employee of such a facility in the performance of the weighing covered by the certificate.

(5) Federal appeal inspection certificate. A Federal appeal inspection certificate, when included in the documents presented for payment, shall supersede any other inspection certificate required by this subpart, the applicable purchase authorization, or the letter of commitment. Appendix B or the applicable purchase authorization will specify the particulars of any required inspection certificate.

(6) Notice of price approval. (i) The document required for each commodity to show that the price is approved for financing (see Appendix B) shall be submitted to the bank with the documents covering the first transaction under the contract. The unit price shown on the supplier's invoice must not exceed the approved unit price shown on the price approval document.

transactions

(ii) For subsequent under the same contract, the supplier shall certify on the CCC copy of the detailed invoice as follows:

I hereby certify that the applicable signed copy of the notice of price approval was submitted to (name of bank) with documents covering Invoice No. dated-for $——.

(7) Transshipment, certification required on invoice. If the Form CCC106 requires grain to be exported from a Canadian transshipment point in a U.S.-flag vessel, and if it authorizes financing of ocean freight or ocean freight differential by CCC, the following certification is required on the supplier's invoice:

The undersigned hereby certifies that an equivalent quantity of the same kind of grain covered by this invoice has been shipped in U.S.-flag vessels from U.S. Great Lakes ports via the St. Lawrence Seaway and received by the undersigned at Canadian transshipment points and such quantity was not previously applied by the undersigned to any government program to which the provisions of Pub. L. 664, 83d Congress are applicable.

"Kind of grain" as used in the above certification is defined as the same kind of grain covered by the invoice without regard to grade or class.

(8) Other required documents. The other required documents are as follows:

(i) Four copies of the ocean bill of lading.

(ii) Signed original of Form CCC106-1 or 106-3.

(iii) One nonnegotiable copy of the insurance certificate or policy where the cost of insurance is included in the price of the commodity to be financed by CCC.

(d) Documents required for reimbursement of ocean freight financed separately from commodity price. To obtain reimbursement for ocean freight, or for ocean freight differential for any portion thereof which is financed separately from the commodity price, the following documentation shall be submitted:

(1) Signed original of Form CCC329, "Supplier's Certificate", to be executed by the carrier or its agent, covering the dollar cost of ocean freight or ocean freight differential.

(2) One copy of the ocean bill of lading and, if required by the related Form CCC 106-2, a notice of arrival at the first port of discharge of the vessel named in the Form CCC 106-2. In lieu of a notice of arrival the carrier may present a waiver of the notice of arrival signed by the General Sales Manager or Controller.

(3) One copy of the carrier's invoice marked "paid" which shows the total freight costs paid, the amount not eligible for financing by CCC, and the amount for which financing is requested from CCC. Such invoice shall contain the following typed or stamped certification, executed by the supplier:

The undersigned hereby certifies that the vessel named herein and for which ocean freight is claimed, qualifies as a privately owned U.S.-flag commercial vessel within the requirements of Pub. L. 87-266 and is an eligible U.S.-flag vessel for the purposes of Pub. L. 664, 83d Congress.

(4) Signed original of Form CCC 106-2 (or Form CCC-106-3 in the case of cotton).

(5) One copy of the charter party for shipment by dry bulk carrier or tanker.

(6) A request for reimbursement of any balance claimed on a shipment

after initial reimbursement of 90 percent of ocean freight or ocean freight differential as provided in § 17.9(m), shall be supported by the following documents:

(i) One copy of the carrier's invoice as described in paragraph (d)(3) of this section except for the certification required therein. When the freight contract does not provide for despatch and the supplier certifies this fact on his final invoice the documents in paragraphs (d)(6)(iii) and (iv) of this section are not required.

(ii) A notice of arrival, if required by the Form CCC-106 and not previously presented to support the 90 percent payment.

(iii) A copy of loading and discharging laytime statement and statement of fact signed by the ship's master or owner and the charterer or consignee. Agents' signatures are acceptable.

(iv) If a copy of the charter party was not presented pursuant to paragraph (d)(5) of this section, a copy of the freight contract showing the terms of despatch and demurrage.

(v) The Form CCC-329, Supplier's Certificate covering the balance claimed.

(7) A request for payment of any amounts claimed because of the exercise of a higher rated option following payment of a lower rated option pursuant to § 17.9(j)(1) shall be supported by the following documents:

(i) One copy of the carrier's invoice as described in paragraph (d)(3) of this section except for the certification required therein.

(ii) The Form CCC-329, Supplier's Certificate, for the balance claimed;

(iii) A statement signed by the ship's master, owner, or owner's agent, and signed laytime statements or other written concurrence of charterer or his agent showing the exercise of the higher rated option.

(e) Documentary requirements. In addition to the general requirements set forth in paragraphs (a) through (c) of this section, each purchase authorization or letter of commitment (1) will refer to a specific section of Appendix B for documentary requirements for the commodity, and (2) will specify any additions to or changes from Appendix B.

[31 FR 16818, Dec. 31, 1966; 32 FR 921, Jan. 26, 1967, as amended at 32 FR 5978, Apr. 14, 1967; 33 FR 5138, Mar. 29, 1968; 33 FR 10005, July 12, 1968; 35 FR 592, Jan. 16, 1970]

§ 17.14 Documents in support of drafts drawn on CCC by banking institutions. Drafts drawn on CCC by banking institutions under letter of commitment for reimbursement of amount disbursed to suppliers shall be supported by the following documents:

(a) Documents obtained from suppliers. Documents specified in § 17.13 and such additional or substitute documents as may be required with respect to any particular transaction as specified in the purchase authorization or in the letter of commitment. A banking institution holding a letter of commitment is not required by CCC to obtain any other documents from suppliers.

(b) Documents originated by banking institutions. (1) Form CCC-331 "Advice of Payment or Acceptance of Draft" in duplicate, the original containing an authorized signature for the banking institution.

(2) A copy of the advice of payment for ocean freight differential when required by § 17.15(a)(7).

(c) Documents originated by ASCS Offices. Form CCC-339, Advice of Receipt of Documents, signed for CCC when documentation was previously submitted to and acknowledged by CCC.

[31 FR 16818, Dec. 31, 1966, as amended at 32 FR 5978, Apr. 14, 1967; 33 FR 10005, July 12, 1968]

§ 17.15 Responsibilities of banking institutions for transactions under letters of commitment.

The responsibilities of banking institutions under the regulations in this subpart for transactions under letters of commitment are limited to the responsibilities stated under paragraphs (a) and (b) of this section and as stated in §§ 17.10 and 17.14.

(a) Full responsibilities. The banking institution shall have full responsibility for the following:

(1) Delivery of documents. The banking institution shall deliver to the Federal Reserve Bank named in the letter

of commitment, documents required by the regulations in this subpart, the letter of commitment, and the purchase authorization. In addition to the general documentation requirements set forth in § 17.13 each purchase authorization or letter of commitment will (i) refer to specific sections of Appendix B for documentation requirements and (ii) specify any additions to or changes from the provisions of Appendix B.

(2) Advice to approved applicant. The banking institution shall airmail advice of the amount of dollar disbursement or the dollar amount and maturity date of time drafts accepted to the approved applicant or to the bank or agency authorized by the approved applicant to open related letters of credit. If documents and advice of payment are sent to such bank or agency, another advice of payment shall be airmailed to the approved applicant. The transmittal shall include one of the following:

(i) When the purchase authorization is for sales on long-term credit there shall be included a request that the approved applicant or the bank or agency authorized by the approved applicant to open related letters of credit notify the participant that "the net amount of the supplier's invoice financed by CCC under the transaction is $--".

(ii) When the purchase authorization is for sales for foreign currency there shall be included a request that the local currency equivalent of dollar disbursements be deposited immediately in the account of the U.S. Disbursing Officer, or that the local currency equivalent of the dollar amount of time drafts being financed by CCC be deposited in the account of the U.S. Disbursing Officer at maturity.

(3) Examination of documents. The banking institution shall examine the required documents in accordance

with good commercial practice.

(4) Delivery date. The banking institution shall ascertain that the ocean bills of lading bear a date within the delivery period specified in the purchase authorization, or any extension thereof granted by the Administrator.

(5) Destination. The banking institution shall ascertain that the required

documents are consistent, under good commercial practice with shipment, transshipment, or reshipment to the country required by the purchase authorization.

(6) Description. Section 17.10(h)(3) provides that the commodity description in letters of credit and on the supplier's detailed invoice must correspond with the description on page 1 of the purchase authorization. In making payment or accepting time drafts under letters of credit, the banking institution shall, on the basis of the description contained in the required documents (other than Form CCC-329) act in accordance with good commercial practice.

(7) Verification of computation of ocean freight differential and notification to approved applicant. When Form CCC-106 provides for an ocean freight rate differential on a cost and freight or c.i.f. sale, and authorizes financing of any part of ocean freight by CCC, and the transaction is financed by the bank under a letter of credit, the banking institution shall:

(i) Determine that the supplier's detailed invoice shows a computation of the dollar amount of ocean freight differential;

(ii) Verify the computation of such amount of differential, using the rate stated in Form CCC-106 and the gross weight shown on the supplier's detailed invoice or the ocean bill of lading, whichever is less; and

(iii) Include with the advice of dollar disbursement or time draft accepted under the letter of credit, advice of whichever of the following is applicable:

(a) Under long-term credit sales the net dollar amount for which the participant is indebted to the Government of the United States. Such notice shall be in substantially the following language:

The amount of $- paid to the beneficiary includes an ocean freight differential of $. The participant is indebted to the Government of the United States for the net amount of $——.

(b) Under sales for foreign currency, the net dollar amount for which the equivalent in local currency is to be deposited immediately or at maturity

of

a time draft as provided in § 17.10(o). This advice shall specify that deposit of local currency is not required for the value of the ocean freight differential. Such advice shall be in substantially the following language:

The amount of $- paid to the beneficiary includes an ocean freight differential of according to the provisions of the attached copy of Form CCC-106, Advice of Vessel Approval. You are requested to deposit only the local currency equivalent to the net amount of $

A copy of such advice, when the amount paid includes such differential, shall be sent with the other required documents to the ASCS Office named in the letter of commitment.

(8) Reimbursement of CCC for losses. On demand by CCC, the banking institution shall promptly reimburse CCC for the amounts of any losses sustained as a direct result of failure on the part of the banking institution to carry out its responsibilities as required by the regulations in this subpart and shall pay to CCC interest on the amount of such losses at a per annum rate equal to the Federal Reserve Bank of New York's discount rate in effect on the date that CCC makes demand upon the banking institution, computed from and including the date of the original payment by or reimbursement by CCC to but not including the date that the banking institution reimburses CCC for the amounts of such losses.

(9) Adjustment refunds. (i) The banking institution shall at the end of each calendar month, report to the Controller the total amount of any adjustment refunds for cotton sales received during the month pursuant to sections (V) and (W) of Appendix A which were remitted to the approved applicant or agent for the account of the importer.

(ii) A copy of each advice sent to approved applicants or agents shall accompany each monthly report. The banking institution has no other responsibility under § 17.12.

(10) Purchase authorization number. The banking institution shall examine required documents to determine that they bear the appropriate purchase

authorization number or are readily identifiable therewith.

(11) Additional requirements. Any additional particulars for which the banking institution is to be responsible will be specified in the purchase authorization or letter of commitment as (i) additional required documents, (ii) additional statements to be contained in the required documents, or (iii) additional actions to be performed.

(b) Limited responsibilities. The banking institution shall have limited responsibility for transactions under letters of commitment as follows:

(1) Contracting. Section 17.6 provides that contracts must meet certain specific requirements to be eligible for financing. The banking institution is responsible only to the extent of ascertaining that the required documents show delivery terms as required by the purchase authorization (f.o.b., f.a.s., cost and freight, or c.i.f.). The banking institution has no other responsibility under § 17.6.

(2) Vessel approval. The banking institution shall not make payment under the letter of credit unless the name of the vessel shown on Form CCC-106 agrees with the name of the vessel shown on the ocean bill of lading. The banking institution is not required to verify the signature appearing on Form CCC-106 or to make an independent inquiry as to the correctness of the information shown thereon.

(3) Discounts, purchasing agents' commissions and consular fees. The banking institution is not required to make independent inquiry as to whether the net invoice price includes either discounts (whether expressed as such or as "commissions" to the importer, or made or to be made through payments, credits to other allowances to the buyer or consignee), commissions payable to purchasing agents, or consular fees but shall not honor any such items when disclosed by required documents other than Form CCC-329. The provisions of § 17.8(c) regarding commissions are intended primarily for the instruction of suppliers, and banking institutions are not responsible for compliance therewith except to the extent set forth above.

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(4) Weight certificate. The banking institution is responsible for ascertaining that a weight certificate is included in the documentation when required by the purchase authorization or Appendix B, and that the quantity invoiced does not exceed the weight shown on the certificate. The banking institution is not responsible for ascertaining that the weight certificate meets the requirements of

§ 17.13(c)(4).

(5) Insurance. The banking institution is responsible only for ascertaining that a copy of the policy or certificate of insurance accompanies the required documents whenever the cost of insurance is included in the commodity price under a purchase authorization which specifically authorized contracting on a c.i.f. basis.

(6) Deduction for ocean freight on cost and freight or c.i.f. invoices. (i) If Form CCC-106 provides that ocean freight is not to be financed by CCC, the banking institution shall not make payment or accept time drafts under the letter of credit unless a deduction for ocean freight is shown on the CCC copy of the supplier's detailed invoice. The banking institution is not responsible for the accuracy of such deduction.

(ii) If the Form CCC-106 provides for ocean freight differential financing by CCC, the banking institution shall not make payment or accept a time draft unless a deduction is shown on the invoice for that part of the cost of ocean freight not being financed by CCC. See also paragraph (b)(8) of this section. The banking institution is not responsible for the accuracy of the deduction.

(7) Price. The banking institution is responsible for verifying that the unit price stated in the supplier's invoice does not exceed the unit price stated in the document showing price approval by USDA when such document is required, but is not responsible for the price provisions set forth in § 17.7.

(8) Ocean transportation. The banking institution is responsible for provisions relating to ocean transportation as set forth in § 17.9 only to the extent specified in paragraphs (a)(5) and (7), and (b)(2) and (6) of this section.

(9) Information from other sources. The right of reimbursement for payments made or drafts accepted by a banking institution in accordance with good commercial practice will not be affected, except for those particulars set forth in paragraphs (a) and (b) of this section, by the fact that the documents received by the banking institution or information or notice received from any other source indicates noncompliance with any provisions of the regulations in this subpart or of the purchase authorization or the letter of commitment.

(10) Delivery of documents. The banking institution is not responsible for delivery of documents required by the provisions of Appendix B, except as provided in paragraph (a)(1) of this section.

(c) No responsibility. For transactions under a letter of commitment, the following shall apply:

(1) Supplier's Certification and required certifications or statements. The banking institution is not responsible for the truth or accuracy of information contained in Form CCC329, Supplier's Certificate, or in any special certification or statement required by these regulations, the terms of the purchase authorization or the letter of commitment. The banking institution is entitled to rely on such Form, certifications and statements and is not responsible for the sufficiency or completeness of the information contained therein, or for any indication by such information of noncompliance with any provisions of such regulations or the purchase authorization, or for any inconsistency with other required documents, certifications or statements. The banking institution is not responsible for ascertaining compliance with § 17.6(f). The provisions of this paragraph shall not supersede or alter the provisions of §§ 17.15(a) and 17.15(b).

(2) [Reserved]

(3) Contracting period. The purchase authorization specifies the period during which contracts may be entered into by suppliers and importers. A banking institution has no responsibility with regard to compliance with this requirement.