[Federal Register: June 22, 2004 (Volume 69, Number 119)]
[Proposed Rules]
[Page 34616-34625]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22jn04-32]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1486
RIN 0551-AA62
Emerging Markets Program
AGENCY: Commodity Credit Corporation, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rule proposes to establish regulations applicable to the
Emerging Markets Program (EMP). The regulations would provide details
concerning program administration, including participant eligibility,
application requirements, review and allocation process, reimbursement
rules and procedures, financial reporting and project evaluation
requirements, appeal procedures, and program controls.
DATES: Written comments must be received by July 22, 2004 to be assured
of consideration.
ADDRESSES: Comments should be submitted to: Denise Huttenlocker,
Director, Marketing Operations Staff, Foreign Agricultural Service,
United States Department of Agriculture, 1400 Independence Avenue SW.,
Ag Box 1042, Room 4932-S, Washington, DC 20250-1042. Fax: (202) 720-
9361; e-mail: mosadmin@fas.usda.gov.
FOR FURTHER INFORMATION CONTACT: Douglas Freeman by phone at (202) 720-
4327, by fax at (202) 720-9361, or by e-mail at emo@fas.usda.gov.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed rule is issued in conformance with Executive Order
12866. It has been determined significant for the purposes of Executive
Order 12866 and, therefore, has been reviewed by the Office of
Management and Budget (OMB).
Executive Order 12988
This proposed rule has been reviewed in accordance with Executive
Order 12988, Civil Justice Reform. The rule would have preemptive
effect with respect to any State or local laws, regulations or policies
which conflict with such provisions or which otherwise impede their
full implementation; would not have retroactive effect; and would
require administrative proceedings before suit may be filed.
Executive Order 12372
This program is not subject to the provisions of 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).
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable to this proposed rule because the Commodity Credit
Corporation (CCC) is not required by any provision of law to publish a
notice of proposed rulemaking with respect to the subject matter of
this proposed rule.
The Unfunded Mandates Reform Act of 1995
This rule contains no Federal mandates under the regulatory
provisions of Title II of the Unfunded Mandates Reform Act of 1995
(UMRA) for State, local, and tribal governments or the private sector.
Thus, this rule is not subject to the requirements of sections 202 and
204 of the UMRA.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 et seq.), CCC requests approval of a new
[[Page 34617]]
information collection in support of the Emerging Markets Program.
Title: Emerging Markets Program.
OMB Control Number: Not yet assigned.
Type of Request: Approval of an information collection.
Abstract: This information is needed to administer CCC's Emerging
Markets Program. The information will be gathered from applicants
seeking assistance under the program to determine the viability of
requests for funds.
Information to be Collected:
A. For Proposals
--Date of proposal;
--Name of organization submitting proposal;
--Organization address, telephone and fax numbers, and tax ID and Dun &
Bradstreet federal D-U-N-S numbers (for private sector applicants);
--Primary contact person;
--Full title of proposal;
--Target market(s);
--Current conditions in the target market(s) affecting the intended
commodity or product;
--Description of problem(s), i.e., constraint(s), to be addressed by
the project--inadequate knowledge of the market, insufficient trade
contacts, lack of awareness by foreign officials of U.S. products and
business practices, impediments: infrastructure, financing, regulatory
or other non-tariff barriers, etc.;
--Project objectives;
--Performance measures: benchmarks for quantifying progress in meeting
the objectives;
--Rationale: explanation of the underlying reasons for the project
proposal and its approach, including especially the anticipated
benefits, and any additional pertinent analysis;
--Clear demonstration that successful implementation will benefit a
particular industry as a whole, not just the applicant(s);
--Explanation as to what specifically could not be accomplished without
federal funding assistance and why participating organization(s) are
unlikely to carry out the project without such assistance;
--Specific description of activity/activities to be undertaken;
--Time line(s) for implementation of activity, including start and end
dates;
--Information on whether similar activities are or have previously been
funded with USDA sources in target country/countries (e.g., under MAP
and/or FMD programs);
--Detailed line item activity budget. Cost items should be allocated
separately to each participating organization. Expense items
constituting a proposed activity's overall budget (e.g., salaries,
travel expenses, consultant fees, administrative costs, etc.), with a
line item cost for each, should be listed, clearly indicating (a) which
items are to be covered by EMP funding; (b) which by the participating
U.S. organization(s); and (c) which by third parties (if applicable).
Cost items for individual consultant fees should show calculation of
daily rate and number of days. Cost items for travel expenses should
show number of trips, destinations, cost, and objective for each trip.
B. For Performance Reports
Quarterly progress reports must contain the following information:
--Benchmarks achieved, summary of activities accomplished, including
commitments on the part of other organizations, U.S. and/or foreign,
which may be participating in the project;
--Problems encountered in implementation, if any; and
--Activities projected for the following reporting period.
The final report must contain the following information:
--Introduction including an acknowledgement of the funding received
from the Emerging Markets Program;
--Concise executive summary;
--Objectives of the project and description of the activities
undertaken;
--Specific accomplishments, e.g., research results, impact on markets
and/or exports, results of training, seminars, etc. and successes,
failures, and lessons learned.
Note: Successes are specific, measurable results that are a
direct outcome of a project or activity, e.g., increases in existing
U.S. agricultural exports (amounts of trade, actual and/or projected
sales in dollars or tonnage), entry of U.S. products into new
markets, elimination of specific market constraints/barriers,
adoption of U.S. regulations and standards, etc.
--Description of the difficulties encountered in implementing the
project;
--Description of the cooperation received from participating parties
(U.S. organizations, foreign governments, or other entities); principal
persons and organizations involved in the project (U.S. and foreign);
and
--Recommendations for follow up (if appropriate).
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 177 hours per year per respondent.
Respondents: U.S. government agencies, State and local government
agencies, non-profit trade associations, universities, agricultural
cooperatives, and private companies.
Estimated Number of Respondents: 130.
Estimated Number of Responses per Respondent: 13.
Estimated Total Annual Burden on Respondents: 42,430 hours.
Proposed topics for comments are: (a) Whether the collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of burden including
the validity of the methodology and assumptions used; (c) ways to
enhance the quality, utility, and clarity of the information to be
collected; or (d) ways to minimize the burden of the collection of
information on those who are to respond, including the use of
appropriate automated, electronic, mechanical or other technological
collection techniques or other forms of information technology.
Comments should be sent to the Desk Officer for Agriculture, Office of
Information and Regulatory Affairs, Office of Management and Budget at
david_rostker@omb.eop.gov and to: Director, Marketing Operations
Staff, Foreign Agricultural Service, Room 4932-S, Stop 1042, U.S.
Department of Agriculture, 1400 Independence Ave., SW., Washington, DC
20250-1042.
Copies of this information collection may be obtained from Kimberly
Chisley, FAS' Information Collection Coordinator, at (202) 720-2568.
All responses to this notice will be summarized. All comments will
also become a matter of public record.
Executive Order 12612
It has been determined that this rule does not have sufficient
Federalism implications to warrant the preparation of a Federalism
Assessment. The provisions contained in this rule will not have a
substantial direct effect on States or their political subdivisions, or
on the distribution of power and responsibilities among the various
levels of government.
Government Paperwork Elimination Act
The Foreign Agricultural Service is committed to compliance with
the Government Paperwork Elimination Act (GPEA), which requires
Government
[[Page 34618]]
agencies, in general, to provide the public the option of submitting
information or transacting business electronically to the maximum
extent possible. Accordingly, applications for participation in the
Emerging Markets Program may be submitted online. Payment transactions
will be handled both electronically and in paper form.
Background
The CCC will periodically announce that proposals may be submitted
for participation in the EMP. The EMP provides funding for technical
assistance activities that develop, maintain, or expand the export of
U.S. agricultural commodities to overseas emerging markets, and which
benefit primarily U.S. industry as a whole. The EMP is authorized by
Section 1542(d) of the Food, Agriculture, Conservation, and Trade Act
of 1990. The Act directs the Secretary to make available to emerging
markets the expertise of the United States to ``identify and carry out
specific opportunities and projects,'' including potential reductions
in trade barriers, ``in order to develop, maintain, or expand markets
for United States agricultural exports.''
The EMP is administered by personnel of the Foreign Agricultural
Service (FAS). FAS implements this provision by providing CCC funds for
specific projects to various entities, including government agencies
and U.S. private organizations, representing a wide range of
agricultural commodities and products. Proposals from research
organizations and consulting entities will be considered for funding
assistance with evidence of substantial participation in and financial
support by U.S. industry. This support would assure that the particular
agricultural industry perceives a market development benefit from the
funded activity. Individuals/consultants may not use program funds to
conduct private business or to promote private self-interests.
Funds for private organizations are made available on the basis of
a competitive application and review process. Approved projects and
activities address generic market development and market access issues
in emerging markets, focusing on such topics as:
--Technical assistance designed to improve food and rural business
systems;
--Marketing and distribution of value-added products, including new
products or uses;
--Studies of food distribution channels in emerging markets;
--Constraints to U.S. exports, including food safety/sanitary and
phytosanitary issues and other non-tariff barriers;
--Collection and use of market information that benefit American
exporters as well as the target country or countries; and
--Training in agriculture and agribusiness trade, including
assessments, seminars, workshops, training, research studies, etc.
The definition of ``emerging market'' in 7 U.S.C. 5622(f) note,
includes the requirement that the country has the potential to be a
viable and significant market for U.S. agricultural commodities.
Therefore, this proposed rule would provide that, in order to best
reflect that requirement, an emerging market country or regional
country grouping have a population greater than 1 million and a per
capita income level below the level of upper-middle income countries as
determined by the World Bank.
Under the EMP, CCC will enter into agreements with those
organizations whose proposals have been approved. After implementation
of an EMP project for which CCC has agreed to provide funding,
Recipients may submit claims for reimbursement of the costs associated
with completing the project, to the extent that CCC has agreed to pay
such costs. A Recipient will be reimbursed after CCC reviews its claim
and determines that the claim is complete. Reimbursement claims will be
subject to verification by the FAS Compliance Review Staff (CRS).
Advances may be authorized by CCC up to 40 percent of an approved
project budget.
Significant Provisions
The proposed rule describes the current program and incorporates
the majority of the guidelines and procedures currently in effect under
the EMP. The proposed regulation would, among other things:
1. Describe procedures for establishing project agreements;
2. List eligible and ineligible contributions and the consequences
of a Recipient failing to meet its required contribution level;
3. List reimbursable and non-reimbursable project expenditures;
4. Explain the procedures followed in the submission and payment of
reimbursement claims;
5. Provide financial management guidelines for Recipients;
6. Identify the reports FAS requires of Recipients;
7. Explain FAS's position on program evaluations and the associated
requirements of Recipients;
8. Detail the steps a Recipient should follow to appeal compliance
findings;
9. List the standards of ethical conduct required of Recipients;
10. Describe contracting procedures to be used by Recipients; and
11. Outline the travel limitations placed on Recipients by FAS,
including the Federal Travel Regulations and the Fly America Act.
List of Subjects in 7 CFR Part 1486
Agricultural commodities, Exports, Grant programs-agriculture,
Technical assistance.
Accordingly, it is proposed that title 7 of the Code of Federal
Regulations is amended by adding a new part 1486 to read as follows:
PART 1486--EMERGING MARKETS PROGRAM
Subpart A--General Information
Sec.
1486.100 What is the Emerging Markets Program?
1486.101 What special definitions apply to this program?
1486.102 Is there a list of eligible emerging market countries?
1486.103 Are regional projects possible under the program?
Subpart B--Eligibility, Applications, and Funding
1486.200 What entities are eligible to participate in the program?
1486.201 Under what conditions may research and consultant groups
and individuals apply to the program?
1486.202 Are there any ineligible organizations?
1486.203 Which commodities/products are eligible for consideration
under the program?
1486.204 Are multi-year or multi-country proposals eligible for
funding?
1486.205 What types of funding are available under the program?
1486.206 What is the Quick Response Marketing Fund?
1486.207 What is the Technical Issues Resolution Fund?
1486.208 How does an organization apply to the program?
1486.209 How are program applications evaluated and approved?
1486.210 Are there any limits on the scope of proposals?
Subpart C--Program Operations
1486.300 How are applicants notified of decisions on their
applications?
1486.301 How is the working relationship established between CCC and
the Recipient of project funding?
1486.302 Can changes be made to a project once it has been approved?
1486.303 What specific contracting procedures must be adhered to?
[[Page 34619]]
Subpart D--Contributions and Reimbursements
1486.400 What are the rules on cost sharing?
1486.401 What cost share contributions are eligible?
1486.402 What are ineligible contributions?
1486.403 What expenditures may CCC reimburse under the program?
1486.404 What expenditures are not eligible for program funding?
1486.405 How are Recipients reimbursed for project expenditures?
1486.406 Will CCC make advance payments to Recipients?
Subpart E--Reporting, Evaluation, and Compliance
1486.500 What are the reporting requirements of the program?
1486.501 What is the rule on notifying field offices of
international travel?
1486.502 How is project effectiveness measured?
1486.503 How is program compliance monitored?
1486.504 How does a Recipient respond to a compliance report?
1486.505 Can a Recipient appeal the determinations of the Deputy
Administrator?
1486.506 When will a project be reviewed?
1486.507 What is the effect of failing to make required
contributions?
1486.508 How long must Recipients maintain original project records?
1486.509 Are Recipients allowed to charge fees for specific
activities in approved projects?
1486.510 What is the policy regarding disclosure of program
information?
1486.511 What is the general policy regarding ethical conduct?
Authority: 7 U.S.C. 5622 note.
Subpart A--General Information
Sec. 1486.100 What is the Emerging Markets Program?
(a) The principal purpose of the EMP is to assist U.S. entities,
including public and private agricultural organizations, in developing,
maintaining, or expanding the exports of U.S. agricultural commodities
and products by providing partial funding for technical assistance
activities that promote U.S. agricultural exports to emerging markets,
consistent with U.S. foreign policy interests. Technical assistance may
include activities such as feasibility studies, market research, sector
assessments, orientation visits, specialized training, business
workshops, and similar undertakings.
(b) The EMP is a generic program; its resources may be used to
support exports of U.S. agricultural commodities and products only
through generic activities. Projects that endorse or promote branded
products are not eligible for the program.
(c) Only initiatives that support the export of U.S. agricultural
commodities and products are eligible for assistance from the program.
The program's resources may not be used to support the export of
another country's products to the United States, or to promote the
development of a foreign economy as a primary objective.
(d) The program is administered by personnel of USDA's Foreign
Agricultural Service.
Sec. 1486.101 What special definitions apply to this program?
For purposes of this subpart, the following definitions apply:
Activities--components of a project which, when implemented
collectively, are intended to achieve a specific market development
objective.
Administrator--the Administrator of FAS, or designee.
Advisory Committee--a group of representatives from the private
sector appointed by the Secretary of Agriculture whose primary mission
is to review proposals requesting funding under the EMP and make
recommendations on projects and programs that can enhance exports
through the use of program funds.
Agreement--a written assistance agreement under this part 1486.
Agricultural Commodity--an agricultural commodity, food, feed,
fiber, wood, livestock, or insect, and any product thereof; and fish
harvested from a U.S. aquaculture farm or harvested by a vessel as
defined in Title 46, United States Code, in waters that are not waters
(including the territorial sea) of a foreign country.
Attache/Counselor--the Foreign Agricultural Service employee
representing United States Department of Agriculture interests in the
foreign country in which promotional activities are conducted.
CCC--Commodity Credit Corporation.
Compliance Review Staff--the office within the Foreign Agricultural
Service responsible for performing reviews of Recipients to ensure
compliance under this part.
Constraint--a condition in a particular country or region which
inhibits the development, expansion, or maintenance of exports of a
specific U.S. agricultural commodity or product.
Cost Share/Contribution--the amount of funding (cash and in-kind)
U.S. organizations are willing to commit from their own resources in
support of an approved project.
Deputy Administrator--the Deputy Administrator, Commodity and
Marketing Programs, Foreign Agricultural Service, or designee.
Emerging Market--any country or regional grouping that is taking
steps toward a market-oriented economy through the food, agriculture,
or rural business sectors of the economy of the country; has the
potential to provide a viable and significant market for United States
agricultural commodities or products; a population greater than 1
million; and a per capita income level below the level for upper
middle-income countries as determined by the World Bank.
EMP--Emerging Markets Program.
FAS--Foreign Agricultural Service.
Generic Promotion--an activity that does not involve the exclusive
or predominant use of an individual company name or logo or brand name.
Project--an approach or undertaking made up of one or more
activities which, taken together, are intended to achieve a specific
market development objective.
Project Funds--the funds made available to a Recipient by the
Commodity Credit Corporation under an agreement, and authorized for
expenditure in accordance with this part.
Proposal--an application for funding.
Recipient--an organization receiving financial assistance directly
from the Commodity Credit Corporation or Foreign Agricultural Service
to carry out a project.
SRTG--State Regional Trade Group.
STRE--sales and trade relations expenses including meals,
receptions, refreshments, checkroom fees, tips, and dining decorations.
UES--Unified Export Strategy.
USDA--United States Department of Agriculture.
Sec. 1486.102 Is there a list of eligible emerging market countries?
The World Bank periodically redefines the income limits on upper
middle-income economies. Consequently, an absolute list of ``emerging
market'' countries has not been established. However, CCC will provide
general guidance on country eligibility in each program announcement.
Sec. 1486.103 Are regional projects possible under the program?
Projects that focus on regions, such as the Caribbean Basin, rather
than individual countries, are eligible for consideration provided such
projects target qualifying emerging markets in the specified region. In
certain circumstances, the CCC may consider activities which target
qualified emerging markets in a specific region, but are conducted in a
non-emerging
[[Page 34620]]
market because of its importance as a central location and ease of
access to that region.
Subpart B--Eligibility, Applications, and Funding
Sec. 1486.200 What entities are eligible to participate in the
program?
To participate in the EMP, U.S. private or government entities must
demonstrate a role or interest in the exports of U.S. agricultural
commodities or products. Government organizations consist of federal,
state, and local agencies. Private organizations include non-profit
trade associations, universities, agricultural cooperatives, state
regional trade groups, and profit-making entities and consulting
businesses.
Sec. 1486.201 Under what conditions may research and consultant
groups and individuals apply to the program?
(a) Proposals from research and consulting organizations will be
considered for funding assistance only with evidence of substantial
participation in and financial support by U.S. industry to a proposed
project. Such support most credibly is provided in the form of actual
monetary contributions to the cost of a project.
(b) Consulting individuals or organizations shall not use program
funds to conduct private business or to promote private self-interests.
Sec. 1486.202 Are there any ineligible organizations?
Foreign organizations, whether government or private, may
participate as third parties in activities carried out by U.S.
organizations, but are not eligible for funding assistance from the
program.
Sec. 1486.203 Which commodities/products are eligible for
consideration under the program?
All U.S. agricultural commodities/products except tobacco are
eligible for consideration. Agricultural product(s) should be comprised
of at least 50 percent U.S. origin content by weight, exclusive of
added water, to be eligible for funding.
Sec. 1486.204 Are multi-year or multi-country proposals eligible for
funding?
Proposals for projects exceeding 1 year in duration may be
considered. If approved, funding for multi-year projects is normally
provided 1 year at a time, with commitments beyond the first year
subject to interim evaluations intended to assess the progress of the
project toward meeting its intended objectives. Projects which seek
support for multiple commodities are also eligible.
Sec. 1486.205 What types of funding are available under the program?
CCC has established three pools of funding within the EMP `` the
Central Fund, the Quick Response Marketing Fund, and the Technical
Issues Resolution Fund. Each year CCC will inform the public of the
process by which interested eligible organizations may submit proposals
for funding under the Central Fund. Because of the time sensitive
nature of issues intended to be addressed, the Quick Response Marketing
Fund and the Technical Issues Resolution Fund will be available with no
application deadline.
Sec. 1486.206 What is the Quick Response Marketing Fund?
(a) This fund is established to address priority constraints to
market access that arise because of unforeseen events; market
conditions in emerging markets are often less predictable than in more
developed countries. It allows responsiveness to time-sensitive
marketing problems or opportunities, such as a change in an import
regime or the removal of a trade embargo; an unexpected or unusual
change in the political or financial situation in a country; or a
significant change in crop conditions--any of which may have an
immediate impact on the access of particular commodities or products to
specific markets. Timing concerns in and of themselves do not justify
use of these funds.
(b) Proposals for the Quick Response Marketing Fund must identify
specific market access issues that also face time constraints.
Application content, evaluation, and reporting requirements are the
same as for the Central Fund.
Sec. 1486.207 What is the Technical Issues Resolution Fund?
(a) This fund was established to address technical barriers to
trade in emerging markets worldwide by providing technical assistance,
training, and exchange of expertise. These include plant quarantine,
animal health, food safety, and other technical barriers to U.S.
exports based on unsound or incomplete scientific information.
(b) Funding priorities are principally those issues that are time
sensitive and are strategic areas of longer term interest. Funding
decisions are determined primarily through a review process that
includes FAS and relevant regulatory agencies. The review is based upon
the following criteria:
(1) The activity occurs in an eligible country or region of market
priority;
(2) The trade constraint warrants intervention;
(3) The proposed activity is likely to achieve an impact in the
short- or long-term;
(4) The Recipient is qualified to undertake the proposed activity;
(5) The budget requested is reasonable and includes leveraged
resources;
(6) If applicable, a U.S. domestic constraint or trade issue can be
resolved in support of a proposed activity; and
(7) The activity has support from USDA field offices.
(c) Because of the time sensitive nature of the issues intended to
be addressed by these funds, proposals, whether private or government,
may be submitted at any time during the year. Reviews of proposals are
scheduled on a monthly basis. An expedited review may be requested but
must be justified.
(d) Application content, evaluation, and reporting requirements are
the same as for the Central Fund.
Sec. 1486.208 How does an organization apply to the program?
General. CCC will periodically announce that it is accepting
proposals for participation in the EMP. All relevant information,
including application deadlines (for the Central Fund) and proposal
content, will be noted in the announcement, and proposals shall be
submitted in accordance with the terms and requirements specified in
the announcement. CCC may request any additional information it deems
necessary from any applicant in order to properly evaluate any
proposal.
Sec. 1486.209 How are program applications evaluated and approved?
(a) General. Proposals received by the application deadline stated
in the announcement for the Central Fund undergo a multi-phase review
by FAS staff and the EMP Advisory Committee to determine
qualifications, quality and appropriateness of projects, and
reasonableness of project budgets.
(b) Evaluation criteria. FAS will consider a number of factors when
reviewing proposals, including:
(1) The ability of the organization to provide an experienced U.S.-
based staff with knowledge and expertise to ensure adequate
development, supervision, and execution of the proposed project;
(2) The organization's willingness to contribute resources,
including cash and goods and services of the U.S. industry, with
greater weight given to cash contributions (for private sector
proposals only);
(3) The conditions or constraints affecting the level of U.S.
exports and
[[Page 34621]]
market share for the agricultural commodity/product;
(4) The degree to which the proposed project is likely to
contribute to the development, maintenance, or expansion of U.S.
agricultural exports to emerging markets;
(5) Demonstration of how a proposed project will benefit a
particular industry as a whole; and
(6) Past program results and evaluations, if applicable. Priority
consideration will be given to the following types of technical
assistance activities:
(i) Projects and activities which use technical assistance designed
specifically to improve market access in emerging markets such as
activities intended to mitigate the impact of sudden political events
or economic and currency crises in order to maintain U.S. market share;
(ii) Marketing and distribution of value-added products, including
new products or new uses. Examples include food service development,
market research on potential for consumer-ready foods or new uses of a
product, and export feasibility studies.
(iii) Studies of food distribution channels in emerging markets,
including infrastructural impediments to U.S. exports; such studies may
include cross-commodity activities which focus on problems which affect
more than one industry, e.g., grain storage handling and inventory
systems development;
(iv) Projects that specifically address various constraints to U.S.
exports, including sanitary and phytosanitary issues and other non-
tariff barriers;
(v) Assessments and follow-up activities designed to improve
country-wide food and business systems, to reduce trade barriers, to
increase prospects for U.S. trade and investment in emerging markets,
or to determine the potential use for general export credit guarantees;
(vi) Projects that help foreign governments collect and use market
information and develop free trade policies that benefit American
exporters as well as the target country or countries; and
(vii) Short-term training in agriculture and agribusiness trade
that will benefit U.S. exporters, including seminars and training at
trade shows designed to expand the potential for U.S. agricultural
exports by focusing on the trading system.
(c) Approval decision. CCC will approve those applications that it
determines best satisfy the criteria and factors specified in paragraph
(b) of this section. All decisions regarding the disposition of an
application are final.
Sec. 1486.210 Are there any limits on the scope of proposals?
(a) CCC will not reimburse 100 percent of any project's cost. The
program is intended to provide appropriate assistance to projects which
also have a significant amount of financial contributions from other
sources, especially U.S. private industry.
(b) Funding for continuing and substantially similar projects is
generally limited to 3 years. After that time, the project is assumed
to have proven its viability and, if necessary, should be continued by
the Recipient with its own or alternative sources of funding.
Subpart C--Program Operations
Sec. 1486.300 How are applicants notified of decisions on their
applications?
FAS will notify each applicant in writing of the final decision on
its application. For approvals, letters will contain the notice of
approval and any required qualifications or adjustments to the original
proposal. For rejections, letters will contain details explaining the
reasons why the proposals were not approved for funding.
Sec. 1486.301 How is the working relationship established between CCC
and the Recipient of project funding?
(a) FAS will notify all applicants in writing of the final
disposition of its application. FAS will send an approval letter
followed by a project agreement to each approved applicant. The
approval letter and agreement will specify the terms and conditions
applicable to the project, including the levels of EMP funding and
cost-share contribution requirements. The applicant is authorized to
begin implementation of the project as of the date of the approval
letter.
(b) The agreement will specify the terms and conditions applicable
to the project, including the levels of EMP funding and cost-share
contribution requirements. An applicant who accepts the terms and
conditions contained in the agreement should so indicate by having the
appropriate authorizing official sign the agreement and submit it to
the Director, Marketing Operations Staff, FAS, USDA. The agreement will
become effective when the Recipient's authorizing official has signed
on behalf of the organization and the Deputy Administrator has
countersigned the agreement on behalf of CCC.
Sec. 1486.302 Can changes be made to a project once it has been
approved?
(a) Approved projects may be modified if circumstances change in
such a way that they would likely affect the progress and ultimate
success of a project. All requests for project modifications must be
made in writing to FAS and must include:
(1) A justification as to why changes to the project as originally
designed are needed;
(2) An explanation of the necessary adjustments in approach or
strategy;
(3) A description of necessary changes in the project's time
line(s); and
(4) Necessary changes to the project's budget (e.g., shifting of
budgetary resources from one line item to another in order to
accommodate the changes).
(b) Extensions of project time lines must be approved and made by
FAS.
Sec. 1486.303 What specific contracting procedures must be adhered
to?
(a) The Recipient has full and sole responsibility for the legal
sufficiency of all contracts it may enter into with one or more third
parties in order to carry out an approved project and shall assume
financial liability for any costs or claims resulting from suits,
challenges, or other disputes based on contracts entered into by the
Recipient. Neither CCC nor any other agency of the United States
Government or any official or employee of CCC or the United States
Government has any obligation or responsibility with respect to
Recipient contracts with third parties.
(b) Recipients are responsible for ensuring to the extent possible
that the terms, conditions, and costs of contracts constitute the most
economical and effective use of project funds.
(c) All fees for professional and consulting services paid to third
parties in any part with project funds must be covered by written
contracts.
(d) A Recipient shall:
(1) Ensure that all expenditures for goods and services in excess
of $25 reimbursed by CCC are documented by a purchase order, invoice,
or contract;
(2) Ensure that no employee or officer participates in the
selection or award of a contract in which such employee or officer, or
the employee's or officer's family or partners has a financial
interest;
(3) Conduct all contracting in an open manner. Individuals who
develop or draft specifications, requirements, statements of work,
invitations for bids, or requests for proposals for procurement of any
goods or services shall be excluded from competition for such
procurement;
(4) Base each solicitation for professional or consulting services
on a
[[Page 34622]]
clear and accurate description of the requirements for the services to
be procured;
(5) Perform some form of fee, 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 fees or prices; and
(6) Document the decision-making process.
Subpart D--Contributions and Reimbursements
Sec. 1486.400 What are the rules on cost sharing?
(a) The EMP is intended to complement, not supplant, the efforts of
the U.S. private sector. Therefore, no private sector proposal will be
considered without the element of cost-share from the participant and/
or U.S. partners.
(b) There is no minimum or maximum amount of cost share. The degree
of commitment to a proposed project represented by the amount and type
of private funding are both used in determining which proposals will be
approved for funding. The type of cost share is also not specified,
though some contributions are ineligible (Sec. 1486.402). Cost-share
may be actual cash invested or professional time of staff assigned to
the project. Proposals in which private industry is willing to commit
funds, rather than in-kind items such as staff resources, will be given
priority consideration.
(c) Cost-sharing is not required for proposals from U.S. Government
agencies, but is mandatory from all other eligible organizations, even
when they may be party to a joint proposal with a U.S. Government
agency.
(d) Contributions from USDA or other U.S. Government agencies or
programs may not be counted toward the stated cost share requirement.
Similarly, contributions from foreign (non-U.S.) organizations may not
be counted toward the cost share requirement, but may be counted in the
total cost of the project.
(e) An activity that is initiated by FAS, and undertaken by an
organization at the request of FAS, may be exempted from the
contribution requirement. This determination is made at the discretion
of FAS.
Sec. 1486.401 What cost share contributions are eligible?
(a) Eligible contributions are those cost items that:
(1) Have not been or will not be reimbursed by any source outside
of the Recipient organization;
(2) Are made during the period covered by the project agreement;
(3) Are directly related to activities necessary to implement an
approved project; and
(4) Are not proscribed under Sec. 1486.402.
(b) Contributions must be included in a project's line item budget.
Sec. 1486.402 What are ineligible contributions?
(a) The following are not eligible as contributions:
(1) Normal operating expenses and other costs not directly related
to the project;
(2) Any portion of salary or compensation of an individual who is
the focus of a promotional activity;
(3) Depreciation, e.g., office equipment;
(4) The cost of insuring articles owned by private individuals;
(5) The cost of product development or product modifications;
(6) Slotting fees or similar sales expenditures;
(7) Funds, services, capital goods, or personnel provided by any
U.S. government agency;
(8) Capital investments made by a third party, such as permanent
structures, real estate, and the purchase of office equipment and
furniture;
(9) The value of any services generated by a third party which
involve no expenditure by the Recipient or third party, e.g., free
publicity;
(10) The cost of developing any application/proposal for EMP
funding;
(11) Costs included as contributions for any other federally-
assisted project or program;
(12) Membership fees in clubs and social or professional
organizations; and
(13) Any expenditure made prior to approval of an EMP-funded
project.
(b) The Deputy Administrator shall determine, at his or her
discretion, whether any cost not expressly listed in this section may
be included as an eligible contribution.
Sec. 1486.403 What expenditures may CCC reimburse under the program?
(a) A Recipient may seek reimbursement for an expenditure if:
(1) The expenditure is reasonable and has been made in furtherance
of an approved activity or project; and
(2) The Recipient has not been or will not be reimbursed for such
expenditure by any other source.
(b) Subject to paragraph (a) of this section, CCC will reimburse,
in whole or in part, the cost of:
(1) Salaries and benefits of the Recipient's existing personnel or
any other participating organization that are assigned to EMP-funded
projects; however, reimbursement is limited to:
(i) The actual daily rate paid by the Recipient for the employee's
salary or the daily rate of a General Schedule U.S. Government
employee, GS-15/Step 10 in effect during the calendar year in which the
project or activity is approved for funding, whichever is less;
(ii) The actual assigned time of the employee to the project; and
(iii) For benefits, a maximum rate of 30 percent of the existing
salary paid to each assigned employee. In addition, reimbursement for
an employee's time spent on an EMP-funded project must be in lieu of
compensation from the Recipient or any other participating
organization.
(2) Consulting fees for professional services; however,
reimbursement for consulting fees is limited to the daily rate of a
General Schedule U.S. Government employee, GS-15/Step 10 in effect
during the calendar year in which the project or activity is approved
for funding. Reimbursement is authorized only for actual days worked.
Benefits are not reimbursable.
(3) STRE, including breakfast, lunch, dinner, and refreshments when
part of an approved overseas trade activity; miscellaneous courtesies
such as checkroom fees, taxi fares, and tips; and representation
expenses such as the costs of social events or receptions that are
primarily attended by foreign officials, and which are held at foreign
venues. STRE incurred in the United States is not authorized for
reimbursement, but may be counted as a cost-share contribution to the
project.
(4) Travel expenses, subject to the following:
(i) Air travel is limited to the full-fare economy class rate;
(ii) Per diem is limited to the allowable rate for each domestic or
foreign locale (41 CFR Chapter 301);
(iii) All other expenses while in travel status must conform to
U.S. Federal Travel Regulations (41 CFR Chapters 301 and 304); and
(iv) Air travel must comply with the Fly America Act, 49 U.S.C.
App. 1517. Expenses in excess of the authorized per diem rates may be
allowed in special or unusual circumstances (41 CFR part 301, subpart
D), and must be approved in advance. The CCC will not reimburse any
portion of air travel in excess of the full fare economy rate or when
the participant fails to notify the Counselor/Attache in the
destination country in advance of the travel unless the Deputy
Administrator determines it was impractical to provide such
notification.
[[Page 34623]]
(5) Direct administrative expenses other than those included in
overhead costs.
(6) Indirect costs (overhead expenses) include those administrative
expenses not identified elsewhere in a project's budget but which are
necessary to the implementation and completion of the project. Such
expenses may include the cost of rent, utilities, telephone and fax,
postage, express couriers, photocopying, office supplies, etc., on a
pro-rated basis. Any indirect cost not identified will not be eligible
for reimbursement. Indirect costs for overhead and administrative
expenses incurred by both private (excluding market development
cooperators, state regional trade groups, and for-profit organizations)
and government Recipients (excluding FAS) may be reimbursed up to a
maximum of 10 percent of the portion of the project budget funded by
the EMP. Indirect costs shall be calculated on the basis of project
costs before adding the indirect charges. These expenses may be charged
only for those items not covered elsewhere in the project budget, and
must be specified. Overhead costs are not reimbursable for any project
funded under the Technical Issues Resolution Fund or the Quick Response
Marketing Fund.
(7) Rental costs for equipment necessary to carry out approved
projects. Equipment rentals must be returned by the Recipient to the
supplier in accordance with the lease agreements, but in no case later
than 90 calendar days from the completion date of the project.
Sec. 1486.404 What expenditures are not eligible for program funding?
(a) CCC will not reimburse expenditures made prior to approval of a
Recipient's proposal, unreasonable expenditures, or any cost of:
(1) Branded product promotions--in-store, restaurant, advertising,
etc.; this includes labeling and supplementing normal company sales
activities designed to increase awareness and stimulate sales of
branded products;
(2) Administrative and operational expenses for trade shows;
(3) Advertising;
(4) Preparation and printing of magazines, brochures, flyers,
posters, etc., except in connection with specific technical assistance
activities such as training seminars;
(5) Design and development of Internet web sites;
(6) Purchase and depreciation of equipment, e.g. office equipment
or other fixed assets;
(7) Subsidizing or otherwise providing funds for graduate programs
at colleges and/or universities (salaries or fees for individual
students who are directly assigned to specific project activities
appropriate to their backgrounds may be covered on a pro-rated basis);
(8) Subsidizing normal, day-to-day operating costs of an
organization;
(9) Honoraria for speakers;
(10) The costs of new product development;
(11) Costs of developing technical assistance proposals submitted
to the program;
(12) Refundable deposits or advances;
(13) STRE expenses within the United States;
(14) Expenses, fines, settlements, or claims resulting from suits,
challenges or disputes emanating from employment terms, conditions,
contract provisions, and related formalities;
(15) Legal fees, including fees and costs associated with trade
disputes;
(16) Real estate costs other than allowable costs for office space
whose use is assigned specifically to a project funded by the EMP; and
(17) Any expenditure which has been or will be reimbursed by any
other source.
(b)The Deputy Administrator may determine whether any cost not
expressly listed in this section will be reimbursed.
Sec. 1486.405 How are Recipients reimbursed for project expenditures?
(a) After implementation of an EMP project for which CCC has agreed
to provide funding, Recipients may submit claims for reimbursement of
the expenses incurred to the extent CCC has agreed to pay for such
costs. Reimbursement for approved project expenses is limited to 85
percent of the amount specified in the project agreement. The Recipient
may be reimbursed for the remaining 15 percent of the funds after the
final performance report containing the information required by the
agreement is submitted to and approved by FAS.
(b) A format for reimbursement claims is available from the
Marketing Operations Staff, FAS, USDA.
(c) Final reimbursement claims must be made no later than 90 days
after the completion date of the project, and are subject to a complete
final performance report acceptable to FAS.
(d) Any duplicate payment or overpayment made by CCC shall be
returned by the Recipient promptly after discovery of the overpayment
by the Recipient or within 30 days after notification by FAS, either by
submitting a check made payable to the Commodity Credit Corporation and
referencing the applicable project, or by offsetting as a credit on the
next reimbursement claim. All checks shall be mailed to the Director,
Marketing Operations Staff, FAS, USDA.
Sec. 1486.406 Will CCC make advance payments to Recipients?
(a) Policy. In general, CCC operates the EMP on a cost reimbursable
basis.
(b) Exception. Upon request, CCC may make advance payments to a
Recipient against an approved project budget. Up to 40 percent of the
approved project budget may be provided as an advance, either at one
time or in incremental payments. Advances should be limited to the
minimum amounts needed and requested as close as is administratively
feasible to the actual time of disbursement by the Recipient.
Reimbursement claims will be used to offset advances. Recipients shall
deposit and maintain advances in insured, interest-bearing accounts.
(c) Refunds due CCC. A Recipient shall expend all advances within
90 calendar days after the date of disbursement by CCC. A Recipient
shall return all interest earned by advances plus any unexpended
portion of the advance within 90 calendar days after the date of
disbursement by CCC by submitting a check payable to CCC. All checks
shall be mailed to the Director, Marketing Operations Staff, FAS, USDA.
Subpart E--Reporting, Evaluation, and Compliance
Sec. 1486.500 What are the reporting requirements of the program?
(a) Performance reports. (1) Recipients are required to submit
regular progress reports in accordance with the project agreement.
Quarterly progress reports are required for all projects with a
duration of 6 months or longer. Projects of less than 6 months in
duration generally require a mid-term report.
(2) Final performance reports must be submitted no later than 90
days after completion of the project, both electronically (preferably
in PDF format) and in hard copy.
(3) Reporting requirements and formats for both quarterly progress
reports and final performance reports are specified in the project
agreement between CCC and the Recipient organization.
(4) All final performance reports will be made available to the
public.
(b) Financial reports. Final financial reports must be submitted no
later than 90 days after completion of the project. Such reports must
provide a final
[[Page 34624]]
accounting of all project expenditures by cost category, and include
the accounting of actual contributions made to the project by the
Recipient and participating organization(s).
Sec. 1486.501 What is the rule on notifying field offices of
international travel?
The Recipient must advise the Agricultural Counselor(s) or
Attache(s) in the country or countries of any planned visits by the
Recipient or its consultants or other participants to such country or
countries under terms of its agreement. Failure to notify the
Counselor/Attache may result in disallowance of the travel
expenditures.
Sec. 1486.502 How is project effectiveness measured?
Project evaluations may be carried out by FAS at its option with or
without Recipients. FAS may also seek outside expertise to conduct or
participate in evaluations.
Sec. 1486.503 How is program compliance monitored?
(a) The CRS, FAS, performs periodic on-site reviews of Recipients
to ensure compliance with this part, applicable federal regulations and
the terms of the project agreements. Program funds spent
inappropriately or on unapproved activities must be returned to CCC.
The CRS will review contributions from Recipients for compliance with
project budgets as approved and specified in the agreements.
(b) The Director, CRS, will notify a Recipient through a compliance
report when it appears that CCC may be entitled to recover funds from
that Recipient. The report will state the basis for this action.
Sec. 1486.504 How does a Recipient respond to a compliance report?
(a) A Recipient shall, within 60 days of the date of the compliance
report, submit a written response to the Director, CRS. The Director,
CRS, at his or her discretion, may extend the period for response up to
an additional 30 days. If the Recipient does not respond to the
compliance report within the required time period or, if after review
of the Recipient's response, the Director, CRS, determines that CCC may
be entitled to recover funds from the Recipient, the Director, CRS,
will refer the compliance report to the Deputy Administrator.
(b) If after review of the compliance report and response, the
Deputy Administrator determines that the Recipient owes money to CCC,
the Deputy Administrator will so inform the Recipient. The Deputy
Administrator may initiate action to collect such amount pursuant to 7
CFR part 1403, Debt Settlement Policies. Determinations of the Deputy
Administrator will be in writing and in sufficient detail to inform the
Recipient of the basis for the determination. The Recipient has 30 days
from the date of the Deputy Administrator's determination to submit any
money owed to CCC or to request reconsideration.
Sec. 1486.505 Can a Recipient appeal the determinations of the Deputy
Administrator?
(a) A Recipient may appeal the determinations of the Deputy
Administrator to the Administrator. An appeal must be in writing and be
submitted to the Office of the Administrator within 30 days following
the date of the determination by the Deputy Administrator. The
Recipient may request a hearing.
(b) If the Recipient submits its appeal and requests a hearing, the
Administrator, or the Administrator's designee, will set a date and
time, generally within 60 days. The hearing will be an informal
proceeding. A transcript will not ordinarily be prepared unless the
Recipient bears the cost of the transcript; however, the Administrator
may have a transcript prepared at FAS's expense.
(c) The Administrator will base the determination on appeal upon
information contained in the administrative record and will endeavor to
make a determination within 60 days after submission of the appeal,
hearing, or receipt of any transcript, whichever is later. The
determination of the Administrator will be the final determination of
FAS. The Recipient must exhaust all administrative remedies contained
in this section before pursuing judicial review of a determination by
the Administrator.
Sec. 1486.506 When will a project be reviewed?
Any project or activity funded under the program is subject to
review or audit at any time during the course of implementation or
after the completion of the project.
Sec. 1486.507 What is the effect of failing to make required
contributions?
A Recipient's contribution requirement is specified in the project
agreement. If a Recipient fails to contribute the total specified in
the agreement, the difference between the amount contributed and the
total must be repaid to the CCC in U.S. dollars. If a Recipient is
reimbursed by CCC for less than the amount of funds approved in the
agreement, then the final cost share shall equal, on a percentage
basis, the original ratio of private contributions to the authorized
EMP funding level.
Sec. 1486.508 How long must Recipients maintain original project
records?
Each Recipient shall maintain all original records and documents
relating to the project for 3 calendar years following the end of the
project's completion. All documents and records related to the project,
including records pertaining to contractors, shall be made available
upon request.
Sec. 1486.509 Are Recipients allowed to charge fees for specific
activities in approved projects?
Reasonable activity fees or registration fees, if identified as
such in a project budget, may be charged for projects approved for
program funding. Income or refunds generated from an activity, however,
for which the expenditures have been wholly or partially reimbursed,
shall be repaid by submitting a check payable to CCC or offsetting the
Recipient's reimbursement claim. Any activity fees charged must be used
to offset activity expenses. Such fees may not be used as profit or
counted as cost-share. The intent to charge a fee must be part of the
original proposal, along with an explanation of how such fees are to be
used.
Sec. 1486.510 What is the policy regarding disclosure of program
information?
(a) Documents submitted to CCC by Recipients 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 1.11,
Handling Information from a Private Business.
(b) Progress reports, final performance reports, and the results of
any research or other activity conducted by a Recipient under an
agreement, shall be the property of the U.S. Government.
Sec. 1486.511 What is the general policy regarding ethical conduct?
(a) The Recipient shall maintain written standards of conduct
governing the performance of its employees engaged in the award and
administration of contracts. No employee, officer, or agent shall
participate in the selection, award, or administration of a contract
supported by Federal funds if a real or apparent conflict of interest
would be involved. Such a conflict would arise when the employee,
officer, or agent and any member of his or her immediate family, his or
her partner, or an organization which employs or is about to employ any
of the parties indicated herein, has
[[Page 34625]]
a financial or other interest in the firm selected for an award. The
officers, employees, and agents of the Recipient shall neither solicit
nor accept gratuities, favors, or anything of monetary value from
contractors, or parties to sub-agreements. However, Recipients may set
standards for situations in which the financial interest is not
substantial or the gift is an unsolicited item of nominal value. The
standards of conduct shall provide for disciplinary actions to be
applied for violations of such standards by officers, employees, or
agents of the Recipient.
(b) A Recipient shall conduct its business in accordance with the
laws and regulations of the country in which an activity is carried
out.
Dated: June 14, 2004.
A. Ellen Terpstra,
Administrator, Foreign Agricultural Service and Vice President,
Commodity Credit Corporation.
[FR Doc. 04-13862 Filed 6-21-04; 8:45 am]
BILLING CODE 3410-10-P