[Code of Federal Regulations]
[Title 7, Volume 10]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1493.300]

[Page 831-832]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE
 
PART 1493--CCC EXPORT CREDIT GUARANTEE PROGRAMS--Table of Contents
 
       Subpart C--CCC Facility Guarantee Program (FGP) Operations
 
Sec. 1493.300  Notice of default and claims for loss.

    (a) Notice of default. If the foreign bank issuing the letter of 
credit fails to make payment pursuant to the terms of the foreign bank 
letter of credit or related obligation, the exporter or the exporter's 
assignee must submit a notice of default to CCC as soon as possible, but 
not later than ten days after the date that payment was due from the 
foreign bank (the due date). A notice of default must be submitted in 
writing to the Treasurer, CCC, at the address specified in the Contacts 
P/R. If the exporter or the exporter's assignee fails to promptly notify 
CCC of defaults in accordance with this paragraph, CCC may make the 
facility payment guarantee null and void with respect to any payment(s) 
applicable to such default. This time limit may be extended only under 
extraordinary circumstances and if approved by the Controller, CCC. The 
notice of default must include:
    (1) Facility payment guarantee number;
    (2) Name of the emerging market;
    (3) Name of the defaulting bank;
    (4) Payment due date;
    (5) Total amount of the defaulted payment due, indicating separately 
the amounts for principal and interest;
    (6) Date of foreign bank's refusal to pay, if applicable; and
    (7) Reason for the foreign bank's refusal to pay, if known.
    (b) Filing a claim for loss. A claim for a loss by the exporter or 
the exporter's

[[Page 832]]

assignee will not be paid if it is made later than six months from the 
due date of the defaulted payment. A claim for loss must be submitted in 
writing to the Treasurer, CCC, at the address specified in the Contacts 
P/R. The claim for loss must include the following information and 
documents:
    (1) Facility payment guarantee number;
    (2) A certification that the scheduled payment has not been 
received;
    (3) A certification of the amount of accrued interest in default, 
the date interest began to accrue and the interest rate on the foreign 
bank obligation applicable to the claim; and
    (4) A copy of each of the following documents, with a cover document 
containing a signed certification by the exporter or the exporter's 
assignee that each page of each document is a true and correct copy:
    (i)(A) The foreign bank's letter of credit securing the export sale, 
and;
    (B) If applicable, the document(s) evidencing the related obligation 
owed by the foreign bank to the assignee financial institution which is 
related to the foreign bank's letter of credit issued in favor of the 
exporter.
    (ii) Depending upon the method of shipment, the negotiable ocean 
carrier or intermodal bill(s) of lading signed by the shipping company 
with the onboard ocean carrier date for each shipment, the airway bill; 
or, if shipped by rail or truck, the entry certificate or similar 
document signed by an official of the emerging market;
    (iii) The exporter's sales invoice(s) showing the value and basis of 
sale (e.g., FOB, CFR, or CIF) or, if services are billed separately, 
documents that the exporter or its assignee relied upon in extending the 
credit to the issuing foreign bank;
    (iv) An instrument, in form and substance satisfactory to CCC, 
subrogating to CCC the respective rights of the exporter and the 
exporter's assignee, if applicable, to the amount of payment in default. 
The instrument must reference the applicable foreign bank letter of 
credit and the related obligation, if applicable; and
    (v) A copy of the evidence of export report(s) previously submitted 
by the exporter to CCC pursuant to Sec. 1493.280.
    (c) Subsequent claims for defaults on installments. The exporter or 
an exporter's assignee need only provide one claim which meets full 
documentation requirements relating to a covered transaction. For 
subsequent claims relating to such failures of the foreign bank to make 
scheduled installments on the same export, the exporter or the 
exporter's assignee need only submit to CCC a notice of such failure 
containing the information stated in paragraphs (b) (1), (2), and (3) of 
this section; an instrument of subrogation as per paragraph (b)(4)(iv) 
of this section, and the date the original claim was filed with CCC.