Market Access Program, 29474-29514 [2012-11601]

Download as PDF 29474 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations (braille, large print, audiotape, etc.) should contact the USDA TARGET Center at (202) 720–2600 (Voice and TDD). SUPPLEMENTARY INFORMATION: DEPARTMENT OF AGRICULTURE Commodity Credit Corporation 7 CFR Part 1485 RIN 0551–AA72 Market Access Program Foreign Agricultural Service and Commodity Credit Corporation, USDA. ACTION: Final rule. AGENCY: This final rule revises and amends the regulation used to administer the Market Access Program (MAP) by updating and merging the application requirements and the activity plan requirements to reflect the Unified Export Strategy (UES) system currently in place; clarifying the eligibility of activities designed to address international market access issues; modifying the list of eligible and ineligible contributions; revising the portions of the regulation regarding evaluations, contracting procedures, and the compliance review and appeals process; eliminating the Export Incentive Program/Market Access Program (EIP/MAP) as a separate subcomponent; and making other administrative changes for clarity and program integrity. This final rule adopts the substantive provisions of the proposed rule published September 8, 2009, revising and amending MAP regulations, with changes made to reflect public comments to the proposed rule. DATES: Effective Date: This rule is effective May 17, 2012. Applicability Date: This regulation will become applicable for each MAP participant at the beginning of the MAP participant’s 2013 program year (i.e., 01/01/2013 or 07/01/2013). FOR FURTHER INFORMATION CONTACT: Mark Slupek, 202–720–1169, U.S. Department of Agriculture, Foreign Agricultural Service, Office of Trade Programs, Program Operations Division, Portals Office Building, Suite 400, 1250 Maryland Avenue SW., Washington, DC 20024; or by phone: (202) 720–4327; or by fax: (202) 720–9361; or by email: podadmin@fas.usda.gov. The U. S. Department of Agriculture (USDA) prohibits discrimination in its programs on the basis of race, color, national origin, sex, religion, sexual orientation, age, disability, political beliefs and marital or familial status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information mstockstill on DSK6TPTVN1PROD with RULES2 SUMMARY: VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 Executive Order 12866 This 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 the Office of Management and Budget. 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 does not preempt State or local laws, regulations, or policies unless they present an irreconcilable conflict with this rule. 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 13175 This rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000) that will preempt Tribal law. Executive Order 13132 This rule does 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 rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with the States was not required. Regulatory Flexibility Act The Regulatory Flexibility Act does not apply to this rule because Commodity Credit Corporation (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 the rule. Environmental Assessment CCC has determined that this 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 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 (NEPA), no environmental assessment or environmental impact statement will be prepared. Unfunded Mandates Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does not apply to this rule because it does not impose any enforceable duty or contain any unfunded mandate as described under the UMRA. Paperwork Reduction Act of 1995 In accordance with the Paperwork Reduction Act of 1995, FAS has previously received approval from OMB with respect to the information collection required to support this program. The information collection is described below: Title: Foreign Market Development Program (FMD) and Market Access Program (MAP); OMB Control Number: 0551–0026. The current OMB approval of this information collection is scheduled to expire on August 31, 2012. Consequently, CCC will submit a request to OMB under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., for the continued use of this information collection. CCC’s request will reflect changes to the new paperwork collection requirements that were made in the final rule in response to public comments. A separate Notice of Request for Extension and Revision of Currently Approved Information Collection for the Market Access Program will be published in the Federal Register for comment. E-Government Act Compliance CCC is committed to complying with the E-Government Act to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services and for other purposes. The forms, regulations, and other information collection activities required to be utilized by a person subject to this rule are available at: http://www.fas.usda.gov. Background Section 203 of the Agricultural Trade Act of 1978, as amended, directs CCC to carry out a program to encourage the development, maintenance, and expansion of commercial export markets for agricultural commodities through cost-share assistance to eligible trade organizations. Such assistance may be provided in the form of CCC funds or CCC-owned commodities. Since the inception of the MAP, CCC has monitored the program closely, E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations strengthened program controls, and implemented changes to improve the effectiveness of the program. In administering the program, CCC is committed to ensuring efficient and effective use of public funds. In this regard, CCC considers an applicant’s need for Federal financial assistance, an applicant’s use of rigorous performance measurements in its plans, and increasing contribution levels from Participants as important factors in the overall management of the MAP. Summary and Analysis of Comments On May 23, 2007, the CCC published an advance notice of proposed rulemaking and public hearing in the Federal Register (72 FR 28901). This notice was intended to solicit comments on whether to amend and revise the current MAP regulations. In addition, CCC held a public hearing on July 25, 2007, to receive oral and written comments. On September 8, 2009 (74 FR 46027), a proposed rule was published governing the operations of MAP. CCC received nearly 1,300 comments from nonprofit U.S. trade associations, U.S. companies, state organizations, regional trade associations, Participants, and consulting firms in response to the proposed rule. Following is a summary of the comments that specifically address the proposed rule and CCC’s responses to these comments. General comments relating to the value of the program, editorial suggestions, and nonsubstantive comments have been omitted. Sec. 1485.10 General Purpose & Scope mstockstill on DSK6TPTVN1PROD with RULES2 Policy Clarifications CCC received 164 comments on this section. Comment: Nineteen respondents expressed their concern with regard to whether previous policy clarifications will remain in effect or if the new MAP regulation will supersede the policy clarifications currently in effect. The respondents asked for clarification on this and stated that if previous policy clarifications remain in effect, that the notices should be incorporated into the new regulation. Response: CCC understands that the commenters are referring to the ‘‘Market Access Program notices’’ available at http://www.fas.usda.gov/mos/programs/ mnotice.html. CCC issues these MAP notices for informational purposes. These notices have no legal effect. They are intended to alert MAP Participants of various aspects of CCC’s administration of the MAP program. For example, CCC issues MAP notices to VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 alert MAP Participants of procedures for requesting advances, applicable federal pay scale rates, lists of economic and trade sanctions against certain foreign countries, reporting formats and computer codes to use with the UES. The content of some MAP notices were already codified in the proposed rule. In response to the commenters, CCC has incorporated into the final rule several additional MAP notices that CCC has judged to be more substantive in nature. Those MAP notices that have been so codified will be deleted from the FAS Web site. CCC will remove certain other of the remaining MAP notices that are now obsolete or inconsistent with the final rule before or concurrent with the final rule’s effective date. The remaining MAP notices will continue to be available on the Web site for informational purposes and reflect details related to CCC’s current administration of the MAP program. Comment: One respondent stated that although domestic travel is not addressed in the new MAP regulation, this is one area with respect to which a policy clarification exists. Fourteen additional comments were made regarding E-ticketing and internet purchasing of tickets (not through a travel agency). The respondents stated that this is an area that was previously covered by a policy clarification but is not covered in the new regulation; so the question whether previous policy clarifications will remain in effect or if the new MAP regulation will supersede the policy clarifications applies here as well. Response: Domestic travel was addressed in a limited fashion in the proposed rule at § 1485.17(c)(25), which would have allowed, inter alia, reimbursement, solely in connection with generic promotion, only of domestic travel expenditures associated with meetings of international organizations conducted in the United States. In response to the comment, however, CCC has addressed domestic travel more extensively in several new subsections of § 1485.17(c). New § 1485.17(c)(24) lays out the conditions under which domestic travel related to international retail, trade and consumer exhibits and shows conducted in the United States can be reimbursed. New § 1485.17(c) (25) allows reimbursement for domestic travel for seminars and educational training conducted in the United States. New § 1485.17(c) (26) allows reimbursement of domestic travel expenditures of certain individuals accompanying foreign trade missions or PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 29475 technical teams while traveling in the United States. This change codifies MAP Notice 06–002. MAP Notice 06– 002 will be removed from FAS’ Web site. CCC has decided to eliminate the provision allowing reimbursement of domestic travel expenditures for a MAP Participant’s attendance at meetings of international technical organizations when such meetings are conducted in the United States. These provisions are discussed in more detail in a later response. Domestic travel expenditures are not reimbursable for brand promotion activities. The comments regarding E-ticketing and internet purchase of tickets appear to refer to MAP Notice 02–004. This notice reminds MAP Participants that the reimbursement of allowable travel expenses when using E-Tickets is subject to the availability of sufficient documentation to support the expenses, as is the case with all travel expenses. The notice provides examples of information that such documentation must include, such as the complete routing codes (i.e., layover and flight information for each segment of a trip in which a change of airplane or flight designation is made) and the fare amount charged (i.e., point-to-point faring). The notice also informs MAP Participants that reimbursable travel expenditures include associated reasonable and common fees that travel agents or other ticketing sources may charge for providing E-Ticket itineraries, invoices and/or receipts. The MAP final rule now sets broad guidance on the reimbursement of a MAP Participant’s domestic travel. CCC believes the final rule’s provisions provide sufficient guidance to MAP Participants and does not believe it necessary to codify MAP Notice 02–004’s explanation of the particulars of program administration. MAP Notice 02–004 shall remain on the FAS Web site for informational purposes. Comment: Six respondents asked for further clarification on the types of activities in the U.S. that are reimbursable. Response: In response to the comments, CCC has made a clarification to § 1485.10(c) that, to be reimbursable, all activities that occur in the United States must develop, maintain, or expand the commercial export market for the relevant U.S. agricultural commodity in accordance with the MAP Participant’s approved MAP program. Comment: Fourteen respondents recommended that the threshold in the regulations for Miscellaneous/Fixed Asset Category be raised to $500 and E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29476 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations proposed that software be subject to the same threshold as fixed assets. Response: These comments refer to a threshold in § 1485.23(d)(2) of the current MAP regulations. This provision was not included in the proposed rule and is not included in the final rule. Section 1485.30 of the MAP final rule provides the final property standards for the program. In addition, MAP Participants are subject to the applicable property management standards described in 7 CFR Parts 3015, 3016 and 3019, depending on the nature of the MAP Participant organization. Comment: One respondent stated more flexibility is needed for electronic communications, which are becoming a more important part of the marketing mix for Participants, both branded and generic. Response: CCC believes that the flexibility provided in § 1485.17(b)(1) and § 1485.17(b)(16) is adequate. Comment: Fourteen respondents stated that FAS refers to miscellaneous communications devices in the new regulations but did not address their usage costs and asked for clarification on whether these costs were reimbursable. Response: CCC believes the reimbursement of the usage costs of various communications devices is already addressed by the various provisions in the MAP final rule. Reimbursement of such communication costs depends on the circumstances under which the communication took place. For example, where usage costs of communications devices are incurred by the MAP Participant’s U.S. offices and staff, those costs are not reimbursable pursuant to § 1485.16(c) and § 1485.17(d)(26). If usage costs of communications devices are incurred while on eligible international or domestic travel for approved MAP brand or generic promotion activities and are allowed under the U.S. Federal Travel Regulations (41 CFR Parts 301 through 304), they are potentially reimbursable as international or domestic travel expenditures under the circumstances laid out in the applicable provisions in § 1485.17(b) and (c). If usage costs of communications devices are incurred as part of the organization costs for a MAP Participant’s overseas office approved in its MAP program agreement and such communications originate overseas, § 1485.17(c)(11) provides that such communications costs are reimbursable for generic promotions so long as the expenditure was made in furtherance of an approved activity. Thus, the monthly service charge for a caller usage plan with unlimited minutes that is incurred VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 primarily in furtherance of an approved activity would be fully reimbursed under MAP. In contrast, under a caller usage plan that charges by the minute, only charges for calls incurred in furtherance of an approved activity would be reimbursed under MAP. Section 1485.11 Definitions CCC received 153 comments on this section. In response to the comments, CCC has edited the definitions as set forth below. In addition, CCC has made minor clarifications to the definitions of ‘‘contribution,’’ ‘‘program year,’’ ‘‘SRTG,’’ and ‘‘supergrade.’’ CCC has also included a new definition for ‘‘product samples.’’ This definition now codifies MAP Notice 11–003, and MAP Notice 11–003 will be removed from FAS’ Web site. Finally, CCC has added a new definition for MAP Notice in the MAP final rule. Comment: One respondent recommended that the generic promotions be defined more broadly as ‘‘using U.S. commodities from multiple U.S. suppliers or in cases where only one U.S. supplier is selected to supply the commodity in question, that multiple U.S. suppliers had the opportunity to submit bids or compete for the business.’’ This respondent stated that as long as multiple U.S. companies had the opportunity to compete for that business, it believed promotions with these companies should be considered generic. Another respondent commented that a generic promotion should not be required to support at least two brands since this is difficult when a retailer carries only one. Response: CCC disagrees with the respondents’ comments suggesting that a generic promotion not be required to support at least two brands, particularly in the case raised by the respondent, in which a single company has been competitively selected over other bidders. For clarity, CCC has moved the substance of proposed § 1485.17(d), defining what may be considered a generic promotion activity, from the section on MAP ‘‘Reimbursement rules’’ to the definition of ‘‘generic promotion’’ in § 1485.11. Original subsections (e), (f), (g), (h), (i), (j), and (k) in § 1485.17 have been re-designated as (d), (e), (j), (f), (g), (h), and (i), respectively. Comment: Fourteen respondents recommended adding or clarifying definitions for the following terms: Advertising, audits, contractors, direct promotional costs, employees, foreign brand, negative comparison, overhead costs, representative, small purchase threshold, and theme. PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 Response: CCC disagrees with the respondents in regard to the need for additional definitions of these terms, except that it has further clarified the terms ‘‘foreign brand’’ and ‘‘theme.’’ The definition of ‘‘generic promotion’’ now refers to a foreign brand as ‘‘a brand owned primarily by foreign interests and being used to market a commodity or product in a foreign market.’’ Similarly, the definition of ‘‘generic promotion’’ refers to the concept of a ‘‘unified theme’’ as ‘‘a dominant idea or motif.’’ CCC has removed the term ‘‘negative comparison’’ from that definition in response to a different comment. Comment: Fourteen respondents questioned the definition of audits. They stated that audits are mentioned in at least three places with seemingly contradictory provisions. Response: CCC notes the MAP final rule does not define ‘‘audit.’’ However, CCC does not believe it is necessary to define this term, as CCC views this term as generally understood. In response to the comments, however, CCC agrees that the use of the term ‘‘audit’’ in § 1485.21(d)(7) is confusing and has replaced the term ‘‘audit’’ with the term ‘‘compliance review’’ in § 1485.21(d)(7). Comment: Fourteen respondents commented that the use of representatives (branded) in the phrase ‘‘no more than two representatives of a single brand participant to exhibit their company’s products at a foreign trade show’’ implied that these individuals have to be employees of the brand (as in § 1485.17(b)(7)). These respondents suggested that this definition be expanded to include others associated with the brand such as distributors, consultants, etc. Response: CCC agrees with the respondents. CCC has modified this section (now § 1485.17(b)(8)) to expand the list of eligible representatives to include: Employees and board members of private companies, employees or members of cooperatives, or any broker, consultant, or marketing representative contracted by the company or cooperative to represent the company or cooperative in sales transactions. CCC notes that MAP Notice 99–003 is now obsolete and will be removed from FAS’ Web site. Comment: Sixteen respondents commented that the proposed definition for ‘‘notifications’’ has veered from the original purpose for notifications, which is to notify CCC of significant changes to the MAP Participant’s strategic plan. The respondents asked FAS to clarify the definition of notifications and stated the proposed rule would be burdensome to the Participants. E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations Response: CCC agrees with the commenters. Instead of changing the definition of ‘‘notification,’’ however, CCC has modified § 1485.14(i) to change when notifications will be required. Notifications are now required only if a MAP Participant wishes to conduct an entirely new activity or if the Participant wishes to increase the funding level for existing, approved activities by more than $25,000 or 25%, whichever is greater. A MAP Participant may make significant adjustments below that threshold without prior notification to CCC, but must still submit a notification alerting CCC of such adjustments no later than 30 days after the change. Finally, CCC has clarified that minor adjustments to existing, approved activities and/or funding levels do not require notification. Comment: Three respondents recommended that the definition of a small-sized entity be expanded for the program by establishing the size eligibility standard to one not exceeding 150 percent of the current Small Business Administration guidelines. The respondents stated that this recommendation would better align the definition with the actual practice in the food processing industry. Response: CCC disagrees. CCC believes it is consistent with the Administration’s National Export Initiative to maintain the same definition of small business as the Small Business Administration. Comment: Fourteen respondents suggested the phrase, ‘‘online to MAP and any other USDA market promotion program * * *’’ in the ‘‘UES Web site’’ definition be changed to ‘‘* * * and any other USDA market development program * * *’’ which is more accurate and the terminology used in the subsequent definition of the Unified Export Strategy (UES). Response: CCC agrees with the respondents and has changed the final rule accordingly. In addition, CCC has added an explicit reference to the MAP program to the end of the definition. Comment: One comment was received recommending each definition be given an identifying number or letter so that it is easier to indicate which definition is being discussed. Response: CCC disagrees. CCC believes that providing the definitions alphabetically is adequate for identifying definitions. Comment: Three respondents stated that because ‘‘brand participant’’ is defined in the proposed regulation to mean only U.S. agricultural cooperatives that are ‘‘participating in the MAP brand promotion of another MAP Participant,’’ the proposed rule VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 does not appear to allow a cooperative to apply for funds to run its own brand program. Therefore, they requested that § 1485.11 (brand participant) and § 1485.13(a) be clarified to make it clear that cooperatives will continue to be eligible to apply directly for a brand promotion program. One respondent stated that currently cooperatives are allowed to contract directly with FAS to participate in the MAP program to promote the brand that their farmers have developed, own and use, to maximize their returns. This respondent stated that it should be allowed to continue to do so, as this was what Congress intended. One respondent stated that the reference to ‘‘participating in the brand promotion program of another MAP Participant’’ does not always apply and should be deleted from the definition. Response: CCC agrees with these comments and has clarified these sections. CCC has modified the definition of ‘‘brand participant’’ to make clear that the term does not include any agricultural cooperatives that are MAP Participants that apply for MAP funds to implement their own brand programs. CCC has also modified the definition of ‘‘brand promotion’’ to include U.S. agricultural cooperatives’ promotion of their own brand in their own brand program. CCC has also modified § 1485.15 to delete the phrase ‘‘third party’’ before ‘‘brand participants’’ as redundant, since the definition of brand participant clearly refers to third parties and not the MAP Participant. CCC has also modified § 1485.17(b)(7) (now § 1485.17(b)(8)) to make clear that the travel expenses of representatives of MAP Participants, including U.S. agricultural cooperatives running their own brand programs, at brand promotions at trade shows are also reimbursable. Finally, CCC has modified § 1485.15(d) to refer to ‘‘entity’’ instead of ‘‘company’’ in noting that MAP Participants may not provide assistance to a single entity for brand promotion in a single country for more than 5 years. Comment: One respondent stated that the proposed definition of ‘‘foreign third party’’ implies that the MAP Participant can select a qualified foreign third party with whom to work. The commenter stated if the proposed definition intends to imply that FAS must give approval of foreign third parties with whom Participants work, then it must be deleted. Response: It is not CCC’s intention that CCC would review or approve foreign third parties with whom Participants wish to work. CCC has clarified this definition accordingly to PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 29477 state that a foreign third party is a foreign entity with whom a MAP Participant works to promote the export of a U.S. agricultural commodity under the MAP program. Comment: Three respondents commented that in light of the continued development of agricultural products for non-food use, they proposed that this rule be amended to insert ‘‘non-durable’’ between ‘‘and any’’ and ‘‘product thereof, excluding tobacco.’’ Response: CCC disagrees with the respondents’ suggestion, as the change would unnecessarily limit the scope of the program. CCC has modified the definition of ‘‘U.S. agricultural commodity’’ to preserve the scope of the program as covering all agricultural commodities, regardless of the type of use to which the agricultural product is put. The definition of U.S. agricultural commodity now refers to ‘‘any agricultural commodity, including any food, feed, fiber, forestry product, livestock, or insect of U.S. origin or fish * * *’’ Sec. 1485.12 Participation Eligibility CCC received 2 comments on this section. Comment: One respondent stated the current MAP regulations allow U.S. agricultural cooperatives to be a MAP Participant. The proposed rule retained this eligibility but qualified ‘‘U.S. agricultural cooperative’’ with the term ‘‘nonprofit.’’ The respondent commented that its understanding is that the term ‘‘nonprofit’’ in § 1485.12(c) and elsewhere in the proposed regulations is not intended to change the eligibility of cooperatives that are currently participating in MAP and which are considered ‘‘nonprofit’’ in the sense that they are entitled to tax treatment afforded by Subchapter T of the Internal Revenue Code Section 1381. The respondent requested that FAS confirm that ‘‘a nonprofit U.S. agricultural cooperative’’ as used in the proposed regulations includes U.S. agricultural cooperatives that are entitled to tax treatment afforded by Subchapter T of the Internal Revenue Code (IRC) Section 1381. Response: CCC confirms that U.S. agricultural cooperatives that are entitled to tax treatment afforded by Subchapter T of the IRC Section 1381 are eligible to participate in the MAP program. CCC has deleted the term ‘‘nonprofit’’ before ‘‘U.S. agricultural cooperative’’ as unnecessary and potentially confusing. CCC has also modified the definition of ‘‘brand participant’’ in § 1485.11 and § 1485.12(c) and made conforming edits E:\FR\FM\17MYR2.SGM 17MYR2 29478 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations mstockstill on DSK6TPTVN1PROD with RULES2 to § 1485.13 and § 1485.28(b) to delete the term ‘‘nonprofit.’’ Comment: One respondent stated its concern that the proposed regulation § 1485.13(a) states that ‘‘applicants’’ may apply for the MAP program, but does not define the term ‘‘applicant.’’ The respondent was also concerned that § 1485.12 uses the term ‘‘entities’’ to describe who can ‘‘participate’’ in the MAP, while § 1485.13(a) uses the term ‘‘applicant.’’ The respondent was concerned that the two sections do not cross reference each other and that neither term is defined in § 1485.11 ‘‘Definitions.’’ The respondent also suggested the proposed regulations be revised as necessary to make clear that ‘‘a nonprofit U.S. agricultural cooperative’’ is one of the four entities eligible to participate in MAP under § 1485.12 and is also eligible to be an ‘‘applicant’’ and apply directly for MAP under § 1485.13(a), including for its own brand promotion program. Response: CCC does not share the respondent’s concerns. CCC believes it is unnecessary to define the terms ‘‘applicant’’ and ‘‘entity.’’ CCC believes that it is appropriate to use different terms in § 1485.13(a), which deals with those who actually apply to the program and therefore are ‘‘applicants,’’ and § 1485.12, which deals with who, in theory, is eligible to apply. The MAP final rule is clear that to participate in the MAP, an entity must be one of four types of entities, one of which is a U.S. agricultural cooperative. Implicit in the concept of being ‘‘eligible’’ to participate in the MAP is the notion that eligible ‘‘entities’’ are also eligible to be ‘‘applicants’’ to the program. Sec. 1485.13 Application Process CCC received 94 comments on this section. CCC’s responses are below. In addition, CCC has included new § 1485.13(d) and (e) to comply with OMB regulations 2 CFR Part 25, ‘‘Universal Identifier and Central Contractor Registration (CCR)’’ and 2 CFR Part 170, ‘‘Reporting Subaward and Executive Compensation Information.’’ 2 CFR § 25.200 directs federal agencies to include in their regulations issued on or after September 14, 2010 requirements that all applicants for federal financial assistance: (1) Be registered in the CCR prior to submitting an application or plan; (2) maintain an active CCR registration with current information at all times during which it has an active Federal award or an application or plan under consideration by an agency; and (3) provide its DUNS number in each application or plan it submits to the agency. Similarly, pursuant to 2 CFR VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 § 170.200(b), any regulations issued after September 14, 2010 and containing instructions for applicants of grants and cooperative agreements, among other assistance, must require applicants that do not qualify for an exception under 2 CFR § 170.110(b) to have the necessary processes and systems in place to comply with Part 170’s reporting requirements if they receive funding. Comment: Two respondents stated that under the current MAP regulations a U.S. agricultural cooperative is eligible to be a MAP Participant and in that capacity to apply directly to CCC for the cooperative’s own brand promotion program. The respondents stated that the proposed regulation at § 1485.13(a) appears to unintentionally change this by providing in the fourth sentence that a MAP applicant (i.e., including a nonprofit U.S. agricultural cooperative) ‘‘may apply to conduct a generic promotion program, a brand promotion program that provides MAP funds to brand participants for branded promotion, or both.’’ They requested that FAS confirm that a nonprofit U.S. agricultural cooperative that applies to CCC for its own brand promotion program would be considered a ‘‘MAP Participant,’’ not a ‘‘brand participant’’ since it would enter into a MAP agreement directly with CCC. Response: CCC agrees with the respondents. CCC did not intend to change this policy and has modified § 1485.13(a) accordingly to explicitly state that an applicant who is a U.S. agricultural cooperative may also apply for funds to conduct its own brand promotion program. As noted previously, CCC has also clarified the definition of ‘‘brand participant’’ in § 1485.11 to exclude from that definition any agricultural cooperatives that are MAP Participants that apply for MAP funds to implement their own brand programs. Comment: Twenty-one respondents submitted requests for FAS to clarify that electronic copies of applications are no longer required to be submitted through the UES system and only a hard copy is required to be sent. Response: CCC’s intent was not to imply that only a hard copy be sent. Applicants have always had a choice to submit either an electronic copy or a hard copy of their application. CCC believes the MAP final rule clearly maintains that choice, but encourages organizations to submit their applications through the UES system, because this format virtually eliminates paperwork and expedites the FAS processing, review, and reimbursement cycles. PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 Comment: Twenty-one respondents questioned if the online version is still required, could it be submitted in a reasonably short time following the deadline? Response: No. Electronic applications may not be submitted after the deadline. CCC is required to publish a Notice of Funds Availability annually in the Federal Register. This notice provides 60 days to submit applications either electronically or by hard copy. Applications are required to be submitted by the deadline that is published in the annual notice. Comment: Two respondents provided comments regarding § 1485.13(a)(3)(i)(A) and § 1485(a)(3)(i)(B). They stated they support the requirement that Participants submit a strategic plan; however, to reduce the complexity of the UES process, they recommended that the plan submission remain separate from the current UES process. Response: CCC disagrees. CCC will continue to approve applications that it considers to present the best opportunities for developing and expanding export markets for U.S. agricultural commodities. The strategic planning process is a critical part of the application and therefore must be provided within the UES process in order for the applications to be evaluated in a consistent and equitable manner. This is not a change from current practice. Comment: Sixteen respondents provided similar comments that stated that § 1485.13(a)(1)(i)(R) & (S) both appear to require that the applicant’s proposed contribution be stated in both dollar terms and as a percentage of CCC resources requested. They stated that they assume this change is not the intention of CCC, because § 1485.25 of the proposed rule implies that the applicant has a choice between stating its proposed contribution either in dollar terms or as a percentage, as is the case under current MAP regulations. The respondents asked for clarification. Response: CCC agrees with the respondents and has changed the final rule to clarify that the applicant has the choice to propose its contribution in dollar terms or as a percentage of resources requested. Section 1485.13(a)(1)(i)(R) & (S) have been eliminated and new § 1485.13(a)(1)(i)(Q) requires applications to include: ‘‘Value, in U.S. dollars, of proposed contributions from the applicant or the applicant’s proposed contribution stated as a percentage of the total dollar amount of CCC resources requested.’’ Comment: Sixteen respondents stated that § 1485.13(a)(3)(i)(M), which E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations introduces the requirement for an evaluation plan as part of the MAP application process, seems to imply that the current practice of ‘‘performance measures’’, Country Progress Reports and regular, formal evaluations is not sufficient. The respondents stated that if this is the case the evaluation plan could become an added bureaucratic burden and asked for further clarification of CCC’s intent with this new requirement. They also asked for further clarification on whether the evaluation plan is an additional requirement. Response: The requirement for an evaluation plan is not a new requirement. The Government Performance and Results Act (GPRA) of 1993 (5 U.S.C. 306; 31 U.S.C. 1105, 1115–1119, 3515, 9703–9704) requires performance measurement of Federal programs, including MAP. Section 1485.13(a)(3)(D) of the prior MAP rule required ‘‘[a] statement of goals and the applicant’s plans for monitoring and evaluating performance towards achieving these goals.’’ In addition, § 1485.14(b)(6)(v) of the previous rule listed as one of the criteria considered by CCC in choosing applications the adequacy of the applicant’s strategic plan in the following category ‘‘Description of an evaluation plan and suitability of the plan for performance measurement.’’ The new final rule merely clarifies the current requirement to increase each applicant’s opportunity for success. To clarify that the evaluation plan is not a new requirement, CCC has combined subparagraphs (M) and (E) into one subparagraph (E) in § 1485.13(a)(3). Comment: Fourteen respondents stated that the specific mention of the submission of an ‘‘evaluation plan’’ in the application process implied that the current submission of goals and performance measures is no longer sufficient. The fourteen respondents also recommended that if such a plan is required, that the Participant’s submission be permitted to be brief and generalized. Response: As noted in response to the prior comment, in this final rule, CCC has combined the current regulation’s language on goals and performance measures and the new proposed language on evaluation plans into one single sub-paragraph (E) in § 1485.13. CCC notes that evaluation of MAP’s effectiveness has been and will continue to be an integral element of program planning and implementation. The adequacy of the evaluation plan has been and will remain one of the criteria in approving applications. VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 Comment: One respondent stated that both § 1485.13(a)(1)(i)(J) and § 1485.14(c)(9) refer to evaluating a request for a brand promotion program based on the percentage of CCC resources that will be made available to small-sized entities. The comment stated that since only small companies are eligible to participate in the branded program, this reference does not appear to be needed and should be deleted. Response: CCC has deleted the references requested by the respondent but for a different reason. The respondent is not correct that only small companies are eligible to participate in the branded program. U.S. agricultural cooperatives are also eligible to participate in the branded program. CCC, however, does not intend for small companies to receive preference over cooperatives. Accordingly, there is no need to determine the percentage of resources made available to small-sized entities, and CCC has eliminated both sections. Large companies remain ineligible for branded programs. Sec. 1485.14 Application Review and Formation of Agreements CCC has edited § 1485.14(b)(3) to make clear that the preference given to organizations with the broadest producer representation/industry participation applies only with respect to nonprofit U.S. trade organizations. CCC has also clarified § 1485.14(e) and (f) to reflect that the approval letter must also be signed by the MAP Participant and that final agreement occurs when both the program agreement or amendment and the approval letter are signed by both parties. In addition, CCC received 130 comments on this section, set forth below. Comment: Fourteen respondents stated under § 1485.14(c)(8) that ‘‘overhead costs’’ and ‘‘direct promotional costs’’ are not defined. Response: CCC believes these terms are generally well-understood and that ‘‘direct promotional costs’’ in specific is self-explanatory. CCC, therefore, does not deem it necessary to define these terms in the final rule. Moreover, this language remains unchanged from the current rule that has been in place for 15 years. Section 1485.14(c) explains the allocation factors used by CCC to determine which applications to approve. Subsection (c)(8), which notes that CCC will review general administrative and overhead costs compared to direct promotional costs, merely reflects CCC’s preference that program funds be used for promotional expenses rather than administrative expenses. CCC has modified § 1485.14(c)(8) to make clear that CCC PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 29479 will review proposed MAP-funded general administrative and overhead costs compared to proposed MAPfunded direct promotional costs. Comment: With respect to § 1485.14(c)(8), fourteen respondents questioned how CCC compares salaries of staff with technical expertise and who execute programs with the fees of consultants who do similar work. The respondents stated that they felt the wording made an overly simplistic distinction between administration and promotional expenses. Response: CCC disagrees that the wording of § 1485.14(c)(8) is overly simplistic. However, this comment raises an issue that requires further clarification of § 1485.11’s definition of ‘‘administrative expenses or costs.’’ The MAP final rule now deletes the phrase ‘‘that are not directly identifiable with a specific market promotion activity’’ from the proposed definition of administrative expenses or costs. Administrative expenses or costs now are defined as those ‘‘expenses or costs of administering, directing, and controlling an organization that is a MAP Participant * * * [including costs related to personnel (including, but not limited to, salaries, benefits, payroll taxes, individual insurance, training)]’’ regardless of whether they are specifically identifiable with a specific market promotion activity. As proposed § 1485.16(c) and § 1485.17(d)(26) made clear, home office domestic administrative expenses, including salaries of U.S. home office staff who execute MAP activities, are generally not reimbursable under MAP, and the Participant must use its own funds to pay any administrative costs of its U.S. offices. This is not a change from the prior regulations. This change to the definition of ‘‘administrative expenses or costs’’ makes the definition consistent with these sections. Pursuant to § 1485.17(c)(1) and (11), however, MAP funding is available, for generic promotion only, to pay for the compensation of a U.S. citizen employee or U.S. citizen contractor stationed overseas, as well as the administrative costs for overseas offices approved in MAP program agreements. In evaluating applications for MAP funding of overseas offices, as reflected in § 1485.14(c)(8), CCC generally prefers that MAP funding be directed toward promotional expenses rather than administrative expenses. It is true that salaries of overseas office staff with technical expertise are still considered administrative expenses even if the staff execute MAP activities, whereas fees of consultants who do similar work would be classified as promotional expenses. E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29480 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations However, applicants are free to explain in their applications what promotional activities overseas office staff are anticipated to conduct. Comment: One respondent stated that the wording in § 1485.14(c)(8) regarding factors affecting allocations does not provide for any distinction when making allocation decisions between time salaried staff spend on ‘‘administrative functions’’ (usually a minor amount of time spent by higher paid staff) and time spent making use of technical expertise to execute programs and provide information to importers and processors, which are the main reasons for employing higher paid staff. Response: See response to prior comment. CCC does not believe that § 1485.14(c)(8) must distinguish between time salaried staff spends on ‘‘administrative functions’’ and time salaried staff spends on executing MAP activities. All time spent by salaried staff is considered general administrative and overhead costs, not direct promotional costs, as clarified in the revised definition of ‘‘administrative expenses or costs.’’ As noted in CCC’s response above, applicants are free to explain in their applications what promotional activities overseas office staff are anticipated to conduct. Comment: One respondent in a comment to § 1485.29 stated further clarification was needed regarding the eligibility of contracts with U.S. based organizations that are retained to implement or assist with approved international market development efforts. This respondent stated the proposed regulations do not completely clarify those domestic contracts that would be deemed eligible for reimbursement and those that would not be. Response: CCC’s current practice is to reimburse MAP Participants’ expenditures for contracts with U.S. based organizations retained to implement or assist with approved international market development efforts, except when the U.S. based organization is also providing administrative services to the MAP Participant’s U.S. office(s). In other words, if a U.S. based organization assumes any functions related to the administration, direction or control of the MAP Participant’s U.S. office(s) in a program year, then no activity of any type undertaken by this organization in the United States or overseas during that program year, including direct promotional services overseas, will be reimbursable with MAP funds. CCC has codified this current practice in new § 1485.17(b)(19). VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 Note that this prohibition does not apply when the U.S. based organization is providing administrative services to an approved MAP funded overseas office (as opposed to the U.S. home office). In that case, the activities provided by the organization are reimbursable whether they are administrative or direct promotion under the MAP final rule, so long as the organization is not also providing administrative services to the MAP Participant’s U.S. office(s) in the same program year. Comment: Nineteen respondents provided similar comments in reference to § 1485.14(i), stating that the current notification process serves CCC’s and the Participant’s purposes. A number of the respondents stated that although they believed some formalization of the process may be necessary, the proposed requirement to notify CCC of any budgetary change that is at least $10,000 or more is burdensome. They stated that approval is only relevant at the constraint level and that acknowledgement of an activity level change would be more appropriate. The respondents also recommended that notification level be increased to $25,000, to reflect the greater impact of an activity funded at this level. Several of the comments stated that the language ‘‘may make adjustments only if it submits a notification’’ implies that any change to an activity, regardless of how minor, requires a notification. The respondents suggested that while the regulations should certainly provide that activities can be changed, details of when a notification is required could be more appropriately addressed in a separate policy clarification. One respondent stated that if CCC has identified the need to track budget changes more closely, they recommend that it adopt a policy based on a percentage change rather than a dollar value and that the percentage be no less than 25 percent of an existing budget amount. The respondent further stated that FAS staff should be required to use the UES system for approving such changes and that approval should not be based on a default period of 15 days. Response: CCC disagrees that the ‘‘current notification process’’ serves CCC’s purposes. However, in response to the above comments, CCC has modified § 1485.14(i) to reduce the burden of notifications, adopting several of the changes requested by commenters. For example, CCC has increased the threshold to $25,000 for requiring notification to CCC of changes to existing activities. This notification must occur before the change is implemented, but no approval is PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 required. Similarly, CCC will require notifications for adjustments below that threshold only if the change is significant. No notification is required for minor changes in existing, approved activities or for deleting an activity. Comment: Two respondents stated that MAP Participants’ current practice of reallocating funds among brand participants in the MAP Participants’ branded programs has allowed MAP Participants to expand brand participation by as much as 40 percent per year. Therefore, they strongly oppose proposed § 1485.14(i)(2)(i), which would require MAP Participants to notify CCC of any increase in the funding level for existing, approved activities addressing a single constraint or opportunity by more than $10,000 or 20 percent of the approved funding level, whichever is greater. They further stated that imposing a hard budget ceiling and requisite advance notification would severely limit the flexibility for MAP Participants with branded programs to reallocate funds from companies that are unable to utilize them in favor of those that can. Response: Respondents are mistaken that § 1485.14(i)(2)(i) requires a MAP Participant to notify CCC of any reallocation of funds among the Participant’s branded program participants. The notification requirement does not apply at the brand company level for a MAP Participant operating a brand program. The brand program is approved by CCC at the program level, not at the company level. CCC simply approves of the Participant’s brand program in the aggregate; CCC does not review or approve a MAP Participant’s allocation of funds among brand participants in its branded program. Comment: Fourteen respondents stated they support the self-certification requirement by small-sized entities participating in a MAP Participant’s activities in the branded program area. In addition, CCC received some comments encouraging CCC to be consistent in its policy to exclude large companies from the program. The respondents stated that currently large companies cannot apply and receive MAP funding directly; however, a marketing company representing a large company may obtain assistance through a SRTG. The respondents recommended that the applicant company as well as the brand owner be required to certify that they meet SBA’s criteria of being a small company. Response: CCC disagrees with respondents’ recommendation that the brand owner certify that it is a small company. It is not CCC’s intention to E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations mstockstill on DSK6TPTVN1PROD with RULES2 limit the products that small export trading companies can market under the MAP branded program, regardless of the size of the company producing the product marketed. CCC believes that it is appropriate for a small export trading company to promote its ability to consolidate export shipments that include products made by a wide range of companies. Sec. 1485.15 Operational Procedures for Brand Programs CCC received 32 comments on this section. CCC has also modified § 1485.15(c)(6) to include additional terms that are acceptable origin identification, currently set forth in MAP Notice 97–020. In addition, CCC has modified § 1485.15(c)(6) to advise that CCC may temporarily waive the U.S. origin labeling requirement where CCC has determined that such labeling will likely harm sales rather than help them. Comment: Three respondents made similar comments in reference to § 1485.15(a). One respondent recommended that the requirement for an annual submission of program operational procedures be changed to require FAS approval only once, after which FAS would merely be notified of any changes. Two respondents proposed that the review of procedures and documents used to administer the branded program be conducted during the annual compliance review. Response: CCC disagrees with the recommendation to remove the annual requirement and has retained the requirement for an annual submission of program operational procedures even if there are no substantial changes in the procedures. CCC expects that any MAP Participant that is operating a brand program would review its procedures and documents annually. CCC disagrees with the respondents’ proposal to have CCC review the procedures during the annual compliance review in lieu of a separate submission. The purpose of the CCC review is to approve a plan at the start of a program year, before the program begins operation. Moreover, during the compliance review, CCC may review the implementation of the plan, rather than the plan itself. In response to other comments requesting additional time for implementation, CCC has delayed the effective date of this final rule until the MAP Participant’s 2013 program year (either 01/01/2013 or 07/01/2013). CCC has deleted the requirement in § 1485.15(a) that the MAP Participant must submit its proposed brand program operational procedures not VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 later than 21 days prior to signing participation agreements with brand participants. CCC has modified § 1485.15(a) to note that CCC will notify all new and existing MAP Participants in writing in each Participant’s annual approval letter and through the FAS web site as to applicable submission dates and dates for approvals of brand program operation procedures. Comment: Two respondents commented on § 1485.15(a). One respondent requested that FAS confirm that § 1485.15(a) does not apply to a U.S. agricultural cooperative that is a MAP Participant and operates the cooperative’s own brand promotion program. Another respondent commented that this section appears to apply to MAP Participants that administer brand promotion programs on behalf of third party brand participants that do not have a direct agreement with CCC. The respondents requested clarification be made on whether this section does not apply to U.S. nonprofit agricultural cooperatives that are MAP Participants operating their own brand program. Response: CCC confirms that § 1485.15(a) applies only to MAP Participants that operate brand promotion programs that include third party brand participants, and does not apply to U.S. agricultural cooperatives that operate their own brand programs. CCC has amended the definition of brand participant in § 1485.11 to make clear it does not include a U.S. agricultural cooperative operating its own brand program. Comment: One respondent stated that § 1485.15(b) and § 1485.15(c) seem to imply that contracts between cooperatives and third party participants be preapproved by CCC each year. The respondent stated that this requirement is unreasonable and burdensome since nonprofit farmer owned cooperatives carefully protect their farmer members and their brand on each and every contract into which they enter. Response: CCC disagrees that § 1485.15(b) and § 1485.15(c) imply that CCC pre-approves a MAP Participant’s contracts with brand participants. Section 1485.15(b) simply requires that the MAP Participant’s proposed operational procedures be pre-approved by CCC. It does not require CCC to preapprove individual contracts. Section 1485.15(c) simply sets forth items that must be addressed in each contract with a brand participant. As discussed above, U.S. agricultural cooperatives operating their own brand program are not ‘‘brand participants.’’ PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 29481 Comment: Six respondents stated that § 1485.15(c)(7) should include ‘‘smallsized entity or cooperative.’’ Response: CCC agrees and has made the requested change. Comment: CCC received one comment asking whether a MAP Participant who had previously received an approval from CCC to use origin identification terms other than those appearing in the current regulations would have to resubmit these terms again for approval when the new regulations become effective. Response: CCC understands the commenter to be referring to § 1485.15(c)(6), which lays out the requirement that MAP activities identify the U.S. origin of the promoted products. CCC considers that an approval under the previous regulations would constitute an approval under the new regulations. A MAP Participant would not have to re-submit these terms again for approval under the new regulations. CCC has also modified § 1485.15(c)(6) to include additional terms that are acceptable origin identification, currently set forth in MAP Notice 97– 020. Specifically, CCC has added the terms ‘‘American’’, ‘‘United States of America’’, as well as any state or territory of the United States of America spelled out in its entirety. Section 1485.15(c)(6) also now clarifies that the use of approved origin terms as a descriptor or in the name of the product (e.g., Texas style chili, Bob’s American Pizza) does not satisfy the product origin requirement. Section 1485.15(c)(6) also now encourages the phrases ‘‘product of ’’, ‘‘grown in’’ or ‘‘made in’’, but does not require them. MAP Notice 97–020 will be removed from the FAS Web site. In addition, CCC notes that in certain situations, CCC has temporarily waived the requirement to identify the U.S. origin of products promoted under the MAP brand program. For example, current MAP Notice 09–007 temporarily waives this requirement for MAP brand activities conducted in certain Middle East countries. Accordingly, CCC has modified § 1485.15(c)(6) to advise that CCC may temporarily waive the U.S. origin labeling requirement where CCC has determined that such labeling will likely harm sales rather than help them and that such determinations will be announced to MAP Participants via a MAP notice issued on FAS’ Web site. MAP Notice 09–007 will continue to be available on the Web site for informational purposes and reflects CCC’s current administration of the MAP program. E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29482 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations Comment: One respondent stated that 5 years is an unreasonable time to keep records, stating that the IRS requires records to be kept for only 3 years. Response: CCC disagrees with the respondent. The Agricultural Trade Act of 1978, as amended, at 7 U.S.C. 5662(a)(1) requires the Secretary of Agriculture ‘‘to require by regulation each exporter or other participant under the [MAP and other] program[s] to maintain all records concerning a program transaction for a period not to exceed 5 years after completion of the program transaction, and to permit the Secretary to have full and complete access, for such 5-year period, to such records.’’ Comment: Five respondents asked CCC to clarify whether cooperatives were still exempt from the 5-year graduation rule or if this had changed. Response: CCC understands the commenters to be referring to the statutory provision in 7 U.S.C. § 5623 note, which states that MAP assistance may not be provided to promote a specific branded product in a single market for more than 5 years unless the Secretary determines that further assistance is necessary in order to meet the objectives of the program. Currently, CCC exempts U.S. agricultural cooperatives from the 5 year rule. CCC determined in 1998 that continued support for U.S. agricultural cooperatives was necessary to meet MAP’s objectives, and that determination remains in place. CCC will publish this determination in a MAP notice on the FAS Web site. Comment: Three similar comments stated that the ‘‘Sunset Rule’’ should be deleted. The respondents suggested that if the rule is maintained, then it should apply to a specific market and not to a country. One respondent stated that the 5-year limitation is the single greatest barrier to program participation and recommended that the country limitation be extended to 8 years per market. Another respondent recommended that export trading companies be considered for exemption from the 5-year limitation, if it can be proven that any additional marketing efforts after 5 years will be for different products beyond those previously marketed. Response: CCC understands the commenters to be referring to the statutory provision in 7 U.S.C. § 5623 note, which states that ‘‘[t]he Secretary should not provide assistance under the [MAP] program to promote a specific branded product in a single market for more than 5 years unless the Secretary determines that further assistance is necessary in order to meet the objectives VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 of the program.’’ Because the 5-year limitation is established by statute, CCC cannot extend the country limitation to 8 years as requested by the respondents. While the statute provides the Secretary the discretion to waive the graduation requirement in individual circumstances where the Secretary believes such further assistance is necessary to achieve the goals of MAP, CCC has no authority to ‘‘delete’’ the ‘‘Sunset Rule’’ as requested by the commenters. CCC also disagrees with the comment that the ‘‘Sunset Rule’’ be applied to a specific market and not to a country. CCC has defined ‘‘market’’ in the proposed and final rules to mean the country or countries targeted by an activity. Lastly, CCC does not have any information that suggests that exempting export trading companies from the 5-year limitation is necessary to achieve the goals of MAP. CCC retains the discretion to waive the 5year limitation, if CCC determines that further assistance in a particular situation is in the best interests of the MAP. Comment: Two respondents commented that they supported continuing exemptions for international shows that reflect a broad international attendance. Response: CCC understands the commenters to be referring to CCC’s practice, as reflected in MAP Notice 09– 005, of not counting a Participant’s attendance at certain international trade shows when determining whether a specific branded product has been promoted in a single market for more than 5 years. CCC will continue this practice and has codified it in § 1485.15(d) of the MAP final rule. Many international trade shows feature buyers and sellers from many countries. Many of the shows are held in the same country annually or biannually (e.g., SIAL and ANUGA are held in alternating years in France and Germany, respectively). Many U.S. companies attend such shows to meet with buyers from many countries, not just the host countries. However, given that CCC may not provide assistance to a single company for brand promotion in a single country for more than 5 years, many small brand companies would face graduation from a host country after exhibiting at one of these international trade shows for five years, even if the companies have had no other activities in that country and participating in the show is used exclusively as a gateway for developing customers in other countries. Therefore, to further the objectives of MAP, CCC has determined that brand participants’ participation in certain PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 international trade shows in foreign countries will not be considered when determining such participants’ time in country for purposes of the 5 year graduation requirement. Specifically, as reflected in MAP Notice 09–005, CCC has compiled a list of international trade shows that CCC ‘‘exempts’’ from the graduation requirement. A show on this list meets two requirements: (1) It is a food or agricultural show, with no less than 30% of exhibitors selling food or agricultural products, and (2) it is an international show, meaning it targets buyers, distributors and the like from more than one foreign country and no less than 15% of the show’s visitors are from countries other than the host country. CCC is not planning on changing its practice and has codified MAP Notice 09–005 in § 1485.15(d). MAP Notice 09– 005 will be removed from the FAS Web site, as parts are now redundant with the final rule, and a new MAP notice will be posted on FAS’ Web site listing the international trade shows that CCC ‘‘exempts’’ from the graduation requirement. If a MAP Participant believes that a show should be added to this list, the Participant should contact FAS. Comment: One respondent stated that because they do not have the facilities for conducting investigations of corporate ownership structure, they proposed that the current process of self-certification continue. Response: CCC notes that § 1485.15(c)(7) as proposed allowed brand participants to self-certify as to status as a small-sized entity and that the final rule continues the current process of self-certification. Sec. 1485.16 Contribution Rules CCC received 20 comments on this section. Below are CCC’s responses. In addition, CCC has clarified in § 1485.16(c) that a MAP Participant’s U.S. office’s administrative costs may be included in calculating the amount of contributions the MAP Participant contributes to MAP activities. Similarly, CCC has clarified in § 1485.16(d)(2) that contributions are subject to the MAP regulations and the applicable OMB circulars on cost principles, to the extent these principles do not directly conflict with the provisions of this subpart. In addition, CCC has removed the cross-reference to § 1485.16(c) in § 1485.16(d)(2) as unnecessary. Comment: Fourteen respondents provided similar comments in reference to § 1485.16, stating it would be clearer to begin the subpart by stating that any expense that is listed as eligible for reimbursement can also be considered a E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations contribution if paid with industry funds. The respondents stated that then the list would only need to state what is not eligible as a contribution, the assumption being that anything that is not listed is eligible. They stated this change would greatly reduce the confusion over items which now appear in both places, sometimes with slightly different wording. Response: CCC believes that eligible contributions are clear as presented in § 1485.16. CCC notes that § 1485.16(d)(2)(xxi) specifically provides that ‘‘the cost of any activity expressly listed as reimbursable in this subpart’’ may be considered a contribution if paid with Participant or industry funds. Comment: One respondent stated that this section does not specifically mention industry travel expenses as being counted as a contribution. This respondent stated that it urges FAS to specifically state that industry travel and other industry expenditures that are in support of the broader mission of Participants be listed as eligible to count toward contributions. Response: CCC allows domestic travel expenses paid by the Participant to be counted as a contribution, pursuant to § 1485.16(d)(2)(xvii). Additionally, at § 1485.16(d)(2)(xxi), CCC allows to be counted as a contribution the cost of any activity paid by the Participant and expressly listed as reimbursable in this subpart, which includes travel. In response to the comment, however, CCC has modified the definition of ‘‘contribution’’ in § 1485.11 to include explicitly expenditures made by entities in the MAP Participant’s industry in support of the entities’ related promotion activities in the markets covered by the MAP Participant’s agreement. Comment: One respondent stated the proposed rule § 1485.16(d)(2)(xvi) reads eligible contributions include ‘‘fees for participating in U.S. Government activities’’ and it requested clarification of the term ‘‘U.S. Government activities.’’ Response: From time to time, the U.S. Government financially sponsors activities or endorses activities, particularly overseas, that promote export opportunities. These could include trade shows, trade missions, restaurant promotions, or a variety of other activities. To clarify this further, CCC has modified § 1485.16(d)(2)(xvi) to note that the activities are ‘‘U.S. government sponsored or endorsed export promotion activities.’’ CCC has made a corresponding edit to § 1485.17(d)(21). VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 Comment: One respondent commented that the proposed regulation at § 1485.16(b) provides that ‘‘in MAP brand promotion programs, a brand participant shall contribute at least 50 percent of the total eligible expenditures made on each approved brand promotion.’’ It suggested that to be consistent with the quoted language, and with the understanding that a brand promotion program can be operated by a MAP Participant, as well as a brand participant, the phrase ‘‘a brand participant’’ in § 1485.16(b) should be replaced with ‘‘a brand participant or Participant’’ or similar language. Response: CCC agrees with the comment and has modified § 1485.16(b) accordingly. Sec. 1485.17 Reimbursement CCC received 330 comments on this section. Below are CCC’s responses to the comments. In addition, CCC has clarified various provisions. For example, CCC has made explicit in § 1485.17(b) that reimbursements are subject to the MAP regulations and the applicable OMB circulars on cost principles, to the extent these principles do not directly conflict with the provisions of this subpart. CCC has also modified § 1485.17(c)(8) to codify CCC’s current practice of requiring MAP Participants to provide documentation establishing the full fare economy class rate to support their reimbursement claims, as well as clarify that international travel expenses for activities that occur inside or outside the United States are reimbursable. In addition, CCC has deleted § 1485.17(c)(9), which provided that per diem was reimbursable, because it is redundant with § 1485.17(c)(8) (which now explicitly includes per diem). Section 1485.17(c)(8) allows the reimbursement of ‘‘international travel expenditures,’’ which include transportation, per diem, and miscellaneous expenses. CCC has also added § 1485.17(b)(17), which allows for reimbursement of international travel expenditures (e.g., transportation, per diem, and miscellaneous expenses) for brand companies participating in foreign trade missions subject to certain conditions. This codifies MAP Notice 03–004. MAP Notice 03–004 will be removed from the FAS Web site. Similarly, CCC has codified MAP Notice 01–004 in new § 1485.17(b)(18). MAP Notice 01–004 describes CCC’s longstanding practice of limiting reimbursement of expenditures related to retail, trade, or consumer exhibits or shows, whether held inside or outside the United States, where USDA has PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 29483 sponsored or endorsed a U.S. pavilion at the exhibit or show. In that situation, MAP funds are used to reimburse the travel and/or non-travel expenditures of only those MAP Participants located within the U.S. pavilion. CCC believes it is important to maintain a unified U.S. presence at these shows, with all exhibitors contributing fairly and supporting the U.S. pavilion. MAP Notice 01–004 will be removed from the FAS Web site. Finally, CCC has added a cross reference to § 1485.17(d) in § 1485.17(b) and § 1485.17(c). Comment: Three respondents provided similar comments in reference to § 1485.17(b)(4). Two comments stated that the rule as written may be interpreted to allow the cost of product samples to be reimbursed. The respondents stated that ‘‘[a]s written, this rule may be interpreted to allow the cost of promotional samples themselves to be reimbursed. We feel that the existing approach, in which costs of distributing samples are eligible, but the costs of the samples themselves are not, remains appropriate within WTO eligibility. We recommend that this be clarified.’’ One comment stated that the current MAP regulations limit the reimbursement of giveaways to U.S. dollars and suggested that the maximum reimbursement be increased to reflect inflation since the 1980s. One respondent stated that the purchase of samples locally on a caseby-case basis with a maximum cost per sample not to exceed the allowable cost of a premium should be allowed. Response: CCC’s practice has been and continues to be that the cost of product samples is not reimbursable under MAP. In response to the first commenters above, CCC has clarified this issue and modified § 1485.17(b)(4), which provides that the costs of in-store and food service promotions, product demonstrations, and distribution of promotional samples are reimbursable. Section 1485.17(b)(4) now explicitly notes that the purchase of product samples are not reimbursable and replaces the term ‘‘promotional samples’’ with ‘‘product samples.’’ CCC also notes that § 1485.17(d)(5) already specifically prohibits the reimbursement of the cost of product samples. In addition, as noted above, CCC has modified § 1485.11 to include a definition of ‘‘product samples.’’ CCC disagrees with the view that the costs of product samples should be reimbursed. CCC does not agree with the commenter requesting that the current MAP regulation’s limit on the E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29484 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations reimbursement of giveaways be increased or that it be codified in the MAP final rule. As noted above, CCC observes that the cost of samples of the promoted MAP product are not reimbursable, regardless of whether the samples are giveaways or not. Regarding the reimbursement of giveaways of nonMAP promoted products in general, the MAP final rule is written in a way to allow CCC to counter inflation, without unduly limiting its flexibility. As discussed below in CCC’s response to similar comments, rather than specify a reimbursement amount for giveaways in § 1485.17(b)(11), CCC will set a reimbursement limit during the course of its administration of MAP and change that limit, as necessary, with appropriate notice to MAP Participants through written MAP notices posted on FAS’ Web site. Comment: Three respondents commented in reference to § 1485.17(b)(8) supporting the inclusion of eligibility of subscriptions. All recommended that CCC change the wording to remove the words ‘‘to publications’’ and instead state that ‘‘CCC will reimburse in whole or in part subscriptions that are of a technical, economic, or marketing nature and relevant to the approved activities.’’ One respondent proposed adding language to allow for expenditures when the internet is used as a staff resource. It gave as an example for market intelligence, economic data, and key policies and procedures to be accessible via their internet site to their international offices and U.S. staff worldwide. Response: CCC agrees with the first general comment and has modified § 1485.17(b)(8) (now § 1485.17(b)(9)), as some appropriate subscriptions could be to web-based information that may not traditionally be thought of as ‘‘publications.’’ CCC has also made a corresponding change to § 1485.16(d)(2)(x). CCC does not agree with the second comment to add language to allow reimbursement of internet expenditures because, as submitted, this appears to be a function of the MAP Participant’s home office, and, thus, is not reimbursable under the program unless otherwise authorized in § 1485.17(c)(22). Comment: Fourteen respondents commented regarding proposed § 1485.17(b)(9) (now § 1485.17(b)(10)), which provided that the cost of ‘‘demonstrators, interpreters, translators, receptionists, and similar temporary workers who help with the implementation of discrete promotional activities’’ is reimbursable. These respondents were concerned with the VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 use of the word ‘‘discrete’’ in the preceding language. Several commented that they presume that the use of the term ‘‘discrete’’ applies to or refers to any approved activities such as described in the regulations. The respondents stated that it would be clearer to use the term ‘‘individual’’ rather than ‘‘discrete,’’ as that might better define the activity. Response: CCC agrees with the respondents and has made the suggested change substituting the term ‘‘individual’’ for the term ‘‘discrete’’ in the final rule for clarity. Comment: Fifteen respondents provided similar comments in regard to proposed § 1485.17(b)(10) (now § 1485.17(b)(11)), which provided that the cost of giveaways, awards, prizes, gifts and other similar promotional materials is reimbursable, subject to such reimbursement limitation as CCC may, from time to time, determine and announce in writing to all MAP Participants and on the FAS Web site. The respondents stated that they presume that announcements pertaining to the reimbursement limitations will be in the form of Program Announcements or similar instruments. Four stated that they agree with the need for flexibility in this area and supported CCC’s approach. Response: CCC understands that the commenters are referring to CCC’s practice of issuing Market Access Program notices. MAP Notice 97–002 currently sets out a $1.00 reimbursement limit for promotional items (which does not include product samples). It also sets out the conditions under which such reimbursement is available. CCC has determined to codify MAP Notice 97–002, in part. Section 1485.17(b)(11), which allows reimbursement for giveaways, awards, prizes, gifts and other similar promotional materials, now notes that reimbursement is available only when: (1) the items are described in detail with a per unit cost in an approved strategic plan and (2) distribution of the promotional item is not contingent upon the consumer, or other target audience, purchasing a good or service to receive the promotional item. CCC believes that specifying a dollar amount in the new MAP regulations is unnecessarily restrictive and does not provide CCC sufficient flexibility to deal with changing economic circumstances such as inflation. Therefore, rather than specify a reimbursement amount in § 1485.17(b)(11), CCC will retain the proposed rule’s discretion. Thus, CCC will set a reimbursement limit during the course of its administration of MAP and change that limit, as necessary, with PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 appropriate notice to MAP Participants through written MAP notices posted on FAS’ Web site. MAP Notice 97–002 will be removed from the FAS Web site, and a new notice will be issued setting forth a reimbursement allowance for giveaways, awards, prizes, gifts and other similar promotional materials. Comment: One respondent commented in reference to § 1485.17(b)(12) and couponing. The commenter suggested that CCC allow ads to be reimbursed if the ad contains coupons for other products but does not contain a coupon for MAP Participant products. Response: CCC confirms that reimbursement is allowed if ads contain coupons for other products but do not contain a coupon for MAP Participant products. In response to the commenter, CCC has revised § 1485.17(b)(12) (now § 1485.17(b)(13)) to make clear that only the design, production and distribution of coupons for products other than the MAP Participant’s promoted products are reimbursable. In addition, CCC has revised § 1485.17(b)(1), which allows advertising to be reimbursed, including advertising of price discounts, to make clear that advertising associated with coupons or price discounts for MAPpromoted products is not reimbursable. CCC has also modified both provisions to note that if otherwise reimbursable advertising or coupon activities include both coupons or price discounts for products other than the MAP Participant’s promoted products as well as for the MAP-promoted products, expenditures for such activities will not be reimbursed in whole or in part (e.g., expenditures may not be prorated and submitted for reimbursement). This codifies MAP Notice 05–001, which will be removed from the FAS Web site. Finally, CCC has modified § 1485.17(d)(9) to clarify that CCC will not reimburse the cost of any coupon redemption or price discounts ‘‘of the MAP promoted commodity.’’ Comment: Sixteen similar comments were received regarding § 1485.17(b)(12) and the design, production and distribution of coupons. The respondents requested that CCC clarify if this section is applicable to both branded and generic. Three comments stated that they strongly support the clarification to incorporate the eligibility of coupon design, production and distribution. In addition, eighteen respondents stated that clarification was needed regarding what is covered as ‘‘branded,’’ as ‘‘generic,’’ or as both, throughout the regulations. Two respondents stated that the language listed in § 1485.17(b)(1) E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations through § 1485.17(b)(15) seems to describe expenses eligible for entities conducting a branded program, and that expenses listed from § 1485.17(c) through § 1485.17(d) addressed generic only. They requested clarification if this understanding was correct. Another similar comment was received which stated that more specificity was needed for branded and generic reimbursement rules. One respondent stated that since Web site costs were previously not considered an eligible branded expense and the eligibility of subscription costs and audit costs do not appear to pertain to the branded program, they would like confirmation that CCC now intended for these expenses to be eligible for both the generic and branded programs. Two respondents stated that in reference to § 1485.17(c)(16), the proposed rule should make it clear that branded programs are specifically included. Response: CCC has modified § 1485.17(b) to clarify that it addresses both brand and generic promotional activities. Therefore, all subparagraphs under § 1485.17(b) are applicable to both generic and branded programs, including § 1485.17(b)(9) (allowing subscription costs), § 1485.17(b)(13) (allowing certain coupon costs), § 1485.17(b)(14) (allowing certain audit costs) and § 1485.17(b)(16) (allowing Web site costs). Section 1485.17(c) addresses generic promotional activities only. Section 1485.17(d) was removed and the text of that section added to the definition of generic promotion in § 1485.11. Subsequent subsections of § 1485.17 have been reordered. As discussed above, CCC does not reimburse the design, production or distribution of coupons for the MAP Participant’s promoted products. CCC has modified § 1485.17(b)(12) (now § 1485.17(b)(13)) to make this clear. Finally, CCC disagrees with the respondents who requested that branded programs be included in § 1485.17(c)(15), which reimburses market research for generic promotions only. That section will remain applicable only to generic promotions. Comment: Fourteen respondents commented in reference to ‘‘audits’’ referenced in § 1485.17(b)(13) (which allowed for reimbursement of an audit of a MAP Participant that was required by the applicable parts of this title if the MAP is the Participant’s largest source of federal funding), § 1485.17(c)(17) (which allowed for reimbursement of independent evaluations or audits not otherwise required by CCC if performed to ensure compliance with program VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 agreement or regulatory requirements), and § 1485.17(e)(16) (which provided that CCC will not reimburse Participants for independent evaluations or audits if CCC determines such evaluation or audit is needed to confirm past or ensure future program agreement or regulatory compliance). The respondents requested further clarity on when CCC will pay for an audit. They also stated that references to ‘‘applicable parts of this title’’ should be avoided and instead, clear language should be provided. For example, the respondents asked whether, in light of § 1485.17(b)(13), which provides for reimbursement for A–133 audits, § 1485.17(c)(17) means MAP will pay for other audits that give the Participant assurances that it is in compliance with MAP rules, i.e., operational or forensic audits. Six respondents also provided similar comments in reference to § 1485.17(e)(16), questioning if all financial audits were not reimbursable. The respondents also asked if OMB Circular A–133 audits were reimbursable given that this is not required by CCC but by the federal government. Response: In response to these comments, CCC has modified § 1485.17(b)(13) (now § 1485.17(b)(14)) to clarify that this section refers to OMB Circular A–133 audits. Thus, for brand and generic promotions, such audits are reimbursable if the MAP is the MAP Participant’s largest source of Federal funding. Also in response to these comments, CCC has clarified § 1485.17(c)(17) (now § 1485.17(c)(16)). That section now provides that it is subject to the limitations set out in § 1485.17(d)(which now lists items for which CCC will not reimburse Participants). CCC has also deleted the reference to ensuring compliance with ‘‘regulatory requirements’’ in this section. Section 1485.17(c)(16) now provides that for generic promotions only, independent evaluations and audits not otherwise required by CCC to ensure compliance with program requirements are reimbursable. CCC observes, however, that, as noted in new § 1485.17(d)(31), expenditures associated with a MAP Participant’s creation or review of its fraud prevention program, contracting procedures, or brand program operational procedures are not reimbursable. With respect to the comments questioning whether § 1485.17(e)(16) prohibits reimbursement of all financial audits, CCC confirms that 1485.17(e)(16) (now § 1485.17(d)(16)) prohibits reimbursement only of evaluations or audits that are required by CCC to PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 29485 confirm past or to ensure future program agreement or regulatory compliance. This is not a change from the current regulations. Finally, CCC notes that this section does not prohibit reimbursement of OMB Circular A–133 audits, which is specifically allowed, under the appropriate circumstances, per § 1485.17(b)(14). CCC disagrees with the comments that the MAP final rule should avoid references to ‘‘applicable parts of this title.’’ As noted in § 1485.10 of both the proposed and final rules, USDA regulations other than the MAP final rule also apply to USDA recipients of federal financial assistance. Some regulations apply to all MAP Participants. Others apply only to certain categories of MAP Participants. Because of the varied nature of MAP Participants, it would be unwieldy to specify which other regulations apply and when for each provision in the MAP final rule. However, in response to the comment, wherever the MAP final rule has explicitly referred to ‘‘applicable parts of this title,’’ CCC has added illustrative examples of what parts potentially apply to different MAP Participants. In addition, CCC notes that § 1485.10(b) provides an illustrative list of other USDA regulations of general application that may apply to MAP and MAP Participants. The section also puts MAP Participants on notice that they must comply with the relevant provisions of the CCC Charter Act and Title VI of the Civil Rights Act of 1964 and related civil rights regulations and policies. Finally, in response to the comments, CCC has also added new § 1485.10(b)(4), which lists additional laws and regulations that are applicable to MAP Participants. Comment: Fourteen similar comments stated that previous policy guidance announced reimbursement of the costs of developing, updating, and servicing non-branded web sites on the internet and stated that they seek clarification on whether this new regulation supersedes the previous guidance. Three comments also stated that they strongly supported web site development expenses being eligible for both branded and generic programs. Response: CCC understands that the commenters are referring to CCC’s practice of issuing Market Access Program notices. CCC issues these MAP notices for informational purposes. While these notices have no legal effect, they alert MAP Participants to information regarding the administration of the MAP program that E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29486 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations CCC believes is beneficial to share with MAP Participants. CCC confirms that the MAP final rule sets out the reimbursement rules for MAP Participants and supersedes all prior inconsistent guidance. Specifically, § 1485.17(b)(15) (now § 1485.17(b)(16)), applicable to both brand and generic activities, and § 1485.17(c)(31), applicable to generic activities, provide that CCC will reimburse, in part or in whole, the cost of developing, updating and servicing certain types of Web sites. In response to the comments, however, CCC has modified § 1485.17(c)(31) to include additional conditions regarding Web site content that CCC currently requires as a condition of reimbursement, as reflected in MAP Notice 01–003. MAP Notice 01–003 has thus been codified and will be removed from FAS’ Web site. Section 1485.17(c)(31) now provides that expenditures associated with developing, updating, and servicing Web sites on the Internet are reimbursable if the Web sites: (1) Contain a message related to exporting or international trade, (2) include a discernible ‘‘link’’ to the FAS/ Washington homepage or an FAS overseas homepage, and (3) have been specifically approved by the appropriate FAS commodity division. Expenditures related to Web sites or portions of Web sites that are accessible only to an organization’s members are not reimbursable. Reimbursement claims for Web sites that include any sort of ‘‘members only’’ sections must be prorated to exclude the costs associated with those areas subject to restricted access. Finally, CCC notes that § 1485.16(b) provides that in MAP brand promotion programs, MAP Participants must contribute at least 50% of the total eligible expenditures made on each approved brand promotion. At this time, CCC reimburses qualified Web site expenses 100% for generic promotions and 50% for brand promotions. Comment: Ten respondents provided comments in regard to § 1485.17(c)(8). They questioned under what circumstances business class travel would be reimbursed. The commentators stated that they felt it would be reasonable to be reimbursed for business class rate for flights over a specific duration (i.e. over 12 hours). Response: CCC recognizes that circumstances might arise where business class flights may be necessary. Thus, CCC has modified § 1485.17(c)(8) of the proposed rule. Originally, that section as proposed provided that CCC would determine a policy regarding the appropriate circumstances when VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 business class rates would be acceptable and announce that policy in writing to all MAP Participants and on the FAS Web site. CCC has now articulated in § 1485.17(c)(8) the limited circumstances under which CCC, after prior written approval, will reimburse air travel up to the business class rate. These circumstances are the following: (a) Regularly scheduled flights between origin and destination points do not offer economy class (or equivalent) airfare and the MAP Participant receives written documentation from its travel agent to that effect at the time the tickets are purchased; (b) Business class air travel is necessary to accommodate an eligible traveler’s disability. Such disability must be substantiated in writing by a physician; and (c) An eligible traveler’s origin and/or destination are outside of the continental United States and the scheduled flight time, beginning with the scheduled departure time, ending with the scheduled arrival time, and including stopovers and changes of planes, exceeds 14 hours. In such case, per diem and other allowable expenses will also be reimbursable for the day of arrival. However, no expenses will be reimbursable for a rest period or for any non-work days (e.g., weekends, holidays, personal leave, etc.) immediately following the date of arrival. Alternatively, in lieu of reimbursing up to the business class rate in such circumstances, CCC will reimburse economy class airfare plus per diem and other allowable travel expenses related to a rest period of up to 24 hours, either en route or upon arrival at the destination. For a trip with multiple destinations, each origin/ destination combination will be considered separately when applying the 14 hour rule for eligibility of reimbursement of business class travel or rest period expenses. A stopover is the time a traveler spends at an airport, other than the originating or destination airport, which is a normally scheduled part of a flight. A change of planes is the time a traveler spends at an airport, other than the originating or destination airport, to disembark from one flight and embark on another. All travel should follow a direct or usually traveled route. Under no circumstances should a traveler select flights in a manner that extends the scheduled flight time to beyond 14 hours in part to secure eligibility for reimbursement of business class travel. CCC believes that requiring CCC’s prior written approval will allow both MAP Participants and CCC to confirm PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 that the Participants meet the circumstances that may justify air travel in excess of the full fare economy rate. Comment: One respondent stated its opposition to § 1485.17(e)(15), given that refundable airline tickets are often ‘‘triple or more the cost of nonrefundable tickets’’. The respondent stated that this rule has the effect of substantially increasing overall travel costs under the program and also that the ability to claim an occasional nonrefundable airline ticket and associated fees, especially for an international buyer (whose travel is both less predictable and less accountable) would be vastly exceeded by the overall higher costs for the less restrictive tickets. The respondent also asked for clarification of ‘‘travel restricted by a U.S. government action’’ and asked if denial by U.S. officials of a visa request constituted a restriction by a U.S. Government action. Response: CCC disagrees. Section 1485.17(e)(15) (now § 1485.17(d)(15)) provides that CCC will not reimburse the cost of any unused non-refundable airline tickets or associated fees, except where travel was restricted by U.S. government action or advisory. The commenter has provided no data that the effect of this proposed section would increase overall travel costs under MAP. This is not a change from the current MAP rule, and CCC does not have any reason to believe that this policy has increased costs to the MAP program beyond what it would have been had the commenter’s proposal been adopted. Finally, CCC notes that denial of a visa request would not constitute a restriction by a U.S. Government action. ‘‘Travel restricted by a U.S. government action’’ would include, for example, if all travel from a country was prohibited due to an epidemic. Comment: Several respondents questioned whether airline change fees are reimbursable. Response: Yes. Airline change fees are reimbursable provided that such fees meet certain conditions. CCC understands that, in order to most effectively use their MAP funding, Participants at times purchase airline tickets at a price that is less than the full fare economy rate. If a Participant purchases a ticket for less than the full fare economy rate and subsequently changes the ticket, a change fee may be incurred. CCC considers this change fee to be reimbursable up to the point that the sum of the ticket purchase price and any ticket change fees equal, but do not exceed, the full fare economy rate. To clarify, if the sum of the ticket purchase price and any ticket change fees exceed E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations the full fare economy rate, only the full fare economy rate is reimbursable. Section 1485.17(b)(8), § 1485.17(b)(17) and § 1485.17(c)(8) have been modified to specify that program-related international air transportation, including any fees for modifying the originally purchased ticket, will be reimbursed at a rate not to exceed the full fare economy rate, as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 through 304). Comment: Seventeen respondents provided similar comments in reference to § 1485.17(c)(13), which stated that more flexibility is needed for electronic communications, which are becoming a more important part of the marketing mix for Participants, both branded and generic. Fourteen of the respondents stated that the cost of service is the largest component of the costs of most devices, such as smartphones, and it is recommended that CCC include as reimbursable a monthly allowance. They stated that as with giveaways and international travel, the determinant CCC statement may be added from time to time to allow for future flexibility. One respondent stated that it recommends that the cost of using these devices be included as reimbursable expenses and that the provisions of the regulations avoid the burdensome requirements of logging individual calls in minutes or sessions. Another commented that the regulations should provide for payment of monthly service fees for portable electronic devices for staff stationed overseas, provided the devices are primarily used for Participant market development purposes. Response: Section 1485.17(c)(13) of the proposed rule provided that, for generic promotions only, CCC would reimburse the cost of the purchase, lease, or repair of, or insurance premiums for, capital goods that have an expected useful life of at least 1 year, including portable electronic communications devices (including mobile phones, wireless email devices, personal digital assistants). That section does not deal with reimbursability of usage costs of electronic devices. CCC adopts § 1485.17(c)(13) as proposed (now § 1485.17(c)(12)). As previously discussed in response to a comment, CCC believes the reimbursability of the usage costs of various communications devices is already adequately addressed by the various provisions in the MAP final rule. Reimbursability of such communication costs depends on the circumstances under which the communication took place. CCC refers to its prior response on this issue. VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 CCC has issued several MAP notices that provide further information on CCC’s current practice of reimbursing telephone calls. MAP Notice 03–006 details CCC’s allowances for programrelated, emergency and personal telephone and internet expenses while on eligible travel. This Notice will remain on the FAS Web site. MAP Notice 99–009 (redundant with MAP Notice 03–006) and MAP Notice 98–017 (discussing reimbursement of wireless phone airtime devoted to program activities and now redundant) will be removed from the FAS Web site. CCC disagrees with the commenter who requested that the regulations avoid the burdensome requirements of logging individual calls in minutes or sessions to claim reimbursement. CCC notes that all reimbursement claims must be substantiated by sufficient supporting documentation per § 1485.21(d)(6). In order to claim reimbursement for usage costs, therefore, the MAP Participant must identify the costs to be reimbursed. Thus, as CCC has noted above, the monthly service charge for a caller usage plan with unlimited minutes must be incurred primarily in furtherance of an approved activity and the Participant is responsible for documenting that such plan was used primarily in further of an approved activity. In contrast, under a caller usage plan that charges by the minute, only charges for calls incurred in furtherance of an approved activity would be reimbursed under MAP and the Participant is responsible for detailing which calls are properly reimbursed with MAP funds. Comment: The respondents asked if § 1485.17(e)(16) means that CCC will reimburse for audits of subcontractors. Response: No, all of the listings under § 1485.17(e) (now § 1485.17(d)) are not reimbursable. Comment: One respondent stated that reimbursement for market research should be moved under subheading (b), thus allowing for reimbursement for market research under both generic and branded programs. Response: CCC disagrees with the suggested comment to make market research eligible for both branded and generic programs. CCC intends that market research funded under the program be available throughout the relevant industry, not only to a single company or cooperative. Comment: Four respondents provided similar comments in reference to § 1485.17(c)(20) (now § 1485.17(c)(19)), which provides that for generic promotions only, CCC will reimburse the cost of STRE (sales and trade relations expenditures made on PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 29487 breakfast, lunch, dinner, receptions, and refreshments at approved activities, including miscellaneous courtesies such as checkroom fees, taxi fares and tips; and decorations for a special promotional occasion). The respondents requested that CCC clarify that STRE incurred in the United States at approved activities that demonstrated a positive impact on agricultural exports, be eligible for reimbursement under MAP. One commenter asked for further clarification of STRE regulations incurred in foreign and domestic markets. Response: Generally, STRE incurred outside of the United States is reimbursable. CCC, however, agrees that under certain limited circumstances, STRE may be critical to the success of an activity being carried out in the United States. Therefore, CCC has modified § 1485.17(c)(19) to clarify that STRE incurred outside the United States is reimbursable and that STRE incurred within the United States may be reimbursed under MAP upon prior written approval by CCC. As with all reimbursable expenses, such STRE must be incurred in conjunction with an approved MAP activity. In response to the request for further clarification of STRE, CCC has codified, in part, MAP Notice 97–016 in § 1485.17(c)(19). That section now specifies that MAP Participants are required to use the American Embassy representational funding guidelines for breakfasts, lunches, dinners and receptions. MAP Participants may exceed Embassy guidelines only when they have received written authorization from the FAS Agricultural Counselor at the Embassy. The amount of unauthorized STRE expenses that exceed the guidelines will not be reimbursed. MAP Participants must pay the difference between the total cost of STRE events and the appropriate amount as determined by the guidelines. MAP Notice 97–016 will be removed from the FAS Web site. Comment: Seven comments were received stating miscellaneous courtesies such as checkroom fees, taxi fares and tips, and decorations for special purposes should not fall under Sales and Trade Related Expenses (STRE) and should be fully covered under MAP as separate expense categories. Response: Congress has given CCC discretion to operate and manage the MAP. In doing so, CCC must balance benefits to MAP Participants against limited financial resources. Under the current MAP regulations, STRE incurred outside of the United States is reimbursable for generic promotions E:\FR\FM\17MYR2.SGM 17MYR2 29488 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations only. In response to other comments to the MAP proposed rule, CCC has modified § 1485.17(c)(19) to allow reimbursement of STRE incurred in conjunction with an approved generic promotion taking place within the United States upon prior written approval by CCC. CCC, however, disagrees with these commenters that miscellaneous courtesies should be considered separately from STRE. Comment: One respondent commented that it did not see language that includes authorization to use program funds to cover costs associated with participation in trade shows and fairs held within the United States. The respondent stated that many are international in nature and have very strong participation from overseas, and it recommended that the rules specifically include language to allow program funds to be used for Participant staff to participate in such trade shows. Response: CCC agrees with the commenter and has clarified this issue in § 1485.17(b)(7), § 1485.17(c)(8) and § 1485.17(c)(24) of this final rule. It has been CCC’s practice to reimburse nontravel expenditures associated with retail, trade and consumer exhibits and shows held inside the United States under certain circumstances. Accordingly, CCC has codified, in relevant part, MAP Notice 09–006 in § 1485.17(b)(7)) of the MAP final rule. Section 1485.17(b)(7) now provides, in part, that, for both generic and branded promotions, non-travel expenditures associated with retail, trade and consumer exhibits and shows held inside the United States are reimbursable, subject to certain conditions set out in § 1485.17(b)(7). In addition, the MAP final rule expands reimbursement to other related expenses. Specifically, § 1485.17(c)(24) now provides that, for generic promotions only, domestic travel expenditures for such exhibits and shows conducted in the United States are reimbursable, subject to certain conditions and upon prior written approval by CCC. Section 1485.17(c)(8) also now specifically allows reimbursement of international travel expenses for an exhibit or show held inside the United States, subject to certain conditions. For brand promotion, neither domestic nor international travel expenses are reimbursable for retail, trade, or consumer exhibits or shows held inside the United States. These sections allow reimbursement of eligible expenses related to exhibits and shows held inside the United States only if the exhibit or show is: (1) A food or agricultural show with no less than 30% of exhibitors selling food or agricultural products, (2) an international show that targets buyers, distributors and the like from more than one foreign country and no less than 15% of its visitors are from countries other than the host country, and (3) an exhibit or show that the MAP Participant has not participated in within the last three years using funds from a source other than the MAP. MAP Notice 09–006 will be removed from the FAS Web site. A new MAP notice will be posted on FAS’ Web site listing the retail, trade and consumer exhibits and shows held inside the United States for which MAP reimbursement is currently allowed by CCC. In addition, MAP Notice 97–004, which addresses when brand companies are allowed to use MAP funds for expenses associated with domestic trade shows, is now inconsistent with the MAP final rule and will be removed from FAS’ web site. Below is a chart summarizing the reimbursement rules for international exhibits and shows held outside and inside the United States: Exhibits and shows outside U.S. Generic promotion .... Exhibits and shows inside U.S. Non-travel expenditures: Reimbursable (§ 1485.17(b)(7)) .... Non-travel expenditures: Reimbursable subject to conditions (§ 1485.17(b)(7)). International travel expenditures: Reimbursable subject to conditions (§ 1485.17(c)(8)). Domestic travel expenditures: Reimbursable subject to prior written approval and subject to conditions (§ 1485.17(c)(24)). Non-travel expenditures: Reimbursable subject to conditions (§ 1485.17(b)(7)). International travel: Not reimbursable. Domestic travel: Not reimbursable. International travel (§ 1485.17(c)(8)). Brand promotion ....... mstockstill on DSK6TPTVN1PROD with RULES2 Reimbursable Non-travel expenditures: Reimbursable (§ 1485.17(b)(7)) .... International travel: (§ 1485.17(b)(8)). Comment: Twenty-five respondents provided similar comments stating that the phrasing was unclear in § 1485.17(c)(24), which includes ‘‘Expenditures associated with conducting international staff conferences.’’ The respondents requested that CCC clarify whether trade shows, seminars, educational training, international staff conferences, and meetings of international organizations are all eligible for reimbursement in the United States and overseas. Several of the respondents questioned if this included international conferences taking place in the United States and if so, whether that included travel. One respondent stated that it was unclear whether the international travel costs associated with having the industry’s VerDate Mar<15>2010 expenditures: 17:34 May 16, 2012 Jkt 226001 Reimbursable up to 2 people trade representative attend the conference would be eligible. Twenty-five respondents commented in reference to § 1485.17(c)(25) and asked for clarification of ‘‘international organizations.’’ Three respondents proposed that the language be amended to include ‘‘and meetings of an international focus within the United States.’’ One stated that this section was confusing and implied that reimbursement for travel for trade shows, seminars, and educational training was authorized only for those events that are conducted outside the United States. The respondent asked for clarification on this and stated that it believed that was not the intent of CCC, as it would severely limit the use of PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 MAP funds to educate foreign target audiences through courses and programs conducted in the United States. Response: CCC agrees that the phrasing in § 1485.17(c)(25) was unclear and has replaced it with new §§ 1485.17(c)(23)–(26). Regarding commenters’ request to clarify whether international staff conferences conducted in the United States and overseas are eligible for reimbursement, CCC observes initially that expenditures related to international staff conferences are reimbursable for generic promotions only. CCC has added a new § 1485.17(c)(23), which provides that non-travel expenditures related to conducting international staff E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations conferences are reimbursable, regardless of whether the conferences are held in or outside the United States. These conferences are gatherings of the international staff of the MAP Participant. CCC further notes that international travel expenditures to such conferences for MAP Participants, whether held outside the United States or in the United States, are already reimbursable in accordance with § 1485.17(c)(8). Thus, under § 1485.17(c)(8), international travel costs associated with having the industry’s trade representative attend the Participant’s staff conference would be eligible if the individual is an employee or overseas contractor of the MAP Participant. Thus, in sum, for generic promotions only, both international travel expenditures and non-travel expenditures for international staff conferences are reimbursable, whether the conference is held outside the United States or in the United States. Domestic travel expenditures to attend such international staff conferences are not reimbursable. For brand promotions, no expenditures of any kind associated with international staff conferences are eligible for reimbursement. In response to commenters’ request to clarify whether trade shows conducted in the United States and overseas are eligible for reimbursement, CCC has added new § 1485.17(c)(24). That section allows reimbursement, for generic promotions only, subject to § 1485.17(b)(18), of domestic travel expenditures related to international retail, trade and consumer exhibits and shows conducted in the United States upon prior written approval by CCC. CCC refers to its prior response to a similar comment above regarding eligibility of domestic travel and nontravel expenditures associated with participation in exhibits and shows held outside or inside the United States. In response to commenters’ request to clarify whether seminars and educational training conducted in the United States and overseas are eligible 29489 for reimbursement, CCC has added new § 1485.17(b)(6) and new § 1485.17(c)(25). Section 1485.17(b)(6) provides that, for both generic and brand promotions, non-travel expenditures associated with seminars and educational training, whether conducted inside or outside the United States, are reimbursable. Further, for generic promotions, international travel expenditures associated with seminars and educational training conducted inside or outside the United States are already reimbursable under § 1485.17(c)(8). And, for generic promotions, new § 1485.17(c)(25) now reimburses domestic travel for seminars and educational training conducted in the United States. For brand promotions, no travel expenditures associated with seminars or educational training, whether conducted inside or outside the United States, are eligible for reimbursement. The chart below summarizes the reimbursement rules for seminars and educational training. Seminars and educational training outside U.S. Generic promotion .... Seminars and educational training inside U.S. Non-travel expenditures: Reimbursable (§ 1485.17(b)(6) ..... Non-travel expenditures: Reimbursable subject to conditions (§ 1485.17(b)(6)). International travel expenditures: Reimbursable (§ 1485.17(c)(8)). Domestic travel expenditures: Reimbursable (§ 1485.17(c)(25)). Non-travel expenditures: Reimbursable (§ 1485.17(b)(6)). International travel: Not reimbursable. Domestic travel: Not reimbursable. International travel (§ 1485.17(c)(8)). mstockstill on DSK6TPTVN1PROD with RULES2 Brand promotion ....... Reimbursable Non-travel expenditures: Reimbursable (§ 1485.17(b)(6)) .... International travel: Not reimbursable ................................... CCC acknowledges the respondents’ request for clarification of the term ‘‘international organizations’’ and their request to reimburse domestic travel to ‘‘meetings of an international focus within the United States.’’ Due to difficulties in defining the criteria for eligible international organizations and meetings with an international focus, CCC has decided to eliminate the provision allowing reimbursement of domestic travel expenditures for a MAP Participant’s attendance at meetings of international technical organizations and declines to expand reimbursement to include ‘‘meetings with an international focus.’’ Unless such attendance falls within another covered category of reimbursement for domestic travel, domestic travel for these purposes will not be reimbursable under the MAP final rule. Finally, as noted previously, CCC has codified MAP Notice 06–002 in new § 1485.17(c)(26). That section now allows, for generic promotion only, the reimbursement of domestic travel expenditures of a MAP Participant VerDate Mar<15>2010 expenditures: 17:34 May 16, 2012 Jkt 226001 employee, a MAP Participant board member, or a state department of agriculture employee paid by the MAP Participant when such individual accompanies foreign trade missions or technical teams when such missions or teams are traveling in the United States. Such trade missions or technical team visits must be identified in the MAP Participant’s UES and must have been approved by CCC. MAP Notice 06–002 will be removed from the FAS Web site. Comment: Ten respondents commented in reference to § 1485.17(c)(31) and questioned if this included educational seminars in the United States and abroad. Three comments stated they supported the inclusion of activities that are intended to improve market access and therefore recommended the insertion of ‘‘or other appropriate activities’’ following ‘‘educational training’’ and before ‘‘designed to improve market access.’’ Response: CCC notes that § 1485.17(c)(31) is now rendered redundant by § 1485.17(b)(6), § 1485.17(c)(8), and § 1485.17(c)(25). PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 Non-travel expenditures associated with seminars and educational training conducted inside or outside the United States are already reimbursable as noted above pursuant to § 1485.17(b)(6). International and domestic travel expenditures for such activities are reimbursable, for generic promotion only, pursuant to § 1485.17(c)(8) and § 1485.17(c)(25). The intention of proposed § 1485.17(c)(31) was to specifically permit reimbursement of educational seminars, whether in the United States or abroad, where such seminars are intended to address market constraints such as temporary or permanent trade barriers. CCC, however, agrees with the comments that other activities in addition to educational training can achieve this objective. Given that, and the fact educational training is already covered in other subsections of the MAP final rule, CCC consequently has modified § 1485.17(c)(31) (now § 1485.17(c)(32)) to permit reimbursement for expenditures not otherwise prohibited from E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29490 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations reimbursement that are associated with an activity held in the United States or abroad designed to improve market access by specifically addressing temporary, permanent, or impending technical barriers to trade that prohibit or threaten U.S. exports of agricultural commodities. Comment: Twenty respondents commented in reference to proposed § 1485.17(d) suggesting the sentence ‘‘A generic promotion activity may also involve the use of specific company names, logos or brand names’’ be clarified to read ‘‘specific U.S. company names, logos, or brand names.’’ The respondents stated that the absence of this clarification gives the impression that two foreign brands have to participate in activities, which would be impossible in the case of store brands. The respondents further commented on the phrase, ‘‘At least two U.S. companies participate.’’ Several of the comments stated that it was not often possible to garner two brands for participation in a generic promotion where brands are specifically identified. One respondent stated that this requirement was so onerous that it would significantly affect their ability to conduct promotions at retail. The respondents stated that some brands may choose not to participate; so this new regulation would limit the ability of a MAP Participant to undertake a generic promotion activity. They recommended that if the MAP Participant can demonstrate that all available brands are invited to participate then the final number of promotion participants would not have an impact on the eligibility of the activity for reimbursement. Response: CCC agrees with the respondents in regard to adding the clarification of ‘‘U.S.’’ to the reference to specific company names, logos, or brand names, and has modified the definition of generic promotion in § 1485.11 accordingly. CCC has also added ‘‘U.S.’’ as a qualifier for promoting separate items from multiple U.S. companies under a generic promotion. However, CCC disagrees with the respondents in regard to requiring two brands for participation and will keep this requirement in the final rule to avoid any appearance of promoting a single brand under a generic promotional activity. The text of proposed § 1485.17(d) has been moved into the definition of ‘‘generic promotion’’ in § 1485.11. § 1485.17 has been reordered. Comment: One respondent recommended that this section be rewritten as follows: ‘‘A generic promotion activity may include the VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 promotion of a foreign brand if the foreign brand uses the promoted U.S. agricultural commodity. A generic promotion activity may also involve the use of specific company names, logos, or brand names. However, in that case, the MAP Participant must ensure that all U.S. and/or foreign companies seeking to promote such U.S. agricultural commodity in the market have an equal opportunity to participate in the market and that at least two companies participate.’’ Response: CCC disagrees with the respondent, and the final rule will continue to reflect that a generic promotional activity may include the promotion of a foreign brand only if the foreign brand uses the promoted U.S. agricultural commodity from multiple U.S. suppliers. The text of proposed § 1485.17(d) has been moved into the definition of ‘‘generic promotion’’ in § 1485.11. § 1485.17 has been reordered. Comment: Fifteen respondents stated in reference to § 1485.17(d) that most foreign brands are developed for the local companies to add value and be competitive in the market and are not generally designed to be the way for U.S. products to enter the market. The objective should be to encourage foreign brands to incorporate U.S. agricultural commodities, but the phrase, ‘‘and is the primary market access to the targeted market for the U.S. agricultural commodity’’ appears to limit it. The respondents questioned what exactly does the phrase itself mean, and recommended that this section be rewritten or deleted altogether. Response: CCC believes that foreign brands are often very useful for increasing U.S. exports generically. Multiple foreign brands may use U.S. products, however, and a single foreign brand does not need to provide the ‘‘primary market access to the targeted market.’’ Thus, CCC agrees with the respondents and has modified the proposed text of § 1485.17(d) to remove the phrase as requested. The text of proposed § 1485.17(d) has been moved into the definition of ‘‘generic promotion’’ in § 1485.11. § 1485.17 has been re-ordered. Comment: Sixteen respondents commented in reference to § 1485.17(d) that since Participants are currently allowed to promote foreign brands that are composed of U.S. commodities, this rule would place the U.S. companies at a disadvantage because Participants could promote their foreign competitors and not U.S. companies. The respondents suggested removing this language to open it up to Participants promoting U.S. company names, logos, PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 or brand names that compete with foreign brands in their market. Response: CCC believes that § 1485.17(d) in the proposed rule has been misunderstood in reference to the promotion of a foreign brand. Promoting a foreign brand constitutes a generic activity promoting the U.S. commodity because the foreign brand uses the promoted commodity from multiple U.S. suppliers. In contrast, promoting a single U.S. brand would constitute a branded activity. While § 1485.17(d) specifically states that a generic promotion activity may also involve the use of multiple specific U.S. company names, logos, or brand names, such branding must meet the conditions of § 1485.17(d), which ensures that the activity remains ‘‘generic’’. The text of proposed § 1485.17(d) has been moved into the definition of ‘‘generic promotion’’ in § 1485.11. Section 1485.17 has been re-ordered. In addition, as discussed in the response to a prior comment, CCC deleted the requirement that generic promotion activity may include the promotion of a foreign brand only if the foreign brand is the primary market access to the targeted market for the U.S. agricultural commodity. Comment: In reference to § 1485.17(d) fourteen respondents provided similar comments in regard to food service promotions. Several stated that generally food service operators rely on one U.S. supplier and the U.S. product is promoted as part of the food service item, identifying the U.S. origin but not the brand. The new regulation states, ‘‘a generic promotion activity may include the promotion of a foreign brand if the foreign brand uses the promoted U.S. agricultural commodity from multiple U.S. suppliers’’. The respondents stated this is not always achievable and they recommend recognizing the broad generic parameters achieved within the context of the entire activity (food service/retail/bakery, etc.) within a market. Response: CCC disagrees. CCC does not consider the promotion of a foreign brand that uses only a single supplier to be generic promotion. The text of proposed § 1485.17(d) has been moved into the definition of ‘‘generic promotion’’ in § 1485.11. Section 1485.17 has been re-ordered. Comment: One respondent commented in reference to § 1485.17(e)(19) (now § 1485.17(d)(19)), which provides that membership fees in clubs and social organizations are not reimbursable. The respondent asked for clarification whether fees paid to a professional industry-related E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations organization would be eligible for reimbursement. Response: CCC intends that fees paid to a professional, industry-related organization would be eligible for reimbursement, and has added new § 1485.17(c)(33) to include such language for generic promotions only. Membership fees for clubs and social organizations remain ineligible. Comment: Three respondents stated that § 1485.17(e)(26) (now § 1485.17(d)(26)) conflicts with § 1485.17(c)(23) (now § 1485.17(c)(22)) and recommended that this be amended by adding ‘‘except as noted at § 1485.17(c)(23).’’ Response: CCC agrees with the respondents’ comment and has amended new § 1485.17(d)(26) to reference § 1485.17(c)(22). Comment: Seventeen respondents commented in reference to § 1485.17(e)(27) and suggested the phrase ‘‘negative comparison’’ be removed. One respondent suggested that if CCC believed that the concept needs to be addressed then the phrase should be replaced with ‘‘derogatory’’. Another questioned whether if a product from one MAP Participant has a better functionality in an end product than that of another MAP Participant, can such statement not be made. Another respondent stated that it was unclear as to the definition of ‘‘negative comparison’’ and questioned if this regulation only refers to comparing a U.S. source of the competitive product as compared to a local source or making a generic statement that does not reference national origin. This respondent requested that this regulation be clarified to permit valid comparisons of a promoted product with that of a locally produced or generically stated product. One stated that the term ‘‘negative’’ was too general and also stated that it was not possible to discuss advantages of one of its products without suggesting something negative about some of its competitors’ other products. Two respondents stated that the words ‘‘negative comparison’’ may be too restrictive a term if it prevents the forthright statement of facts and comparison of functionality and relative value of various commodities and products in a given use. Several recommended revising this section by removing the words ‘‘negative comparison.’’ Response: CCC agrees with the comments requesting the removal of the phrase ‘‘negative comparison’’ and with the comment asking to substitute ‘‘derogatory’’ in its place. CCC has modified § 1485.17(e)(27) (now § 1485.17(d)(27)) accordingly to prohibit VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 reimbursement of any expenditure on an activity that includes any derogatory reference or comparison to other U.S. agricultural commodities. Comment: Four respondents commented on § 1485.17(e)(28), which provides that CCC will not reimburse the cost of any expenditure on an activity that contradicts U.S. foreign policy. Respondents stated that it was not clear how the exact standard of U.S. foreign policy is to be determined and what constitutes a contradiction of that policy. One stated that the regulation was too vague. Another stated that it agreed with the spirit of the regulation but were unsure how it should determine if it was contradicting U.S. foreign policy. The respondents recommended further clarification. Response: CCC agrees with the respondents that the U.S. foreign policy that applies to MAP Participants is not clearly articulated in the regulation. Moreover, independent regulations and Presidential Executive Orders setting out foreign policy related to specially designated nationals and other economic trade sanctions already apply to MAP Participants independent of the MAP final rule. Accordingly, CCC has deleted § 1485.17(e)(28) from the final rule. Comment: Two similar comments were made in reference to § 1485.17(f). One respondent stated that it supports the applicability of the GS–15 Step 10 salary cap as it relates to non-U.S. citizens; however, it stated in the case of contractors (U.S. citizens or non-U.S. citizens), application of this pay scale should be left to the discretion of the Participant. The respondent stated that adherence to the pay scale does not relieve Participants from having to competitively bid the position; since the Participant will have to competitively bid the position, the Participant should be allowed to pay and be reimbursed for the bid amount, which is a compensation amount that is reasonable for the market. Another respondent stated that this method of rate-setting is unfair to companies in high cost regions of the world and that it benefits those located in less expensive areas, especially third-world countries. Response: § 1485.17(f) (now § 1485.17(e)) refers to employees or contractors who are hired to act as employees, rather than contractors hired to undertake a specific activity. Thus, this is not a bidding situation. CCC has modified the final rule to clarify that the type of contractor subject to § 1485.17(e) are ‘‘contractors who are hired to act as employees.’’ If a MAP Participant chooses to employ an employee or contractor at a salary rate higher than is PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 29491 permissible in this section, then the MAP Participant must pay for the excess in compensation itself. Comment: Fourteen respondents commented in reference to § 1485.17(g) stating that since this sentence appears in the middle of the section, it is unclear as to what it applies. The respondents suggested that this be moved to the last item under the section. Response: CCC confirms that § 1485.17(g) (now § 1485.17(j)) refers to all of § 1485.17. CCC agrees with the comment and has modified § 1485.17(j). That subsection now states ‘‘CCC may determine, at CCC’s discretion, whether any cost not expressly listed in § 1485.17 will be reimbursed.’’ Sec. 1485.18 Reimbursement Procedures Comment: One respondent commented in reference to § 1485.18(a)(5) that the requirement that claims for reimbursement include the applicable cost category greatly complicates the accounting process for Participants. The respondent stated that unless CCC has some practical need for cost category information, it recommended eliminating that reporting requirement. Response: CCC disagrees. The requirement that claims for reimbursement include cost category is not a new requirement. Moreover, this information is necessary as CCC is often asked by Congress to report expenditures by cost category. Sec. 1485.19 Advances CCC received 45 comments in regard to advances. Comment: Fifteen respondents provided similar comments in reference to § 1485.19(b). Each respondent recommended that language be included about the ability to apply for an advance in the current year if there is an outstanding advance from the previous year. The respondents stated that with the ability to apply for an advance for up to 3 months after the end of a program year this clarification is needed. They also stated that this was not spelled out in the new regulations and might be confusing to newer Participants. Response: CCC does not believe it is necessary to include language about the ability to apply for an advance while there is an outstanding advance from the previous year. In the proposed rule, CCC removed the current rule’s requirement that no advance will be made if an advance from a previous program year is still open. Thus, CCC believes § 1485.19(b) of the proposed rule, which does not contain any E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29492 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations prohibitions on a MAP Participant’s request for an advance (except to require that such Participant meet the criteria for advance payments set forth in the applicable parts of this title, e.g., parts 3015, 3016, 3019), as written, allows Participants to apply for an advance in the current year if there is an outstanding advance from the previous year. In addition, CCC notes that the proposed rule already makes clear that a Participant may apply for an advance for up to 3 months after the end of its program year. The proposed rule provides, in part, that ‘‘CCC will not approve any request for an advance submitted later than 3 months after the end of a MAP Participant’s program year.’’ Comment: Four respondents commented regarding security in reference to § 1485.19(b). Two of the respondents requested clarification as to what circumstances would require submission of security and what type of security would be expected. One commented that the regulation was very vague and stated that they felt that a Participant capable of ‘‘fronting security’’ may not need an advance. Response: Section 1485.19(b) provides, in part, that ‘‘[i]f CCC approves the request, prior to making an advance, CCC may require the MAP Participant to submit security in a form and amount acceptable to CCC to protect CCC’s financial interests.’’ USDA’s uniform federal assistance regulations, in 7 CFR § 3015.17(a), already provide that ‘‘[i]f the recipient is not a unit of government, the awarding agency may require the recipient to carry adequate fidelity bond coverage where the absence of coverage for the grant-supported activity is considered as creat[ing] an unacceptable risk.’’ Similarly, USDA’s uniform administrative requirements for grants and agreements with nonprofit organizations, in 7 CFR § 3019.21(d), provide that ‘‘[t]he Federal awarding agency may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government’s interest.’’ The proposed MAP rule explicitly observed that 7 CFR parts 3105 and 3109 apply to the MAP and MAP Participants (to the extent that they do not directly conflict with the MAP final rule). Thus, to the extent that CCC needs to take precautions to protect the federal government’s interests, USDA’s uniform regulations already provide a way for CCC to do so. To accommodate the respondents’ request to clarify what circumstances would require submission of security and what type of security would be VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 expected, CCC has decided to delete the sentence from § 1485.19(b) quoted above and to add to the end of § 1485.19(b) the following: ‘‘When approving a request for an advance, CCC may require the MAP Participant to carry adequate fidelity bond coverage when the absence of such coverage is considered to create an unacceptable risk to the interests of the MAP. Whether an ‘‘unacceptable risk’’ exists in a particular situation will depend on a number of factors, such as, for example, the Participant’s history of performance in MAP; the Participant’s perceived financial stability and resources; and any other factors presented in the particular situation that may reflect on the Participant’s responsibility or the riskiness of its activities.’’ Thus, CCC will make a determination, based on the applicable facts and circumstances presented by a particular MAP Participant’s advance request, whether the MAP Participant must obtain fidelity bond coverage and in what amount. Comment: Twenty-five respondents made similar comments in reference to § 1485.19(c). Fifteen stated that the requirement for a quarterly financial statement to CCC for all funds advanced and all interest earned is onerous. These respondents further stated that an annual statement should suffice. Six of the comments received recommended a waiver of interest for smaller advances. Four of the respondents stated that Participants are expected to pay all expenses in advance of reimbursement and that the financing of these costs are significant and dramatically exceed any potential revenue generated by interest income therefore they specifically oppose this rule. Response: CCC agrees that requiring a quarterly statement on advances is unnecessary, given the fact that such information should be readily available in the UES system. Accordingly, CCC has deleted the last sentence from § 1485.19(c) requiring the submission of a financial statement. Sec. 1485.20 Employment Practices CCC received 20 comments in regard to this section. Comment: Twenty respondents commented in reference to § 1485.20(a), which requires that MAP Participants enter into written contracts with all employees and that all terms, conditions, and related formalities of such contracts conform to governing local law. The respondents stated that this rule was onerous and counterproductive, and that they opposed this rule. Response: CCC disagrees that this rule is counterproductive or onerous. CCC is PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 aware of several cases of MAP Participants being involved in lawsuits involving the Participant’s overseas employees. The written employment contract protects Participants’ and CCC’s interests. Furthermore, in order to properly perform its compliance and monitoring functions, CCC requires documentation to support all MAP expenditures. The written employment contract provides such documentation for overseas employees. Comment: Fourteen respondents asked if the intent was to require employment contracts with MAP Participant employees in foreign locations and suggested CCC restate this to be clear. Two questioned if this was intended for foreign staff only and stated that contracts would limit both the flexibility of the employer as well as employee and provide a much more difficult environment in cases of unsatisfactory performance by an employee. They also stated that it could lead to substantially higher costs for Participants. One commented that all of the 50 states are ‘‘at-will employment states’’ and that this doctrine covers employment practices for MAP Participants with domestic U.S. staff. Two respondents commented that written contracts should only be required by CCC in reference to employees paid for with MAP funds. Response: CCC intends that this section refers to the employment of overseas employees who are paid in whole or in part with MAP funds and has modified this section accordingly to require ‘‘written contracts with all overseas employees who are paid in whole or in part with MAP funds.’’ CCC disagrees with the comment that contracts would limit the employer’s and employee’s flexibility and make it more difficult to let go of an unsatisfactory employee. A written employment contract would not eliminate the ability of employers to fire employees at will if the contract includes an at-will clause. Similarly, an employment contract can be written to reflect the flexibility desired by the parties to the contract. Sec. 1485.21 Financial Management CCC received 18 comments in regard to this section. Comment: Sixteen respondents provided comments in regard to § 1485.21(c). Fourteen of the respondents stated that the record retention policy is modified to delete the 5-year requirement without specifying the required retention period. They stated that they assumed it was included in 7 CFR part 1, subpart A— Official Records, but questioned the E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations point of referencing this part when the required retention time could be stated here. One respondent commented that there were several references in this section and others to ‘‘applicable parts of this title’’ and stated that was very vague. They asked CCC to clarify the reference more precisely. Another respondent stated they believed § 1485.21(c) pertained to employment records for non-U.S.-based employees and asked that the regulation be restated to clarify this. Response: CCC agrees with the respondents’ recommendation of an explicit statement of the required retention time. 7 U.S.C. § 5662 requires, in part, that MAP Participants maintain all records concerning a program transaction for a period not to exceed 5 years after completion of the program transaction, and to permit the Secretary to have full and complete access, for such 5-year period, to such records. CCC has modified § 1485.21(c) accordingly to require retention of all records concerning a MAP program transaction for a period of 5 years after completion of the program transaction, and to permit CCC to have full and complete access, for such 5-year period, to such records. Additionally, in response to the comment questioning whether employment records had to be retained only for non-U.S.-based employees, CCC has modified § 1485.21(c) to explicitly state that records shall include all documents related to employment of any employees whose salaries are reimbursed in whole or in part with MAP funds, whether such employees are based in the United States or overseas. In response to the comments that refer to ‘‘applicable parts of this title’’ in the MAP final rule are vague, CCC refers to its prior response to a similar comment. Comment: One respondent referenced § 1485.21(d)(6) and asked for clarification of the term ‘‘receipted paid bills.’’ They stated in the past ‘‘stamped’’ paid bills were not considered an acceptable form of proof of payment and that instead there had to be evidence of a financial transaction which involved a third party such as a bank. Response: Receipted paid bills means bills for which receipt of payment has been confirmed in writing by the payee. This language has not been changed from the current regulation. CCC has not changed its past practice. CCC believes this term is well understood and does not believe it is necessary to codify any clarification. Comment: One respondent commented on § 1485.21(d)(7), which VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 requires MAP Participants to maintain documentation supporting contributions. Such documentation must include the dates, purpose, and location of the activity for which the cash or in-kind items were claimed as a contribution; who conducted the activity; the participating groups or individuals; and, the method of computing the claimed contributions. The respondent stated that although the required documentation referenced in this section was relatively easy for a MAP Participant to provide, it was unreasonable to expect this level of detail in reports from the U.S. industry. Response: CCC disagrees. In order to properly perform its compliance and monitoring functions, CCC requires documentation to support all MAP contributions. If U.S. industry expenditures cannot be supported by adequate documentation, such expenditures will not count as eligible contributions. This language has not been changed from the current regulation. Sec. 1485.22 Reports CCC received four comments in regard to § 1485.22. One comment supported the proposed rule. CCC’s responses to these comments are below. In addition, CCC has modified § 1485.22(e) to clarify that CCC can require a MAP Participant to submit an A–133 audit only when CCC is designated the cognizant agency for audit. Comment: One respondent commented on § 1485.22(a), stating that the format currently used to report contributions requires identification of amounts by cost category and source, not by activity code. The respondent stated that to track expenditures by activities would be burdensome, and it recommended that CCC retain the current format for reporting contributions. Response: CCC agrees with the respondent and has modified the section accordingly to delete the requirement to identify contributions by activity. Comment: Two respondents commented in reference to § 1485.22(b), stating that in many cases, documentation of travel and travel expenses were not received by the Participant until well beyond the proposed 45 day period after travel. The respondents proposed that the reference to ‘‘completion of travel’’ be replaced with ‘‘submission of claims for travel expenses.’’ Response: CCC disagrees with the respondent. Travel expense information is not required in trip reports. Moreover, PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 29493 this provision has been in place for at least 15 years, and reporting has become easier with the improvement in electronic technologies. Sec. 1485.23 Evaluation In reference to § 1485.23(b), CCC received six comments supporting the change in requirements for submission of the evaluation report from 3 months to 6 months. They stated this change will result in an improved ability to more accurately report the results of their activities. Sec. 1485.24 Notices Compliance Reviews and CCC received 107 substantive comments in reference to § 1485.24. CCC has also deleted the reference to ‘‘a notice of delinquency’’ from § 1485.24(e)(2). Pursuant to 7 CFR part 1403, when a debt is due CCC, only an initial written demand for payment is provided to the debtor. Comment: Fifteen respondents recommended that CCC develop and publish a realistic timeline for MAP Participants to come into compliance with the new regulations after the effective date. The respondents stated that compliance with the contracting guidelines and anti-fraud requirements requires a reasonable length of time. Response: CCC has delayed the effective date of the final rule until the MAP Participant’s 2013 program year (i.e., either 01/01/2013 or 07/01/2013). MAP Participants may, however, voluntarily choose to comply with § 1485.15(a)–(b), § 1485.29(d) and § 1485.31(a)(1) of the final rule in their 2012 program year. In subsequent program years after 2013, a new MAP Participant, including a former Participant that did not participate in the previous program year, will be required to submit its initial brand program operational procedures (as applicable), contracting guidelines and anti-fraud program as set forth in its approval letter. Returning MAP Participants will be required to submit their brand program operational procedures (as applicable) and antifraud program, as set forth in their approval letters. Comment: Twenty-two respondents stated their concern in reference to § 1485.24(d). The respondents stated that they were concerned that the proposed rule states ‘‘the fact that a compliance review has been conducted by USDA staff does not signify that a MAP Participant is in compliance with its program agreement, approval letter and/or applicable laws and regulations.’’ E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29494 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations Response: This language is included to signify that a compliance review may not identify all occasions in which a Participant is out of compliance. The fact that a compliance review had occurred and did not uncover the noncompliant action is not a defense to any subsequent determination by CCC that the Participant is not in compliance with its program agreement, approval letter and/or applicable laws and regulations. Similarly, a future compliance review may include findings that were not identified in a previous review, although similar noncompliant actions may have occurred during the time period covered by the previous review. Comment: Fifteen respondents questioned how a Participant can be assured that it is in compliance with the MAP program if a compliance review cannot be used as a basis for establishing program compliance. Another respondent commented that § 1485.24(d) seems to imply that a compliance review means only that the auditor has not found anything—yet. One respondent stated that when a Participant has acted in good faith, the determination long after the fact that a given practice was in error should not cause CCC to re-open previously audited expenditures for reimbursement to CCC. Several of the respondents stated that a successful review should be considered confirmation that a Participant is in compliance with its program agreement, approval letter and/ or applicable laws and regulations. They questioned what value a compliance review has if it doesn’t attest to a Participant’s compliance. Two respondents commented that the problems with this language are further compounded by the current rarity of reviews and the extended length of time it takes to receive the official concluding letter. Fourteen comments stated that the compliance staff should develop an approach that would be sufficient to cover all areas of the program and give all Participants (MAP Participants and USDA staff) a sense of confidence that a thorough review has been achieved. Response: CCC disagrees. When requesting and accepting MAP funding, MAP Participants become responsible for the effective control over all funds, property, and other assets they receive from the federal government. MAP Participants must act accordingly and institute their own internal controls for safeguarding these funds. CCC has a similar duty to ensure public funds are properly expended. Compliance reviews are one way in which CCC discharges, in part, this duty. The purpose of such reviews is to VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 give assurance to CCC, not MAP Participants. These reviews are not comprehensive evaluations for Participants regarding their own internal controls and systems. Moreover, even the most stringent review would not necessarily bring about CCC’s complete confidence that a Participant’s program did not include any non-compliant actions. As an example, fraudulent behavior by a MAP Participant’s contractor may initially appear to be completely compliant upon review of well-crafted fraudulent documentation. A subsequent whistleblower complaint, however, may reveal the fraudulent activity. It is simply not possible for CCC to confirm that an entire program is in compliance for any MAP Participant, much less for all MAP Participants. In short, whether or not CCC’s compliance staff conducts a compliance review of a MAP Participant’s program and regardless of the outcome of that review, the Participant retains the ultimate responsibility, as a result of having accepted federal funds, for running its program in compliance with all applicable laws and regulations. Comment: Fourteen respondents proposed that additional language be added to this section, stating, ‘‘Should USDA staff determine that a MAP Participant is out of compliance, the MAP Participant will be required as in (b) and (c) of this subpart to return to CCC the amount of funding deemed to have been inappropriately spent for the reviewed program year. Notice will be made of the particular error and shared with all MAP Participants. A pattern of this error may be noted but the MAP Participant will only be required to reimburse CCC for the compliance finding resulting from the current review and at the time the finding was made and going forward and not liable for previously un-reviewed and undiscovered findings.’’ Response: CCC disagrees with this comment. CCC does not agree that all compliance findings are appropriate to share with other MAP Participants. While compliance findings often are the results of errors or misunderstandings, occasionally compliance findings involve intentional actions taken to violate the regulations. Such actions are often covered up by the perpetrator, and are sometimes not discovered through normal compliance reviews. CCC will continue its current practice of providing notice to MAP Participants of patterns of errors or misunderstandings that it has discovered through compliance reviews and that it deems appropriate to share with all MAP Participants. Also, as noted in previous PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 responses, CCC disagrees that MAP Participants should not be liable for previously undiscovered instances of noncompliance. Comment: Nineteen respondents commented in reference to § 1485.24(e)(1) stating that the reduction in the amount of time for a Participant to respond to an audit finding from 60 to 30 days was an unreasonably short period of time, an unwarranted reduction and an onerous requirement. Several stated that staff members are not always in-country to begin working on a response immediately and that 30 days does not provide sufficient time for the Participant to research and develop an adequate response or appeal. Response: CCC concurs with the commenters that the reduction in time to respond may create an onerous requirement as Participants are often in travel status. Therefore, CCC has changed § 1485.24(e)(1)’s period of time within which a MAP Participant may submit a response to a compliance report or written notice back to 60 days. In addition, CCC has made a corresponding change to § 1485.24(b) and (c), whereby if a MAP Participant notifies CCC within 30 days of the date of the written compliance report or written notice that the Participant intends to file an appeal pursuant to § 1485.24(e), the amount owed to CCC by the MAP Participant is not due until the appeal procedures are finished and CCC has made a final determination as to the amount owed. Sec. 1485.25 Failure To Make Required Contribution CCC received 17 comments in reference to § 1485.25. Comment: Sixteen respondents stated that they believed that the time to remit payment for failure to make required contributions should be 6 months after the program year ends, not 90 days. Two respondents proposed the contributions should be within 6 months in order to be consistent with the proposed rule at § 1485.23(b), which states that evaluation results be submitted within 6 months following the end of the Participant’s program year. They stated the evaluation process is an essential component in determining a MAP Participant’s contribution level and therefore proposed that § 1485.25 be amended to read, ‘‘a MAP Participant shall remit such payment within 6 months after the end of the program year.’’ Response: CCC agrees that the time to remit payment should be 6 months, because the MAP Participant has 6 months to develop its contribution report and may not realize it has fallen E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations mstockstill on DSK6TPTVN1PROD with RULES2 short in contributions until the report is complete. Section 1485.25 has been modified accordingly. Sec. 1485.28 Ethical Conduct CCC received 21 comments in reference to § 1485.28. Comment: One respondent commented on § 1485.28(b), which states that ‘‘A MAP Participant may, however, collect check-off funds and membership fees that are required for membership in the MAP Participant.’’ The commenter also refers to § 1485.28(c), which states, in part, that ‘‘A MAP Participant shall not limit participation in its MAP activities to members of its organization.’’ The respondent stated the two sections appear to be contradictory and further questioned how a MAP Participant recruits members, if all companies must have equal access to programs and information regardless of their membership in the Participant organization. This respondent stated that additionally, as the companies that are members are contributing financial resources to satisfy the MAP’s contribution requirements, it is only fair that these companies derive some benefit over companies that are nonmembers. Nineteen respondents commented in reference to § 1485.28(c) stating that they would like to know what method a MAP Participant is to use to incentivize membership (thus achieving the broadest base) if no preference is permitted as a benefit of membership. They stated that, while not excluding anyone from participating, it is possible to give some limited preference, such as first notice of events, etc. Three of the respondents stated that § 1485.28(c) would require non-members to participate in their marketing program using their brand. These commentators state that a farmer-owned agricultural cooperative cannot permit non-members to participate in the cooperative’s marketing program using the cooperative’s brand. The respondents believed this proposed rule was in direct contradiction with these statutory requirements. One respondent suggested the regulation should state that all commercial entities must have equal opportunity to access program information funded by MAP, but that such opportunity is provided only through membership in a Participant organization. Response: Section 1485.28(b) and § 1485.28(c) are not contradictory. Under § 1485.28(b), a MAP Participant may collect check-off funds and membership fees that are required for VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 membership in the MAP Participant. Section 1485.28(c) prohibits a MAP Participant from limiting participation in its MAP activities to members of its organization. The MAP final rule does not require equal access to the MAP Participant’s non-MAP-funded programs and information. To make clearer that the requirement of open participation is limited to MAP activities, CCC is modifying § 1485.28(c) to require that Participants agree to ensure that their MAP-funded programs and activities are open to all otherwise qualified individuals and entities on an equal basis and without regard to any nonmerit factors. It is CCC’s intention that the benefits of the MAP should be made broadly available throughout the relevant agricultural sector. Not all MAP Participants are similarly structured, and some organizations are far more inclusive than others. Because CCC cannot, and would not desire to, instruct industry groups how to organize themselves, this requirement is placed on those organizations that choose to participate in the MAP. Participating organizations are free to charge reasonable and documentable administrative fees to non-members that participate in MAP-funded activities. CCC notes that § 1485.28(c) is not intended to require MAP agricultural cooperatives to allow non-members to participate in their marketing program using the cooperative’s brands. In response to this comment and the following comment, CCC has modified § 1485.28(c) accordingly to explicitly provide that this provision does not apply to U.S. agricultural cooperatives when implementing their own brand program. Comment: One respondent asked that FAS clarify that § 1485.28(c) and § 1485.28(d) would not apply to nonprofit U.S. agricultural cooperatives with their own brand program. If FAS determines otherwise with respect to the document disclosure provision § 1485.28(c), the respondent asked that the provision be made clear that it allows for the redaction of businessconfidential information from any documents provided pursuant to the provision. Response: As noted above, CCC has modified § 1485.28(c) in response to a prior comment so that the provision does not apply to agricultural cooperatives promoting their own brand program. Furthermore, § 1485.28(d) does not deal with brand promotion, but speaks only to how MAP Participants select industry representatives to participate in generic MAP activities. CCC has also modified § 1485.28(d) to PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 29495 clarify that the provision applies only to generic activities. Sec. 1485.29 Contracting Procedures CCC received 69 comments in reference to § 1485.29. Responses are set forth below. Comment: Three respondents provided similar comments in reference to § 1485.29(b). One comment asked if this section applies to items paid with MAP funds and income generated from programs or only the former. Two questioned if the ‘‘small purchase threshold referenced in 7 CFR part 3019 is set at $100,000, to whom do the contracting plan requirements apply for contracts above $25,000?’’ One respondent questioned what contracting compliance procedures were affected by this dollar threshold. Response: CCC intends that any use of income generated by MAP funded activities should be governed by the MAP regulation. CCC has modified § 1485.32 accordingly to state that the Participant’s use of such revenue or refunds generated from MAP-funded programs shall be governed by 7 CFR Part 1485. Thus, § 1485.29 would apply to items paid, in whole or in part, with income generated from MAP programs. Regarding the questions related to the $100,000 small purchase threshold and the $25,000 contract requirement, CCC notes these are two different thresholds that relate to two different provisions in the MAP final rule. In addition, CCC notes that it has increased the $25,000 threshold to $35,000 in the MAP final rule as discussed below in response to a different comment. Proposed § 1485.29(d) of the MAP final rule created a new requirement for MAP Participants to submit a contracting plan that lists each contract with an annual value of $25,000 or more. In the MAP final rule, CCC changed § 1485.29(d) to require that ‘‘[e]ach MAP Participant shall submit to CCC, for CCC approval, written contracting guidelines for contracts that are funded, in whole or in part, with MAP funds. CCC’s approval of such contracting guidelines will remain in place until CCC retracts its approval in writing or new guidelines are approved that supersede them. Once approved by CCC, these contracting guidelines shall govern all of a Participant’s MAPfunded contracting involving contracts with an annual value of $35,000 or more.’’ Thus, all MAP Participants must establish written contracting guidelines for contracts that are funded in whole or in part by MAP funds and that have an annual value of $35,000 or more. CCC also modified § 1485.29(c) and (d) to E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29496 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations make clear that these provisions apply only to MAP-funded contracts. In addition to this requirement for written contracting guidelines, § 1485.29(b) also provides that ‘‘[a] MAP Participant shall comply with the procurement standards set forth below and in the applicable parts of this title when procuring goods and services and when engaging in construction to implement program agreements (e.g., 7 CFR Parts 3015, 3016, and 3019). For purposes of this subpart, the ‘‘small purchase threshold’’ referenced in 7 CFR part 3019 is the ‘‘simplified acquisition threshold’’ established by 41 U.S.C. § 134.’’ Thus, the small purchase threshold of $100,000 referenced in § 1485.29(b) relates to those procurement standards set out in part 3019 of this title, which sets out the uniform administrative requirements for nonprofit organizations. To illustrate, both 7 CFR part 3019 and 7 CFR part 3016 contain procurement requirements, some of which are tied to the ‘‘simplified acquisition threshold’’ (previously ‘‘the small purchase threshold’’) previously set out at 41 U.S.C. § 403(11), now codified at 41 U.S.C. § 134. See, e.g., 7 CFR § 3019.44(e), 7 CFR § 3016.36(d). This threshold was, at one time, $25,000. It was subsequently increased to $100,000 by statute. Because the current 7 CFR part 3019 has not been updated to reflect the increase in that threshold from $25,000 to $100,000 as set forth in 41 U.S.C. § 403(11), now codified at 41 U.S.C. § 134, CCC clarified the current $100,000 threshold in proposed § 1485.29(b). In response to these comments, however, CCC believes that, to account for possible changes to the simplified acquisition threshold that may occur in the future, it would be best if the final rule referred to the statute fixing the threshold rather than specify the currently applicable threshold. Accordingly, CCC has modified § 1485.29(b) to refer to the threshold set at 41 U.S.C. § 134 rather than a $100,000 threshold. Comment: Thirty-one respondents stated that if the requirement to submit contracting ‘‘plans’’ is retained, they proposed an increase to the annual contract value greater than the current $25,000. A suggestion was made for $100,000. Four comments stated that the total cost is often not known until the bidding is completed. They stated that this regulation was too intrusive and would lead to multiple re-submittals of the contracting plan to account for new and revised contracts. They stated that this policy should not require a listing up-front of all contracts expected during that plan year. VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 Comment: CCC received thirty-one similar comments in reference to § 1485.29(d). All respondents opposed the regulation as written. Fifteen respondents stated that they believed these contracting requirements should apply only to those contracts that are fully funded and reimbursable by MAP and not those that will be paid for with industry funds (contributions). Several respondents stated that the proposed rule was too onerous and that, at most, MAP Participants should be required to provide a description of contracting guidelines, not procedures that could be applied to different contracting situations. Comment: Eighteen respondents provided comments that ‘‘contracting guidelines’’ should be substituted for ‘‘contracting plan’’ and that once a plan (guideline) is approved in any given year, it should not need to be reapproved, unless it changes in some fundamental way. Comment: Seventeen respondents stated their strong opposition to the proposed rule and stated that the rule presented a number of challenges, including that the decision to use a contractor may not be made until the award letter is received and individual projects are approved. They stated that the timing of the award cycle would make this proposed requirement impossible and create an onerous preapproval process that not only micromanages program implementation but would be impossible under the timelines by which the program currently operates. Comment: One respondent proposed a change in the wording in the following passage to read, ‘‘Prior to entering into any contracts during a program year, a MAP Participant must submit to CCC for CCC approval a written contracting (procedure manual).’’ The commenter then asked when the MAP Participant could anticipate receiving approval of their contracting procedure manual. Another proposed that at most FAS require that the Participant develop a description of contracting procedures that could be applied to different contracting situations and would remain applicable over multiple years. Comment: Fourteen respondents questioned on what basis anyone at CCC would be qualified to judge a Participant’s contracting plan. They stated conversely, if the judgment was only related to whether there was a plan or whether it was adequately updated, then what was the point? They stated that this set of requirements created the need for a parallel notification process as Participants will be forced to amend the plan with each new need. PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 Comment: Fifteen respondents commented in reference to § 1485.29(d)(1) stating that much of this section was covered by inference in § 1485.28; so it should not need to be spelled out here. Comment: Three respondents stated they supported the regulation for requiring an annual documented evaluation for in-country representation in lieu of the current arbitrary process of rebidding every 3 years. Response: The proposed rule established a requirement for a contracting plan in § 1485.29(d) because CCC has received many questions about appropriate contracting procedures over recent years. The proposal was not meant to be an onerous requirement. Rather, it was meant to encourage MAP Participants to formalize their contracting methods and intentions for a given year and to give MAP Participants the opportunity to obtain in advance CCC review and pre-approval of the Participants’ contracting methods. CCC understands that the bulk of the opposition to this proposal stems from the requirement to list all contracts. CCC agrees that this is unnecessary and actually detracts from the intended purpose. CCC has accordingly modified § 1485.29(d) to require that MAP Participants establish contracting guidelines to follow as various contracting situations arise. Individual contracts need not be identified. Moreover, CCC has removed the requirement that a MAP Participant must submit its contracting plan to CCC prior to entering into any contracts during the program year. Rather, the MAP final rule now provides that after CCC approves the initial contracting guidelines, such approval will remain in place until CCC retracts its approval in writing or new guidelines are approved that supersede them. As discussed above in response to a separate comment, MAP Participants shall submit their contracting guidelines to CCC as set forth in their approval letters. The MAP final rule continues to allow the MAP Participant to modify and resubmit these guidelines for reapproval at any time. CCC agrees that these contracting requirements should apply only to those contracts that are funded, in whole or in part, by MAP funds and not those that are paid for with industry funds (contributions). CCC has modified § 1485.29(d) accordingly. CCC observes that this would encompass all contracts funded in whole or in part with MAP funds, which would include contracts with U.S.-based organizations that are retained to implement or assist with approved international market E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations development efforts, if such contracts were funded by MAP. CCC does not agree with the suggestions to increase the threshold of $25,000 to $100,000 for contracts that are to be submitted in contracting ‘‘plans.’’ First, CCC notes that the requirement no longer requests contracts to be listed. Second, CCC observes that CCC chose the $25,000 level in the proposed rule because that is the same threshold that CCC has maintained since 1996, as reflected in MAP Notice 05–005, for the contract competition requirement. Since 1996, CCC has required MAP Participants to conduct an appropriate form of competition at least every three years on all contracts valued at $25,000. CCC believes that the $25,000 level is an appropriate level not only for when competition should be conducted but also for determining what contracts should be subject to written contracting guidelines. However, in recognition that the $25,000 level should be adjusted for inflation, using the Department of Labor’s Bureau of Labor Statistics inflation calculator, CCC has increased the minimum level to $35,000, with the possibility of future increases through written guidance announced to MAP Participants via a MAP notice issued on FAS’ Web site. Section 1485.29(d) has been modified accordingly. CCC notes that MAP Notice 99–003 is now obsolete and will be removed from FAS’ Web site. CCC disagrees that the substance of § 1485.29(d)(1) can already be inferred from § 1485.28 and need not be spelled out in § 1485.29(d)(1). In response to the comment asking when the MAP Participant should expect approval of its contracting procedures, CCC will try to complete its review of contracting guidelines within 21 calendar days of receipt. Comment: A respondent suggested that if an activity is approved in a particular city that MAP Participants be required to at least offer qualified contractors in that city or country an opportunity to bid on the project. The commenter further stated that contractor lists should be obtained from the local post rather than requiring potential contractors to register on a Web site. In addition, the commentator stated that the post should review the activity before it begins. Response: While CCC requires open, fair, and competitive contracting practices, CCC cannot and does not deem it appropriate to instruct MAP Participants in appropriate methods for identifying potential contractors in every market in the world. In addition, VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 some FAS Posts could not review every activity in their markets. Comment: Two respondents provided similar comments in reference to § 1485.29(d)(3) and stated that they understood the rationale for this proposal was ensuring that contracting procedures were open, fair and competitive. They stated that there are exceptions, especially in the area of highly technical services where there is reasonable cause to allow the same individual to draft specifications as to bid on them. The respondents proposed that such circumstances be treated as a rare exception and as one of the ‘‘various situations’’ for which ‘‘separate procedures’’ are developed as cited in § 1485.29(d)(2), to ensure that such exceptional cases result in an open, fair, and competitive contract. Response: In response to the commenters’ requests, CCC has modified § 1485.29(d)(3) to provide that MAP Participants’ written contracting guidelines may detail special situations where the prohibitions in this subsection do not apply, such as in situations involving highly specialized technical services or situations where the services are not commonly offered in a specific market. As discussed above, CCC must approve or disapprove of MAP Participants’ contracting guidelines. Respondents question whether § 1485.29(d)(2) authorizes MAP Participants to develop separate procedures that would allow the same individual to draft specifications to bid on the solicitation. Section 1485.29(d)(2) does not directly address this issue. Consequently, as discussed above, CCC has modified § 1485.29(d)(3) instead. Comment: Six respondents stated that this section does not discuss requirements for contracts of less than $25,000 (now $35,000). Response: While the contracting guidelines required by § 1485.29(d) apply only to contracts with an annual value of $35,000 or more, contracts with an annual value of less than that threshold are still subject to the remaining provisions of the MAP regulations, including § 1485.29(a)–(c), as well as other procurement provisions of the applicable parts of this Title. For example, § 1485.29(c) indicates that all contracting should be fair, open, and competitive. Sec. 1485.31 Anti-Fraud Requirements CCC received 85 comments in reference to this section. Comment: Twenty-one respondents provided similar comments in reference to § 1485.31(a)(1), stating that the PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 29497 regulation as written was too intrusive and onerous. Several of the respondents recommended either removing this regulation altogether and/or treating it like Civil Rights training by developing course work based on what was developed for the anti-fraud course offered by Western U.S. Agricultural Trade Association. The respondents stated that FAS could then require all MAP Participant staff and board with fiduciary responsibilities to take the course and submit certification statements to that effect. Response: CCC disagrees. CCC’s position is that anti-fraud efforts should be more structured and intensive than in the past. Recent incidents indicate fraud has the potential to cause considerable losses to the government. In addition to the requirement that they develop a fraud prevention program, MAP Participants are highly encouraged to attend anti-fraud training courses. Comment: Seventeen respondents stated that if necessary, this plan should be developed once, submitted and approved and only be resubmitted if there has been some fundamental change. As with the contracting subpart, they questioned what the timing was for submission of the MAP Participant’s fraud prevention program and when the MAP Participant should expect the program’s approval. Three respondents asked for clarification on when the information needs to be submitted and if the review was to be done by an independent third party or if it could be done in house. Two respondents provided comments proposing that the annual submission take place outside of the annual UES application process or that it be completed as part of the regular compliance review process. Response: CCC disagrees that plans should only be re-submitted if there are fundamental changes to the plan. While an initial plan would not need to be rewritten every year, CCC expects MAP Participants to review their anti-fraud plans annually and to submit these plans each year, regardless of whether they have fundamentally changed. CCC has modified § 1485.31(a)(1) to make clear that MAP Participants should review their fraud prevention programs annually. While a plan may not change dramatically from one year to the next, CCC expects that annual reviews would yield the need for minor changes from time to time and expects to review the current applicable plan for each program year. It is not necessary that the plan be developed by an independent third party if the MAP Participant has internal expertise. E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29498 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations As stated above in response to an earlier comment, it is expected that a 2013 MAP Participant should submit its initial anti-fraud program as directed in its approval letter. Thus, annual submission will take place outside of the UES application process. In subsequent program years, a new Participant, including a former Participant that did not participate in the previous program year, will be required to submit its initial anti-fraud program as set forth in its approval letter. For continuing annual submissions, MAP Participants will submit their plans as directed in their approval letters. CCC does not agree that the anti-fraud submission should be completed as part of the regular compliance review process. First, as noted above in response to a similar request related to operational brand procedures, the purpose of the CCC review is to approve a plan at the start of a program year, before the program begins operation. Compliance reviews look at what has historically happened. Moreover, during the compliance review, CCC may review the implementation of the plan, rather than the plan itself. In response to the comment asking when the MAP Participant should expect approval of its program, CCC will endeavor to complete its review within 21 calendar days of receipt. Comment: Sixteen respondents questioned if a MAP Participant has multiple locations with accounting responsibilities, does the annual review have to include all locations or just the corporate headquarters where the financial consolidation occurs? Response: Because fraud can occur both at corporate headquarters and field offices, CCC expects anti-fraud reviews to encompass all of a Participant’s offices. Comment: One respondent commented that this section appears to apply to exclude brand participants. The respondent stated that the current fraud prevention program covered by A–133 covers this requirement, and therefore it asserted that this regulation was redundant and recommended that this regulation be eliminated or A–133 should be eliminated. Response: The anti-fraud requirements are imposed on MAP Participants, not brand participants that participate in the MAP program through MAP Participants. CCC disagrees that § 1485.31’s requirements are redundant with OMB Circular A–133. OMB Circular A–133 requires, in part, that subject entities (those who expend $500,000 or more in federal awards) have an audit conducted. Such entities VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 must maintain appropriate internal controls. In contrast, the MAP final rule applies to all MAP Participants (not just those who expend $500,000 or more) and requires a specific proactive and preemptive fraud prevention program. One of the objectives of the fraud prevention requirement is to make MAP Participants more aware of the specific risk for brand participants to defraud them. The MAP requirements are in addition to, not in lieu of, the requirements of OMB Circular A–133. Comment: Two respondents questioned if the cost of fraud prevention review would be reimbursable. Response: CCC does not intend for anti-fraud efforts to be reimbursable with MAP funds. CCC has added § 1485.17(d)(31) to clarify this. Comment: One respondent stated that it (the Participant) has adhered to an internal controls document which includes language on fraudulent behavior. It stated that it would like clarification of the new anti-fraud preparation policies to ensure that its policies adhere to MAP regulations. Response: While CCC may provide anti-fraud training and guidance in the future, given the differences in structure between classes of MAP Participants, as well as differences between individual MAP Participants, CCC does not believe CCC should dictate a single set of antifraud procedures or a model anti-fraud plan for all MAP Participants to use. The respondent may submit its internal controls document to CCC by the time stated in its approval letter or any time before that, at which time CCC will review this document and respond. Comment: One respondent commented that it did not feel that each Participant should be responsible for developing its own anti-fraud program and that this would result in the application of different security standards. This respondent stated it would be more efficient and more economical if CCC, with the assistance of an outside contractor, could develop a set of minimum anti-fraud procedures for all Participants to use. Response: While CCC may provide anti-fraud training and guidance in the future, given the differences in structure between classes of MAP Participants, as well as differences between individual MAP Participants, CCC does not believe CCC should dictate a single set of antifraud procedures or a model anti-fraud plan for all MAP Participants to use. Comment: Three respondents provided similar comments in reference to § 1485.31(a)(2). All three suggested that the language be modified to read, ‘‘notify CCC promptly when any PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 instances of fraud have been substantially determined.’’ Response: CCC disagrees with the respondents and believes CCC should be a part of any investigation early enough to determine if fraud has occurred. Sec. 1485.32 Program Income CCC received six comments in regard to this issue. Comment: One respondent stated that as an organization that conducts activities spanning more than one program year, it felt there were several challenges with this language. It stated that it does not see a way to comply strictly with the proposed language and further stated that it recommended that Participants be allowed to create a program reserve (at an agreed upon level) from participation fees, with the understanding that any funds above that level be remitted to CCC as they occur and that the reserve fund itself remit to CCC if/when the Participant terminates participation in the MAP program. Comment: Four respondents stated they strongly support the proposed revision. Response: Proposed § 1485.32 allowed the MAP Participant to expend program income in furtherance of the MAP Participant’s approved MAP activities in the program year in which the program income was received. CCC, however, acknowledges that a MAP Participant’s program can be funded over a multi-year basis. Therefore, given that the grant period may be multi-year and certain activities may occur over more than one calendar year, CCC has accordingly modified § 1485.32 to allow MAP Participants to use program income in furtherance of approved MAP activities during the program period over which the MAP Participant may expend the MAP funds, regardless of the specific program year that the income was received. Thus, for example, if a MAP activity in program year 1 yields a net revenue in program year 2 in a 3-year MAP grant, the MAP Participant should apply that revenue to MAP activities conducted in program year 2 or 3. CCC does not believe that allowing MAP Participants to establish a reserve fund with program proceeds is appropriate. Sec. 1485.36 Paperwork Reduction Requirements CCC received three comments to this section. Comment: Three respondents recommended that CCC transition from solely paper recordkeeping of MAP related files to electronic recordkeeping. Response: CCC understands the respondents’ comments to refer to CCC’s E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations use of the UES, the standardized online Internet application used by entities to apply to any USDA market development program, including the MAP. MAP Participants currently use the UES to submit reimbursement claims, trip reports, and other information to CCC under the MAP. While CCC believes MAP Participants’ use of the UES effectively reduces costs and increases efficiencies, MAP Participants cannot transition solely from paper recordkeeping to electronic recordkeeping. The MAP final rule requires Participants to maintain records of expenditures and contributions to substantiate their MAP activities. Such records must include, inter alia, original receipts for all STRE (e.g., actual vendor invoices or restaurant checks) and any other program-related expenditure in excess of $75.00 (e.g., canceled checks, receipted paid bills, contracts or purchase orders, per diem calculations, travel vouchers, and credit memos). Where the original documentation is provided in paper, MAP Participants must maintain and make such paper documentation available for review for compliance and monitoring purposes. List of Subjects in 7 CFR Part 1485 Agricultural commodities, Exports. For the reasons stated in the preamble, CCC amends 7 CFR part 1485 as follows: PART 1485—GRANT AGREEMENTS FOR THE DEVELOPMENT OF FOREIGN MARKETS FOR U.S. AGRICULTURAL COMMODITIES 1. The authority citation for 7 CFR part 1485 reads as follows: ■ Authority: 7 U.S.C. 5623, 5662–5663 and sec. 203, 402–403, Pub. L. 95–501, as amended, 92 Stat 1685 and sec. 1302, Pub. L. 103–66, 107 Stat. 330. 2. Subpart B is revised to read as follows: mstockstill on DSK6TPTVN1PROD with RULES2 ■ Subpart B—Market Access Program Sec. 1485.10 General purpose and scope. 1485.11 Definitions. 1485.12 Participation eligibility. 1485.13 Application process. 1485.14 Application review and formation of agreements. 1485.15 Operational procedures for brand programs. 1485.16 Contribution rules. 1485.17 Reimbursement rules. 1485.18 Reimbursement procedures. 1485.19 Advances. 1485.20 Employment practices. 1485.21 Financial management. 1485.22 Reports. 1485.23 Evaluation. 1485.24 Compliance reviews and notices. VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 1485.25 Failure to make required contribution. 1485.26 Submissions. 1485.27 Disclosure of program information. 1485.28 Ethical conduct. 1485.29 Contracting procedures. 1485.30 Property standards. 1485.31 Anti-fraud requirements. 1485.32 Program income. 1485.33 Amendment. 1485.34 Noncompliance with an agreement. 1485.35 Suspension, termination, and closeout of agreements. 1485.36 Paperwork reduction requirements. Subpart B—Market Access Program § 1485.10 General purpose and scope. (a) This subpart sets forth the general terms, conditions, and policies governing the Commodity Credit Corporation’s (CCC) operation of the Market Access Program (MAP). (b)(1) In addition to the provisions of this subpart, other regulations of general application issued by the U. S. Department of Agriculture (USDA), including the regulations set forth in Chapter XXX of this title, ‘‘Office of the Chief Financial Officer, Department of Agriculture,’’ may apply to the MAP and MAP Participants, to the extent that these regulations of general application do not directly conflict with the provisions of this subpart. These include, but are not limited to: (i) 7 CFR part 1, subpart A—Official Records (ii) 7 CFR part 3—Debt Management (iii) 7 CFR part 15, subpart A— Nondiscrimination (iv) 7 CFR part 3015—Uniform Federal Assistance Regulations (v) 7 CFR part 3016—Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (vi) 2 CFR part 417—Governmentwide Debarment and Suspension (Nonprocurement) (vii) 7 CFR part 3018—New Restrictions on Lobbying (viii) 7 CFR part 3019—Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations (ix) 7 CFR part 3021—Governmentwide requirements for drug-free workplace (financial assistance) (x) 7 CFR part 3052—Audits of States, Local Governments, and Non-profit Organizations (xi) 48 CFR part 31—Contract Cost Principles and Procedures of the Federal Acquisition Regulations. (2) In addition, relevant provisions of the CCC Charter Act (15 U.S.C. 714 et seq.) and any other statutory provisions that are generally applicable to CCC are PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 29499 also applicable to the MAP and the regulations set forth in this part. (3) MAP Participants must also comply with Title VI of the Civil Rights Act of 1964 and related civil rights regulations and policies. (4) Other laws and regulations that apply to MAP Participants include, but are not limited to: (i) 2 CFR part 25—Universal Identifier and Central Contractor Registration (ii) 2 CFR part 170—Reporting Subaward and Executive Compensation Information (iii) 2 CFR part 175—Award Term for Trafficking in Persons (iv) 2 CFR part 180—OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) (v) 37 CFR part 401.1—Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements (vi) Executive Order 13224, as amended, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism (c) Under the MAP, CCC may provide grants to eligible U.S. entities to conduct certain marketing and promotion activities aimed at developing, maintaining, or expanding commercial export markets for U.S. agricultural commodities and products. MAP Participants may receive assistance for either generic or brand promotion activities. While activities generally take place overseas, reimbursable activities may also take place in the United States. CCC expects all activities that occur in the United States for which MAP reimbursement is sought to develop, maintain, or expand the commercial export market for the relevant U.S. agricultural commodity in accordance with the MAP Participant’s approved MAP program. When considering eligible nonprofit U.S. trade organizations, CCC gives priority to organizations that have the broadest producer representation and affiliated industry participation of the commodity being promoted. (d) The MAP generally operates on a reimbursement basis. (e) CCC’s policy is to ensure that benefits generated by MAP agreements are broadly available throughout the relevant agricultural sector and that no single entity gains an undue advantage. CCC also endeavors to enter into MAP agreements covering a broad array of agricultural commodity sectors. The MAP is administered by personnel of the Foreign Agricultural Service (FAS) acting on behalf of CCC. E:\FR\FM\17MYR2.SGM 17MYR2 29500 mstockstill on DSK6TPTVN1PROD with RULES2 § 1485.11 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations Definitions. For purposes of this subpart the following definitions apply: Activity—a specific foreign market development effort undertaken by a MAP Participant. Administrative expenses or costs— expenses or costs of administering, directing, and controlling an organization that is a MAP Participant. Generally, this would include expenses or costs such as those related to: (1) Maintaining a physical office (including, but not limited to, rent, office equipment, office supplies, office ´ decor, office furniture, computer hardware and software, maintenance, extermination, parking, business cards); (2) Personnel (including, but not limited to, salaries, benefits, payroll taxes, individual insurance, training); (3) Communications (including, but not limited to, phone expenses, internet, mobile phones, personal digital assistants, email, mobile email devices, postage, courier services, television, radio, walkie talkies); (4) Management of an organization or unit of an organization (including, but not limited to, planning, supervision, supervisory travel, teambuilding, recruiting, hiring); (5) Utilities (including, but not limited to, sewer, water, energy); (6) Professional services (including, but not limited to, accounting expenses, financial services, investigatory services). Approval letter—a document by which CCC informs an applicant that its MAP application for a program year has been approved for funding. This letter may also approve specific activities and contain terms and conditions in addition to the program agreement. This letter requires a countersignature by the MAP Participant before it becomes effective. ´ Attache/Counselor—the FAS employee representing USDA interests in the foreign country in which promotional activities are conducted. Brand participant—a small-sized U.S. for-profit entity, or a U.S. agricultural cooperative that owns the brand(s) of the U.S. agricultural commodity to be promoted or has the exclusive rights to use such brand(s) and that is participating in the MAP brand promotion program of another MAP Participant. This definition does not include any U.S. agricultural cooperatives that are MAP Participants that apply for MAP funds to implement their own brand programs. Brand promotion—an activity that involves the exclusive or predominant use of a single U.S. company name, or the logo or brand name of a single U.S. VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 company, or the brand of a U.S. agricultural cooperative, or any activity undertaken by a MAP Participant in the brand program. CCC—the Commodity Credit Corporation, including any agency or official of the United States delegated the responsibility to act on behalf of CCC. Contribution—an expenditure made by a MAP Participant, the U.S. industry, or State agency in support of an approved activity. This includes expenditures to be made by entities in the MAP Participant’s industry in support of the entities’ related promotion activities in the markets covered by the MAP Participant’s agreement. Credit memo—a commercial document, also known as a credit memorandum, issued by the MAP Participant to a commercial entity that owes the MAP Participant a certain sum. A credit memo is used when the MAP Participant owes the commercial entity a sum less than the amount the entity owes the Participant. The credit memo reflects an offset of the amount the MAP Participant owes the entity against the amount the entity owes to the MAP Participant. Demonstration projects—activities involving the erection or construction of a structure or facility or the installation of equipment. Expenditure—either payment via the transfer of funds or offset reflected in a credit memo in lieu of a transfer of funds. FAS—Foreign Agricultural Service, USDA. FAS Web site—a Web site maintained by FAS providing information on MAP. It is currently accessible at www.fas.usda.gov/mos/programs/ map.asp. Foreign third party—a foreign entity that a MAP Participant works with to promote the export of a U.S. agricultural commodity under the MAP program. Generic promotion—an activity that is not a brand promotion but, rather, promotes a U.S. agricultural commodity generally. A generic promotion activity may include the promotion of a foreign brand (i.e., a brand owned primarily by foreign interests and being used to market a commodity or product in a foreign market), if the foreign brand uses the promoted U.S. agricultural commodity or product from multiple U.S. suppliers. A generic promotion activity may also involve the use of specific U.S. company names, logos or brand names. However, in that case, the MAP Participant must ensure that all U.S. companies seeking to promote such U.S. agricultural commodity in the PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 market have an equal opportunity to participate in the activity and that at least two U.S. companies participate. In addition, an activity that promotes separate items from multiple U.S. companies will be considered a generic promotion only if the promotion of the separate items maintains a unified theme (i.e., a dominant idea or motif) and style and is subordinate to the promotion of the generic theme. MAP—the Market Access Program. MAP Notice—Market Access Program notices are documents that CCC issues for informational purposes. These MAP notices are made available electronically at http://www.fas.usda.gov/mos/ programs/mnotice.html. These notices have no legal effect. They are intended to alert MAP Participants of various aspects of CCC’s current administration of the MAP program. For example, CCC issues MAP notices to alert MAP Participants of procedures for requesting advances, applicable federal pay scale rates, lists of economic and trade sanctions against certain foreign countries, reporting formats and computer codes to use with the UES. MAP Participant or Participant—an entity that has entered into a MAP program agreement with CCC. Market—the country or countries targeted by an activity. Notification—a document from the MAP Participant by which the MAP Participant proposes to CCC changes to the activities and/or funding levels in an approved MAP program agreement and/ or approval letter. Product samples—a representative part of a larger whole promoted commodity or group of promoted commodities. Product samples include all forms of a promoted commodity (e.g., fresh or processed), independent of the ultimate utilization of the sample. Product samples might be used in support of international marketing activities including, but not limited to, displays, food process testing, cooking demonstrations, or trade and consumer tastings. Program agreement—a document entered into between CCC and a MAP Participant setting forth the terms and conditions of approved activities under MAP, including any subsequent amendments to such agreement. Program year—Unless otherwise agreed in writing between CCC and a MAP Participant, a 12-month period during which a MAP Participant can undertake activities consistent with this subpart and its program agreement and approval letter with CCC. Promoted commodity—a U.S. agricultural commodity the sale of E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations which is the intended result of a promotion activity. Sales and trade relations expenditures (STRE)—expenditures made on breakfast, lunch, dinner, receptions, and refreshments at approved activities; miscellaneous courtesies such as checkroom fees, taxi fares and tips; and decorations for a special promotional occasion. Sales team—a group of individuals engaged in an approved activity intended to result in specific sales. Small-sized entity—a U.S. commercial entity that meets the small business size standards published at 13 CFR part 121, Small Business Size Regulations. SRTG—the acronym for State Regional Trade Group. An SRTG is a nonprofit association of state-funded agricultural promotion agencies. Supergrade—a salary level above the reimbursable salary range generally allowable under MAP, which CCC may approve on a case by case basis. This salary level is available only for certain non-U.S. employees who direct MAP Participants’ overseas offices. Temporary contractor—a contractor, typically a consultant or other highly paid professional, that is hired on a short term basis to assist in the performance of an activity. Trade team—a group of individuals engaged in an approved activity intended to promote the interests of an entire agricultural sector rather than to result in specific sales by any of its members. UES Web site—a Web site maintained by FAS through which applicants may apply online to MAP and any other USDA market development program. The Web site is currently accessible at www.fas.usda.gov/mos/ues/unified.asp. Unified Export Strategy (UES)—is a standardized online Internet application developed by USDA and available for use by entities to apply to any USDA market development program, including the MAP. U.S. agricultural commodity—any agricultural commodity, including any food, feed, fiber, forestry product, livestock, or insect of U.S. origin or fish harvested from a U.S. aquaculture farm or harvested by a vessel as defined in Title 46 of the United States Code, in waters that are not waters (including the territorial sea) of a foreign country, and any product thereof, excluding tobacco. An agricultural commodity shall be considered to be U.S. origin if it is comprised of at least 50 percent by weight, exclusive of added water, of agricultural commodities grown or raised in the United States. USDA—the United States Department of Agriculture. VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 U.S. for-profit entity—a firm, association, or other entity organized or incorporated, located and doing business for profit in the United States, and engaged in the export or sale of a U.S. agricultural commodity. § 1485.12 Participation eligibility. To participate in the MAP, an entity shall be: (a) A nonprofit U.S agricultural trade organization; (b) A nonprofit SRTG; (c) A U.S. agricultural cooperative; or (d) A State agency. § 1485.13 Application process. (a) General application requirements. CCC will periodically publish a Notice in the Federal Register that it is accepting applications for participation in MAP. Applications shall be submitted in accordance with the terms and requirements specified in the Notice and in these regulations. Applicants are encouraged to submit a UES through the UES Internet Web site, but are not required to do so. Applicants may apply to conduct a generic promotion program and/or a brand promotion program that provides MAP funds to brand participants for branded promotion. An applicant who is a U.S. agricultural cooperative may also apply for funds to conduct its own brand promotion program. (1) Applicant and program information. (i) All applications shall contain: (A) The name, address, and Internet location of the home page of the applicant organization; (B) The name of the applicant’s Chief Executive Officer; (C) The name, telephone number, fax number, and email address of the applicant’s primary contact person; (D) The name(s) of the person(s) responsible for managing the proposed program; (E) A description of the applicant organization, including the type of organization of the applicant (e.g., nonprofit SRTG), its mission, and the statutory authorities by which it is constituted and under which it operates, if applicable; (F) Tax exempt identification number of the applicant, if applicable; (G) Beginning and ending dates for proposed program year (mm/dd/yy-mm/ dd/yy); (H) Dollar amount of CCC resources requested for generic activities; (I) Dollar amount of CCC resources requested for brand activities; (J) Total dollar amount of CCC resources requested; PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 29501 (K) Percentage of CCC resources requested for general administrative expenses; (L) A Dun and Bradstreet DUNS number for the applicant; (M) A description of the applicant organization’s membership and membership criteria; (N) A list of organizations affiliated with the applicant, including parent organizations, subsidiaries, and partnerships; (O) A description of the applicant’s management and administrative capability; (P) A description of the applicant’s prior export promotion experience; (Q) Value, in U.S. dollars, of proposed contributions from the applicant or the applicant’s proposed contribution stated as a percentage of the total dollar amount of CCC resources requested; and (R) Value, in U.S. dollars, of proposed contributions from other sources. (ii) [Reserved] (2) Program justification. (i) All applications shall contain: (A) A description of the promoted U.S. agricultural commodity(s), its harmonized tariff classification, the applicable commodity aggregate code (available from the UES Web site) and the percentage of U.S. origin content by weight, exclusive of added water; (B) A description of the anticipated supply and demand situation for the promoted U.S. agricultural commodity(s); (C) The volume and value of exports of the promoted U.S. agricultural commodity(s) to the targeted markets for the most recent 3-year period; (D) If the proposal is for 2 or more years, an explanation why the proposal should be funded on a multi-year basis; and (E) A certification and, if requested by CCC, a written explanation supporting the certification that any funds received will supplement, but not supplant, any private or third-party funds or other contributions to program activities. An explanation, if one is requested, shall indicate why the applicant is unlikely to carry out the activities without Federal financial assistance. In determining whether Federal funds would supplement or supplant private or thirdparty funds or contributions, CCC will consider the applicant’s prior overall marketing budget in the MAP program from year-to-year, variations in promotional strategies within a country, and new markets. (ii) [Reserved] (3) Proposed program’s strategic plan. (i) All applications shall include a strategic plan that contains: (A) A description of overall long term strategic goals to be advanced by the E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29502 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations proposed activities for the ensuing 3–5 years; (B) An explanation of the organization’s strategic planning process and identification of priority target markets, including a summary of proposed budgets by country and commodity aggregate code; (C) A description of the world market situation for the exported U.S. agricultural commodity(s); (D) A description of competition from other exporters; (E) An evaluation plan describing the applicant’s goals and the applicant’s plans for monitoring and evaluating performance towards achieving these goals. This evaluation plan should set forth specific goals and benchmarks set at regular intervals to be used to identify results against identified constraints and opportunities and to measure progress made in the target market. Evaluation of a proposed MAP program’s effectiveness will depend on a clear statement by the applicant of goals, method of achievement, and expected results of programming at regular intervals. The overall goal of the MAP and of individual Participants’ programming is to achieve or maintain sales that would not have occurred in the absence of MAP funding. A MAP Participant may modify and resubmit this plan for reapproval at any time during the program year. (F) For each target country, 5 years or as many years as are available of: (1) Historical U.S. export data; (2) U.S. market share; and (3) MAP funds received by the applicant; (G) For each target country, 3 years of projected U.S. export data and U.S. market share; (H) Country strategy, including market constraint(s) impeding U.S. exports (e.g., trade barriers) or opportunities present and the strategy proposed to overcome constraints or take advantage of the opportunities, previous activities in the country, and the projected impact of the proposed program on U.S. exports; (I) A justification for any proposed overseas office, including a staffing plan listing job titles, position descriptions, salary ranges, any request for approval of supergrade salaries, and an itemized administrative budget; (J) A description of any demonstration projects, if applicable; (K) Data summarizing the applicant’s historical and projected exports, market share, and MAP budgets of the promoted U.S. agricultural commodity(s); (L) A written presentation of all proposed activities including: VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 (1) A short description of the relevant market constraint or opportunity; (2) A budget for each proposed activity, identifying the source of funds. (ii) Applications for brand promotion assistance shall also include in their strategic plans: (A) A description of how the brand promotion program will be publicized to U.S. industry; and (B) The criteria that will be used to allocate funds to U.S. for-profit entities and U.S. agricultural cooperatives. (b) CCC may request any additional information that it deems necessary to evaluate an application, including, but not limited to, performance measurement information. (c) Special rules governing demonstration projects funded with CCC resources. (1) CCC will consider proposals for demonstration projects, provided: (i) No more than one such demonstration project per constraint is undertaken within a market; (ii) The constraint to be addressed in the target market is a lack of technical knowledge or expertise; (iii) The demonstration project is a practical and cost effective method of overcoming the constraint; and (iv) A third-party must participate in such project through a written agreement with the MAP Participant. (d) Universal Identifier and Central Contractor Registration (CCR) (1) In accordance with 2 CFR Part 25, each entity that applies to the MAP program and does not qualify for an exemption under 2 CFR 25.110 must: (i) Be registered in the CCR prior to submitting an application or plan; (ii) Maintain an active CCR registration with current information at all times during which it has an active Federal award or an application or plan under consideration by CCC; and (iii) Provide its DUNS number in each application or plan it submits to CCC. (2) [Reserved] (e) Reporting Subaward and Executive Compensation Information. In accordance with 2 CFR Part 170, each entity that applies to the MAP program and does not qualify for an exception under 2 CFR 170.110(b) must ensure it has the necessary processes and systems in place to comply with the applicable reporting requirements of 2 CFR Part 170 should it receive MAP funding. § 1485.14 Application review and formation of agreements. (a) General. CCC will, subject to the availability of funds, approve those applications that it considers to present the best opportunity for developing, maintaining, or expanding export PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 markets for U.S. agricultural commodities. The selection process, by its nature, involves the exercise of judgment. CCC’s choice of Participants and proposed promotion projects requires that it consider and weigh a number of factors, some of which cannot be mathematically measured— e.g., market opportunity, market strategy, and management capability. CCC may require that an applicant participate in the MAP through another MAP Participant or applicant. (b) Application review criteria. In assessing the likelihood of success of the applications it receives and deciding which it will approve, CCC will follow results-oriented management principles and consider the following criteria: (1) The effectiveness of program management; (2) Soundness of accounting procedures; (3) The nature of the applicant organization. With respect to nonprofit U.S. trade organizations, preference will be given to those organizations with the broadest base of producer representation of and affiliated industry participation for the commodity being promoted; (4) Prior export promotion experience; (5) Appropriateness of staffing; (6) Adequacy of the applicant’s strategic plan in the following categories; (i) Description of target market conditions; (ii) Description of and plan for addressing market constraints and opportunities; (iii) Breadth of industry participation in strategic planning process; (iv) Strategic prioritization identified in proposed plan; (v) Export volume and value and market share goals in each target country; (vi) Description of evaluation plan and suitability of the plan for performance measurement; and (vii) Past program results and/or evaluations, including program success stories. (c) Allocation factors. CCC determines which applications to approve and develops preliminary recommended funding levels for each approved application based on the following factors, in addition to those in paragraph (b) of this section. CCC determines final funding levels after allocating available funds to approved applications on the basis of criteria that will be fully described in each program year’s MAP announcement in the Federal Register: (1) Size of the budget request in relation to projected value of exports; E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations (2) Where applicable, size of the budget request in relation to actual value of exports in prior years; (3) Where applicable, Participant’s past projections of exports compared with actual exports; (4) Level of contributions by the applicant and by all other sources; (5) Market share goals in target country(ies); (6) The percentage by weight, exclusive of added water, of U.S. agricultural commodities contained in the promoted products; (7) The degree of value-added processing in the United States; and (8) Proposed MAP-funded general administrative and overhead costs compared to proposed MAP-funded direct promotional costs. (d) Approval decision. (1) CCC will approve those applications that it determines best satisfy the criteria and factors specified above. (2) Notification of decision. CCC will notify each applicant in writing of the final disposition of its application. (e) Formation of agreements. CCC will send a program agreement (or amendment to an existing program agreement), an approval letter, and a signature card to each approved applicant. The program agreement or amendment and the approval letter will outline which activities and budgets are approved and will specify any special terms and conditions applicable to a MAP Participant’s program, including any requirements with respect to contributions and program evaluations. An applicant that decides to accept the terms and conditions contained in the program agreement or amendment and the approval letter must so indicate by having its Chief Executive Officer (CEO) or designee sign the program agreement or amendment and the approval letter and submit these to CCC. Final agreement shall occur when the program agreement or amendment and the approval letter are signed by both parties. (f) Signature cards. The MAP Participant shall designate at least two individuals in its organization to sign program agreements and amendments, approval letters, reimbursement claims, and advance requests. The MAP Participant shall submit the signature card signed by those designated individuals and by the MAP Participant’s CEO to CCC. The Participant shall immediately notify CCC of any changes in signatories and shall submit a revised signature card accordingly. (g) UES ID and passwords. CCC will provide each MAP Participant with IDs VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 and passwords for the UES Web site, as necessary. MAP Participants shall protect these IDs and passwords in accordance with USDA’s information technology policies that CCC will provide to MAP Participants. MAP Participants shall immediately notify CCC whenever a person who possesses the ID and password information no longer needs such information or a person who is not authorized gains such information. (h) A MAP Participant through which small-sized U.S. for-profit entities are participating in the MAP program shall obtain annual certifications from all such entities that they are small-sized entities or U.S. agricultural cooperatives as defined in these regulations. The Participant shall retain these certifications in accordance with the recordkeeping requirements of this subpart. (i) Changes to activities and funding. (1) Adding a new activity. (i) A MAP Participant may not conduct a new activity without first obtaining an approved activity budget for such change. To request approval of such activity budget, the MAP Participant shall submit a notification to CCC. (ii) A notification for a new activity shall provide an activity justification and identify any related adjustments to the approved strategic plan, including changes in market, constraint, or opportunity that the activity proposes to address. The notification shall contain the activity description, the proposed budget, and a justification of transfer of funds. (iii) After receipt of the notification, CCC will inform the MAP Participant via the UES Web site whether the requested budget is approved. (2) Modifying existing activities and their funding levels. (i) A MAP Participant desiring to increase the funding level for existing, approved activities addressing a single constraint or opportunity by more than $25,000 or 25 percent of the approved funding level, whichever is greater, must first submit a notification explaining the adjustment to CCC before making such change. (ii) A MAP Participant may make significant adjustments below that threshold to the funding levels for existing, approved activities without prior notification to CCC, only if it submits a notification explaining the adjustments to CCC no later than 30 days after the change. Minor adjustments to existing, approved activities and/or funding levels do not require notification. PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 29503 (iii) Notifications shall describe the activity, changes to the activity, the existing funding level, the proposed funding level, and a justification for transfer of funds, if applicable. § 1485.15 Operational procedures for brand programs. (a) Where CCC approves an application by a MAP Participant to run a brand promotion program that will include brand Participants, the MAP Participant shall establish brand program operational procedures. The MAP Participant annually shall submit to CCC for approval its proposed brand program operational procedures for such program year. CCC will notify all new and existing MAP Participants in writing in each Participant’s annual approval letter and through the FAS Web site as to applicable submission dates for and dates for approvals of brand program operation procedures. Such procedures shall include, at a minimum, a brand program application, application procedures, application review criteria, brand participant eligibility requirements, a participation agreement, reimbursement requirements, compliance requirements, reporting and recordkeeping requirements, employment practices, financial management requirements, contracting procedures, and evaluation requirements. (b) The MAP Participant shall not enter into any participation agreements with brand participants nor shall it implement any MAP brand activities for the applicable program year unless and until CCC has communicated in writing its approval of the proposed operational procedures to the MAP Participant. (c) Participation agreements between MAP Participants and brand participants. Where CCC approves a MAP Participant’s application to run a brand promotion program that will include brand participants, the MAP Participant shall enter into participation agreements with brand participants. These agreements must: (1) Specify a time period for such brand promotion and require that all brand promotion expenditures be made within the MAP Participant’s approved program year; (2) Make no allowance for extension or renewal; (3) Limit reimbursable expenditures to those made in countries and for activities approved in the brand participant’s activity plan; (4) Specify the percentage of promotion expenditures that will be reimbursed, reimbursement procedures, and documentation requirements; E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29504 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations (5) Include a written certification by the brand participant that it either owns the brand of the product it will promote or has exclusive rights to promote the brand in each of the countries in which promotion activities will occur; (6) Require that all product labels, promotional material, and advertising will identify the origin of the U.S. agricultural commodity as ‘‘American’’, ‘‘Product of the United States of America’’, ‘‘Product of the U.S.’’, ‘‘Product of the U.S.A.’’, ‘‘Product of America’’, ‘‘Grown in the United States of America’’, ‘‘Grown in the U.S.’’, ‘‘Grown in the U.S.A.’’, ‘‘Grown in America’’, ‘‘Made in the United States of America,’’ ‘‘Made in the U.S.’’, ‘‘Made in the U.S.A.’’, ‘‘Made in America’’, or product of, grown in or made in any state or territory of the United States of America spelled out in its entirety, or other U.S. regional designation if approved in advance by CCC; that such origin identification will be conspicuously displayed in a manner easily observed as identifying the origin of the product; and that such origin identification will conform, to the extent possible, to the U.S. standard of 1⁄6 inch (.42 centimeters) in height based on the lower case letter ‘‘o’’. The use of the above terms as a descriptor or in the name of the product (e.g., Texas style chili, Bob’s American Pizza) does not satisfy the product origin requirement. Phrases ‘‘product of ’’, ‘‘grown in’’ or ‘‘made in’’ are encouraged, but not required. A MAP Participant may request an exemption from this requirement on a case-by-case basis. All such requests shall be in writing and include justification satisfactory to CCC that this labeling requirement would hinder a MAP Participant’s promotional efforts. CCC will determine, on a case by case basis, whether sufficient justification exists to grant an exemption from the labeling requirement. In addition, CCC may temporarily waive this requirement where CCC has determined that such labeling will likely harm sales rather than help them. Such determinations will be announced to MAP Participants via a MAP notice issued on FAS’ Web site; (7) Include a written certification by the brand participant that it is either a small-sized entity as defined in this subpart or a U.S. agricultural cooperative; (8) Require that the brand participant submit to the MAP Participant a statement certifying that any Federal funds received will supplement, but not supplant, any private or third party funds or other contributions to program activities; and VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 (9) Require the brand participant to maintain all original records and documents relating to program activities for 5 calendar years following the end of the applicable program year and make such records and documents available upon request to authorized officials of the U.S. Government. (d) MAP Participants may not provide assistance to a single entity including a entity reincorporated or re-organized under the same or different name if the reincorporated or re-organized entity is substantially similar to the pre-existing entity, for brand promotion in a single country for more than 5 years. Such 5 years do not need to be consecutive. Such 5-year period shall not begin prior to the 1994 program year or the brand participant’s first program year, whichever is later. In limited circumstances, CCC may waive the 5 year limitation if CCC determines that further assistance is in the best interests of the MAP. CCC shall, at its discretion, decide whether a reincorporated or reorganized entity is substantially similar to the pre-existing entity for purposes of applying this 5-year rule. Brand participants’ participation in certain international trade shows in foreign countries will not be considered when determining such brand participants’ time in country for purposes of the 5 year graduation requirement. Such shows must meet two requirements: They are food or agricultural shows, with no less than 30% of exhibitors selling food or agricultural products, and they are international shows, meaning they target buyers, distributors and the like from more than one foreign country and no less than 15% of each show’s visitors are from countries other than the host country. CCC will compile a list of international trade shows that CCC exempts from the graduation requirement and such list will be announced to MAP Participants via a MAP notice issued on FAS’ Web site. § 1485.16 Contribution rules. (a) In MAP generic promotion programs, a MAP Participant shall contribute a total amount in goods, services, and/or cash equal to at least 10 percent of the value of resources to be provided by CCC for all generic promotion activities proposed to be undertaken by the MAP Participant. (b) In MAP brand promotion programs, a MAP Participant conducting its own brand promotion or a brand participant shall contribute at least 50 percent of the total eligible expenditures made on each approved brand promotion. (c) A MAP Participant must use its own funds and may not use MAP PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 program funds to pay any administrative costs of the MAP Participant’s U.S. office(s), including legal fees, except as set forth in this subpart. Where the MAP Participant uses its own funds to pay for administrative costs, such costs may be counted in calculating the amount of contributions the MAP Participant contributes to MAP generic or brand promotion programs. (d) Eligible contributions. (1) In calculating the amount of contributions that it will make, and the contributions that the U.S. industry (including expenditures to be made by entities in the applicant’s industry in support of the entities’ related promotion activities in the markets covered by the applicant’s application) or State agency will make, the MAP applicant may include the costs listed under paragraph (d)(2) of this section if: (i) Expenditures will be made in furtherance of an approved activity, and (ii) The contributor has not been and will not be reimbursed by any source for such costs. (2) Subject to paragraph (d)(1) of this section, as well as applicable cost principles (e.g., 2 CFR Parts 220, 225, and 230) to the extent these principles do not directly conflict with the provisions of this subpart, eligible contributions are: (i) Cash; (ii) Compensation paid to personnel; (iii) The cost of acquiring materials, supplies or services; (iv) The cost of office space; (v) A reasonable and justifiable proportion of general administrative costs and overhead; (vi) Payments for indemnity and fidelity bond expenses; (vii) The cost of business cards that target a foreign audience; (viii) The cost of seasonal greeting cards; (ix) Fees for office parking; (x) The cost of subscriptions that are of a technical, economic, or marketing nature and that are relevant to the approved activities of the MAP Participant; (xi) The cost of activities conducted overseas; (xii) Credit card fees; (xiii) The cost of any independent evaluation or audit that is not required by CCC to ensure compliance with program agreement or regulatory requirements; (xiv) The cost of giveaways, awards, prizes and gifts; (xv) The cost of product samples; (xvi) Fees for participating in U.S. government sponsored or endorsed export promotion activities; E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations (xvii) The cost of air and local travel in the United States; (xviii) Payment of employee’s or contractor’s share of personal taxes; (xix) STRE and the cost associated with trade shows, seminars, and entertainment conducted in the United States; (xx) Other administrative expenses (e.g., supervisory travel from the U.S. to an overseas office); and (xxi) The cost of any activity expressly listed as reimbursable in this subpart. (3) The following are not eligible contributions: (i) Any portion of salary or compensation of an individual who is the target of an approved promotional activity; (ii) Any expenditure, including that portion of salary and time spent, related to promoting membership in the Participant organization (sometimes referred to in the industry as ‘‘backsell’’); (iii) Any land costs other than allowable costs for office space; (iv) Depreciation; (v) The cost of refreshments and related equipment provided to office staff; (vi) The cost of insuring articles owned by private individuals; (vii) The cost of any arrangement that has the effect of reducing the selling price of a U.S. agricultural commodity; (viii) The cost of product development, product modifications, or product research; (ix) Slotting fees or similar sales expenditures; (x) Membership fees in clubs and social organizations; and (xi) Any expenditure for an activity prior to CCC’s approval of that activity. (4) CCC shall determine, at CCC’s discretion, whether any cost not expressly listed in this section may be included by the MAP Participant as an eligible contribution. mstockstill on DSK6TPTVN1PROD with RULES2 § 1485.17 Reimbursement rules. (a) A MAP Participant may seek reimbursement for an eligible expenditure if: (1) The expenditure was made in furtherance of an approved activity; and (2) The Participant has not been and will not be reimbursed for such expenditure by any other source. (b) Subject to paragraphs (a) and (d) of this section, as well as applicable cost principles (e.g., 2 CFR Parts 220, 225, and 230) to the extent these principles do not directly conflict with the provisions of this subpart, for either brand or generic promotion activities, CCC will reimburse, in whole or in part, the cost of: VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 (1) Production and placement of advertising, in print, electronic media, billboards, or posters, which may include advertising the availability of price discounts, except that advertising associated with a coupon or price discount for the MAP promoted product is not reimbursable. If advertising is related to both coupons or price discounts for products other than the MAP Participant’s promoted products as well as for MAP-promoted products, expenditures for such advertising will not be reimbursed in whole or in part (e.g., expenditures may not be prorated and submitted for reimbursement). Electronic media includes, but is not limited to, radio, television, electronic mail, internet, telephone, text messaging, and podcasting; (2) Production and distribution of banners, recipe cards, table tents, shelf talkers, and other similar point of sale materials; (3) Direct mail advertising; (4) In-store and food service promotions, product demonstrations to the trade and to consumers, and distribution of product samples (but not the purchase of the product samples); (5) Temporary displays and rental of space for temporary displays; (6) Expenditures, other than travel expenditures, associated with seminars and educational training, whether conducted in the United States or outside the United States; (7) Subject to § 1485.17(b)(18), expenditures, other than travel expenditures, associated with retail, trade and consumer exhibits and shows, whether held outside or inside the United States, including participation fees, booth construction, transportation of related materials, rental of space and equipment, and duplication of related printed materials. However, with regard to non-travel expenditures associated with retail, trade and consumer exhibits and shows held inside the United States, such expenditures are reimbursable only if the exhibit or show is: (1) a food or agricultural show with no less than 30% of exhibitors selling food or agricultural products, (2) an international show that targets buyers, distributors and the like from more than one foreign country and no less than 15% of its visitors are from countries other than the host country, and (3) an exhibit or show that the MAP Participant has not participated in within the last three years using funds from a source other than the MAP. CCC will compile a list of approved retail, trade and consumer exhibits and shows held inside the United States for which MAP reimbursement is available and such list will be announced to MAP PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 29505 Participants via a MAP notice issued on FAS’ Web site; (8) Subject to § 1485.17(b)(18), international travel expenditures, not to exceed the full fare economy rate, including any fees for modifying the originally purchased airline ticket, per diem, passports, visas and inoculations, as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 through 304), for no more than two representatives of a single brand participant (or MAP Participant directly running its own brand program) to exhibit their company’s (or cooperative’s) products at a retail, trade, or consumer exhibit or show held outside the United States. Representatives may include employees and board members of private companies, employees or members of cooperatives, or any broker, consultant, or marketing representative contracted by the company or cooperative to represent the company or cooperative in sales transactions; (9) Subscriptions that are of a technical, economic, or marketing nature and that are relevant to the approved activities of the MAP Participant; (10) Demonstrators, interpreters, translators, receptionists, and similar temporary workers who help with the implementation of individual promotional activities, such as trade shows, in-store promotions, food service promotions, and trade seminars; (11) Giveaways, awards, prizes, gifts and other similar promotional materials, subject to such reimbursement limitation as CCC may determine and announce in writing to MAP Participants via a MAP notice issued on FAS’ Web site. Reimbursement is available only when: (1) The items are described in detail with a per unit cost in an approved strategic plan and (2) distribution of the promotional item is not contingent upon the consumer, or other target audience, purchasing a good or service to receive the promotional item; (12) The design and production of packaging, labeling or origin identification, to be used during the program year in which the expenditure is made, if such packaging, labeling or origin identification is necessary to meet the importing requirements of a foreign country; (13) The design, production, and distribution of coupons for products other than the MAP Participant’s promoted products. If such activities include both coupons or price discounts for products other than the MAP Participant’s promoted products as well as for MAP-promoted products, E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29506 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations expenditures for such activities will not be reimbursed in whole or in part (e.g., expenditures may not be prorated and submitted for reimbursement); (14) An audit of a MAP Participant as required by Office of Management and Budget Circular A–133 if the MAP is the MAP Participant’s largest source of Federal funding; (15) The translation of written materials as necessary to carry out approved activities; (16) Expenditures associated with developing, updating, and servicing Web sites on the Internet that clearly target a foreign audience; (17) International travel expenditures, not to exceed the full fare economy rate, including any fees for modifying the originally purchased airline ticket, per diem, passports, visas and inoculations, as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 through 304), incurred for a foreign trade mission conducted outside the United States that is an activity under an approved branded program and that has met the following conditions: (i) Trade mission travel for company (or cooperative) representatives was identified as a separate approved activity in the MAP Participant’s UES; (ii) The trade mission included representatives, as defined in § 1485.17(b)(8), from a minimum of five different companies (or cooperatives), and no more than two representatives from each participating company (or cooperative); (iii) The appropriate FAS overseas office supported the trade mission by dedicating meaningful funding or other resources (such as facilities or staff time) to the activity; and (iv)(A) The MAP Participant with the approved brand program produced an itinerary or agenda for the trade mission that demonstrated that company (or cooperative) representatives would be engaged for a minimum of 6 hours per day (except for the first and last days of the mission) in trade mission activities that include, at a minimum, each of the following: (1) A product showcase where the FAS overseas office approved an invitation list of qualified buyers; (2) Pre-arranged one-on-one business meetings; and (3) Evaluation and feedback sessions with FAS staff and trade mission sponsors. (B) Reimbursement is conditional on the MAP Participant having notified in ´ writing the Attache/Counselor in the destination country in advance of the travel; (18) Where USDA has sponsored or endorsed a U.S. pavilion at a retail, VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 trade and consumer exhibit or show, whether held outside or inside the United States, MAP funds may be used to reimburse the travel and/or nontravel expenditures of only those MAP Participants located within the U.S. pavilion. Such expenditures must also adhere to the standard terms and conditions of the U.S. pavilion organizer. Upon written request, CCC may temporarily waive this subsection, on a case by case basis, where: the trade show is segregated into product pavilions, or a company’s distributor or importer is located outside the U.S. pavilion. Such waiver will be provided to the MAP Participant in writing; and (19) Contracts with U.S. based organizations when the only contracted service such organizations provide to a MAP Participant is carrying out a specific market promotion activity in the United States directed to a foreign audience (e.g., a trade mission of foreign buyers coming to the United States to visit U.S. exporters). Such contracts may be reimbursable as a direct promotional expense. If a U.S. based organization provides administrative services to the MAP Participant’s domestic home office during a program year, any direct promotional services such organization provides to the Participant, whether for the Participant’s domestic or overseas offices, during the same program year are not reimbursable. (c) Subject to paragraphs (a) and (d) of this section, but for generic promotion activities only, CCC will also reimburse, in whole or in part, the cost of: (1) Compensation and allowances for housing, educational tuition, and cost of living adjustments paid to a U.S. citizen employee or a U.S. citizen contractor stationed overseas, except CCC will not reimburse that portion of: (i) The total of compensation and allowances that exceed 125 percent of the level of a GS–15 Step 10 salary for U.S. Government employees, and (ii) Allowances that exceed the rate authorized for U.S. Embassy personnel; (2) Approved supergrade salaries for non-U.S. citizens and non-U.S. contractors stationed overseas; (3) Compensation of non-U.S. citizen staff employees or non-U.S. contractors stationed overseas subject to the following limitations: (i) Where there is a local U.S. Embassy Foreign Service National (FSN) salary plan, CCC will not reimburse any portion of such compensation that exceeds the compensation prescribed for the most comparable position in the FSN salary plan, except for approved supergrades, or (ii) Where an FSN salary plan does not exist, CCC will not reimburse any PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 portion of such compensation that exceeds locally prevailing levels, which the MAP Participant shall document by a salary survey or other means, except for approved supergrades; (4) A retroactive salary adjustment for non-U.S. citizen staff employees or nonU.S. contractors stationed overseas that conforms to a change in FSN salary plans, effective as of the date of such change; (5) Accrued annual leave as of the time employment is terminated or as of such time as required by local law; (6) Overtime paid to clerical staff of approved MAP-funded overseas offices; (7) Temporary contractor fees for contractors stationed overseas, except CCC will not reimburse any portion of any such fee that exceeds the daily gross salary of a GS–15, Step 10 for U.S. Government employees in effect on the date the fee is earned, unless a bidding process reveals that such a contractor is not available at or below that salary rate; (8)(i) Subject to § 1485.17(b)(18), international travel expenditures, not to exceed the full fare economy rate, including any fees for modifying the originally purchased airline ticket, per diem, passports, visas and inoculations, for activities held outside the United States or in the United States, as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 through 304), except that if the activity is participation in a retail, trade, or consumer exhibit or show held inside the United States, international travel expenditures are covered only if the exhibit or show is: (1) A food or agricultural show with no less than 30% of exhibitors selling food or agricultural products, (2) an international show that targets buyers, distributors and the like from more than one foreign country and no less than 15% of its visitors are from countries other than the host country, and (3) an exhibit or show that the MAP Participant has not participated in within the last three years using funds from a source other than the MAP. CCC will compile a list of approved retail, trade and consumer exhibits and shows held inside the United States for which MAP reimbursement is available and such list will be announced to MAP Participants via a MAP notice issued on FAS’ Web site. (ii) CCC generally will not reimburse any portion of air travel, including any fees for modifying the originally purchased ticket, in excess of the full fare economy rate or when the MAP ´ Participant fails to notify the Attache/ Counselor in the destination country in advance of the travel, unless the CCC determines it was impractical to provide such notice. If a traveler flies in E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations business class or a different premium class, the basis for reimbursement will be the full fare economy class rate for the same flight and the MAP Participant shall provide documentation establishing such full fare economy class rate to support its reimbursement claim. If economy class is not offered for the same flight or if the traveler flies on a charter flight, the basis for reimbursement will be the average of the full fare economy class rate for flights offered by three different airlines between the same points on the same date and the MAP Participant shall provide documentation establishing such average of the full fare economy class rates to support its reimbursement claim. (iii) In very limited circumstances, the MAP Participant may be reimbursed for air travel up to the business class rate (i.e., a premium class rate other than the first class rate) upon prior written approval by CCC. Such circumstances are: (A) Regularly scheduled flights between origin and destination points do not offer economy class (or equivalent) airfare and the MAP Participant receives written documentation from its travel agent to that effect at the time the tickets are purchased; (B) Business class air travel is necessary to accommodate an eligible traveler’s disability. Such disability must be substantiated in writing by a physician; and (C) An eligible traveler’s origin and/or destination are outside of the continental United States and the scheduled flight time, beginning with the scheduled departure time, ending with the scheduled arrival time, and including stopovers and changes of planes, exceeds 14 hours. In such case, per diem and other allowable expenses will also be reimbursable for the day of arrival. However, no expenses will be reimbursable for a rest period or for any non-work days (e.g., weekends, holidays, personal leave, etc.) immediately following the date of arrival. (iv) Alternatively, in lieu of reimbursing up to the business class rate in such circumstances, CCC will reimburse economy class airfare plus per diem and other allowable travel expenses related to a rest period of up to 24 hours, either en route or upon arrival at the destination. For a trip with multiple destinations, each origin/ destination combination will be considered separately when applying the 14 hour rule for eligibility of reimbursement of business class travel or rest period expenses. A stopover is VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 the time a traveler spends at an airport, other than the originating or destination airport, which is a normally scheduled part of a flight. A change of planes is the time a traveler spends at an airport, other than the originating or destination airport, to disembark from one flight and embark on another. All travel should follow a direct or usually traveled route. Under no circumstances should a traveler select flights in a manner that extends the scheduled flight time to beyond 14 hours in part to secure eligibility for reimbursement of business class travel; (9) Automobile mileage at the local U.S. Embassy rate or rental cars while in travel status; (10) Other allowable expenditures while in travel status as authorized by the U.S. Federal Travel Regulations (41 CFR parts 301 through 304); (11) Organization costs for overseas offices approved in MAP program agreements. Such costs include incorporation fees, brokers’ fees, fees to attorneys, accountants, or investment counselors, whether or not employees of the organization, incurred in connection with the establishment or reorganization of the overseas office, and rent, utilities, communications originating overseas, office supplies, accident liability insurance premiums, and routine accounting and legal services required to maintain the overseas office; (12) The purchase, lease, or repair of, or insurance premiums for, capital goods that have an expected useful life of at least 1 year, such as furniture, equipment, machinery, removable fixtures, draperies, blinds, floor coverings, computer hardware and software, and portable electronic communications devices (including mobile phones, wireless email devices, personal digital assistants); (13) Such premiums for health or accident insurance and other benefits for foreign national employees that the employer is required by law to pay; (14) Accident liability insurance premiums for facilities used jointly with third-party participants for MAP activities or for MAP-funded travel of third-party participants; (15) Market research, including research to determine the types of products that are desired in a market; (16) Independent evaluations and audits, if not otherwise required by CCC, to ensure compliance with program requirements; (17) Legal fees to obtain advice on the host country’s labor laws; (18) Employment agency fees; (19) STRE incurred outside of the United States, and STRE incurred in conjunction with an approved activity PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 29507 taking place within the United States with prior written approval from CCC. MAP Participants are required to use the appropriate American Embassy representational funding guidelines for breakfasts, lunches, dinners and receptions. MAP Participants may exceed Embassy guidelines only when they have received written authorization from the FAS Agricultural Counselor at the Embassy. The amount of unauthorized STRE expenses that exceed the guidelines will not be reimbursed. MAP Participants must pay the difference between the total cost of STRE events and the appropriate amount as determined by the guidelines. For STRE incurred in the United States, the MAP Participant should provide, in its request for approval, the basis for determining its proposed expenses; (20) Educational travel of dependent children, visitation travel, rest and recuperation travel, home leave travel, emergency visitation travel for U.S. overseas employees allowed under the Foreign Affairs Manual published by the U.S. Department of State; (21) Evacuation payments (safe haven) and shipment and storage of household goods and motor vehicles; (22) U.S. office(s) administrative support expenses for the National Association of State Departments of Agriculture, the SRTGs, and the Intertribal Agriculture Council; (23) Non-travel expenditures associated with conducting international staff conferences held either in or outside the United States; (24) Subject to § 1485.17(b)(18), domestic travel expenditures, as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 through 304), for international retail, trade and consumer exhibits and shows conducted in the United States upon prior written approval by CCC. Domestic travel expenses to such a show or exhibit are covered only if the exhibit or show is: (1) A food or agricultural show with no less than 30% of exhibitors selling food or agricultural products, (2) an international show that targets buyers, distributors and the like from more than one foreign country and no less than 15% of its visitors are from countries other than the host country, and (3) an exhibit or show that the MAP Participant has not participated in within the last three years using funds from a source other than the MAP. CCC will compile a list of approved retail, trade and consumer exhibits and shows held inside the United States for which MAP reimbursement is available and such list will be announced to MAP E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 29508 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations Participants via a MAP notice issued on FAS’ Web site; (25) Domestic travel expenditures, as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 through 304), for seminars and educational training conducted in the United States; (26) Domestic travel expenditures, as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 through 304), for one home office MAP Participant employee, one MAP Participant board member, or a state department of agriculture employee paid by the MAP Participant, when such individual accompanies foreign trade missions or technical teams while traveling in the United States where the following conditions are met: (i) Such trade missions or technical team visits are identified in the MAP Participant’s UES; (ii) Such trade missions or technical team visits have been approved by CCC; and (iii) The MAP-sponsored traveler submits a follow-up trip report to CCC that includes the following: (A) Purpose for the individual’s participation; (B) Any pre-arranged business meetings; (C) Itinerary and/or agenda for the trip; and (D) Feedback from sponsors and trade mission/technical team members on the success of the trip. (27) Approved demonstration projects; (28) Expenditures related to copyright, trademark, or patent registration, including attorney fees; (29) Rental or lease expenditures for storage space for program-related materials; (30) Business cards that target a foreign audience; (31) Expenditures associated with developing, updating, and servicing Web sites on the Internet that: Contain a message related to exporting or international trade, include a discernible ‘‘link’’ to the FAS/ Washington homepage or an FAS overseas homepage, and have been specifically approved by the appropriate FAS commodity division. Expenditures related to Web sites or portions of Web sites that are accessible only to an organization’s members are not reimbursable. Reimbursement claims for Web sites that include any sort of ‘‘members only’’ sections must be prorated to exclude the costs associated with those areas subject to restricted access; (32) Expenditures not otherwise prohibited from reimbursement that are associated with activities held in the VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 United States or abroad designed to improve market access by specifically addressing temporary, permanent, or impending technical barriers to trade that prohibit or threaten U.S. exports of agricultural commodities; and (33) Membership fees in professional, industry-related organizations. (d) CCC will not reimburse any cost of: (1) Forward year financial obligations, such as severance pay, attributable to employment of foreign nationals; (2) Expenses, fines, settlements, judgments or payments relating to legal suits, challenges or disputes; (3) The design and production of packaging, labeling or origin identification, except as specifically allowed in this subpart; (4) Product development, product modification or product research; (5) Product samples; (6) Slotting fees or similar sales expenditures; (7) The purchase of, construction of, or lease of space for permanent, nonmobile displays, i.e., displays that are constructed to remain permanently in the same location beyond one program year. However, CCC may, at its discretion, reimburse the construction or purchase of permanent displays on a case-by-case basis, if the Participant sought and received prior written approval from CCC of such construction or purchase; (8) Rental, lease or purchase of warehouse space, except for storage space for program-related material; (9) Coupon redemption or price discounts of the MAP promoted commodity; (10) Refundable deposits or advances; (11) Giveaways, awards, prizes, gifts and other similar promotional materials in excess of the limitation that CCC will determine. Such determination will be announced in writing via a MAP notice issued on FAS’ Web site; (12) Alcoholic beverages that are not an integral part of an approved promotional activity; (13) The purchase, lease (except for use in authorized travel status) or repair of motor vehicles; (14) Travel of applicants for employment interviews; (15) Unused non-refundable airline tickets or associated penalty fees, except where travel was restricted by U.S. Government action or advisory; (16) Independent evaluations or audits, including evaluations or audits of the activities of a subcontractor, if CCC determines that such a review is needed in order to confirm past or to ensure future program agreement or regulatory compliance; PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 (17) Any arrangement that has the effect of reducing the selling price of a U.S. agricultural commodity; (18) Goods, services and salaries of personnel provided by U.S. industry or foreign third party; (19) Membership fees in clubs and social organizations; (20) Indemnity and fidelity bonds; (21) Fees for participating in U.S. Government sponsored activities, other than trade fairs and exhibits; (22) Business cards that target a U.S. domestic audience; (23) Seasonal greeting cards; (24) Office parking fees; (25) Subscriptions to publications that are not of a technical, economic, or marketing nature or that are not relevant to the approved activities of the MAP Participant; (26) U.S. office(s) administrative expenses, including communication costs, except as noted in § 1485.17(c)(22) and except that usage costs for communications devices incurred while on reimbursable international or domestic travel for approved MAP brand or generic promotion activities are reimbursable as eligible travel expenditures as allowed under the U.S. Federal Travel Regulations (41 CFR Parts 301 through 304); (27) Any expenditure on an activity that includes any derogatory reference or comparison to other U.S. agricultural commodities; (28) Payment of U.S. and foreign employees’ or contractors’ share of personal taxes, except where a foreign country’s laws require the MAP Participant to pay such employees’ or contractors’ share; (29) Any expenditure made for an activity prior to CCC’s approval of that activity; (30) Contributions to a contingency reserve or any similar provision made for events the occurrence of which cannot be foretold with certainty as to time, intensity, or with an assurance of their happening; and (31) Expenditures associated with a MAP Participant’s creation or review of their fraud prevention program, contracting procedures, or brand program operational procedures. (e) Special rules for approval of supergrades. (1) With respect to individuals who are not U.S. citizens and who are hired by MAP Participants either as employees or contractors who are hired to act as employees, ordinarily, CCC will not reimburse any portion of such individual’s compensation that exceeds the compensation prescribed for the most comparable position in the FSN E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations salary plan applicable to the country in which the employee or contractor works. However, a MAP Participant may seek a higher level of reimbursement for a non-U.S. citizen employee or contractor who will be employed as a country director or regional director by requesting that CCC approve that employee or contractor as a supergrade. (2) To request approval of a supergrade, the MAP Participant shall provide CCC with a detailed description of both the duties and responsibilities of the position and the qualifications and background of the employee or contractor concerned. The Participant shall also justify why the comparable FSN salary level is insufficient. (3) Where a non-U.S. citizen employee or contractor will be employed as a country director, the MAP Participant may request approval for a ‘‘Supergrade I’’ salary level, equivalent to a grade increase over the existing top grade of the FSN salary plan. The supergrade and its step increases are calculated as the percentage difference between the second highest and the highest grade in the FSN salary plan, with that percentage applied to each of the steps in the top grade. Where the non-U.S. citizen employee or contractor will be employed as a regional director, with responsibility for activities and/or offices in more than one country, the MAP Participant may request approval for a ‘‘Supergrade II’’ salary level, which is calculated relative to a ‘‘Supergrade I’’ in the same way the latter is calculated relative to the highest grade in the FSN salary plan. (4) A U.S. citizen with dual citizenship with another foreign country or countries shall not be considered a non-U.S. citizen. (f) For a brand promotion activity, CCC will reimburse no more than 50 percent of the total eligible expenditures made on that activity. (g) CCC will reimburse for expenditures made after the conclusion of a MAP Participant’s program year provided: (1) The activity was approved by CCC prior to the end of the program year; (2) The activity was completed within 30 calendar days following the end of the program year; and (3) All expenditures were made for the activity within 6 months following the end of the program year. (h) A MAP Participant shall not use MAP funds for any activity or any expenses incurred by the MAP Participant prior to the date of the program agreement or after the date the program agreement is suspended or VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 terminated, except as otherwise permitted by CCC. (i) Except as otherwise provided in this subpart, MAP-funded travel shall conform to U.S. Federal Travel Regulations (41 CFR parts 301 through 304) and MAP-funded air travel shall conform to the requirements of the Fly America Act (49 U.S.C. 40118). The MAP Participant shall notify the ´ Attache/Counselor in the destination countries in writing in advance of any proposed travel. (j) CCC may determine, at CCC’s discretion, whether any cost not expressly listed in § 1485.17 will be reimbursed. § 1485.18 Reimbursement procedures. (a) Participants are required to use CCC’s Internet-based UES system to request reimbursement for eligible MAP expenses. Claims for reimbursement shall contain the following information: (1) Activity type—brand or generic; (2) Activity number; (3) Commodity aggregate code; (4) Country code; (5) Cost category; (6) Amount to be reimbursed; (7) If applicable, any reduction in the amount of reimbursement claimed to offset CCC demand for refund of amounts previously reimbursed and reference to the relevant compliance report or written notice; and (8) If applicable, any amount previously claimed that has not been reimbursed. (b) All claims for reimbursement shall be submitted by the MAP Participant’s U.S. office to CCC. (c) CCC will not reimburse a claim for less than $10,000, except that CCC will reimburse a final claim for a MAP Participant’s program year for a lesser amount. (d) CCC will not reimburse claims submitted later than 6 months after the end of a MAP Participant’s program year. (e) If CCC overpays a reimbursement claim, the MAP Participant shall repay CCC within 30 days of such overpayment the amount of the overpayment either by submitting a check payable to CCC or by offsetting its next reimbursement claim. The MAP Participant shall make such payment in U.S. dollars, unless otherwise approved in advance by CCC. (f) If a MAP Participant receives a reimbursement or offsets an advanced payment which is later disallowed, the MAP Participant shall repay CCC within 30 days of such disallowance the amount disallowed either by submitting a check payable to CCC or by offsetting its next reimbursement claim. The MAP PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 29509 Participant shall make such payment in U.S. dollars, unless otherwise approved in advance by CCC. (g) MAP funds may be expended by MAP Participants only on legitimate, approved activities as set forth in the program agreement and approval letter. If a MAP Participant discovers that MAP funds have not been properly spent, it shall notify CCC and shall within 30 days of its discovery repay CCC the amount owed either by submitting a check payable to CCC or by offsetting its next reimbursement claim. The MAP Participant shall make such payment in U.S. dollars, unless otherwise approved in advance by CCC. (h) The MAP Participant shall report any actions that may have a bearing on the propriety of any claims for reimbursement in writing to CCC. § 1485.19 Advances. (a) Policy. In general, CCC operates the MAP on a reimbursable basis. (b) Exception. A MAP Participant for generic promotion activities may request an advance of MAP funds from CCC, provided the MAP Participant meets the criteria for advance payments set forth in the applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, and 3019). CCC will not approve any request for an advance submitted later than 3 months after the end of a MAP Participant’s program year. At any given time, total payments advanced shall not exceed 40 percent of a MAP Participant’s approved generic activity budget for the program year. CCC will not advance funds to a MAP Participant for brand promotion activities. When approving a request for an advance, CCC may require the MAP Participant to carry adequate fidelity bond coverage when the absence of such coverage is considered to create an unacceptable risk to the interests of the . Whether an ‘‘unacceptable risk’’ exists in a particular situation will depend on a number of factors, such as, for example, the Participant’s history of performance in MAP; the Participant’s perceived financial stability and resources; and any other factors presented in the particular situation that may reflect on the Participant’s responsibility or the riskiness of its activities. (c) Interest. A MAP Participant shall deposit and maintain in an insured bank account in the United States all funds advanced by CCC. The account shall be interest-bearing, unless the exceptions in the applicable parts of this title apply (e.g., 7 CFR Parts 3015, 3016 and 3019). Interest earned by the MAP Participant on funds advanced by CCC is not program income. The MAP Participant shall remit any interest earned on the E:\FR\FM\17MYR2.SGM 17MYR2 29510 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations advanced funds to the appropriate entity as set forth in the applicable parts of this title. (d) Refunds due CCC. A MAP Participant shall fully expend all advances on approved generic promotion activities within 90 calendar days after the date of disbursement by CCC. By the end of the 90 calendar days, the MAP Participant must submit reimbursement claims to offset the advance and submit a check made payable to CCC for any unexpended balance. The MAP Participant shall make such payment in U.S. dollars, unless otherwise approved in advance by CCC. § 1485.20 Employment practices. (a) A MAP Participant shall enter into written contracts with all overseas employees who are paid in whole or in part with MAP funds and shall ensure that all terms, conditions, and related formalities of such contracts conform to governing local law. (b) A MAP Participant shall in its overseas offices conform its office hours, work week, and holidays to local law and to the custom generally observed by U.S. commercial entities in the local business community. (c) A MAP Participant may pay salaries or fees in any currency (U.S. or foreign). Participants should consult local laws regarding currency restrictions. mstockstill on DSK6TPTVN1PROD with RULES2 § 1485.21 Financial management. (a) A MAP Participant shall implement and maintain a financial management system that conforms to generally accepted accounting principles. A MAP Participant’s financial management system shall comply with the standards set forth in the applicable parts of this title (e.g., 7 CFR Parts 3015, 3016 and 3019). (b) A MAP Participant shall institute internal controls and provide written guidance to commercial entities participating in its activities to ensure their compliance with these regulations. (c) A MAP Participant shall retain all records concerning a MAP program transaction for a period of 5 years after completion of the program transaction and permit CCC to have full and complete access, for such 5-year period, to such records. These records shall include all documents related to employment of any employees whose salaries are reimbursed in whole or in part with MAP funds, whether such employees are based in the United States or overseas, such as employment applications, contracts, position descriptions, leave records, salary VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 changes, and all records pertaining to contractors. (d) A MAP Participant shall maintain its records of expenditures and contributions in a manner that allows it to provide information by activity plan, country, activity number, and cost category. Such records shall include: (1) Receipts for all STRE (actual vendor invoices or restaurant checks, rather than credit card receipts); (2) Original receipts for any other program-related expenditure in excess of $75.00. CCC may, from time to time, determine a different minimum level and announce that minimum level in writing to all MAP Participants via a MAP notice issued on the FAS Web site; (3) The exchange rate used to calculate the dollar equivalent of expenditures made in a foreign currency and the basis for such calculation; (4) Copies of reimbursement claims; (5) An itemized list of claims charged to each of the MAP Participant’s CCC resources accounts; (6) Documentation with accompanying English translation supporting each reimbursement claim, including original evidence to support the financial transactions such as canceled checks, receipted paid bills, contracts or purchase orders, per diem calculations, travel vouchers, and credit memos; and (7) Documentation supporting contributions. These must include the dates, purpose, and location of the activity for which the cash or in-kind items were claimed as a contribution; who conducted the activity; the participating groups or individuals; and, the method of computing the claimed contributions. MAP Participants must retain and make available for compliance review documentation related to claimed contributions. (e) Upon request, a MAP Participant shall provide to CCC originals of documents supporting reimbursement claims. § 1485.22 Reports. (a)End-of-Year Contribution Report. Not later than 6 months after the end of its program year, a MAP Participant shall submit two copies of a report that identifies, by cost category and in U.S. dollar equivalent, contributions made by the Participant, the U.S. industry, and the States during that program year. A suggested format of a contribution report is available from FAS. Foreign third party contributions are not included in the end-of-year contribution report. (b)Trip reports. Not later than 45 days after completion of travel (other than local travel), a MAP Participant shall PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 electronically submit a trip report. The report must include the name(s) of the traveler(s), purpose of travel, itinerary, names and affiliations of contacts, and a brief summary of findings, conclusions, recommendations, and specific accomplishments. (c) Research reports. Not later than 6 months after the end of its program year, a MAP Participant shall submit a report on any research conducted pursuant to the approved MAP program. (d) Evaluation reports. Not later than 6 months after the end of its program year, a MAP Participant shall submit a report on any evaluations conducted in accordance with the approved MAP program. (e) Where CCC is designated the cognizant agency for audit, CCC may require the MAP Participant to submit to CCC an annual OMB Circular A–133 audit in accordance with 7 CFR Part 3052. If CCC requires an additional audit with respect to a particular agreement, the MAP Participant shall arrange for such audit and shall submit to CCC, in the manner to be specified by CCC, such audit of the agreement. (f) CCC may require the submission of additional reports. (g) A MAP Participant’s program agreement and/or approval letter shall specify to whom the Participant shall submit the reports required in this section. § 1485.23 Evaluation. (a) Policy. (1) The Government Performance and Results Act (GPRA) of 1993 (5 U.S.C. 306; 31 U.S.C. 1105, 1115–1119, 3515, 9703–9704) requires performance measurement of Federal programs, including the MAP. Evaluation of the MAP’s effectiveness will depend on a clear statement by Participants of goals to be met within a specified time, schedule of measurable milestones for gauging success, plan for achievement, and assessment of results of activities at regular intervals. The overall goal of the MAP and of individual Participants’ programming is to achieve or maintain sales that would not have occurred in the absence of MAP funding. A MAP Participant that can demonstrate such sales, taking into account extenuating factors beyond the Participant’s control, will have met the overall objective of the GPRA and the need for evaluation. (2) Evaluation is an integral element of program planning and implementation, providing the basis for the strategic plan. The evaluation results guide the development and scope of a MAP Participant’s program, contributing to program accountability, E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations and providing evidence of program effectiveness. (b) All MAP Participants must report annual results against their target market and/or regional constraint/ opportunity performance measures. These are outcome results usually based on multiple activities and should demonstrate progress made in the market. This report shall be completed and submitted to CCC no later than 6 months following the end of the Participant’s program year. (c) MAP Participants conducting a branded program must also complete a brand promotion evaluation. A brand promotion evaluation is a review of the U.S. and foreign commercial entities’ export sales to determine whether the activity achieved the goals specified in the approved MAP program. This evaluation shall be completed and submitted to CCC no later than 6 months following the end of the Participant’s program year. (d) When appropriate or required by CCC, a MAP Participant shall complete a program evaluation. A program evaluation is a review of the MAP Participant’s entire program, or an appropriate portion of the program as agreed to by the MAP Participant and CCC, to determine the effectiveness of the MAP Participant’s strategy in meeting specified goals. Actual scope and timing of the program evaluation shall be determined by the MAP Participant and CCC and specified in the approval letter. A MAP Participant shall submit, via a cover letter to CCC, an executive summary that assesses the program evaluation’s findings and recommendations and proposed changes in program strategy or design as a result of the evaluation. In addition to the requirements set forth in the applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, and 3019), a program evaluation shall contain: (1) The name of the party conducting the evaluation; (2) The scope of the evaluation; (3) A concise statement of the market constraint(s)/opportunity(ies) and the goals specified in the approved strategic plan; (4) A description of the evaluation methodology; (5) A description of export sales achieved; (6) A summary of the findings, including an analysis of the strengths and weaknesses of the program(s); and (7) Recommendations for future programs. (e) On an annual basis, or more often when appropriate or required by CCC, a MAP Participant shall complete and submit program success stories. CCC VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 will announce to all MAP Participants in writing via a MAP notice issued on the FAS Web site the detailed requirements for completing and submitting program success stories. § 1485.24 notices. Compliance reviews and (a) USDA staff may conduct compliance reviews of MAP Participants’ activities under the MAP program. MAP Participants shall cooperate fully with relevant USDA staff conducting compliance reviews and shall comply with all requests from USDA staff to facilitate the conduct of such reviews. (b) Upon conclusion of the compliance review, USDA staff will provide either a written compliance report or a letter to the MAP Participant. USDA staff will issue a compliance report if it appears that CCC may be entitled to recover funds from that Participant and/or it appears that the Participant is not complying with any of the terms or conditions of the program agreement, approval letter, or the applicable laws and regulations. The compliance report will explain the basis for any recovery of funds from the Participant. Within 30 days of the date of the compliance report, the MAP Participant shall repay CCC the amount owed either by submitting a check payable to CCC or by offsetting its next reimbursement claim. The MAP Participant shall make such payment in U.S. dollars, unless otherwise approved in advance by CCC. If, however, a MAP Participant notifies CCC within 30 days of the date of the compliance report that the Participant intends to file an appeal pursuant to § 1485.24(e), the amount owed to CCC by the MAP Participant is not due until the appeal procedures are concluded and CCC has made a final determination as to the amount owed. In the absence of any finding of funds due to CCC or other non-compliance, CCC will issue a letter to the MAP Participant. If, as a result of a compliance review, CCC determines that further review is needed in order to ensure compliance with the requirements of MAP, CCC may require the Participant to contract for an independent audit. (c) In addition, CCC may notify a MAP Participant in writing at any time if CCC determines that CCC may be entitled to recover funds from the Participant. CCC will explain the basis for any recovery of funds from the Participant in the written notice. The MAP Participant shall within 30 days of the date of the notice repay CCC the amount owed either by submitting a check payable to CCC or by offsetting its PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 29511 next reimbursement claim. The MAP Participant shall make such payment in U.S. dollars, unless otherwise approved in advance by CCC. If, however, a MAP Participant notifies CCC within 30 days of the date of the written notice that the Participant intends to file an appeal pursuant to § 1485.24(e), the amount owed to CCC by the MAP Participant is not due until the appeal procedures are concluded and CCC has made a final determination as to the amount owed. (d) The fact that a compliance review has been conducted by USDA staff does not signify that a MAP Participant is in compliance with its program agreement, approval letter and/or applicable laws and regulations. (e) Appeals. (1) A MAP Participant may, within 60 days of the date of the compliance report or written notice from CCC, submit a written response to CCC appealing the report or notice. CCC, at its discretion, may extend the period for response. (2) After review of the Participant’s response, CCC shall determine whether the Participant owes any funds to CCC and will inform the Participant in writing of the basis for the determination. CCC will initiate action to collect such amount by providing the Participant a written demand for payment of the debt pursuant to Debt Settlement Policies and Procedures, 7 CFR part 1403. (3) Within 30 days of the date of the determination, the Participant may request in writing that CCC reconsider the determination and shall submit in writing the basis for such reconsideration. The Participant may also request a hearing. (4) If the Participant requests a hearing, CCC will set a date and time for the hearing. The hearing will be an informal proceeding. A transcript will not ordinarily be prepared unless the Participant bears the cost of a transcript; however, CCC may in its discretion have a transcript prepared at CCC’s expense. (5) CCC will base its final determination upon information contained in the administrative record. The Participant must exhaust all administrative remedies contained in this section before pursuing judicial review of a determination by CCC. § 1485.25 Failure to make required contribution. A MAP Participant’s required contribution will be specified in the approval letter. If the MAP Participant’s required contribution is specified as a dollar amount and the MAP Participant does not make the required contribution, the MAP Participant shall E:\FR\FM\17MYR2.SGM 17MYR2 29512 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations pay to CCC in dollars the difference between the amount actually contributed and the amount specified in the approval letter. If the MAP Participant’s required contribution is specified as a percentage of the total amount reimbursed by CCC, the MAP Participant may either return to CCC the amount of funds reimbursed by CCC to increase its actual contribution percentage to the required level or pay to CCC in dollars the difference between the amount actually contributed and the amount of funds necessary to increase its actual contribution percentage to the required level. A MAP Participant shall remit such payment within six months after the end of its program year. The MAP Participant shall make such payment in U.S. dollars, unless otherwise approved in advance by CCC. § 1485.26 Submissions. For all permissible methods of delivery, submissions required by this subpart shall be deemed submitted as of the date received by CCC. § 1485.27 Disclosure of program information. (a) Documents submitted to CCC by MAP Participants are subject to the provisions of the Freedom of Information Act (FOIA), 5 U.S.C. 552, 7 CFR part 1, subpart A—Official Records, and specifically 7 CFR 1.12, Handling Information from a Private Business. (b) Any research conducted by a MAP Participant pursuant to a MAP program agreement and/or approval letter shall be subject to the provisions relating to intangible property in the applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, and 3019). mstockstill on DSK6TPTVN1PROD with RULES2 § 1485.28 Ethical conduct. (a) A MAP Participant shall conduct its business in accordance with the laws and regulations of the country in which an activity is carried out and in accordance with applicable U.S. Federal, state and local laws, and regulations. A MAP Participant shall conduct its business in the United States in accordance with applicable Federal, state and local laws and regulations. All MAP Participants must comply with the regulations in the applicable parts of this title (e.g., 7 CFR Parts 1485, 3015, 3016, 3018, 3021, 3019, and 3052). (b) Except for a U.S. agricultural cooperative or a U.S. for-profit entity, neither a MAP Participant nor its affiliates shall make export sales of U.S. agricultural commodities and products covered under the terms of the applicable MAP agreement. Nor shall such entities charge a fee for facilitating VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 an export sale. A MAP Participant may, however, collect check-off funds and membership fees that are required for membership in the MAP Participant. For the purposes of this paragraph, ‘‘affiliate’’ means any partnership, association, company, corporation, trust, or any other such party in which the Participant has an investment other than in a mutual fund. (c) A MAP Participant shall not limit participation in its MAP activities to members of its organization. Participants shall ensure that their MAP-funded programs and activities are open to all otherwise qualified individuals and entities on an equal basis and without regard to any nonmerit factors. The MAP Participant shall publicize its program and make participation possible for commercial entities throughout the relevant commodity sector or, in the case of SRTGs, throughout the corresponding region. This includes providing to such commercial entities, upon request, a copy of any document in its possession or control containing market information developed and produced under the terms of its MAP agreement. The Participant may charge a fee not to exceed the costs for assembling, duplicating and distributing the materials. This paragraph does not apply to U.S. agricultural cooperatives when implementing their own brand program. (d) A MAP Participant shall select U.S. agricultural industry representatives to participate in generic MAP activities such as trade teams, sales teams, and trade fairs based on criteria that ensure participation on an equitable basis by a broad cross section of the U.S. industry. If requested by CCC, a MAP Participant shall submit such selection criteria to CCC for approval. (e) All MAP Participants should endeavor to ensure fair and accurate fact-based advertising. Deceptive or misleading promotions may result in cancellation or termination of a Participant’s MAP agreement and the recovery of CCC funds related to such promotions from the Participant. (f) The MAP Participant must report any actions or circumstances that may have a bearing on the propriety of its MAP program to the appropriate ´ Attache/Counselor, and its U.S. office shall report such actions or circumstances in writing to CCC. § 1485.29 Contracting procedures. (a) Neither CCC nor any other agency of the U.S. Government nor any official or employee of CCC, FAS, USDA, or the U.S. Government has any obligation or PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 responsibility with respect to MAP Participant contracts with third parties. (b) A MAP Participant shall comply with the procurement standards set forth below and in the applicable parts of this title when procuring goods and services and when engaging in construction to implement program agreements (e.g., 7 CFR Parts 3015, 3016, and 3019). For purposes of this subpart, the ‘‘small purchase threshold’’ referenced in 7 CFR part 3019 is the ‘‘simplified acquisition threshold’’ established by 41 U.S.C. 134. (c) Each MAP Participant shall establish contracting procedures for contracts that are funded, in whole or in part, with MAP funds that are open, fair, and competitive. (d) Each MAP Participant shall submit to CCC, for CCC approval, written contracting guidelines for contracts that are funded, in whole or in part, with MAP funds. CCC will notify all new and existing MAP Participants in writing in each Participant’s annual approval letter and through the FAS web site as to applicable submission dates for and dates for approvals of contracting guidelines. CCC’s approval of such contracting guidelines will remain in place until CCC retracts its approval in writing, or until new guidelines are approved that supersede them. Once approved by CCC, these contracting guidelines shall govern all of a Participant’s MAP-funded contracting involving contracts with an annual value of $35,000 or more. CCC may determine a different minimum value and announce that minimum value in writing to all MAP Participants via a MAP notice issued on the FAS Web site. The guidelines shall indicate the method for evaluating proposals received for all contract competitions, the method for monitoring and evaluating performance under contracts, and the method for initiating corrective action for unsatisfactory performance under contracts. The MAP Participant may modify and resubmit these guidelines for re-approval at any time. In addition to the requirements set forth in the applicable parts of this title (e.g., 7 CFR Parts 3015, 306, 3019), these guidelines shall include, at a minimum, the following: (1) Procedures for developing and publicizing requests for proposals, invitations for bids, and similar documents that solicit third party offers to provide goods or services. Solicitations for professional and technical services shall be based on clear and accurate descriptions of and requirements related to the services to be procured. Such procedures must include a conflict-of-interest provision E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK6TPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations that states that no employee, officer, board member, or agent thereof of the MAP Participant will participate in the review, selection, award or administration of a contract if a real or apparent conflict of interest would arise. Such a conflict would arise when an employee, official, board member, agent, or the employee’s, officer’s, board member’s, agent’s family, partners, or an organization that employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. Procedures shall provide that officers, employees, board members, and agents thereof shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or subcontractors. Procedures shall also provide for disciplinary actions to be applied for violations of such standards by officers, employees, board members or agents thereof; (2) Procedures for reviewing proposals, bids, or other offers to provide goods and services. Separate procedures shall be developed for various situations, including, but not limited to: solicitations for highly technical services; solicitations for services that are not common in a specific market; solicitations that yield receipt of three or more bids; solicitations that yield receipt of fewer than three bids; (3) Requirements to conduct all contracting in an openly competitive manner. Individuals who develop or draft specifications, requirements, statements of work, invitations for bids, and/or requests for proposals for procurement of any goods or services, and such individuals’ families or partners, or an organization that employs or is about to employ any of the aforementioned, shall be excluded from competition for such procurement. MAP Participants’ written contracting guidelines may detail special situations where the prohibitions in this subparagraph do not apply, such as in situations involving highly specialized technical services or situations where the services are not commonly offered in a specific market; (4) Requirements to perform and document in the procurement files some form of price or cost analysis, such as a comparison of price quotations to market prices or other price indicia, to determine the reasonableness of the offered prices in connection with every procurement action that is governed by the contracting guidelines; (5) Requirements to conduct an appropriate form of competition every 3 years on all multi-year contracts that are governed by the contracting guidelines. VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 However, contracts for in-country representation are not required to be recompeted after the initial reward. Instead, the performance of in-country representation must be evaluated and documented by the MAP Participant annually to ensure that the terms of the contract are being met in a satisfactory manner; and (6) Requirements for written contracts with each provider of goods, services, or construction work. Such contracts shall require such providers to maintain adequate records to account for funds provided to them by the MAP Participant. (e) A MAP Participant may undertake MAP promotional activities directly or through a domestic or foreign third party. However, the MAP Participant shall remain responsible and accountable to CCC for all MAP promotional activities and related expenditures undertaken by such third party and shall be responsible for reimbursing CCC for any funds that CCC determines should be refunded to CCC in relation to such third-party’s promotional activities and expenditures. § 1485.30 Property standards. The MAP Participant shall insure all MAP-funded real property and equipment acquired in furtherance of program activities and safeguard such against theft, damage and unauthorized use. The Participant shall promptly report any loss, theft, or damage of property to the insurance company. § 1485.31 Anti-fraud requirements. (a) All MAP Participants. (1) All MAP Participants annually shall submit to CCC for approval a detailed fraud prevention program. CCC will notify all new and existing MAP Participants in writing in each Participant’s annual approval letter and through the FAS web site as to applicable submission dates for and dates for approvals of fraud prevention programs. MAP Participants should review their fraud prevention programs annually. The fraud prevention program shall, at a minimum, include an annual review of physical controls and weaknesses, a standard process for investigating and remediation of suspected fraud cases, and training in risk management and fraud detection for all current and future employees. The MAP Participant shall not conduct or permit any MAP promotion activities to occur unless and until CCC has communicated in writing approval of the MAP Participant’s fraud prevention program. (2) The MAP Participant, within five business days of receiving an allegation PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 29513 or information giving rise to a reasonable suspicion of misrepresentation or fraud that could give rise to a claim by CCC, shall report such allegation or information in writing to such USDA personnel as specified in the Participant’s MAP program agreement and/or approval letter. The MAP Participant shall cooperate fully in any USDA investigation of such allegation or occurrence of misrepresentation or fraud and shall comply with any directives given by CCC or USDA to the MAP Participant for the prompt investigation of such allegation or occurrence. (b) MAP Participants with brand programs. (1) The MAP Participant may charge a fee to brand participants to cover the cost of the fraud prevention program. (2) The MAP Participant shall repay to CCC funds paid to a brand participant through the MAP Participant on claims that the MAP Participant or CCC subsequently determines are unauthorized or otherwise nonreimbursable expenses within 30 days of the MAP Participant’s determination or CCC’s disallowance. The MAP Participant shall repay CCC by submitting a check to CCC or by offsetting the MAP Participant’s next reimbursement claim. The MAP Participant shall make such payment in U.S. dollars, unless otherwise approved in advance by CCC. A MAP Participant operating a brand program in strict accordance with an approved fraud prevention program, however, will not be liable to reimburse CCC for MAP funds paid on such claims if the claims were based on misrepresentations or fraud of the brand participant, its employees or agents, unless CCC determines that the MAP Participant was grossly negligent in the operation of the brand program regarding such claims. CCC shall communicate any such determination to the MAP Participant in writing. § 1485.32 Program income. Any revenue or refunds generated from an activity, e.g., participation fees, proceeds of sales, refunds of value added taxes (VAT), the expenditures for which have been wholly or partially reimbursed with MAP funds, shall be used by the MAP Participant in furtherance of its approved MAP activities in the program period during which the MAP funds are available for obligation by the MAP Participant. The use of such revenue or refunds shall be governed by 7 CFR Part 1485. Interest earned on funds advanced by CCC is not program income. E:\FR\FM\17MYR2.SGM 17MYR2 29514 § 1485.33 Federal Register / Vol. 77, No. 96 / Thursday, May 17, 2012 / Rules and Regulations Amendment. § 1485.36 Paperwork reduction requirements. MAP Participant if program income or CCC-provided funds are lost due to an action or omission of the MAP Participant. § 1485.34 Noncompliance with an agreement. § 1485.35 Suspension, termination, and closeout of agreements. If a MAP Participant fails to comply with any term in its program agreement or approval letter, CCC may take one or more of the enforcement actions set forth in the applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, and 3019) and, if, appropriate, initiate a claim against the MAP Participant, following the procedures set forth in this subpart. CCC may also initiate a claim against a mstockstill on DSK6TPTVN1PROD with RULES2 A program agreement may be amended in writing with the consent of CCC and the MAP Participant. A program agreement may be suspended or terminated in accordance with the suspension and termination procedures in the applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, 3019). If an agreement is terminated, the applicable parts of this title will apply to the closeout of the agreement (e.g., 7 CFR Parts 3015, 3016, 3019). The paperwork and recordkeeping requirements imposed by this subpart have been approved by OMB under the Paperwork Reduction Act of 1980. OMB has assigned control number 0551–0026 for this information collection. Dated: May 4, 2012. Suzanne E Heinen, Administrator, Foreign Agricultural Service, and Vice President, Commodity Credit Corporation. VerDate Mar<15>2010 17:34 May 16, 2012 Jkt 226001 PO 00000 Frm 00042 Fmt 4701 Sfmt 9990 [FR Doc. 2012–11601 Filed 5–16–12; 8:45 am] BILLING CODE 3410–10–P E:\FR\FM\17MYR2.SGM 17MYR2

Agencies

[Federal Register Volume 77, Number 96 (Thursday, May 17, 2012)]
[Rules and Regulations]
[Pages 29474-29514]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-11601]



[[Page 29473]]

Vol. 77

Thursday,

No. 96

May 17, 2012

Part II





Department of Agriculture





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Commodity Credit Corporation





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7 CFR Part 1485





Market Access Program; Final Rule

Federal Register / Vol. 77 , No. 96 / Thursday, May 17, 2012 / Rules 
and Regulations

[[Page 29474]]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1485

RIN 0551-AA72


Market Access Program

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

ACTION: Final rule.

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SUMMARY: This final rule revises and amends the regulation used to 
administer the Market Access Program (MAP) by updating and merging the 
application requirements and the activity plan requirements to reflect 
the Unified Export Strategy (UES) system currently in place; clarifying 
the eligibility of activities designed to address international market 
access issues; modifying the list of eligible and ineligible 
contributions; revising the portions of the regulation regarding 
evaluations, contracting procedures, and the compliance review and 
appeals process; eliminating the Export Incentive Program/Market Access 
Program (EIP/MAP) as a separate subcomponent; and making other 
administrative changes for clarity and program integrity. This final 
rule adopts the substantive provisions of the proposed rule published 
September 8, 2009, revising and amending MAP regulations, with changes 
made to reflect public comments to the proposed rule.

DATES: Effective Date: This rule is effective May 17, 2012. 
Applicability Date: This regulation will become applicable for each MAP 
participant at the beginning of the MAP participant's 2013 program year 
(i.e., 01/01/2013 or 07/01/2013).

FOR FURTHER INFORMATION CONTACT: Mark Slupek, 202-720-1169, U.S. 
Department of Agriculture, Foreign Agricultural Service, Office of 
Trade Programs, Program Operations Division, Portals Office Building, 
Suite 400, 1250 Maryland Avenue SW., Washington, DC 20024; or by phone: 
(202) 720-4327; or by fax: (202) 720-9361; or by email: 
podadmin@fas.usda.gov.
    The U. S. Department of Agriculture (USDA) prohibits discrimination 
in its programs on the basis of race, color, national origin, sex, 
religion, sexual orientation, age, disability, political beliefs and 
marital or familial status. (Not all prohibited bases apply to all 
programs.) Persons with disabilities who require alternative means for 
communication of program information (braille, large print, audiotape, 
etc.) should contact the USDA TARGET Center at (202) 720-2600 (Voice 
and TDD).

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    This 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 the Office of Management and 
Budget. 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 does not preempt State or local laws, regulations, or 
policies unless they present an irreconcilable conflict with this rule. 
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 13175

    This rule does not have tribal implications as specified by 
Executive Order 13175 (65 FR 67249, November 9, 2000) that will preempt 
Tribal law.

Executive Order 13132

    This rule does 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 rule impose substantial direct compliance 
costs on State and local governments. Therefore, consultation with the 
States was not required.

Regulatory Flexibility Act

    The Regulatory Flexibility Act does not apply to this rule because 
Commodity Credit Corporation (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 the rule.

Environmental Assessment

    CCC has determined that this 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), no environmental assessment or environmental impact statement 
will be prepared.

Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does 
not apply to this rule because it does not impose any enforceable duty 
or contain any unfunded mandate as described under the UMRA.

Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995, FAS has 
previously received approval from OMB with respect to the information 
collection required to support this program. The information collection 
is described below:
    Title: Foreign Market Development Program (FMD) and Market Access 
Program (MAP); OMB Control Number: 0551-0026.
    The current OMB approval of this information collection is 
scheduled to expire on August 31, 2012. Consequently, CCC will submit a 
request to OMB under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 
et seq., for the continued use of this information collection. CCC's 
request will reflect changes to the new paperwork collection 
requirements that were made in the final rule in response to public 
comments. A separate Notice of Request for Extension and Revision of 
Currently Approved Information Collection for the Market Access Program 
will be published in the Federal Register for comment.

E-Government Act Compliance

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

Background

    Section 203 of the Agricultural Trade Act of 1978, as amended, 
directs CCC to carry out a program to encourage the development, 
maintenance, and expansion of commercial export markets for 
agricultural commodities through cost-share assistance to eligible 
trade organizations. Such assistance may be provided in the form of CCC 
funds or CCC-owned commodities.
    Since the inception of the MAP, CCC has monitored the program 
closely,

[[Page 29475]]

strengthened program controls, and implemented changes to improve the 
effectiveness of the program. In administering the program, CCC is 
committed to ensuring efficient and effective use of public funds. In 
this regard, CCC considers an applicant's need for Federal financial 
assistance, an applicant's use of rigorous performance measurements in 
its plans, and increasing contribution levels from Participants as 
important factors in the overall management of the MAP.

Summary and Analysis of Comments

    On May 23, 2007, the CCC published an advance notice of proposed 
rulemaking and public hearing in the Federal Register (72 FR 28901). 
This notice was intended to solicit comments on whether to amend and 
revise the current MAP regulations. In addition, CCC held a public 
hearing on July 25, 2007, to receive oral and written comments.
    On September 8, 2009 (74 FR 46027), a proposed rule was published 
governing the operations of MAP.
    CCC received nearly 1,300 comments from nonprofit U.S. trade 
associations, U.S. companies, state organizations, regional trade 
associations, Participants, and consulting firms in response to the 
proposed rule. Following is a summary of the comments that specifically 
address the proposed rule and CCC's responses to these comments. 
General comments relating to the value of the program, editorial 
suggestions, and non-substantive comments have been omitted.

Sec. 1485.10 General Purpose & Scope

Policy Clarifications
    CCC received 164 comments on this section.
    Comment: Nineteen respondents expressed their concern with regard 
to whether previous policy clarifications will remain in effect or if 
the new MAP regulation will supersede the policy clarifications 
currently in effect. The respondents asked for clarification on this 
and stated that if previous policy clarifications remain in effect, 
that the notices should be incorporated into the new regulation.
    Response: CCC understands that the commenters are referring to the 
``Market Access Program notices'' available at http://www.fas.usda.gov/mos/programs/mnotice.html. CCC issues these MAP notices for 
informational purposes. These notices have no legal effect. They are 
intended to alert MAP Participants of various aspects of CCC's 
administration of the MAP program. For example, CCC issues MAP notices 
to alert MAP Participants of procedures for requesting advances, 
applicable federal pay scale rates, lists of economic and trade 
sanctions against certain foreign countries, reporting formats and 
computer codes to use with the UES.
    The content of some MAP notices were already codified in the 
proposed rule. In response to the commenters, CCC has incorporated into 
the final rule several additional MAP notices that CCC has judged to be 
more substantive in nature. Those MAP notices that have been so 
codified will be deleted from the FAS Web site.
    CCC will remove certain other of the remaining MAP notices that are 
now obsolete or inconsistent with the final rule before or concurrent 
with the final rule's effective date. The remaining MAP notices will 
continue to be available on the Web site for informational purposes and 
reflect details related to CCC's current administration of the MAP 
program.
    Comment: One respondent stated that although domestic travel is not 
addressed in the new MAP regulation, this is one area with respect to 
which a policy clarification exists. Fourteen additional comments were 
made regarding E-ticketing and internet purchasing of tickets (not 
through a travel agency). The respondents stated that this is an area 
that was previously covered by a policy clarification but is not 
covered in the new regulation; so the question whether previous policy 
clarifications will remain in effect or if the new MAP regulation will 
supersede the policy clarifications applies here as well.
    Response: Domestic travel was addressed in a limited fashion in the 
proposed rule at Sec.  1485.17(c)(25), which would have allowed, inter 
alia, reimbursement, solely in connection with generic promotion, only 
of domestic travel expenditures associated with meetings of 
international organizations conducted in the United States. In response 
to the comment, however, CCC has addressed domestic travel more 
extensively in several new subsections of Sec.  1485.17(c).
    New Sec.  1485.17(c)(24) lays out the conditions under which 
domestic travel related to international retail, trade and consumer 
exhibits and shows conducted in the United States can be reimbursed.
    New Sec.  1485.17(c) (25) allows reimbursement for domestic travel 
for seminars and educational training conducted in the United States.
    New Sec.  1485.17(c) (26) allows reimbursement of domestic travel 
expenditures of certain individuals accompanying foreign trade missions 
or technical teams while traveling in the United States. This change 
codifies MAP Notice 06-002. MAP Notice 06-002 will be removed from FAS' 
Web site.
    CCC has decided to eliminate the provision allowing reimbursement 
of domestic travel expenditures for a MAP Participant's attendance at 
meetings of international technical organizations when such meetings 
are conducted in the United States.
    These provisions are discussed in more detail in a later response.
    Domestic travel expenditures are not reimbursable for brand 
promotion activities.
    The comments regarding E-ticketing and internet purchase of tickets 
appear to refer to MAP Notice 02-004. This notice reminds MAP 
Participants that the reimbursement of allowable travel expenses when 
using E-Tickets is subject to the availability of sufficient 
documentation to support the expenses, as is the case with all travel 
expenses. The notice provides examples of information that such 
documentation must include, such as the complete routing codes (i.e., 
layover and flight information for each segment of a trip in which a 
change of airplane or flight designation is made) and the fare amount 
charged (i.e., point-to-point faring). The notice also informs MAP 
Participants that reimbursable travel expenditures include associated 
reasonable and common fees that travel agents or other ticketing 
sources may charge for providing E-Ticket itineraries, invoices and/or 
receipts. The MAP final rule now sets broad guidance on the 
reimbursement of a MAP Participant's domestic travel. CCC believes the 
final rule's provisions provide sufficient guidance to MAP Participants 
and does not believe it necessary to codify MAP Notice 02-004's 
explanation of the particulars of program administration. MAP Notice 
02-004 shall remain on the FAS Web site for informational purposes.
    Comment: Six respondents asked for further clarification on the 
types of activities in the U.S. that are reimbursable.
    Response: In response to the comments, CCC has made a clarification 
to Sec.  1485.10(c) that, to be reimbursable, all activities that occur 
in the United States must develop, maintain, or expand the commercial 
export market for the relevant U.S. agricultural commodity in 
accordance with the MAP Participant's approved MAP program.
    Comment: Fourteen respondents recommended that the threshold in the 
regulations for Miscellaneous/Fixed Asset Category be raised to $500 
and

[[Page 29476]]

proposed that software be subject to the same threshold as fixed 
assets.
    Response: These comments refer to a threshold in Sec.  
1485.23(d)(2) of the current MAP regulations. This provision was not 
included in the proposed rule and is not included in the final rule. 
Section 1485.30 of the MAP final rule provides the final property 
standards for the program. In addition, MAP Participants are subject to 
the applicable property management standards described in 7 CFR Parts 
3015, 3016 and 3019, depending on the nature of the MAP Participant 
organization.
    Comment: One respondent stated more flexibility is needed for 
electronic communications, which are becoming a more important part of 
the marketing mix for Participants, both branded and generic.
    Response: CCC believes that the flexibility provided in Sec.  
1485.17(b)(1) and Sec.  1485.17(b)(16) is adequate.
    Comment: Fourteen respondents stated that FAS refers to 
miscellaneous communications devices in the new regulations but did not 
address their usage costs and asked for clarification on whether these 
costs were reimbursable.
    Response: CCC believes the reimbursement of the usage costs of 
various communications devices is already addressed by the various 
provisions in the MAP final rule. Reimbursement of such communication 
costs depends on the circumstances under which the communication took 
place. For example, where usage costs of communications devices are 
incurred by the MAP Participant's U.S. offices and staff, those costs 
are not reimbursable pursuant to Sec.  1485.16(c) and Sec.  
1485.17(d)(26). If usage costs of communications devices are incurred 
while on eligible international or domestic travel for approved MAP 
brand or generic promotion activities and are allowed under the U.S. 
Federal Travel Regulations (41 CFR Parts 301 through 304), they are 
potentially reimbursable as international or domestic travel 
expenditures under the circumstances laid out in the applicable 
provisions in Sec.  1485.17(b) and (c). If usage costs of 
communications devices are incurred as part of the organization costs 
for a MAP Participant's overseas office approved in its MAP program 
agreement and such communications originate overseas, Sec.  
1485.17(c)(11) provides that such communications costs are reimbursable 
for generic promotions so long as the expenditure was made in 
furtherance of an approved activity. Thus, the monthly service charge 
for a caller usage plan with unlimited minutes that is incurred 
primarily in furtherance of an approved activity would be fully 
reimbursed under MAP. In contrast, under a caller usage plan that 
charges by the minute, only charges for calls incurred in furtherance 
of an approved activity would be reimbursed under MAP.

Section 1485.11 Definitions

    CCC received 153 comments on this section. In response to the 
comments, CCC has edited the definitions as set forth below. In 
addition, CCC has made minor clarifications to the definitions of 
``contribution,'' ``program year,'' ``SRTG,'' and ``supergrade.'' CCC 
has also included a new definition for ``product samples.'' This 
definition now codifies MAP Notice 11-003, and MAP Notice 11-003 will 
be removed from FAS' Web site. Finally, CCC has added a new definition 
for MAP Notice in the MAP final rule.
    Comment: One respondent recommended that the generic promotions be 
defined more broadly as ``using U.S. commodities from multiple U.S. 
suppliers or in cases where only one U.S. supplier is selected to 
supply the commodity in question, that multiple U.S. suppliers had the 
opportunity to submit bids or compete for the business.'' This 
respondent stated that as long as multiple U.S. companies had the 
opportunity to compete for that business, it believed promotions with 
these companies should be considered generic. Another respondent 
commented that a generic promotion should not be required to support at 
least two brands since this is difficult when a retailer carries only 
one.
    Response: CCC disagrees with the respondents' comments suggesting 
that a generic promotion not be required to support at least two 
brands, particularly in the case raised by the respondent, in which a 
single company has been competitively selected over other bidders.
    For clarity, CCC has moved the substance of proposed Sec.  
1485.17(d), defining what may be considered a generic promotion 
activity, from the section on MAP ``Reimbursement rules'' to the 
definition of ``generic promotion'' in Sec.  1485.11. Original 
subsections (e), (f), (g), (h), (i), (j), and (k) in Sec.  1485.17 have 
been re-designated as (d), (e), (j), (f), (g), (h), and (i), 
respectively.
    Comment: Fourteen respondents recommended adding or clarifying 
definitions for the following terms: Advertising, audits, contractors, 
direct promotional costs, employees, foreign brand, negative 
comparison, overhead costs, representative, small purchase threshold, 
and theme.
    Response: CCC disagrees with the respondents in regard to the need 
for additional definitions of these terms, except that it has further 
clarified the terms ``foreign brand'' and ``theme.'' The definition of 
``generic promotion'' now refers to a foreign brand as ``a brand owned 
primarily by foreign interests and being used to market a commodity or 
product in a foreign market.'' Similarly, the definition of ``generic 
promotion'' refers to the concept of a ``unified theme'' as ``a 
dominant idea or motif.'' CCC has removed the term ``negative 
comparison'' from that definition in response to a different comment.
    Comment: Fourteen respondents questioned the definition of audits. 
They stated that audits are mentioned in at least three places with 
seemingly contradictory provisions.
    Response: CCC notes the MAP final rule does not define ``audit.'' 
However, CCC does not believe it is necessary to define this term, as 
CCC views this term as generally understood. In response to the 
comments, however, CCC agrees that the use of the term ``audit'' in 
Sec.  1485.21(d)(7) is confusing and has replaced the term ``audit'' 
with the term ``compliance review'' in Sec.  1485.21(d)(7).
    Comment: Fourteen respondents commented that the use of 
representatives (branded) in the phrase ``no more than two 
representatives of a single brand participant to exhibit their 
company's products at a foreign trade show'' implied that these 
individuals have to be employees of the brand (as in Sec.  
1485.17(b)(7)). These respondents suggested that this definition be 
expanded to include others associated with the brand such as 
distributors, consultants, etc.
    Response: CCC agrees with the respondents. CCC has modified this 
section (now Sec.  1485.17(b)(8)) to expand the list of eligible 
representatives to include: Employees and board members of private 
companies, employees or members of cooperatives, or any broker, 
consultant, or marketing representative contracted by the company or 
cooperative to represent the company or cooperative in sales 
transactions. CCC notes that MAP Notice 99-003 is now obsolete and will 
be removed from FAS' Web site.
    Comment: Sixteen respondents commented that the proposed definition 
for ``notifications'' has veered from the original purpose for 
notifications, which is to notify CCC of significant changes to the MAP 
Participant's strategic plan. The respondents asked FAS to clarify the 
definition of notifications and stated the proposed rule would be 
burdensome to the Participants.

[[Page 29477]]

    Response: CCC agrees with the commenters. Instead of changing the 
definition of ``notification,'' however, CCC has modified Sec.  
1485.14(i) to change when notifications will be required. Notifications 
are now required only if a MAP Participant wishes to conduct an 
entirely new activity or if the Participant wishes to increase the 
funding level for existing, approved activities by more than $25,000 or 
25%, whichever is greater. A MAP Participant may make significant 
adjustments below that threshold without prior notification to CCC, but 
must still submit a notification alerting CCC of such adjustments no 
later than 30 days after the change. Finally, CCC has clarified that 
minor adjustments to existing, approved activities and/or funding 
levels do not require notification.
    Comment: Three respondents recommended that the definition of a 
small-sized entity be expanded for the program by establishing the size 
eligibility standard to one not exceeding 150 percent of the current 
Small Business Administration guidelines. The respondents stated that 
this recommendation would better align the definition with the actual 
practice in the food processing industry.
    Response: CCC disagrees. CCC believes it is consistent with the 
Administration's National Export Initiative to maintain the same 
definition of small business as the Small Business Administration.
    Comment: Fourteen respondents suggested the phrase, ``online to MAP 
and any other USDA market promotion program * * *'' in the ``UES Web 
site'' definition be changed to ``* * * and any other USDA market 
development program * * *'' which is more accurate and the terminology 
used in the subsequent definition of the Unified Export Strategy (UES).
    Response: CCC agrees with the respondents and has changed the final 
rule accordingly. In addition, CCC has added an explicit reference to 
the MAP program to the end of the definition.
    Comment: One comment was received recommending each definition be 
given an identifying number or letter so that it is easier to indicate 
which definition is being discussed.
    Response: CCC disagrees. CCC believes that providing the 
definitions alphabetically is adequate for identifying definitions.
    Comment: Three respondents stated that because ``brand 
participant'' is defined in the proposed regulation to mean only U.S. 
agricultural cooperatives that are ``participating in the MAP brand 
promotion of another MAP Participant,'' the proposed rule does not 
appear to allow a cooperative to apply for funds to run its own brand 
program. Therefore, they requested that Sec.  1485.11 (brand 
participant) and Sec.  1485.13(a) be clarified to make it clear that 
cooperatives will continue to be eligible to apply directly for a brand 
promotion program.
    One respondent stated that currently cooperatives are allowed to 
contract directly with FAS to participate in the MAP program to promote 
the brand that their farmers have developed, own and use, to maximize 
their returns. This respondent stated that it should be allowed to 
continue to do so, as this was what Congress intended.
    One respondent stated that the reference to ``participating in the 
brand promotion program of another MAP Participant'' does not always 
apply and should be deleted from the definition.
    Response: CCC agrees with these comments and has clarified these 
sections. CCC has modified the definition of ``brand participant'' to 
make clear that the term does not include any agricultural cooperatives 
that are MAP Participants that apply for MAP funds to implement their 
own brand programs. CCC has also modified the definition of ``brand 
promotion'' to include U.S. agricultural cooperatives' promotion of 
their own brand in their own brand program. CCC has also modified Sec.  
1485.15 to delete the phrase ``third party'' before ``brand 
participants'' as redundant, since the definition of brand participant 
clearly refers to third parties and not the MAP Participant. CCC has 
also modified Sec.  1485.17(b)(7) (now Sec.  1485.17(b)(8)) to make 
clear that the travel expenses of representatives of MAP Participants, 
including U.S. agricultural cooperatives running their own brand 
programs, at brand promotions at trade shows are also reimbursable. 
Finally, CCC has modified Sec.  1485.15(d) to refer to ``entity'' 
instead of ``company'' in noting that MAP Participants may not provide 
assistance to a single entity for brand promotion in a single country 
for more than 5 years.
    Comment: One respondent stated that the proposed definition of 
``foreign third party'' implies that the MAP Participant can select a 
qualified foreign third party with whom to work. The commenter stated 
if the proposed definition intends to imply that FAS must give approval 
of foreign third parties with whom Participants work, then it must be 
deleted.
    Response: It is not CCC's intention that CCC would review or 
approve foreign third parties with whom Participants wish to work. CCC 
has clarified this definition accordingly to state that a foreign third 
party is a foreign entity with whom a MAP Participant works to promote 
the export of a U.S. agricultural commodity under the MAP program.
    Comment: Three respondents commented that in light of the continued 
development of agricultural products for non-food use, they proposed 
that this rule be amended to insert ``non-durable'' between ``and any'' 
and ``product thereof, excluding tobacco.''
    Response: CCC disagrees with the respondents' suggestion, as the 
change would unnecessarily limit the scope of the program. CCC has 
modified the definition of ``U.S. agricultural commodity'' to preserve 
the scope of the program as covering all agricultural commodities, 
regardless of the type of use to which the agricultural product is put. 
The definition of U.S. agricultural commodity now refers to ``any 
agricultural commodity, including any food, feed, fiber, forestry 
product, livestock, or insect of U.S. origin or fish * * *''

Sec. 1485.12 Participation Eligibility

    CCC received 2 comments on this section.
    Comment: One respondent stated the current MAP regulations allow 
U.S. agricultural cooperatives to be a MAP Participant. The proposed 
rule retained this eligibility but qualified ``U.S. agricultural 
cooperative'' with the term ``nonprofit.'' The respondent commented 
that its understanding is that the term ``nonprofit'' in Sec.  
1485.12(c) and elsewhere in the proposed regulations is not intended to 
change the eligibility of cooperatives that are currently participating 
in MAP and which are considered ``nonprofit'' in the sense that they 
are entitled to tax treatment afforded by Subchapter T of the Internal 
Revenue Code Section 1381. The respondent requested that FAS confirm 
that ``a nonprofit U.S. agricultural cooperative'' as used in the 
proposed regulations includes U.S. agricultural cooperatives that are 
entitled to tax treatment afforded by Subchapter T of the Internal 
Revenue Code (IRC) Section 1381.
    Response: CCC confirms that U.S. agricultural cooperatives that are 
entitled to tax treatment afforded by Subchapter T of the IRC Section 
1381 are eligible to participate in the MAP program. CCC has deleted 
the term ``nonprofit'' before ``U.S. agricultural cooperative'' as 
unnecessary and potentially confusing. CCC has also modified the 
definition of ``brand participant'' in Sec.  1485.11 and Sec.  
1485.12(c) and made conforming edits

[[Page 29478]]

to Sec.  1485.13 and Sec.  1485.28(b) to delete the term ``nonprofit.''
    Comment: One respondent stated its concern that the proposed 
regulation Sec.  1485.13(a) states that ``applicants'' may apply for 
the MAP program, but does not define the term ``applicant.'' The 
respondent was also concerned that Sec.  1485.12 uses the term 
``entities'' to describe who can ``participate'' in the MAP, while 
Sec.  1485.13(a) uses the term ``applicant.'' The respondent was 
concerned that the two sections do not cross reference each other and 
that neither term is defined in Sec.  1485.11 ``Definitions.'' The 
respondent also suggested the proposed regulations be revised as 
necessary to make clear that ``a nonprofit U.S. agricultural 
cooperative'' is one of the four entities eligible to participate in 
MAP under Sec.  1485.12 and is also eligible to be an ``applicant'' and 
apply directly for MAP under Sec.  1485.13(a), including for its own 
brand promotion program.
    Response: CCC does not share the respondent's concerns. CCC 
believes it is unnecessary to define the terms ``applicant'' and 
``entity.'' CCC believes that it is appropriate to use different terms 
in Sec.  1485.13(a), which deals with those who actually apply to the 
program and therefore are ``applicants,'' and Sec.  1485.12, which 
deals with who, in theory, is eligible to apply. The MAP final rule is 
clear that to participate in the MAP, an entity must be one of four 
types of entities, one of which is a U.S. agricultural cooperative. 
Implicit in the concept of being ``eligible'' to participate in the MAP 
is the notion that eligible ``entities'' are also eligible to be 
``applicants'' to the program.

Sec. 1485.13 Application Process

    CCC received 94 comments on this section. CCC's responses are 
below. In addition, CCC has included new Sec.  1485.13(d) and (e) to 
comply with OMB regulations 2 CFR Part 25, ``Universal Identifier and 
Central Contractor Registration (CCR)'' and 2 CFR Part 170, ``Reporting 
Subaward and Executive Compensation Information.'' 2 CFR Sec.  25.200 
directs federal agencies to include in their regulations issued on or 
after September 14, 2010 requirements that all applicants for federal 
financial assistance: (1) Be registered in the CCR prior to submitting 
an application or plan; (2) maintain an active CCR registration with 
current information at all times during which it has an active Federal 
award or an application or plan under consideration by an agency; and 
(3) provide its DUNS number in each application or plan it submits to 
the agency. Similarly, pursuant to 2 CFR Sec.  170.200(b), any 
regulations issued after September 14, 2010 and containing instructions 
for applicants of grants and cooperative agreements, among other 
assistance, must require applicants that do not qualify for an 
exception under 2 CFR Sec.  170.110(b) to have the necessary processes 
and systems in place to comply with Part 170's reporting requirements 
if they receive funding.
    Comment: Two respondents stated that under the current MAP 
regulations a U.S. agricultural cooperative is eligible to be a MAP 
Participant and in that capacity to apply directly to CCC for the 
cooperative's own brand promotion program.
    The respondents stated that the proposed regulation at Sec.  
1485.13(a) appears to unintentionally change this by providing in the 
fourth sentence that a MAP applicant (i.e., including a nonprofit U.S. 
agricultural cooperative) ``may apply to conduct a generic promotion 
program, a brand promotion program that provides MAP funds to brand 
participants for branded promotion, or both.'' They requested that FAS 
confirm that a nonprofit U.S. agricultural cooperative that applies to 
CCC for its own brand promotion program would be considered a ``MAP 
Participant,'' not a ``brand participant'' since it would enter into a 
MAP agreement directly with CCC.
    Response: CCC agrees with the respondents. CCC did not intend to 
change this policy and has modified Sec.  1485.13(a) accordingly to 
explicitly state that an applicant who is a U.S. agricultural 
cooperative may also apply for funds to conduct its own brand promotion 
program. As noted previously, CCC has also clarified the definition of 
``brand participant'' in Sec.  1485.11 to exclude from that definition 
any agricultural cooperatives that are MAP Participants that apply for 
MAP funds to implement their own brand programs.
    Comment: Twenty-one respondents submitted requests for FAS to 
clarify that electronic copies of applications are no longer required 
to be submitted through the UES system and only a hard copy is required 
to be sent.
    Response: CCC's intent was not to imply that only a hard copy be 
sent. Applicants have always had a choice to submit either an 
electronic copy or a hard copy of their application. CCC believes the 
MAP final rule clearly maintains that choice, but encourages 
organizations to submit their applications through the UES system, 
because this format virtually eliminates paperwork and expedites the 
FAS processing, review, and reimbursement cycles.
    Comment: Twenty-one respondents questioned if the online version is 
still required, could it be submitted in a reasonably short time 
following the deadline?
    Response: No. Electronic applications may not be submitted after 
the deadline. CCC is required to publish a Notice of Funds Availability 
annually in the Federal Register. This notice provides 60 days to 
submit applications either electronically or by hard copy. Applications 
are required to be submitted by the deadline that is published in the 
annual notice.
    Comment: Two respondents provided comments regarding Sec.  
1485.13(a)(3)(i)(A) and Sec.  1485(a)(3)(i)(B). They stated they 
support the requirement that Participants submit a strategic plan; 
however, to reduce the complexity of the UES process, they recommended 
that the plan submission remain separate from the current UES process.
    Response: CCC disagrees. CCC will continue to approve applications 
that it considers to present the best opportunities for developing and 
expanding export markets for U.S. agricultural commodities. The 
strategic planning process is a critical part of the application and 
therefore must be provided within the UES process in order for the 
applications to be evaluated in a consistent and equitable manner. This 
is not a change from current practice.
    Comment: Sixteen respondents provided similar comments that stated 
that Sec.  1485.13(a)(1)(i)(R) & (S) both appear to require that the 
applicant's proposed contribution be stated in both dollar terms and as 
a percentage of CCC resources requested. They stated that they assume 
this change is not the intention of CCC, because Sec.  1485.25 of the 
proposed rule implies that the applicant has a choice between stating 
its proposed contribution either in dollar terms or as a percentage, as 
is the case under current MAP regulations. The respondents asked for 
clarification.
    Response: CCC agrees with the respondents and has changed the final 
rule to clarify that the applicant has the choice to propose its 
contribution in dollar terms or as a percentage of resources requested. 
Section 1485.13(a)(1)(i)(R) & (S) have been eliminated and new Sec.  
1485.13(a)(1)(i)(Q) requires applications to include: ``Value, in U.S. 
dollars, of proposed contributions from the applicant or the 
applicant's proposed contribution stated as a percentage of the total 
dollar amount of CCC resources requested.''
    Comment: Sixteen respondents stated that Sec.  1485.13(a)(3)(i)(M), 
which

[[Page 29479]]

introduces the requirement for an evaluation plan as part of the MAP 
application process, seems to imply that the current practice of 
``performance measures'', Country Progress Reports and regular, formal 
evaluations is not sufficient. The respondents stated that if this is 
the case the evaluation plan could become an added bureaucratic burden 
and asked for further clarification of CCC's intent with this new 
requirement. They also asked for further clarification on whether the 
evaluation plan is an additional requirement.
    Response: The requirement for an evaluation plan is not a new 
requirement. The Government Performance and Results Act (GPRA) of 1993 
(5 U.S.C. 306; 31 U.S.C. 1105, 1115-1119, 3515, 9703-9704) requires 
performance measurement of Federal programs, including MAP. Section 
1485.13(a)(3)(D) of the prior MAP rule required ``[a] statement of 
goals and the applicant's plans for monitoring and evaluating 
performance towards achieving these goals.'' In addition, Sec.  
1485.14(b)(6)(v) of the previous rule listed as one of the criteria 
considered by CCC in choosing applications the adequacy of the 
applicant's strategic plan in the following category ``Description of 
an evaluation plan and suitability of the plan for performance 
measurement.'' The new final rule merely clarifies the current 
requirement to increase each applicant's opportunity for success. To 
clarify that the evaluation plan is not a new requirement, CCC has 
combined sub-paragraphs (M) and (E) into one sub-paragraph (E) in Sec.  
1485.13(a)(3).
    Comment: Fourteen respondents stated that the specific mention of 
the submission of an ``evaluation plan'' in the application process 
implied that the current submission of goals and performance measures 
is no longer sufficient. The fourteen respondents also recommended that 
if such a plan is required, that the Participant's submission be 
permitted to be brief and generalized.
    Response: As noted in response to the prior comment, in this final 
rule, CCC has combined the current regulation's language on goals and 
performance measures and the new proposed language on evaluation plans 
into one single sub-paragraph (E) in Sec.  1485.13. CCC notes that 
evaluation of MAP's effectiveness has been and will continue to be an 
integral element of program planning and implementation. The adequacy 
of the evaluation plan has been and will remain one of the criteria in 
approving applications.
    Comment: One respondent stated that both Sec.  1485.13(a)(1)(i)(J) 
and Sec.  1485.14(c)(9) refer to evaluating a request for a brand 
promotion program based on the percentage of CCC resources that will be 
made available to small-sized entities. The comment stated that since 
only small companies are eligible to participate in the branded 
program, this reference does not appear to be needed and should be 
deleted.
    Response: CCC has deleted the references requested by the 
respondent but for a different reason. The respondent is not correct 
that only small companies are eligible to participate in the branded 
program. U.S. agricultural cooperatives are also eligible to 
participate in the branded program. CCC, however, does not intend for 
small companies to receive preference over cooperatives. Accordingly, 
there is no need to determine the percentage of resources made 
available to small-sized entities, and CCC has eliminated both 
sections. Large companies remain ineligible for branded programs.

Sec. 1485.14 Application Review and Formation of Agreements

    CCC has edited Sec.  1485.14(b)(3) to make clear that the 
preference given to organizations with the broadest producer 
representation/industry participation applies only with respect to 
nonprofit U.S. trade organizations. CCC has also clarified Sec.  
1485.14(e) and (f) to reflect that the approval letter must also be 
signed by the MAP Participant and that final agreement occurs when both 
the program agreement or amendment and the approval letter are signed 
by both parties. In addition, CCC received 130 comments on this 
section, set forth below.
    Comment: Fourteen respondents stated under Sec.  1485.14(c)(8) that 
``overhead costs'' and ``direct promotional costs'' are not defined.
    Response: CCC believes these terms are generally well-understood 
and that ``direct promotional costs'' in specific is self-explanatory. 
CCC, therefore, does not deem it necessary to define these terms in the 
final rule. Moreover, this language remains unchanged from the current 
rule that has been in place for 15 years. Section 1485.14(c) explains 
the allocation factors used by CCC to determine which applications to 
approve. Subsection (c)(8), which notes that CCC will review general 
administrative and overhead costs compared to direct promotional costs, 
merely reflects CCC's preference that program funds be used for 
promotional expenses rather than administrative expenses. CCC has 
modified Sec.  1485.14(c)(8) to make clear that CCC will review 
proposed MAP-funded general administrative and overhead costs compared 
to proposed MAP-funded direct promotional costs.
    Comment: With respect to Sec.  1485.14(c)(8), fourteen respondents 
questioned how CCC compares salaries of staff with technical expertise 
and who execute programs with the fees of consultants who do similar 
work. The respondents stated that they felt the wording made an overly 
simplistic distinction between administration and promotional expenses.
    Response: CCC disagrees that the wording of Sec.  1485.14(c)(8) is 
overly simplistic. However, this comment raises an issue that requires 
further clarification of Sec.  1485.11's definition of ``administrative 
expenses or costs.'' The MAP final rule now deletes the phrase ``that 
are not directly identifiable with a specific market promotion 
activity'' from the proposed definition of administrative expenses or 
costs. Administrative expenses or costs now are defined as those 
``expenses or costs of administering, directing, and controlling an 
organization that is a MAP Participant * * * [including costs related 
to personnel (including, but not limited to, salaries, benefits, 
payroll taxes, individual insurance, training)]'' regardless of whether 
they are specifically identifiable with a specific market promotion 
activity. As proposed Sec.  1485.16(c) and Sec.  1485.17(d)(26) made 
clear, home office domestic administrative expenses, including salaries 
of U.S. home office staff who execute MAP activities, are generally not 
reimbursable under MAP, and the Participant must use its own funds to 
pay any administrative costs of its U.S. offices. This is not a change 
from the prior regulations. This change to the definition of 
``administrative expenses or costs'' makes the definition consistent 
with these sections.
    Pursuant to Sec.  1485.17(c)(1) and (11), however, MAP funding is 
available, for generic promotion only, to pay for the compensation of a 
U.S. citizen employee or U.S. citizen contractor stationed overseas, as 
well as the administrative costs for overseas offices approved in MAP 
program agreements. In evaluating applications for MAP funding of 
overseas offices, as reflected in Sec.  1485.14(c)(8), CCC generally 
prefers that MAP funding be directed toward promotional expenses rather 
than administrative expenses. It is true that salaries of overseas 
office staff with technical expertise are still considered 
administrative expenses even if the staff execute MAP activities, 
whereas fees of consultants who do similar work would be classified as 
promotional expenses.

[[Page 29480]]

However, applicants are free to explain in their applications what 
promotional activities overseas office staff are anticipated to 
conduct.
    Comment: One respondent stated that the wording in Sec.  
1485.14(c)(8) regarding factors affecting allocations does not provide 
for any distinction when making allocation decisions between time 
salaried staff spend on ``administrative functions'' (usually a minor 
amount of time spent by higher paid staff) and time spent making use of 
technical expertise to execute programs and provide information to 
importers and processors, which are the main reasons for employing 
higher paid staff.
    Response: See response to prior comment. CCC does not believe that 
Sec.  1485.14(c)(8) must distinguish between time salaried staff spends 
on ``administrative functions'' and time salaried staff spends on 
executing MAP activities. All time spent by salaried staff is 
considered general administrative and overhead costs, not direct 
promotional costs, as clarified in the revised definition of 
``administrative expenses or costs.'' As noted in CCC's response above, 
applicants are free to explain in their applications what promotional 
activities overseas office staff are anticipated to conduct.
    Comment: One respondent in a comment to Sec.  1485.29 stated 
further clarification was needed regarding the eligibility of contracts 
with U.S. based organizations that are retained to implement or assist 
with approved international market development efforts. This respondent 
stated the proposed regulations do not completely clarify those 
domestic contracts that would be deemed eligible for reimbursement and 
those that would not be.
    Response: CCC's current practice is to reimburse MAP Participants' 
expenditures for contracts with U.S. based organizations retained to 
implement or assist with approved international market development 
efforts, except when the U.S. based organization is also providing 
administrative services to the MAP Participant's U.S. office(s). In 
other words, if a U.S. based organization assumes any functions related 
to the administration, direction or control of the MAP Participant's 
U.S. office(s) in a program year, then no activity of any type 
undertaken by this organization in the United States or overseas during 
that program year, including direct promotional services overseas, will 
be reimbursable with MAP funds. CCC has codified this current practice 
in new Sec.  1485.17(b)(19).
    Note that this prohibition does not apply when the U.S. based 
organization is providing administrative services to an approved MAP 
funded overseas office (as opposed to the U.S. home office). In that 
case, the activities provided by the organization are reimbursable 
whether they are administrative or direct promotion under the MAP final 
rule, so long as the organization is not also providing administrative 
services to the MAP Participant's U.S. office(s) in the same program 
year.
    Comment: Nineteen respondents provided similar comments in 
reference to Sec.  1485.14(i), stating that the current notification 
process serves CCC's and the Participant's purposes. A number of the 
respondents stated that although they believed some formalization of 
the process may be necessary, the proposed requirement to notify CCC of 
any budgetary change that is at least $10,000 or more is burdensome. 
They stated that approval is only relevant at the constraint level and 
that acknowledgement of an activity level change would be more 
appropriate. The respondents also recommended that notification level 
be increased to $25,000, to reflect the greater impact of an activity 
funded at this level.
    Several of the comments stated that the language ``may make 
adjustments only if it submits a notification'' implies that any change 
to an activity, regardless of how minor, requires a notification. The 
respondents suggested that while the regulations should certainly 
provide that activities can be changed, details of when a notification 
is required could be more appropriately addressed in a separate policy 
clarification. One respondent stated that if CCC has identified the 
need to track budget changes more closely, they recommend that it adopt 
a policy based on a percentage change rather than a dollar value and 
that the percentage be no less than 25 percent of an existing budget 
amount. The respondent further stated that FAS staff should be required 
to use the UES system for approving such changes and that approval 
should not be based on a default period of 15 days.
    Response: CCC disagrees that the ``current notification process'' 
serves CCC's purposes. However, in response to the above comments, CCC 
has modified Sec.  1485.14(i) to reduce the burden of notifications, 
adopting several of the changes requested by commenters. For example, 
CCC has increased the threshold to $25,000 for requiring notification 
to CCC of changes to existing activities. This notification must occur 
before the change is implemented, but no approval is required. 
Similarly, CCC will require notifications for adjustments below that 
threshold only if the change is significant. No notification is 
required for minor changes in existing, approved activities or for 
deleting an activity.
    Comment: Two respondents stated that MAP Participants' current 
practice of reallocating funds among brand participants in the MAP 
Participants' branded programs has allowed MAP Participants to expand 
brand participation by as much as 40 percent per year. Therefore, they 
strongly oppose proposed Sec.  1485.14(i)(2)(i), which would require 
MAP Participants to notify CCC of any increase in the funding level for 
existing, approved activities addressing a single constraint or 
opportunity by more than $10,000 or 20 percent of the approved funding 
level, whichever is greater. They further stated that imposing a hard 
budget ceiling and requisite advance notification would severely limit 
the flexibility for MAP Participants with branded programs to 
reallocate funds from companies that are unable to utilize them in 
favor of those that can.
    Response: Respondents are mistaken that Sec.  1485.14(i)(2)(i) 
requires a MAP Participant to notify CCC of any reallocation of funds 
among the Participant's branded program participants. The notification 
requirement does not apply at the brand company level for a MAP 
Participant operating a brand program. The brand program is approved by 
CCC at the program level, not at the company level. CCC simply approves 
of the Participant's brand program in the aggregate; CCC does not 
review or approve a MAP Participant's allocation of funds among brand 
participants in its branded program.
    Comment: Fourteen respondents stated they support the self-
certification requirement by small-sized entities participating in a 
MAP Participant's activities in the branded program area. In addition, 
CCC received some comments encouraging CCC to be consistent in its 
policy to exclude large companies from the program. The respondents 
stated that currently large companies cannot apply and receive MAP 
funding directly; however, a marketing company representing a large 
company may obtain assistance through a SRTG. The respondents 
recommended that the applicant company as well as the brand owner be 
required to certify that they meet SBA's criteria of being a small 
company.
    Response: CCC disagrees with respondents' recommendation that the 
brand owner certify that it is a small company. It is not CCC's 
intention to

[[Page 29481]]

limit the products that small export trading companies can market under 
the MAP branded program, regardless of the size of the company 
producing the product marketed. CCC believes that it is appropriate for 
a small export trading company to promote its ability to consolidate 
export shipments that include products made by a wide range of 
companies.

Sec. 1485.15 Operational Procedures for Brand Programs

    CCC received 32 comments on this section. CCC has also modified 
Sec.  1485.15(c)(6) to include additional terms that are acceptable 
origin identification, currently set forth in MAP Notice 97-020. In 
addition, CCC has modified Sec.  1485.15(c)(6) to advise that CCC may 
temporarily waive the U.S. origin labeling requirement where CCC has 
determined that such labeling will likely harm sales rather than help 
them.
    Comment: Three respondents made similar comments in reference to 
Sec.  1485.15(a). One respondent recommended that the requirement for 
an annual submission of program operational procedures be changed to 
require FAS approval only once, after which FAS would merely be 
notified of any changes. Two respondents proposed that the review of 
procedures and documents used to administer the branded program be 
conducted during the annual compliance review.
    Response: CCC disagrees with the recommendation to remove the 
annual requirement and has retained the requirement for an annual 
submission of program operational procedures even if there are no 
substantial changes in the procedures. CCC expects that any MAP 
Participant that is operating a brand program would review its 
procedures and documents annually.
    CCC disagrees with the respondents' proposal to have CCC review the 
procedures during the annual compliance review in lieu of a separate 
submission. The purpose of the CCC review is to approve a plan at the 
start of a program year, before the program begins operation. Moreover, 
during the compliance review, CCC may review the implementation of the 
plan, rather than the plan itself.
    In response to other comments requesting additional time for 
implementation, CCC has delayed the effective date of this final rule 
until the MAP Participant's 2013 program year (either 01/01/2013 or 07/
01/2013). CCC has deleted the requirement in Sec.  1485.15(a) that the 
MAP Participant must submit its proposed brand program operational 
procedures not later than 21 days prior to signing participation 
agreements with brand participants. CCC has modified Sec.  1485.15(a) 
to note that CCC will notify all new and existing MAP Participants in 
writing in each Participant's annual approval letter and through the 
FAS web site as to applicable submission dates and dates for approvals 
of brand program operation procedures.
    Comment: Two respondents commented on Sec.  1485.15(a). One 
respondent requested that FAS confirm that Sec.  1485.15(a) does not 
apply to a U.S. agricultural cooperative that is a MAP Participant and 
operates the cooperative's own brand promotion program. Another 
respondent commented that this section appears to apply to MAP 
Participants that administer brand promotion programs on behalf of 
third party brand participants that do not have a direct agreement with 
CCC. The respondents requested clarification be made on whether this 
section does not apply to U.S. nonprofit agricultural cooperatives that 
are MAP Participants operating their own brand program.
    Response: CCC confirms that Sec.  1485.15(a) applies only to MAP 
Participants that operate brand promotion programs that include third 
party brand participants, and does not apply to U.S. agricultural 
cooperatives that operate their own brand programs. CCC has amended the 
definition of brand participant in Sec.  1485.11 to make clear it does 
not include a U.S. agricultural cooperative operating its own brand 
program.
    Comment: One respondent stated that Sec.  1485.15(b) and Sec.  
1485.15(c) seem to imply that contracts between cooperatives and third 
party participants be preapproved by CCC each year. The respondent 
stated that this requirement is unreasonable and burdensome since 
nonprofit farmer owned cooperatives carefully protect their farmer 
members and their brand on each and every contract into which they 
enter.
    Response: CCC disagrees that Sec.  1485.15(b) and Sec.  1485.15(c) 
imply that CCC pre-approves a MAP Participant's contracts with brand 
participants. Section 1485.15(b) simply requires that the MAP 
Participant's proposed operational procedures be pre-approved by CCC. 
It does not require CCC to pre-approve individual contracts. Section 
1485.15(c) simply sets forth items that must be addressed in each 
contract with a brand participant. As discussed above, U.S. 
agricultural cooperatives operating their own brand program are not 
``brand participants.''
    Comment: Six respondents stated that Sec.  1485.15(c)(7) should 
include ``small-sized entity or cooperative.''
    Response: CCC agrees and has made the requested change.
    Comment: CCC received one comment asking whether a MAP Participant 
who had previously received an approval from CCC to use origin 
identification terms other than those appearing in the current 
regulations would have to re-submit these terms again for approval when 
the new regulations become effective.
    Response: CCC understands the commenter to be referring to Sec.  
1485.15(c)(6), which lays out the requirement that MAP activities 
identify the U.S. origin of the promoted products. CCC considers that 
an approval under the previous regulations would constitute an approval 
under the new regulations. A MAP Participant would not have to re-
submit these terms again for approval under the new regulations.
    CCC has also modified Sec.  1485.15(c)(6) to include additional 
terms that are acceptable origin identification, currently set forth in 
MAP Notice 97-020. Specifically, CCC has added the terms ``American'', 
``United States of America'', as well as any state or territory of the 
United States of America spelled out in its entirety. Section 
1485.15(c)(6) also now clarifies that the use of approved origin terms 
as a descriptor or in the name of the product (e.g., Texas style chili, 
Bob's American Pizza) does not satisfy the product origin requirement. 
Section 1485.15(c)(6) also now encourages the phrases ``product of '', 
``grown in'' or ``made in'', but does not require them. MAP Notice 97-
020 will be removed from the FAS Web site.
    In addition, CCC notes that in certain situations, CCC has 
temporarily waived the requirement to identify the U.S. origin of 
products promoted under the MAP brand program. For example, current MAP 
Notice 09-007 temporarily waives this requirement for MAP brand 
activities conducted in certain Middle East countries. Accordingly, CCC 
has modified Sec.  1485.15(c)(6) to advise that CCC may temporarily 
waive the U.S. origin labeling requirement where CCC has determined 
that such labeling will likely harm sales rather than help them and 
that such determinations will be announced to MAP Participants via a 
MAP notice issued on FAS' Web site. MAP Notice 09-007 will continue to 
be available on the Web site for informational purposes and reflects 
CCC's current administration of the MAP program.

[[Page 29482]]

    Comment: One respondent stated that 5 years is an unreasonable time 
to keep records, stating that the IRS requires records to be kept for 
only 3 years.
    Response: CCC disagrees with the respondent. The Agricultural Trade 
Act of 1978, as amended, at 7 U.S.C. 5662(a)(1) requires the Secretary 
of Agriculture ``to require by regulation each exporter or other 
participant under the [MAP and other] program[s] to maintain all 
records concerning a program transaction for a period not to exceed 5 
years after completion of the program transaction, and to permit the 
Secretary to have full and complete access, for such 5-year period, to 
such records.''
    Comment: Five respondents asked CCC to clarify whether cooperatives 
were still exempt from the 5-year graduation rule or if this had 
changed.
    Response: CCC understands the commenters to be referring to the 
statutory provision in 7 U.S.C. Sec.  5623 note, which states that MAP 
assistance may not be provided to promote a specific branded product in 
a single market for more than 5 years unless the Secretary determines 
that further assistance is necessary in order to meet the objectives of 
the program. Currently, CCC exempts U.S. agricultural cooperatives from 
the 5 year rule. CCC determined in 1998 that continued support for U.S. 
agricultural cooperatives was necessary to meet MAP's objectives, and 
that determination remains in place. CCC will publish this 
determination in a MAP notice on the FAS Web site.
    Comment: Three similar comments stated that the ``Sunset Rule'' 
should be deleted. The respondents suggested that if the rule is 
maintained, then it should apply to a specific market and not to a 
country. One respondent stated that the 5-year limitation is the single 
greatest barrier to program participation and recommended that the 
country limitation be extended to 8 years per market. Another 
respondent recommended that export trading companies be considered for 
exemption from the 5-year limitation, if it can be proven that any 
additional marketing efforts after 5 years will be for different 
products beyond those previously marketed.
    Response: CCC understands the commenters to be referring to the 
statutory provision in 7 U.S.C. Sec.  5623 note, which states that 
``[t]he Secretary should not provide assistance under the [MAP] program 
to promote a specific branded product in a single market for more than 
5 years unless the Secretary determines that further assistance is 
necessary in order to meet the objectives of the program.'' Because the 
5-year limitation is established by statute, CCC cannot extend the 
country limitation to 8 years as requested by the respondents. While 
the statute provides the Secretary the discretion to waive the 
graduation requirement in individual circumstances where the Secretary 
believes such further assistance is necessary to achieve the goals of 
MAP, CCC has no authority to ``delete'' the ``Sunset Rule'' as 
requested by the commenters. CCC also disagrees with the comment that 
the ``Sunset Rule'' be applied to a specific market and not to a 
country. CCC has defined ``market'' in the proposed and final rules to 
mean the country or countries targeted by an activity. Lastly, CCC does 
not have any information that suggests that exempting export trading 
companies from the 5-year limitation is necessary to achieve the goals 
of MAP. CCC retains the discretion to waive the 5-year limitation, if 
CCC determines that further assistance in a particular situation is in 
the best interests of the MAP.
    Comment: Two respondents commented that they supported continuing 
exemptions for international shows that reflect a broad international 
attendance.
    Response: CCC understands the commenters to be referring to CCC's 
practice, as reflected in MAP Notice 09-005, of not counting a 
Participant's attendance at certain international trade shows when 
determining whether a specific branded product has been promoted in a 
single market for more than 5 years. CCC will continue this practice 
and has codified it in Sec.  1485.15(d) of the MAP final rule.
    Many international trade shows feature buyers and sellers from many 
countries. Many of the shows are held in the same country annually or 
biannually (e.g., SIAL and ANUGA are held in alternating years in 
France and Germany, respectively). Many U.S. companies attend such 
shows to meet with buyers from many countries, not just the host 
countries. However, given that CCC may not provide assistance to a 
single company for brand promotion in a single country for more than 5 
years, many small brand companies would face graduation from a host 
country after exhibiting at one of these international trade shows for 
five years, even if the companies have had no other activities in that 
country and participating in the show is used exclusively as a gateway 
for developing customers in other countries.
    Therefore, to further the objectives of MAP, CCC has determined 
that brand participants' participation in certain international trade 
shows in foreign countries will not be considered when determining such 
participants' time in country for purposes of the 5 year graduation 
requirement. Specifically, as reflected in MAP Notice 09-005, CCC has 
compiled a list of international trade shows that CCC ``exempts'' from 
the graduation requirement. A show on this list meets two requirements: 
(1) It is a food or agricultural show, with no less than 30% of 
exhibitors selling food or agricultural products, and (2) it is an 
international show, meaning it targets buyers, distributors and the 
like from more than one foreign country and no less than 15% of the 
show's visitors are from countries other than the host country.
    CCC is not planning on changing its practice and has codified MAP 
Notice 09-005 in Sec.  1485.15(d). MAP Notice 09-005 will be removed 
from the FAS Web site, as parts are now redundant with the final rule, 
and a new MAP notice will be posted on FAS' Web site listing the 
international trade shows that CCC ``exempts'' from the graduation 
requirement. If a MAP Participant believes that a show should be added 
to this list, the Participant should contact FAS.
    Comment: One respondent stated that because they do not have the 
facilities for conducting investigations of corporate ownership 
structure, they proposed that the current process of self-certification 
continue.
    Response: CCC notes that Sec.  1485.15(c)(7) as proposed allowed 
brand participants to self-certify as to status as a small-sized entity 
and that the final rule continues the current process of self-
certification.

Sec. 1485.16 Contribution Rules

    CCC received 20 comments on this section. Below are CCC's 
responses. In addition, CCC has clarified in Sec.  1485.16(c) that a 
MAP Participant's U.S. office's administrative costs may be included in 
calculating the amount of contributions the MAP Participant contributes 
to MAP activities. Similarly, CCC has clarified in Sec.  1485.16(d)(2) 
that contributions are subject to the MAP regulations and the 
applicable OMB circulars on cost principles, to the extent these 
principles do not directly conflict with the provisions of this 
subpart. In addition, CCC has removed the cross-reference to Sec.  
1485.16(c) in Sec.  1485.16(d)(2) as unnecessary.
    Comment: Fourteen respondents provided similar comments in 
reference to Sec.  1485.16, stating it would be clearer to begin the 
subpart by stating that any expense that is listed as eligible for 
reimbursement can also be considered a

[[Page 29483]]

contribution if paid with industry funds. The respondents stated that 
then the list would only need to state what is not eligible as a 
contribution, the assumption being that anything that is not listed is 
eligible. They stated this change would greatly reduce the confusion 
over items which now appear in both places, sometimes with slightly 
different wording.
    Response: CCC believes that eligible contributions are clear as 
presented in Sec.  1485.16. CCC notes that Sec.  1485.16(d)(2)(xxi) 
specifically provides that ``the cost of any activity expressly listed 
as reimbursable in this subpart'' may be considered a contribution if 
paid with Participant or industry funds.
    Comment: One respondent stated that this section does not 
specifically mention industry travel expenses as being counted as a 
contribution. This respondent stated that it urges FAS to specifically 
state that industry travel and other industry expenditures that are in 
support of the broader mission of Participants be listed as eligible to 
count toward contributions.
    Response: CCC allows domestic travel expenses paid by the 
Participant to be counted as a contribution, pursuant to Sec.  
1485.16(d)(2)(xvii). Additionally, at Sec.  1485.16(d)(2)(xxi), CCC 
allows to be counted as a contribution the cost of any activity paid by 
the Participant and expressly listed as reimbursable in this subpart, 
which includes travel. In response to the comment, however, CCC has 
modified the definition of ``contribution'' in Sec.  1485.11 to include 
explicitly expenditures made by entities in the MAP Participant's 
industry in support of the entities' related promotion activities in 
the markets covered by the MAP Participant's agreement.
    Comment: One respondent stated the proposed rule Sec.  
1485.16(d)(2)(xvi) reads eligible contributions include ``fees for 
participating in U.S. Government activities'' and it requested 
clarification of the term ``U.S. Government activities.''
    Response: From time to time, the U.S. Government financially 
sponsors activities or endorses activities, particularly overseas, that 
promote export opportunities. These could include trade shows, trade 
missions, restaurant promotions, or a variety of other activities. To 
clarify this further, CCC has modified Sec.  1485.16(d)(2)(xvi) to note 
that the activities are ``U.S. government sponsored or endorsed export 
promotion activities.'' CCC has made a corresponding edit to Sec.  
1485.17(d)(21).
    Comment: One respondent commented that the proposed regulation at 
Sec.  1485.16(b) provides that ``in MAP brand promotion programs, a 
brand participant shall contribute at least 50 percent of the total 
eligible expenditures made on each approved brand promotion.'' It 
suggested that to be consistent with the quoted language, and with the 
understanding that a brand promotion program can be operated by a MAP 
Participant, as well as a brand participant, the phrase ``a brand 
participant'' in Sec.  1485.16(b) should be replaced with ``a brand 
participant or Participant'' or similar language.
    Response: CCC agrees with the comment and has modified Sec.  
1485.16(b) accordingly.

Sec. 1485.17 Reimbursement

    CCC received 330 comments on this section. Below are CCC's 
responses to the comments. In addition, CCC has clarified various 
provisions. For example, CCC has made explicit in Sec.  1485.17(b) that 
reimbursements are subject to the MAP regulations and the applicable 
OMB circulars on cost principles, to the extent these principles do not 
directly conflict with the provisions of this subpart. CCC has also 
modified Sec.  1485.17(c)(8) to codify CCC's current practice of 
requiring MAP Participants to provide documentation establishing the 
full fare economy class rate to support their reimbursement claims, as 
well as clarify that international travel expenses for activities that 
occur inside or outside the United States are reimbursable. In 
addition, CCC has deleted Sec.  1485.17(c)(9), which provided that per 
diem was reimbursable, because it is redundant with Sec.  1485.17(c)(8) 
(which now explicitly includes per diem). Section 1485.17(c)(8) allows 
the reimbursement of ``international travel expenditures,'' which 
include transportation, per diem, and miscellaneous expenses.
    CCC has also added Sec.  1485.17(b)(17), which allows for 
reimbursement of international travel expenditures (e.g., 
transportation, per diem, and miscellaneous expenses) for brand 
companies participating in foreign trade missions subject to certain 
conditions. This codifies MAP Notice 03-004. MAP Notice 03-004 will be 
removed from the FAS Web site.
    Similarly, CCC has codified MAP Notice 01-004 in new Sec.  
1485.17(b)(18). MAP Notice 01-004 describes CCC's longstanding practice 
of limiting reimbursement of expenditures related to retail, trade, or 
consumer exhibits or shows, whether held inside or outside the United 
States, where USDA has sponsored or endorsed a U.S. pavilion at the 
exhibit or show. In that situation, MAP funds are used to reimburse the 
travel and/or non-travel expenditures of only those MAP Participants 
located within the U.S. pavilion. CCC believes it is important to 
maintain a unified U.S. presence at these shows, with all exhibitors 
contributing fairly and supporting the U.S. pavilion. MAP Notice 01-004 
will be removed from the FAS Web site.
    Finally, CCC has added a cross reference to Sec.  1485.17(d) in 
Sec.  1485.17(b) and Sec.  1485.17(c).
    Comment: Three respondents provided similar comments in reference 
to Sec.  1485.17(b)(4). Two comments stated that the rule as written 
may be interpreted to allow the cost of product samples to be 
reimbursed. The respondents stated that ``[a]s written, this rule may 
be interpreted to allow the cost of promotional samples themselves to 
be reimbursed. We feel that the existing approach, in which costs of 
distributing samples are eligible, but the costs of the samples 
themselves are not, remains appropriate within WTO eligibility. We 
recommend that this be clarified.''
    One comment stated that the current MAP regulations limit the 
reimbursement of giveaways to U.S. dollars and suggested that the 
maximum reimbursement be increased to reflect inflation since the 
1980s.
    One respondent stated that the purchase of samples locally on a 
case-by-case basis with a maximum cost per sample not to exceed the 
allowable cost of a premium should be allowed.
    Response: CCC's practice has been and continues to be that the cost 
of product samples is not reimbursable under MAP. In response to the 
first commenters above, CCC has clarified this issue and modified Sec.  
1485.17(b)(4), which provides that the costs of in-store and food 
service promotions, product demonstrations, and distribution of 
promotional samples are reimbursable. Section 1485.17(b)(4) now 
explicitly notes that the purchase of product samples are not 
reimbursable and replaces the term ``promotional samples'' with 
``product samples.'' CCC also notes that Sec.  1485.17(d)(5) already 
specifically prohibits the reimbursement of the cost of product 
samples. In addition, as noted above, CCC has modified Sec.  1485.11 to 
include a definition of ``product samples.''
    CCC disagrees with the view that the costs of product samples 
should be reimbursed.
    CCC does not agree with the commenter requesting that the current 
MAP regulation's limit on the

[[Page 29484]]

reimbursement of giveaways be increased or that it be codified in the 
MAP final rule. As noted above, CCC observes that the cost of samples 
of the promoted MAP product are not reimbursable, regardless of whether 
the samples are giveaways or not. Regarding the reimbursement of 
giveaways of non-MAP promoted products in general, the MAP final rule 
is written in a way to allow CCC to counter inflation, without unduly 
limiting its flexibility. As discussed below in CCC's response to 
similar comments, rather than specify a reimbursement amount for 
giveaways in Sec.  1485.17(b)(11), CCC will set a reimbursement limit 
during the course of its administration of MAP and change that limit, 
as necessary, with appropriate notice to MAP Participants through 
written MAP notices posted on FAS' Web site.
    Comment: Three respondents commented in reference to Sec.  
1485.17(b)(8) supporting the inclusion of eligibility of subscriptions. 
All recommended that CCC change the wording to remove the words ``to 
publications'' and instead state that ``CCC will reimburse in whole or 
in part subscriptions that are of a technical, economic, or marketing 
nature and relevant to the approved activities.''
    One respondent proposed adding language to allow for expenditures 
when the internet is used as a staff resource. It gave as an example 
for market intelligence, economic data, and key policies and procedures 
to be accessible via their internet site to their international offices 
and U.S. staff worldwide.
    Response: CCC agrees with the first general comment and has 
modified Sec.  1485.17(b)(8) (now Sec.  1485.17(b)(9)), as some 
appropriate subscriptions could be to web-based information that may 
not traditionally be thought of as ``publications.'' CCC has also made 
a corresponding change to Sec.  1485.16(d)(2)(x). CCC does not agree 
with the second comment to add language to allow reimbursement of 
internet expenditures because, as submitted, this appears to be a 
function of the MAP Participant's home office, and, thus, is not 
reimbursable under the program unless otherwise authorized in Sec.  
1485.17(c)(22).
    Comment: Fourteen respondents commented regarding proposed Sec.  
1485.17(b)(9) (now Sec.  1485.17(b)(10)), which provided that the cost 
of ``demonstrators, interpreters, translators, receptionists, and 
similar temporary workers who help with the implementation of discrete 
promotional activities'' is reimbursable. These respondents were 
concerned with the use of the word ``discrete'' in the preceding 
language. Several commented that they presume that the use of the term 
``discrete'' applies to or refers to any approved activities such as 
described in the regulations. The respondents stated that it would be 
clearer to use the term ``individual'' rather than ``discrete,'' as 
that might better define the activity.
    Response: CCC agrees with the respondents and has made the 
suggested change substituting the term ``individual'' for the term 
``discrete'' in the final rule for clarity.
    Comment: Fifteen respondents provided similar comments in regard to 
proposed Sec.  1485.17(b)(10) (now Sec.  1485.17(b)(11)), which 
provided that the cost of giveaways, awards, prizes, gifts and other 
similar promotional materials is reimbursable, subject to such 
reimbursement limitation as CCC may, from time to time, determine and 
announce in writing to all MAP Participants and on the FAS Web site. 
The respondents stated that they presume that announcements pertaining 
to the reimbursement limitations will be in the form of Program 
Announcements or similar instruments. Four stated that they agree with 
the need for flexibility in this area and supported CCC's approach.
    Response: CCC understands that the commenters are referring to 
CCC's practice of issuing Market Access Program notices. MAP Notice 97-
002 currently sets out a $1.00 reimbursement limit for promotional 
items (which does not include product samples). It also sets out the 
conditions under which such reimbursement is available. CCC has 
determined to codify MAP Notice 97-002, in part. Section 
1485.17(b)(11), which allows reimbursement for giveaways, awards, 
prizes, gifts and other similar promotional materials, now notes that 
reimbursement is available only when: (1) the items are described in 
detail with a per unit cost in an approved strategic plan and (2) 
distribution of the promotional item is not contingent upon the 
consumer, or other target audience, purchasing a good or service to 
receive the promotional item.
    CCC believes that specifying a dollar amount in the new MAP 
regulations is unnecessarily restrictive and does not provide CCC 
sufficient flexibility to deal with changing economic circumstances 
such as inflation. Therefore, rather than specify a reimbursement 
amount in Sec.  1485.17(b)(11), CCC will retain the proposed rule's 
discretion. Thus, CCC will set a reimbursement limit during the course 
of its administration of MAP and change that limit, as necessary, with 
appropriate notice to MAP Participants through written MAP notices 
posted on FAS' Web site. MAP Notice 97-002 will be removed from the FAS 
Web site, and a new notice will be issued setting forth a reimbursement 
allowance for giveaways, awards, prizes, gifts and other similar 
promotional materials.
    Comment: One respondent commented in reference to Sec.  
1485.17(b)(12) and couponing. The commenter suggested that CCC allow 
ads to be reimbursed if the ad contains coupons for other products but 
does not contain a coupon for MAP Participant products.
    Response: CCC confirms that reimbursement is allowed if ads contain 
coupons for other products but do not contain a coupon for MAP 
Participant products. In response to the commenter, CCC has revised 
Sec.  1485.17(b)(12) (now Sec.  1485.17(b)(13)) to make clear that only 
the design, production and distribution of coupons for products other 
than the MAP Participant's promoted products are reimbursable.
    In addition, CCC has revised Sec.  1485.17(b)(1), which allows 
advertising to be reimbursed, including advertising of price discounts, 
to make clear that advertising associated with coupons or price 
discounts for MAP-promoted products is not reimbursable. CCC has also 
modified both provisions to note that if otherwise reimbursable 
advertising or coupon activities include both coupons or price 
discounts for products other than the MAP Participant's promoted 
products as well as for the MAP-promoted products, expenditures for 
such activities will not be reimbursed in whole or in part (e.g., 
expenditures may not be prorated and submitted for reimbursement). This 
codifies MAP Notice 05-001, which will be removed from the FAS Web 
site.
    Finally, CCC has modified Sec.  1485.17(d)(9) to clarify that CCC 
will not reimburse the cost of any coupon redemption or price discounts 
``of the MAP promoted commodity.''
    Comment: Sixteen similar comments were received regarding Sec.  
1485.17(b)(12) and the design, production and distribution of coupons. 
The respondents requested that CCC clarify if this section is 
applicable to both branded and generic. Three comments stated that they 
strongly support the clarification to incorporate the eligibility of 
coupon design, production and distribution.
    In addition, eighteen respondents stated that clarification was 
needed regarding what is covered as ``branded,'' as ``generic,'' or as 
both, throughout the regulations. Two respondents stated that the 
language listed in Sec.  1485.17(b)(1)

[[Page 29485]]

through Sec.  1485.17(b)(15) seems to describe expenses eligible for 
entities conducting a branded program, and that expenses listed from 
Sec.  1485.17(c) through Sec.  1485.17(d) addressed generic only. They 
requested clarification if this understanding was correct.
    Another similar comment was received which stated that more 
specificity was needed for branded and generic reimbursement rules. One 
respondent stated that since Web site costs were previously not 
considered an eligible branded expense and the eligibility of 
subscription costs and audit costs do not appear to pertain to the 
branded program, they would like confirmation that CCC now intended for 
these expenses to be eligible for both the generic and branded 
programs.
    Two respondents stated that in reference to Sec.  1485.17(c)(16), 
the proposed rule should make it clear that branded programs are 
specifically included.
    Response: CCC has modified Sec.  1485.17(b) to clarify that it 
addresses both brand and generic promotional activities. Therefore, all 
subparagraphs under Sec.  1485.17(b) are applicable to both generic and 
branded programs, including Sec.  1485.17(b)(9) (allowing subscription 
costs), Sec.  1485.17(b)(13) (allowing certain coupon costs), Sec.  
1485.17(b)(14) (allowing certain audit costs) and Sec.  1485.17(b)(16) 
(allowing Web site costs).
    Section 1485.17(c) addresses generic promotional activities only.
    Section 1485.17(d) was removed and the text of that section added 
to the definition of generic promotion in Sec.  1485.11. Subsequent 
subsections of Sec.  1485.17 have been reordered.
    As discussed above, CCC does not reimburse the design, production 
or distribution of coupons for the MAP Participant's promoted products. 
CCC has modified Sec.  1485.17(b)(12) (now Sec.  1485.17(b)(13)) to 
make this clear.
    Finally, CCC disagrees with the respondents who requested that 
branded programs be included in Sec.  1485.17(c)(15), which reimburses 
market research for generic promotions only. That section will remain 
applicable only to generic promotions.
    Comment: Fourteen respondents commented in reference to ``audits'' 
referenced in Sec.  1485.17(b)(13) (which allowed for reimbursement of 
an audit of a MAP Participant that was required by the applicable parts 
of this title if the MAP is the Participant's largest source of federal 
funding), Sec.  1485.17(c)(17) (which allowed for reimbursement of 
independent evaluations or audits not otherwise required by CCC if 
performed to ensure compliance with program agreement or regulatory 
requirements), and Sec.  1485.17(e)(16) (which provided that CCC will 
not reimburse Participants for independent evaluations or audits if CCC 
determines such evaluation or audit is needed to confirm past or ensure 
future program agreement or regulatory compliance). The respondents 
requested further clarity on when CCC will pay for an audit. They also 
stated that references to ``applicable parts of this title'' should be 
avoided and instead, clear language should be provided. For example, 
the respondents asked whether, in light of Sec.  1485.17(b)(13), which 
provides for reimbursement for A-133 audits, Sec.  1485.17(c)(17) means 
MAP will pay for other audits that give the Participant assurances that 
it is in compliance with MAP rules, i.e., operational or forensic 
audits. Six respondents also provided similar comments in reference to 
Sec.  1485.17(e)(16), questioning if all financial audits were not 
reimbursable. The respondents also asked if OMB Circular A-133 audits 
were reimbursable given that this is not required by CCC but by the 
federal government.
    Response: In response to these comments, CCC has modified Sec.  
1485.17(b)(13) (now Sec.  1485.17(b)(14)) to clarify that this section 
refers to OMB Circular A-133 audits. Thus, for brand and generic 
promotions, such audits are reimbursable if the MAP is the MAP 
Participant's largest source of Federal funding.
    Also in response to these comments, CCC has clarified Sec.  
1485.17(c)(17) (now Sec.  1485.17(c)(16)). That section now provides 
that it is subject to the limitations set out in Sec.  1485.17(d)(which 
now lists items for which CCC will not reimburse Participants). CCC has 
also deleted the reference to ensuring compliance with ``regulatory 
requirements'' in this section. Section 1485.17(c)(16) now provides 
that for generic promotions only, independent evaluations and audits 
not otherwise required by CCC to ensure compliance with program 
requirements are reimbursable. CCC observes, however, that, as noted in 
new Sec.  1485.17(d)(31), expenditures associated with a MAP 
Participant's creation or review of its fraud prevention program, 
contracting procedures, or brand program operational procedures are not 
reimbursable.
    With respect to the comments questioning whether Sec.  
1485.17(e)(16) prohibits reimbursement of all financial audits, CCC 
confirms that 1485.17(e)(16) (now Sec.  1485.17(d)(16)) prohibits 
reimbursement only of evaluations or audits that are required by CCC to 
confirm past or to ensure future program agreement or regulatory 
compliance. This is not a change from the current regulations. Finally, 
CCC notes that this section does not prohibit reimbursement of OMB 
Circular A-133 audits, which is specifically allowed, under the 
appropriate circumstances, per Sec.  1485.17(b)(14).
    CCC disagrees with the comments that the MAP final rule should 
avoid references to ``applicable parts of this title.'' As noted in 
Sec.  1485.10 of both the proposed and final rules, USDA regulations 
other than the MAP final rule also apply to USDA recipients of federal 
financial assistance. Some regulations apply to all MAP Participants. 
Others apply only to certain categories of MAP Participants. Because of 
the varied nature of MAP Participants, it would be unwieldy to specify 
which other regulations apply and when for each provision in the MAP 
final rule. However, in response to the comment, wherever the MAP final 
rule has explicitly referred to ``applicable parts of this title,'' CCC 
has added illustrative examples of what parts potentially apply to 
different MAP Participants.
    In addition, CCC notes that Sec.  1485.10(b) provides an 
illustrative list of other USDA regulations of general application that 
may apply to MAP and MAP Participants. The section also puts MAP 
Participants on notice that they must comply with the relevant 
provisions of the CCC Charter Act and Title VI of the Civil Rights Act 
of 1964 and related civil rights regulations and policies.
    Finally, in response to the comments, CCC has also added new Sec.  
1485.10(b)(4), which lists additional laws and regulations that are 
applicable to MAP Participants.
    Comment: Fourteen similar comments stated that previous policy 
guidance announced reimbursement of the costs of developing, updating, 
and servicing non-branded web sites on the internet and stated that 
they seek clarification on whether this new regulation supersedes the 
previous guidance. Three comments also stated that they strongly 
supported web site development expenses being eligible for both branded 
and generic programs.
    Response: CCC understands that the commenters are referring to 
CCC's practice of issuing Market Access Program notices. CCC issues 
these MAP notices for informational purposes. While these notices have 
no legal effect, they alert MAP Participants to information regarding 
the administration of the MAP program that

[[Page 29486]]

CCC believes is beneficial to share with MAP Participants.
    CCC confirms that the MAP final rule sets out the reimbursement 
rules for MAP Participants and supersedes all prior inconsistent 
guidance. Specifically, Sec.  1485.17(b)(15) (now Sec.  
1485.17(b)(16)), applicable to both brand and generic activities, and 
Sec.  1485.17(c)(31), applicable to generic activities, provide that 
CCC will reimburse, in part or in whole, the cost of developing, 
updating and servicing certain types of Web sites. In response to the 
comments, however, CCC has modified Sec.  1485.17(c)(31) to include 
additional conditions regarding Web site content that CCC currently 
requires as a condition of reimbursement, as reflected in MAP Notice 
01-003. MAP Notice 01-003 has thus been codified and will be removed 
from FAS' Web site. Section 1485.17(c)(31) now provides that 
expenditures associated with developing, updating, and servicing Web 
sites on the Internet are reimbursable if the Web sites: (1) Contain a 
message related to exporting or international trade, (2) include a 
discernible ``link'' to the FAS/Washington homepage or an FAS overseas 
homepage, and (3) have been specifically approved by the appropriate 
FAS commodity division. Expenditures related to Web sites or portions 
of Web sites that are accessible only to an organization's members are 
not reimbursable. Reimbursement claims for Web sites that include any 
sort of ``members only'' sections must be prorated to exclude the costs 
associated with those areas subject to restricted access.
    Finally, CCC notes that Sec.  1485.16(b) provides that in MAP brand 
promotion programs, MAP Participants must contribute at least 50% of 
the total eligible expenditures made on each approved brand promotion. 
At this time, CCC reimburses qualified Web site expenses 100% for 
generic promotions and 50% for brand promotions.
    Comment: Ten respondents provided comments in regard to Sec.  
1485.17(c)(8). They questioned under what circumstances business class 
travel would be reimbursed. The commentators stated that they felt it 
would be reasonable to be reimbursed for business class rate for 
flights over a specific duration (i.e. over 12 hours).
    Response: CCC recognizes that circumstances might arise where 
business class flights may be necessary. Thus, CCC has modified Sec.  
1485.17(c)(8) of the proposed rule. Originally, that section as 
proposed provided that CCC would determine a policy regarding the 
appropriate circumstances when business class rates would be acceptable 
and announce that policy in writing to all MAP Participants and on the 
FAS Web site. CCC has now articulated in Sec.  1485.17(c)(8) the 
limited circumstances under which CCC, after prior written approval, 
will reimburse air travel up to the business class rate. These 
circumstances are the following:
    (a) Regularly scheduled flights between origin and destination 
points do not offer economy class (or equivalent) airfare and the MAP 
Participant receives written documentation from its travel agent to 
that effect at the time the tickets are purchased;
    (b) Business class air travel is necessary to accommodate an 
eligible traveler's disability. Such disability must be substantiated 
in writing by a physician; and
    (c) An eligible traveler's origin and/or destination are outside of 
the continental United States and the scheduled flight time, beginning 
with the scheduled departure time, ending with the scheduled arrival 
time, and including stopovers and changes of planes, exceeds 14 hours. 
In such case, per diem and other allowable expenses will also be 
reimbursable for the day of arrival. However, no expenses will be 
reimbursable for a rest period or for any non-work days (e.g., 
weekends, holidays, personal leave, etc.) immediately following the 
date of arrival. Alternatively, in lieu of reimbursing up to the 
business class rate in such circumstances, CCC will reimburse economy 
class airfare plus per diem and other allowable travel expenses related 
to a rest period of up to 24 hours, either en route or upon arrival at 
the destination. For a trip with multiple destinations, each origin/
destination combination will be considered separately when applying the 
14 hour rule for eligibility of reimbursement of business class travel 
or rest period expenses. A stopover is the time a traveler spends at an 
airport, other than the originating or destination airport, which is a 
normally scheduled part of a flight. A change of planes is the time a 
traveler spends at an airport, other than the originating or 
destination airport, to disembark from one flight and embark on 
another. All travel should follow a direct or usually traveled route. 
Under no circumstances should a traveler select flights in a manner 
that extends the scheduled flight time to beyond 14 hours in part to 
secure eligibility for reimbursement of business class travel.
    CCC believes that requiring CCC's prior written approval will allow 
both MAP Participants and CCC to confirm that the Participants meet the 
circumstances that may justify air travel in excess of the full fare 
economy rate.
    Comment: One respondent stated its opposition to Sec.  
1485.17(e)(15), given that refundable airline tickets are often 
``triple or more the cost of non-refundable tickets''. The respondent 
stated that this rule has the effect of substantially increasing 
overall travel costs under the program and also that the ability to 
claim an occasional non-refundable airline ticket and associated fees, 
especially for an international buyer (whose travel is both less 
predictable and less accountable) would be vastly exceeded by the 
overall higher costs for the less restrictive tickets.
    The respondent also asked for clarification of ``travel restricted 
by a U.S. government action'' and asked if denial by U.S. officials of 
a visa request constituted a restriction by a U.S. Government action.
    Response: CCC disagrees. Section 1485.17(e)(15) (now Sec.  
1485.17(d)(15)) provides that CCC will not reimburse the cost of any 
unused non-refundable airline tickets or associated fees, except where 
travel was restricted by U.S. government action or advisory. The 
commenter has provided no data that the effect of this proposed section 
would increase overall travel costs under MAP. This is not a change 
from the current MAP rule, and CCC does not have any reason to believe 
that this policy has increased costs to the MAP program beyond what it 
would have been had the commenter's proposal been adopted. Finally, CCC 
notes that denial of a visa request would not constitute a restriction 
by a U.S. Government action. ``Travel restricted by a U.S. government 
action'' would include, for example, if all travel from a country was 
prohibited due to an epidemic.
    Comment: Several respondents questioned whether airline change fees 
are reimbursable.
    Response: Yes. Airline change fees are reimbursable provided that 
such fees meet certain conditions. CCC understands that, in order to 
most effectively use their MAP funding, Participants at times purchase 
airline tickets at a price that is less than the full fare economy 
rate. If a Participant purchases a ticket for less than the full fare 
economy rate and subsequently changes the ticket, a change fee may be 
incurred. CCC considers this change fee to be reimbursable up to the 
point that the sum of the ticket purchase price and any ticket change 
fees equal, but do not exceed, the full fare economy rate. To clarify, 
if the sum of the ticket purchase price and any ticket change fees 
exceed

[[Page 29487]]

the full fare economy rate, only the full fare economy rate is 
reimbursable. Section 1485.17(b)(8), Sec.  1485.17(b)(17) and Sec.  
1485.17(c)(8) have been modified to specify that program-related 
international air transportation, including any fees for modifying the 
originally purchased ticket, will be reimbursed at a rate not to exceed 
the full fare economy rate, as allowed under the U.S. Federal Travel 
Regulations (41 CFR parts 301 through 304).
    Comment: Seventeen respondents provided similar comments in 
reference to Sec.  1485.17(c)(13), which stated that more flexibility 
is needed for electronic communications, which are becoming a more 
important part of the marketing mix for Participants, both branded and 
generic. Fourteen of the respondents stated that the cost of service is 
the largest component of the costs of most devices, such as 
smartphones, and it is recommended that CCC include as reimbursable a 
monthly allowance.
    They stated that as with giveaways and international travel, the 
determinant CCC statement may be added from time to time to allow for 
future flexibility. One respondent stated that it recommends that the 
cost of using these devices be included as reimbursable expenses and 
that the provisions of the regulations avoid the burdensome 
requirements of logging individual calls in minutes or sessions. 
Another commented that the regulations should provide for payment of 
monthly service fees for portable electronic devices for staff 
stationed overseas, provided the devices are primarily used for 
Participant market development purposes.
    Response: Section 1485.17(c)(13) of the proposed rule provided 
that, for generic promotions only, CCC would reimburse the cost of the 
purchase, lease, or repair of, or insurance premiums for, capital goods 
that have an expected useful life of at least 1 year, including 
portable electronic communications devices (including mobile phones, 
wireless email devices, personal digital assistants). That section does 
not deal with reimbursability of usage costs of electronic devices. CCC 
adopts Sec.  1485.17(c)(13) as proposed (now Sec.  1485.17(c)(12)).
    As previously discussed in response to a comment, CCC believes the 
reimbursability of the usage costs of various communications devices is 
already adequately addressed by the various provisions in the MAP final 
rule. Reimbursability of such communication costs depends on the 
circumstances under which the communication took place. CCC refers to 
its prior response on this issue.
    CCC has issued several MAP notices that provide further information 
on CCC's current practice of reimbursing telephone calls. MAP Notice 
03-006 details CCC's allowances for program-related, emergency and 
personal telephone and internet expenses while on eligible travel. This 
Notice will remain on the FAS Web site. MAP Notice 99-009 (redundant 
with MAP Notice 03-006) and MAP Notice 98-017 (discussing reimbursement 
of wireless phone airtime devoted to program activities and now 
redundant) will be removed from the FAS Web site.
    CCC disagrees with the commenter who requested that the regulations 
avoid the burdensome requirements of logging individual calls in 
minutes or sessions to claim reimbursement. CCC notes that all 
reimbursement claims must be substantiated by sufficient supporting 
documentation per Sec.  1485.21(d)(6). In order to claim reimbursement 
for usage costs, therefore, the MAP Participant must identify the costs 
to be reimbursed. Thus, as CCC has noted above, the monthly service 
charge for a caller usage plan with unlimited minutes must be incurred 
primarily in furtherance of an approved activity and the Participant is 
responsible for documenting that such plan was used primarily in 
further of an approved activity. In contrast, under a caller usage plan 
that charges by the minute, only charges for calls incurred in 
furtherance of an approved activity would be reimbursed under MAP and 
the Participant is responsible for detailing which calls are properly 
reimbursed with MAP funds.
    Comment: The respondents asked if Sec.  1485.17(e)(16) means that 
CCC will reimburse for audits of subcontractors.
    Response: No, all of the listings under Sec.  1485.17(e) (now Sec.  
1485.17(d)) are not reimbursable.
    Comment: One respondent stated that reimbursement for market 
research should be moved under subheading (b), thus allowing for 
reimbursement for market research under both generic and branded 
programs.
    Response: CCC disagrees with the suggested comment to make market 
research eligible for both branded and generic programs. CCC intends 
that market research funded under the program be available throughout 
the relevant industry, not only to a single company or cooperative.
    Comment: Four respondents provided similar comments in reference to 
Sec.  1485.17(c)(20) (now Sec.  1485.17(c)(19)), which provides that 
for generic promotions only, CCC will reimburse the cost of STRE (sales 
and trade relations expenditures made on breakfast, lunch, dinner, 
receptions, and refreshments at approved activities, including 
miscellaneous courtesies such as checkroom fees, taxi fares and tips; 
and decorations for a special promotional occasion). The respondents 
requested that CCC clarify that STRE incurred in the United States at 
approved activities that demonstrated a positive impact on agricultural 
exports, be eligible for reimbursement under MAP. One commenter asked 
for further clarification of STRE regulations incurred in foreign and 
domestic markets.
    Response: Generally, STRE incurred outside of the United States is 
reimbursable. CCC, however, agrees that under certain limited 
circumstances, STRE may be critical to the success of an activity being 
carried out in the United States. Therefore, CCC has modified Sec.  
1485.17(c)(19) to clarify that STRE incurred outside the United States 
is reimbursable and that STRE incurred within the United States may be 
reimbursed under MAP upon prior written approval by CCC. As with all 
reimbursable expenses, such STRE must be incurred in conjunction with 
an approved MAP activity.
    In response to the request for further clarification of STRE, CCC 
has codified, in part, MAP Notice 97-016 in Sec.  1485.17(c)(19). That 
section now specifies that MAP Participants are required to use the 
American Embassy representational funding guidelines for breakfasts, 
lunches, dinners and receptions. MAP Participants may exceed Embassy 
guidelines only when they have received written authorization from the 
FAS Agricultural Counselor at the Embassy. The amount of unauthorized 
STRE expenses that exceed the guidelines will not be reimbursed. MAP 
Participants must pay the difference between the total cost of STRE 
events and the appropriate amount as determined by the guidelines. MAP 
Notice 97-016 will be removed from the FAS Web site.
    Comment: Seven comments were received stating miscellaneous 
courtesies such as checkroom fees, taxi fares and tips, and decorations 
for special purposes should not fall under Sales and Trade Related 
Expenses (STRE) and should be fully covered under MAP as separate 
expense categories.
    Response: Congress has given CCC discretion to operate and manage 
the MAP. In doing so, CCC must balance benefits to MAP Participants 
against limited financial resources. Under the current MAP regulations, 
STRE incurred outside of the United States is reimbursable for generic 
promotions

[[Page 29488]]

only. In response to other comments to the MAP proposed rule, CCC has 
modified Sec.  1485.17(c)(19) to allow reimbursement of STRE incurred 
in conjunction with an approved generic promotion taking place within 
the United States upon prior written approval by CCC. CCC, however, 
disagrees with these commenters that miscellaneous courtesies should be 
considered separately from STRE.
    Comment: One respondent commented that it did not see language that 
includes authorization to use program funds to cover costs associated 
with participation in trade shows and fairs held within the United 
States. The respondent stated that many are international in nature and 
have very strong participation from overseas, and it recommended that 
the rules specifically include language to allow program funds to be 
used for Participant staff to participate in such trade shows.
    Response: CCC agrees with the commenter and has clarified this 
issue in Sec.  1485.17(b)(7), Sec.  1485.17(c)(8) and Sec.  
1485.17(c)(24) of this final rule. It has been CCC's practice to 
reimburse non-travel expenditures associated with retail, trade and 
consumer exhibits and shows held inside the United States under certain 
circumstances. Accordingly, CCC has codified, in relevant part, MAP 
Notice 09-006 in Sec.  1485.17(b)(7)) of the MAP final rule. Section 
1485.17(b)(7) now provides, in part, that, for both generic and branded 
promotions, non-travel expenditures associated with retail, trade and 
consumer exhibits and shows held inside the United States are 
reimbursable, subject to certain conditions set out in Sec.  
1485.17(b)(7). In addition, the MAP final rule expands reimbursement to 
other related expenses. Specifically, Sec.  1485.17(c)(24) now provides 
that, for generic promotions only, domestic travel expenditures for 
such exhibits and shows conducted in the United States are 
reimbursable, subject to certain conditions and upon prior written 
approval by CCC. Section 1485.17(c)(8) also now specifically allows 
reimbursement of international travel expenses for an exhibit or show 
held inside the United States, subject to certain conditions. For brand 
promotion, neither domestic nor international travel expenses are 
reimbursable for retail, trade, or consumer exhibits or shows held 
inside the United States.
    These sections allow reimbursement of eligible expenses related to 
exhibits and shows held inside the United States only if the exhibit or 
show is: (1) A food or agricultural show with no less than 30% of 
exhibitors selling food or agricultural products, (2) an international 
show that targets buyers, distributors and the like from more than one 
foreign country and no less than 15% of its visitors are from countries 
other than the host country, and (3) an exhibit or show that the MAP 
Participant has not participated in within the last three years using 
funds from a source other than the MAP.
    MAP Notice 09-006 will be removed from the FAS Web site. A new MAP 
notice will be posted on FAS' Web site listing the retail, trade and 
consumer exhibits and shows held inside the United States for which MAP 
reimbursement is currently allowed by CCC. In addition, MAP Notice 97-
004, which addresses when brand companies are allowed to use MAP funds 
for expenses associated with domestic trade shows, is now inconsistent 
with the MAP final rule and will be removed from FAS' web site.
    Below is a chart summarizing the reimbursement rules for 
international exhibits and shows held outside and inside the United 
States:

----------------------------------------------------------------------------------------------------------------
                                        Exhibits and shows outside U.S.        Exhibits and shows inside U.S.
----------------------------------------------------------------------------------------------------------------
Generic promotion..................  Non-travel expenditures: Reimbursable  Non-travel expenditures:
                                      (Sec.   1485.17(b)(7)).                Reimbursable subject to conditions
                                                                             (Sec.   1485.17(b)(7)).
                                     International travel expenditures:     International travel expenditures:
                                      Reimbursable (Sec.   1485.17(c)(8)).   Reimbursable subject to conditions
                                                                             (Sec.   1485.17(c)(8)).
                                                                            Domestic travel expenditures:
                                                                             Reimbursable subject to prior
                                                                             written approval and subject to
                                                                             conditions (Sec.   1485.17(c)(24)).
Brand promotion....................  Non-travel expenditures: Reimbursable  Non-travel expenditures:
                                      (Sec.   1485.17(b)(7)).                Reimbursable subject to conditions
                                                                             (Sec.   1485.17(b)(7)).
                                     International travel: Reimbursable up  International travel: Not
                                      to 2 people (Sec.   1485.17(b)(8)).    reimbursable.
                                                                            Domestic travel: Not reimbursable.
----------------------------------------------------------------------------------------------------------------

    Comment: Twenty-five respondents provided similar comments stating 
that the phrasing was unclear in Sec.  1485.17(c)(24), which includes 
``Expenditures associated with conducting international staff 
conferences.'' The respondents requested that CCC clarify whether trade 
shows, seminars, educational training, international staff conferences, 
and meetings of international organizations are all eligible for 
reimbursement in the United States and overseas. Several of the 
respondents questioned if this included international conferences 
taking place in the United States and if so, whether that included 
travel. One respondent stated that it was unclear whether the 
international travel costs associated with having the industry's trade 
representative attend the conference would be eligible.
    Twenty-five respondents commented in reference to Sec.  
1485.17(c)(25) and asked for clarification of ``international 
organizations.'' Three respondents proposed that the language be 
amended to include ``and meetings of an international focus within the 
United States.''
    One stated that this section was confusing and implied that 
reimbursement for travel for trade shows, seminars, and educational 
training was authorized only for those events that are conducted 
outside the United States. The respondent asked for clarification on 
this and stated that it believed that was not the intent of CCC, as it 
would severely limit the use of MAP funds to educate foreign target 
audiences through courses and programs conducted in the United States.
    Response: CCC agrees that the phrasing in Sec.  1485.17(c)(25) was 
unclear and has replaced it with new Sec. Sec.  1485.17(c)(23)-(26).
    Regarding commenters' request to clarify whether international 
staff conferences conducted in the United States and overseas are 
eligible for reimbursement, CCC observes initially that expenditures 
related to international staff conferences are reimbursable for generic 
promotions only. CCC has added a new Sec.  1485.17(c)(23), which 
provides that non-travel expenditures related to conducting 
international staff

[[Page 29489]]

conferences are reimbursable, regardless of whether the conferences are 
held in or outside the United States. These conferences are gatherings 
of the international staff of the MAP Participant. CCC further notes 
that international travel expenditures to such conferences for MAP 
Participants, whether held outside the United States or in the United 
States, are already reimbursable in accordance with Sec.  
1485.17(c)(8). Thus, under Sec.  1485.17(c)(8), international travel 
costs associated with having the industry's trade representative attend 
the Participant's staff conference would be eligible if the individual 
is an employee or overseas contractor of the MAP Participant. Thus, in 
sum, for generic promotions only, both international travel 
expenditures and non-travel expenditures for international staff 
conferences are reimbursable, whether the conference is held outside 
the United States or in the United States. Domestic travel expenditures 
to attend such international staff conferences are not reimbursable. 
For brand promotions, no expenditures of any kind associated with 
international staff conferences are eligible for reimbursement.
    In response to commenters' request to clarify whether trade shows 
conducted in the United States and overseas are eligible for 
reimbursement, CCC has added new Sec.  1485.17(c)(24). That section 
allows reimbursement, for generic promotions only, subject to Sec.  
1485.17(b)(18), of domestic travel expenditures related to 
international retail, trade and consumer exhibits and shows conducted 
in the United States upon prior written approval by CCC. CCC refers to 
its prior response to a similar comment above regarding eligibility of 
domestic travel and non-travel expenditures associated with 
participation in exhibits and shows held outside or inside the United 
States.
    In response to commenters' request to clarify whether seminars and 
educational training conducted in the United States and overseas are 
eligible for reimbursement, CCC has added new Sec.  1485.17(b)(6) and 
new Sec.  1485.17(c)(25). Section 1485.17(b)(6) provides that, for both 
generic and brand promotions, non-travel expenditures associated with 
seminars and educational training, whether conducted inside or outside 
the United States, are reimbursable. Further, for generic promotions, 
international travel expenditures associated with seminars and 
educational training conducted inside or outside the United States are 
already reimbursable under Sec.  1485.17(c)(8). And, for generic 
promotions, new Sec.  1485.17(c)(25) now reimburses domestic travel for 
seminars and educational training conducted in the United States. For 
brand promotions, no travel expenditures associated with seminars or 
educational training, whether conducted inside or outside the United 
States, are eligible for reimbursement. The chart below summarizes the 
reimbursement rules for seminars and educational training.

----------------------------------------------------------------------------------------------------------------
                                       Seminars and educational training      Seminars and educational training
                                                  outside U.S.                           inside U.S.
----------------------------------------------------------------------------------------------------------------
Generic promotion..................  Non-travel expenditures: Reimbursable  Non-travel expenditures:
                                      (Sec.   1485.17(b)(6).                 Reimbursable subject to conditions
                                                                             (Sec.   1485.17(b)(6)).
                                     International travel expenditures:     International travel expenditures:
                                      Reimbursable (Sec.   1485.17(c)(8)).   Reimbursable (Sec.
                                                                             1485.17(c)(8)).
                                                                            Domestic travel expenditures:
                                                                             Reimbursable (Sec.
                                                                             1485.17(c)(25)).
Brand promotion....................  Non-travel expenditures: Reimbursable  Non-travel expenditures:
                                      (Sec.   1485.17(b)(6)).                Reimbursable (Sec.
                                                                             1485.17(b)(6)).
                                     International travel: Not              International travel: Not
                                      reimbursable.                          reimbursable.
                                                                            Domestic travel: Not reimbursable.
----------------------------------------------------------------------------------------------------------------

    CCC acknowledges the respondents' request for clarification of the 
term ``international organizations'' and their request to reimburse 
domestic travel to ``meetings of an international focus within the 
United States.'' Due to difficulties in defining the criteria for 
eligible international organizations and meetings with an international 
focus, CCC has decided to eliminate the provision allowing 
reimbursement of domestic travel expenditures for a MAP Participant's 
attendance at meetings of international technical organizations and 
declines to expand reimbursement to include ``meetings with an 
international focus.'' Unless such attendance falls within another 
covered category of reimbursement for domestic travel, domestic travel 
for these purposes will not be reimbursable under the MAP final rule.
    Finally, as noted previously, CCC has codified MAP Notice 06-002 in 
new Sec.  1485.17(c)(26). That section now allows, for generic 
promotion only, the reimbursement of domestic travel expenditures of a 
MAP Participant employee, a MAP Participant board member, or a state 
department of agriculture employee paid by the MAP Participant when 
such individual accompanies foreign trade missions or technical teams 
when such missions or teams are traveling in the United States. Such 
trade missions or technical team visits must be identified in the MAP 
Participant's UES and must have been approved by CCC. MAP Notice 06-002 
will be removed from the FAS Web site.
    Comment: Ten respondents commented in reference to Sec.  
1485.17(c)(31) and questioned if this included educational seminars in 
the United States and abroad. Three comments stated they supported the 
inclusion of activities that are intended to improve market access and 
therefore recommended the insertion of ``or other appropriate 
activities'' following ``educational training'' and before ``designed 
to improve market access.''
    Response: CCC notes that Sec.  1485.17(c)(31) is now rendered 
redundant by Sec.  1485.17(b)(6), Sec.  1485.17(c)(8), and Sec.  
1485.17(c)(25). Non-travel expenditures associated with seminars and 
educational training conducted inside or outside the United States are 
already reimbursable as noted above pursuant to Sec.  1485.17(b)(6). 
International and domestic travel expenditures for such activities are 
reimbursable, for generic promotion only, pursuant to Sec.  
1485.17(c)(8) and Sec.  1485.17(c)(25).
    The intention of proposed Sec.  1485.17(c)(31) was to specifically 
permit reimbursement of educational seminars, whether in the United 
States or abroad, where such seminars are intended to address market 
constraints such as temporary or permanent trade barriers. CCC, 
however, agrees with the comments that other activities in addition to 
educational training can achieve this objective. Given that, and the 
fact educational training is already covered in other subsections of 
the MAP final rule, CCC consequently has modified Sec.  1485.17(c)(31) 
(now Sec.  1485.17(c)(32)) to permit reimbursement for expenditures not 
otherwise prohibited from

[[Page 29490]]

reimbursement that are associated with an activity held in the United 
States or abroad designed to improve market access by specifically 
addressing temporary, permanent, or impending technical barriers to 
trade that prohibit or threaten U.S. exports of agricultural 
commodities.
    Comment: Twenty respondents commented in reference to proposed 
Sec.  1485.17(d) suggesting the sentence ``A generic promotion activity 
may also involve the use of specific company names, logos or brand 
names'' be clarified to read ``specific U.S. company names, logos, or 
brand names.'' The respondents stated that the absence of this 
clarification gives the impression that two foreign brands have to 
participate in activities, which would be impossible in the case of 
store brands. The respondents further commented on the phrase, ``At 
least two U.S. companies participate.'' Several of the comments stated 
that it was not often possible to garner two brands for participation 
in a generic promotion where brands are specifically identified. One 
respondent stated that this requirement was so onerous that it would 
significantly affect their ability to conduct promotions at retail.
    The respondents stated that some brands may choose not to 
participate; so this new regulation would limit the ability of a MAP 
Participant to undertake a generic promotion activity. They recommended 
that if the MAP Participant can demonstrate that all available brands 
are invited to participate then the final number of promotion 
participants would not have an impact on the eligibility of the 
activity for reimbursement.
    Response: CCC agrees with the respondents in regard to adding the 
clarification of ``U.S.'' to the reference to specific company names, 
logos, or brand names, and has modified the definition of generic 
promotion in Sec.  1485.11 accordingly. CCC has also added ``U.S.'' as 
a qualifier for promoting separate items from multiple U.S. companies 
under a generic promotion. However, CCC disagrees with the respondents 
in regard to requiring two brands for participation and will keep this 
requirement in the final rule to avoid any appearance of promoting a 
single brand under a generic promotional activity. The text of proposed 
Sec.  1485.17(d) has been moved into the definition of ``generic 
promotion'' in Sec.  1485.11. Sec.  1485.17 has been re-ordered.
    Comment: One respondent recommended that this section be rewritten 
as follows: ``A generic promotion activity may include the promotion of 
a foreign brand if the foreign brand uses the promoted U.S. 
agricultural commodity. A generic promotion activity may also involve 
the use of specific company names, logos, or brand names. However, in 
that case, the MAP Participant must ensure that all U.S. and/or foreign 
companies seeking to promote such U.S. agricultural commodity in the 
market have an equal opportunity to participate in the market and that 
at least two companies participate.''
    Response: CCC disagrees with the respondent, and the final rule 
will continue to reflect that a generic promotional activity may 
include the promotion of a foreign brand only if the foreign brand uses 
the promoted U.S. agricultural commodity from multiple U.S. suppliers. 
The text of proposed Sec.  1485.17(d) has been moved into the 
definition of ``generic promotion'' in Sec.  1485.11. Sec.  1485.17 has 
been re-ordered.
    Comment: Fifteen respondents stated in reference to Sec.  
1485.17(d) that most foreign brands are developed for the local 
companies to add value and be competitive in the market and are not 
generally designed to be the way for U.S. products to enter the market. 
The objective should be to encourage foreign brands to incorporate U.S. 
agricultural commodities, but the phrase, ``and is the primary market 
access to the targeted market for the U.S. agricultural commodity'' 
appears to limit it. The respondents questioned what exactly does the 
phrase itself mean, and recommended that this section be rewritten or 
deleted altogether.
    Response: CCC believes that foreign brands are often very useful 
for increasing U.S. exports generically. Multiple foreign brands may 
use U.S. products, however, and a single foreign brand does not need to 
provide the ``primary market access to the targeted market.'' Thus, CCC 
agrees with the respondents and has modified the proposed text of Sec.  
1485.17(d) to remove the phrase as requested. The text of proposed 
Sec.  1485.17(d) has been moved into the definition of ``generic 
promotion'' in Sec.  1485.11. Sec.  1485.17 has been re-ordered.
    Comment: Sixteen respondents commented in reference to Sec.  
1485.17(d) that since Participants are currently allowed to promote 
foreign brands that are composed of U.S. commodities, this rule would 
place the U.S. companies at a disadvantage because Participants could 
promote their foreign competitors and not U.S. companies. The 
respondents suggested removing this language to open it up to 
Participants promoting U.S. company names, logos, or brand names that 
compete with foreign brands in their market.
    Response: CCC believes that Sec.  1485.17(d) in the proposed rule 
has been misunderstood in reference to the promotion of a foreign 
brand. Promoting a foreign brand constitutes a generic activity 
promoting the U.S. commodity because the foreign brand uses the 
promoted commodity from multiple U.S. suppliers. In contrast, promoting 
a single U.S. brand would constitute a branded activity. While Sec.  
1485.17(d) specifically states that a generic promotion activity may 
also involve the use of multiple specific U.S. company names, logos, or 
brand names, such branding must meet the conditions of Sec.  
1485.17(d), which ensures that the activity remains ``generic''. The 
text of proposed Sec.  1485.17(d) has been moved into the definition of 
``generic promotion'' in Sec.  1485.11. Section 1485.17 has been re-
ordered. In addition, as discussed in the response to a prior comment, 
CCC deleted the requirement that generic promotion activity may include 
the promotion of a foreign brand only if the foreign brand is the 
primary market access to the targeted market for the U.S. agricultural 
commodity.
    Comment: In reference to Sec.  1485.17(d) fourteen respondents 
provided similar comments in regard to food service promotions. Several 
stated that generally food service operators rely on one U.S. supplier 
and the U.S. product is promoted as part of the food service item, 
identifying the U.S. origin but not the brand. The new regulation 
states, ``a generic promotion activity may include the promotion of a 
foreign brand if the foreign brand uses the promoted U.S. agricultural 
commodity from multiple U.S. suppliers''. The respondents stated this 
is not always achievable and they recommend recognizing the broad 
generic parameters achieved within the context of the entire activity 
(food service/retail/bakery, etc.) within a market.
    Response: CCC disagrees. CCC does not consider the promotion of a 
foreign brand that uses only a single supplier to be generic promotion. 
The text of proposed Sec.  1485.17(d) has been moved into the 
definition of ``generic promotion'' in Sec.  1485.11. Section 1485.17 
has been re-ordered.
    Comment: One respondent commented in reference to Sec.  
1485.17(e)(19) (now Sec.  1485.17(d)(19)), which provides that 
membership fees in clubs and social organizations are not reimbursable. 
The respondent asked for clarification whether fees paid to a 
professional industry-related

[[Page 29491]]

organization would be eligible for reimbursement.
    Response: CCC intends that fees paid to a professional, industry-
related organization would be eligible for reimbursement, and has added 
new Sec.  1485.17(c)(33) to include such language for generic 
promotions only. Membership fees for clubs and social organizations 
remain ineligible.
    Comment: Three respondents stated that Sec.  1485.17(e)(26) (now 
Sec.  1485.17(d)(26)) conflicts with Sec.  1485.17(c)(23) (now Sec.  
1485.17(c)(22)) and recommended that this be amended by adding ``except 
as noted at Sec.  1485.17(c)(23).''
    Response: CCC agrees with the respondents' comment and has amended 
new Sec.  1485.17(d)(26) to reference Sec.  1485.17(c)(22).
    Comment: Seventeen respondents commented in reference to Sec.  
1485.17(e)(27) and suggested the phrase ``negative comparison'' be 
removed. One respondent suggested that if CCC believed that the concept 
needs to be addressed then the phrase should be replaced with 
``derogatory''. Another questioned whether if a product from one MAP 
Participant has a better functionality in an end product than that of 
another MAP Participant, can such statement not be made. Another 
respondent stated that it was unclear as to the definition of 
``negative comparison'' and questioned if this regulation only refers 
to comparing a U.S. source of the competitive product as compared to a 
local source or making a generic statement that does not reference 
national origin. This respondent requested that this regulation be 
clarified to permit valid comparisons of a promoted product with that 
of a locally produced or generically stated product. One stated that 
the term ``negative'' was too general and also stated that it was not 
possible to discuss advantages of one of its products without 
suggesting something negative about some of its competitors' other 
products. Two respondents stated that the words ``negative comparison'' 
may be too restrictive a term if it prevents the forthright statement 
of facts and comparison of functionality and relative value of various 
commodities and products in a given use. Several recommended revising 
this section by removing the words ``negative comparison.''
    Response: CCC agrees with the comments requesting the removal of 
the phrase ``negative comparison'' and with the comment asking to 
substitute ``derogatory'' in its place. CCC has modified Sec.  
1485.17(e)(27) (now Sec.  1485.17(d)(27)) accordingly to prohibit 
reimbursement of any expenditure on an activity that includes any 
derogatory reference or comparison to other U.S. agricultural 
commodities.
    Comment: Four respondents commented on Sec.  1485.17(e)(28), which 
provides that CCC will not reimburse the cost of any expenditure on an 
activity that contradicts U.S. foreign policy. Respondents stated that 
it was not clear how the exact standard of U.S. foreign policy is to be 
determined and what constitutes a contradiction of that policy. One 
stated that the regulation was too vague. Another stated that it agreed 
with the spirit of the regulation but were unsure how it should 
determine if it was contradicting U.S. foreign policy. The respondents 
recommended further clarification.
    Response: CCC agrees with the respondents that the U.S. foreign 
policy that applies to MAP Participants is not clearly articulated in 
the regulation. Moreover, independent regulations and Presidential 
Executive Orders setting out foreign policy related to specially 
designated nationals and other economic trade sanctions already apply 
to MAP Participants independent of the MAP final rule. Accordingly, CCC 
has deleted Sec.  1485.17(e)(28) from the final rule.
    Comment: Two similar comments were made in reference to Sec.  
1485.17(f). One respondent stated that it supports the applicability of 
the GS-15 Step 10 salary cap as it relates to non-U.S. citizens; 
however, it stated in the case of contractors (U.S. citizens or non-
U.S. citizens), application of this pay scale should be left to the 
discretion of the Participant. The respondent stated that adherence to 
the pay scale does not relieve Participants from having to 
competitively bid the position; since the Participant will have to 
competitively bid the position, the Participant should be allowed to 
pay and be reimbursed for the bid amount, which is a compensation 
amount that is reasonable for the market. Another respondent stated 
that this method of rate-setting is unfair to companies in high cost 
regions of the world and that it benefits those located in less 
expensive areas, especially third-world countries.
    Response: Sec.  1485.17(f) (now Sec.  1485.17(e)) refers to 
employees or contractors who are hired to act as employees, rather than 
contractors hired to undertake a specific activity. Thus, this is not a 
bidding situation. CCC has modified the final rule to clarify that the 
type of contractor subject to Sec.  1485.17(e) are ``contractors who 
are hired to act as employees.'' If a MAP Participant chooses to employ 
an employee or contractor at a salary rate higher than is permissible 
in this section, then the MAP Participant must pay for the excess in 
compensation itself.
    Comment: Fourteen respondents commented in reference to Sec.  
1485.17(g) stating that since this sentence appears in the middle of 
the section, it is unclear as to what it applies. The respondents 
suggested that this be moved to the last item under the section.
    Response: CCC confirms that Sec.  1485.17(g) (now Sec.  1485.17(j)) 
refers to all of Sec.  1485.17. CCC agrees with the comment and has 
modified Sec.  1485.17(j). That subsection now states ``CCC may 
determine, at CCC's discretion, whether any cost not expressly listed 
in Sec.  1485.17 will be reimbursed.''

Sec. 1485.18 Reimbursement Procedures

    Comment: One respondent commented in reference to Sec.  
1485.18(a)(5) that the requirement that claims for reimbursement 
include the applicable cost category greatly complicates the accounting 
process for Participants. The respondent stated that unless CCC has 
some practical need for cost category information, it recommended 
eliminating that reporting requirement.
    Response: CCC disagrees. The requirement that claims for 
reimbursement include cost category is not a new requirement. Moreover, 
this information is necessary as CCC is often asked by Congress to 
report expenditures by cost category.

Sec. 1485.19 Advances

    CCC received 45 comments in regard to advances.
    Comment: Fifteen respondents provided similar comments in reference 
to Sec.  1485.19(b). Each respondent recommended that language be 
included about the ability to apply for an advance in the current year 
if there is an outstanding advance from the previous year. The 
respondents stated that with the ability to apply for an advance for up 
to 3 months after the end of a program year this clarification is 
needed. They also stated that this was not spelled out in the new 
regulations and might be confusing to newer Participants.
    Response: CCC does not believe it is necessary to include language 
about the ability to apply for an advance while there is an outstanding 
advance from the previous year. In the proposed rule, CCC removed the 
current rule's requirement that no advance will be made if an advance 
from a previous program year is still open. Thus, CCC believes Sec.  
1485.19(b) of the proposed rule, which does not contain any

[[Page 29492]]

prohibitions on a MAP Participant's request for an advance (except to 
require that such Participant meet the criteria for advance payments 
set forth in the applicable parts of this title, e.g., parts 3015, 
3016, 3019), as written, allows Participants to apply for an advance in 
the current year if there is an outstanding advance from the previous 
year. In addition, CCC notes that the proposed rule already makes clear 
that a Participant may apply for an advance for up to 3 months after 
the end of its program year. The proposed rule provides, in part, that 
``CCC will not approve any request for an advance submitted later than 
3 months after the end of a MAP Participant's program year.''
    Comment: Four respondents commented regarding security in reference 
to Sec.  1485.19(b). Two of the respondents requested clarification as 
to what circumstances would require submission of security and what 
type of security would be expected. One commented that the regulation 
was very vague and stated that they felt that a Participant capable of 
``fronting security'' may not need an advance.
    Response: Section 1485.19(b) provides, in part, that ``[i]f CCC 
approves the request, prior to making an advance, CCC may require the 
MAP Participant to submit security in a form and amount acceptable to 
CCC to protect CCC's financial interests.'' USDA's uniform federal 
assistance regulations, in 7 CFR Sec.  3015.17(a), already provide that 
``[i]f the recipient is not a unit of government, the awarding agency 
may require the recipient to carry adequate fidelity bond coverage 
where the absence of coverage for the grant-supported activity is 
considered as creat[ing] an unacceptable risk.'' Similarly, USDA's 
uniform administrative requirements for grants and agreements with 
nonprofit organizations, in 7 CFR Sec.  3019.21(d), provide that 
``[t]he Federal awarding agency may require adequate fidelity bond 
coverage where the recipient lacks sufficient coverage to protect the 
Federal Government's interest.'' The proposed MAP rule explicitly 
observed that 7 CFR parts 3105 and 3109 apply to the MAP and MAP 
Participants (to the extent that they do not directly conflict with the 
MAP final rule). Thus, to the extent that CCC needs to take precautions 
to protect the federal government's interests, USDA's uniform 
regulations already provide a way for CCC to do so.
    To accommodate the respondents' request to clarify what 
circumstances would require submission of security and what type of 
security would be expected, CCC has decided to delete the sentence from 
Sec.  1485.19(b) quoted above and to add to the end of Sec.  1485.19(b) 
the following: ``When approving a request for an advance, CCC may 
require the MAP Participant to carry adequate fidelity bond coverage 
when the absence of such coverage is considered to create an 
unacceptable risk to the interests of the MAP. Whether an 
``unacceptable risk'' exists in a particular situation will depend on a 
number of factors, such as, for example, the Participant's history of 
performance in MAP; the Participant's perceived financial stability and 
resources; and any other factors presented in the particular situation 
that may reflect on the Participant's responsibility or the riskiness 
of its activities.'' Thus, CCC will make a determination, based on the 
applicable facts and circumstances presented by a particular MAP 
Participant's advance request, whether the MAP Participant must obtain 
fidelity bond coverage and in what amount.
    Comment: Twenty-five respondents made similar comments in reference 
to Sec.  1485.19(c). Fifteen stated that the requirement for a 
quarterly financial statement to CCC for all funds advanced and all 
interest earned is onerous. These respondents further stated that an 
annual statement should suffice. Six of the comments received 
recommended a waiver of interest for smaller advances. Four of the 
respondents stated that Participants are expected to pay all expenses 
in advance of reimbursement and that the financing of these costs are 
significant and dramatically exceed any potential revenue generated by 
interest income therefore they specifically oppose this rule.
    Response: CCC agrees that requiring a quarterly statement on 
advances is unnecessary, given the fact that such information should be 
readily available in the UES system. Accordingly, CCC has deleted the 
last sentence from Sec.  1485.19(c) requiring the submission of a 
financial statement.

Sec. 1485.20 Employment Practices

    CCC received 20 comments in regard to this section.
    Comment: Twenty respondents commented in reference to Sec.  
1485.20(a), which requires that MAP Participants enter into written 
contracts with all employees and that all terms, conditions, and 
related formalities of such contracts conform to governing local law. 
The respondents stated that this rule was onerous and 
counterproductive, and that they opposed this rule.
    Response: CCC disagrees that this rule is counterproductive or 
onerous. CCC is aware of several cases of MAP Participants being 
involved in lawsuits involving the Participant's overseas employees. 
The written employment contract protects Participants' and CCC's 
interests. Furthermore, in order to properly perform its compliance and 
monitoring functions, CCC requires documentation to support all MAP 
expenditures. The written employment contract provides such 
documentation for overseas employees.
    Comment: Fourteen respondents asked if the intent was to require 
employment contracts with MAP Participant employees in foreign 
locations and suggested CCC restate this to be clear. Two questioned if 
this was intended for foreign staff only and stated that contracts 
would limit both the flexibility of the employer as well as employee 
and provide a much more difficult environment in cases of 
unsatisfactory performance by an employee. They also stated that it 
could lead to substantially higher costs for Participants. One 
commented that all of the 50 states are ``at-will employment states'' 
and that this doctrine covers employment practices for MAP Participants 
with domestic U.S. staff. Two respondents commented that written 
contracts should only be required by CCC in reference to employees paid 
for with MAP funds.
    Response: CCC intends that this section refers to the employment of 
overseas employees who are paid in whole or in part with MAP funds and 
has modified this section accordingly to require ``written contracts 
with all overseas employees who are paid in whole or in part with MAP 
funds.'' CCC disagrees with the comment that contracts would limit the 
employer's and employee's flexibility and make it more difficult to let 
go of an unsatisfactory employee. A written employment contract would 
not eliminate the ability of employers to fire employees at will if the 
contract includes an at-will clause. Similarly, an employment contract 
can be written to reflect the flexibility desired by the parties to the 
contract.

Sec. 1485.21 Financial Management

    CCC received 18 comments in regard to this section.
    Comment: Sixteen respondents provided comments in regard to Sec.  
1485.21(c). Fourteen of the respondents stated that the record 
retention policy is modified to delete the 5-year requirement without 
specifying the required retention period. They stated that they assumed 
it was included in 7 CFR part 1, subpart A--Official Records, but 
questioned the

[[Page 29493]]

point of referencing this part when the required retention time could 
be stated here.
    One respondent commented that there were several references in this 
section and others to ``applicable parts of this title'' and stated 
that was very vague. They asked CCC to clarify the reference more 
precisely. Another respondent stated they believed Sec.  1485.21(c) 
pertained to employment records for non-U.S.-based employees and asked 
that the regulation be restated to clarify this.
    Response: CCC agrees with the respondents' recommendation of an 
explicit statement of the required retention time. 7 U.S.C. Sec.  5662 
requires, in part, that MAP Participants maintain all records 
concerning a program transaction for a period not to exceed 5 years 
after completion of the program transaction, and to permit the 
Secretary to have full and complete access, for such 5-year period, to 
such records. CCC has modified Sec.  1485.21(c) accordingly to require 
retention of all records concerning a MAP program transaction for a 
period of 5 years after completion of the program transaction, and to 
permit CCC to have full and complete access, for such 5-year period, to 
such records. Additionally, in response to the comment questioning 
whether employment records had to be retained only for non-U.S.-based 
employees, CCC has modified Sec.  1485.21(c) to explicitly state that 
records shall include all documents related to employment of any 
employees whose salaries are reimbursed in whole or in part with MAP 
funds, whether such employees are based in the United States or 
overseas.
    In response to the comments that refer to ``applicable parts of 
this title'' in the MAP final rule are vague, CCC refers to its prior 
response to a similar comment.
    Comment: One respondent referenced Sec.  1485.21(d)(6) and asked 
for clarification of the term ``receipted paid bills.'' They stated in 
the past ``stamped'' paid bills were not considered an acceptable form 
of proof of payment and that instead there had to be evidence of a 
financial transaction which involved a third party such as a bank.
    Response: Receipted paid bills means bills for which receipt of 
payment has been confirmed in writing by the payee. This language has 
not been changed from the current regulation. CCC has not changed its 
past practice. CCC believes this term is well understood and does not 
believe it is necessary to codify any clarification.
    Comment: One respondent commented on Sec.  1485.21(d)(7), which 
requires MAP Participants to maintain documentation supporting 
contributions. Such documentation must include the dates, purpose, and 
location of the activity for which the cash or in-kind items were 
claimed as a contribution; who conducted the activity; the 
participating groups or individuals; and, the method of computing the 
claimed contributions. The respondent stated that although the required 
documentation referenced in this section was relatively easy for a MAP 
Participant to provide, it was unreasonable to expect this level of 
detail in reports from the U.S. industry.
    Response: CCC disagrees. In order to properly perform its 
compliance and monitoring functions, CCC requires documentation to 
support all MAP contributions. If U.S. industry expenditures cannot be 
supported by adequate documentation, such expenditures will not count 
as eligible contributions. This language has not been changed from the 
current regulation.

Sec. 1485.22 Reports

    CCC received four comments in regard to Sec.  1485.22. One comment 
supported the proposed rule. CCC's responses to these comments are 
below. In addition, CCC has modified Sec.  1485.22(e) to clarify that 
CCC can require a MAP Participant to submit an A-133 audit only when 
CCC is designated the cognizant agency for audit.
    Comment: One respondent commented on Sec.  1485.22(a), stating that 
the format currently used to report contributions requires 
identification of amounts by cost category and source, not by activity 
code. The respondent stated that to track expenditures by activities 
would be burdensome, and it recommended that CCC retain the current 
format for reporting contributions.
    Response: CCC agrees with the respondent and has modified the 
section accordingly to delete the requirement to identify contributions 
by activity.
    Comment: Two respondents commented in reference to Sec.  
1485.22(b), stating that in many cases, documentation of travel and 
travel expenses were not received by the Participant until well beyond 
the proposed 45 day period after travel. The respondents proposed that 
the reference to ``completion of travel'' be replaced with ``submission 
of claims for travel expenses.''
    Response: CCC disagrees with the respondent. Travel expense 
information is not required in trip reports. Moreover, this provision 
has been in place for at least 15 years, and reporting has become 
easier with the improvement in electronic technologies.

Sec. 1485.23 Evaluation

    In reference to Sec.  1485.23(b), CCC received six comments 
supporting the change in requirements for submission of the evaluation 
report from 3 months to 6 months. They stated this change will result 
in an improved ability to more accurately report the results of their 
activities.

Sec. 1485.24 Compliance Reviews and Notices

    CCC received 107 substantive comments in reference to Sec.  
1485.24. CCC has also deleted the reference to ``a notice of 
delinquency'' from Sec.  1485.24(e)(2). Pursuant to 7 CFR part 1403, 
when a debt is due CCC, only an initial written demand for payment is 
provided to the debtor.
    Comment: Fifteen respondents recommended that CCC develop and 
publish a realistic timeline for MAP Participants to come into 
compliance with the new regulations after the effective date. The 
respondents stated that compliance with the contracting guidelines and 
anti-fraud requirements requires a reasonable length of time.
    Response: CCC has delayed the effective date of the final rule 
until the MAP Participant's 2013 program year (i.e., either 01/01/2013 
or 07/01/2013). MAP Participants may, however, voluntarily choose to 
comply with Sec.  1485.15(a)-(b), Sec.  1485.29(d) and Sec.  
1485.31(a)(1) of the final rule in their 2012 program year.
    In subsequent program years after 2013, a new MAP Participant, 
including a former Participant that did not participate in the previous 
program year, will be required to submit its initial brand program 
operational procedures (as applicable), contracting guidelines and 
anti-fraud program as set forth in its approval letter. Returning MAP 
Participants will be required to submit their brand program operational 
procedures (as applicable) and anti-fraud program, as set forth in 
their approval letters.
    Comment: Twenty-two respondents stated their concern in reference 
to Sec.  1485.24(d). The respondents stated that they were concerned 
that the proposed rule states ``the fact that a compliance review has 
been conducted by USDA staff does not signify that a MAP Participant is 
in compliance with its program agreement, approval letter and/or 
applicable laws and regulations.''

[[Page 29494]]

    Response: This language is included to signify that a compliance 
review may not identify all occasions in which a Participant is out of 
compliance. The fact that a compliance review had occurred and did not 
uncover the non-compliant action is not a defense to any subsequent 
determination by CCC that the Participant is not in compliance with its 
program agreement, approval letter and/or applicable laws and 
regulations. Similarly, a future compliance review may include findings 
that were not identified in a previous review, although similar non-
compliant actions may have occurred during the time period covered by 
the previous review.
    Comment: Fifteen respondents questioned how a Participant can be 
assured that it is in compliance with the MAP program if a compliance 
review cannot be used as a basis for establishing program compliance. 
Another respondent commented that Sec.  1485.24(d) seems to imply that 
a compliance review means only that the auditor has not found 
anything--yet. One respondent stated that when a Participant has acted 
in good faith, the determination long after the fact that a given 
practice was in error should not cause CCC to re-open previously 
audited expenditures for reimbursement to CCC. Several of the 
respondents stated that a successful review should be considered 
confirmation that a Participant is in compliance with its program 
agreement, approval letter and/or applicable laws and regulations. They 
questioned what value a compliance review has if it doesn't attest to a 
Participant's compliance.
    Two respondents commented that the problems with this language are 
further compounded by the current rarity of reviews and the extended 
length of time it takes to receive the official concluding letter. 
Fourteen comments stated that the compliance staff should develop an 
approach that would be sufficient to cover all areas of the program and 
give all Participants (MAP Participants and USDA staff) a sense of 
confidence that a thorough review has been achieved.
    Response: CCC disagrees. When requesting and accepting MAP funding, 
MAP Participants become responsible for the effective control over all 
funds, property, and other assets they receive from the federal 
government. MAP Participants must act accordingly and institute their 
own internal controls for safeguarding these funds.
    CCC has a similar duty to ensure public funds are properly 
expended. Compliance reviews are one way in which CCC discharges, in 
part, this duty. The purpose of such reviews is to give assurance to 
CCC, not MAP Participants. These reviews are not comprehensive 
evaluations for Participants regarding their own internal controls and 
systems. Moreover, even the most stringent review would not necessarily 
bring about CCC's complete confidence that a Participant's program did 
not include any non-compliant actions. As an example, fraudulent 
behavior by a MAP Participant's contractor may initially appear to be 
completely compliant upon review of well-crafted fraudulent 
documentation. A subsequent whistleblower complaint, however, may 
reveal the fraudulent activity. It is simply not possible for CCC to 
confirm that an entire program is in compliance for any MAP 
Participant, much less for all MAP Participants.
    In short, whether or not CCC's compliance staff conducts a 
compliance review of a MAP Participant's program and regardless of the 
outcome of that review, the Participant retains the ultimate 
responsibility, as a result of having accepted federal funds, for 
running its program in compliance with all applicable laws and 
regulations.
    Comment: Fourteen respondents proposed that additional language be 
added to this section, stating, ``Should USDA staff determine that a 
MAP Participant is out of compliance, the MAP Participant will be 
required as in (b) and (c) of this subpart to return to CCC the amount 
of funding deemed to have been inappropriately spent for the reviewed 
program year. Notice will be made of the particular error and shared 
with all MAP Participants. A pattern of this error may be noted but the 
MAP Participant will only be required to reimburse CCC for the 
compliance finding resulting from the current review and at the time 
the finding was made and going forward and not liable for previously 
un-reviewed and undiscovered findings.''
    Response: CCC disagrees with this comment. CCC does not agree that 
all compliance findings are appropriate to share with other MAP 
Participants. While compliance findings often are the results of errors 
or misunderstandings, occasionally compliance findings involve 
intentional actions taken to violate the regulations. Such actions are 
often covered up by the perpetrator, and are sometimes not discovered 
through normal compliance reviews. CCC will continue its current 
practice of providing notice to MAP Participants of patterns of errors 
or misunderstandings that it has discovered through compliance reviews 
and that it deems appropriate to share with all MAP Participants. Also, 
as noted in previous responses, CCC disagrees that MAP Participants 
should not be liable for previously undiscovered instances of 
noncompliance.
    Comment: Nineteen respondents commented in reference to Sec.  
1485.24(e)(1) stating that the reduction in the amount of time for a 
Participant to respond to an audit finding from 60 to 30 days was an 
unreasonably short period of time, an unwarranted reduction and an 
onerous requirement. Several stated that staff members are not always 
in-country to begin working on a response immediately and that 30 days 
does not provide sufficient time for the Participant to research and 
develop an adequate response or appeal.
    Response: CCC concurs with the commenters that the reduction in 
time to respond may create an onerous requirement as Participants are 
often in travel status. Therefore, CCC has changed Sec.  
1485.24(e)(1)'s period of time within which a MAP Participant may 
submit a response to a compliance report or written notice back to 60 
days. In addition, CCC has made a corresponding change to Sec.  
1485.24(b) and (c), whereby if a MAP Participant notifies CCC within 30 
days of the date of the written compliance report or written notice 
that the Participant intends to file an appeal pursuant to Sec.  
1485.24(e), the amount owed to CCC by the MAP Participant is not due 
until the appeal procedures are finished and CCC has made a final 
determination as to the amount owed.

Sec. 1485.25 Failure To Make Required Contribution

    CCC received 17 comments in reference to Sec.  1485.25.
    Comment: Sixteen respondents stated that they believed that the 
time to remit payment for failure to make required contributions should 
be 6 months after the program year ends, not 90 days. Two respondents 
proposed the contributions should be within 6 months in order to be 
consistent with the proposed rule at Sec.  1485.23(b), which states 
that evaluation results be submitted within 6 months following the end 
of the Participant's program year. They stated the evaluation process 
is an essential component in determining a MAP Participant's 
contribution level and therefore proposed that Sec.  1485.25 be amended 
to read, ``a MAP Participant shall remit such payment within 6 months 
after the end of the program year.''
    Response: CCC agrees that the time to remit payment should be 6 
months, because the MAP Participant has 6 months to develop its 
contribution report and may not realize it has fallen

[[Page 29495]]

short in contributions until the report is complete. Section 1485.25 
has been modified accordingly.

Sec. 1485.28 Ethical Conduct

    CCC received 21 comments in reference to Sec.  1485.28.
    Comment: One respondent commented on Sec.  1485.28(b), which states 
that ``A MAP Participant may, however, collect check-off funds and 
membership fees that are required for membership in the MAP 
Participant.'' The commenter also refers to Sec.  1485.28(c), which 
states, in part, that ``A MAP Participant shall not limit participation 
in its MAP activities to members of its organization.'' The respondent 
stated the two sections appear to be contradictory and further 
questioned how a MAP Participant recruits members, if all companies 
must have equal access to programs and information regardless of their 
membership in the Participant organization. This respondent stated that 
additionally, as the companies that are members are contributing 
financial resources to satisfy the MAP's contribution requirements, it 
is only fair that these companies derive some benefit over companies 
that are non-members.
    Nineteen respondents commented in reference to Sec.  1485.28(c) 
stating that they would like to know what method a MAP Participant is 
to use to incentivize membership (thus achieving the broadest base) if 
no preference is permitted as a benefit of membership. They stated 
that, while not excluding anyone from participating, it is possible to 
give some limited preference, such as first notice of events, etc. 
Three of the respondents stated that Sec.  1485.28(c) would require 
non-members to participate in their marketing program using their 
brand. These commentators state that a farmer-owned agricultural 
cooperative cannot permit non-members to participate in the 
cooperative's marketing program using the cooperative's brand. The 
respondents believed this proposed rule was in direct contradiction 
with these statutory requirements.
    One respondent suggested the regulation should state that all 
commercial entities must have equal opportunity to access program 
information funded by MAP, but that such opportunity is provided only 
through membership in a Participant organization.
    Response: Section 1485.28(b) and Sec.  1485.28(c) are not 
contradictory. Under Sec.  1485.28(b), a MAP Participant may collect 
check-off funds and membership fees that are required for membership in 
the MAP Participant. Section 1485.28(c) prohibits a MAP Participant 
from limiting participation in its MAP activities to members of its 
organization. The MAP final rule does not require equal access to the 
MAP Participant's non-MAP-funded programs and information. To make 
clearer that the requirement of open participation is limited to MAP 
activities, CCC is modifying Sec.  1485.28(c) to require that 
Participants agree to ensure that their MAP-funded programs and 
activities are open to all otherwise qualified individuals and entities 
on an equal basis and without regard to any non-merit factors.
    It is CCC's intention that the benefits of the MAP should be made 
broadly available throughout the relevant agricultural sector. Not all 
MAP Participants are similarly structured, and some organizations are 
far more inclusive than others. Because CCC cannot, and would not 
desire to, instruct industry groups how to organize themselves, this 
requirement is placed on those organizations that choose to participate 
in the MAP. Participating organizations are free to charge reasonable 
and documentable administrative fees to non-members that participate in 
MAP-funded activities.
    CCC notes that Sec.  1485.28(c) is not intended to require MAP 
agricultural cooperatives to allow non-members to participate in their 
marketing program using the cooperative's brands. In response to this 
comment and the following comment, CCC has modified Sec.  1485.28(c) 
accordingly to explicitly provide that this provision does not apply to 
U.S. agricultural cooperatives when implementing their own brand 
program.
    Comment: One respondent asked that FAS clarify that Sec.  
1485.28(c) and Sec.  1485.28(d) would not apply to nonprofit U.S. 
agricultural cooperatives with their own brand program. If FAS 
determines otherwise with respect to the document disclosure provision 
Sec.  1485.28(c), the respondent asked that the provision be made clear 
that it allows for the redaction of business-confidential information 
from any documents provided pursuant to the provision.
    Response: As noted above, CCC has modified Sec.  1485.28(c) in 
response to a prior comment so that the provision does not apply to 
agricultural cooperatives promoting their own brand program. 
Furthermore, Sec.  1485.28(d) does not deal with brand promotion, but 
speaks only to how MAP Participants select industry representatives to 
participate in generic MAP activities. CCC has also modified Sec.  
1485.28(d) to clarify that the provision applies only to generic 
activities.

Sec. 1485.29 Contracting Procedures

    CCC received 69 comments in reference to Sec.  1485.29. Responses 
are set forth below.
    Comment: Three respondents provided similar comments in reference 
to Sec.  1485.29(b). One comment asked if this section applies to items 
paid with MAP funds and income generated from programs or only the 
former. Two questioned if the ``small purchase threshold referenced in 
7 CFR part 3019 is set at $100,000, to whom do the contracting plan 
requirements apply for contracts above $25,000?'' One respondent 
questioned what contracting compliance procedures were affected by this 
dollar threshold.
    Response: CCC intends that any use of income generated by MAP 
funded activities should be governed by the MAP regulation. CCC has 
modified Sec.  1485.32 accordingly to state that the Participant's use 
of such revenue or refunds generated from MAP-funded programs shall be 
governed by 7 CFR Part 1485. Thus, Sec.  1485.29 would apply to items 
paid, in whole or in part, with income generated from MAP programs.
    Regarding the questions related to the $100,000 small purchase 
threshold and the $25,000 contract requirement, CCC notes these are two 
different thresholds that relate to two different provisions in the MAP 
final rule. In addition, CCC notes that it has increased the $25,000 
threshold to $35,000 in the MAP final rule as discussed below in 
response to a different comment.
    Proposed Sec.  1485.29(d) of the MAP final rule created a new 
requirement for MAP Participants to submit a contracting plan that 
lists each contract with an annual value of $25,000 or more. In the MAP 
final rule, CCC changed Sec.  1485.29(d) to require that ``[e]ach MAP 
Participant shall submit to CCC, for CCC approval, written contracting 
guidelines for contracts that are funded, in whole or in part, with MAP 
funds. CCC's approval of such contracting guidelines will remain in 
place until CCC retracts its approval in writing or new guidelines are 
approved that supersede them. Once approved by CCC, these contracting 
guidelines shall govern all of a Participant's MAP-funded contracting 
involving contracts with an annual value of $35,000 or more.'' Thus, 
all MAP Participants must establish written contracting guidelines for 
contracts that are funded in whole or in part by MAP funds and that 
have an annual value of $35,000 or more. CCC also modified Sec.  
1485.29(c) and (d) to

[[Page 29496]]

make clear that these provisions apply only to MAP-funded contracts.
    In addition to this requirement for written contracting guidelines, 
Sec.  1485.29(b) also provides that ``[a] MAP Participant shall comply 
with the procurement standards set forth below and in the applicable 
parts of this title when procuring goods and services and when engaging 
in construction to implement program agreements (e.g., 7 CFR Parts 
3015, 3016, and 3019). For purposes of this subpart, the ``small 
purchase threshold'' referenced in 7 CFR part 3019 is the ``simplified 
acquisition threshold'' established by 41 U.S.C. Sec.  134.'' Thus, the 
small purchase threshold of $100,000 referenced in Sec.  1485.29(b) 
relates to those procurement standards set out in part 3019 of this 
title, which sets out the uniform administrative requirements for 
nonprofit organizations.
    To illustrate, both 7 CFR part 3019 and 7 CFR part 3016 contain 
procurement requirements, some of which are tied to the ``simplified 
acquisition threshold'' (previously ``the small purchase threshold'') 
previously set out at 41 U.S.C. Sec.  403(11), now codified at 41 
U.S.C. Sec.  134. See, e.g., 7 CFR Sec.  3019.44(e), 7 CFR Sec.  
3016.36(d). This threshold was, at one time, $25,000. It was 
subsequently increased to $100,000 by statute. Because the current 7 
CFR part 3019 has not been updated to reflect the increase in that 
threshold from $25,000 to $100,000 as set forth in 41 U.S.C. Sec.  
403(11), now codified at 41 U.S.C. Sec.  134, CCC clarified the current 
$100,000 threshold in proposed Sec.  1485.29(b). In response to these 
comments, however, CCC believes that, to account for possible changes 
to the simplified acquisition threshold that may occur in the future, 
it would be best if the final rule referred to the statute fixing the 
threshold rather than specify the currently applicable threshold. 
Accordingly, CCC has modified Sec.  1485.29(b) to refer to the 
threshold set at 41 U.S.C. Sec.  134 rather than a $100,000 threshold.
    Comment: Thirty-one respondents stated that if the requirement to 
submit contracting ``plans'' is retained, they proposed an increase to 
the annual contract value greater than the current $25,000. A 
suggestion was made for $100,000. Four comments stated that the total 
cost is often not known until the bidding is completed. They stated 
that this regulation was too intrusive and would lead to multiple re-
submittals of the contracting plan to account for new and revised 
contracts. They stated that this policy should not require a listing 
up-front of all contracts expected during that plan year.
    Comment: CCC received thirty-one similar comments in reference to 
Sec.  1485.29(d). All respondents opposed the regulation as written. 
Fifteen respondents stated that they believed these contracting 
requirements should apply only to those contracts that are fully funded 
and reimbursable by MAP and not those that will be paid for with 
industry funds (contributions). Several respondents stated that the 
proposed rule was too onerous and that, at most, MAP Participants 
should be required to provide a description of contracting guidelines, 
not procedures that could be applied to different contracting 
situations.
    Comment: Eighteen respondents provided comments that ``contracting 
guidelines'' should be substituted for ``contracting plan'' and that 
once a plan (guideline) is approved in any given year, it should not 
need to be reapproved, unless it changes in some fundamental way.
    Comment: Seventeen respondents stated their strong opposition to 
the proposed rule and stated that the rule presented a number of 
challenges, including that the decision to use a contractor may not be 
made until the award letter is received and individual projects are 
approved. They stated that the timing of the award cycle would make 
this proposed requirement impossible and create an onerous pre-approval 
process that not only micromanages program implementation but would be 
impossible under the timelines by which the program currently operates.
    Comment: One respondent proposed a change in the wording in the 
following passage to read, ``Prior to entering into any contracts 
during a program year, a MAP Participant must submit to CCC for CCC 
approval a written contracting (procedure manual).'' The commenter then 
asked when the MAP Participant could anticipate receiving approval of 
their contracting procedure manual. Another proposed that at most FAS 
require that the Participant develop a description of contracting 
procedures that could be applied to different contracting situations 
and would remain applicable over multiple years.
    Comment: Fourteen respondents questioned on what basis anyone at 
CCC would be qualified to judge a Participant's contracting plan. They 
stated conversely, if the judgment was only related to whether there 
was a plan or whether it was adequately updated, then what was the 
point? They stated that this set of requirements created the need for a 
parallel notification process as Participants will be forced to amend 
the plan with each new need.
    Comment: Fifteen respondents commented in reference to Sec.  
1485.29(d)(1) stating that much of this section was covered by 
inference in Sec.  1485.28; so it should not need to be spelled out 
here.
    Comment: Three respondents stated they supported the regulation for 
requiring an annual documented evaluation for in-country representation 
in lieu of the current arbitrary process of rebidding every 3 years.
    Response: The proposed rule established a requirement for a 
contracting plan in Sec.  1485.29(d) because CCC has received many 
questions about appropriate contracting procedures over recent years. 
The proposal was not meant to be an onerous requirement. Rather, it was 
meant to encourage MAP Participants to formalize their contracting 
methods and intentions for a given year and to give MAP Participants 
the opportunity to obtain in advance CCC review and pre-approval of the 
Participants' contracting methods.
    CCC understands that the bulk of the opposition to this proposal 
stems from the requirement to list all contracts. CCC agrees that this 
is unnecessary and actually detracts from the intended purpose. CCC has 
accordingly modified Sec.  1485.29(d) to require that MAP Participants 
establish contracting guidelines to follow as various contracting 
situations arise. Individual contracts need not be identified. 
Moreover, CCC has removed the requirement that a MAP Participant must 
submit its contracting plan to CCC prior to entering into any contracts 
during the program year. Rather, the MAP final rule now provides that 
after CCC approves the initial contracting guidelines, such approval 
will remain in place until CCC retracts its approval in writing or new 
guidelines are approved that supersede them. As discussed above in 
response to a separate comment, MAP Participants shall submit their 
contracting guidelines to CCC as set forth in their approval letters. 
The MAP final rule continues to allow the MAP Participant to modify and 
resubmit these guidelines for reapproval at any time.
    CCC agrees that these contracting requirements should apply only to 
those contracts that are funded, in whole or in part, by MAP funds and 
not those that are paid for with industry funds (contributions). CCC 
has modified Sec.  1485.29(d) accordingly. CCC observes that this would 
encompass all contracts funded in whole or in part with MAP funds, 
which would include contracts with U.S.-based organizations that are 
retained to implement or assist with approved international market

[[Page 29497]]

development efforts, if such contracts were funded by MAP.
    CCC does not agree with the suggestions to increase the threshold 
of $25,000 to $100,000 for contracts that are to be submitted in 
contracting ``plans.'' First, CCC notes that the requirement no longer 
requests contracts to be listed. Second, CCC observes that CCC chose 
the $25,000 level in the proposed rule because that is the same 
threshold that CCC has maintained since 1996, as reflected in MAP 
Notice 05-005, for the contract competition requirement. Since 1996, 
CCC has required MAP Participants to conduct an appropriate form of 
competition at least every three years on all contracts valued at 
$25,000. CCC believes that the $25,000 level is an appropriate level 
not only for when competition should be conducted but also for 
determining what contracts should be subject to written contracting 
guidelines. However, in recognition that the $25,000 level should be 
adjusted for inflation, using the Department of Labor's Bureau of Labor 
Statistics inflation calculator, CCC has increased the minimum level to 
$35,000, with the possibility of future increases through written 
guidance announced to MAP Participants via a MAP notice issued on FAS' 
Web site. Section 1485.29(d) has been modified accordingly. CCC notes 
that MAP Notice 99-003 is now obsolete and will be removed from FAS' 
Web site.
    CCC disagrees that the substance of Sec.  1485.29(d)(1) can already 
be inferred from Sec.  1485.28 and need not be spelled out in Sec.  
1485.29(d)(1).
    In response to the comment asking when the MAP Participant should 
expect approval of its contracting procedures, CCC will try to complete 
its review of contracting guidelines within 21 calendar days of 
receipt.
    Comment: A respondent suggested that if an activity is approved in 
a particular city that MAP Participants be required to at least offer 
qualified contractors in that city or country an opportunity to bid on 
the project. The commenter further stated that contractor lists should 
be obtained from the local post rather than requiring potential 
contractors to register on a Web site. In addition, the commentator 
stated that the post should review the activity before it begins.
    Response: While CCC requires open, fair, and competitive 
contracting practices, CCC cannot and does not deem it appropriate to 
instruct MAP Participants in appropriate methods for identifying 
potential contractors in every market in the world. In addition, some 
FAS Posts could not review every activity in their markets.
    Comment: Two respondents provided similar comments in reference to 
Sec.  1485.29(d)(3) and stated that they understood the rationale for 
this proposal was ensuring that contracting procedures were open, fair 
and competitive. They stated that there are exceptions, especially in 
the area of highly technical services where there is reasonable cause 
to allow the same individual to draft specifications as to bid on them. 
The respondents proposed that such circumstances be treated as a rare 
exception and as one of the ``various situations'' for which ``separate 
procedures'' are developed as cited in Sec.  1485.29(d)(2), to ensure 
that such exceptional cases result in an open, fair, and competitive 
contract.
    Response: In response to the commenters' requests, CCC has modified 
Sec.  1485.29(d)(3) to provide that MAP Participants' written 
contracting guidelines may detail special situations where the 
prohibitions in this subsection do not apply, such as in situations 
involving highly specialized technical services or situations where the 
services are not commonly offered in a specific market. As discussed 
above, CCC must approve or disapprove of MAP Participants' contracting 
guidelines.
    Respondents question whether Sec.  1485.29(d)(2) authorizes MAP 
Participants to develop separate procedures that would allow the same 
individual to draft specifications to bid on the solicitation. Section 
1485.29(d)(2) does not directly address this issue. Consequently, as 
discussed above, CCC has modified Sec.  1485.29(d)(3) instead.
    Comment: Six respondents stated that this section does not discuss 
requirements for contracts of less than $25,000 (now $35,000).
    Response: While the contracting guidelines required by Sec.  
1485.29(d) apply only to contracts with an annual value of $35,000 or 
more, contracts with an annual value of less than that threshold are 
still subject to the remaining provisions of the MAP regulations, 
including Sec.  1485.29(a)-(c), as well as other procurement provisions 
of the applicable parts of this Title. For example, Sec.  1485.29(c) 
indicates that all contracting should be fair, open, and competitive.

Sec. 1485.31 Anti-Fraud Requirements

    CCC received 85 comments in reference to this section.
    Comment: Twenty-one respondents provided similar comments in 
reference to Sec.  1485.31(a)(1), stating that the regulation as 
written was too intrusive and onerous. Several of the respondents 
recommended either removing this regulation altogether and/or treating 
it like Civil Rights training by developing course work based on what 
was developed for the anti-fraud course offered by Western U.S. 
Agricultural Trade Association. The respondents stated that FAS could 
then require all MAP Participant staff and board with fiduciary 
responsibilities to take the course and submit certification statements 
to that effect.
    Response: CCC disagrees. CCC's position is that anti-fraud efforts 
should be more structured and intensive than in the past. Recent 
incidents indicate fraud has the potential to cause considerable losses 
to the government. In addition to the requirement that they develop a 
fraud prevention program, MAP Participants are highly encouraged to 
attend anti-fraud training courses.
    Comment: Seventeen respondents stated that if necessary, this plan 
should be developed once, submitted and approved and only be 
resubmitted if there has been some fundamental change. As with the 
contracting subpart, they questioned what the timing was for submission 
of the MAP Participant's fraud prevention program and when the MAP 
Participant should expect the program's approval.
    Three respondents asked for clarification on when the information 
needs to be submitted and if the review was to be done by an 
independent third party or if it could be done in house. Two 
respondents provided comments proposing that the annual submission take 
place outside of the annual UES application process or that it be 
completed as part of the regular compliance review process.
    Response: CCC disagrees that plans should only be re-submitted if 
there are fundamental changes to the plan. While an initial plan would 
not need to be rewritten every year, CCC expects MAP Participants to 
review their anti-fraud plans annually and to submit these plans each 
year, regardless of whether they have fundamentally changed. CCC has 
modified Sec.  1485.31(a)(1) to make clear that MAP Participants should 
review their fraud prevention programs annually. While a plan may not 
change dramatically from one year to the next, CCC expects that annual 
reviews would yield the need for minor changes from time to time and 
expects to review the current applicable plan for each program year. It 
is not necessary that the plan be developed by an independent third 
party if the MAP Participant has internal expertise.

[[Page 29498]]

    As stated above in response to an earlier comment, it is expected 
that a 2013 MAP Participant should submit its initial anti-fraud 
program as directed in its approval letter. Thus, annual submission 
will take place outside of the UES application process. In subsequent 
program years, a new Participant, including a former Participant that 
did not participate in the previous program year, will be required to 
submit its initial anti-fraud program as set forth in its approval 
letter. For continuing annual submissions, MAP Participants will submit 
their plans as directed in their approval letters. CCC does not agree 
that the anti-fraud submission should be completed as part of the 
regular compliance review process. First, as noted above in response to 
a similar request related to operational brand procedures, the purpose 
of the CCC review is to approve a plan at the start of a program year, 
before the program begins operation. Compliance reviews look at what 
has historically happened. Moreover, during the compliance review, CCC 
may review the implementation of the plan, rather than the plan itself.
    In response to the comment asking when the MAP Participant should 
expect approval of its program, CCC will endeavor to complete its 
review within 21 calendar days of receipt.
    Comment: Sixteen respondents questioned if a MAP Participant has 
multiple locations with accounting responsibilities, does the annual 
review have to include all locations or just the corporate headquarters 
where the financial consolidation occurs?
    Response: Because fraud can occur both at corporate headquarters 
and field offices, CCC expects anti-fraud reviews to encompass all of a 
Participant's offices.
    Comment: One respondent commented that this section appears to 
apply to exclude brand participants. The respondent stated that the 
current fraud prevention program covered by A-133 covers this 
requirement, and therefore it asserted that this regulation was 
redundant and recommended that this regulation be eliminated or A-133 
should be eliminated.
    Response: The anti-fraud requirements are imposed on MAP 
Participants, not brand participants that participate in the MAP 
program through MAP Participants. CCC disagrees that Sec.  1485.31's 
requirements are redundant with OMB Circular A-133. OMB Circular A-133 
requires, in part, that subject entities (those who expend $500,000 or 
more in federal awards) have an audit conducted. Such entities must 
maintain appropriate internal controls. In contrast, the MAP final rule 
applies to all MAP Participants (not just those who expend $500,000 or 
more) and requires a specific proactive and preemptive fraud prevention 
program. One of the objectives of the fraud prevention requirement is 
to make MAP Participants more aware of the specific risk for brand 
participants to defraud them. The MAP requirements are in addition to, 
not in lieu of, the requirements of OMB Circular A-133.
    Comment: Two respondents questioned if the cost of fraud prevention 
review would be reimbursable.
    Response: CCC does not intend for anti-fraud efforts to be 
reimbursable with MAP funds. CCC has added Sec.  1485.17(d)(31) to 
clarify this.
    Comment: One respondent stated that it (the Participant) has 
adhered to an internal controls document which includes language on 
fraudulent behavior. It stated that it would like clarification of the 
new anti-fraud preparation policies to ensure that its policies adhere 
to MAP regulations.
    Response: While CCC may provide anti-fraud training and guidance in 
the future, given the differences in structure between classes of MAP 
Participants, as well as differences between individual MAP 
Participants, CCC does not believe CCC should dictate a single set of 
anti-fraud procedures or a model anti-fraud plan for all MAP 
Participants to use. The respondent may submit its internal controls 
document to CCC by the time stated in its approval letter or any time 
before that, at which time CCC will review this document and respond.
    Comment: One respondent commented that it did not feel that each 
Participant should be responsible for developing its own anti-fraud 
program and that this would result in the application of different 
security standards. This respondent stated it would be more efficient 
and more economical if CCC, with the assistance of an outside 
contractor, could develop a set of minimum anti-fraud procedures for 
all Participants to use.
    Response: While CCC may provide anti-fraud training and guidance in 
the future, given the differences in structure between classes of MAP 
Participants, as well as differences between individual MAP 
Participants, CCC does not believe CCC should dictate a single set of 
anti-fraud procedures or a model anti-fraud plan for all MAP 
Participants to use.
    Comment: Three respondents provided similar comments in reference 
to Sec.  1485.31(a)(2). All three suggested that the language be 
modified to read, ``notify CCC promptly when any instances of fraud 
have been substantially determined.''
    Response: CCC disagrees with the respondents and believes CCC 
should be a part of any investigation early enough to determine if 
fraud has occurred.

Sec. 1485.32 Program Income

    CCC received six comments in regard to this issue.
    Comment: One respondent stated that as an organization that 
conducts activities spanning more than one program year, it felt there 
were several challenges with this language. It stated that it does not 
see a way to comply strictly with the proposed language and further 
stated that it recommended that Participants be allowed to create a 
program reserve (at an agreed upon level) from participation fees, with 
the understanding that any funds above that level be remitted to CCC as 
they occur and that the reserve fund itself remit to CCC if/when the 
Participant terminates participation in the MAP program.
    Comment: Four respondents stated they strongly support the proposed 
revision.
    Response: Proposed Sec.  1485.32 allowed the MAP Participant to 
expend program income in furtherance of the MAP Participant's approved 
MAP activities in the program year in which the program income was 
received. CCC, however, acknowledges that a MAP Participant's program 
can be funded over a multi-year basis. Therefore, given that the grant 
period may be multi-year and certain activities may occur over more 
than one calendar year, CCC has accordingly modified Sec.  1485.32 to 
allow MAP Participants to use program income in furtherance of approved 
MAP activities during the program period over which the MAP Participant 
may expend the MAP funds, regardless of the specific program year that 
the income was received. Thus, for example, if a MAP activity in 
program year 1 yields a net revenue in program year 2 in a 3-year MAP 
grant, the MAP Participant should apply that revenue to MAP activities 
conducted in program year 2 or 3. CCC does not believe that allowing 
MAP Participants to establish a reserve fund with program proceeds is 
appropriate.

Sec. 1485.36 Paperwork Reduction Requirements

    CCC received three comments to this section.
    Comment: Three respondents recommended that CCC transition from 
solely paper recordkeeping of MAP related files to electronic 
recordkeeping.
    Response: CCC understands the respondents' comments to refer to 
CCC's

[[Page 29499]]

use of the UES, the standardized online Internet application used by 
entities to apply to any USDA market development program, including the 
MAP. MAP Participants currently use the UES to submit reimbursement 
claims, trip reports, and other information to CCC under the MAP. While 
CCC believes MAP Participants' use of the UES effectively reduces costs 
and increases efficiencies, MAP Participants cannot transition solely 
from paper recordkeeping to electronic recordkeeping. The MAP final 
rule requires Participants to maintain records of expenditures and 
contributions to substantiate their MAP activities. Such records must 
include, inter alia, original receipts for all STRE (e.g., actual 
vendor invoices or restaurant checks) and any other program-related 
expenditure in excess of $75.00 (e.g., canceled checks, receipted paid 
bills, contracts or purchase orders, per diem calculations, travel 
vouchers, and credit memos). Where the original documentation is 
provided in paper, MAP Participants must maintain and make such paper 
documentation available for review for compliance and monitoring 
purposes.

List of Subjects in 7 CFR Part 1485

    Agricultural commodities, Exports.

    For the reasons stated in the preamble, CCC amends 7 CFR part 1485 
as follows:

PART 1485--GRANT AGREEMENTS FOR THE DEVELOPMENT OF FOREIGN MARKETS 
FOR U.S. AGRICULTURAL COMMODITIES

0
1. The authority citation for 7 CFR part 1485 reads as follows:

    Authority:  7 U.S.C. 5623, 5662-5663 and sec. 203, 402-403, Pub. 
L. 95-501, as amended, 92 Stat 1685 and sec. 1302, Pub. L. 103-66, 
107 Stat. 330.


0
2. Subpart B is revised to read as follows:
Subpart B--Market Access Program
Sec.
1485.10 General purpose and scope.
1485.11 Definitions.
1485.12 Participation eligibility.
1485.13 Application process.
1485.14 Application review and formation of agreements.
1485.15 Operational procedures for brand programs.
1485.16 Contribution rules.
1485.17 Reimbursement rules.
1485.18 Reimbursement procedures.
1485.19 Advances.
1485.20 Employment practices.
1485.21 Financial management.
1485.22 Reports.
1485.23 Evaluation.
1485.24 Compliance reviews and notices.
1485.25 Failure to make required contribution.
1485.26 Submissions.
1485.27 Disclosure of program information.
1485.28 Ethical conduct.
1485.29 Contracting procedures.
1485.30 Property standards.
1485.31 Anti-fraud requirements.
1485.32 Program income.
1485.33 Amendment.
1485.34 Noncompliance with an agreement.
1485.35 Suspension, termination, and closeout of agreements.
1485.36 Paperwork reduction requirements.

Subpart B--Market Access Program


Sec.  1485.10  General purpose and scope.

    (a) This subpart sets forth the general terms, conditions, and 
policies governing the Commodity Credit Corporation's (CCC) operation 
of the Market Access Program (MAP).
    (b)(1) In addition to the provisions of this subpart, other 
regulations of general application issued by the U. S. Department of 
Agriculture (USDA), including the regulations set forth in Chapter XXX 
of this title, ``Office of the Chief Financial Officer, Department of 
Agriculture,'' may apply to the MAP and MAP Participants, to the extent 
that these regulations of general application do not directly conflict 
with the provisions of this subpart. These include, but are not limited 
to:
    (i) 7 CFR part 1, subpart A--Official Records
    (ii) 7 CFR part 3--Debt Management
    (iii) 7 CFR part 15, subpart A--Nondiscrimination
    (iv) 7 CFR part 3015--Uniform Federal Assistance Regulations
    (v) 7 CFR part 3016--Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments
    (vi) 2 CFR part 417--Government-wide Debarment and Suspension 
(Nonprocurement)
    (vii) 7 CFR part 3018--New Restrictions on Lobbying
    (viii) 7 CFR part 3019--Uniform Administrative Requirements for 
Grants and Other Agreements with Institutions of Higher Education, 
Hospitals, and Other Nonprofit Organizations
    (ix) 7 CFR part 3021--Government-wide requirements for drug-free 
workplace (financial assistance)
    (x) 7 CFR part 3052--Audits of States, Local Governments, and Non-
profit Organizations
    (xi) 48 CFR part 31--Contract Cost Principles and Procedures of the 
Federal Acquisition Regulations.
    (2) In addition, relevant provisions of the CCC Charter Act (15 
U.S.C. 714 et seq.) and any other statutory provisions that are 
generally applicable to CCC are also applicable to the MAP and the 
regulations set forth in this part.
    (3) MAP Participants must also comply with Title VI of the Civil 
Rights Act of 1964 and related civil rights regulations and policies.
    (4) Other laws and regulations that apply to MAP Participants 
include, but are not limited to:
    (i) 2 CFR part 25--Universal Identifier and Central Contractor 
Registration
    (ii) 2 CFR part 170--Reporting Subaward and Executive Compensation 
Information
    (iii) 2 CFR part 175--Award Term for Trafficking in Persons
    (iv) 2 CFR part 180--OMB Guidelines to Agencies on Governmentwide 
Debarment and Suspension (Nonprocurement)
    (v) 37 CFR part 401.1--Rights to Inventions Made by Nonprofit 
Organizations and Small Business Firms Under Government Grants, 
Contracts, and Cooperative Agreements
    (vi) Executive Order 13224, as amended, Blocking Property and 
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, 
or Support Terrorism
    (c) Under the MAP, CCC may provide grants to eligible U.S. entities 
to conduct certain marketing and promotion activities aimed at 
developing, maintaining, or expanding commercial export markets for 
U.S. agricultural commodities and products. MAP Participants may 
receive assistance for either generic or brand promotion activities. 
While activities generally take place overseas, reimbursable activities 
may also take place in the United States. CCC expects all activities 
that occur in the United States for which MAP reimbursement is sought 
to develop, maintain, or expand the commercial export market for the 
relevant U.S. agricultural commodity in accordance with the MAP 
Participant's approved MAP program. When considering eligible nonprofit 
U.S. trade organizations, CCC gives priority to organizations that have 
the broadest producer representation and affiliated industry 
participation of the commodity being promoted.
    (d) The MAP generally operates on a reimbursement basis.
    (e) CCC's policy is to ensure that benefits generated by MAP 
agreements are broadly available throughout the relevant agricultural 
sector and that no single entity gains an undue advantage. CCC also 
endeavors to enter into MAP agreements covering a broad array of 
agricultural commodity sectors. The MAP is administered by personnel of 
the Foreign Agricultural Service (FAS) acting on behalf of CCC.

[[Page 29500]]

Sec.  1485.11  Definitions.

    For purposes of this subpart the following definitions apply:
    Activity--a specific foreign market development effort undertaken 
by a MAP Participant.
    Administrative expenses or costs-- expenses or costs of 
administering, directing, and controlling an organization that is a MAP 
Participant. Generally, this would include expenses or costs such as 
those related to:
    (1) Maintaining a physical office (including, but not limited to, 
rent, office equipment, office supplies, office d[eacute]cor, office 
furniture, computer hardware and software, maintenance, extermination, 
parking, business cards);
    (2) Personnel (including, but not limited to, salaries, benefits, 
payroll taxes, individual insurance, training);
    (3) Communications (including, but not limited to, phone expenses, 
internet, mobile phones, personal digital assistants, email, mobile 
email devices, postage, courier services, television, radio, walkie 
talkies);
    (4) Management of an organization or unit of an organization 
(including, but not limited to, planning, supervision, supervisory 
travel, teambuilding, recruiting, hiring);
    (5) Utilities (including, but not limited to, sewer, water, 
energy);
    (6) Professional services (including, but not limited to, 
accounting expenses, financial services, investigatory services).
    Approval letter--a document by which CCC informs an applicant that 
its MAP application for a program year has been approved for funding. 
This letter may also approve specific activities and contain terms and 
conditions in addition to the program agreement. This letter requires a 
countersignature by the MAP Participant before it becomes effective.
    Attach[eacute]/Counselor--the FAS employee representing USDA 
interests in the foreign country in which promotional activities are 
conducted.
    Brand participant--a small-sized U.S. for-profit entity, or a U.S. 
agricultural cooperative that owns the brand(s) of the U.S. 
agricultural commodity to be promoted or has the exclusive rights to 
use such brand(s) and that is participating in the MAP brand promotion 
program of another MAP Participant. This definition does not include 
any U.S. agricultural cooperatives that are MAP Participants that apply 
for MAP funds to implement their own brand programs.
    Brand promotion--an activity that involves the exclusive or 
predominant use of a single U.S. company name, or the logo or brand 
name of a single U.S. company, or the brand of a U.S. agricultural 
cooperative, or any activity undertaken by a MAP Participant in the 
brand program.
    CCC--the Commodity Credit Corporation, including any agency or 
official of the United States delegated the responsibility to act on 
behalf of CCC.
    Contribution--an expenditure made by a MAP Participant, the U.S. 
industry, or State agency in support of an approved activity. This 
includes expenditures to be made by entities in the MAP Participant's 
industry in support of the entities' related promotion activities in 
the markets covered by the MAP Participant's agreement.
    Credit memo--a commercial document, also known as a credit 
memorandum, issued by the MAP Participant to a commercial entity that 
owes the MAP Participant a certain sum. A credit memo is used when the 
MAP Participant owes the commercial entity a sum less than the amount 
the entity owes the Participant. The credit memo reflects an offset of 
the amount the MAP Participant owes the entity against the amount the 
entity owes to the MAP Participant.
    Demonstration projects--activities involving the erection or 
construction of a structure or facility or the installation of 
equipment.
    Expenditure--either payment via the transfer of funds or offset 
reflected in a credit memo in lieu of a transfer of funds.
    FAS--Foreign Agricultural Service, USDA.
    FAS Web site--a Web site maintained by FAS providing information on 
MAP. It is currently accessible at www.fas.usda.gov/mos/programs/map.asp.
    Foreign third party--a foreign entity that a MAP Participant works 
with to promote the export of a U.S. agricultural commodity under the 
MAP program.
    Generic promotion--an activity that is not a brand promotion but, 
rather, promotes a U.S. agricultural commodity generally. A generic 
promotion activity may include the promotion of a foreign brand (i.e., 
a brand owned primarily by foreign interests and being used to market a 
commodity or product in a foreign market), if the foreign brand uses 
the promoted U.S. agricultural commodity or product from multiple U.S. 
suppliers. A generic promotion activity may also involve the use of 
specific U.S. company names, logos or brand names. However, in that 
case, the MAP Participant must ensure that all U.S. companies seeking 
to promote such U.S. agricultural commodity in the market have an equal 
opportunity to participate in the activity and that at least two U.S. 
companies participate. In addition, an activity that promotes separate 
items from multiple U.S. companies will be considered a generic 
promotion only if the promotion of the separate items maintains a 
unified theme (i.e., a dominant idea or motif) and style and is 
subordinate to the promotion of the generic theme.
    MAP--the Market Access Program.
    MAP Notice--Market Access Program notices are documents that CCC 
issues for informational purposes. These MAP notices are made available 
electronically at http://www.fas.usda.gov/mos/programs/mnotice.html. 
These notices have no legal effect. They are intended to alert MAP 
Participants of various aspects of CCC's current administration of the 
MAP program. For example, CCC issues MAP notices to alert MAP 
Participants of procedures for requesting advances, applicable federal 
pay scale rates, lists of economic and trade sanctions against certain 
foreign countries, reporting formats and computer codes to use with the 
UES.
    MAP Participant or Participant--an entity that has entered into a 
MAP program agreement with CCC.
    Market--the country or countries targeted by an activity.
    Notification--a document from the MAP Participant by which the MAP 
Participant proposes to CCC changes to the activities and/or funding 
levels in an approved MAP program agreement and/or approval letter.
    Product samples--a representative part of a larger whole promoted 
commodity or group of promoted commodities. Product samples include all 
forms of a promoted commodity (e.g., fresh or processed), independent 
of the ultimate utilization of the sample. Product samples might be 
used in support of international marketing activities including, but 
not limited to, displays, food process testing, cooking demonstrations, 
or trade and consumer tastings.
    Program agreement--a document entered into between CCC and a MAP 
Participant setting forth the terms and conditions of approved 
activities under MAP, including any subsequent amendments to such 
agreement.
    Program year--Unless otherwise agreed in writing between CCC and a 
MAP Participant, a 12-month period during which a MAP Participant can 
undertake activities consistent with this subpart and its program 
agreement and approval letter with CCC.
    Promoted commodity--a U.S. agricultural commodity the sale of

[[Page 29501]]

which is the intended result of a promotion activity.
    Sales and trade relations expenditures (STRE)--expenditures made on 
breakfast, lunch, dinner, receptions, and refreshments at approved 
activities; miscellaneous courtesies such as checkroom fees, taxi fares 
and tips; and decorations for a special promotional occasion.
    Sales team--a group of individuals engaged in an approved activity 
intended to result in specific sales.
    Small-sized entity--a U.S. commercial entity that meets the small 
business size standards published at 13 CFR part 121, Small Business 
Size Regulations.
    SRTG--the acronym for State Regional Trade Group. An SRTG is a 
nonprofit association of state-funded agricultural promotion agencies.
    Supergrade--a salary level above the reimbursable salary range 
generally allowable under MAP, which CCC may approve on a case by case 
basis. This salary level is available only for certain non-U.S. 
employees who direct MAP Participants' overseas offices.
    Temporary contractor--a contractor, typically a consultant or other 
highly paid professional, that is hired on a short term basis to assist 
in the performance of an activity.
    Trade team--a group of individuals engaged in an approved activity 
intended to promote the interests of an entire agricultural sector 
rather than to result in specific sales by any of its members.
    UES Web site--a Web site maintained by FAS through which applicants 
may apply online to MAP and any other USDA market development program. 
The Web site is currently accessible at www.fas.usda.gov/mos/ues/unified.asp.
    Unified Export Strategy (UES)--is a standardized online Internet 
application developed by USDA and available for use by entities to 
apply to any USDA market development program, including the MAP.
    U.S. agricultural commodity--any agricultural commodity, including 
any food, feed, fiber, forestry product, livestock, or insect of U.S. 
origin or fish harvested from a U.S. aquaculture farm or harvested by a 
vessel as defined in Title 46 of the United States Code, in waters that 
are not waters (including the territorial sea) of a foreign country, 
and any product thereof, excluding tobacco. An agricultural commodity 
shall be considered to be U.S. origin if it is comprised of at least 50 
percent by weight, exclusive of added water, of agricultural 
commodities grown or raised in the United States.
    USDA--the United States Department of Agriculture.
    U.S. for-profit entity--a firm, association, or other entity 
organized or incorporated, located and doing business for profit in the 
United States, and engaged in the export or sale of a U.S. agricultural 
commodity.


Sec.  1485.12  Participation eligibility.

    To participate in the MAP, an entity shall be:
    (a) A nonprofit U.S agricultural trade organization;
    (b) A nonprofit SRTG;
    (c) A U.S. agricultural cooperative; or
    (d) A State agency.


Sec.  1485.13  Application process.

    (a) General application requirements. CCC will periodically publish 
a Notice in the Federal Register that it is accepting applications for 
participation in MAP. Applications shall be submitted in accordance 
with the terms and requirements specified in the Notice and in these 
regulations. Applicants are encouraged to submit a UES through the UES 
Internet Web site, but are not required to do so. Applicants may apply 
to conduct a generic promotion program and/or a brand promotion program 
that provides MAP funds to brand participants for branded promotion. An 
applicant who is a U.S. agricultural cooperative may also apply for 
funds to conduct its own brand promotion program.
    (1) Applicant and program information.
    (i) All applications shall contain:
    (A) The name, address, and Internet location of the home page of 
the applicant organization;
    (B) The name of the applicant's Chief Executive Officer;
    (C) The name, telephone number, fax number, and email address of 
the applicant's primary contact person;
    (D) The name(s) of the person(s) responsible for managing the 
proposed program;
    (E) A description of the applicant organization, including the type 
of organization of the applicant (e.g., nonprofit SRTG), its mission, 
and the statutory authorities by which it is constituted and under 
which it operates, if applicable;
    (F) Tax exempt identification number of the applicant, if 
applicable;
    (G) Beginning and ending dates for proposed program year (mm/dd/yy-
mm/dd/yy);
    (H) Dollar amount of CCC resources requested for generic 
activities;
    (I) Dollar amount of CCC resources requested for brand activities;
    (J) Total dollar amount of CCC resources requested;
    (K) Percentage of CCC resources requested for general 
administrative expenses;
    (L) A Dun and Bradstreet DUNS number for the applicant;
    (M) A description of the applicant organization's membership and 
membership criteria;
    (N) A list of organizations affiliated with the applicant, 
including parent organizations, subsidiaries, and partnerships;
    (O) A description of the applicant's management and administrative 
capability;
    (P) A description of the applicant's prior export promotion 
experience;
    (Q) Value, in U.S. dollars, of proposed contributions from the 
applicant or the applicant's proposed contribution stated as a 
percentage of the total dollar amount of CCC resources requested; and
    (R) Value, in U.S. dollars, of proposed contributions from other 
sources.
    (ii) [Reserved]
    (2) Program justification.
    (i) All applications shall contain:
    (A) A description of the promoted U.S. agricultural commodity(s), 
its harmonized tariff classification, the applicable commodity 
aggregate code (available from the UES Web site) and the percentage of 
U.S. origin content by weight, exclusive of added water;
    (B) A description of the anticipated supply and demand situation 
for the promoted U.S. agricultural commodity(s);
    (C) The volume and value of exports of the promoted U.S. 
agricultural commodity(s) to the targeted markets for the most recent 
3-year period;
    (D) If the proposal is for 2 or more years, an explanation why the 
proposal should be funded on a multi-year basis; and
    (E) A certification and, if requested by CCC, a written explanation 
supporting the certification that any funds received will supplement, 
but not supplant, any private or third-party funds or other 
contributions to program activities. An explanation, if one is 
requested, shall indicate why the applicant is unlikely to carry out 
the activities without Federal financial assistance. In determining 
whether Federal funds would supplement or supplant private or third-
party funds or contributions, CCC will consider the applicant's prior 
overall marketing budget in the MAP program from year-to-year, 
variations in promotional strategies within a country, and new markets.
    (ii) [Reserved]
    (3) Proposed program's strategic plan.
    (i) All applications shall include a strategic plan that contains:
    (A) A description of overall long term strategic goals to be 
advanced by the

[[Page 29502]]

proposed activities for the ensuing 3-5 years;
    (B) An explanation of the organization's strategic planning process 
and identification of priority target markets, including a summary of 
proposed budgets by country and commodity aggregate code;
    (C) A description of the world market situation for the exported 
U.S. agricultural commodity(s);
    (D) A description of competition from other exporters;
    (E) An evaluation plan describing the applicant's goals and the 
applicant's plans for monitoring and evaluating performance towards 
achieving these goals. This evaluation plan should set forth specific 
goals and benchmarks set at regular intervals to be used to identify 
results against identified constraints and opportunities and to measure 
progress made in the target market. Evaluation of a proposed MAP 
program's effectiveness will depend on a clear statement by the 
applicant of goals, method of achievement, and expected results of 
programming at regular intervals. The overall goal of the MAP and of 
individual Participants' programming is to achieve or maintain sales 
that would not have occurred in the absence of MAP funding. A MAP 
Participant may modify and resubmit this plan for re-approval at any 
time during the program year.
    (F) For each target country, 5 years or as many years as are 
available of:
    (1) Historical U.S. export data;
    (2) U.S. market share; and
    (3) MAP funds received by the applicant;
    (G) For each target country, 3 years of projected U.S. export data 
and U.S. market share;
    (H) Country strategy, including market constraint(s) impeding U.S. 
exports (e.g., trade barriers) or opportunities present and the 
strategy proposed to overcome constraints or take advantage of the 
opportunities, previous activities in the country, and the projected 
impact of the proposed program on U.S. exports;
    (I) A justification for any proposed overseas office, including a 
staffing plan listing job titles, position descriptions, salary ranges, 
any request for approval of supergrade salaries, and an itemized 
administrative budget;
    (J) A description of any demonstration projects, if applicable;
    (K) Data summarizing the applicant's historical and projected 
exports, market share, and MAP budgets of the promoted U.S. 
agricultural commodity(s);
    (L) A written presentation of all proposed activities including:
    (1) A short description of the relevant market constraint or 
opportunity;
    (2) A budget for each proposed activity, identifying the source of 
funds.
    (ii) Applications for brand promotion assistance shall also include 
in their strategic plans:
    (A) A description of how the brand promotion program will be 
publicized to U.S. industry; and
    (B) The criteria that will be used to allocate funds to U.S. for-
profit entities and U.S. agricultural cooperatives.
    (b) CCC may request any additional information that it deems 
necessary to evaluate an application, including, but not limited to, 
performance measurement information.
    (c) Special rules governing demonstration projects funded with CCC 
resources.
    (1) CCC will consider proposals for demonstration projects, 
provided:
    (i) No more than one such demonstration project per constraint is 
undertaken within a market;
    (ii) The constraint to be addressed in the target market is a lack 
of technical knowledge or expertise;
    (iii) The demonstration project is a practical and cost effective 
method of overcoming the constraint; and
    (iv) A third-party must participate in such project through a 
written agreement with the MAP Participant.
    (d) Universal Identifier and Central Contractor Registration (CCR)
    (1) In accordance with 2 CFR Part 25, each entity that applies to 
the MAP program and does not qualify for an exemption under 2 CFR 
25.110 must:
    (i) Be registered in the CCR prior to submitting an application or 
plan;
    (ii) Maintain an active CCR registration with current information 
at all times during which it has an active Federal award or an 
application or plan under consideration by CCC; and
    (iii) Provide its DUNS number in each application or plan it 
submits to CCC.
    (2) [Reserved]
    (e) Reporting Subaward and Executive Compensation Information. In 
accordance with 2 CFR Part 170, each entity that applies to the MAP 
program and does not qualify for an exception under 2 CFR 170.110(b) 
must ensure it has the necessary processes and systems in place to 
comply with the applicable reporting requirements of 2 CFR Part 170 
should it receive MAP funding.


Sec.  1485.14  Application review and formation of agreements.

    (a) General. CCC will, subject to the availability of funds, 
approve those applications that it considers to present the best 
opportunity for developing, maintaining, or expanding export markets 
for U.S. agricultural commodities. The selection process, by its 
nature, involves the exercise of judgment. CCC's choice of Participants 
and proposed promotion projects requires that it consider and weigh a 
number of factors, some of which cannot be mathematically measured--
e.g., market opportunity, market strategy, and management capability. 
CCC may require that an applicant participate in the MAP through 
another MAP Participant or applicant.
    (b) Application review criteria. In assessing the likelihood of 
success of the applications it receives and deciding which it will 
approve, CCC will follow results-oriented management principles and 
consider the following criteria:
    (1) The effectiveness of program management;
    (2) Soundness of accounting procedures;
    (3) The nature of the applicant organization. With respect to 
nonprofit U.S. trade organizations, preference will be given to those 
organizations with the broadest base of producer representation of and 
affiliated industry participation for the commodity being promoted;
    (4) Prior export promotion experience;
    (5) Appropriateness of staffing;
    (6) Adequacy of the applicant's strategic plan in the following 
categories;
    (i) Description of target market conditions;
    (ii) Description of and plan for addressing market constraints and 
opportunities;
    (iii) Breadth of industry participation in strategic planning 
process;
    (iv) Strategic prioritization identified in proposed plan;
    (v) Export volume and value and market share goals in each target 
country;
    (vi) Description of evaluation plan and suitability of the plan for 
performance measurement; and
    (vii) Past program results and/or evaluations, including program 
success stories.
    (c) Allocation factors. CCC determines which applications to 
approve and develops preliminary recommended funding levels for each 
approved application based on the following factors, in addition to 
those in paragraph (b) of this section. CCC determines final funding 
levels after allocating available funds to approved applications on the 
basis of criteria that will be fully described in each program year's 
MAP announcement in the Federal Register:
    (1) Size of the budget request in relation to projected value of 
exports;

[[Page 29503]]

    (2) Where applicable, size of the budget request in relation to 
actual value of exports in prior years;
    (3) Where applicable, Participant's past projections of exports 
compared with actual exports;
    (4) Level of contributions by the applicant and by all other 
sources;
    (5) Market share goals in target country(ies);
    (6) The percentage by weight, exclusive of added water, of U.S. 
agricultural commodities contained in the promoted products;
    (7) The degree of value-added processing in the United States; and
    (8) Proposed MAP-funded general administrative and overhead costs 
compared to proposed MAP-funded direct promotional costs.
    (d) Approval decision.
    (1) CCC will approve those applications that it determines best 
satisfy the criteria and factors specified above.
    (2) Notification of decision. CCC will notify each applicant in 
writing of the final disposition of its application.
    (e) Formation of agreements. CCC will send a program agreement (or 
amendment to an existing program agreement), an approval letter, and a 
signature card to each approved applicant. The program agreement or 
amendment and the approval letter will outline which activities and 
budgets are approved and will specify any special terms and conditions 
applicable to a MAP Participant's program, including any requirements 
with respect to contributions and program evaluations. An applicant 
that decides to accept the terms and conditions contained in the 
program agreement or amendment and the approval letter must so indicate 
by having its Chief Executive Officer (CEO) or designee sign the 
program agreement or amendment and the approval letter and submit these 
to CCC. Final agreement shall occur when the program agreement or 
amendment and the approval letter are signed by both parties.
    (f) Signature cards. The MAP Participant shall designate at least 
two individuals in its organization to sign program agreements and 
amendments, approval letters, reimbursement claims, and advance 
requests. The MAP Participant shall submit the signature card signed by 
those designated individuals and by the MAP Participant's CEO to CCC. 
The Participant shall immediately notify CCC of any changes in 
signatories and shall submit a revised signature card accordingly.
    (g) UES ID and passwords. CCC will provide each MAP Participant 
with IDs and passwords for the UES Web site, as necessary. MAP 
Participants shall protect these IDs and passwords in accordance with 
USDA's information technology policies that CCC will provide to MAP 
Participants. MAP Participants shall immediately notify CCC whenever a 
person who possesses the ID and password information no longer needs 
such information or a person who is not authorized gains such 
information.
    (h) A MAP Participant through which small-sized U.S. for-profit 
entities are participating in the MAP program shall obtain annual 
certifications from all such entities that they are small-sized 
entities or U.S. agricultural cooperatives as defined in these 
regulations. The Participant shall retain these certifications in 
accordance with the recordkeeping requirements of this subpart.
    (i) Changes to activities and funding.
    (1) Adding a new activity.
    (i) A MAP Participant may not conduct a new activity without first 
obtaining an approved activity budget for such change. To request 
approval of such activity budget, the MAP Participant shall submit a 
notification to CCC.
    (ii) A notification for a new activity shall provide an activity 
justification and identify any related adjustments to the approved 
strategic plan, including changes in market, constraint, or opportunity 
that the activity proposes to address. The notification shall contain 
the activity description, the proposed budget, and a justification of 
transfer of funds.
    (iii) After receipt of the notification, CCC will inform the MAP 
Participant via the UES Web site whether the requested budget is 
approved.
    (2) Modifying existing activities and their funding levels.
    (i) A MAP Participant desiring to increase the funding level for 
existing, approved activities addressing a single constraint or 
opportunity by more than $25,000 or 25 percent of the approved funding 
level, whichever is greater, must first submit a notification 
explaining the adjustment to CCC before making such change.
    (ii) A MAP Participant may make significant adjustments below that 
threshold to the funding levels for existing, approved activities 
without prior notification to CCC, only if it submits a notification 
explaining the adjustments to CCC no later than 30 days after the 
change. Minor adjustments to existing, approved activities and/or 
funding levels do not require notification.
    (iii) Notifications shall describe the activity, changes to the 
activity, the existing funding level, the proposed funding level, and a 
justification for transfer of funds, if applicable.


Sec.  1485.15  Operational procedures for brand programs.

    (a) Where CCC approves an application by a MAP Participant to run a 
brand promotion program that will include brand Participants, the MAP 
Participant shall establish brand program operational procedures. The 
MAP Participant annually shall submit to CCC for approval its proposed 
brand program operational procedures for such program year. CCC will 
notify all new and existing MAP Participants in writing in each 
Participant's annual approval letter and through the FAS Web site as to 
applicable submission dates for and dates for approvals of brand 
program operation procedures. Such procedures shall include, at a 
minimum, a brand program application, application procedures, 
application review criteria, brand participant eligibility 
requirements, a participation agreement, reimbursement requirements, 
compliance requirements, reporting and recordkeeping requirements, 
employment practices, financial management requirements, contracting 
procedures, and evaluation requirements.
    (b) The MAP Participant shall not enter into any participation 
agreements with brand participants nor shall it implement any MAP brand 
activities for the applicable program year unless and until CCC has 
communicated in writing its approval of the proposed operational 
procedures to the MAP Participant.
    (c) Participation agreements between MAP Participants and brand 
participants. Where CCC approves a MAP Participant's application to run 
a brand promotion program that will include brand participants, the MAP 
Participant shall enter into participation agreements with brand 
participants. These agreements must:
    (1) Specify a time period for such brand promotion and require that 
all brand promotion expenditures be made within the MAP Participant's 
approved program year;
    (2) Make no allowance for extension or renewal;
    (3) Limit reimbursable expenditures to those made in countries and 
for activities approved in the brand participant's activity plan;
    (4) Specify the percentage of promotion expenditures that will be 
reimbursed, reimbursement procedures, and documentation requirements;

[[Page 29504]]

    (5) Include a written certification by the brand participant that 
it either owns the brand of the product it will promote or has 
exclusive rights to promote the brand in each of the countries in which 
promotion activities will occur;
    (6) Require that all product labels, promotional material, and 
advertising will identify the origin of the U.S. agricultural commodity 
as ``American'', ``Product of the United States of America'', ``Product 
of the U.S.'', ``Product of the U.S.A.'', ``Product of America'', 
``Grown in the United States of America'', ``Grown in the U.S.'', 
``Grown in the U.S.A.'', ``Grown in America'', ``Made in the United 
States of America,'' ``Made in the U.S.'', ``Made in the U.S.A.'', 
``Made in America'', or product of, grown in or made in any state or 
territory of the United States of America spelled out in its entirety, 
or other U.S. regional designation if approved in advance by CCC; that 
such origin identification will be conspicuously displayed in a manner 
easily observed as identifying the origin of the product; and that such 
origin identification will conform, to the extent possible, to the U.S. 
standard of \1/6\ inch (.42 centimeters) in height based on the lower 
case letter ``o''. The use of the above terms as a descriptor or in the 
name of the product (e.g., Texas style chili, Bob's American Pizza) 
does not satisfy the product origin requirement. Phrases ``product of 
'', ``grown in'' or ``made in'' are encouraged, but not required. A MAP 
Participant may request an exemption from this requirement on a case-
by-case basis. All such requests shall be in writing and include 
justification satisfactory to CCC that this labeling requirement would 
hinder a MAP Participant's promotional efforts. CCC will determine, on 
a case by case basis, whether sufficient justification exists to grant 
an exemption from the labeling requirement. In addition, CCC may 
temporarily waive this requirement where CCC has determined that such 
labeling will likely harm sales rather than help them. Such 
determinations will be announced to MAP Participants via a MAP notice 
issued on FAS' Web site;
    (7) Include a written certification by the brand participant that 
it is either a small-sized entity as defined in this subpart or a U.S. 
agricultural cooperative;
    (8) Require that the brand participant submit to the MAP 
Participant a statement certifying that any Federal funds received will 
supplement, but not supplant, any private or third party funds or other 
contributions to program activities; and
    (9) Require the brand participant to maintain all original records 
and documents relating to program activities for 5 calendar years 
following the end of the applicable program year and make such records 
and documents available upon request to authorized officials of the 
U.S. Government.
    (d) MAP Participants may not provide assistance to a single entity 
including a entity reincorporated or re-organized under the same or 
different name if the reincorporated or re-organized entity is 
substantially similar to the pre-existing entity, for brand promotion 
in a single country for more than 5 years. Such 5 years do not need to 
be consecutive. Such 5-year period shall not begin prior to the 1994 
program year or the brand participant's first program year, whichever 
is later. In limited circumstances, CCC may waive the 5 year limitation 
if CCC determines that further assistance is in the best interests of 
the MAP. CCC shall, at its discretion, decide whether a reincorporated 
or re-organized entity is substantially similar to the pre-existing 
entity for purposes of applying this 5-year rule. Brand participants' 
participation in certain international trade shows in foreign countries 
will not be considered when determining such brand participants' time 
in country for purposes of the 5 year graduation requirement. Such 
shows must meet two requirements: They are food or agricultural shows, 
with no less than 30% of exhibitors selling food or agricultural 
products, and they are international shows, meaning they target buyers, 
distributors and the like from more than one foreign country and no 
less than 15% of each show's visitors are from countries other than the 
host country. CCC will compile a list of international trade shows that 
CCC exempts from the graduation requirement and such list will be 
announced to MAP Participants via a MAP notice issued on FAS' Web site.


Sec.  1485.16  Contribution rules.

    (a) In MAP generic promotion programs, a MAP Participant shall 
contribute a total amount in goods, services, and/or cash equal to at 
least 10 percent of the value of resources to be provided by CCC for 
all generic promotion activities proposed to be undertaken by the MAP 
Participant.
    (b) In MAP brand promotion programs, a MAP Participant conducting 
its own brand promotion or a brand participant shall contribute at 
least 50 percent of the total eligible expenditures made on each 
approved brand promotion.
    (c) A MAP Participant must use its own funds and may not use MAP 
program funds to pay any administrative costs of the MAP Participant's 
U.S. office(s), including legal fees, except as set forth in this 
subpart. Where the MAP Participant uses its own funds to pay for 
administrative costs, such costs may be counted in calculating the 
amount of contributions the MAP Participant contributes to MAP generic 
or brand promotion programs.
    (d) Eligible contributions.
    (1) In calculating the amount of contributions that it will make, 
and the contributions that the U.S. industry (including expenditures to 
be made by entities in the applicant's industry in support of the 
entities' related promotion activities in the markets covered by the 
applicant's application) or State agency will make, the MAP applicant 
may include the costs listed under paragraph (d)(2) of this section if:
    (i) Expenditures will be made in furtherance of an approved 
activity, and
    (ii) The contributor has not been and will not be reimbursed by any 
source for such costs.
    (2) Subject to paragraph (d)(1) of this section, as well as 
applicable cost principles (e.g., 2 CFR Parts 220, 225, and 230) to the 
extent these principles do not directly conflict with the provisions of 
this subpart, eligible contributions are:
    (i) Cash;
    (ii) Compensation paid to personnel;
    (iii) The cost of acquiring materials, supplies or services;
    (iv) The cost of office space;
    (v) A reasonable and justifiable proportion of general 
administrative costs and overhead;
    (vi) Payments for indemnity and fidelity bond expenses;
    (vii) The cost of business cards that target a foreign audience;
    (viii) The cost of seasonal greeting cards;
    (ix) Fees for office parking;
    (x) The cost of subscriptions that are of a technical, economic, or 
marketing nature and that are relevant to the approved activities of 
the MAP Participant;
    (xi) The cost of activities conducted overseas;
    (xii) Credit card fees;
    (xiii) The cost of any independent evaluation or audit that is not 
required by CCC to ensure compliance with program agreement or 
regulatory requirements;
    (xiv) The cost of giveaways, awards, prizes and gifts;
    (xv) The cost of product samples;
    (xvi) Fees for participating in U.S. government sponsored or 
endorsed export promotion activities;

[[Page 29505]]

    (xvii) The cost of air and local travel in the United States;
    (xviii) Payment of employee's or contractor's share of personal 
taxes;
    (xix) STRE and the cost associated with trade shows, seminars, and 
entertainment conducted in the United States;
    (xx) Other administrative expenses (e.g., supervisory travel from 
the U.S. to an overseas office); and
    (xxi) The cost of any activity expressly listed as reimbursable in 
this subpart.
    (3) The following are not eligible contributions:
    (i) Any portion of salary or compensation of an individual who is 
the target of an approved promotional activity;
    (ii) Any expenditure, including that portion of salary and time 
spent, related to promoting membership in the Participant organization 
(sometimes referred to in the industry as ``backsell'');
    (iii) Any land costs other than allowable costs for office space;
    (iv) Depreciation;
    (v) The cost of refreshments and related equipment provided to 
office staff;
    (vi) The cost of insuring articles owned by private individuals;
    (vii) The cost of any arrangement that has the effect of reducing 
the selling price of a U.S. agricultural commodity;
    (viii) The cost of product development, product modifications, or 
product research;
    (ix) Slotting fees or similar sales expenditures;
    (x) Membership fees in clubs and social organizations; and
    (xi) Any expenditure for an activity prior to CCC's approval of 
that activity.
    (4) CCC shall determine, at CCC's discretion, whether any cost not 
expressly listed in this section may be included by the MAP Participant 
as an eligible contribution.


Sec.  1485.17  Reimbursement rules.

    (a) A MAP Participant may seek reimbursement for an eligible 
expenditure if:
    (1) The expenditure was made in furtherance of an approved 
activity; and
    (2) The Participant has not been and will not be reimbursed for 
such expenditure by any other source.
    (b) Subject to paragraphs (a) and (d) of this section, as well as 
applicable cost principles (e.g., 2 CFR Parts 220, 225, and 230) to the 
extent these principles do not directly conflict with the provisions of 
this subpart, for either brand or generic promotion activities, CCC 
will reimburse, in whole or in part, the cost of:
    (1) Production and placement of advertising, in print, electronic 
media, billboards, or posters, which may include advertising the 
availability of price discounts, except that advertising associated 
with a coupon or price discount for the MAP promoted product is not 
reimbursable. If advertising is related to both coupons or price 
discounts for products other than the MAP Participant's promoted 
products as well as for MAP-promoted products, expenditures for such 
advertising will not be reimbursed in whole or in part (e.g., 
expenditures may not be prorated and submitted for reimbursement). 
Electronic media includes, but is not limited to, radio, television, 
electronic mail, internet, telephone, text messaging, and podcasting;
    (2) Production and distribution of banners, recipe cards, table 
tents, shelf talkers, and other similar point of sale materials;
    (3) Direct mail advertising;
    (4) In-store and food service promotions, product demonstrations to 
the trade and to consumers, and distribution of product samples (but 
not the purchase of the product samples);
    (5) Temporary displays and rental of space for temporary displays;
    (6) Expenditures, other than travel expenditures, associated with 
seminars and educational training, whether conducted in the United 
States or outside the United States;
    (7) Subject to Sec.  1485.17(b)(18), expenditures, other than 
travel expenditures, associated with retail, trade and consumer 
exhibits and shows, whether held outside or inside the United States, 
including participation fees, booth construction, transportation of 
related materials, rental of space and equipment, and duplication of 
related printed materials. However, with regard to non-travel 
expenditures associated with retail, trade and consumer exhibits and 
shows held inside the United States, such expenditures are reimbursable 
only if the exhibit or show is: (1) a food or agricultural show with no 
less than 30% of exhibitors selling food or agricultural products, (2) 
an international show that targets buyers, distributors and the like 
from more than one foreign country and no less than 15% of its visitors 
are from countries other than the host country, and (3) an exhibit or 
show that the MAP Participant has not participated in within the last 
three years using funds from a source other than the MAP. CCC will 
compile a list of approved retail, trade and consumer exhibits and 
shows held inside the United States for which MAP reimbursement is 
available and such list will be announced to MAP Participants via a MAP 
notice issued on FAS' Web site;
    (8) Subject to Sec.  1485.17(b)(18), international travel 
expenditures, not to exceed the full fare economy rate, including any 
fees for modifying the originally purchased airline ticket, per diem, 
passports, visas and inoculations, as allowed under the U.S. Federal 
Travel Regulations (41 CFR parts 301 through 304), for no more than two 
representatives of a single brand participant (or MAP Participant 
directly running its own brand program) to exhibit their company's (or 
cooperative's) products at a retail, trade, or consumer exhibit or show 
held outside the United States. Representatives may include employees 
and board members of private companies, employees or members of 
cooperatives, or any broker, consultant, or marketing representative 
contracted by the company or cooperative to represent the company or 
cooperative in sales transactions;
    (9) Subscriptions that are of a technical, economic, or marketing 
nature and that are relevant to the approved activities of the MAP 
Participant;
    (10) Demonstrators, interpreters, translators, receptionists, and 
similar temporary workers who help with the implementation of 
individual promotional activities, such as trade shows, in-store 
promotions, food service promotions, and trade seminars;
    (11) Giveaways, awards, prizes, gifts and other similar promotional 
materials, subject to such reimbursement limitation as CCC may 
determine and announce in writing to MAP Participants via a MAP notice 
issued on FAS' Web site. Reimbursement is available only when: (1) The 
items are described in detail with a per unit cost in an approved 
strategic plan and (2) distribution of the promotional item is not 
contingent upon the consumer, or other target audience, purchasing a 
good or service to receive the promotional item;
    (12) The design and production of packaging, labeling or origin 
identification, to be used during the program year in which the 
expenditure is made, if such packaging, labeling or origin 
identification is necessary to meet the importing requirements of a 
foreign country;
    (13) The design, production, and distribution of coupons for 
products other than the MAP Participant's promoted products. If such 
activities include both coupons or price discounts for products other 
than the MAP Participant's promoted products as well as for MAP-
promoted products,

[[Page 29506]]

expenditures for such activities will not be reimbursed in whole or in 
part (e.g., expenditures may not be prorated and submitted for 
reimbursement);
    (14) An audit of a MAP Participant as required by Office of 
Management and Budget Circular A-133 if the MAP is the MAP 
Participant's largest source of Federal funding;
    (15) The translation of written materials as necessary to carry out 
approved activities;
    (16) Expenditures associated with developing, updating, and 
servicing Web sites on the Internet that clearly target a foreign 
audience;
    (17) International travel expenditures, not to exceed the full fare 
economy rate, including any fees for modifying the originally purchased 
airline ticket, per diem, passports, visas and inoculations, as allowed 
under the U.S. Federal Travel Regulations (41 CFR parts 301 through 
304), incurred for a foreign trade mission conducted outside the United 
States that is an activity under an approved branded program and that 
has met the following conditions:
    (i) Trade mission travel for company (or cooperative) 
representatives was identified as a separate approved activity in the 
MAP Participant's UES;
    (ii) The trade mission included representatives, as defined in 
Sec.  1485.17(b)(8), from a minimum of five different companies (or 
cooperatives), and no more than two representatives from each 
participating company (or cooperative);
    (iii) The appropriate FAS overseas office supported the trade 
mission by dedicating meaningful funding or other resources (such as 
facilities or staff time) to the activity; and
    (iv)(A) The MAP Participant with the approved brand program 
produced an itinerary or agenda for the trade mission that demonstrated 
that company (or cooperative) representatives would be engaged for a 
minimum of 6 hours per day (except for the first and last days of the 
mission) in trade mission activities that include, at a minimum, each 
of the following:
    (1) A product showcase where the FAS overseas office approved an 
invitation list of qualified buyers;
    (2) Pre-arranged one-on-one business meetings; and
    (3) Evaluation and feedback sessions with FAS staff and trade 
mission sponsors.
    (B) Reimbursement is conditional on the MAP Participant having 
notified in writing the Attach[eacute]/Counselor in the destination 
country in advance of the travel;
    (18) Where USDA has sponsored or endorsed a U.S. pavilion at a 
retail, trade and consumer exhibit or show, whether held outside or 
inside the United States, MAP funds may be used to reimburse the travel 
and/or non-travel expenditures of only those MAP Participants located 
within the U.S. pavilion. Such expenditures must also adhere to the 
standard terms and conditions of the U.S. pavilion organizer. Upon 
written request, CCC may temporarily waive this subsection, on a case 
by case basis, where: the trade show is segregated into product 
pavilions, or a company's distributor or importer is located outside 
the U.S. pavilion. Such waiver will be provided to the MAP Participant 
in writing; and
    (19) Contracts with U.S. based organizations when the only 
contracted service such organizations provide to a MAP Participant is 
carrying out a specific market promotion activity in the United States 
directed to a foreign audience (e.g., a trade mission of foreign buyers 
coming to the United States to visit U.S. exporters). Such contracts 
may be reimbursable as a direct promotional expense. If a U.S. based 
organization provides administrative services to the MAP Participant's 
domestic home office during a program year, any direct promotional 
services such organization provides to the Participant, whether for the 
Participant's domestic or overseas offices, during the same program 
year are not reimbursable.
    (c) Subject to paragraphs (a) and (d) of this section, but for 
generic promotion activities only, CCC will also reimburse, in whole or 
in part, the cost of:
    (1) Compensation and allowances for housing, educational tuition, 
and cost of living adjustments paid to a U.S. citizen employee or a 
U.S. citizen contractor stationed overseas, except CCC will not 
reimburse that portion of:
    (i) The total of compensation and allowances that exceed 125 
percent of the level of a GS-15 Step 10 salary for U.S. Government 
employees, and
    (ii) Allowances that exceed the rate authorized for U.S. Embassy 
personnel;
    (2) Approved supergrade salaries for non-U.S. citizens and non-U.S. 
contractors stationed overseas;
    (3) Compensation of non-U.S. citizen staff employees or non-U.S. 
contractors stationed overseas subject to the following limitations:
    (i) Where there is a local U.S. Embassy Foreign Service National 
(FSN) salary plan, CCC will not reimburse any portion of such 
compensation that exceeds the compensation prescribed for the most 
comparable position in the FSN salary plan, except for approved 
supergrades, or
    (ii) Where an FSN salary plan does not exist, CCC will not 
reimburse any portion of such compensation that exceeds locally 
prevailing levels, which the MAP Participant shall document by a salary 
survey or other means, except for approved supergrades;
    (4) A retroactive salary adjustment for non-U.S. citizen staff 
employees or non-U.S. contractors stationed overseas that conforms to a 
change in FSN salary plans, effective as of the date of such change;
    (5) Accrued annual leave as of the time employment is terminated or 
as of such time as required by local law;
    (6) Overtime paid to clerical staff of approved MAP-funded overseas 
offices;
    (7) Temporary contractor fees for contractors stationed overseas, 
except CCC will not reimburse any portion of any such fee that exceeds 
the daily gross salary of a GS-15, Step 10 for U.S. Government 
employees in effect on the date the fee is earned, unless a bidding 
process reveals that such a contractor is not available at or below 
that salary rate;
    (8)(i) Subject to Sec.  1485.17(b)(18), international travel 
expenditures, not to exceed the full fare economy rate, including any 
fees for modifying the originally purchased airline ticket, per diem, 
passports, visas and inoculations, for activities held outside the 
United States or in the United States, as allowed under the U.S. 
Federal Travel Regulations (41 CFR parts 301 through 304), except that 
if the activity is participation in a retail, trade, or consumer 
exhibit or show held inside the United States, international travel 
expenditures are covered only if the exhibit or show is: (1) A food or 
agricultural show with no less than 30% of exhibitors selling food or 
agricultural products, (2) an international show that targets buyers, 
distributors and the like from more than one foreign country and no 
less than 15% of its visitors are from countries other than the host 
country, and (3) an exhibit or show that the MAP Participant has not 
participated in within the last three years using funds from a source 
other than the MAP. CCC will compile a list of approved retail, trade 
and consumer exhibits and shows held inside the United States for which 
MAP reimbursement is available and such list will be announced to MAP 
Participants via a MAP notice issued on FAS' Web site.
    (ii) CCC generally will not reimburse any portion of air travel, 
including any fees for modifying the originally purchased ticket, in 
excess of the full fare economy rate or when the MAP Participant fails 
to notify the Attach[eacute]/Counselor in the destination country in 
advance of the travel, unless the CCC determines it was impractical to 
provide such notice. If a traveler flies in

[[Page 29507]]

business class or a different premium class, the basis for 
reimbursement will be the full fare economy class rate for the same 
flight and the MAP Participant shall provide documentation establishing 
such full fare economy class rate to support its reimbursement claim. 
If economy class is not offered for the same flight or if the traveler 
flies on a charter flight, the basis for reimbursement will be the 
average of the full fare economy class rate for flights offered by 
three different airlines between the same points on the same date and 
the MAP Participant shall provide documentation establishing such 
average of the full fare economy class rates to support its 
reimbursement claim.
    (iii) In very limited circumstances, the MAP Participant may be 
reimbursed for air travel up to the business class rate (i.e., a 
premium class rate other than the first class rate) upon prior written 
approval by CCC. Such circumstances are:
    (A) Regularly scheduled flights between origin and destination 
points do not offer economy class (or equivalent) airfare and the MAP 
Participant receives written documentation from its travel agent to 
that effect at the time the tickets are purchased;
    (B) Business class air travel is necessary to accommodate an 
eligible traveler's disability. Such disability must be substantiated 
in writing by a physician; and
    (C) An eligible traveler's origin and/or destination are outside of 
the continental United States and the scheduled flight time, beginning 
with the scheduled departure time, ending with the scheduled arrival 
time, and including stopovers and changes of planes, exceeds 14 hours. 
In such case, per diem and other allowable expenses will also be 
reimbursable for the day of arrival. However, no expenses will be 
reimbursable for a rest period or for any non-work days (e.g., 
weekends, holidays, personal leave, etc.) immediately following the 
date of arrival.
    (iv) Alternatively, in lieu of reimbursing up to the business class 
rate in such circumstances, CCC will reimburse economy class airfare 
plus per diem and other allowable travel expenses related to a rest 
period of up to 24 hours, either en route or upon arrival at the 
destination. For a trip with multiple destinations, each origin/
destination combination will be considered separately when applying the 
14 hour rule for eligibility of reimbursement of business class travel 
or rest period expenses. A stopover is the time a traveler spends at an 
airport, other than the originating or destination airport, which is a 
normally scheduled part of a flight. A change of planes is the time a 
traveler spends at an airport, other than the originating or 
destination airport, to disembark from one flight and embark on 
another. All travel should follow a direct or usually traveled route. 
Under no circumstances should a traveler select flights in a manner 
that extends the scheduled flight time to beyond 14 hours in part to 
secure eligibility for reimbursement of business class travel;
    (9) Automobile mileage at the local U.S. Embassy rate or rental 
cars while in travel status;
    (10) Other allowable expenditures while in travel status as 
authorized by the U.S. Federal Travel Regulations (41 CFR parts 301 
through 304);
    (11) Organization costs for overseas offices approved in MAP 
program agreements. Such costs include incorporation fees, brokers' 
fees, fees to attorneys, accountants, or investment counselors, whether 
or not employees of the organization, incurred in connection with the 
establishment or reorganization of the overseas office, and rent, 
utilities, communications originating overseas, office supplies, 
accident liability insurance premiums, and routine accounting and legal 
services required to maintain the overseas office;
    (12) The purchase, lease, or repair of, or insurance premiums for, 
capital goods that have an expected useful life of at least 1 year, 
such as furniture, equipment, machinery, removable fixtures, draperies, 
blinds, floor coverings, computer hardware and software, and portable 
electronic communications devices (including mobile phones, wireless 
email devices, personal digital assistants);
    (13) Such premiums for health or accident insurance and other 
benefits for foreign national employees that the employer is required 
by law to pay;
    (14) Accident liability insurance premiums for facilities used 
jointly with third-party participants for MAP activities or for MAP-
funded travel of third-party participants;
    (15) Market research, including research to determine the types of 
products that are desired in a market;
    (16) Independent evaluations and audits, if not otherwise required 
by CCC, to ensure compliance with program requirements;
    (17) Legal fees to obtain advice on the host country's labor laws;
    (18) Employment agency fees;
    (19) STRE incurred outside of the United States, and STRE incurred 
in conjunction with an approved activity taking place within the United 
States with prior written approval from CCC. MAP Participants are 
required to use the appropriate American Embassy representational 
funding guidelines for breakfasts, lunches, dinners and receptions. MAP 
Participants may exceed Embassy guidelines only when they have received 
written authorization from the FAS Agricultural Counselor at the 
Embassy. The amount of unauthorized STRE expenses that exceed the 
guidelines will not be reimbursed. MAP Participants must pay the 
difference between the total cost of STRE events and the appropriate 
amount as determined by the guidelines. For STRE incurred in the United 
States, the MAP Participant should provide, in its request for 
approval, the basis for determining its proposed expenses;
    (20) Educational travel of dependent children, visitation travel, 
rest and recuperation travel, home leave travel, emergency visitation 
travel for U.S. overseas employees allowed under the Foreign Affairs 
Manual published by the U.S. Department of State;
    (21) Evacuation payments (safe haven) and shipment and storage of 
household goods and motor vehicles;
    (22) U.S. office(s) administrative support expenses for the 
National Association of State Departments of Agriculture, the SRTGs, 
and the Intertribal Agriculture Council;
    (23) Non-travel expenditures associated with conducting 
international staff conferences held either in or outside the United 
States;
    (24) Subject to Sec.  1485.17(b)(18), domestic travel expenditures, 
as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301 
through 304), for international retail, trade and consumer exhibits and 
shows conducted in the United States upon prior written approval by 
CCC. Domestic travel expenses to such a show or exhibit are covered 
only if the exhibit or show is: (1) A food or agricultural show with no 
less than 30% of exhibitors selling food or agricultural products, (2) 
an international show that targets buyers, distributors and the like 
from more than one foreign country and no less than 15% of its visitors 
are from countries other than the host country, and (3) an exhibit or 
show that the MAP Participant has not participated in within the last 
three years using funds from a source other than the MAP. CCC will 
compile a list of approved retail, trade and consumer exhibits and 
shows held inside the United States for which MAP reimbursement is 
available and such list will be announced to MAP

[[Page 29508]]

Participants via a MAP notice issued on FAS' Web site;
    (25) Domestic travel expenditures, as allowed under the U.S. 
Federal Travel Regulations (41 CFR parts 301 through 304), for seminars 
and educational training conducted in the United States;
    (26) Domestic travel expenditures, as allowed under the U.S. 
Federal Travel Regulations (41 CFR parts 301 through 304), for one home 
office MAP Participant employee, one MAP Participant board member, or a 
state department of agriculture employee paid by the MAP Participant, 
when such individual accompanies foreign trade missions or technical 
teams while traveling in the United States where the following 
conditions are met:
    (i) Such trade missions or technical team visits are identified in 
the MAP Participant's UES;
    (ii) Such trade missions or technical team visits have been 
approved by CCC; and
    (iii) The MAP-sponsored traveler submits a follow-up trip report to 
CCC that includes the following:
    (A) Purpose for the individual's participation;
    (B) Any pre-arranged business meetings;
    (C) Itinerary and/or agenda for the trip; and
    (D) Feedback from sponsors and trade mission/technical team members 
on the success of the trip.
    (27) Approved demonstration projects;
    (28) Expenditures related to copyright, trademark, or patent 
registration, including attorney fees;
    (29) Rental or lease expenditures for storage space for program-
related materials;
    (30) Business cards that target a foreign audience;
    (31) Expenditures associated with developing, updating, and 
servicing Web sites on the Internet that: Contain a message related to 
exporting or international trade, include a discernible ``link'' to the 
FAS/Washington homepage or an FAS overseas homepage, and have been 
specifically approved by the appropriate FAS commodity division. 
Expenditures related to Web sites or portions of Web sites that are 
accessible only to an organization's members are not reimbursable. 
Reimbursement claims for Web sites that include any sort of ``members 
only'' sections must be prorated to exclude the costs associated with 
those areas subject to restricted access;
    (32) Expenditures not otherwise prohibited from reimbursement that 
are associated with activities held in the United States or abroad 
designed to improve market access by specifically addressing temporary, 
permanent, or impending technical barriers to trade that prohibit or 
threaten U.S. exports of agricultural commodities; and
    (33) Membership fees in professional, industry-related 
organizations.
    (d) CCC will not reimburse any cost of:
    (1) Forward year financial obligations, such as severance pay, 
attributable to employment of foreign nationals;
    (2) Expenses, fines, settlements, judgments or payments relating to 
legal suits, challenges or disputes;
    (3) The design and production of packaging, labeling or origin 
identification, except as specifically allowed in this subpart;
    (4) Product development, product modification or product research;
    (5) Product samples;
    (6) Slotting fees or similar sales expenditures;
    (7) The purchase of, construction of, or lease of space for 
permanent, non-mobile displays, i.e., displays that are constructed to 
remain permanently in the same location beyond one program year. 
However, CCC may, at its discretion, reimburse the construction or 
purchase of permanent displays on a case-by-case basis, if the 
Participant sought and received prior written approval from CCC of such 
construction or purchase;
    (8) Rental, lease or purchase of warehouse space, except for 
storage space for program-related material;
    (9) Coupon redemption or price discounts of the MAP promoted 
commodity;
    (10) Refundable deposits or advances;
    (11) Giveaways, awards, prizes, gifts and other similar promotional 
materials in excess of the limitation that CCC will determine. Such 
determination will be announced in writing via a MAP notice issued on 
FAS' Web site;
    (12) Alcoholic beverages that are not an integral part of an 
approved promotional activity;
    (13) The purchase, lease (except for use in authorized travel 
status) or repair of motor vehicles;
    (14) Travel of applicants for employment interviews;
    (15) Unused non-refundable airline tickets or associated penalty 
fees, except where travel was restricted by U.S. Government action or 
advisory;
    (16) Independent evaluations or audits, including evaluations or 
audits of the activities of a subcontractor, if CCC determines that 
such a review is needed in order to confirm past or to ensure future 
program agreement or regulatory compliance;
    (17) Any arrangement that has the effect of reducing the selling 
price of a U.S. agricultural commodity;
    (18) Goods, services and salaries of personnel provided by U.S. 
industry or foreign third party;
    (19) Membership fees in clubs and social organizations;
    (20) Indemnity and fidelity bonds;
    (21) Fees for participating in U.S. Government sponsored 
activities, other than trade fairs and exhibits;
    (22) Business cards that target a U.S. domestic audience;
    (23) Seasonal greeting cards;
    (24) Office parking fees;
    (25) Subscriptions to publications that are not of a technical, 
economic, or marketing nature or that are not relevant to the approved 
activities of the MAP Participant;
    (26) U.S. office(s) administrative expenses, including 
communication costs, except as noted in Sec.  1485.17(c)(22) and except 
that usage costs for communications devices incurred while on 
reimbursable international or domestic travel for approved MAP brand or 
generic promotion activities are reimbursable as eligible travel 
expenditures as allowed under the U.S. Federal Travel Regulations (41 
CFR Parts 301 through 304);
    (27) Any expenditure on an activity that includes any derogatory 
reference or comparison to other U.S. agricultural commodities;
    (28) Payment of U.S. and foreign employees' or contractors' share 
of personal taxes, except where a foreign country's laws require the 
MAP Participant to pay such employees' or contractors' share;
    (29) Any expenditure made for an activity prior to CCC's approval 
of that activity;
    (30) Contributions to a contingency reserve or any similar 
provision made for events the occurrence of which cannot be foretold 
with certainty as to time, intensity, or with an assurance of their 
happening; and
    (31) Expenditures associated with a MAP Participant's creation or 
review of their fraud prevention program, contracting procedures, or 
brand program operational procedures.
    (e) Special rules for approval of supergrades.
    (1) With respect to individuals who are not U.S. citizens and who 
are hired by MAP Participants either as employees or contractors who 
are hired to act as employees, ordinarily, CCC will not reimburse any 
portion of such individual's compensation that exceeds the compensation 
prescribed for the most comparable position in the FSN

[[Page 29509]]

salary plan applicable to the country in which the employee or 
contractor works. However, a MAP Participant may seek a higher level of 
reimbursement for a non-U.S. citizen employee or contractor who will be 
employed as a country director or regional director by requesting that 
CCC approve that employee or contractor as a supergrade.
    (2) To request approval of a supergrade, the MAP Participant shall 
provide CCC with a detailed description of both the duties and 
responsibilities of the position and the qualifications and background 
of the employee or contractor concerned. The Participant shall also 
justify why the comparable FSN salary level is insufficient.
    (3) Where a non-U.S. citizen employee or contractor will be 
employed as a country director, the MAP Participant may request 
approval for a ``Supergrade I'' salary level, equivalent to a grade 
increase over the existing top grade of the FSN salary plan. The 
supergrade and its step increases are calculated as the percentage 
difference between the second highest and the highest grade in the FSN 
salary plan, with that percentage applied to each of the steps in the 
top grade. Where the non-U.S. citizen employee or contractor will be 
employed as a regional director, with responsibility for activities 
and/or offices in more than one country, the MAP Participant may 
request approval for a ``Supergrade II'' salary level, which is 
calculated relative to a ``Supergrade I'' in the same way the latter is 
calculated relative to the highest grade in the FSN salary plan.
    (4) A U.S. citizen with dual citizenship with another foreign 
country or countries shall not be considered a non-U.S. citizen.
    (f) For a brand promotion activity, CCC will reimburse no more than 
50 percent of the total eligible expenditures made on that activity.
    (g) CCC will reimburse for expenditures made after the conclusion 
of a MAP Participant's program year provided:
    (1) The activity was approved by CCC prior to the end of the 
program year;
    (2) The activity was completed within 30 calendar days following 
the end of the program year; and
    (3) All expenditures were made for the activity within 6 months 
following the end of the program year.
    (h) A MAP Participant shall not use MAP funds for any activity or 
any expenses incurred by the MAP Participant prior to the date of the 
program agreement or after the date the program agreement is suspended 
or terminated, except as otherwise permitted by CCC.
    (i) Except as otherwise provided in this subpart, MAP-funded travel 
shall conform to U.S. Federal Travel Regulations (41 CFR parts 301 
through 304) and MAP-funded air travel shall conform to the 
requirements of the Fly America Act (49 U.S.C. 40118). The MAP 
Participant shall notify the Attach[eacute]/Counselor in the 
destination countries in writing in advance of any proposed travel.
    (j) CCC may determine, at CCC's discretion, whether any cost not 
expressly listed in Sec.  1485.17 will be reimbursed.


Sec.  1485.18  Reimbursement procedures.

    (a) Participants are required to use CCC's Internet-based UES 
system to request reimbursement for eligible MAP expenses. Claims for 
reimbursement shall contain the following information:
    (1) Activity type--brand or generic;
    (2) Activity number;
    (3) Commodity aggregate code;
    (4) Country code;
    (5) Cost category;
    (6) Amount to be reimbursed;
    (7) If applicable, any reduction in the amount of reimbursement 
claimed to offset CCC demand for refund of amounts previously 
reimbursed and reference to the relevant compliance report or written 
notice; and
    (8) If applicable, any amount previously claimed that has not been 
reimbursed.
    (b) All claims for reimbursement shall be submitted by the MAP 
Participant's U.S. office to CCC.
    (c) CCC will not reimburse a claim for less than $10,000, except 
that CCC will reimburse a final claim for a MAP Participant's program 
year for a lesser amount.
    (d) CCC will not reimburse claims submitted later than 6 months 
after the end of a MAP Participant's program year.
    (e) If CCC overpays a reimbursement claim, the MAP Participant 
shall repay CCC within 30 days of such overpayment the amount of the 
overpayment either by submitting a check payable to CCC or by 
offsetting its next reimbursement claim. The MAP Participant shall make 
such payment in U.S. dollars, unless otherwise approved in advance by 
CCC.
    (f) If a MAP Participant receives a reimbursement or offsets an 
advanced payment which is later disallowed, the MAP Participant shall 
repay CCC within 30 days of such disallowance the amount disallowed 
either by submitting a check payable to CCC or by offsetting its next 
reimbursement claim. The MAP Participant shall make such payment in 
U.S. dollars, unless otherwise approved in advance by CCC.
    (g) MAP funds may be expended by MAP Participants only on 
legitimate, approved activities as set forth in the program agreement 
and approval letter. If a MAP Participant discovers that MAP funds have 
not been properly spent, it shall notify CCC and shall within 30 days 
of its discovery repay CCC the amount owed either by submitting a check 
payable to CCC or by offsetting its next reimbursement claim. The MAP 
Participant shall make such payment in U.S. dollars, unless otherwise 
approved in advance by CCC.
    (h) The MAP Participant shall report any actions that may have a 
bearing on the propriety of any claims for reimbursement in writing to 
CCC.


Sec.  1485.19  Advances.

    (a) Policy. In general, CCC operates the MAP on a reimbursable 
basis.
    (b) Exception. A MAP Participant for generic promotion activities 
may request an advance of MAP funds from CCC, provided the MAP 
Participant meets the criteria for advance payments set forth in the 
applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, and 
3019). CCC will not approve any request for an advance submitted later 
than 3 months after the end of a MAP Participant's program year. At any 
given time, total payments advanced shall not exceed 40 percent of a 
MAP Participant's approved generic activity budget for the program 
year. CCC will not advance funds to a MAP Participant for brand 
promotion activities. When approving a request for an advance, CCC may 
require the MAP Participant to carry adequate fidelity bond coverage 
when the absence of such coverage is considered to create an 
unacceptable risk to the interests of the . Whether an ``unacceptable 
risk'' exists in a particular situation will depend on a number of 
factors, such as, for example, the Participant's history of performance 
in MAP; the Participant's perceived financial stability and resources; 
and any other factors presented in the particular situation that may 
reflect on the Participant's responsibility or the riskiness of its 
activities.
    (c) Interest. A MAP Participant shall deposit and maintain in an 
insured bank account in the United States all funds advanced by CCC. 
The account shall be interest-bearing, unless the exceptions in the 
applicable parts of this title apply (e.g., 7 CFR Parts 3015, 3016 and 
3019). Interest earned by the MAP Participant on funds advanced by CCC 
is not program income. The MAP Participant shall remit any interest 
earned on the

[[Page 29510]]

advanced funds to the appropriate entity as set forth in the applicable 
parts of this title.
    (d) Refunds due CCC. A MAP Participant shall fully expend all 
advances on approved generic promotion activities within 90 calendar 
days after the date of disbursement by CCC. By the end of the 90 
calendar days, the MAP Participant must submit reimbursement claims to 
offset the advance and submit a check made payable to CCC for any 
unexpended balance. The MAP Participant shall make such payment in U.S. 
dollars, unless otherwise approved in advance by CCC.


Sec.  1485.20  Employment practices.

    (a) A MAP Participant shall enter into written contracts with all 
overseas employees who are paid in whole or in part with MAP funds and 
shall ensure that all terms, conditions, and related formalities of 
such contracts conform to governing local law.
    (b) A MAP Participant shall in its overseas offices conform its 
office hours, work week, and holidays to local law and to the custom 
generally observed by U.S. commercial entities in the local business 
community.
    (c) A MAP Participant may pay salaries or fees in any currency 
(U.S. or foreign). Participants should consult local laws regarding 
currency restrictions.


Sec.  1485.21  Financial management.

    (a) A MAP Participant shall implement and maintain a financial 
management system that conforms to generally accepted accounting 
principles. A MAP Participant's financial management system shall 
comply with the standards set forth in the applicable parts of this 
title (e.g., 7 CFR Parts 3015, 3016 and 3019).
    (b) A MAP Participant shall institute internal controls and provide 
written guidance to commercial entities participating in its activities 
to ensure their compliance with these regulations.
    (c) A MAP Participant shall retain all records concerning a MAP 
program transaction for a period of 5 years after completion of the 
program transaction and permit CCC to have full and complete access, 
for such 5-year period, to such records. These records shall include 
all documents related to employment of any employees whose salaries are 
reimbursed in whole or in part with MAP funds, whether such employees 
are based in the United States or overseas, such as employment 
applications, contracts, position descriptions, leave records, salary 
changes, and all records pertaining to contractors.
    (d) A MAP Participant shall maintain its records of expenditures 
and contributions in a manner that allows it to provide information by 
activity plan, country, activity number, and cost category. Such 
records shall include:
    (1) Receipts for all STRE (actual vendor invoices or restaurant 
checks, rather than credit card receipts);
    (2) Original receipts for any other program-related expenditure in 
excess of $75.00. CCC may, from time to time, determine a different 
minimum level and announce that minimum level in writing to all MAP 
Participants via a MAP notice issued on the FAS Web site;
    (3) The exchange rate used to calculate the dollar equivalent of 
expenditures made in a foreign currency and the basis for such 
calculation;
    (4) Copies of reimbursement claims;
    (5) An itemized list of claims charged to each of the MAP 
Participant's CCC resources accounts;
    (6) Documentation with accompanying English translation supporting 
each reimbursement claim, including original evidence to support the 
financial transactions such as canceled checks, receipted paid bills, 
contracts or purchase orders, per diem calculations, travel vouchers, 
and credit memos; and
    (7) Documentation supporting contributions. These must include the 
dates, purpose, and location of the activity for which the cash or in-
kind items were claimed as a contribution; who conducted the activity; 
the participating groups or individuals; and, the method of computing 
the claimed contributions. MAP Participants must retain and make 
available for compliance review documentation related to claimed 
contributions.
    (e) Upon request, a MAP Participant shall provide to CCC originals 
of documents supporting reimbursement claims.


Sec.  1485.22  Reports.

    (a)End-of-Year Contribution Report. Not later than 6 months after 
the end of its program year, a MAP Participant shall submit two copies 
of a report that identifies, by cost category and in U.S. dollar 
equivalent, contributions made by the Participant, the U.S. industry, 
and the States during that program year. A suggested format of a 
contribution report is available from FAS. Foreign third party 
contributions are not included in the end-of-year contribution report.
    (b)Trip reports. Not later than 45 days after completion of travel 
(other than local travel), a MAP Participant shall electronically 
submit a trip report. The report must include the name(s) of the 
traveler(s), purpose of travel, itinerary, names and affiliations of 
contacts, and a brief summary of findings, conclusions, 
recommendations, and specific accomplishments.
    (c) Research reports. Not later than 6 months after the end of its 
program year, a MAP Participant shall submit a report on any research 
conducted pursuant to the approved MAP program.
    (d) Evaluation reports. Not later than 6 months after the end of 
its program year, a MAP Participant shall submit a report on any 
evaluations conducted in accordance with the approved MAP program.
    (e) Where CCC is designated the cognizant agency for audit, CCC may 
require the MAP Participant to submit to CCC an annual OMB Circular A-
133 audit in accordance with 7 CFR Part 3052. If CCC requires an 
additional audit with respect to a particular agreement, the MAP 
Participant shall arrange for such audit and shall submit to CCC, in 
the manner to be specified by CCC, such audit of the agreement.
    (f) CCC may require the submission of additional reports.
    (g) A MAP Participant's program agreement and/or approval letter 
shall specify to whom the Participant shall submit the reports required 
in this section.


Sec.  1485.23  Evaluation.

    (a) Policy. (1) The Government Performance and Results Act (GPRA) 
of 1993 (5 U.S.C. 306; 31 U.S.C. 1105, 1115-1119, 3515, 9703-9704) 
requires performance measurement of Federal programs, including the 
MAP. Evaluation of the MAP's effectiveness will depend on a clear 
statement by Participants of goals to be met within a specified time, 
schedule of measurable milestones for gauging success, plan for 
achievement, and assessment of results of activities at regular 
intervals. The overall goal of the MAP and of individual Participants' 
programming is to achieve or maintain sales that would not have 
occurred in the absence of MAP funding. A MAP Participant that can 
demonstrate such sales, taking into account extenuating factors beyond 
the Participant's control, will have met the overall objective of the 
GPRA and the need for evaluation.
    (2) Evaluation is an integral element of program planning and 
implementation, providing the basis for the strategic plan. The 
evaluation results guide the development and scope of a MAP 
Participant's program, contributing to program accountability,

[[Page 29511]]

and providing evidence of program effectiveness.
    (b) All MAP Participants must report annual results against their 
target market and/or regional constraint/opportunity performance 
measures. These are outcome results usually based on multiple 
activities and should demonstrate progress made in the market. This 
report shall be completed and submitted to CCC no later than 6 months 
following the end of the Participant's program year.
    (c) MAP Participants conducting a branded program must also 
complete a brand promotion evaluation. A brand promotion evaluation is 
a review of the U.S. and foreign commercial entities' export sales to 
determine whether the activity achieved the goals specified in the 
approved MAP program. This evaluation shall be completed and submitted 
to CCC no later than 6 months following the end of the Participant's 
program year.
    (d) When appropriate or required by CCC, a MAP Participant shall 
complete a program evaluation. A program evaluation is a review of the 
MAP Participant's entire program, or an appropriate portion of the 
program as agreed to by the MAP Participant and CCC, to determine the 
effectiveness of the MAP Participant's strategy in meeting specified 
goals. Actual scope and timing of the program evaluation shall be 
determined by the MAP Participant and CCC and specified in the approval 
letter. A MAP Participant shall submit, via a cover letter to CCC, an 
executive summary that assesses the program evaluation's findings and 
recommendations and proposed changes in program strategy or design as a 
result of the evaluation. In addition to the requirements set forth in 
the applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, and 
3019), a program evaluation shall contain:
    (1) The name of the party conducting the evaluation;
    (2) The scope of the evaluation;
    (3) A concise statement of the market constraint(s)/
opportunity(ies) and the goals specified in the approved strategic 
plan;
    (4) A description of the evaluation methodology;
    (5) A description of export sales achieved;
    (6) A summary of the findings, including an analysis of the 
strengths and weaknesses of the program(s); and
    (7) Recommendations for future programs.
    (e) On an annual basis, or more often when appropriate or required 
by CCC, a MAP Participant shall complete and submit program success 
stories. CCC will announce to all MAP Participants in writing via a MAP 
notice issued on the FAS Web site the detailed requirements for 
completing and submitting program success stories.


Sec.  1485.24  Compliance reviews and notices.

    (a) USDA staff may conduct compliance reviews of MAP Participants' 
activities under the MAP program. MAP Participants shall cooperate 
fully with relevant USDA staff conducting compliance reviews and shall 
comply with all requests from USDA staff to facilitate the conduct of 
such reviews.
    (b) Upon conclusion of the compliance review, USDA staff will 
provide either a written compliance report or a letter to the MAP 
Participant. USDA staff will issue a compliance report if it appears 
that CCC may be entitled to recover funds from that Participant and/or 
it appears that the Participant is not complying with any of the terms 
or conditions of the program agreement, approval letter, or the 
applicable laws and regulations. The compliance report will explain the 
basis for any recovery of funds from the Participant. Within 30 days of 
the date of the compliance report, the MAP Participant shall repay CCC 
the amount owed either by submitting a check payable to CCC or by 
offsetting its next reimbursement claim. The MAP Participant shall make 
such payment in U.S. dollars, unless otherwise approved in advance by 
CCC. If, however, a MAP Participant notifies CCC within 30 days of the 
date of the compliance report that the Participant intends to file an 
appeal pursuant to Sec.  1485.24(e), the amount owed to CCC by the MAP 
Participant is not due until the appeal procedures are concluded and 
CCC has made a final determination as to the amount owed. In the 
absence of any finding of funds due to CCC or other non-compliance, CCC 
will issue a letter to the MAP Participant. If, as a result of a 
compliance review, CCC determines that further review is needed in 
order to ensure compliance with the requirements of MAP, CCC may 
require the Participant to contract for an independent audit.
    (c) In addition, CCC may notify a MAP Participant in writing at any 
time if CCC determines that CCC may be entitled to recover funds from 
the Participant. CCC will explain the basis for any recovery of funds 
from the Participant in the written notice. The MAP Participant shall 
within 30 days of the date of the notice repay CCC the amount owed 
either by submitting a check payable to CCC or by offsetting its next 
reimbursement claim. The MAP Participant shall make such payment in 
U.S. dollars, unless otherwise approved in advance by CCC. If, however, 
a MAP Participant notifies CCC within 30 days of the date of the 
written notice that the Participant intends to file an appeal pursuant 
to Sec.  1485.24(e), the amount owed to CCC by the MAP Participant is 
not due until the appeal procedures are concluded and CCC has made a 
final determination as to the amount owed.
    (d) The fact that a compliance review has been conducted by USDA 
staff does not signify that a MAP Participant is in compliance with its 
program agreement, approval letter and/or applicable laws and 
regulations.
    (e) Appeals.
    (1) A MAP Participant may, within 60 days of the date of the 
compliance report or written notice from CCC, submit a written response 
to CCC appealing the report or notice. CCC, at its discretion, may 
extend the period for response.
    (2) After review of the Participant's response, CCC shall determine 
whether the Participant owes any funds to CCC and will inform the 
Participant in writing of the basis for the determination. CCC will 
initiate action to collect such amount by providing the Participant a 
written demand for payment of the debt pursuant to Debt Settlement 
Policies and Procedures, 7 CFR part 1403.
    (3) Within 30 days of the date of the determination, the 
Participant may request in writing that CCC reconsider the 
determination and shall submit in writing the basis for such 
reconsideration. The Participant may also request a hearing.
    (4) If the Participant requests a hearing, CCC will set a date and 
time for the hearing. The hearing will be an informal proceeding. A 
transcript will not ordinarily be prepared unless the Participant bears 
the cost of a transcript; however, CCC may in its discretion have a 
transcript prepared at CCC's expense.
    (5) CCC will base its final determination upon information 
contained in the administrative record. The Participant must exhaust 
all administrative remedies contained in this section before pursuing 
judicial review of a determination by CCC.


Sec.  1485.25  Failure to make required contribution.

    A MAP Participant's required contribution will be specified in the 
approval letter. If the MAP Participant's required contribution is 
specified as a dollar amount and the MAP Participant does not make the 
required contribution, the MAP Participant shall

[[Page 29512]]

pay to CCC in dollars the difference between the amount actually 
contributed and the amount specified in the approval letter. If the MAP 
Participant's required contribution is specified as a percentage of the 
total amount reimbursed by CCC, the MAP Participant may either return 
to CCC the amount of funds reimbursed by CCC to increase its actual 
contribution percentage to the required level or pay to CCC in dollars 
the difference between the amount actually contributed and the amount 
of funds necessary to increase its actual contribution percentage to 
the required level. A MAP Participant shall remit such payment within 
six months after the end of its program year. The MAP Participant shall 
make such payment in U.S. dollars, unless otherwise approved in advance 
by CCC.


Sec.  1485.26  Submissions.

    For all permissible methods of delivery, submissions required by 
this subpart shall be deemed submitted as of the date received by CCC.


Sec.  1485.27  Disclosure of program information.

    (a) Documents submitted to CCC by MAP Participants are subject to 
the provisions of the Freedom of Information Act (FOIA), 5 U.S.C. 552, 
7 CFR part 1, subpart A--Official Records, and specifically 7 CFR 1.12, 
Handling Information from a Private Business.
    (b) Any research conducted by a MAP Participant pursuant to a MAP 
program agreement and/or approval letter shall be subject to the 
provisions relating to intangible property in the applicable parts of 
this title (e.g., 7 CFR Parts 3015, 3016, and 3019).


Sec.  1485.28  Ethical conduct.

    (a) A MAP Participant shall conduct its business in accordance with 
the laws and regulations of the country in which an activity is carried 
out and in accordance with applicable U.S. Federal, state and local 
laws, and regulations. A MAP Participant shall conduct its business in 
the United States in accordance with applicable Federal, state and 
local laws and regulations. All MAP Participants must comply with the 
regulations in the applicable parts of this title (e.g., 7 CFR Parts 
1485, 3015, 3016, 3018, 3021, 3019, and 3052).
    (b) Except for a U.S. agricultural cooperative or a U.S. for-profit 
entity, neither a MAP Participant nor its affiliates shall make export 
sales of U.S. agricultural commodities and products covered under the 
terms of the applicable MAP agreement. Nor shall such entities charge a 
fee for facilitating an export sale. A MAP Participant may, however, 
collect check-off funds and membership fees that are required for 
membership in the MAP Participant. For the purposes of this paragraph, 
``affiliate'' means any partnership, association, company, corporation, 
trust, or any other such party in which the Participant has an 
investment other than in a mutual fund.
    (c) A MAP Participant shall not limit participation in its MAP 
activities to members of its organization. Participants shall ensure 
that their MAP-funded programs and activities are open to all otherwise 
qualified individuals and entities on an equal basis and without regard 
to any non-merit factors. The MAP Participant shall publicize its 
program and make participation possible for commercial entities 
throughout the relevant commodity sector or, in the case of SRTGs, 
throughout the corresponding region. This includes providing to such 
commercial entities, upon request, a copy of any document in its 
possession or control containing market information developed and 
produced under the terms of its MAP agreement. The Participant may 
charge a fee not to exceed the costs for assembling, duplicating and 
distributing the materials. This paragraph does not apply to U.S. 
agricultural cooperatives when implementing their own brand program.
    (d) A MAP Participant shall select U.S. agricultural industry 
representatives to participate in generic MAP activities such as trade 
teams, sales teams, and trade fairs based on criteria that ensure 
participation on an equitable basis by a broad cross section of the 
U.S. industry. If requested by CCC, a MAP Participant shall submit such 
selection criteria to CCC for approval.
    (e) All MAP Participants should endeavor to ensure fair and 
accurate fact-based advertising. Deceptive or misleading promotions may 
result in cancellation or termination of a Participant's MAP agreement 
and the recovery of CCC funds related to such promotions from the 
Participant.
    (f) The MAP Participant must report any actions or circumstances 
that may have a bearing on the propriety of its MAP program to the 
appropriate Attach[eacute]/Counselor, and its U.S. office shall report 
such actions or circumstances in writing to CCC.


Sec.  1485.29  Contracting procedures.

    (a) Neither CCC nor any other agency of the U.S. Government nor any 
official or employee of CCC, FAS, USDA, or the U.S. Government has any 
obligation or responsibility with respect to MAP Participant contracts 
with third parties.
    (b) A MAP Participant shall comply with the procurement standards 
set forth below and in the applicable parts of this title when 
procuring goods and services and when engaging in construction to 
implement program agreements (e.g., 7 CFR Parts 3015, 3016, and 3019). 
For purposes of this subpart, the ``small purchase threshold'' 
referenced in 7 CFR part 3019 is the ``simplified acquisition 
threshold'' established by 41 U.S.C. 134.
    (c) Each MAP Participant shall establish contracting procedures for 
contracts that are funded, in whole or in part, with MAP funds that are 
open, fair, and competitive.
    (d) Each MAP Participant shall submit to CCC, for CCC approval, 
written contracting guidelines for contracts that are funded, in whole 
or in part, with MAP funds. CCC will notify all new and existing MAP 
Participants in writing in each Participant's annual approval letter 
and through the FAS web site as to applicable submission dates for and 
dates for approvals of contracting guidelines. CCC's approval of such 
contracting guidelines will remain in place until CCC retracts its 
approval in writing, or until new guidelines are approved that 
supersede them. Once approved by CCC, these contracting guidelines 
shall govern all of a Participant's MAP-funded contracting involving 
contracts with an annual value of $35,000 or more. CCC may determine a 
different minimum value and announce that minimum value in writing to 
all MAP Participants via a MAP notice issued on the FAS Web site. The 
guidelines shall indicate the method for evaluating proposals received 
for all contract competitions, the method for monitoring and evaluating 
performance under contracts, and the method for initiating corrective 
action for unsatisfactory performance under contracts. The MAP 
Participant may modify and resubmit these guidelines for re-approval at 
any time. In addition to the requirements set forth in the applicable 
parts of this title (e.g., 7 CFR Parts 3015, 306, 3019), these 
guidelines shall include, at a minimum, the following:
    (1) Procedures for developing and publicizing requests for 
proposals, invitations for bids, and similar documents that solicit 
third party offers to provide goods or services. Solicitations for 
professional and technical services shall be based on clear and 
accurate descriptions of and requirements related to the services to be 
procured. Such procedures must include a conflict-of-interest provision

[[Page 29513]]

that states that no employee, officer, board member, or agent thereof 
of the MAP Participant will participate in the review, selection, award 
or administration of a contract if a real or apparent conflict of 
interest would arise. Such a conflict would arise when an employee, 
official, board member, agent, or the employee's, officer's, board 
member's, agent's family, partners, or an organization that employs or 
is about to employ any of the parties indicated herein, has a financial 
or other interest in the firm selected for an award. Procedures shall 
provide that officers, employees, board members, and agents thereof 
shall neither solicit nor accept gratuities, favors, or anything of 
monetary value from contractors or subcontractors. Procedures shall 
also provide for disciplinary actions to be applied for violations of 
such standards by officers, employees, board members or agents thereof;
    (2) Procedures for reviewing proposals, bids, or other offers to 
provide goods and services. Separate procedures shall be developed for 
various situations, including, but not limited to: solicitations for 
highly technical services; solicitations for services that are not 
common in a specific market; solicitations that yield receipt of three 
or more bids; solicitations that yield receipt of fewer than three 
bids;
    (3) Requirements to conduct all contracting in an openly 
competitive manner. Individuals who develop or draft specifications, 
requirements, statements of work, invitations for bids, and/or requests 
for proposals for procurement of any goods or services, and such 
individuals' families or partners, or an organization that employs or 
is about to employ any of the aforementioned, shall be excluded from 
competition for such procurement. MAP Participants' written contracting 
guidelines may detail special situations where the prohibitions in this 
subparagraph do not apply, such as in situations involving highly 
specialized technical services or situations where the services are not 
commonly offered in a specific market;
    (4) Requirements to perform and document in the procurement files 
some form of price or cost analysis, such as a comparison of price 
quotations to market prices or other price indicia, to determine the 
reasonableness of the offered prices in connection with every 
procurement action that is governed by the contracting guidelines;
    (5) Requirements to conduct an appropriate form of competition 
every 3 years on all multi-year contracts that are governed by the 
contracting guidelines. However, contracts for in-country 
representation are not required to be re-competed after the initial 
reward. Instead, the performance of in-country representation must be 
evaluated and documented by the MAP Participant annually to ensure that 
the terms of the contract are being met in a satisfactory manner; and
    (6) Requirements for written contracts with each provider of goods, 
services, or construction work. Such contracts shall require such 
providers to maintain adequate records to account for funds provided to 
them by the MAP Participant.
    (e) A MAP Participant may undertake MAP promotional activities 
directly or through a domestic or foreign third party. However, the MAP 
Participant shall remain responsible and accountable to CCC for all MAP 
promotional activities and related expenditures undertaken by such 
third party and shall be responsible for reimbursing CCC for any funds 
that CCC determines should be refunded to CCC in relation to such 
third-party's promotional activities and expenditures.


Sec.  1485.30  Property standards.

    The MAP Participant shall insure all MAP-funded real property and 
equipment acquired in furtherance of program activities and safeguard 
such against theft, damage and unauthorized use. The Participant shall 
promptly report any loss, theft, or damage of property to the insurance 
company.


Sec.  1485.31  Anti-fraud requirements.

    (a) All MAP Participants.
    (1) All MAP Participants annually shall submit to CCC for approval 
a detailed fraud prevention program. CCC will notify all new and 
existing MAP Participants in writing in each Participant's annual 
approval letter and through the FAS web site as to applicable 
submission dates for and dates for approvals of fraud prevention 
programs. MAP Participants should review their fraud prevention 
programs annually. The fraud prevention program shall, at a minimum, 
include an annual review of physical controls and weaknesses, a 
standard process for investigating and remediation of suspected fraud 
cases, and training in risk management and fraud detection for all 
current and future employees. The MAP Participant shall not conduct or 
permit any MAP promotion activities to occur unless and until CCC has 
communicated in writing approval of the MAP Participant's fraud 
prevention program.
    (2) The MAP Participant, within five business days of receiving an 
allegation or information giving rise to a reasonable suspicion of 
misrepresentation or fraud that could give rise to a claim by CCC, 
shall report such allegation or information in writing to such USDA 
personnel as specified in the Participant's MAP program agreement and/
or approval letter. The MAP Participant shall cooperate fully in any 
USDA investigation of such allegation or occurrence of 
misrepresentation or fraud and shall comply with any directives given 
by CCC or USDA to the MAP Participant for the prompt investigation of 
such allegation or occurrence.
    (b) MAP Participants with brand programs.
    (1) The MAP Participant may charge a fee to brand participants to 
cover the cost of the fraud prevention program.
    (2) The MAP Participant shall repay to CCC funds paid to a brand 
participant through the MAP Participant on claims that the MAP 
Participant or CCC subsequently determines are unauthorized or 
otherwise non-reimbursable expenses within 30 days of the MAP 
Participant's determination or CCC's disallowance. The MAP Participant 
shall repay CCC by submitting a check to CCC or by offsetting the MAP 
Participant's next reimbursement claim. The MAP Participant shall make 
such payment in U.S. dollars, unless otherwise approved in advance by 
CCC. A MAP Participant operating a brand program in strict accordance 
with an approved fraud prevention program, however, will not be liable 
to reimburse CCC for MAP funds paid on such claims if the claims were 
based on misrepresentations or fraud of the brand participant, its 
employees or agents, unless CCC determines that the MAP Participant was 
grossly negligent in the operation of the brand program regarding such 
claims. CCC shall communicate any such determination to the MAP 
Participant in writing.


Sec.  1485.32  Program income.

    Any revenue or refunds generated from an activity, e.g., 
participation fees, proceeds of sales, refunds of value added taxes 
(VAT), the expenditures for which have been wholly or partially 
reimbursed with MAP funds, shall be used by the MAP Participant in 
furtherance of its approved MAP activities in the program period during 
which the MAP funds are available for obligation by the MAP 
Participant. The use of such revenue or refunds shall be governed by 7 
CFR Part 1485. Interest earned on funds advanced by CCC is not program 
income.

[[Page 29514]]

Sec.  1485.33  Amendment.

    A program agreement may be amended in writing with the consent of 
CCC and the MAP Participant.


Sec.  1485.34  Noncompliance with an agreement.

    If a MAP Participant fails to comply with any term in its program 
agreement or approval letter, CCC may take one or more of the 
enforcement actions set forth in the applicable parts of this title 
(e.g., 7 CFR Parts 3015, 3016, and 3019) and, if, appropriate, initiate 
a claim against the MAP Participant, following the procedures set forth 
in this subpart. CCC may also initiate a claim against a MAP 
Participant if program income or CCC-provided funds are lost due to an 
action or omission of the MAP Participant.


Sec.  1485.35  Suspension, termination, and closeout of agreements.

    A program agreement may be suspended or terminated in accordance 
with the suspension and termination procedures in the applicable parts 
of this title (e.g., 7 CFR Parts 3015, 3016, 3019). If an agreement is 
terminated, the applicable parts of this title will apply to the 
closeout of the agreement (e.g., 7 CFR Parts 3015, 3016, 3019).


Sec.  1485.36  Paperwork reduction requirements.

    The paperwork and recordkeeping requirements imposed by this 
subpart have been approved by OMB under the Paperwork Reduction Act of 
1980. OMB has assigned control number 0551-0026 for this information 
collection.

    Dated: May 4, 2012.
Suzanne E Heinen,
Administrator, Foreign Agricultural Service, and Vice President, 
Commodity Credit Corporation.
[FR Doc. 2012-11601 Filed 5-16-12; 8:45 am]
BILLING CODE 3410-10-P