PART 201—RULES AND PROCEDURES APPLICABLE TO COMMODITY TRANSACTIONS FINANCED BY USAID Authority: 22 U.S.C. 2381. Source: 55 FR 34232, Aug. 22, 1990, unless otherwise noted. Editorial Note: Nomenclature changes to part 201 appear at 62 FR 38027, July 16, 1997. Subpart A—Definitions and Scope of This Part § 201.01 Definitions. As used in this part, the following terms shall have the meanings indicated below: (a) The Act (b) USAID (c) USAID Geographic Code (d) USAID/W (e) Approved applicant (f) Bank (g) Borrower/grantee (h) Commission (i) Commodity (j) Commodity Approval Application (k) Commodity-related services (l) Cooperating country (m) Delivery (n) Delivery service Delivery services (o) Implementing document (p) Importer (q) Incidental services (r) Mission (s) Non-vessel-operating common carrier (t) Purchase contract (u) Responsible bidder (v) Responsive bid (w) Schedule B (x) Source (y) State (z) Supplier (aa) Supplier's Certificate (bb) United States (cc) Vessel operating common carrier § 201.02 Scope and application. (a) The appropriate implementing documents will indicate whether and the extent to which this part 201 shall apply to the procurement of commodities or commodity-related services or both. Whenever this part 201 is applicable, those terms and conditions of this part will govern which are in effect on the date of issuance of the direct letter of commitment to the supplier; if a bank letter of commitment is applicable, the terms and conditions govern which are in effect on the date of issuance of an irrevocable letter of credit under which payment is made or is to be made from funds made available under the Act, or, if no such letter of credit has been issued, on the date payment instructions for payment from funds made available under the Act are received by the paying bank. (b) The borrower/grantee is responsible for compliance with the applicable provisions of this part by importers and suppliers and for assuring that importers and suppliers are informed of the extent to which this part applies. (c) Unless otherwise indicated, references in this part 201 to subparts or to sections relate to subparts or sections of this part 201. § 201.03 OMB approval under the Paperwork Reduction Act. (a) OMB has approved the following information collection and recordkeeping requirements established by this part 201 (OMB Control No. 0412-0514, expiring July 31, 2000): Sec. 201.13(b)(1) 201.13(b)(2) 201.15(c) 201.31(f) 201.31(g) 201.32(b) 201.32(c) 201.51(c) 201.52(a) 201.74 (b) USAID will use the information requested in these sections to verify compliance with statutory and regulatory requirements and to assist in the administration of USAID-financed commodity programs. The information is required from suppliers in order to receive payment for commodities or commodity-related services. The public reporting burden for this collection of information is estimated to average a half hour per response, including the time required for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Office of Procurement, Policy Division (M/OP/P), U.S. Agency for International Development, 1300 Pennsylvania Avenue, Washington, DC 20523-7801, and the Office of Management and Budget, Paperwork Reduction Project (0412-0514), Washington, DC 20503. [64 FR 17535, Apr. 12, 1999] Subpart B—Conditions Governing the Eligibility of Procurement Transactions for USAID Financing § 201.10 Purpose. This subpart sets forth requirements for USAID financing applicable to transactions for the procurement of commodities and/or commodity-related services. § 201.11 Eligibility of commodities. To qualify for USAID financing, a commodity procurement transaction shall satisfy the following requirements: (a) Description and condition of the commodity. (b) Source. (c) Date of shipping documents. (d) Medium of transportation. (1) By a transportation medium owned, operated or under the control of any country not included within USAID Geographic Code 935; or (2) Under any ocean or air charter which has not received prior approval by USAID/W, Office of Procurement (Transportation Division). (e) Marine insurance. (f) Timely submission of documents. (g) U.S. Treasury Department regulations. (h) Commodities shipped out of a free port or bonded warehouse. (i) Purchase price. (j) Purchases from eligible suppliers. (k) Determination of commodity eligibility. [55 FR 34232, Aug. 22, 1990, as amended at 58 FR 48797, Sept. 20, 1993; 62 FR 38027, July 16, 1997] § 201.12 Eligibility of incidental services. Incidental services may be financed under the same implementing document which makes funds available for the procurement of equipment only if: (a) Such services are specified in the purchase contract relating to the equipment; (b) The price satisfies the requirements of § 201.68; (c) The portion of the total purchase contract price attributable to such services does not exceed 25 percent; and (d) The supplier of such services, prior to approval of the USAID Commodity Approval Application, has neither been suspended or debarred by USAID under part 208 of this chapter, nor has been placed on the “Lists of Parties Excluded from Federal Procurement or Nonprocurement Programs,” published by the U.S. General Services Administration. (e) The supplier of such services meets the requirements of § 228.25 of this chapter. [55 FR 34232, Aug. 22, 1990, as amended at 62 FR 38027, July 16, 1997] § 201.13 Eligibility of delivery services. (a) General. (b) Transportation costs. (1) For shipment beyond the point of entry in the cooperating country except when intermodal transportation service covering the carriage of cargo from point of origin to destination is used, and the point of destination, as stated in the carrier's through bill of lading, is established in the carrier's tariff; or (2) On a transportation medium owned, operated or under the control of any country not included in Geographic Code 935; or (3) Under any ocean or air charter covering full or part cargo (whether for a single voyage, consecutive voyages, or a time period) which has not received prior approval by USAID/W, Office of Procurement, Transportation Division); or (4) Which are attributable to brokerage commissions which exceed the limitations specified in § 201.65(h) or to address commissions, dead freight, demurrage or detention. (c) Inspection services. (d) Marine insurance. (i) The insurance is placed in a country included in the authorized Geographic Code: Provided, that if the authorized Geographic Code is any other than USAID Geographic Code 000, the cooperating country itself shall be recognized as an eligible source; and (ii) Such insurance is placed either in accordance with the terms of the commodity purchase contract or on the written instructions of the importer; and (iii) Insurance coverage relates only to the period during which the commodities are in transit to the cooperating country, except that it may include coverage under a warehouse-to-warehouse clause; and (iv) The premiums do not exceed the limitations contained in § 201.68; and (v) The insurance provides that loss payment proceeds shall be paid in U.S. dollars or other freely convertible currency. (2) Within the meaning of § 201.11(e), as well as this paragraph, insurance is placed in a country only if payment of the insurance premium is made to, and the insurance policy is issued by, an insurance company office located in that country. (e) Suspension and debarment. [55 FR 34232, Aug. 22, 1990, as amended at 62 FR 38027, July 16, 1997] § 201.14 Eligibility of bid and performance bonds and guaranties. The cost of any bid bond or guaranty posted by a successful bidder or of any performance bond or guaranty posted by a supplier is eligible for financing under the implementing document, provided that the bond or guaranty conforms to the requirements of the invitation for bids or the contract, as applicable, and to the extent that the principal amount of the bond or guaranty does not exceed the amount customary in international trade for the type of transaction and commodity involved. Bonds or guaranties may be payable in U.S. dollars, or a freely convertible currency or local currency, and shall be posted in favor of the purchaser. Nationality requirements for sureties, insurance companies or banks who issue bonds or guaranties under USAID-financed transactions are set forth in § 228.38(b) of this chapter. [55 FR 34232, Aug. 22, 1990, as amended at 62 FR 38027, July 16, 1997] § 201.15 U.S. flag vessel shipping requirements. (a) General requirements. (1) At least fifty percent (50%) of the gross tonnage (computed separately for dry bulk carriers, dry cargo liners, and tankers from each of two geographic areas—the U.S. and all other countries) of all goods financed by USAID which are transported on ocean vessels shall be transported on privately owned U.S. flag commercial vessels; and (2) At least fifty percent (50%) of the gross freight revenue generated by all shipments of USAID-financed commodities which are transported to the territory of the borrower/grantee on dry cargo liners shall be paid to or for the benefit of privately owned U.S. flag commercial vessels. (b) Methods of compliance. (2) Compliance with these requirements with respect to dry bulk carriers and tankers shall be achieved for each quantitative unit of cargo. A quantitative unit of cargo is the total tonnage of a commodity or commodities included in one invitation for bids or other solicitation of offers from ocean carriers for the transportation of cargo which may move in full shipload lots. USAID shall approve a charter or other contract of affreightment for a non-U.S. flag vessel only if USAID has determined that at least 50% of the quantitative unit will move on U.S. flag vessels, to the extent that such vessels are available at fair and reasonable rates for such vessels. U.S. flag dry cargo liners whose offers are responsive to the terms of the invitation for bids or other solicitation of vessels may be used for achieving compliance for the quantitative unit. (c) Nonavailability of U.S. flag vessels. (d) Responsibility. (e) Privately owned U.S. flag commercial vessels. Subpart C—Procurement Procedures; Responsibilities of Importers § 201.20 Purpose. This subpart prescribes procurement procedures which shall apply to an importer whenever a commodity procurement is to be financed by USAID subject to this part 201. § 201.21 Notice to supplier. The importer is responsible for providing the supplier with the following information (either through the invitation for bids, the request for quotations or otherwise): (a) Notice that the transaction is to be financed by USAID under this part 201; (b) The identification number of the implementing document; (c) All additional information prerequisite to USAID financing and contained in the instructions from the borrower/grantee to the importer (for example, eligible source of commodity, periods during which deliveries must be made, shipping provisions, and documentation requirements); and, where appropriate, (d) Notice of the marking requirements in § 201.31(d), when the importer is the government of the cooperating country or any if its subdivisions or instrumentalities. § 201.22 Procurement under public sector procedures. (a) General requirements. (b) Formal competitive bidding. (1) Contents of the invitation for bids. (i) Statement of requirements. (ii) Statement regarding submission of bids. (iii) Statement regarding this part 201. (iv) Statement regarding late bids. (2) Handling bids. (3) Awards. (c) Two-stage formal competitive bidding. (d) Competitive negotiation procedures. (i) When it is impossible to develop adequate commodity specifications for use in an invitation for bids; (ii) When price alone would not be an effective means of determining an award ( i.e. (iii) When emergency procurement is justified by a demonstration that the time required for formal competitive bid procedures would result in an unacceptable delay in delivering the commodities; (iv) When proprietary procurement is justified; or (v) When adherence to formal competitive procedures would impair program objectives. (2) When formal competitive bidding procedures have failed, all bids have been rejected, and further use of such procedures would clearly not be productive, the Mission Director may authorize the use of competitive negotiation procedures. Further advertising is not required. The request for quotations may be prepared as a new document or may incorporate appropriate provisions of the invitation for bids. It shall be submitted to those potential suppliers who originally submitted bids in response to the invitation for bids. (e) Small value procurement. (1) The nature of the commodities to be purchased; (2) The number of sources which can supply the commodities; (3) The value of the procurement; and (4) The administrative cost of procuring the commodities. The contract shall be awarded to the offeror with the most advantageous offer, price and other factors considered. (f) Proprietary procurement. (1) Substantial benefits, such as economies in maintenance of spare parts inventories, stronger local dealer organization, better repair facilities, or greater familiarity by operating personnel, can be achieved through standardizing on a particular brand; (2) Compatibility with equipment on hand is required; or (3) Special design or operational characteristics are required. The need for proprietary procurement may serve as the basis for approving the use of competitive negotiation procedures in accordance with paragraph (d) of this section or a waiver for negotiation with a single source in accordance with paragraph (g) of this section. (g) Negotiation with a single source Circumstances. (i) the purchaser can demonstrate the existence of an emergency situation in which the requirement for competition would result in an unacceptable delay in the procurement of the commodities; (ii) proprietary procurement is justified and the necessary commodities or spare parts are available from only one source, taking into account any special requirements such as the need for in-country service capability; or (iii) adherence to competitive procedures would result in the impairment of the objectives of the United States foreign assistance program or would not be in the best interest of the United States. (2) Amendments. (h) Advertising Requirements. (ii) Additionally, if the estimated value of the contract is more than $100,000, or equivalent (exclusive of ocean and air transportation costs), the notice of availability of the invitation for bids or request for quotations shall be published in the “Commerce Business Daily” of the U.S. Department of Commerce. (2) Exceptions. (ii) When formal competitive bid procedures have failed to result in an award pursuant to paragraph (d)(2) of this section and a determination is made to follow competitive negotiation procedures, no further advertising is required. (iii) The requirements for advertising as set forth above may be waived by USAID to avoid serious procurement delays in certain circumstances, provided, however, that efforts shall be made to secure bids or offers from a reasonable number of potential suppliers. (i) USAID approvals. (2) Each contract in excess of $100,000, or equivalent (exclusive of ocean and air transportation costs), must be formally approved by USAID prior to finalization with the supplier. (3) USAID may require that contracts under $100,000 be formally approved prior to finalization with the supplier. § 201.23 Procurement under private sector procedures. (a) General requirements. (b) Publicizing. (c) Notification. (d) Notice of quotations and offers received. (e) Procurement under special supplier-importer relationships. (i) The importer is purchasing for resale or processing, as the supplier's regularly authorized distributor or dealer, a commodity which, under the terms of the distributorship or dealer agreement, the importer is precluded from buying from another supplier; or (ii) The importer is purchasing for resale a registered brand-name commodity from a supplier who is the exclusive distributor of that commodity to the area of the importer. (2) USAID may require the importer to furnish, or cause to be furnished, to USAID documentary evidence of the existence of the relationships described in paragraph (e)(1) of this section. [55 FR 34232, Aug. 22, 1990, as amended at 64 FR 17535, Apr. 12, 1999] § 201.24 Progress and advance payments. (a) Definitions Progress payments. (2) Advance payments. (b) Progress payments Conditions for eligibility. (i) The period between the commencement of work and the first required delivery will exceed four months; (ii) There will be substantial predelivery costs that may have a material impact on a suppliers's working capital; (iii) The total FAS purchase price will exceed $200,000; (iv) The supplier must establish a performance bond or guaranty in favor of the borrower/grantee providing adequate security for the amount of the progress payments; and (v) The amount of the progress payments does not exceed 95 percent of the total FAS purchase price. (2) Notice. (3) Approval. (c) Advance payments Conditions for eligibility. (i) USAID will benefit therefrom, in terms of increased competition and/or lower prices, prior to the issuance of the solicitation or prior to award of a noncompetitive contract; and (ii) The supplier has a financial management system which is adequate for controlling and accounting for U.S. government funds. (2) Amount. (3) Security. (4) Notice. (5) Approvals. § 201.25 Bid and performance bonds and guaranties. Whenever the importer requires the posting of a bid bond or guaranty or performance bond or guaranty, the type of bond or guaranty (certified check, irrevocable letter of credit, bank bond, bank guaranty, or surety bond) shall be at the option of the bidder or supplier. Posted bid bonds or guaranties shall be returned to unsuccessful bidders promptly after an award is made. Unless converted to a required performance bond or guaranty, any bid bond or guaranty posted by the successful bidder shall also be returned promptly. Performance bonds or guaranties (as distinguished from commodity warranties of quality or performance) shall be canceled no later than 30 days after completion of the contract performance guarantied. § 201.26 Expenditure of marine insurance loss payments. Unless otherwise authorized by USAID, any marine insurance loss payment under a marine insurance policy financed pursuant to this part 201 received by the importer, either directly or indirectly, shall be used by the importer as follows: (a) To procure from a source specified in the implementing document which originally provided the USAID funds, commodities which have been designated by USAID to the borrower/grantee as eligible for USAID financing; or (b) To cover the cost of repairs to commodities damaged during shipment. Subpart D—Responsibilities of Suppliers § 201.30 Purpose. This subpart establishes the responsibilities of suppliers who furnish commodities and/or commodity-related services. § 201.31 Suppliers of commodities. (a) Performance of the sales contract. (b) Responsibilities relating to eligibility of commodities. (1) The commodity conforms to the description contained in its contract and letter of credit or direct letter of commitment and, unless otherwise authorized by USAID in writing, the commodity is unused and has not been disposed of as surplus by any governmental agency; (2) The source of the commodity complies with the provisions of § 201.11(b) relating to source as required by its contract, letter of credit or direct letter of commitment; (3) The provisions of § 201.11(d) relating to the medium of transportation are complied with to the extent that the supplier arranges such transportation; (4) All documents required by § 201.52 to be submitted by the supplier to receive payment are submitted by it on or before the terminal date specified in the letter of credit, direct letter of commitment, or, if payment is to be made at sight, the purchase contract; (5) The provisions of the U.S. Treasury Department Foreign Assets, Sanctions, Transactions and Funds Control Regulations published in 31 CFR parts 500 through 599, as from time to time amended, are complied with; and (6) The purchase price of the commodity meets the requirements of subpart G of this part applicable to the supplier. (c) Responsibilities relating to eligibility of delivery services. (d) Marking of shipping containers and commodities Affixing emblems and identification numbers. (i) Durability of emblems. (ii) Size of emblems. (iii) Design and color of emblems. (2) Exception to requirement for affixing emblems. (i) Raw materials shipped in bulk (including grain, coal, petroleum, oil, and lubricants); (ii) Vegetable fibers packaged in bales; and (iii) Semifinished products which are not packaged in any way. (3) Waiver. (e) Export licenses and approvals. (f) Distribution of shipping documents. (g) Adjustment refunds, credits, and allowances. (h) Vesting in USAID of title to commodities. (i) Termination or modification of USAID-financing. [55 FR 34232, Aug. 22, 1990, as amended at 64 FR 17535, Apr. 12, 1999] § 201.32 Suppliers of delivery services. (a) Performance of the service contract. (b) Adjustment in the price of delivery services. (c) Marine insurance reporting requirement. [55 FR 34232, Aug. 22, 1990, as amended at 64 FR 17535, Apr. 12, 1999] Subpart E—General Provisions Relating to USAID Financing of Commodities and Commodity-Related Services § 201.40 Purpose. This subpart sets forth certain provisions of general application to transactions subject to this part. § 201.41 Audit and inspection. The borrower/grantee shall maintain records adequate to document the arrival and disposition in the cooperating country of all commodities financed by USAID, and to identify the importer (or the first purchaser or transferee if the commodity is imported by the borrower/grantee) for a period of 3 years following the date of payment or reimbursement by USAID or for such other period as USAID and the borrower/grantee agree. In addition, the borrower/grantee or the importer shall, to the extent either exercises control or custody over the commodities, permit USAID or any of its authorized representatives at all reasonable times during the 3-year or other agreed period to inspect the commodities at any point, including the point of use, and to inspect all records and documents pertaining to such commodities. § 201.42 Reexport of USAID-financed commodities. Unless specifically authorized by USAID, commodities imported into a cooperating country under USAID-financing may not be exported in the same or substantially in the same form from the cooperating country. In the event of any unauthorized reexport, the borrower/grantee shall pay promptly to USAID, upon demand, the entire amount reimbursed or such lesser or greater amount as USAID may deem appropriate under the circumstances of the particular transaction. Such an amount shall in no event, however, exceed the greater of either the amount reimbursed or the amount realized from the reexport. § 201.43 Diversion clause. USAID may require that charter parties, bills of lading, or other ocean shipping documents covering USAID-financed commodities contain a clause substantially as follows: USAID may at any time prior to unloading prescribe a different port of discharge from among the ports covered by the applicable tariff. Diversion charges shall apply in accordance with the tariff or contract of affreightment. Deviation insurance and extra handling costs actually incurred shall be reimbursed. § 201.44 Vesting in USAID of title to commodities. (a) Vesting upon order of USAID (1) Rights of USAID upon vesting of title. (2) Diversion of commodities. (b) Financial responsibility of USAID under vesting order. (2) USAID will assume the responsibility for any extra costs (including the costs of marine insurance and handling) which are incurred as a result of a diversion. Such costs shall not exceed diversion charges as per tariff (liner shipments) or contract of affreightment (charters), and shall include only those deviation insurance and extra handling costs which are actually incurred. (3) USAID shall incur no liability to the borrower/grantee, the importer, or to the approved applicant by reason of any order which vests in USAID title to commodities, or by reason of any request for the diversion of commodities. § 201.45 Termination or modification of a loan, grant or implementing document. (a) Effect of termination or modification. (2) Unless the supplier and USAID agree otherwise, to the extent that the supplier has received an irrevocable letter of credit from a bank under an USAID letter of commitment, the purchase contract shall be affected only to the extent necessary to comply with any vesting order issued by USAID in accordance with § 201.44. (b) Responsibilities of parties after termination or modification of USAID-financing. § 201.46 Compensation to supplier if shipment is prohibited. (a) Payment to supplier. (1) Shipment is prohibited by order of the U.S. Government and such order has general application to all shipments to the cooperating country. (2) Payment may not be made by the bank under the terms of the letter of credit or payment instructions. (3) The supplier is unable to dispose of the commodities without loss. (4) The supplier tenders to USAID a negotiable warehouse receipt covering the commodities in question and presents to USAID such other documentation required by § 201.52 as may be appropriate under the circumstances. (b) Other settlement. § 201.47 Use of marine insurance loss proceeds. The borrower/grantee shall pay promptly to USAID a sum equal to the proceeds received by an importer or its assignee in settlement of a marine insurance claim under a marine insurance policy financed pursuant to this part 201, if such proceeds are not expended in the manner provided by § 201.26 within a reasonable period after receipt by the importer. Subpart F—Payment and Reimbursement § 201.50 Purpose. This subpart describes: (a) The methods by which USAID will make payment or reimbursement for commodities and commodity related services which have been furnished; (b) The documentation required to be submitted to USAID for the purpose of obtaining such payment or reimbursement; and (c) The terminal date for presentation of documents which USAID requires as a condition for payment or reimbursement. § 201.51 Methods of financing. Under procurements subject to this part 201, the following methods of financing may be employed by USAID In each case, the method of financing shall be consistent with provisions in the pertinent implementing documents. (a) Direct reimbursement. (b) Letter of commitment to a bank. (1) Requests for bank letters of commitment. (i) Identification of the loan or grant agreement; (ii) The dollar amount of the letter of commitment; (iii) The name and address of the bank to which the letter of commitment is to be issued; (iv) The name and address of the approved applicant; (v) The expiration date to be stated in the letter of commitment, which shall be not later than the final date specified in the implementing document for submission of documentation to the bank as a basis for disbursement against the letter of commitment, except that, if a terminal shipping date is provided in the implementing document, the expiration date shall be the last day of the month following the month in which the terminal shipping date occurs. (vi) Identification of the items to be financed under the letter of commitment (including the Schedule B identification). (2) Approved applicant's request to bank Form and effect of request. (ii) Borrower/grantee assignment under a letter of commitment. (iii) Requirements imposed by bank. (3) Reimbursement of bank. (c) Bank charges under letters of commitment. (2) To claim reimbursement for interest on advances, the bank shall claim reimbursement on the Voucher SF 1034, attaching thereto: (i) The monthly statement of advance account established under the letter of commitment, in duplicate, showing: (A) The opening balance; (B) The date and amount of each type of charge attributable to the letter of commitment, indicating the number of the letter of commitment, subsidiary letter of credit, or payment instruction or request under which the charge was made; (C) The date and amount of each USAID reimbursement to the bank, indicating either the USAID bureau voucher number or the number of the letter of commitment, subsidiary letter of credit, or payment instruction or request under which the payment was made; and (D) The closing balance; (ii) The bank's monthly advice of charge, in duplicate, showing: (A) The outstanding balance in the advance account on each day of the period covered; and (B) The amount of interest charged during the period. (3) Certification. (4) Report. (d) Direct letter of commitment to a supplier. (2) Assignment may be permitted as provided for in the direct letter of commitment. [55 FR 34232, Aug. 22, 1990, as amended at 64 FR 17535, Apr. 12, 1999] § 201.52 Required documents. (a) Commodities and commodity-related services. (1) Voucher. (2) Supplier's invoice. (A) The name and address of the importer; (B) The quantity and the description of each item shipped, in sufficient detail, including the U.S. Department of Commerce Schedule B number, for ready identification; (C) The total gross sales price; (D) The total net sales price (determined by deducting from the total gross sales price the amounts required to be deducted under § 201.65(d)); (E) The sales price for each item net of all trade discounts under § 201.65(d); (F) The delivery terms (e.g., f.o.b., f.a.s., c.i.f. or c. & f.); (G) The type and dollar amount of each incidental service which is not included in the price of the commodity and for which reimbursement is claimed; (H) The type and dollar amount of each delivery service obtained by the supplier of the commodity for the importer's account which is not included in the price of the commodity and for which reimbursement is claimed; (I) To the extent that the commodity price includes commodity-related services, a list of each such service and the dollar amounts attributable to each such service; and (J) Unless a Supplier's certificate covering marine insurance is submitted, the name and address of the supplier of such insurance and the dollar cost thereof. (ii) Each invoice submitted under a bank letter of commitment shall be marked PAID by the supplier, or alternatively, the bank may certify by an endorsement on or attachment to the invoice that payment has been made in the amount shown on the invoice. (iii) Each invoice must contain certifications from the supplier to the effect that: (A) The USAID marking requirements set forth in § 201.31(d) have been met; (B) Unless otherwise specified by USAID, the supplier has airmailed to the USAID Mission in the capital city of the cooperating country one copy each of the invoice, packing list and bill(s) of lading; (C) If shipment is effected by ocean vessel, one copy of all bill(s) of lading described in § 201.52(a)(4) has been maiIed to: Maritime Administration, Division of National Cargo, 400 Seventh Street SW., Washington, DC 20590-0001; and Transportation Division, Office of Procurement, USAID, Washington, DC 20523-7900. (3) Charter party. (i) By the commodity supplier whenever USAID-finances any portion of the dollar price of a commodity sale under c.&f. or c.i.f. delivery terms, or (ii) By the supplier of ocean transportation whenever USAID-finances the freight under any freight reimbursement arrangement. If shipment is made under a consecutive voyage or time charter and the person or organization seeking reimbursement or payment has previously submitted to USAID a copy (or photostat) of said charter party in support of a prior claim for reimbursement or payment, such person or organization may, in lieu of further submission of the charter party, certify to the fact of prior submission. (4) Evidence of shipment. (ii) When the commodity is transported to the cooperating country under its own power (e.g., a fishing vessel), USAID will require a certificate signed by the importer or its authorized agent, certifying that the commodity has been received by the importer, to be submitted instead of a bill of lading. (iii) When the supplier is not responsible under the terms of its agreement with the importer for assuring that the commodities are loaded on board the vessel, such as when delivery terms are f.a.s. port of shipment, the importer may request and the Commodity Support Division, Office of Procurement, USAID, Washington, DC 20523-7900 may authorize the following documents, instead of a bill of lading, to be submitted with a claim for reimbursement or payment for the commodities: (A) A dock or warehouse receipt containing the commodity description, weight and cubic measurement, port of loading, and, if available, name and flag of vessel; the receipt must show consignment of the commodities to a person or organization designated by the importer; and (B) A letter from the consignee addressed to USAID undertaking to arrange for shipment of the goods to the cooperating country and to deliver to: FM/CMPD, Office of Financial Management, USAID, Washington, DC 20523-7702, within 15 days from the date of shipment, a copy of the bill of lading evidencing shipment to the cooperating country. The bill of lading shall indicate the carrier's complete statement of charges, as in paragraph (a)(4)(i) of this section. (5) Documentation on shipments to a free port or bonded warehouse. (i) Provide as an attachment to a copy of the invoice, a copy of the bill of lading (bearing a notation of the freight cost) covering the shipment of the commodity into the free port or bonded warehouse, or (ii) If such a bill of lading is not available to the supplier, provide the following information and certify to the accuracy of the information: the country or area from which the commodities were shipped to such free port or bonded warehouse; the name and flag of the vessel which transported the commodities from the source country to the free port or bonded warehouse; the cost of the freight for such shipment; and the free port or bonded warehouse to which shipment was made from the source country, or (iii) If commodities have been commingled in the warehouse in such a way that shipments out of the warehouse cannot be related to particular shipments into the warehouse, the supplier shall certify to the best of its knowledge and belief that a portion of the commodities was transported to the free port or bonded warehouse as required by § 201.13(b)(1)(i)(D), and the quantity for which USAID-financing is sought does not exceed that amount. (6) Supplier's Certificate (form AID 282). (i) The supplier of the commodity for the cost of the commodity and any commodity-related services furnished by the commodity supplier; (ii) The carrier for the cost of ocean or air transportation financed by USAID; (iii) The insurer for the cost of marine insurance financed by USAID if such cost exceeds $50. (7) Freight forwarder's invoice. (8) Commodity approval application (form AID 11). (b) Execution of Certificates. (2) The Supplier's Certificate covering the cost of marine insurance may be executed on behalf of the marine insurer by an insurance broker or by a commodity supplier if the commodity supplier is the assured under an open cargo insurance policy issued by the marine insurer and is authorized under such policy to bind the marine insurer by issuing insurance certificates or policies in favor of importers. In each such case, the insurance broker or commodity supplier shall indicate on the Supplier's Certificate the name and address of the insurance company which is acting as the supplier of marine insurance and shall describe itself below its signature as a commodity supplier issuing a certificate under an open cargo insurance policy or as an insurance broker. [55 FR 34232, Aug. 22, 1990, as amended at 64 FR 17535, Apr. 12, 1999] § 201.53 Final date for presentation of documents. (a) Direct reimbursement. (b) Letter of commitment to a bank. (1) Payments or negotiations made under letters of credit expiring no later than the expiration date stated in the letter of commitment, or (2) Payments to a supplier, the approved applicant, or, at the request of an approved applicant, to a person other than the supplier, made no later than such expiration date. (c) Direct letter of commitment to supplier. Subpart G—Price Provisions § 201.60 Purpose and applicability of this subpart. This subpart prescribes rules relating to prices, discounts, commissions, credits, allowances, and other payments. These rules shall be observed in the procurement of commodities and commodity-related services financed under this part. The rules implement and supplement the requirements of the Act relating to prices in such procurement. The general purpose of these rules is to assure the prudent use of USAID funds. (a) Statutory price limitations. inter alia (2) Section 604(b) of the Act provides that no funds made available under this Act shall be used for the purchase in bulk of any commodities at prices higher than the market price prevailing in the United States at the time of purchase, adjusted for differences in the cost of transportation to destination, quality, and terms of payment. (b) Transactions covered. (c) Compliance. § 201.61 Meaning of terms in this subpart. (a) Class of purchaser (b) Commission. (c) Comparable domestic sale (d) Comparable export sale (e) Comparable sale (1) Is not sufficiently different from the sale being tested to result customarily in a price different from the price in the sale being tested; or (2) Can be related to the sale being tested through application of a customary price differential. A sale which is otherwise comparable to another sale is not rendered noncomparable by virtue of its being made out of a free port or bonded warehouse. The fact that a sale is made out of a free port or bonded warehouse shall not cause that sale to differ from otherwise comparable sales with respect to terms of sale, supply area, or period of delivery. (f) The date the purchase price is fixed (g) Export differential (h) Period of delivery (i) Producer (j) Purchase price (k) Representative of the importer (l) Similar commodity (m) Supply area (n) Time of purchase (o) Transportation cost § 201.62 Responsibilities of borrower/grantee and of supplier. (a) Responsibilities of borrower/grantee. (1) When required by USAID, develop and periodically update, or cooperate with USAID in the development and updating of, lists of importers who have traditionally imported the commodities which may be purchased under the loan or grant. Such listings shall be by commodity groupings selected by USAID, cover all commodities eligible for financing, and, to the extent such information is available, show the names and addresses of all importers, regardless of the source from which their imports originated. (2) Insure that the importer (i) Procures in accordance with the conditions set forth in subpart C as applicable, and (ii) Except as provided otherwise in § 201.22, pays no more than the lowest available competitive price, including transportation cost, for the commodity. (b) Responsibility of supplier. § 201.63 Maximum prices for commodities. (a) U.S. prevailing market price—U.S. source. Provided, however, (b) U.S. prevailing market price—non-U.S. source. Provided, however, (c) Supplier's comparable export price—U.S. and non-U.S. sources. (2) The requirement in paragraph (c)(1) of this section shall not apply to the purchase price: (i) In any sale under formal competitive bid procedures; or (ii) In any sale of a commodity generally traded on an organized commodity exchange. (3) Comparable export sales (i) Under formal competitive bid procedures; or (ii) Of a commodity by a supplier to affiliates if the supplier demonstrates an established practice of selling the commodity to affiliates at prices lower than the prices it charges to nonaffiliates. (d) Source country prevailing market price—non-U.S. source. Provided, however, (e) Price test in the absence of comparable sales at time of purchase Sale by supplier who is not the producer. (i) The lower of the following: The price paid by the supplier for the commodity or the price charged by the producer in the original sale of that specific commodity; and (ii) A markup over the amount allowed in paragraph (e)(1)(i) of this section which may not exceed the lower of the following: The markup over direct cost that is usual and customary in sales by the supplier of the same commodity, if any, or the most similar commodity, or, the markup over direct cost that is usual and customary in such sales by the competitors of the supplier; and (iii) To the extent not included in paragraph (e)(1)(i) of this section an amount not to exceed the cost at prevailing rates of those expenses recognized in § 201.64(a) and actually incurred in moving the commodities supplied from the point of purchase to a position alongside or on board the vessel or other export conveyance at point of export. (2) Sale by a supplier who is the producer. (f) Additional rules for sales through or out of a free port or bonded warehouse. (i) The maximum price f.o.b. or f.a.s. source country eligible for USAID-financing under the foregoing provisions of this § 201.63: plus (ii) Transportation cost calculated on the basis of the prevailing ocean freight rate for shipments using the most direct route from the source country to the cooperating country on the type and flag of vessel on which the commodity actually moved from the free port or bonded warehouse to the cooperating country. (2) The purchase price of a commodity f.o.b. or f.a.s. a free port or bonded warehouse shall not exceed the maximum price established in paragraph (f)(1) of this section, minus transportation costs from the free port or bonded warehouse to the cooperating country, calculated on the basis of the prevailing ocean freight rate from the free port or bonded warehouse to the cooperating country for the type and flag of vessel on which the commodity actually moved between those points. (g) Commodity price subject to escalation. (1) The purchase price of the commodity before the operation of the escalation clause to the extent that it does not exceed the applicable price limitations contained in this subpart; and (2) That portion of the commodity price attributable to the operation of the price escalation clause if such clause: (i) Uses a formula based on variations in a cost factor which is reasonably related to the price of the commodity subject to escalation and is readily determinable; (ii) Provides for downward as well as upward adjustment of the price; and (iii) Accords with recognized trade practices. § 201.64 Application of the price rules to commodities. (a) Calculation of commodity prices on a common basis. (b) Calculation of commodity prices which involve transportation costs. (2) In testing a purchase price involving transportation cost for compliance with §§ 201.62 and 201.63(b), the test or measurement prices shall be: (i) Prices based upon transportation by a U.S.-flag vessel if the price tested involves transportation by such vessel; or (ii) Prices based upon transportation by either a U.S.-flag or a foreign-flag vessel, whichever is lower, if the price tested involves transportation by a foreign-flag vessel. (c) Calculation of amount eligible for financing when shipment is through or out of a free port or bonded warehouse. (i) The maximum price described in § 201.63(f)(1), or (ii) The maximum price described in § 201.63(f)(1)(i), plus any transportation costs into the free port or bonded warehouse which meet the requirements of § 201.13(b)(1)(i)(D), and any transportation costs out of the free port or bonded warehouse on a vessel flying the flag of a country included in the authorized geographic code. (2) When a shipment is f.o.b. or f.a.s. a free port or bonded warehouse, USAID will finance no more than the lower of the following: (i) The maximum price described in § 201.63(f)(2), or (ii) The maximum price described in § 201.63(f)(1)(i), plus any transportation costs into the free port or bonded warehouse which meet the requirements of § 201.13(b)(1)(i)(D). (d) Determination of prevailing prices. § 201.65 Commissions, discounts and other payments, credits, benefits and allowances. (a) General. (b) Commissions to sales agents. (c) Commissions and other payments, credits, benefits or allowances to importers, purchasing agents and others. (1) To or for the benefit of the importer; (2) To or for the benefit of a purchasing agent or other agent or representative of an importer, even though such agent or representative may also have an agreement with a supplier to represent the supplier; or (3) To any third party in connection with a sale by the supplier to its dealer, distributor, or established agent in the cooperating country. (d) Trade discounts. (e) Commissions and other payments or benefits attributable to USAID-financing. (f) Maximum commission. (g) Reporting. (h) Brokerage commission. (1) Such commission does not exceed 2 1/2 (2) Such commission is payable to an individual resident in a country included in the authorized source code; a non-resident citizen of a country included in the authorized source code; or a corporation or partnership organized under the laws of a country included in the authorized source code; and (3) The names of all persons receiving such commissions appear on the face of the charter party. (i) Address commissions. § 201.66 Side payments. Any payment which an importer makes to a supplier, whether or not indicated on the supplier's invoice and whether or not financed by USAID, in connection with an USAID-financed transaction, shall be disclosed by the supplier on the Supplier's Certificate and shall be considered as part of the actual purchase price in applying the rules of this subpart G. § 201.67 Maximum freight charges. (a) Ocean freight rates Similar shipments. Similar shipments (2) Maximum charter rates. (A) The rate prevailing for similar shipments; or (B) The lowest rate charged by the vessel for similar shipments on the same voyage. (ii) In determining the rate prevailing for similar shipments, recognized sources of charter market rate information will be consulted and, if necessary, will be supplemented by other information which contributes to a realistic determination of the prevailing charter rate. (3) Effect of USAID approval of a charter. (4) Maximum liner rates. (i) The conference contract rate or the conference noncontract rate, whichever is lower; (ii) The rate named in any tariff or other rate listing for the same destination and commodities on file at the Federal Maritime Commission; or (iii) The lowest rate charged by the VOCC for similar shipments on the same voyage. (5) Despatch. (A) At the port of unloading on c.i.f. or c. & f. shipments, or (B) At the port of loading or unloading on f.o.b. or f.a.s. shipments, to the extent that despatch exceeds demurrage incurred on the same voyage. (ii) Refunds of despatch, supported by the vessel's signed laytime statement(s), must be transmitted to the Office of Financial Management, USAID, Washington, DC 20523-7702, within 90 days after date of discharge of cargo on which the despatch was earned. (b) Airfreight rates. (1) The rate under any air charter approved by USAID covering the transaction; (2) The lowest rate charged by the carrier for similar shipments on the same flight; or (3) The rate prevailing in the industry for similar shipments. A similar shipment is one which is similar with respect to type of commodity, commodity rate classification, quantity, flag category, choice of airport, and other pertinent factors. [55 FR 34232, Aug. 22, 1990, as amended at 64 FR 17535, Apr. 12, 1999] § 201.68 Maximum prices for commodity-related services. (a) The price for an USAID-financed commodity-related service, other than ocean or air transportation, shall not exceed the lower of: (1) The prevailing price, if any, for the same or similar services; or (2) The price paid to the supplier under similar circumstances by other customers. (b) The eligible price of services covered by an NVOCC bill of lading is limited to the sum of the costs of individual delivery services eligible under § 201.13 of this part, and only to the extent that the cost of each such service is eligible for USAID-financing under § 201.67 or § 201.68(a) of this part. § 201.69 Cooperating country taxes and fees. USAID will not finance any taxes or fees imposed under the laws in effect in the cooperating country, including customs duties, consular and legalization fees, and other levies. Subpart H—Rights and Responsibilities of Banks § 201.70 Purpose. This subpart sets forth the rights and responsibilities of banks with regard to reimbursement under a letter of commitment opened pursuant to an USAID request. Banks will not be held responsible for the requirements of subparts B, C, D, E (excluding § 201.44(a)(1)), and subpart G except insofar as provisions of these subparts are included in this subpart H or in a letter of commitment issued by USAID to a bank. § 201.71 Terms of letters of credit. Any letter of credit issued, confirmed or advised under an USAID letter of commitment and any agreement relating to such letter of credit or to instructions for payment issued by an approved applicant shall not be inconsistent with or contrary to the terms of the letter of commitment. Any such letter of credit or agreement may be modified or extended at any time in such a manner and to such extent as is acceptable to the approved applicant and the bank: Provided, § 201.72 Making payments. (a) Collection of documents. (b) Examination of documents other than Supplier's Certificate. (1) Shipment. (2) Source of commodities. (3) Destination. (4) Description. (5) Discounts and purchasing agents' commissions. (6) Certifications. (7) Other requirements. (c) Acceptance of certificates. § 201.73 Limitations on the responsibilities of banks. The following general limitations on the responsibilities of banks issuing, advising, or confirming letters of credit and making payments under letters of credit or otherwise shall apply. (a) Sufficiency and completeness of documents. (b) Reimbursement right notwithstanding certain deficiencies. (c) Nonresponsibility of bank for truth or accuracy of statements or certifications. (d) Protection of bank making payment. (e) Payment to third persons. (f) Bank procedures with regard to certain suppliers. (g) Provision of implementing documents. § 201.74 Additional documents for USAID. In addition to the documents required for reimbursement, a bank shall retain in its files for a period of at least 3 years and shall make available to USAID promptly upon request a copy of any of the following documents which may pertain to an USAID-financed transaction: (a) Each letter of credit issued, confirmed, or advised by it, together with any extension or modification thereof; (b) Payment instructions received from the approved applicant; (c) Each application and agreement relating to such letter of credit or instructions for payment, together with any extension or modification thereof; (d) A detailed advice of the interest, commissions, expenses, or other items charged by it in connection with each such letter of credit or payment instructions. § 201.75 Termination or modification. If USAID directs that the delivery of commodities be terminated, orders that title to commodities be vested in it, or modifies any implementing document concerning the disposition of documents, USAID shall give written notice thereof to the banks holding applicable letters of commitment and shall instruct each bank with regard to the disposition of documents. Each such bank shall be relieved of any liability whatsoever to the approved applicant for anything done or omitted to be done under instruction of USAID. Notwithstanding the foregoing, a bank shall comply with the instructions of USAID only to the extent that it may do so without impairing or affecting any irrevocable obligation to any person or organization except an approved applicant, and in the event the bank shall incur any costs, expenses, or liabilities, including any liability to the approved applicant, it shall be repaid and reimbursed by USAID in respect thereof. Subpart I—Rights and Remedies of USAID, and Waiver Authority § 201.80 Purpose. This subpart sets forth certain USAID rights and remedies against borrower/grantees and suppliers, and prescribes certain general provisions relating to the waiver by USAID of this part. § 201.81 Rights of USAID against borrower/grantees. If any transaction financed hereunder violates the requirements of this part or any U.S. statute or any rule or regulation of USAID promulgated under any such statute, USAID may require the borrower/grantee to refund the amounts USAID determines are attributable to such violation and may exercise any right of acceleration or termination contained in the implementing document. The borrower/grantee shall be deemed to have agreed to make such refund or accelerated payment promptly upon request by USAID and shall be deemed to have consented to any modification of the implementing document determined by USAID to be necessary to reflect any such refund or acceleration. § 201.82 Rights of USAID against suppliers. Without limiting the responsibility of the borrower/grantee or other parties, USAID may require an appropriate refund to it by a supplier under any transaction which violates the requirements of this part, whenever in USAID's opinion the failure of the supplier to comply with the rules and other requirements of this part has contributed to such violation. Any refund requested will include interest from the time of payment to the supplier. Interest will be charged at the rate established by the Secretary of the Treasury in accordance with the Internal Revenue Code, 26 U.S.C. 6621(b). § 201.83 No waiver of alternative rights or remedies by USAID. No right reserved to USAID in this subpart to seek a refund from a borrower/grantee, and no exercise of such right, whether or not successful, shall in any way limit or affect, under the doctrine of the election of remedies or otherwise, USAID's rights against a supplier under this subpart I or under the laws of the United States, or of any other country or political subdivision thereof, nor shall any right or remedy herein reserved to USAID against a supplier in any way derogate from or otherwise limit any other rights or remedies which may accrue to USAID under such laws. § 201.84 Limitation on period for making refund requests. USAID will endeavor, but shall not be bound, to make any requests for refunds from a borrower/grantee within three years from the date of the last disbursement of USAID funds for the transaction to which such request relates. § 201.85 Legal effect of USAID approvals and decisions. In any transaction subject to this part 201, USAID may reserve certain rights to approve the transaction for USAID-financing. USAID, in reserving any approval rights, acts solely as a financing entity to assure the proper use of United States Government funds. Any decision by USAID to exercise or refrain from exercising these approval rights shall be made as a financier and shall not be construed as making USAID a party to the contract or incurring any liability to the parties jointly or to any of them. § 201.86 Waiver and amendment authority. USAID may waive, withdraw, or amend at any time any or all of the provisions of this part. Appendix A to Part 201—Supplier's Certificate and Agreement With the Agency for International Development (AID 282) Appendix B to Part 201—Application for Approval of Commodity Eligibility (AID 11)