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basis unless IFB's are issued for commodity and ocean freight so that all commodity and ocean freight offers are reviewed simultaneously: And provided further, That when vessels offered under the flag of the participant or importing country or vessels controlled by the participant or importing country are to be used, the participant must purchase commodities on the basis of the lowest FAS/FOB offers. (ii) Announcement of awards shall be made in the United States. The importer shall promptly submit to OGSM copies of all offers received with a copy of the IFB which was issued. No sale can be approved for financing until this information has been received by OGSM. The decision of the GSM shall be final regarding the responsiveness of offers to IFB terms in the awarding of contracts. (c) [Reserved]

(d) Record of offers submitted by suppliers. The participant shall maintain a record of all offers received from suppliers either as a result of public tenders or negotiation. The General Sales Manager reserves the right to examine these records or to request specific information in connection with the offers until the expiration of 3 years after final payment under contracts awarded pursuant to the purchase authorization.

(e) Shipment before letter of credit. If the supplier of the commodity permits shipment or the ocean carrier accepts the commodity before receipt of an acceptable letter of credit from a bank he takes such action at his own risk. This action in itself does not affect eligibility for CCC financing provided acceptable documentation is presented within the time limitations prescribed in the regulations in this subpart.

(f) Export Trade Act (Webb-Pomerene Law). A supplier who is a member of a Webb-Pomerene Association and who enters into contracts with importers as a member of such an association shall so indicate in a statement on, or attached to, the copy of the supplier's detailed invoice referred to in § 17.13(c)(2).

(g) [Reserved]

(h) Contract disputes. Contracts between suppliers and importers should

stipulate the responsibility of each party for payment of any costs not eligible for financing by CCC. Questions as to payment of ineligible costs should be resolved between the contracting parties.

(i) Special contracting provisions. The general provisions for contracting set forth in this section are supplemented by special contracting provisions in Appendix A applicable to individual commodities. Each purchase authorization, unless otherwise provided, shall be subject to the special provisions of Appendix A for the specific commodity named in the purchase authroization as though such special provisions were fully set forth in the purchase authorization. Each contract entered into for financing hereunder shall be deemed to include all terms and conditions required by the regulations in this subpart.

(j) Prohibition against sales, trade, or commerce with North Vietnam. (1) [Reserved]

(2) A legal entity shall be deemed to own or control a second legal entity if

(i) The legal entity owns an interest of 50 percent or more in the second legal entity,

(ii) The legal entity and one or more other legal entities, in which it owns an interest of 50 percent or more, together own an interest of 50 percent or more in the second legal entity, or

(iii) The legal entity owns an interest of 50 percent or more in another legal entity which in turn owns an interest of 50 percent or more in the second legal entity.

(3) In addition to the other requirements of the regulations covering contract approval, sales submitted by suppliers will not be approved unless the supplier has submitted a statement, maintained on a current basis in which are listed by name, address, and chief executive officers all legal entities, foreign and domestic, which the supplier owns or controls, and similar information for all legal entities which own or control the supplier and for all legal entities which are owned or controlled by any legal entity which owns or controls the supplier. The statement shall be submitted to the Director, Program Operations Division, OGSM, U.S. De

partment of Agriculture, Washington, D.C. 20250, except that for tobacco sales it shall be submitted to the Director, Producer Associations Division, ASCS, U.S. Department of Agriculture, Washington, D.C. 20250, and for upland and extra long staple cotton sales to the Director, New Orleans ASCS Commodity Office, at the address provided in § 17.16. A statement filed by a subsidiary will be considered complete as to the legal entities which it owns or controls and any other legal entities owned or controlled by the parent (including the chief executive officers for all such companies) if it certified thereon that such information has been furnished to USDA in a separate statement filed by the parent. A statement shall be considered to be maintained on a current basis if all changes are reported promptly after they have occurred and if changes in chief executive officers are reported at intervals of not less than 3 months on a calendar quarter basis. The term "chief executive officers" shall include:

(i) The president, or if no president, the Chairman of the Board of Directors, and

(ii) The vice president, but in cases of multiple vice presidents only the principal vice president, and then only if one is so designated, and

(iii) Any other person who is designated as or who acts in the capacity of a chief executive officer.

(Secs. 101-115, Pub. L. 83-480, as amended (7 U.S.C. 1701 et seq.); E.O. 10900, 26 FR 143, as amended)

[31 FR 16813, Dec. 31, 1966, as amended at 33 FR 5137, Mar. 29, 1968; 34 FR 8963, June 5, 1969; 42 FR 54399, Oct. 6, 1977; 42 FR 63163, Dec. 15, 1977]

§ 17.7 Commodity price provisions.

(a) Maximum price. The supplier's sales price must not exceed the prevailing range of export market prices as applied to the terms of sale at the time of sale, as determined by USDA, and when the purchase authorization provides for a maximum price, expressed in dollars and cents or computed on a stated basis, the supplier's sales price shall not exceed such maximum price. The "time of sale" unless otherwise defined for specific com

modities in Appendix A, shall mean the day as of which the sale price is established in or pursuant to the contract between the importer and the supplier or the day of any amendment thereto if such amendment in any manner affects the sales price as determined by USDA. If USDA is unable to ascertain the prevailing range of export market prices for a specific commodity, USDA will determine a maximum export market price, representing the top of the range of export market prices, for the commodity at the time of sale for the time and place of delivery provided for in the contract. In so determining a maximum export market price, USDA will utilize, as needed, available domestic or export market information for the same or other quality descriptions, packagings, locations, and dates; will apply appropriate market differentials and such other factors as would be reflected in the export market price at the time of sale for the time and place of delivery; and will take into account CCC export sales prices when appropriate.

(b) Prior approval of contract price. Prior approval by USDA of the contracted price of the commodity is required as a condition of eligibility for financing unless otherwise provided in the purchase authorization. The detailed instructions for requesting and obtaining such prior price approval are set forth in Appendix A or will be stated in the purchase authorization.

(c) Ineligible selling agents. If at the time the supplier reports the sale for price approval, it is determined that an agent employed or engaged by the supplier to obtain a contract is not a selling agent as defined in § 17.2(c)(19) the sale will not be approved for financing.

(d) Refund of excess price. If the sale has been financed and the sales price is determined to exceed the maximum price permissible under this section, the supplier shall refund the amount of such excess in accordance with § 17.12(d).

[31 FR 16818, Dec. 31, 1966, as amended at 32 FR 5977, Apr. 14, 1967]

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§ 17.8 Fees, discounts, commissions, brand names, purchasing agents, shipping agents.

(a) Consular fees. Consular fees imposed for the issuance or legalization of consular invoices or certificates in connection with the importation of commodities into a foreign country will not be financed by CCC.

(b) Discounts. If a contract provides for one or more discounts (including but not limited to trade or quantity discounts and discounts for prompt payment) whether expressed as such or as "commissions" to the importer, only the invoice amount after discount (supplier's contracted price less all discounts) will be eligible for financing.

(c) Commissions. (1) (i) For non-food commodities, a commission to a selling agent as defined in § 17.2(c)(19), employed or engaged by the supplier to obtain a contract, is eligible for financing to the extent that such commission is included in the contract price, except as stated in this paragraph.

(ii) For food commodities, a commission, fee or other payment to a selling agent as defined in § 17.2(c)(19), employed or engaged by the supplier to obtain a contract, is prohibited.

INTERPRETATION

Any act by a person on behalf of a commodity supplier, which would influence or tend to influence a buyer to award a contract to the supplier, or which may result in the supplier's having a competitive advantage in relation to other potential suppliers, constitutes an act "to obtain a contract." Furthermore, any act by a person on behalf of a commodity supplier to influence USDA to approve a contract for financing constitutes an act "to obtain a contract."

Services on behalf of a supplier which are purely ministerial in nature and do not require the exercise of personal influence, judgment, or discretion, such as attending bid openings or presenting offers at bid openings, would not in themselves be considered acts "to obtain a contract."

Services to implement a contract after it has been entered into by the parties thereto, such as handling documentation problems or contract disputes, would not constitute acts "to obtain a contract."

Payments of any kind to a person who has acted as a selling agent to obtain a contract, including payments for services performed in connection with such contract which in themselves are not services to obtain a contract, are prohibited.

(2) If the supplier of the commodity has employed any person or firm, other than a selling agent, to obtain a contract, the sale is not eligible for financing.

(3) No commission paid or to be paid to any agency, including a corporation, owned or controlled by the participant or the government of the destination country will be eligible for financing.

(4) No commission paid or to be paid to any agent, broker or other representatives of the participant or the importer will be eligible for financing. This limitation is not applicable to ocean transportation brokerage commissions which do not exceed 21⁄2 percent of the freight financed.

(5) For ocean transportation, in addition to this paragraph, see also § 17.9(i)(8).

(6) If a commission is paid in violation of paragraph (c) (2), (3), or (4) of this section, CCC reserves the right to demand dollar refund of the entire amount financed by CCC under the contract.

(d) Brand names. Brand names are not required to be shown on packaged commodities. If, however, a brand name is used, it must be a bona fide U.S. brand. The container or attached label must show the name and U.S. business address of the supplier or the manufacturer. Any reference on the container or attached label to foreign addresses of suppliers or foreign brand names is prohibited and will make the sale ineligible for financing. If the markings on the shipping container include a brand name such brand name shall be identical with the brand name on the unit container.

(e) Purchasing agents; shipping agents. (1) A participant is not required to use a purchasing agent or shipping agent; however, if a purchasing or shipping agent is to be used, the participant shall submit the nomination(s) to the GSM in writing along with a copy of the proposed agency agreement. No person may act as purchasing or shipping agent, or as both, unless approved by the Assistant Sales Manager, Pub. L. 480 Programs, in accordance with the provisions of this paragraph.

(2) The term "affiliate" shall have the meaning as provided in § 17.2(c)(1)

and in addition, persons will also be deemed to be affiliates if any of the following conditions are met:

(i) Such persons have any common officers or directors.

(ii) There is any investment by ships brokers, ocean transportation suppliers, approved commodity suppliers, or selling agents, or their officers, or directors in the purchasing agents or shipping agents.

(iii) There is any investment by the purchasing agent or shipping agent, or his officers or directors in ships brokers, ocean transportation suppliers, or approved commodity suppliers, or selling agents.

These conditions include those cases in which investment has been concealed by the utilization of any scheme or device to circumvent the purposes of this section but does not include investment in any mutual fund.

(3) A person whose nomination has been submitted to act as a purchasing agent or shipping agent, or both, shall furnish to the Assistant Sales Manager, Pub. L. 480 Programs, the following:

(i) The names of all incorporators of the firm:

(ii) The names and titles of all officers and directors;

(iii) The names and proportionate share interest of all stockholders;

(iv) If the beneficial interest in the firm is held by persons other than the named shareholders, the names of the holders of the beneficial interest and the proportionate share of each;

(v) The amount of the subscribed capital of the firm;

(vi) A written undertaking signed by such person agreeing that if he is approved neither he nor any of his affiliates, as defined in § 17.8(e)(2), will act as a ships broker, ocean transportation supplier, commodity supplier, or selling agent in any Title I transactions with the participant during the term of the agency agreement;

(vii) A certification that the person has not arranged to give or receive any payment or other benefit in connection with his selection as agent.

(4) Consideration will not be given to approval of a person to act as a shipping or purchasing agent, or both,

until the documents required to be submitted by this paragraph are received by the Assistant General Sales Manager, Pub. L. 480 Programs. Approval of a nomination for purchasing agent or shipping agent may be withheld for a period not to exceed 30 days pending completion of any investigation deemed appropriate.

(5) Approval of a purchasing agent or shipping agent to act for a participant shall be coextensive with the term of the agency agreement or such shorter period as the Assistant Sales Manager, Pub. L. 480 Programs, may determine: Provided, That such approval will be automatically terminated if the shipping or purchasing agent or any of the affiliates of such agent, acts as ships broker, ocean transportation supplier, commodity supplier or selling agent in connection with any Title I transaction for such participant during the term of the agency agreement.

(6) If a participant uses an unapproved purchasing agent in the procurement of commodities made available under Title I, Pub. L. 480, sales approval may be withheld.

(7) If a participant uses an unapproved shipping agent in the shipping of commodities made available under Title I, Pub. L. 480, vessel approval may be withheld or the amount of the shipping agent's commission in connection with the shipment may be deducted from the ocean freight differential to be paid.

(8) The Assistant Sales Manager, Pub. L. 480 Programs, shall promptly notify persons seeking approval as purchasing or shipping agents of his determination or of the need for further investigation. If such person is not approved, the notification shall state the reasons therefor. The determination of the Assistant Sales Manager shall be effective immediately and shall continue in effect pending the result of any appeal to the General Sales Manager. Nothing herein shall be construed as to prohibit a shipping agent or purchasing agent, whose application has been disapproved or whose approval terminated, from being nominated at a later time.

(9) Any person whose nomination has been disapproved or whose ap

proval has been terminated pursuant to the provisions of this section shall have the opportunity, within 30 days, to present to the General Sales Manager any reasons, orally or in writing, as to why such action should not stand.

(f) Reports required from suppliers of commodities and ocean transportation. (1) Suppliers of (i) agricultural commodities financed under the Act and (ii) U.S. flag vessels on which such commodities are transported, if ocean freight differential payments are made by CCC with respect thereto, shall report to the General Sales Manager (GSM) any commission, fee or other compensation of any kind (hereinafter referred to as "payment") which, in connection with the supplying of such commodities or vessels, is paid or to be paid by the supplier to any agent, broker, or other representative of the importer or importing country, including a corporation owned or controlled by the importer or importing country, to which he supplies such commodities or vessels.

(2) The term "other compensation of any kind" means anything given in return for any consideration, services, or benefits received or to be received by the supplier in connection with the supplying of commodities or vessels financed under the Act.

(3) The supplier shall report in writing as soon as he knows that a payment as described in paragraph (f)(1) of this section is made or to be made. Reports shall be submitted to the GSM, Office of the General Sales Manager, Room 4073-S, U.S. Department of Agriculture, Washington, D.C. 20250. The supplier shall include in the report the following information with respect to each payment reported pursuant to paragraph (f)(1):

(i) The name and address of the person to whom the payment was made or is to be made, and his relationship to the importer or importing country.

(ii) Date payment made or approximate date when payment is to be made, and amount or approximate amount of payment.

(iii) An explanation of the transaction in connection with which the payment was made or is to be made.

(iv) The number(s) of the purchase authorization(s) providing for the financing under the Act of the sale of agricultural commodities to the importer or importing country to whose agent, broker or other representative the payment was made or is to be made.

(4) Knowledge of any fact material to obligations under paragraph (f) of this section shall be imputed to the supplier if the supplier should reasonably have known that such fact existed.

(5) The information in reports filed hereunder will be available for public inspection by contacting the General Sales Manager, OGSM, USDA, at the address given in paragraph (f)(3) of this section.

(6) Failure to file a required report or the filing of a false report hereunder constitutes a cause for debarment pursuant to 7 CFR 1407.5(c). Whenever the GSM believes, or has reason to believe, that a supplier has failed to file a report as required by this paragraph (f) or has filed a false report thereunder, the GSM is authorized to institute suspension or debarment proceedings against the supplier in accordance with the provisions of 7 CFR Part 1407.

(7) If a final determination has been made under 7 CFR Part 1407 that a supplier has failed to file a report as required by this paragraph (f) or has filed a false report thereunder, the supplier shall be debarred, for a period of five years from the date of such final determination, from furnishing— directly or indirectly-commodities financed under the Act or U.S. flag vessels on which such commodities are to be transported if ocean freight differential payments are to be made by CCC with respect thereto. Such supplier may also be debarred (in accordance with 7 CFR Part 1407) from participating in other programs administered or financed by CCC.

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