"(j) (1) The Comptroller General of the United States shall monitor and evaluate the operations hereunder including reporting activities. The Comptroller General shall (A) review and evaluate the procedures followed by the Secretary in gathering, analyzing, and interpreting statistics, data, and information related to the supply of agricultural commodities, and (B) evaluate particular projects or programs. The Comptroller General shall have access to such data within the possession or control of the Secretary from any public or private source whatever, notwithstanding the provisions of any other law, as are necessary to carry out his responsibilities under this section and shall report to the Congress at such times as he deems appropriate with respect to the operations hereunder including his recommendations for modifications in existing laws, regulations, procedures, and practices. "(2) The Comptroller General or any of his authorized representatives, in carrying out his responsibilities under this section shall have access to any books, documents, papers, statistics, data, records, and information of any person owning or operating facilities or business premises who is engaged in any phase of export of agricultural commodities as he may determine relates to the purposes of this section. "(3) To assist in carrying out his responsibilities under this section, the Comptroller General may sign and issue subpenas requiring the production of the books, documents, papers, statistics, data, records, and information referred to in subsection (j) (2). "(4) In case of disobedience to a subpena issued under subsection (j) (3) of this section, the Comptroller General may, through his own attorneys or attorneys he may choose, invoke the aid of any district court of the United States in requiring the production of the books, documents, papers, statistics, data, records, and information referred to in subsection (j) (2). Any district court of the United States within the jurisdiction where such person is found or transacts business may, in case of contumacy or refusal to obey a subpena issued by the Comptroller General, issue an order requiring such person to produce the books, documents, papers, statistics, data, records, or information; and any failure to obey such order of the court shall be punished by the court as a contempt thereof. "(5) Reports submitted by the Comptroller General to the Congress pursuant to this section shall be available to the public at reasonable cost and upon identifiable request. The Comptroller General may not disclose to the public any information which concerns or relates to a trade secret or other matter referred to in section 1905 of title 18, United States Code, except that such information shall be disclosed by the Comptroller General or the Secretary, in a manner designed to preserve its confidentiality "(A) to other Federal Government departments, agencies, and officials for official use upon request; "(B) to committees or Congress upon request; and "(C) to a court in any judicial proceeding under court order. "(k) To the extent necessary or appropriate to the enforcement of this section the Secretary (and officers or employees of the Department specifically designated by him) may make investigation and obtain information from, require reports or the keeping of records by, make inspection of the books, records, and other writings, premises, or property of, and take the sworn testimony of, any person. In addition, such officers or employees may administer oaths or affirmations, and may by subpena require any person to appear and testify or to appear and produce books, records, and other writings, or both, and, in the case of contumacy by, or refusal to obey a subpena issued to, any such person, the district court of the United States for any district in which such person is found or resides or transacts business, upon application, and after notice to any such person and hearing, shall have jurisdiction to issue an order requiring such person to appear and give testimony or to appear and produce books, records, and other writings, or both, and any failure to obey such order of the court may be punished by such court as a contempt thereof. No person shall be excused from complying with any requirements under this section because of his privilege against self-incrimination, but the immunity provisions of the Compulsory Testimony Act, Part V of title 18, United States Code, shall apply with respect to any individual who specifically claims such privilege. "(1) The Secretary of Agriculture and the Secretary of Commerce shall fully cooperate in the administration of this section. "(m) In the administration of this section, reporting requirements shall be so designed as to reduce the cost of reporting, recordkeeping, and export documentation to the extent feasible consistent with effective enforcement and compilation of useful statistics. Reporting, recordkeeping, and export documentation requirements shall be periodically reviewed and revised in the light of developments in the field of information technology.” EXPLANATION OF PROPOSED REVISION OF SECTION 812 The Export Administration Act of 1969, as amended, recognizes that control of exports may be necessary in certain circumstances. Agricultural commodities are specifically exempted from export controls unless the Secretary of Agriculture approves the imposition of controls in a particular instance. 50 U.S.C. App. § 2403 (f) (Supp. IV, 1974). Except where the President determines that control of an agricultural commodity is required to further U.S. foreign policy and fulfill its international responsibilities, or where control over the export is significant to the national security of the United States, the Secretary may not give his approval to controls over exports of agricultural commodities during any period for which he determines the supply of such commodity to be in excess of the requirements of the domestic economy. One grave difficulty with the operation of this system has emerged: the Secretary's determination whether supply exceeds domestic demand can only be as good as the information available to him, and that information, with respect to the export by private persons or corporations of agricultural commodities, is often incomplete or inaccurate, and hence misleading. Currently, the source of information on exports of agricultural commodities is section 812 of the Agriculture Act of 1970, as added by the Agriculture and Consumer Protection Act of 1973. 7 U.S.C. § 612c-3 (Supp. IV, 1974). The accompanying amendment to section 812 is intended to make more and better information available to the Secretary, and to provide a mechanism whereby the crisis atmosphere and the decisions without sufficient information which have characterized previous short-supply situations can be avoided. Of crucial importance is improvement of the data base. The amendment would require all exporters of agricultural commodities to report to the Secretary, rather than just those of wheat, feed grains, cotton, and oil seeds, as in section 812. While the Secretary may, under existing law, designate other commodities to be reported on, the problem remains that by the time a short-supply situation with respect to a particular commodity has developed to the point that the Secretary finds it necessary to require reports on exports, much of the harm may have been done. Second, the kind of information to be reported will be significantly broadened. The amendment makes it clear that not just formal contracts for export but any kind of commitment or agreement, written or otherwise, which may result in an export, should be reported. Price is to be reported, along with the other information. Price trends may give a valuable clue for forecasters. Where an export is not at a fixed or pre-determined price, reports should reveal the basis or formula on which price will ultimately be set. Existing law requires that destination be reported. The amendment makes it explicit that the purpose of the reports is not served by reporting intermediate destinations or transfer points only. Where the final destination is known to the exporter, it should be reported. A requirement is added that the identity of the buyer be reported, and that if the buyer is in some way affiliated with the seller, this relationship should be revealed. The bill recognizes that the information sought is proprietary in nature. The confidentiality requirement of existing section 812 is retained, with a direction added that information concerning identity of buyers, and buyer-seller relationships is not to be published or disseminated. Nothing in the bill, however, is intended to limit the access of the General Accounting Office to records of the Department, including reports filed thereunder, to the extent necessary to carry out its duties GAO would be expected to respect the confidentiality of private data. In addition to reports of contracts, exporters would be required to submit reports of negotiations with foreign buyers which may lead to contracts. This requirement is intended to allow the Secretary to predict accurately the potential for a short-supply situation, particularly with respect to certain critical commodities. Once the Secretary determines that an agricultural commodity is po tentially in a short-supply situation, he can, on a temporary emergency basis, promulgate regulations which prevent consummation of any further agreements for export of that commodity without prior approval by him. (At the same time, he would be required to report his determination to the Congress, so as to activate the mechanism in the bill which brings export of commodities in short-supply within the Export Administration Act, unless the Congress disapproves.) But a short-supply situation may be created by the execution of contracts which are not known to the Secretary until after they are executed and reported to him. At that time, exercise of his power to prevent execution of proposed contracts might come too late to avoid market disruption and the other consequences of an unforeseen short-supply situation. The bill therefore provides for reports of negotiations by exporters which, if they result in execution of a contract, are likely to have a significant impact on supply. The reports are to be made when the negotiations are entered into, and are intended to provide an additional, and crucial, source of data for the Secretary to make forecasts. Recognizing the sensitivity and the competitive nature of negotions at an early stage, however, the bill not only protects the confidentiality of individual reports of negotiations, but provides that these reports need not include the identity of the prospective buyer, and that the reports of negotiations are not to be published by the Secretary, even in compilation form. A requirement that the Secretary publish regulations and consider comments thereon has been added. Its purpose is to give the exporters who will be affected, as well as interested Government agencies, a chance to review the procedures proposed by the Secretary before they go into effect. The Secretary is to report annually on the export reporting system. The purpose of this requirement is to provide continuing assurance that the system is accomplishing its intended purpose and, particularly, that there is adequate capability within the Department to ensure that the regulations are being complied with. That capability does not now exist, and one result has been the failure of the current reporting system to be responsive. The evaluation of the system by the Secretary should be useful to the Congress as well as to the General Accounting Office which, it is expected, will also carefully review and comment on the manner in which the Secretary carries out the mandate of section 812. Finally, the bill is addressed to the problems that there is now no adequate system to ensure adequate supplies of a variety of agricultural commodities at stable prices, that there is no effective early warning system to protect the domestic economy against the disruptions of unanticipated export sales, and that the short-supply "trigger" for agricultural commodities-that is, the mechanism for bringing agricultural commodities under the export controls of the Export Administration Act of 1969-does not now operate effectively. The trigger in 50 U.S.C. App. § 2403 (f) requires approval by the Secretary, but he cannot give approval during any period for which supply is determined by him to exceed the needs of the domestic economy. No limits are set on his authority to withhold approval. What is needed is a trigger which is a matter of public knowledge, and which gives more weight to forecasting, rather than to the supply-demand relationship at the present moment. The bill enjoins the Secretary to determine when a short-supply situation exists or will exist. Its intent in this respect is that he make a careful and systematic assessment of developing shortages and the longterm supply and demand situation. His analysis should show the impact on the economy and world trade of shortages or increased prices, their probable duration, the world-wide supply, and actions taken by other nations in response to such shortages or increased prices. The analysis is intended to allow development of appropriate policies before a crisis materializes, and before options short of a complete embargo are foreclosed. Such a provision was controversial in the proposed 1973 amendments to the Export Administration Act of 1969 and, ultimately, was rejected. This provision is intended to answer some of the objections which led to rejection of that earlier provision. Under this bill. the Secretary's determination of a short-supply situation does not automatically impose controls, but only brings the commodity potentially under controls, subject to congressional veto. The bill incorporates the penalty provision contained in present section 812. While the nature and amount of any penalties are matters for the Congress, we are not convinced that the present provision is effective. The Congress may wish to consider providing for civil penalties, as is done in the Export Administration Act of 1969, as amended, possibly to include suspension of the right to export. О HEARING BEFORE THE SUBCOMMITTEE ON FOREIGN AGRICULTURAL POLICY AND THE SUBCOMMITTEE ON AGRICULTURAL PRODUCTION, MARKETING, AND STABILIZATION OF PRICES OF THE COMMITTEE ON AGRICULTURE AND FORESTRY NINETY-FOURTH CONGRESS FIRST SESSION ON GRAIN INSPECTION IRREGULARITIES AND PROBLEMS AND S.J. Res. 88 TO PROVIDE EMERGENCY AUTHORITY TO THE SECRETARY JUNE 19, 1975 Printed for the use of the Committee on Agriculture and Forestry 64-240 U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1975 For sale by the Superintendent of Documents, U.S. Government Printing Office |