forwarded immediately after its execution to the Director, Program Operations Division, FAS, for review and approval prior to issuance of Form CCC 106. In the event of any conflict between the provisions of this subpart and the charter party or bills of lading issued pursuant thereto, the provisions of this subpart shall prevail. The charter party shall contain or, for the purpose of financing pursuant to this subpart, be deemed to contain the following provisions:

(1) That if there is any failure on the part of the supplier of ocean transportation to perform the charter party after the vessel has tendered at the loading port, the charterer shall be entitled to incur all expenses which in the judgment of the Administrator are required to enable the vessel to undertake and carry out her obligations under the charter party, including but not limited to, expenses for lifting any liens asserted against the vessel.

(2) That, notwithstanding any prior assignments of freight made by the owner or operator, the expenses authorized in subparagraph (1) of this paragraph may be deducted from the freight earned under the charter party.

(3) That the supplier of ocean transportation shall release copies of the ocean bills of lading to the supplier of the commodity promptly upon completion of loading of the vessel.

(4) That ocean freight is earned and that 90 percent thereof is payable by the charterer when the vessel and cargo arrive at the first port of discharge, subject to subparagraph (5) of this paragraph. This provision does not relieve the carrier of the obligation to carry to other points of discharge if this is required by the charter party or bill of lading. The final 10 percent shall be settled, subject to adjustments, if any, after submission of loading and discharging laytime statements and statement(s) of fact.

(5) That if a force majeure situation as described in § 11.13(e) (2) prevents the vessel's arrival at the first port of discharge, not to exceed 90 percent of the freight shall be payable by the charterer at the time the Administrator determines that such force majeure was the cause of nonarrival. Any dispatch earned at loading port will be deducted from this payment. The remaining 10 percent of freight shall not be due or payable.

(6) That laydays are reversible.

(7) That in case of a dispute as to any rights of CCC, including rights as successor or assignee, which cannot be settled by agreement, the decision respecting any such rights shall not be subject to arbitration, but shall be decided if necessary by the U.S. courts.

(d) Special charter party information required when freight is financed by CCC. Where CCC finances the ocean freight for commodities booked on charter terms, the charter party shall contain the following information:

(1) The name of each party partici pating in the ocean freight brokerage commission (if any) and the percentage thereof payable to each party;

(2) The name of the vessel and the name of the substitute vessel, if any.

(e) Notice of arrival. Each Form CCC 106-2 will indicate whether or not a notice of arrival is required. A notice of arrival, when required, must be furnished promptly by the importing country, or its designated agent or other source acceptable to CCC (excluding the carrier or his agent), and must include the name of the vessel, the purchase authorization number, the first port of discharge, and the date of arrival.

(f) Advice of vessel approval. Advice of vessel approval will be issued as follows:

(1) For cotton. Form CCC 106-3 (white) signed for the Director, New Orleans ASCS Commodity Office, will be issued only for the supplier of the cotton on sales made on a c.i.f. or c. & f. basis. When cotton is shipped on an f.a.s. basis, if CCC finances the ocean freight, two signed original copies of this form will be issued; one for the supplier of the cotton and the other for the ocean carrier.

(2) For commodities other than cotton. Form CCC 106 signed for the Director, Program Operations Division, FAS, will be issued as follows:

(i) On shipments to be made on an f.o.b. or f.a.s. basis, the original of Form CCC 106-1 (yellow) will be issued for the supplier of the commodity and where CCC finances the cost of ocean freight, the original of Form CCC 106-2 (blue) will be issued for the ocean carrier.

(ii) On shipments to be made on a c.i.f. or c. & f. basis, the original of Form CCC 106-1 (yellow) will be issued for the supplier of the commodity.

(g) Foreign-flag vessels. CCC will not finance the cost of ocean transportation on foreign-flag vessel(s), either as a part of the commodity contract price or separate therefrom.

(h) United States-flag vessels. Where a commodity is required to be shipped on a privately-owned United States-flag commercial vessel, Form CCC 106 will set forth the amount of the ocean freight differential, if any, which the Director, Program Operations Division, determines to exist between the prevailing foreign-flag vessel rate and the United States-flag vessel rate. CCC will authorize reimbursement of such ocean freight differential to the extent of the full tonnage for which the commodity cost is to be financed by CCC.

(1) Ocean transportation financed by CCC. Where ocean transportation will be financed either separately from or as part of the commodity contract price, the following shall apply:

(1) Loading, trimming and other related shipping expenses will not be financed as items separate from the ocean transportation rate;

(2) Discharge costs may be included in the ocean transportation rate only when in accordance with trade customs; (3) The cost of "dead freight" will not be financed;

(4) The cost of lighterage or lightening will not be financed by CCC unless specifically approved by the Administrator;

(5) Cargo dues and taxes assessed by the importing country will not be financed;

(6) Surcharges assessed by steamship conferences or carriers will not be financed;

average

(7) General will not be financed;

contributions

(8) Charters and liner booking contracts must reflect the ocean transportation rate from one port loading to one port discharge. A charter or liner booking contract may provide for an increase in rate for additional port(s) of loading or discharge, alternate route(s) or any other option; CCC, however, will finance initially the lowest such rate. Increased amounts (if any) due because of the exercise of such option (s) will be financed only after receipt of evidence that an option was exercised. If an option is exercised conclusively prior to the issuance of ocean bill of lading, CCC will finance the rate applicable to the option so exercised.

(9) In the case of transshipment from a United States-flag vessel to a foreign-flag vessel, CCC will finance the cost of ocean freight only to the point of transshipment, at a rate to be determined by the Administrator, and the cost of ocean freight beyond the point of transshipment will not be financed by CCC unless specifically approved by the Administrator. If the commodity was transported from a U.S. port and was transshipped at another U.S. port, CCC will not finance the cost of the transportation which took place prior to the transshipment.

(10) Ocean freight will be financed only to the extent that the rate charged does not exceed the lowest of the following rates for the category of vessel concerned:

(i) For commodities covered by published tariff rates-the published Conference contract rate;

(ii) For other commodities (bulk commodities and other commodities for which no tariff rates are currently effective, whether carried on liners, dry bulk carriers, or tankers)-the market rate prevailing at the time of request for approval was determined by the Director, Program Operations Division, but in any event not in excess of rates charged other shippers (irrespective of booking dates) for like commodities on the voyage concerned.

(11) Reimbursement will be made for cost of shipment from loading points to discharge points at rates approved by the Director, Program Operations Division, on Form CCC 106 in conformity with subparagraph (10) of this paragraph.

(j) Initial reimbursement for ocean freight separately financed. (1) Where the Form CCC 106 states that Notice of Arrival is not required and the carrier's invoice includes a certification that the contract does not provide for dispatch earnings, reimbursement will be made for 100 percent of freight upon presentation of required documents.

(2) When the Form CCC 106 indicates that a Notice of Arrival is required, reimbursement for advances made to the supplier of the ocean transportation up to 90 percent of the cost of ocean freight may be obtained prior to arrival at the first port of discharge if the supplier furnishes CCC financial coverage in the form of an acceptable letter of credit from a U.S. bank or Form CCC 124,

Freight Refund Bond, executed by an acceptable surety. The amount of coverage may be computed as follows:

(i) 90 percent of the cost of ocean freight based upon the tonnage shown on the related "on-board" bill of lading (copy must be supplied to CCC) times the approved rate per ton shown on the related Form CCC 106, or

(ii) 100 percent of the cost of ocean freight based upon the tonnage stated in the charter party (without tolerance) times the rate per ton shown on the related Form CCC 106. Upon receipt of an acceptable letter of credit or Freight Refund Bond, the Controller, CCC, or his designee, will issue a waiver of the Notice of Arrival. The waiver may be submitted in lieu of a Notice of Arrival when such notice is required under § 11.13(e) (2) for reimbursement of 90 percent of the cost of ocean transportation.

(3) Where the charter party or liner booking contract provides for dispatch earnings, reimbursement of 90 percent of the cost of ocean transportation may be obtained prior to presentation of signed laytime statements and statements of fact upon presentation of the required documents. Where, in such instances the Form CCC 106 indicates that a Notice of Arrival is required, the waiver described in subparagraph (2) of this paragraph may be substituted for the Notice of Arrival as a document required to obtain the 90 percent reimbursement.

(4) The Administrator will waive the requirement for the Notice of Arrival by written notice to the supplier of ocean transportation, upon the receipt of evidence satisfactory to the Administrator that the vessel is lost or unable to proceed to destination after completion of loading as a result of one or more of the following causes: Damage caused by perils of the sea or other waters; collisions; wrecks; stranding without the fault of the carrier; jettison; fire from any cause; Act of God; public enemies or pirates; arrest or restraint of princes, rulers, or peoples without the fault of the supplier of the ocean transportation; wars; public disorders; captures; or detention by public authority in the interest of public safety.

(k) Demurrage. Demurrage incurred in excess of dispatch earnings will not be financed. Dispatch shall be credited first against demurrage, if any, incurred in connection with the same voyage; any

balance of dispatch shall be deducted from the amount of the final request for reimbursement. Stevedore overtime pay at loading port will be financed by CCC only if the Director, Program Operations Division, determines that by incurring such expense net dispatch is earned by the vessel.

(1) Reimbursement for balance of ocean freight. In cases where the charter party or liner booking contract provides for dispatch earnings or where Form CCC 106 indicates that a Notice of Arrival is required and subsequent to the initial reimbursement of 90 percent of the dollar cost of ocean transportation, it is established that a part or all of the final 10 percent is eligible for reimbursement, the supplier of transportation is entitled to prompt payment by the charterer of that portion of the final 10 percent which is not in dispute. Upon request of such supplier, the importing country must arrange for the Notice of Arrival and signed loading and discharging laytime statements and statements of fact, to permit the supplier to present documents required by § 11.13(e) covering payment of any portion of the final 10 percent not in dispute. Upon presentation of acceptable documentation, the importing country must promptly make or authorize payment therefor.

(m) Eligibility of ocean transportation contracts for financing. Contracts for ocean transportation shall not be eligible for financing by CCC if the sup-plier of the ocean transportation is also the supplier of the commodity or is an affiliate of such supplier of the commodity, unless the supplier of ocean transportation (1) is the owner of the vessel named in the Form CCC 106 or (2) is the operator of such vessel by time charter or bareboat charter and the ocean freight rate for which reimbursement is claimed is not in excess of the rate he contracted for with the owner of the vessel.

(n) Ocean transportation included in the commodity contract price. (1) If the contract is basis c. & f. or c.i.f. and the price includes the cost of ocean transportation as well as the cost of the commodity, the cost of ocean transportation will be financed only to the extent specifically provided in the applicable purchase authorization.

(2) When the Form CCC 106 provides that the cost of ocean transportation will not be financed by CCC, it will require that the supplier's detailed invoice

Covering the commodity shipped show a deduction for ocean transportation. 130 F.R. 15514, Dec. 16, 1965, as amended at 31 F.R. 3059, Feb. 24, 1966]

11.13 Documentation.

(a) General. Requests for payment submitted to banking institutions by suppliers and requests submitted to CCC for reimbursement of commodity or ocean transportation payments or both shall be supported, except as otherwise provided in the purchase authorization, by the documents required by this section, the purchase authorization, the letter of commitment, and Appendix B unless previously submitted to CCC. Such documents, however, need not be submitted when and to the extent that the Controller, CCC, determines that the intended purpose of a document is served by documents otherwise available to or under the control of CCC or by alternate documents specified in such determination. The documents required herein are in addition to any other documents the supplier may be required to submit to a bank under the applicable letter of credit. The supplier must present documentation required by CCC to the banking institution for immediate payment or acceptance of a time draft.

(b) Identification. (1) The following documents must be identified with the appropriate purchase authorization numbers or be readily identifiable therewith:

(1) Documents to be submitted by suppliers to banking institutions with request for payment of commodity price (including ocean transportation and insurance when covered by the commodity price) and such documents when submitted to CCC for reimbursement.

(1) Documents to be submitted to CCC to obtain reimbursement under a purchase authorization for ocean transportation shall be identified with the number thereof including the "OT" suffix, except that a copy of the ocean bill of lading may bear the related commodity purchase authorization number.

(2) The supplier must put the appropriate purchase authorization number on all documents specified in this Section which are prepared under his control. He should arrange for the appropriate purchase authorization number to be put on all other required documents at the time of their preparation.

(c) Documents required for financing commodity price (including ocean trans

portation and insurance when covered by the commodity price). (1) Signed originals of supplier's certificates, with invoice-and-contract abstract on the reverse side (Form CCC 329) as follows:

(1) When the cost of ocean transportation is financed by CCC, in whole or in part, two Forms 329 are required, that is, one covering the commodity supplier's invoice price expressed in dollars (to be executed by the supplier of the commodity), and one covering the cost of ocean transportation expressed in dollars (to be executed by the ocean carrier).

(ii) When no part of the ocean transportation cost is being financed by CCC, only one Form CCC 329 is required covering the supplier's net invoice price for the commodity expressed in dollars, executed by the supplier of the commodity.

(2) One copy of the ocean bill of lading (on-board or showing on-board endorsement dated and signed or initialled on behalf of the carrier).

(3) One copy of the supplier's detailed invoice showing quantity, description, contracted price, and net total invoice price expressed in dollars and basis of delivery (e.g., f.o.b. vessel, c. & f.) of the commodity. In the case of the reimbursement method of financing the invoice shall also be marked "paid." Whenever the Form CCC 106 provides for an ocean freight rate differential on a c. & f. or c.i.f. sale and authorizes financing of ocean transportation costs by CCC, the supplier's detailed invoice shall show a computation of the dollar amount of ocean freight rate differential. In arriving at the net invoice price there shall be deducted:

(i) The cost of ocean transportation, or portion thereof, which is not being financed by CCC when the cost of ocean transportation is included in the contracted price;

(ii) All discounts from the supplier's contracted price through payments, credits, or other allowances made or to be made to the importers, his agent or consignee;

(iii) All purchasing agent's commissions applicable;

(iv) All other amount not eligible for financing.

(4) Signed original of Form CCC 106-1 or 106-3.

(5) 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.

(6) Signed original of Form CCC 829-3, "Statement of Transmittal of Ocean Bills of Lading", showing that two nonnegotiable copies of ocean bills of lading have been sent to the Administrator, Foreign Agricultural Service, USDA, Washington, D.C., 20250.

(7) Requests for additional payments, submitted in connection with transactions for which all or part of the required documents have been previously submitted to the banking institution, shall be supported by the following documents as applicable:

(1) The supplier's certificate, with the invoice-and-contract abstract on the reverse and the supplier's detailed invoice, covering the additional amount requested. The supplier's invoice must show the date, serial number and the amount of the original invoice and the basis for the additional amount claimed;

(ii) If the payment is stated to be due because of the exercise of a higher-rated option provided in a liner booking contract or charter party, a statement signed by the ship's master or owner (or agent of either of them) showing exercise of the higher-rated option.

(8) Any additional or substitute documentation that may be required by the purchase authorization or the letter of commitment.

(9) Whenever a copy of a weight certificate is required by this subpart or the applicable purchase authorization, the supplier shall submit a weight certificate issued by or on authority of a State or other governmental Weighing Department, Chamber of Commerce, Board of Trade, Grain Exchange, or other independent organization or firm providing public weighing services. Such organization or firm must have (i) qualified, impartial, paid employees who are stationed at the port facility or, if authorized under the applicable purchase authorization, other facility where weights customarily are determined, one of whom performed the weighing covered by the certificate, or (ii) qualified, independent, impartial, supervised weighmasters stationed at the port facility or, if authorized under the applicable purchase authorization, other facility where weights are customarily determined one of whom supervised the employee of such a facility in the performance of the weighing covered by the certificate.

(10) Appendix B or the applicable purchase authorization will specify the par

ticulars of any required inspection certificate. Federal appeal inspection certificates 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 commit

ment.

(d) Special documentation requirements. In addition to the general documentation requirements set forth in paragraphs (a) through (c) of this section, each purchase authorization or letter of commitment (1) will refer to specific sections of Appendix B for special documentation requirements and (2) will specify any additions to or deletions from the provisions of Appendix B.

(e) Documents required for reimbursement of ocean transportation financed separately from commodity price. In order to obtain reimbursement of ocean transportation which is financed separately from the commodity price, the following documentation shall be submitted:

(1) Signed original of supplier's (ocean carrier or agent) certificate, with invoice-and-contract abstract on the reverse side (Form CCC 329) to be executed by the carrier or agent, covering the dollar cost of ocean transportation.

(2) One copy of the ocean bill of lading (on-board or showing on-board endorsement dated and signed or initialed on behalf of the carrier) and, if required by the related Form CCC-1062, 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 Administrator or Controller, CCC.

(3) One copy of carrier's detailed invoice marked, "Paid." 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 the cost of ocean freight is claimed, qualifies as a privately owned U.S.-flag commercial vessel within the requirements of Public Law 87-266 and is an eligible U.S.-flag vessel for the purposes of Public Law 664, 83d Congress."

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

(5) One copy of the charter party in the case of shipment by dry bulk cargo vessel or tanker,