) of this section; and
    (ii) Financial institution in the U.S. indicating an interest in 
financing the export sales of goods or services under the facility 
payment guarantee for an amount at least equal to the net contract 
value listed in paragraph (a)(14) of this section less the initial 
payment requirement listed in paragraph (a)(15) of this section. The 
financial institution must state that such financing would not 
otherwise be available without an FGP payment guarantee;
    (6) The period for which credit is being extended to finance the 
sale of goods or services covered by the facility payment guarantee;
    (7) The exporter's sales number pertinent to this application and a 
description of the status of the intended sale;
    (8) A description (e.g., a process flow diagram) of the 
agriculture-related facility that will use the goods or services to be 
covered by the facility payment guarantee and an explanation of how 
these goods and services will be used to improve handling, marketing, 
processing, storage, or distribution of agricultural commodities or 
products;
    (9) A brief description of each good or service to be covered by 
the facility payment guarantee including, where applicable, brand name, 
model number, Standard Industrial Classification (SIC) or the North 
American Industry Classification System (NAICS) code, and contract 
specifications;
    (10) The final date for export of goods or services. If applicable, 
include construction start date, milestones (e.g., installation), and 
contractual deadline for completion of project;
    (11) The contract value for the sale of goods or services and the 
basis of sale for goods to be exported (e.g., FOB, CFR, CIF);
    (12) The description and value of the goods or cost of services 
listed in paragraph (a)(11) of this section that are not U.S. goods or 
services;
    (13) Identification and cost of, and justification for, those 
services listed in paragraph (a)(12) of this section for which the 
exporter requests CCC to provide coverage;
    (14) The net contract value in Sec. 1493.260(b)(1) obtained by 
subtracting paragraph (a)(12) of this section from paragraph (a)(11) of 
this section, and adding paragraph (a)(13) of this section;
    (15) The amount to be paid in accordance with the initial payment 
requirement (Sec. 1493.230(c));
    (16) The description and dollar amount of discounts and allowances 
provided in connection with the sale of goods or services covered by 
the facility payment guarantee;
    (17) The facility base value in Sec. 1493.260(b)(2) obtained by 
subtracting paragraphs (a)(15) and (a)(16) of this section from 
paragraph (a)(14) of this section;
    (18) The maximum guaranteed value under the facility payment 
guarantee determined by multiplying the facility base value listed in 
paragraph (a)(17) of this section by the guarantee rate of coverage 
announced by CCC in Sec. 1493.260(b)(3);
    (19) A map or other description of the facility's location and 
distance from major population centers of neighboring countries;
    (20) For all principal agricultural commodities or products 
(inputs) to be handled, marketed, processed, stored, or distributed, by 
the proposed project after completion, provide:
    (i) A list or table identifying such principal inputs;
    (ii) The likely countries of origin for each input;
    (iii) Estimated annual quantities, in metric tons, of each input 
listed in paragraph (a)(20)(i) of this section to be used by the 
project for five years from the final date of export or until the 
expiration of the facility payment guarantee, whichever comes first; 
and
    (iv) An analysis, including price, cost, and other assumptions (the 
reasons why U.S. agricultural commodities or products will be more 
competitive inputs than commodities or products from other sources, and 
whether the projected use of U.S. agricultural commodities or products 
depends on the availability of U.S. export bonus or credit guarantee 
programs), of which inputs listed in paragraph (a)(20)(i) of this 
section will represent increased imports of U.S. agricultural 
commodities or products:
    (A) To a greater degree than imports of agricultural commodities or 
products from other countries;
    (B) To or at levels significantly above those expected in the 
absence of the project; and
    (C) For a period of five years from the final date of export or 
until expiration of the facility payment guarantee, whichever comes 
first.
    (21) If applicable, a list of agricultural outputs or final 
products of the proposed project and:
    (i) Projected annual quantities (for five years or until the 
expiration of the facility payment guarantee, whichever comes first), 
in metric tons, of each output to be marketed;
    (A) Within the emerging market; and
    (B) In any other country;
    (ii) Quantities, by country of origin, of products imported into 
the emerging market during the past year which would compete with such 
outputs; and
    (iii) An analysis of whether products of the project will 
significantly displace U.S. exports of similar agricultural commodities 
or products in any market;
    (22) If applicable, a description of any arrangements or 
understandings with other U.S. or foreign government agencies, or with 
financial institutions or entities, private or public, providing 
financing to the exporter in connection with this export sale, and 
copies of any documents relating to such arrangements;
    (23) A description of the exporter's experience selling goods or 
providing services similar to those for which the exporter seeks to 
obtain facility payment guarantee coverage;
    (24) A statement of how this project may encourage privatization of 
the agricultural sector, or benefit private farms or cooperatives, in 
the emerging market. Include in the statement the share of private 
sector ownership of the project;
    (25) The exporter's signature.
    (b) Application fee. The exporter shall pay the application fee 
specified in the program announcement at the time the application is 
submitted. An application will not be considered without payment of the 
specified fee. The application fee is nonrefundable.
    (c) Letter of preliminary commitment. CCC will determine whether, 
in its

[[Page 42659]]

judgment, the project in connection with which the exporter seeks a 
facility payment guarantee is likely to increase exports of U.S. 
agricultural commodities or products to an emerging market; and whether 
the project is likely to benefit primarily U.S. agricultural 
commodities or products as opposed to commodities or products 
originating in other countries. If necessary, CCC may seek additional 
information from an applicant prior to making its determination. If CCC 
determines that an application meets these standards and appears to 
represent, in CCC's judgment, the best use of available resources, CCC 
will respond to the applicant with a letter of preliminary commitment 
indicating CCC's interest in issuing a facility payment guarantee 
conditioned on its approval of the exporter's final application.


Sec. 1493.250  Final  application and issuance of facility payment 
guarantee.

    (a) Final application. An exporter who has received a letter of 
preliminary commitment may, within six months of the date of such 
letter, submit a final application to CCC for a facility payment 
guarantee which shall include the following information:
    (1) A cover sheet with the title: ``Application for a Facility 
Payment Guarantee--Final Commitment.''
    (2) A letterhead statement from the importer's bank or other 
documentation confirming the importer has the financial ability to 
comply with the initial payment requirement in Sec. 1493.230(c);
    (3) Written evidence of a firm sale signed by the exporter and the 
importer, specifying at minimum, the following information: Goods or 
services to be exported, quantities of such items, delivery terms 
(e.g., FOB, CFR, CIF), delivery period(s), contract value, payment 
terms, and date of sale. A sales contract may be contingent upon 
obtaining a facility payment guarantee;
    (4) A description of any changes in the information submitted in 
the preliminary application; and
    (5) The exporter's signature;
    (b) Additional information. CCC shall have the right to request the 
exporter to furnish any other information and documentation it deems 
pertinent to the evaluation of the exporter's final application for a 
final commitment. CCC may request from the exporter an independent 
engineering study or economic feasibility study relating to the 
project.
    (c) Final commitment letter. After making a favorable determination 
on the exporter's submissions, CCC will issue a final commitment letter 
indicating the applicable exposure fee rate and stating that CCC is 
prepared to issue a facility payment guarantee upon receiving full 
payment of the exposure fee within an allotted time. The letter will 
also indicate the key terms and coverage of the guarantee to be issued. 
CCC will also inform exporters in writing when it denies their request 
for a facility payment guarantee.
    (d) Exposure fee. The exposure fee is calculated by multiplying the 
requested guaranteed value (up to the maximum established by CCC's 
final commitment letter) by the exposure fee rate. Once the facility 
payment guarantee is issued to the exporter, CCC will ordinarily not 
refund the exposure fee. If CCC does not issue a facility payment 
guarantee, or issues a guarantee for only part of the coverage 
requested, CCC will make a full or pro rata refund of the exposure fee, 
as appropriate.
    (e) Issuance of the facility payment guarantee. Upon receipt of the 
exposure fee, CCC will issue a facility payment guarantee.


Sec. 1493.260  Facility payment guarantee.

    (a) CCC's maximum obligation. CCC will agree to pay the exporter or 
the exporter's assignee an amount not to exceed the guaranteed value 
stipulated on the face of the facility payment guarantee, plus eligible 
interest, in the event that the foreign bank fails to pay under the 
foreign bank letter of credit or related obligation. The exact amount 
of CCC's liability in the event of default will be determined in 
accordance with Sec. 1493.310(b).
    (b) Calculation of maximum guarantee coverage. CCC will determine 
the maximum amount of its obligation under a facility payment guarantee 
by calculating a:
    (1) Net contract value equal to the contract value minus:
    (i) The value of goods that are not U.S. goods; and
    (ii) The cost of services that are not U.S. services (except those 
services the exporter requests CCC to determine are vital to the 
success of the project and approved to be included in the net contract 
value);
    (2) Facility base value equal to net contract value minus:
    (i) The amount to be paid in accordance with the initial payment 
requirement in Sec. 1493.230(c); and
    (ii) The amount of discounts and allowances; and
    (3) Maximum guaranteed value equal to:
    (i) A principal amount determined by multiplying the facility base 
value (as determined in Sec. 1493.260(b)(2)) by the guaranteed 
percentage specified in the program announcement; and
    (ii) Interest on such principal amount at the rate specified in the 
applicable program announcement, not to exceed the investment rate of 
the most recent Treasury 52-week bill auction in effect at that time.
    (c) Value and cost. For the purposes of this section:
    (1) Value means declared customs value of the goods; or, in the 
absence of specific information regarding declared customs value, the 
fair market wholesale value of the imported goods in the United States 
at the time they were acquired by the participant; and
    (2) Cost means actual amount paid by the exporter for the services 
in an arms-length transaction; or in the absence of an arms-length 
transaction, the fair market value of the services at the time the 
services were provided.
    (d) U.S. content test. (1) CCC will issue a guarantee only if the 
following items collectively represent less than 50 percent of the net 
contract value in Sec. 1493.260(b)(1):
    (i) The value of imported components (except for raw materials) 
that are assembled, processed, or manufactured into U.S. goods included 
in the net contract value;
    (ii) The cost of services that are not U.S. services (including 
freight on foreign flag carriers and transportation insurance 
registered with foreign agents) that, at the request of the exporter, 
CCC determines are vital to the success of the project and approves 
their inclusion in the net contract value;
    (2) For purpose of this subsection, minor or cosmetic procedures 
(e.g., affixing labels, cleaning, painting, polishing) do not qualify 
as assembling, processing or manufacturing;
    (3) For purpose of this subsection, local services which involve 
costs for hotels, meals, transportation, and other similar services 
incurred in the emerging market are not U.S. services.
    (e) Period of guarantee coverage. The payment guarantee will apply 
to the period beginning on the date(s) of export(s) and will continue 
during the credit term specified in the facility payment guarantee. For 
goods, the period of coverage will also apply from the date on which 
interest begins to accrue, if earlier than the date of export. The 
final payments of principal and interest by the foreign bank must come 
due within the period of guarantee coverage.
    (f) Terms of the CCC facility payment guarantee. The terms of CCC's 
coverage will be set forth in the facility payment guarantee and will 
include the provisions of this subpart, which may

[[Page 42660]]

be supplemented by any program announcement(s) or notice(s) to 
participants in effect at the time the facility payment guarantee is 
approved by CCC.
    (g) Final date to export. The final date to export will be stated 
in the facility payment guarantee.
    (h) Ineligible exports. Goods or services with a date of export 
prior to the date CCC issues the facility payment guarantee are 
ineligible for coverage unless approved by the GSM.
    (i) Additional requirements. The facility payment guarantee may 
contain such additional terms, conditions, and limitations as are 
deemed necessary or desirable by the GSM. Such additional terms, 
conditions or qualifications, as stated in the facility payment 
guarantee, are binding on the exporter or the exporter's assignee.
    (j) Amendments. Exporters must notify CCC of any amendments 
concerning contracts covered by a facility payment guarantee. CCC will 
determine if the contract amendments will require amendments to the 
facility payment guarantee. Amending the facility payment guarantee may 
result in an increase to the exposure fee. Requests made by the 
exporter to amend the facility payment guarantee so as to change the 
guaranteed value must have the concurrence of the assignee when an 
assignment has been made.
    (k) Effective date. The facility payment guarantee shall become 
effective on the date of export of the goods or services.

Appendix to Section 1493.260--Illustration of FGP Coverage of 
Imported Raw Materials, Components, and Services That Are Not U.S. 
Services

    The following example illustrates CCC's regulations and policy 
options with regard to issuing a payment guarantee for a project 
which includes imported raw materials, imported components, and 
services that are not U.S. services:
    1. Ten grain trucks and one truck scale are to be exported from 
the U.S. to an emerging market. The trucks will provide the ability 
to purchase larger quantities of grain from the U.S. The contract 
value totals $2,025,000, cost, insurance and freight (CIF) basis.
    2. The fenders, hoods and doors of the trucks have been 
manufactured and assembled in the U.S. and contain some imported raw 
materials (sheet metal).
    3. Imported components consist of starters and alternators, with 
a U.S. customs valuation of $149,000. These items are installed into 
the trucks in the U.S.
    4. The truck scale was imported from Canada into the U.S. with a 
U.S. customs valuation of $20,000.
    5. A U.S. citizen, will travel on a foreign airline carrier to 
the emerging market (airfare is $1,000) to instruct mechanics in 
repair and maintenance of the trucks. He will be paid a salary for 
this service and, in addition, will be reimbursed separately for 
local costs in the emerging market (e.g., hotel, meals, 
transportation) which are estimated to be $5,000.
    6. The trucks are to be shipped on foreign flag vessels, and the 
marine insurance is to be placed with a foreign agent. The combined 
cost of these services that are not U.S. services for which the 
exporter seeks coverage is estimated to be $500,000.

CCC's Approval of Services that are Not U.S. Services

    CCC agrees to include in the net contract value the foreign flag 
freight and marine insurance ($500,000) and the airfare ($1,000) of 
the U.S. instructor (Sec. 1493.260(b)(1)).

Calculation of Net Contract Value

    CCC will calculate the net contract value by subtracting from 
the contract value ($2,025,000) the U.S. customs value of the truck 
scale ($20,000) in accordance with Sec. 1493.260(b)(1)(I) and the 
local costs to be incurred by the U.S. instructor ($5,000) in 
accordance with Sec. 1493.260(b)(1)(ii) to equal $2,000,000.

CCC's Determination of U.S. Content Eligibility

    The imported components and services that are not U.S. services 
approved for coverage total $650,000 (i.e., $149,000 for starters 
and alternators, $1,000 for airfare, $500,000 for freight and 
insurance; or 32.5 percent of the net contract value of $2,000,000 
(Sec. 1493.260(b)(1)). Since this is less than 50 percent of the net 
contract value the transaction meets the U.S. content test 
(Sec. 1493.260(d)).


Sec. 1493.270  Certifications.

    (a) Exporter's signature. The exporter's signature on documentation 
submitted to CCC under this subpart, is the exporter's certification 
that:
    (1) There have not been and are no arrangements for any payments in 
violation of the Foreign Corrupt Practices Act of 1977, as amended, or 
other U.S. Laws;
    (2) All information submitted to CCC is true and correct; and
    (3) The exporter is in compliance with this subpart.
    (b) False certification. False certifications under this subpart 
may result in the termination of the facility payment guarantee, 
suspension or debarment, or civil or criminal action.


Sec. 1493.280  Evidence of export report.

    (a) Report of export. The exporter is required to provide CCC an 
evidence of export report for each shipment of goods or provision of 
services covered under the facility payment guarantee. Each report must 
be numbered in chronological order and contain the following 
information in the order prescribed below:
    (1) The facility payment guarantee number;
    (2) The date goods or services were exported or provided;
    (3) The exporter's sale number, bill of lading numbers, or 
identification of other documents that may be submitted to establish 
the contract value of the goods or services exported or provided;
    (4) The net contract value of the exported goods or services as 
determined in accordance with Sec. 1493.260(b)(1);
    (5) The amount paid in accordance with the initial payment 
requirement (Sec. 1493.230 (c));
    (6) A description and dollar value of discounts and allowances, if 
any;
    (7) The exported value of the shipment which is the net contract 
value of the goods or services exported in paragraph (a)(4) of this 
section minus:
    (i) The initial payment requirement listed in paragraph (a)(5) of 
this section; and
    (ii) The dollar amount of any discounts and allowances listed in 
paragraph (a)(6) of this section;
    (8) The name of the carrier and, if applicable, the name of the 
vessel;
    (9) The final payment schedule showing the payment due dates and 
amounts of principal, and payment due dates for interest accrual. If 
the payment schedule is unknown, the exporter must indicate in writing 
that: ``The payment schedule will be provided in an amendment to the 
evidence of export report when the payment schedule has been 
determined;''
    (10) Written statements that:
    (i) The goods exported or services provided were included in the 
final application for a final commitment as approved by CCC for 
coverage under the facility payment guarantee and this subpart;
    (ii) The specifications and quantity of goods or services exported 
conform to the information contained in the exporter's application 
documents for a facility payment guarantee, or if different, that CCC 
has approved of such changes;
    (iii) A letter of credit has been opened in favor of the exporter 
by the foreign bank shown on the facility payment guarantee to cover 
the dollar amount of the sale of goods or services exported less the 
amount paid in accordance with the initial payment requirement and less 
discounts and allowances; and
    (11) The exporter's signature.
    (b) Final report of export. The final evidence of export report 
submitted under a facility payment guarantee must contain:
    (1) A written statement that exports under the facility payment 
guarantee have been completed;

[[Page 42661]]

    (2) The information requested in Sec. 1493.280(a) for the 
shipment(s) included in the final report; and
    (3) The combined total of all dollar amounts reported under 
Sec. 1493.280 (a) and (b) for all reports.
    (c) Time limit for submission of evidence of export report. Unless 
extended by CCC for good cause, the exporter must submit to CCC an 
evidence of export report:
    (1) Within 60 days of the date goods are exported by rail or truck;
    (2) Within 30 days of the date goods are exported by any other 
carrier; or
    (3) Within 30 days of the date of export of services.
    (d) Late reports. If the evidence of export report is not received 
by CCC within the time period for filing, the facility payment 
guarantee will become null and void only if and only to the extent that 
failure to make timely filing resulted, or would likely result, in:
    (1) Significant financial harm to CCC;
    (2) The undermining of an essential regulatory purpose of the FGP;
    (3) The obstruction of the fair administration of the FGP; or
    (4) A threat to the integrity of the FGP.


Sec. 1493.290  Proof of entry.

    (a) Diversion. The diversion of goods covered by a facility payment 
guarantee to a country other than that shown on the facility payment 
guarantee is prohibited, unless expressly authorized by the GSM.
    (b) Records of proof of entry. Exporters must obtain and maintain 
records of an official or customary commercial nature and grant 
authorized USDA officials access to such documents or records as may be 
necessary to demonstrate the arrival of the goods authorized by the 
facility payment guarantee. 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:
    (1) For goods: An original certificate, signed by a duly authorized 
customs or port official of the emerging market, by the importer, by an 
agent or representative of the vessel or ship line which delivered the 
goods to the emerging market, or by a private surveyor in the emerging 
market, or other documentation deemed acceptable by CCC:
    (i) Showing that the goods entered the emerging market;
    (ii) Identifying the export carrier;
    (iii) Describing the goods; and
    (iv) Indicating date and place the goods were unloaded in the 
emerging market.


Sec. 1493.300  Notice of default and claims for loss.

    (a) Notice of default. If the foreign bank issuing the letter of 
credit fails to make payment pursuant to the terms of the foreign bank 
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 ten days after the date that payment was due from 
the foreign bank (the due date). A notice of default must be submitted 
in writing to the Treasurer, CCC, at the address specified in the 
Contacts P/R. If the exporter or the exporter's assignee fails to 
promptly notify CCC of defaults in accordance with this paragraph, CCC 
may make the facility payment guarantee null and void with respect to 
any payment(s) applicable to such default. This time limit may be 
extended only under extraordinary circumstances and if approved by the 
Controller, CCC. The notice of default must include:
    (1) Facility payment guarantee number;
    (2) Name of the emerging market;
    (3) Name of the defaulting bank;
    (4) Payment due date;
    (5) Total amount of the defaulted payment due, indicating 
separately the amounts for principal and interest;
    (6) Date of foreign bank's refusal to pay, if applicable; and
    (7) Reason for the foreign bank's refusal to pay, if known.
    (b) Filing a claim for loss. A claim for a loss by the exporter or 
the exporter's assignee will not be paid if it is made later than six 
months from the due date of the defaulted payment. A claim for loss 
must be submitted in writing to the Treasurer, CCC, at the address 
specified in the Contacts P/R. The claim for loss must include the 
following information and documents:
    (1) Facility payment guarantee number;
    (2) A certification that the scheduled payment has not been 
received;
    (3) A certification of the amount of accrued interest in default, 
the date interest began to accrue and the interest rate on the foreign 
bank obligation applicable to the claim; and
    (4) 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 each page of each document is a true and 
correct copy:
    (i)(A) The foreign bank's letter of credit securing the export 
sale, and;
    (B) If applicable, the document(s) evidencing the related 
obligation owed by the foreign bank to the assignee financial 
institution which is related to the foreign bank's letter of credit 
issued in favor of the exporter.
    (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 entry certificate or similar 
document signed by an official of the emerging market;
    (iii) The exporter's sales invoice(s) showing the value and basis 
of sale (e.g., FOB, CFR, or CIF) or, if services are billed separately, 
documents that the exporter or its assignee relied upon in extending 
the credit to the issuing foreign bank;
    (iv) 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. The instrument must reference the applicable foreign bank 
letter of credit and the related obligation, if applicable; and
    (v) A copy of the evidence of export report(s) previously submitted 
by the exporter to CCC pursuant to Sec. 1493.280.
    (c) Subsequent claims for defaults on installments. The exporter or 
an exporter's assignee need only provide one claim which meets full 
documentation requirements relating to a covered transaction. For 
subsequent claims relating to such failures of the foreign bank to make 
scheduled installments on the same export, the exporter or the 
exporter's assignee need only submit to CCC a notice of such failure 
containing the information stated in paragraphs (b) (1), (2), and (3) 
of this section; an instrument of subrogation as per paragraph 
(b)(4)(iv) of this section, and the date the original claim was filed 
with CCC.


Sec. 1493.310  Payment for loss.

    (a) Determination of CCC's liability. Upon receipt in good order of 
the information and documents required under Sec. 1493.300, CCC will 
determine whether or not a loss has occurred for which CCC is liable 
under the facility payment guarantee, this subpart, program 
announcement(s) and notice(s) to participants. If CCC determines that 
it is liable to the exporter 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 for loss submitted with respect to any facility payment 
guarantee, not including any late interest payments due in accordance 
with paragraph (c) of

[[Page 42662]]

this section, will be limited to the lesser of:
    (1) The guaranteed value as stated in the facility payment 
guarantee, plus eligible interest; or
    (2) The guaranteed percentage (as indicated in the facility payment 
guarantee) of the exported value indicated in the evidence of export 
report (Sec. 1493.280(a)(7)), plus eligible interest.
    (c) Late interest payment. If a claim is not paid within one day of 
receipt of a claim which CCC has determined to be in good order, late 
interest will accrue in favor of the exporter or the exporter's 
assignee beginning with the first day after the claim was found by CCC 
to be in good order and continuing until and including the date that 
payment is made by 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 based on the latest average investment rate of the 
most recent Treasury 91-day bill auction as announced by the Department 
of Treasury as of the due date.
    (d) Accelerated payments. CCC will pay claims only for losses 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 bank's letter of credit, or any obligation owed by the foreign 
bank to the assignee U.S. financial institution which is related to the 
foreign bank's letter of credit issued in favor of the exporter, unless 
it is determined to be in the best interest of CCC by the Controller, 
CCC. Notwithstanding the foregoing, CCC at its option may declare the 
entire amount of the unpaid balance, plus accrued interest, in default 
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 the value of 
goods or services covered by a facility 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 
Sec. 1493.270 and Sec. 1493.280 excluding post-export adjustments 
(i.e., corrections of evidence of export reports); and
    (2) The exporter or the exporter's assignee furnishes the 
statements and documents specified in Sec. 1493.300.


Sec. 1493.320  Recovery of losses.

    (a) Notification. Upon payment of loss to the exporter or the 
exporter's assignee, CCC will notify the foreign bank of CCC's rights 
under the subrogation agreement to recover all monies in default.
    (b) Receipt of monies. (1) In the event that monies for a defaulted 
payment are recovered by the exporter or the exporter's assignee from 
the importer, the foreign bank or any other source whatsoever, such 
monies shall be immediately paid to the Treasurer, CCC. If such monies 
are not received by CCC within 15 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 based on the latest 
average investment rate of the most recent Treasury 91-day auction, as 
announced by the Department of Treasury, in effect on the date of 
recovery and will accrue from such date to the date of payment by the 
exporter or the exporter's assignee to CCC. Such interest will be 
charged only on CCC's share of the recovery.
    (2) If CCC recovers monies that should be applied to a facility 
payment guarantee for which a claim has been paid by CCC, CCC will pay 
the holder of the facility 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 days from the date of recovery or 15 days from 
receiving the required information for determining pro rata 
distribution, whichever is later, CCC will pay interest calculated on 
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 CCC. The interest will apply only to the portion of the 
recovery payable to the holder of the facility payment guarantee.
    (c) Allocation of recoveries. Recoveries made by CCC from the 
importer or the foreign bank, and recoveries received by CCC from the 
exporter, the exporter's assignee or any other source whatsoever, 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 facility payment guarantee, CCC prorates 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. Appendix to Sec. 1493.320 provides an 
example of the methodology used by CCC in applying this paragraph (c).
    (d) Liabilities to CCC. Notwithstanding any other terms of the 
facility payment guarantee, the exporter may be liable to CCC for any 
amounts paid by CCC under the facility payment guarantee when and if it 
is determined by CCC that the exporter engaged in fraud, or has been or 
is in breach of any contractual obligation, certification or warranty 
made by the exporter for the purpose of obtaining the facility payment 
guarantee or for fulfilling obligations under the FGP. Further, the 
exporter's assignee may be liable to CCC for any amounts paid by CCC 
under the facility payment guarantee when and if it is determined by 
CCC that the exporter's assignee engaged in fraud or otherwise violated 
program requirements.
    (e) Good faith. The violation by an exporter of the certifications 
in Sec. 1493.270 or the failure of an exporter to comply with the 
provisions of Sec. 1493.290 or Sec. 1493.330(e) will not affect the 
validity of any facility 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 facility payment guarantee or at the 
time of assignment of the facility 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 effect recoveries from the foreign 
bank or the importer.

Appendix to Sec. 1493.320--Illustration of Pro Rata Allocation of 
Recoveries

    The following example illustrates CCC's policy, as set forth in 
Sec. 1493.320, regarding pro rata sharing of recoveries made for 
claims filed under the FGP. For the purpose of this example only, 
even though CCC interest coverage is on a floating rate basis, a 
constant rate of interest is assumed. A typical case might be as 
follows:
    1. The U.S. bank enters into a $300,000 three-year credit 
arrangement for the export sale of goods and services with the 
foreign bank calling for equal semi-annual payments of principal and 
semi-annual payment of interest at a rate of 10 percent per annum 
and a penalty interest rate of 12 percent per annum on overdue 
amounts until the overdue amount is paid.
    2. Exported value reported to CCC equals $300,000.

[[Page 42663]]

    3. The foreign bank fails to make the final principal payment of 
$50,000 and an interest payment of $2,493.15, both due on January 
31.
    4. On February 10, the U.S. bank files a notice of default and 
claim in good order with CCC.
    5. CCC's guarantee states that CCC's maximum liability is 
limited to 95 percent of the principal amount due ($47,500) and 
interest at a rate of 8 percent per annum (basis 365 days) on 95 
percent of the principal ($1,894.80).
    6. CCC pays the claim on February 22.
    7. The latest investment rate of the 91-day Treasury Bill 
auction average which has been published by the Department of 
Treasury in effect on the date of nonpayment by CCC (February 11) is 
7 percent.

Computation of Obligations

    Using the above case, CCC's payment to the holder of the 
facility payment guarantee would be computed as follows:

1. CCC's Obligation under the Facility Payment Guarantee:               
    (a) Principal coverage--(95%  x  $50,000)..............   $47,500.00
    (b) Interest coverage--(8%  x  $47,500  x  182/365)....     1,894.80
                                                            ------------
        Total..............................................    49,394.80
    (c) Late interest due from CCC (7% per annum for 11                 
     days  x  $49,394.80)..................................       104.20
                                                            ------------
    (d) Amount paid by CCC on February 22..................    49,499.00
                                                            ============
2. Foreign Bank's Obligation under the Letter of Credit or              
 the Related Obligation:                                                
    (a) Principal due January 31...........................    50,000.00
        Interest due January 31 (10%  x  $ 50,000  x  182/              
         365)..............................................     2,493.15
                                                            ------------
        Amount owed by foreign bank as of January 31.......    52,493.15
    (b) Penalty interest due (12% per annum for 22 days  x              
     $ 50,000).............................................       361.64
                                                            ------------
    (c) Amount owed by foreign bank as of February 22......    52,854.79
3. Amount of Foreign Bank's Obligation Not Covered by CCC's             
 Payment Guarantee:........................................    3,355.79.
                                                                        

Computation of Pro Rata Sharing in Recovery of Losses

    In establishing each party's respective interest in any recovery 
of losses, the total amount due under the foreign bank obligation 
would be determined as of the date the claim is paid by CCC 
(February 22). Using the above example in which the amount owed by 
the foreign bank is $52,854.79, CCC would be entitled to 93.65 
percent ($49,499.00 divided by $52,854.79) and the holder of the 
facility payment guarantee would be entitled to 6.35 percent 
($3,355.79 divided by $52,854.79) of any recoveries of losses after 
settlement of the claim. Since in this example, the losses were 
recovered after the claim had been paid by CCC, Sec. 1493.320(b) 
would apply.


Sec. 1493.330  Miscellaneous provisions.

    (a) Assignment. (1) The exporter may assign the proceeds which are, 
or may become, payable by CCC under a facility payment guarantee or the 
right to such proceeds only to a financial institution in the U.S. The 
assignment must cover all amounts payable under the facility payment 
guarantee not already paid, may not be made to more than one party, and 
may not, unless approved in advance by CCC, be subject to further 
assignment. Any assignment may be made to one party as agent or trustee 
for two or more parties participating in the assignment.
    (2) An original and two copies of the written notice of assignment 
signed by the parties thereto must be filed by the assignee with the 
Treasurer, CCC, at the address specified in the Contacts P/R.
    (3) Receipt of the notice of assignment will ordinarily be 
acknowledged to the exporter and its assignee in writing by an officer 
of CCC. In cases where a financial institution is determined to be 
ineligible to receive an assignment, in accordance with paragraph (b) 
of this section, CCC will provide notice thereof to such financial 
institution and to the exporter issued the facility payment guarantee 
in lieu of an acknowledgment of assignment.
    (4) The name and address of the assignee must be included on the 
written notice of assignment.
    (b) Ineligibility of financial institutions to receive an 
assignment. A financial institution will be ineligible to receive an 
assignment of proceeds which may become payable under a facility 
payment guarantee if, at the time of assignment, such financial 
institution:
    (1) Is not in sound financial condition, as determined by the 
Treasurer of CCC; or
    (2) Is the financial institution issuing the letter of credit or a 
branch, agency or subsidiary of such institution; or
    (3) Is owned or controlled by an entity that owns or controls the 
financial institution issuing the letter of credit; or
    (4) Is the U.S. parent of the foreign bank issuing the letter of 
credit.
    (c) Ineligibility of financial institutions to receive proceeds. A 
financial institution will be ineligible to receive proceeds payable 
under a facility payment guarantee approved by CCC if such financial 
institution:
    (1) At the time of assignment of a facility payment guarantee, is 
not in sound financial condition, as determined by the Treasurer of 
CCC;
    (2) Is the financial institution issuing the letter of credit or a 
branch, agency, or subsidiary of such institution; or
    (3) Is owned or controlled by an entity that owns or controls the 
financial institution issuing the letter of credit; or
    (4) Is the U.S. parent of the foreign bank issuing the letter of 
credit.
    (d) Alternative satisfaction of facility payment guarantees. CCC 
may, with the agreement of the exporter (or if the right to proceeds 
payable under the facility payment guarantee has been assigned, with 
the agreement of the exporter's assignee), establish procedures, terms 
or conditions for the satisfaction of CCC's obligations under a 
facility payment guarantee other than those provided for in this 
subpart if CCC determines that those alternative procedures, terms or 
conditions are appropriate in rescheduling the debts arising out of any 
transaction covered by the facility payment guarantee and would not 
result in CCC paying more than the amount of CCC's obligation.
    (e) Maintenance of records and access to premises. (1) For a period 
of five years after the date of expiration of the coverage of a 
facility 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 goods or services 
exported in connection with a facility payment guarantee, including 
those records generated and maintained by agents, 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 facility 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, or a related company's books, records, and 
accounts concerning transactions relating to the facility payment 
guarantee, including, but not limited to, financial records and 
accounts pertaining to sales, inventory, manufacturing, processing, and 
administrative and incidental costs, both normal and unforeseen.
    (2) The exporter must maintain the proof of entry required by 
Sec. 1493.290(b),

[[Page 42664]]

and must provide access to such document if requested by the Secretary 
of Agriculture or his authorized representative for the five-year 
period specified in paragraph (e)(1) of this section.
    (f) Responsibility of program participants. It is the 
responsibility of all program participants to review, and fully 
acquaint themselves with, this subpart, program announcement(s), and 
notice(s) to participants relating to the FGP, as applicable. 
Applicants for facility payment guarantees under this program are 
hereby on notice that they will be bound by any terms contained in 
applicable program announcement(s) or notice(s) to participants issued 
prior to the date of approval of a facility payment guarantee.
    (g) 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 or officer 
of the exporter or exporter's assignee or their authorized designee(s). 
In cases where the designee is acting on behalf of the principal or the 
officer, the signature must be accompanied by:
    (1) Wording indicating the delegation of authority or, in the 
alternative, by a certified copy of the delegation of authority; and
    (2) 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 this subpart are submitted within 
the required time limits. If requested in writing, CCC will acknowledge 
receipt of a submission by the exporter or the exporter's assignee. If 
acknowledgment of receipt is requested, the exporter or exporter's 
assignee must submit an extra copy of each document and a stamped self-
addressed envelope for return by U.S. mail. If courier services are 
desired for the return receipt, the exporter or exporter's assignee 
must also submit a self-addressed courier service order which includes 
the recipient's billing code for such service.
    (h) Officials not to benefit. No member of or delegate to Congress, 
or resident Commissioner, shall be admitted to any share or part of the 
facility payment guarantee or to any benefit that may arise therefrom, 
but this provision shall not be construed to extend to the facility 
payment guarantee if made with a corporation for its general benefit.
    (i) Deadlines. (1) Where a deadline is fixed in terms of days, it 
means business days and excludes Saturdays, Sundays and federal 
holidays.
    (2) Where a deadline is fixed in terms of months, the deadline 
falls on the same day of the month as the day triggering the deadline 
period, or if there is no same day, the last day of the month; and
    (3) Where a deadline would otherwise fall on a Saturday, Sunday or 
federal holiday, the deadline shall be the next business day.

    Signed this 1st day of August, 1997 at Washington, DC.
Christopher E. Goldthwait,
General Sales Manager, Commodity Credit Corporation.
[FR Doc. 97-20761 Filed 8-7-97; 8:45 am]
BILLING CODE 3410-10-P