[Code of Federal Regulations]
[Title 7, Volume 1]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR17.10]

[Page 453-454]
 
                          TITLE 7--AGRICULTURE
 
PART 17_SALES OF AGRICULTURAL COMMODITIES MADE AVAILABLE UNDER TITLE I 
 
Sec. 17.10  Refunds and insurance.

    (a) Participant--failure to comply. 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 GSM may 
demand) whenever the GSM determines that the participant has failed to 
comply with any agreement or commitment made by the participant in 
connection with the transaction financed or with the applicable 
Agricultural Commodities Agreement between the U.S. and the participant.
    (b) Adjustment refunds. All claims by importers for adjustment 
refunds arising out of terms of the contract or out of the normal 
customs of the trade, including arbitration and appeal awards, 
allowances, and claims for overpayment of ocean transportation, if such 
refunds relate to amounts financed by CCC, shall be settled by payment 
in U.S. dollars and such payment shall be remitted by the supplier to 
CCC. The remittance shall be identified with the date and amount of the 
original payment and the applicable purchase authorization number.
    (c) Insurance on c.i.f. sales. The provisions of this paragraph 
apply only to transactions under purchase authorizations that 
specifically authorize c.i.f. sales in which the cost of insurance is 
included in the net c.i.f. invoice price of the commodity financed. When 
the supplier furnishes insurance in favor of or for the account of the 
importer, the policies or certificates of insurance shall include a loss 
payable clause which provides that all claims shall be paid in U.S. 
dollars to the Controller. Such payments shall be accompanied by advice 
of the purchase authorization number, the names and addresses of the 
supplier and importer, the nature of the claim, the quantity of the 
commodity involved in the claim, the date of shipment, the bill of 
lading number, and the name of the vessel. CCC will credit the account 
of the participant or will refund local currency in accordance with 
paragraph (e) of this section.
    (d) Refund of ineligible amounts. If a sale has been financed and 
CCC determines that the sales price exceeds the price permissible under 
Sec. 17.5(b)(4), or that the sale is otherwise ineligible for 
financing, in whole or in part, the supplier shall refund in dollars 
such excess price or ineligible amount to CCC promptly on demand. If not 
promptly refunded, such amount may be set off by CCC against monies it 
owes to the supplier. The making of any such refund to CCC, or any such 
setoff by CCC shall not prejudice the right of the supplier to challenge 
such determination in a court action brought against CCC for recovery of 
the amount refunded or set off.
    (e) Refund of local currency or reduction of amount due. Immediately 
after receipt by CCC of U.S. dollar payment from suppliers, or from or 
for the account of the participant under this section, CCC will provide 
for payment to the participant of the local currency equivalent of 
dollars received, if such local currency has been deposited for

[[Page 454]]

the particular transaction, or will credit the participant's account as 
follows:
    (1) For payments under this section, except paragraph (a), the local 
currency refunded will be at the exchange rate agreed to by the 
Government of the United States and the participant in effect at the 
time the local currency is paid to or for the account of the importer, 
except that if there has been a change in the exchange system or 
structure of the importing country or the destination country, such 
payment shall be made at the agreed exchange rate which was in effect on 
the date of dollar disbursement for the transaction financed, and except 
further that local currency shall not be paid when the dollars are to be 
reauthorized for replacement of the commodity.
    (2) For payment under paragraph (a) of this section, the local 
currency refunded will be at the agreed exchange rate in effect on the 
date of the dollar disbursement for the transaction financed: Provided, 
that local currency will not be refunded to the extent that deposits of 
such currency have been made available to the participant on a grant 
basis.
    (3) For refunds received by CCC under long-term credit agreements 
the participant's account shall be credited with the dollar amount 
refunded or otherwise recovered, and the participant notified 
accordingly.