This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

43675

Vol. 62, No. 158

Friday, August 15, 1997

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1493

Expanding Export Transactions for

CCC Payment Guarantees

AGENCY: Commodity Credit Corporation

(CCC), USDA.

ACTION: Advance notice of proposed

rulemaking.

SUMMARY: CCC requests comments on

two options to modify the regulations

found at 7 CFR part 1493, subpart B,

governing CCC’s Export Credit

Guarantee Program (GSM–102) and

Intermediate Export Credit Guarantee

Program (GSM–103). One option would

permit CCC to guarantee payments

pursuant to sight letters of credit issued

by eligible foreign banks, which letters

of credit would not include deferred

payment terms. The other option would

permit CCC to guarantee payment of

obligations of eligible foreign banks

arising out of transactions not involving

an export letter of credit. For example,

such obligations could be created by

foreign banks providing guarantees of

obligations of foreign buyers, including,

for example, drafts drawn on and

accepted by such buyers.

CCC also welcomes and will consider

comments or recommendations

regarding other approaches to increasing

the flexibility of these programs.

DATES: Comments are due on or before

September 15, 1997.

ADDRESSES: All comments should be

addressed to L.T. McElvain, Director,

CCC Operations Division, Foreign

Agricultural Service, U.S. Department of

Agriculture, AG Stop 1035, Washington,

DC 20250–1035; FAX (202) 720–2949.

All comments received will be available

for public inspection at the above

address during regular business hours.

FOR FURTHER INFORMATION CONTACT: L.T.

McElvain, Director, CCC Operations

Division, Foreign Agricultural Service,

U.S. Department of Agriculture, Stop

1035, Washington D.C., 20250-1035; Fax

(202) 720–2949; Telephone (202) 720–

6211. The U.S. Department of

Agriculture (USDA) prohibits

discrimination in its programs on the

basis of race, color, national origin, sex,

religion, age, disability, political beliefs,

and marital or familial status. Persons

with disabilities who require alternative

means for communication of program

information (braille, large print,

audiotape, etc.) should contact the

USDA Office of Communications at

(202) 720–5881 (voice) or (202) 720–

7808 (TDD).

SUPPLEMENTARY INFORMATION:

Background

The GSM–102 and GSM–103

programs are intended to increase

exports of U.S. agricultural commodities

and to serve other purposes stated in

subpart A of 7 CFR part 1493. Criteria

for allocating the availability of credit

guarantees under these programs among

countries and commodities are also

found in subpart. In addition, the

subpart contains certain program

restrictions, including a prohibition on

making credit guarantees available in

connection with sales to any country

that the Secretary of Agriculture

determines cannot adequately service

the debt associated with such sales.

Since late 1980, CCC has issued

payment guarantees totaling $56.7

billion (guarantee value) under the

GSM–102 program. This program covers

U.S. agricultural export transactions

where payments are governed by

irrevocable letters of credit issued by

eligible foreign banks, and credits are

extended by U.S. exporters or financial

institutions to such foreign banks for a

maximum of three years. Since FY 1986,

CCC has issued payment guarantees

totaling $2.2 billion under the GSM–103

program. In this program, which is

similar to the GSM–102 program, the

credit periods are for not less than three,

but no more than 10, years.

The regulations for the GSM–102 and

103 programs at 7 CFR part 1493 were

specifically designed to assist export

transactions having at least two

characteristics: (1) they are financed

through foreign bank letters of credit,

and (2) the foreign bank makes payment

on deferred terms (credit terms being

provided for either in the letter of credit

or a related obligation). Under the

regulations as currently written, export

transactions that lack either one of these

characteristics are not eligible for GSM–

102 or 103 payment guarantees. For

example, transactions involving

payment by sight letters of credit with

no related credit obligation (i.e., no

credit extended to the issuing foreign

bank) are not eligible. Neither are other

forms of collections involving

acceptances or other forms of financial

documents handled by U.S. banks that

are also guaranteed by a foreign bank.

Such collections may be subject to the

Uniform Rules for Collections

(International Chamber of Commerce

(ICC) Publication 522), in contrast to

existing GSM–102/103 transactions

which must involve letters of credit

subject to the Uniform Customs and

Practice for Documentary Credits (ICC

Publication 500).

To enable CCC to better evaluate

whether to modify 7 CFR part 1493 to

permit the GSM–102 and 103 programs

to include a greater range of transactions

for which CCC would assume foreign

bank risk, it was decided to seek the

views of program participants and

others through this advance notice of

proposed rulemaking.

Options

Option 1. Amend regulations to

permit CCC to issue payment guarantees

covering sight letter of credit

transactions (with no credit extended to

the foreign bank issuing the letter of

credit).

This option would require a revision

of 7 CFR 1493.10. Specifically, 7 CFR

1493.10(b) provides that CCC will

consider applications for payment

guarantees only in connection with

export sales where the payment will be

made in one of two ways:

(1) An irrevocable foreign bank letter

of credit, issued in favor of the exporter,

specifically stating the deferred

payment terms under which the foreign

bank is obligated to make payments; or

(2) An irrevocable foreign bank letter

of credit, issued in favor of the exporter,

that is supported by a related obligation

specifically stating the deferred

payment terms under which the foreign

bank is obligated to pay.

To implement this option, it would be

necessary to delete the requirement

under (1) above that the letter of credit

state deferred payment terms. Other

conforming changes would have to be

made to various parts of the regulations.
43676 Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Proposed Rules

Possible Benefits of This Option

1. Might facilitate additional export

transactions without increasing CCC’s

multi-year credit exposure to a country

at a time when such exposure is

approaching the maximum exposure

established by CCC. Since payment

would be due at sight, CCC’s exposure

would be reduced more quickly than in

a transaction calling for deferred

payment. As a result, more transactions

could be done with a country which

was nearing its CCC-established credit

limitations.

2. Might increase the number of

export transactions where U.S. financial

institutions could reduce their letter of

credit confirmation fees because of the

availability of CCC’s guarantee.

Possible Disadvantages of This Option

1. Might be of interest to foreign

buyers and U.S. banks and exporters

only when the risk of default by the

issuing foreign bank is considered high

and U.S. banks are unwilling to confirm

letters of credit or are willing to do so

only at very high fees. The rate of

defaults and, therefore, CCC’s costs,

might be high.

2. Might duplicate insurance or

guarantee coverage available from

private sector firms or other U.S.

Government agencies.

3. Might displace cash export sales of

U.S. agricultural commodities since no

credit is necessary to make the

transactions workable.

Option 2. Amend regulations to

permit CCC to guarantee payment of

eligible foreign bank obligations in

transactions calling for deferred

payment but not involving an

irrevocable letter of credit.

One type of transaction under this

option could involve foreign bank

guarantees of financial instruments,

including, for example, drafts drawn on,

and accepted by, foreign buyers.

However, the range of possible types of

transactions and foreign bank

guarantees could be broader than this,

and commenters are urged to be as

specific and detailed as possible in

proposing or opposing alternatives that

might be covered by this option. CCC is

aware of a bank guarantee known as an

aval. CCC is concerned, however, that

avals, although commonly used in civil

law jurisdictions, are virtually unknown

in American jurisprudence and may not

be readily enforceable in the United

States.

CCC is also especially interested in

comments on whether it should require,

as a condition of eligibility for a

guarantee, that collections of financial

and commercial documents be subject

to the Uniform Rules for Collections set

forth in the International Chamber of

Commerce Publication 522’’, or to

other requirements. In this connection,

commenters may wish to state clearly

their understanding of the extent of the

non-documentary risk that exporters

would bear in a transaction where the

importer refused to accept documents

despite conformity of the documents

with the collection instruction. In such

a case the CCC guarantee would not

appear to apply because the drawee

would not have incurred a payment

obligation to which the foreign bank

guarantee would apply. Similarly, CCC

seeks comments regarding whether it

should require any specific wording or

content in the obligation that would be

guaranteed by the foreign bank or in the

foreign bank’s guarantee itself.

Possible Benefits of This Option

1. Might increase U.S. agricultural

exports by leveraging credits made

available by the private sector.

2. New or more cost-effective export

opportunities might arise by increasing

the flexibility with which export

transactions could be structured, with

payment of credits still guaranteed by

eligible foreign banks.

3. Might enable or encourage

participation in GSM–102 and 103

programs by additional financial

institutions, resulting in a more

competitive credit environment.

Possible Disadvantage of this Option

1. Exporters might face greater

problems or risks in negotiating

documents should they choose to

participate in these types of

transactions.

Considerations Regarding Comments

CCC will consider a number of factors

in reviewing comments and determining

whether to implement one or both of the

options, or modifications thereof.

1. GSM–102/103 Criteria. As

discussed above, 7 CFR part 1493,

subpart A, contains objectives and

criteria for these programs. Some of

these, such as the requirement that

countries to which credits are to be

extended must be ‘‘creditworthy’’, are

mandated by statute. Commenters

should familiarize themselves with

subpart A and include a discussion of

relevant regulatory provisions in their

comments. They should particularly

address the issue of whether

transactions pursuant to the proposed

options would more likely be in

addition to, or would more likely

displace, unassisted private sector

transactions. Commenters should bear

in mind that, in considering options for

additional program flexibility, CCC does

not intend to relax current criteria that

serve to manage program risk or protect

the assets of CCC.

2. Government Performance and

Results Act (GPRA). In September 1997

the government-wide provisions of the

GPRA will take effect. The GPRA is a

performance-based management system

that is directly tied to the budget

process. Under the GPRA each federal

agency must present to Congress its

goals, how it spends money and

organizes its personnel to achieve these

goals, and the extent to which it

achieves its goals. Each agency must

prepare a 5-year strategic plan as part of

its budget submission. To incorporate

new programs or an expansion of

existing programs into this planning

process, agencies must address such

issues as how benefits will be measured,

why the functions or services are not

being adequately performed by the

private sector, and whether the new

activities will be cost-effective.

Commenters are invited to address

specifically these issues.

Signed at Washington, DC, on August 11,

1997.

Mary T. Chambliss,

Acting General Sales Manager,

Commodity Credit Corporation.

[FR Doc. 97–21670 Filed 8–14–97; 8:45 am]

BILLING CODE 3410–10–P

DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Part 252

[INS No. 1695–95]

RIN 1115–AD95

Inspection of Alien Crewmembers; 90-

Day Modified Inspection Procedure

AGENCY: Immigration and Naturalization

Service, Justice.

ACTION: Proposed rule.

SUMMARY: This rule proposes to amend

the Immigration and Naturalization

Service (Service) regulations by

codifying the Service’s longstanding

practice of authorizing, on a

discretionary basis, multiple landing

privileges for certain maritime

crewmembers actively serving on board

a limited number of commercial

maritime cruise ships and ferries

making regular trips to and from the

United States. This proposed rule would

codify the Service’s current procedure

of granting, in appropriate cases, certain

crewmembers’ conditional landing

permits. An alien crewmember who is