quired. Following issuance of a purchase authorization, and on application, the Controller, Commodity Credit Corporation will issue letters of commitment to banking institutions designated by the participant and acceptable to CCC, unless the participant elects to procure the commodities under the reimbursement method of financing.

(2) The cost of ocean freight or ocean freight differential will be financed by CCC only when specifically provided for in the purchase authorization. Prior approval for the use of all vessels must be obtained from the appropriate office of the U.S. Department of Agriculture (§ 17.9(b)).

(c) Letters of commitment and reimbursement method of financing. (1) Under the letter of commitment method of financing the U.S. supplier of agricultural commodities will receive payment as provided in the regulations in this subpart under irrevocable letters of credit issued, confirmed or advised by a banking institution for the commodities and, when authorized in the purchase authorization and included as a part of the commodity cost, for the ocean freight or the ocean freight differential, and marine insurance. Notwithstanding any other provision of these regulations, if authorized by the purchase authorization, ocean freight differential shall be financed by CCC under the letter of commitment method of financing in cases where ocean freight is not included as a part of the commodity cost, subject to the applicable provisions of these regulations and such other provisions as may be specified in the purchase authorization. In such case, the U.S. supplier of ocean freight will receive payment for ocean freight differential as provided in these regulations and the purchase authorization under irrevocable letters of credit issued, confirmed or advised by a banking institution.

(2) Under the reimbursement method of financing, the U.S. supplier will obtain payment from the participant or its assignee as provided in the regulations in this subpart for the cost of commodities and, when authorized in the purchase authorization and included as a part of the commodity

cost, for the ocean freight or the ocean freight differential, and marine insurance. When ocean freight or ocean freight differential is approved for financing on Form CCC-106 and is to be financed separately from the commodity cost, the supplier of ocean transportation will obtain payment from the participant or its assignee.

(3) To the extent provided in the regulations in this subpart, CCC will reimburse banking institutions for payments made under letters of commitment and CCC will reimburse the participant or its assignee for ocean freight or ocean freight differential financed separately from the commodity and for the commodities procured under the reimbursement method of financing.

(d) Advice of amount financed. Under the letter of commitment method of financing, the banking institutions will forward documents and advice of the amount financed by CCC to the approved applicant or to the bank or agency authorized by the approved applicant to open related letters of credit. Under the reimbursement method of financing, CCC will forward advice of payment to the participant or its assignee.

(e) Where information is obtainable. General information about purchase authorizations and related operations under the regulations in this subpart may be obtained from the Director, Program Operations Division, Office of the General Sales Manager, U.S. Department of Agriculture, Washington, D.C. 20250. Information about financing operations under these regulations including forms prescribed for use thereunder, may be obtained from the Controller, Commodity Credit Corporation, U.S. Department of Agriculture, Washington, D.C. 20250. The Office of the General Sales Manager will make public the issuance of each purchase authorization through a U.S. Department of Agriculture press announcement. A copy of each announcement will be made available to the Office of Small Business Administration to assist small business firms to have adequate and fair opportunity to participate as suppliers.

53-006 0-85--22

[31 FR 16818, Dec. 31, 1966; 32 FR 3935, Mar. 10, 1967, as amended at 33 FR 5137, Mar. 29, 1968; 37 FR 16669, Aug. 18, 1972]

§ 17.2 Definition of terms.

Terms used in the regulations in this subpart are defined or identified as follows, subject to amplification in subsequent sections:

(a) Terms relating to the United States, its agencies and officials. (1) "AMS" means the Agricultural Marketing Service, U.S. Department of Agriculture.

(2) "CCC" means the Commodity Credit Corporation, U.S. Department of Agriculture.

(3) "Controller" means the Controller, Commodity Credit Corporation, or his designee.

(4) "ASCS" means the Agricultural Stabilization and Conservation Service, U.S. Department of Agriculture.

(5) "ASCS Offices" means the ASCS Offices listed in § 17.16, and any other offices or agencies which may succeed to the functions of such offices.

(6) "FGIS" means the Federal Grain Inspection Service, U.S. Department of Agriculture.

(7) "OGSM" means the Office of the General Sales Manager, U.S. Department of Agriculture.

(8) "USDA" means the U.S. Department of Agriculture and includes all or any of the offices mentioned in paragraphs (a) (1) through (7) of this section.

(9) "Secretary" means the Secretary of Agriculture of the United States, or his designee.

(10) "General Sales Manager" and "GSM" mean the General Sales Manager, OGSM, or his designee.

(11) "United States" means the 50 States, the District of Columbia, and Puerto Rico.

(b) Terms relating to ocean transportation. (1) "Dry bulk carriers" mean irregularly scheduled vessels, other than tankers, commonly referred to as "tramps," which go where full cargoes are offered. Rates are negotiated covering the movement of a specific commodity, a specific quantity, at a specific time from a specific port or ports to specific destination port or ports.

(2) "Dry cargo liners" and "liners" are interchangeable terms meaning regularly scheduled vessels on specific

trade routes. Shipments can be made on this service of part-cargoes (parcels) generally not exceeding 60 percent of the capacity of the vessel.

(3) "Tankers" mean vessels which are designed to carry full cargoes of liquids and which trade wherever full cargoes are offered. Because of compartmentation, tankers can carry a combination of cargoes, including bulk grain. Rates are negotiated in the same manner as with dry bulk carri

ers.

(4) "Form CCC-106" means "Advice of Vessel Approval", Form CCC-106-1 (Supplier of Commodity); Form CCC106-2 (Ocean Carrier), or Form CCC106-3 (Cotton), or any or all of them, as applicable. Colors of the original form are: Form CCC-106-1 yellow; Form CCC-106-2 blue; and Form CCC-106-3 white.

(5) "Ocean bill of lading" means an "On-Board" bill of lading, or a bill of lading with an "On-Board" endorsement, which must be dated and signed or initialled on behalf of the carrier. Documentary requirements for a copy of an ocean bill of lading refer to a nonnegotiable copy thereof.

(6) "Ocean Transportation" means and is interchangeable with the term "Ocean freight".

(7) "Notice of Arrival" means a written notice or copy of a cablegram in accordance with § 17.9(f) reciting that the vessel has arrived at the first port of discharge.

(c) Other terms. (1) “Affiliate" and "associated company" mean any legal entity which owns or controls, or is owned or controlled by, another legal entity. For a corporation, ownership of the voting stock shall be the controlling criterion. The term “owns or controls" shall have the meaning as provided in § 17.6(j)(2).

(2) "Approved applicant" means the bank in the importing country or other agency acceptable to CCC designated by the participant and named in any letter of commitment issued to a banking institution. This term shall include any agent authorized to act on behalf of such an applicant.

(3) "Banking institution" means a banking institution organized under the laws of the United States, any State, or the District of Columbia.

(4) [Reserved]

(5) "Form CCC-329" means the signed original of Form CCC-329 "Supplier's Certificate" having an issue date of January 1, 1967 or later. (6) "Commodity" means an agricultural commodity produced in the United States or product thereof produced in the United States as specified in the applicable purchase authorization.

(7) "Copy" means a photocopy or other type of copy of an original document showing all data shown on the original, including signature or the name of the person signing the original, or, if the signature or name is not shown on the copy, a statement that the original was signed.

(8) "Delivery" means the transfer to or for the account of an importer of custody and right of possession of the commodity at U.S. ports or Canadian transshipment point in accordance with the delivery terms of the contract and purchase authorization. Delivery shall be deemed to occur as of the onboard date shown on the ocean bill of lading.

(9) "Destination country" means the foreign country to which the commodities are exported under a private trade entry agreement.

(10) "Foreign currency" and "local currency" are interchangeable terms and mean a currency of the importing country.

(11) "Foreign currency sale" means sales for the currency of the importing country.

(12) "Importer" means the legal entity which contracts with the supplier for the importation of the commodity. The importer may be the participant or any legal entity to which a participant has issued a subauthorization.

(13) "Importing country" means any nation with which an agreement has been negotiated pursuant to the Act.

(14) "Letter of credit" means an irrevocable commercial letter of credit issued, confirmed, or advised by a banking institution on behalf of an approved applicant.

(15) "Long-term credit sale" is the collective term used to denote any one or more of the following: (i) Sales to an importing country for dollars on

credit terms (ii) sales to a private trade entity for dollars on credit terms and (iii) sales to an importing country for local currency on credit terms which permit conversion to dollars.

(16) "Participant" is the collective term used to denote the importing country or the private trade entity with whom an agreement has been negotiated pursuant to the Act.

(17) "Purchase authorization" means OGSM Form-480 (Commodity) Authorization to Purchase Agricultural Commodity or OGSM Form-480 (Ocean Transportation) Authorization to Procure Ocean Transportation, issued to a participant pursuant to these regulations in this subpart.

(18) "Private Trade Entity" means the individual or other nongovernmental legal entity with whom a long-term credit sale agreement has been negotiated pursuant to the Act.

(19) "Selling agent" means any individual or other legal entity who operates as a bona fide sales agent for the supplier of the commodity and who is not employed by or otherwise connected with the importer or the importing country.

(20) "Supplier" means any individual or other legal entity who sells any commodity to an importer under the terms of a purchase authorization for delivery to such importer, or who sells ocean transportation to an importer or supplier of the commodity under the terms of a purchase authorization. (See § 17.6(a)(4).)

(21) "Legal entity" shall include, but not be limited to, an individual (except that an individual and his or her spouse and their minor children shall be considered as one legal entity), partnership, association, company, corporation, and trust.

(22) "Shipping agent" means any person engaged by a participant to arrange ocean transportation.

(23) "Ships broker" means any person engaged by a supplier of ocean transportation to arrange employment of vessels.

(24) "Purchasing agent" means any person engaged by a participant to procure agricultural commodities.

(25) "Person" means an individual or other legal entity.

26) "Invitation for bids" and "IFB" an a publicly advertised request for

ers.

ecs. 101-115, Pub. L. 83-480, as amended U.S.C. 1701 et seq.); E.O. 10900, 26 FR 3, as amended)

1 FR 16818, Dec. 31, 1966; 32 FR 3935, ar. 10, 1967, as amended at 32 FR 5977, pr. 14, 1967; 33 FR 5137, Mar. 29, 1968; 34 R 8963, June 5, 1969; 42 FR 54399, Oct. 6, 977]

17.3 Purchase authorization.

(a) Application. For each commodity the participant shall submit to the General Sales Manager an application for authorization to purchase the commodity or for authorization to procure ocean transportation, or both. The completed application shall be submitted in triplicate on OGSM Form-480 (Application) and shall include a statement as to the usual marketings of the commodity in accordance with the applicable agreement and any other information required by the General Sales Manager.

(b) Issuance of purchase authorization. On approval of the application by the General Sales Manager, a purchase authorization will be issued to the participant. The forms used shall be OGSM Form-480 (Commodity), Authorization to Purchase Agricultural Commodity and OGSM Form-480

(Ocean Transportation), Authorization to Procure Ocean Transportation. Financing will be in accordance with the purchase authorization.

(c) Provisions of purchase authorization. Each purchase authorization will specify:

(1) Authorization to purchase commodity. (i) The commodity to be purchased and the approximate quantity and maximum dollar value;

(ii) Contracting requirements in addition to or in lieu of those enumerated in Appendix A of this subpart, if any;

(iii) The periods during which contracts between suppliers and importers must be entered into and during which deliveries must be made;

(iv) The terms of delivery to the importer;

(v) Documentation required in support of drafts presented to banks by suppliers in addition to or in lieu of

the documentation specified in Appen

dix B of this subpart;

(vi) Provisions relating to payment to CCC, if applicable;

(vii) The ASCS Office which will administer the financing operation on behalf of CCC;

(viii) The method of financing;

(ix) Any limitation relating to financing by CCC in addition to or in lieu of those specified in the regulations in this subpart;

(x) Any other provisions deemed necessary by the General Sales Manager.

(2) Authorization to procure ocean transportation. (i) The commodity to be shipped;

(ii) The delivery period;

(iii) The maximum dollar amount for ocean transportation;

(iv) Any limitation relating to financing by CCC in addition to or in lieu of those specified in the regulations in this subpart;

(v) Any other provisions deemed necessary by the General Sales Manager.

(d) Applicability of this subpart. In addition to the provisions of the particular purchase authorization, each purchase authorization (unless otherwise provided) shall be subject to the provisions of this subpart to the same extent as if the provisions were fully set forth in the purchase authorization.

(e) Modification or revocation. The General Sales Manager reserves the right at any time for any reason or cause whatsoever to supplement, modify, or revoke any purchase authorization, including the termination of deliveries. CCC shall reimburse suppliers who would otherwise be entitled to be financed by CCC for costs which were incurred as a result of such action by the General Sales Manager in connection with firm sales or shipping contracts, and which were not otherwise recovered after a reasonable effort to minimize such costs: Provided, however, That such reimbursement shall not be made to a supplier if the General Sales Manager determines that his action was taken because the supplier failed to comply with the requirements of the regulations in this subpart or the applicable purchase authorization; Provided further, That re

imbursement to suppliers of ocean transportation shall not exceed the ocean freight differential when the purchase authorization provides only for financing the differential.

(f) Refund to CCC for failure to comply by the participant. The participant shall pay in U.S. dollars promptly to CCC on demand by the General Sales Manager the entire amount financed by CCC (or such lesser amount as the General Sales Manager may demand) whenever the General Sales Manager determines that the participant has failed to comply with any agreement or commitment made by it in connection with the transaction financed.

(g) Extension of delivery periods in purchase authorizations. Requests for extensions of delivery periods will be considered by the General Sales Manager only if submitted by the participant. Such requests should be submitted as far as possible in advance of the expiration of the delivery period and in any event as soon as the participant has knowledge that delivery may not be completed within the period specified in the purchase authorization. Requests for extension must establish to the satisfaction of the General Sales Manager that failure to complete delivery was due to a cause other than the fault or negligence of the importer or the supplier. The General Sales Manager may also approve requests for extension if he determines that such extension would be in the interest of the United States.

(h) Letters of conditional reimbursement. The General Sales Manager, at his election, may issue to an importing country or a private trade entity, with which an Agricultural Commodities Agreement is being considered, a letter of agreement which authorizes it to apply for a purchase authorization under which it may obtain reimbursement for certain costs incurred by it in the procurement of the commodity and ocean freight before the signing of the agreement. Such reimbursement shall be conditioned on the signing of an Agricultural Commodities Agreement with the participant providing for the financing of such commodity and ocean freight and on the participant's complying with the terms

and conditions set forth in the Agreement, the letter, and the purchase authorization.

[31 FR 16818, Dec. 31, 1966, as amended at 33 FR 5137, Mar. 29, 1968]

§ 17.4 Subauthorizations.

The participant may issue subauthorizations to importers within the terms of the applicable purchase authorization. The participant, in subauthorizing, shall instruct importers to use the applicable purchase authorization number in placing orders, and shall specify to importers all the provisions of the applicable purchase authorization which are applicable to the subauthorization. Each importer granted a subauthorization must inform his supplier that the transaction is to be financed under the provisions of the regulations in this subpart. The importer must also provide his supplier with the applicable purchase authorization number. Copies of the purchase authorization may be obtained from the Office of the General Sales Manager (see § 17.1(e)). The importer shall inform his supplier of any special provisions which affect the supplier in carrying out the transaction.

§ 17.5 Eligible commodities.

(a) General. Commodities eligible for financing under the regulations in this subpart shall be those determined by the Secretary to be available for disposition under the Act.

(b) Commodity description and specification. The commodity and quantity thereof to be financed shall be as described and specified in the purchase authorization.

(c) Payment-in-kind and cash payment-export programs. Any commodity exported under the regulations in this subpart to which a payment-inkind or cash export subsidy is applicable under any export subsidy program will be eligible for such subsidy payment if the terms and conditions of such export subsidy program are met.

(d) Export Wheat Marketing Certificate Program. Any wheat exported under the regulations in this subpart is subject to any export wheat marketing certificate costs announced by