CCC Export Credit Guarantee (GSM-102) Program, 44836-44855 [2011-18403]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 76, Number 144 (Wednesday, July 27, 2011)]
[Proposed Rules]
[Pages 44836-44855]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18403]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

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.

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

[[Page 44836]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1493

RIN 0551-AA74


CCC Export Credit Guarantee (GSM-102) Program

AGENCY: Foreign Agricultural Service and Commodity Credit Corporation, 
USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise and amend the regulations that 
administer the Export Credit Guarantee (GSM-102) Program. Changes in 
this proposed rule incorporate program operational changes and 
information from press releases and notices to participants that have 
been implemented since the publication of the current rule, and include 
other administrative revisions to enhance clarity and program 
integrity. These changes should increase program availability to all 
participants and enhance access and encourage sales for smaller U.S. 
exporters. The proposed rule would eliminate provisions for the 
Intermediate Export Credit Guarantee (GSM-103) Program, consistent with 
the repeal of authority to operate this program in the Food, 
Conservation, and Energy Act of 2008 (2008 Act).

DATES: Comments concerning this proposed rule must be received by 
September 26, 2011 to be assured consideration.

ADDRESSES: Comments may be submitted by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions to submit comments.
     E-Mail: GSMregs@fas.usda.gov.
     Fax: (202) 720-2495, Attention: ``GSM102 Proposed Rule 
Comments''.
     Hand Delivery, Courier, or U.S. Postal delivery: Amy 
Slusher, Deputy Director, Credit Programs Division, c/o Public Affairs 
Division, Foreign Agricultural Service, U.S. Department of Agriculture, 
1400 Independence Ave., SW., Stop 1004, Room 5076, Washington, DC 
20250-1004.
    Comments may be inspected at 1400 Independence Avenue, SW., 
Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday, 
except holidays. A copy of this proposed rule is available through the 
Foreign Agricultural Service (FAS) homepage at: https://www.fas.usda.gov/excredits/exp-cred-guar-new.asp.

FOR FURTHER INFORMATION CONTACT: Amy Slusher, Deputy Director, Credit 
Programs Division; by phone at (202) 720-6211; or by e-mail at: 
Amy.Slusher@fas.usda.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Commodity Credit Corporation's (CCC) Export Credit Guarantee 
(GSM-102) Program is administered by the Foreign Agricultural Service 
(FAS) of the U.S. Department of Agriculture (USDA) on behalf of CCC, 
pursuant to program regulations codified at 7 CFR Part 1493 and through 
the issuance of ``Program Announcements'' and ``Notices to 
Participants'' that are consistent with this program regulation. The 
current regulations became effective on November 18, 1994. Since that 
time, CCC has implemented numerous operational changes to improve the 
efficiency of the program, including an automated, Internet-based 
system for participants and revised program controls to improve program 
quality, reduce costs, and protect against waste and fraud. Also since 
that time, agricultural trade and finance practices have evolved. This 
proposed rule is intended to reflect these changes and to enhance the 
overall clarity and integrity of the program. In addition, the 2008 Act 
repealed the authority to operate the GSM-103 Program, and this change 
is reflected in the proposed rule.
    On December 17, 2008, CCC published an advance notice of proposed 
rulemaking (ANPR) in the Federal Register (73 FR 76568). This notice 
was intended to solicit comments on improvements and changes to be made 
in the implementation and operation of the GSM-102 program, with the 
intent of improving the GSM-102 program's effectiveness and efficiency. 
In addition to incorporating some of the comments received in response 
to the ANPR, this proposed rule incorporates several previous 
operational requirements announced by FAS through notices to 
participants. Other supplemental notices to participants were issued as 
reminders of various program requirements or contained informational 
requirements for specific commodities. These notices are not 
appropriate for inclusion in the regulations for the GSM-102 program 
but nevertheless remain in effect.

Section-by-Section Analysis

    The numbering system of this proposed rule differs from that in the 
current regulation. Several sections have been added, some sections 
have been deleted and others have been reordered. For the purposes of 
this discussion, the numbering of the proposed rule will be used, 
except where otherwise indicated.

Subpart A--Restrictions and Criteria for Export Credit Guarantee 
Programs

    In accordance with section 202 of the Agricultural Trade Act of 
1978 (7 U.S.C. 5622), as amended by section 3101 of the 2008 Act, this 
proposed rule would eliminate provisions for intermediate-term credit 
guarantees, also known as the GSM-103 program. Reference has been added 
to the Facility Guarantee Program (FGP), authorized by section 1542 of 
the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
5622 note) (as amended), to reflect the fact that the restrictions and 
criteria in subpart A apply to the FGP. The regulations for the FGP are 
found at subpart C of 7 CFR Part 1493.
    In section 1493.4, ``Criteria for country and regional 
allocations,'' CCC proposes to include regional allocations. CCC 
currently announces allocations by both country and region. The 
addition of the regional program concept to the proposed rule is 
therefore reflective of current program operations and appears 
throughout the proposed rule.

Subpart B--CCC Export Credit Guarantee (GSM-102) Program Operations

Section 1493.20 Definition of Terms

    Numerous definitions are proposed to be added to this section. 
Certain definitions would be added to provide greater clarity to 
program participants, and other definitions appearing in this section 
have been moved from other parts of the regulation.

[[Page 44837]]

    In section 1493.20(j), a definition of ``Director'' has been added. 
In certain sections throughout the proposed rule, ``CCC'' has been 
changed to ``Director.'' This change was made to provide participants 
transparency regarding the specific official authorized to make certain 
program decisions.
    Section 1493.20(l) would modify the definition of ``eligible 
interest'' contained in the current rule to be consistent with the 
interest coverage currently specified on the payment guarantee. CCC's 
coverage of interest will always be limited to the lesser of the amount 
calculated using the interest rate specified between the exporter or 
exporter's assignee and the foreign financial institution or the amount 
calculated using the Treasury bill investment rate specified on the 
face of the payment guarantee. In addition, to clarify the various 
types of interest associated with CCC's coverage, definitions have been 
added for ``CCC late interest'' (e), ``ordinary interest'' (dd), and 
``post-default interest'' (gg).
    A definition of the ``FAS Web site'' would be added in section 
1493.20(p). This Web site will contain all program-related information 
and details on where and by what means participants must submit 
information required by this subpart. CCC proposes no longer to 
announce these details through a Notice to Participants. The ``Contacts 
P/R'' found in section 1493.20(c) of the current rule would be deleted.
    Section 1493.20(r) would add a definition of a ``firm export sales 
contract.'' The current rule, at section 1493.40, requires that ``a 
firm export sale must exist before an exporter may submit an 
application for a payment guarantee.'' CCC proposes to add this 
definition to clarify to participants both what constitutes a ``firm 
export sale'' and the specific information needed to meet this 
requirement.
    A new definition of ``foreign financial institution'' would be 
added in section 1493.20(s). A foreign financial institution is not 
defined in the current rule, but is referenced throughout the current 
rule as a ``foreign bank'' that is able to issue an irrevocable letter 
of credit. The new definition would clarify the basic requirements for 
foreign institutions to be eligible to apply for participation in the 
program, and also would permit non-bank foreign institutions to apply.
    The definition of ``importer'' would be revised in section 
1493.20(y) to require that the importer be physically located in the 
country or region of destination. Although not specified in the current 
rule, CCC now permits an importer to have a ``presence of business'' in 
the country or region to meet the requirement that the ``agricultural 
commodities * * * be shipped from the United States to the foreign 
buyer.'' Under this ``presence of business'' concept, the importer need 
not be located in the country or region but may contract with another 
party (such as an agent) in the country or region of destination to 
receive and sell the goods. Due to the difficulty in confirming whether 
an importer has a legitimate ``presence of business'' to act on its 
behalf, CCC proposes to eliminate this practice and would now require 
the importer to be physically located in the country or region of 
destination.
    CCC proposes to add a definition for ``letter of credit account 
party'' in section 1493.20(aa). CCC currently permits an entity other 
than the importer to request the foreign financial institution letter 
of credit be opened, but in such cases the exporter is required to 
notify CCC on the application for payment guarantee. The ``letter of 
credit account party'' would now be added as a required field on the 
application for payment guarantee (section 1493.70(a)(3)), if this 
entity is other than the importer.

Section 1493.30 Information Required for Exporter Participation

    An exporter seeking to participate in the GSM-102 program would be 
required to submit with its application for program participation, 
pursuant to section 1493.30(a)(ii) and (iii), its Dun and Bradstreet 
(DUNS) number and its Employer Identification Number (EIN) issued by 
the Internal Revenue Service. The DUNS number would be utilized by CCC 
to report on entities that are awarded federal grants, loans, 
contracts, and other forms of assistance as required by the Federal 
Funding Accountability and Transparency Act (FFATA). CCC would utilize 
the EIN to confirm that the exporter, as a recipient of Federal 
financial assistance, does not owe an outstanding Federal nontax debt 
that is in delinquent status, consistent with the Debt Collection 
Improvement Act of 1996 and the associated requirements found in 31 CFR 
285.13.
    Pursuant to section 1493.30(a)(4), each exporter would be required 
to provide a description of the exporter's business. The exporter would 
also be required to advise CCC whether or not it meets the definition 
of a small or medium enterprise (SME), as defined on the FAS Web site. 
Although this information will not be utilized to determine an 
exporter's eligibility for program participation, CCC will utilize it 
to help target specific countries, regions and commodities under the 
program, and to track new-to-export businesses and the number of SMEs 
assisted by the program. This information will assist in justifying 
budgetary requests and targeting outreach efforts.
    Pursuant to section 1493.30(c), exporters that have previously 
qualified to participate but have not submitted an application for a 
payment guarantee for two consecutive fiscal years would be required to 
resubmit all information required for participation. This requirement 
will assist CCC in maintaining accurate exporter records.

Section 1493.40 Information Required for U.S. Financial Institution 
Participation and Section 1493.50 Information Required for Foreign 
Financial Institution Participation

    Under the proposed rule, these sections would be new provisions. 
Currently, requirements for U.S. and foreign financial institutions are 
specified on the FAS Web site; however, CCC has determined that these 
requirements are more appropriately addressed in the rulemaking 
process. Similar to the requirements for exporter participation, both 
U.S. and foreign financial institutions would be required to re-apply 
if they do not utilize the program for two consecutive fiscal years. 
U.S. financial institutions, like exporters, would be required to 
provide their DUNS and EIN numbers for purposes of compliance with 
FFATA and the Debt Collection Improvement Act of 1996.

Section 1493.60 Certifications Required for Program Participation

    This section would revise the certifications required of all 
exporters and U.S. and foreign financial institution program 
participants, to make them consistent with U.S. Government 
requirements. OMB Guidelines to Agencies on Government-wide Debarment 
and Suspension (Nonprocurement) (2 CFR 180.335) require all 
participants in the primary tier of a covered transaction to provide 
certain information to a Federal agency before entering into a 
transaction with that agency. Such required information would now be 
reflected in the certifications set forth in section 1493.60(a)(1) 
through (4). Proposed new certifications in section 1493.60(a)(5) 
through (7) would assist in meeting the requirements of 31 CFR 285.13 
(``Barring delinquent debtors from obtaining Federal loans or loan 
insurance or guarantees''). Exporters and U.S. and foreign financial 
institutions would certify that they do not have any outstanding nontax 
debt to

[[Page 44838]]

the United States that is in delinquent status, nor do any persons 
controlling or controlled by the applicant.
    Under the proposed rule, U.S. and foreign financial institutions 
would be required to make two additional certifications (section 
1493.60(b)) asserting their compliance with all regulatory requirements 
and U.S. anti-money laundering and terrorist financing statutes. The 
purpose of these certifications is to ensure that CCC is dealing only 
with responsible entities that are in compliance with all relevant U.S. 
laws and regulations.
    Exporters and U.S. and foreign financial institution program 
participants would also be required to re-assert these certifications 
when submitting documentation to CCC under this subpart.

Section 1493.80 Certification Requirements for Obtaining the Payment 
Guarantee

    The proposed rule sets forth a new certification at section 
1493.80(d) to require the exporter to confirm that the importer (and 
intervening purchaser, if applicable) in the transaction is not 
excluded or disqualified from participation in U.S. government programs 
through either the Excluded Parties List System (EPLS) or the Specially 
Designated Nationals list of the Office of Foreign Assets Control 
(OFAC) of the U.S. Department of the Treasury. These lists are defined 
(including Web site addresses) at sections 1493.20(m) and (cc), 
respectively, and contain individuals and entities that are not 
eligible to participate in U.S. government procurement and non-
procurement programs or are otherwise excluded based on applicable 
federal laws. Pursuant to 2 CFR 417.222(a), concerning U.S. Department 
of Agriculture nonprocurement debarment and suspension, ``the U.S. 
exporter or U.S. financial institution would be prohibited from 
entering into, at the first lower tier, an agreement with an importer 
(or intervening purchaser) or foreign bank * * * with an entity that 
appears on the EPLS as excluded or disqualified.'' To meet this 
requirement, and to ensure that the exporter or U.S. financial 
institution does not enter into a transaction with a prohibited entity 
on the OFAC list, the exporter must certify at the time of application 
that neither the importer nor intervening purchaser is excluded by 
either list. This will necessarily require the exporter to check both 
the EPLS and OFAC lists to ensure these entities are not listed.

Section 1493.90 Terms and Requirements of the Foreign Financial 
Institution Letter of Credit and Related Obligation

    Under the proposed rule, this section would be a new provision. In 
section 1493.90(a), CCC describes requirements applicable to the 
foreign financial institution letter of credit. In recent foreign 
financial institution defaults, CCC's ability to recover has, on 
occasion, been adversely affected because GSM-102 guaranteed debt was 
determined, in foreign jurisdictions of certain defaulting obligors, 
not to be ``trade finance'' and therefore subject to less favorable 
restructuring terms. In an attempt to bolster CCC's position in future 
restructurings, section 1493.90(a)(1) would now require the letter of 
credit to contain a specific statement describing the obligation as 
trade finance debt. Similar language has been adopted by export credit 
agencies in other countries that have faced similar treatment in recent 
foreign bank debt restructurings.
    Additionally, it has been necessary for CCC to accelerate claims 
payment to U.S. financial institutions and exporters so that CCC could 
negotiate restructuring terms for all GSM-102 debt directly with the 
foreign obligors. To ensure that there is no future issue affecting 
CCC's ability to accelerate claims payments, the letter of credit or 
related obligation would now be required to include an acceleration 
clause, as provided in section 1493.90(a)(2).
    CCC has determined that the documents submitted for payment under 
the foreign financial institution letter of credit and/or related 
obligation should be consistent with the requirements of such foreign 
financial institution letter of credit and/or related obligation, to 
ensure that the default was not based on failure to comply with the 
underlying terms of the sale. CCC has added this requirement in section 
1493.90(a)(3).

Section 1493.100 Terms and Requirements of the Payment Guarantee

    Several modifications have been made to this section in the 
proposed rule. The reference to ``final date to export'' has been 
converted to a definition and now appears in section 1493.20(q). CCC 
proposes to eliminate the ``grace period'' that currently extends this 
date one month past the contractual shipping deadline. Over the past 
several years, CCC has reduced the maximum shipping period allowed in 
an attempt to reduce the problem of exporters over-registering 
immediately after allocations are announced. By reducing the shipping 
period CCC hopes to maintain availability of allocations throughout the 
fiscal year, thus increasing program availability to all participants. 
In this context, CCC believes the one month grace period is 
unnecessary, and it would be eliminated.
    In section 1493.100(d), CCC proposes to limit reserve coverage to a 
maximum of five (5) percent of the transaction's port value to 
accommodate the upward loading tolerance. Exporters have increasingly 
been reserving coverage for larger amounts, which encumbers the 
allocation and reduces the amount available to other participants. 
Further, the delay in determining whether reserve coverage will be 
utilized or released back to the allocations creates delays in 
determining CCC's exact liability under a guarantee. Therefore, in 
addition to capping the amount of reserve coverage that will be 
granted, CCC proposes to require exporters to file an amendment to the 
payment guarantee to utilize such coverage within 15 calendar days of 
the last export under the payment guarantee. If such amendment is not 
filed within this timeframe, CCC would automatically cancel the reserve 
coverage.
    The proposed rule would add new section 1493.100(e) on ``Prohibited 
transactions.'' In general, these prohibitions follow the certification 
requirements found in section 1493.80. The purpose of this new section 
is to give additional legal recourse to CCC if an exporter violates any 
of the required certifications. CCC would specifically prohibit 
coverage of transactions that have already been guaranteed by CCC under 
another payment guarantee (section 1493.100(e)(6)). Although this 
prohibition is implicit in the current rule, CCC has determined to make 
such prohibition explicit. If a default were to occur under this 
scenario, CCC could receive identical claims for payment from multiple 
exporters or assignees. Section 1493.100(e)(6) is specifically intended 
to avoid this result.
    Section 1493.100(f) would institute a new requirement that the 
foreign financial institution letter of credit be issued within 30 
calendar days following the date of export under a payment guarantee. 
It has become an increasingly common practice under the GSM-102 Program 
for exporters to obtain a payment guarantee without a foreign financial 
institution letter of credit in place in connection with the sale for 
an extended period of time after exports have occurred. This is often 
an indication that an exporter has not confirmed that the foreign 
financial institution is willing to issue the letter

[[Page 44839]]

of credit underlying the transaction, and is instead submitting the 
registration to garner a portion of the allocation. CCC expects that 
prior to registering an export sale the exporter has worked with the 
importer and foreign financial institution on the details of the 
financing, even though the letter of credit may not be in place at that 
time. CCC has surveyed financial institutions on this issue and has 
determined that 30 calendar days from the date of export is a 
reasonable timeframe for issuance of the letter of credit. CCC would 
annul coverage for any exports where this requirement is not met.
    In response to the large number of amendment requests routinely 
submitted to CCC, section 1493.100(h) has been modified to permit CCC 
to charge a fee for amendments over and above the normal guarantee fee 
to offset the administrative costs of processing amendments. CCC also 
may, at its discretion, request documentation from the exporter to 
justify the amendment, with a view to reducing what CCC considers 
unwarranted amendment requests. Additionally, consistent with the new 
certification requirements related to the EPLS and OFAC lists, 
exporters (or their assignees) will be required to resubmit these 
certifications any time the payment guarantee is amended to change the 
foreign financial institution.

Section 1493.110 Guarantee Fees

    In response to the problems associated with high demand for certain 
GSM-102 country and region allocations, several participants have 
suggested that CCC implement a competitive process, akin to an auction, 
whereby exporters would be required to bid on coverage. CCC agrees that 
such a process may be an economically efficient way to allocate 
coverage when demand for coverage exceeds supply. Therefore, proposed 
section 1493.110(a)(2) would include this option for determining fees. 
If operational, details of this process would be made available on the 
FAS Web site. CCC could implement this option at its discretion and 
would notify participants via the FAS Web site if it chose to apply 
this optional method.
    CCC also proposes to modify its policy on fee refunds. Currently, 
once CCC advises an exporter of acceptance of its application(s) (prior 
to processing the applications and providing the exporter a GSM 
number), the exporter can determine not to utilize the coverage and CCC 
will refund the exporter's fees. It has become increasingly common for 
exporters to apply for coverage and then subsequently cancel large 
portions of their submitted applications. In such instances this 
coverage could have been utilized by other exporters, and CCC loses the 
opportunity to support additional export sales. In an attempt to 
curtail this practice, once CCC has notified an exporter that its 
application has been accepted, CCC will not refund the fees on such 
application if the exporter elects to withdraw it.

Section 1493.120 Assignment of the Payment Guarantee

    Under section 1493.120(c), assignees would now be required to make 
two certifications when submitting the notice of assignment: (1) The 
foreign financial institution is not excluded or otherwise disqualified 
from program participation, and (2) the information provided to CCC at 
the time of qualification as an assignee has not changed. The 
certification on the foreign financial institution found in section 
1493.120(c)(1) is consistent with the requirement of the exporter to 
make a similar certification related to the importer (see discussion of 
section 1493.80). Further, as is the case with the requirement for 
exporters, CCC believes it is appropriate that the U.S. financial 
institution certify with each assignment that the information and 
certifications provided to CCC at time of approval for participation 
are accurate.
    CCC proposes to modify some of the bases for a determination that a 
U.S. financial institution may be ineligible to receive assignment of a 
payment guarantee. The proposed rule would delete the current provision 
of section 1493.140(b)(1) that requires the financial institution to be 
in sound financial condition. The underlying statutory requirement 
imposing such ineligibility was repealed in the Federal Agriculture 
Improvement and Reform Act of 1996 (Pub. L. 104-127). CCC proposes to 
make a U.S. financial institution ineligible to receive an assignment 
if it does not meet the qualification requirements found in section 
1493.40(a) and certified in 1493.120(c)(2) at the time of the 
assignment.
    At the request of U.S. financial institution participants, CCC 
proposes to add a provision to allow the assignee (or exporter, if the 
payment guarantee is unassigned) to include obligations guaranteed by 
CCC in a repurchase agreement (section 1493.120(f) and as defined in 
section 1493.20(kk)). Permitting the sale of these obligations as part 
of a repurchase agreement would allow the assignee to temporarily 
improve its liquidity position and thus increase the amount of credit 
available for the assignee to support additional U.S. exports. Although 
CCC will not approve repurchase agreements, the assignee (or exporter) 
must notify CCC when CCC-guaranteed obligations are included in a 
repurchase agreement by supplying the information specified in section 
1493.120(f)(2). Failure of the assignee (or exporter) to comply with 
the requirements in section 1493.120(f) will result in CCC annulling 
coverage under the payment guarantee.

Section 1493.130 Evidence of Export

    CCC proposes to make several modifications to the requirements for 
evidence of export (EOE) reports. Several items that are currently 
contained in notices to participants have been incorporated into 
section 1493.130(a). CCC also proposes to add ``destination country'' 
as required information in the EOE. Collection of this information will 
provide CCC data on the specific countries to which GSM-102 commodities 
are shipped under regional programs, thus assisting in targeting of 
programming and prioritizing of CCC activities.
    The time limit for submission of EOE reports would be modified, and 
CCC proposes to add new rules regarding failure to submit EOEs on time. 
It has become increasingly important for CCC to receive EOEs in a 
timely manner for both budgetary and policy purposes. However, it has 
also become increasingly common for exporters to fail to submit EOEs 
within the timeframe specified in the current regulations. Therefore, 
CCC would now require that all EOEs be submitted to CCC within 10 
calendar days of the date of export (section 1493.130(b)(1)). CCC also 
proposes to add a requirement that the exporter must notify CCC no 
later than the final date to export if the exporter determines not to 
make any shipments under the payment guarantee (section 
1493.130(b)(2)). Because there are sometimes legitimate circumstances 
that prevent an exporter from meeting these filing deadlines, CCC 
proposes in section 1493.130(b)(3) to allow the exporter to request an 
extension of the filing deadline. Any extension must be requested prior 
to the filing deadline and must be accompanied by an explanation as to 
why the extension is needed.
    Given the importance of CCC receiving EOEs in a timely manner, CCC 
proposes to impose new consequences for failure to submit EOEs within 
the required timeframe. Under section 1493.130(c), exporters who do not 
submit EOE reports as required would be prohibited from receiving any 
new payment guarantees until they are fully

[[Page 44840]]

in compliance with the requirements of section 1493.130(b).

Section 1493.140 Certification Requirements for the Evidence of Export

    CCC proposes several changes to the certifications required with 
submission of the evidence of export report (EOE). The certification 
found in section 1493.90(b) of the current regulation, to attest that 
``agricultural commodities of the grade, quality and quantity called 
for in the exporter's contract with the importer have been exported to 
the country specified on the payment guarantee'' would be removed, and 
as noted in the explanation of section 1493.90, a requirement added 
that the commodity grade and quality specified in the foreign financial 
institution letter of credit be consistent with the commodity grade and 
quality specified in the firm export sales contract. CCC would also 
eliminate the certification currently in section 1493.90(c) specifying 
that ``a letter of credit has been opened in favor of the exporter by 
the foreign bank shown in the payment guarantee to cover the port value 
of the commodity exported.'' This certification often keeps exporters 
from submitting EOEs on time, if the letter of credit has not been 
opened and therefore the exporter cannot make this certification. CCC 
has removed this certification to avoid delays in submitting EOE 
reports. As explained previously, CCC proposes no longer to provide 
coverage of any exports where the foreign financial institution letter 
of credit is issued more than 30 calendar days after the date of export 
(section 1493.100(f)(3)). Given this new requirement, the certification 
related to the letter of credit would no longer be necessary.
    CCC proposes to add a new certification in section 1493.140(c): if 
the payment guarantee has not been assigned to an approved U.S. 
financial institution by the time of submission of the EOE, the 
exporter would be required to certify that the foreign financial 
institution issuing the letter of credit is not excluded or 
disqualified from participation in U.S. government programs through 
either the EPLS or OFAC Specially Designated Nationals (SDN) lists. 
There is no requirement for an exporter to assign the payment 
guarantee. Because this certification is required of the U.S. financial 
institution when submitting the notice of assignment, including it with 
the EOE certifications will ensure that this certification is made even 
when the exporter determines not to assign the payment guarantee.

Section 1493.160 Notice of Default

    CCC proposes to change the timeframe for the exporter or exporter's 
assignee to submit a notice of default (NOD) to CCC, reducing it from 
the current ten (10) calendar days to five (5) business days. By 
reducing this timeframe CCC hopes to mitigate the impact of any 
defaults, as the primary purpose of the NOD is to allow CCC to 
immediately prohibit additional transactions with the foreign financial 
institution in default. CCC also proposes to require two additional 
pieces of information with the notice of default: (1) A copy of the 
foreign financial institution's repayment schedule (section 
1493.160(a)(5)) and (2) any correspondence with the foreign financial 
institution regarding the default (section 1493.160(a)(7)). The 
repayment schedule will give CCC an accurate accounting of when future 
payments are coming due (and hence, when additional defaults may be 
expected), and the correspondence may provide CCC additional 
information that is helpful in restructuring the debt with the 
defaulting institution.
    Under the proposed rule, CCC would add new section 1493.160(c), 
``Impact of a default on other existing payment guarantees.'' The 
existing regulation is silent on potential CCC actions related to 
outstanding payment guarantees once a foreign financial institution 
defaults. As a result, exporters may obtain a letter of credit or 
continue to export under an existing guarantee even after the foreign 
financial institution issuing the letter of credit has defaulted, thus 
potentially increasing CCC's exposure. The proposed rule therefore 
would prescribe a specific policy that CCC will notify the impacted 
exporters and withdraw coverage of any shipments that occur after the 
exporter receives this notification where the letter of credit has been 
or will be issued by the defaulting foreign financial institution. The 
exporter will be given the option to find another foreign financial 
institution to issue a letter of credit for the balance of the 
guarantee, or CCC would cancel that portion of the guarantee allocable 
to unshipped amounts and refund that portion of the guarantee fee to 
the exporter.

Section 1493.170 Claims for Default

    As would similarly be required in conjunction with a notice of 
default, CCC also proposes to require, under section 1493.170(a)(3), a 
copy of the foreign financial institution's repayment schedule as a 
claims document. Under section 1493.170(a)(4), CCC would also require 
the claimant to provide a description of any payments received prior to 
claim and any insurance proceeds, securities or collateral arrangements 
that may be realized upon that are in any way associated with the debt 
with respect to which the claim is filed. Because any such payments or 
instruments are deemed recoveries and must be remitted to CCC for pro-
rata sharing, CCC proposes to require them to be declared concurrently 
with submission of any claim.
    Proof of entry, as defined in section 1493.150, would be added as a 
required claims document. Although CCC already has the authority to 
request proof of entry documentation from the exporter, the 
proliferation of regional programs under GSM-102 has raised concerns as 
to the entry point of the commodities covered by the payment guarantee. 
Rather than request this documentation from exporters on an ad hoc 
basis, CCC proposes to require it with all submitted claims. Failure to 
demonstrate proof of entry into the country or region specified on the 
payment guarantee would result in denial of the claim by CCC.
    CCC also proposes to add new section 1493.170(b), ``Additional 
documents.'' At times, the required claims documents may not provide 
sufficient information for CCC to determine that a claim is in ``good 
order,'' and the claim may therefore be denied. This provision would 
give the exporter or the exporter's assignee the right to submit 
additional documentation to CCC to support a claim if the claim has 
been denied.

Section 1493.180 Payment for Default

    In section 1493.180(b), CCC would clarify that its liability with 
respect to any defaulted payments will be reduced by any payments 
received or funds realized from insurance, security or collateral 
arrangements prior to claim by the exporter or the exporter's assignee. 
Although this is inherent under the current terms of the guarantee, it 
is not specifically stated in the current regulation.
    In section 1493.180(c), CCC proposes to modify the time requirement 
for making claims payments. The proposed rule would allow CCC 15 
business days (from the date of receiving a claim in good order) to 
make a claim payment before late interest would begin to accrue in 
favor of the exporter or the exporter's assignee. Upon receipt of a 
claim, CCC must review all of the claims documents to ensure they are 
compliant with the program regulations; enter the claims data into 
CCC's GSM System; provide final claims documents to a CCC Certifying 
Officer for review and

[[Page 44841]]

certification; and disburse the payment to the claimant. It is not 
possible for CCC to complete all of these tasks within the one day 
currently required in the regulations--resulting in payment of late 
interest by CCC on every claim. The U.S. Office of Management and 
Budget's final rule on, and codification of, Prompt Payment Act 
regulations (5 CFR Part 1315), only requires, unless otherwise 
specified, Federal agencies to pay their bills within 30 days of the 
date of receipt of a proper invoice.
    CCC proposes to modify the provision on accelerated payments in 
section 1493.180(d). In order for CCC to accelerate a claim payment to 
the exporter or assignee, the exporter or assignee must accelerate the 
payments due from the foreign financial institution and file all claims 
documents required in section 1493.170(a). Although this is currently 
understood and practiced by claimants, CCC believes it is appropriate 
to specify these requirements as part of the regulation.

Section 1493.190 Recovery of Defaulted Payments

    In section 1493.190(b), CCC proposes to exclude from the meaning of 
the term ``recoveries'' the transfer of funds between CCC, the exporter 
and the exporter's assignee. Under certain circumstances, the U.S. 
financial institution taking assignment of the GSM-102 payment 
guarantee may be unwilling to take risk on the uncovered portion of the 
transaction. As a result, under such circumstances, the exporter may 
retain this risk. The current regulation, by use of the phrase ``or any 
source whatsoever,'' dictates that the flow of funds between the 
exporter and the assignee under such an arrangement must occur prior to 
a default, because any transfer of funds after a default is considered 
a ``recovery.''
    CCC's primary interest is in maintaining a risk-share partner in 
the GSM-102 transaction such that either the exporter or exporter's 
assignee carries the risk for the uncovered portion of the export sale. 
It is irrelevant to CCC when any proceeds are shared between these 
parties. Therefore, CCC proposes to add a clarification that payments 
between CCC, the exporter, or the exporter's assignee are not 
considered recoveries and therefore need not be paid to CCC. This 
change would allow the exporter and the assignee greater flexibility in 
structuring the transaction between themselves in instances where the 
assignee does not wish to take risk on the uncovered portion of the 
transaction.
    Consistent with the proposed new section 1493.170(a)(4), which 
would require the claimant to provide a description of any payments 
received prior to claim or any insurance, securities or collateral 
arrangements that may be realized upon that are in any way associated 
with the debt with respect to which the claim is filed. CCC proposes to 
clarify in section 1493.190(b)(1) that any monies derived through 
payments of insurance or the liquidation of any securities or 
collateral are also considered recoveries and must be paid to CCC.
    CCC has added examples of what actions by the exporter or the 
exporter's assignee constitute ``cooperation'' in recoveries in section 
1493.190(f). Although these actions are not precluded under the current 
regulation, they have been added in the proposed rule to provide 
exporters and assignees an illustration of possible cooperative efforts 
that may be required of participants in the course of recoveries.

Section 1493.200 Dispute Resolution and Appeals

    CCC proposes to add this new section. As previously noted, the 
proposed rule would clarify instances throughout the regulation in 
which the Director of the Credit Programs Division, FAS, is authorized 
to make determinations with respect to the GSM-102 program. In 
conjunction with this change, CCC proposes to add specific procedures 
pursuant to which program participants may appeal decisions made by the 
Director. In addition to affording specific appeal rights to 
participants, this section also specifies certain responsibilities of 
participants during and after the appeal process. The addition of these 
procedures will provide clarity to participants regarding their rights 
to appeal adverse decisions.

Executive Order 12866

    This proposed rule is issued in conformance with Executive Order 
12866. It has been determined to be not significant for the purposes of 
Executive Order 12866 and was not reviewed by OMB. A cost-benefit 
assessment of this rule was not completed.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988. This rule would not preempt State or local laws, regulations, or 
policies unless they present an irreconcilable conflict with this rule. 
Before any judicial action may be brought concerning the provisions of 
this rule, the appeal provisions of 7 CFR 1493.200 would need to be 
exhausted. This rule would not be retroactive.

Executive Order 12372

    This program is not subject to Executive Order 12372, which 
requires intergovernmental consultation with State and local officials. 
See the notice related to 7 CFR Part 3015, subpart V, published at 48 
FR 29115 (June 24, 1983).

Executive Order 13132

    This proposed rule has been reviewed under Executive Order 13132, 
``Federalism.'' The policies contained in this proposed rule do not 
have any substantial direct effect on States, on the relationship 
between the Federal government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
nor does this proposed rule impose substantial direct compliance costs 
on State and local governments. Therefore, consultation with the States 
is not required.

Executive Order 13175

    The United States has a unique relationship with Indian Tribes as 
provided in the Constitution of the United States, treaties, and 
Federal statutes. On November 5, 2009, President Obama signed a 
Memorandum emphasizing his commitment to ``regular and meaningful 
consultation and collaboration with tribal officials in policy 
decisions that have tribal implications including, as an initial step, 
through complete and consistent implementation of Executive Order 
13175.'' This proposed rule has been reviewed for compliance with E.O. 
13175 and CCC worked directly with the Office of Tribal Relations in 
the rule's development. The policies contained in this proposed rule do 
not have tribal implications that preempt tribal law.

Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
CCC is not required by 5 U.S.C. 553 or any other law to publish a 
notice of proposed rulemaking with respect to the subject matter of 
this rule.

Environmental Assessment

    CCC has determined that this proposed rule does not constitute a 
major State or Federal action that would significantly affect the human 
or natural environment. Consistent with the National Environmental 
Policy Act (NEPA), 40 CFR 1502.4, ``Major Federal Actions Requiring the 
Preparation of Environmental Impact Statements'' and

[[Page 44842]]

the regulations of the Council on Environmental Quality, 40 CFR Parts 
1500-1508, no environmental assessment or environmental impact 
statement will be prepared.

Unfunded Mandates

    This proposed rule does not impose any enforceable duty or contain 
any unfunded mandate as described under Title II of the Unfunded 
Mandates Reform Act of 1995 (UMRA). Therefore, this rule is not subject 
to the requirements of sections 202 and 205 of UMRA.

Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995, CCC is 
requesting comments from all interested individuals and organizations 
on a proposed revision to the currently approved information collection 
for this program. This revision includes the proposed change in 
information collection activities related to the regulatory changes in 
this proposed rule.
    Title: CCC Export Credit Guarantee Program (GSM-102).
    OMB Control Number: 0551-0004.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: This information collection is required to support the 
existing regulations and proposed changes to 7 CFR Part 1493, subpart 
B, ``CCC Export Credit Guarantee (GSM-102) Program Operations,'' which 
establishes the requirements for participation in CCC's GSM-102 
program. This revised collection incorporates the additional estimated 
burden to program participants as a result of certain new requirements 
in this proposed rule for (1) Exporter, U.S. and foreign financial 
institution qualification; (2) applications for payment guarantees; (3) 
notices of assignment; (4) repurchase agreements; (5) evidence of 
export reports; (6) submission of claims for default; and (7) appeals. 
This revision also reflects an increase in program activity since the 
last approval. This information collection is necessary for CCC to 
manage, plan and evaluate the program and to ensure the proper and 
judicious use of government resources.
    Estimate of Burden: The public reporting burden for this collection 
of information is estimated to average 0.47 hours per response.
    Respondents: U.S. exporters, U.S. financial institutions, and 
foreign financial institutions.
    Estimated Number of Respondents: 180 per year.
    Estimated Number of Responses per Respondent: 40 per year.
    Estimated Total Annual Burden on Respondents: 3,377 hours.
    Comments on this information collection may be submitted to CCC in 
accordance with the instructions for submitting comments to this 
proposed rule. All comments received in response to this notice will be 
a matter of public record.

E-Government Act Compliance

    CCC is committed to complying with the E-Government Act to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services and for other purposes. The forms, regulations, and other 
information collection activities required to be utilized by a person 
subject to this rule are available at: https://www.fas.usda.gov.

Title 7--Agriculture

List of Subjects in 7 CFR Part 1493

    Agricultural commodities, Exports.

    For the reasons stated in the preamble, CCC proposes to amend 7 CFR 
Part 1493 as follows:

PART 1493--CCC EXPORT CREDIT GUARANTEE PROGRAMS

    1. The authority citation for 7 CFR Part 1493 continues to read as 
follows:

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

    2. Subpart A is revised to read as follows:
Subpart A--Restrictions and Criteria for Export Credit Guarantee 
Program
Sec.
1493.1 General statement.
1493.2 Purposes of programs.
1493.3 Restrictions on programs and cargo preference statement.
1493.4 Criteria for country and regional allocations.
1493.5 Criteria for agricultural commodity allocations.

Subpart A--Restrictions and Criteria for Export Credit Guarantee 
Programs


Sec.  1493.1  General statement.

    This subpart sets forth the restrictions that apply to the issuance 
and use of payment guarantees under the Commodity Credit Corporation 
(CCC) Export Credit Guarantee (GSM-102) Program and Facility Guarantee 
Program (FGP), the criteria considered by CCC in determining the annual 
allocations of payment guarantees to be made available with respect to 
each participating country and region, and the criteria considered by 
CCC in the review and approval of proposed allocation levels for 
specific U.S. agricultural commodities to these countries and regions.


Sec.  1493.2  Purposes of programs.

    CCC may use payment guarantees:
    (a) To increase exports of U.S. agricultural commodities and expand 
access to trade finance;
    (b) To compete against foreign agricultural exports;
    (c) To assist countries, particularly developing countries and 
emerging markets, in meeting their food and fiber needs;
    (d) To establish or improve facilities and infrastructure in 
emerging markets to expand exports of U.S. agricultural commodities; 
and
    (e) For such other purposes as the Secretary of Agriculture 
determines appropriate.


Sec.  1493.3  Restrictions on programs and cargo preference statement.

    (a) Restrictions on use of payment guarantees. (1) Payment 
guarantees authorized under these regulations shall not be used for 
foreign aid, foreign policy, or debt rescheduling purposes.
    (2) CCC shall not make payment guarantees available in connection 
with sales of agricultural commodities to any country that the 
Secretary determines cannot adequately service the debt associated with 
such sales.
    (b) Cargo preference laws. The provisions of the cargo preference 
laws do not apply to export sales with respect to which payment 
guarantees are issued under this program.


Sec.  1493.4  Criteria for country and regional allocations.

    The criteria considered by CCC in reviewing proposals for country 
and regional allocations will include, but not be limited to, the 
following:
    (a) Potential benefits that the extension of payment guarantees 
would provide for the development, expansion, or maintenance of the 
market for particular U.S. agricultural commodities in the importing 
country;
    (b) Financial and economic ability and/or willingness of the 
country whose financial institution obligation is guaranteed by CCC 
(``country of obligation'') to adequately service CCC guaranteed debt;
    (c) Financial status of participating financial institutions in the 
country of obligation as it would affect their ability to adequately 
service CCC guaranteed debt;
    (d) Political stability of the country of obligation as it would 
affect its ability

[[Page 44843]]

and/or willingness to adequately service CCC guaranteed debt; and
    (e) Current status of debt either owed by the country of obligation 
or by the participating foreign financial institutions to CCC or to 
lenders protected by CCC's guarantees.


Sec.  1493.5  Criteria for agricultural commodity allocations.

    The criteria considered by CCC in determining U.S. commodity 
allocations within a specific country or regional allocation will 
include, but not be limited to, the following:
    (a) Potential benefits that the extension of payment guarantees 
would provide for the development, expansion or maintenance of the 
market in the importing country for the particular U.S. agricultural 
commodity under consideration;
    (b) The best use to be made of the payment guarantees in assisting 
the importing country in meeting its particular needs for food and 
fiber, as may be determined through consultations with private buyers 
and/or representatives of the government of the importing country;
    (c) Evaluation, in terms of program purposes, of the relative 
benefits of providing payment guarantee coverage for sales of the U.S. 
agricultural commodity under consideration compared to providing 
coverage for sales of other U.S. agricultural commodities.
    3. Subpart B is revised to read as follows:
Subpart B--CCC Export Credit Guarantee (GSM-102) Program Operations
Sec.
1493.10 General statement.
1493.20 Definition of terms.
1493.30 Information required for exporter participation.
1493.40 Information required for U.S. financial institution 
participation.
1493.50 Information required for foreign financial institution 
participation.
1493.60 Certification requirements for program participation.
1493.70 Application for payment guarantee.
1493.80 Certification requirements for obtaining payment guarantee.
1493.90 Terms and requirements of the foreign financial institution 
letter of credit and related obligation.
1493.100 Terms and requirements of the payment guarantee.
1493.110 Guarantee fees.
1493.120 Assignment of the payment guarantee.
1493.130 Evidence of export.
1493.140 Certification requirements for the evidence of export.
1493.150 Proof of entry.
1493.160 Notice of default.
1493.170 Claims for default.
1493.180 Payment for default.
1493.190 Recovery of defaulted payments.
1493.192 Dispute resolution and appeals.
1493.195 Miscellaneous provisions.

Subpart B--CCC Export Credit Guarantee Program (GSM-102) Operations


Sec.  1493.10  General statement.

    (a) Overview. This subpart contains the regulations governing the 
operations of the Export Credit Guarantee (GSM-102) Program. The GSM-
102 program of the Commodity Credit Corporation (CCC) was developed to 
expand U.S. agricultural exports by making available payment guarantees 
to encourage U.S. private sector financing of foreign purchases of U.S. 
agricultural commodities on credit terms. The payment guarantee issued 
under GSM-102 is an agreement by CCC to pay the exporter, or the U.S. 
financial institution that may take assignment of the payment 
guarantee, specified amounts of principal and interest in case of 
default by the foreign financial institution that issued the letter of 
credit for the export sale covered by the payment guarantee. Under GSM-
102, payment guarantees are issued for terms of up to three years. The 
program operates in a manner intended not to interfere with markets for 
cash sales and is targeted toward those countries that have sufficient 
financial strength so that foreign exchange will be available for 
scheduled payments. In providing this program, CCC seeks to expand and/
or maintain market opportunities for U.S. agricultural exporters and 
assist long-term market development for U.S. agricultural commodities.
    (b) Program administration. The GSM-102 program will be 
administered under the direction of the General Sales Manager and Vice 
President, CCC, pursuant to this part and any Program Announcements 
issued by CCC pursuant to, and not inconsistent with, this part. From 
time to time, CCC may issue a Notice to Participants on the FAS Web 
site reminding participants of the requirements of this subpart, or 
clarifying provisions of this subpart. Information regarding specific 
points of contact for the public, including names, addresses, and 
telephone and facsimile numbers of particular USDA or CCC offices, will 
be available on the Foreign Agricultural Service (FAS) Web site.
    (c) Country and regional program announcements. From time to time, 
CCC will issue a Program Announcement on the FAS Web site to announce a 
GSM-102 program for a specific country or region. The Program 
Announcement for a country or region will designate specific U.S. 
agricultural commodities or products thereof, or designate that all 
eligible commodities are available under the announcement. The Program 
Announcement will contain any requirements applicable to that country 
or region as determined by CCC.


Sec.  1493.20  Definition of terms.

    Terms set forth in this part, on the FAS Web site (including in 
Program Announcements and Notices to Participants), and in any CCC-
originated documents pertaining to the GSM-102 program will have the 
following meanings:
    (a) Affiliate. Entities or persons are affiliates of each other if, 
directly or indirectly, either one controls or has the power to control 
the other or a third person controls or has the power to control both. 
Control may include, but is not limited to: interlocking management or 
ownership; identity of interests among family members; shared 
facilities and equipment; common use of employees; or a business entity 
which has been organized following the exclusion of a person from 
eligibility to enter into certain procurement or non-procurement 
transactions with the U.S. Government that has the same or similar 
management, ownership, or principal employees as the excluded person.
    (b) Assignee. A U.S. financial institution that has obtained the 
legal right to make claim and receive the payment of proceeds under the 
payment guarantee.
    (c) Business day. Days during which employees of the U.S. 
Department of Agriculture in the Washington, DC., metropolitan area are 
on official duty during normal business hours.
    (d) CCC. The Commodity Credit Corporation, an agency and 
instrumentality of the United States within the Department of 
Agriculture, authorized pursuant to the Commodity Credit Corporation 
Charter Act (15 U.S.C. 714 et seq.), further specifically authorized to 
carry out the GSM-102 Program pursuant to section 202 of the 
Agricultural Trade Act of 1978, as amended, and subject to the general 
supervision and direction of the Secretary of Agriculture.
    (e) CCC late interest. Interest payable by CCC pursuant to Sec.  
1493.180(c).
    (f) Cost and Freight (CFR). A customary trade term, as defined by 
the International Chamber of Commerce, Incoterms (current revision), 
indicating that the seller delivers when the goods pass the ship's rail 
in the port of shipment, and the seller pays the cost and freight 
necessary to bring the goods to the named port of destination.

[[Page 44844]]

    (g) Cost Insurance and Freight (CIF). A customary trade term, as 
defined by the International Chamber of Commerce, Incoterms (current 
revision), indicating that the seller delivers when the goods pass the 
ship's rail in the port of shipment, and the seller pays the cost and 
freight necessary to bring the goods to the named port of destination, 
as well as the marine insurance.
    (h) Date of export. One of the following dates, depending upon the 
method of shipment: the on-board date of an ocean bill of lading or the 
on-board ocean carrier date of an intermodal bill of lading; the on-
board date of an airway bill; or, if exported by rail or truck, the 
date of entry shown on an entry certificate or similar document issued 
and signed by an official of the Government of the importing country.
    (i) Date of sale. The earliest date on which a firm export sales 
contract exists between the exporter, or an intervening purchaser, if 
applicable, and the importer.
    (j) Director. The Director, Credit Programs Division, Office of 
Trade Programs, Foreign Agricultural Service, or designee.
    (k) Discounts and allowances. Any consideration provided directly 
or indirectly, by or on behalf of the exporter or an intervening 
purchaser, to the importer in connection with a sale of an agricultural 
commodity, above and beyond the commodity's value, stated on the 
appropriate FOB, FAS, CFR or CIF basis. Discounts and allowances 
include, but are not limited to, the provision of additional goods, 
services or benefits; the promise to provide additional goods, services 
or benefits in the future; financial rebates; the assumption of any 
financial or contractual obligations; commissions where the buyer 
requires the exporter to employ and compensate a specified agent as a 
condition of concluding the export sale; the whole or partial release 
of the importer from any financial or contractual obligations; or 
settlements made in favor of the importer for quality or weight.
    (l) Eligible interest. The amount of interest that CCC agrees to 
pay the exporter or the exporter's assignee in the event that CCC pays 
a claim for default of ordinary interest. Such amount of interest that 
CCC agrees to pay equals the lesser of:
    (1) The amount calculated using the interest rate specified between 
the exporter or exporter's assignee and the foreign financial 
institution; or
    (2) The amount calculated using the specified percentage of the 
Treasury bill investment rate set forth on the face of the payment 
guarantee.
    (m) EPLS (Excluded Parties List System). The electronic version of 
the Lists of Parties Excluded from Federal Procurement and 
Nonprocurement Programs, which identifies those parties excluded 
throughout the U.S. Government (unless otherwise noted) from receiving 
Federal contracts or certain subcontracts and excluded from certain 
types of Federal financial and nonfinancial assistance and benefits. 
The EPLS can be found at www.epls.gov.
    (n) Exported value. (1) Where CCC announces coverage on a FAS or 
FOB basis and:
    (i) Where the commodity is sold on a FAS or FOB basis, the value, 
FAS or FOB basis, U.S. point of export, of the export sale, reduced by 
the value of any discounts or allowances granted to the importer in 
connection with such sale; or
    (ii) Where the commodity was sold on a CFR or CIF basis, point of 
entry, the value of the export sale, FAS or FOB, point of export, is 
measured by the CFR or CIF value of the agricultural commodity less the 
cost of ocean freight, as determined at the time of application and, in 
the case of CIF sales, less the cost of marine and war risk insurance, 
as determined at the time of application, reduced by the value of any 
discounts or allowances granted to the importer in connection with the 
sale of the commodity; or
    (2) Where CCC announces coverage on a CFR or CIF basis, and where 
the commodity is sold on a CFR or CIF basis, point of entry, the total 
value of the export sale, CFR or CIF basis, point of entry, reduced by 
the value of any discounts or allowances granted to the importer in 
connection with the sale of the commodity.
    (3) When a CFR or CIF commodity export sale involves the 
performance of non-freight services to be performed outside the United 
States (e.g., services such as bagging bulk cargo) which are not 
normally included in ocean freight contracts, the value of such 
services and any related materials not exported from the U.S. with the 
commodity must also be deducted from the CFR or CIF sales price in 
determining the exported value.
    (o) Exporter. A seller of U.S. agricultural commodities or products 
thereof that is both qualified in accordance with the provisions of 
Sec.  1493.30 and the applicant for the payment guarantee.
    (p) FAS Web site. Location of information related to the GSM-102 
program, including program announcements, press releases, notices to 
participants, program contact information, eligible U.S. and foreign 
financial institutions, eligible commodities, etc. The Web site also 
provides details on where and by what method participants may submit 
documentation required by this subpart. The current Web site is https://www.fas.usda.gov/excredits/exp-cred-guar-new.asp.
    (q) Final date to export. The final allowable date to export as 
shown on the payment guarantee.
    (r) Firm export sales contract. The written sales contract entered 
into between the exporter and the importer (or, if applicable, the 
written sales contracts between the exporter and the intervening 
purchaser and the intervening purchaser and the importer) which sets 
forth the terms and conditions of a sale of the eligible commodity from 
the exporter to the importer (or, if applicable, the sale of the 
eligible commodity from the exporter to the intervening purchaser and 
the intervening purchaser and the importer). Written evidence of a sale 
may be in the form of a signed sales contract, a written offer and 
acceptance between parties, or other documentary evidence of sale. The 
written evidence of sale for the purposes of the GSM-102 program must, 
at a minimum, document the following information: The eligible 
commodity, quantity, quality specifications, delivery terms (FOB, C&F, 
etc.) to the eligible country or region, delivery period, unit price, 
payment terms, date of sale, and evidence of agreement between buyer 
and seller. The sales contract between the exporter and the importer 
(or, if applicable, between the exporter and the intervening purchaser 
and between the intervening purchaser and the importer) may be 
conditioned upon CCC's approval of the exporter's payment guarantee 
application.
    (s) Foreign financial institution. A financial institution:
    (1) Organized under the laws of a jurisdi