[Federal Register Volume 77, Number 96 (Thursday, May 17, 2012)]
[Rules and Regulations]
[Pages 29474-29514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11601]
[[Page 29473]]
Vol. 77
Thursday,
No. 96
May 17, 2012
Part II
Department of Agriculture
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Commodity Credit Corporation
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7 CFR Part 1485
Market Access Program; Final Rule
Federal Register / Vol. 77 , No. 96 / Thursday, May 17, 2012 / Rules
and Regulations
[[Page 29474]]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1485
RIN 0551-AA72
Market Access Program
AGENCY: Foreign Agricultural Service and Commodity Credit Corporation,
USDA.
ACTION: Final rule.
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SUMMARY: This final rule revises and amends the regulation used to
administer the Market Access Program (MAP) by updating and merging the
application requirements and the activity plan requirements to reflect
the Unified Export Strategy (UES) system currently in place; clarifying
the eligibility of activities designed to address international market
access issues; modifying the list of eligible and ineligible
contributions; revising the portions of the regulation regarding
evaluations, contracting procedures, and the compliance review and
appeals process; eliminating the Export Incentive Program/Market Access
Program (EIP/MAP) as a separate subcomponent; and making other
administrative changes for clarity and program integrity. This final
rule adopts the substantive provisions of the proposed rule published
September 8, 2009, revising and amending MAP regulations, with changes
made to reflect public comments to the proposed rule.
DATES: Effective Date: This rule is effective May 17, 2012.
Applicability Date: This regulation will become applicable for each MAP
participant at the beginning of the MAP participant's 2013 program year
(i.e., 01/01/2013 or 07/01/2013).
FOR FURTHER INFORMATION CONTACT: Mark Slupek, 202-720-1169, U.S.
Department of Agriculture, Foreign Agricultural Service, Office of
Trade Programs, Program Operations Division, Portals Office Building,
Suite 400, 1250 Maryland Avenue SW., Washington, DC 20024; or by phone:
(202) 720-4327; or by fax: (202) 720-9361; or by email:
[email protected].
The U. S. Department of Agriculture (USDA) prohibits discrimination
in its programs on the basis of race, color, national origin, sex,
religion, sexual orientation, age, disability, political beliefs and
marital or familial status. (Not all prohibited bases apply to all
programs.) Persons with disabilities who require alternative means for
communication of program information (braille, large print, audiotape,
etc.) should contact the USDA TARGET Center at (202) 720-2600 (Voice
and TDD).
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule is issued in conformance with Executive Order 12866. It
has been determined to be not significant for the purposes of Executive
Order 12866 and was not reviewed by the Office of Management and
Budget. A cost-benefit assessment of this rule was not completed.
Executive Order 12988
This rule has been reviewed in accordance with Executive Order
12988. This rule does not preempt State or local laws, regulations, or
policies unless they present an irreconcilable conflict with this rule.
This rule would not be retroactive.
Executive Order 12372
This program is not subject to Executive Order 12372, which
requires intergovernmental consultation with State and local officials.
See the notice related to 7 CFR part 3015, subpart V, published at 48
FR 29115 (June 24, 1983).
Executive Order 13175
This rule does not have tribal implications as specified by
Executive Order 13175 (65 FR 67249, November 9, 2000) that will preempt
Tribal law.
Executive Order 13132
This rule does not have any substantial direct effect on States, on
the relationship between the Federal government and the States, or on
the distribution of power and responsibilities among the various levels
of government, nor does this rule impose substantial direct compliance
costs on State and local governments. Therefore, consultation with the
States was not required.
Regulatory Flexibility Act
The Regulatory Flexibility Act does not apply to this rule because
Commodity Credit Corporation (CCC) is not required by 5 U.S.C. 553 or
any other law to publish a notice of proposed rulemaking with respect
to the subject matter of the rule.
Environmental Assessment
CCC has determined that this rule does not constitute a major State
or Federal action that would significantly affect the human or natural
environment. Consistent with the National Environmental Policy Act
(NEPA), no environmental assessment or environmental impact statement
will be prepared.
Unfunded Mandates
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) does
not apply to this rule because it does not impose any enforceable duty
or contain any unfunded mandate as described under the UMRA.
Paperwork Reduction Act of 1995
In accordance with the Paperwork Reduction Act of 1995, FAS has
previously received approval from OMB with respect to the information
collection required to support this program. The information collection
is described below:
Title: Foreign Market Development Program (FMD) and Market Access
Program (MAP); OMB Control Number: 0551-0026.
The current OMB approval of this information collection is
scheduled to expire on August 31, 2012. Consequently, CCC will submit a
request to OMB under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501
et seq., for the continued use of this information collection. CCC's
request will reflect changes to the new paperwork collection
requirements that were made in the final rule in response to public
comments. A separate Notice of Request for Extension and Revision of
Currently Approved Information Collection for the Market Access Program
will be published in the Federal Register for comment.
E-Government Act Compliance
CCC is committed to complying with the E-Government Act to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services and for other purposes. The forms, regulations, and other
information collection activities required to be utilized by a person
subject to this rule are available at: http://www.fas.usda.gov.
Background
Section 203 of the Agricultural Trade Act of 1978, as amended,
directs CCC to carry out a program to encourage the development,
maintenance, and expansion of commercial export markets for
agricultural commodities through cost-share assistance to eligible
trade organizations. Such assistance may be provided in the form of CCC
funds or CCC-owned commodities.
Since the inception of the MAP, CCC has monitored the program
closely,
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strengthened program controls, and implemented changes to improve the
effectiveness of the program. In administering the program, CCC is
committed to ensuring efficient and effective use of public funds. In
this regard, CCC considers an applicant's need for Federal financial
assistance, an applicant's use of rigorous performance measurements in
its plans, and increasing contribution levels from Participants as
important factors in the overall management of the MAP.
Summary and Analysis of Comments
On May 23, 2007, the CCC published an advance notice of proposed
rulemaking and public hearing in the Federal Register (72 FR 28901).
This notice was intended to solicit comments on whether to amend and
revise the current MAP regulations. In addition, CCC held a public
hearing on July 25, 2007, to receive oral and written comments.
On September 8, 2009 (74 FR 46027), a proposed rule was published
governing the operations of MAP.
CCC received nearly 1,300 comments from nonprofit U.S. trade
associations, U.S. companies, state organizations, regional trade
associations, Participants, and consulting firms in response to the
proposed rule. Following is a summary of the comments that specifically
address the proposed rule and CCC's responses to these comments.
General comments relating to the value of the program, editorial
suggestions, and non-substantive comments have been omitted.
Sec. 1485.10 General Purpose & Scope
Policy Clarifications
CCC received 164 comments on this section.
Comment: Nineteen respondents expressed their concern with regard
to whether previous policy clarifications will remain in effect or if
the new MAP regulation will supersede the policy clarifications
currently in effect. The respondents asked for clarification on this
and stated that if previous policy clarifications remain in effect,
that the notices should be incorporated into the new regulation.
Response: CCC understands that the commenters are referring to the
``Market Access Program notices'' available at http://www.fas.usda.gov/mos/programs/mnotice.html. CCC issues these MAP notices for
informational purposes. These notices have no legal effect. They are
intended to alert MAP Participants of various aspects of CCC's
administration of the MAP program. For example, CCC issues MAP notices
to alert MAP Participants of procedures for requesting advances,
applicable federal pay scale rates, lists of economic and trade
sanctions against certain foreign countries, reporting formats and
computer codes to use with the UES.
The content of some MAP notices were already codified in the
proposed rule. In response to the commenters, CCC has incorporated into
the final rule several additional MAP notices that CCC has judged to be
more substantive in nature. Those MAP notices that have been so
codified will be deleted from the FAS Web site.
CCC will remove certain other of the remaining MAP notices that are
now obsolete or inconsistent with the final rule before or concurrent
with the final rule's effective date. The remaining MAP notices will
continue to be available on the Web site for informational purposes and
reflect details related to CCC's current administration of the MAP
program.
Comment: One respondent stated that although domestic travel is not
addressed in the new MAP regulation, this is one area with respect to
which a policy clarification exists. Fourteen additional comments were
made regarding E-ticketing and internet purchasing of tickets (not
through a travel agency). The respondents stated that this is an area
that was previously covered by a policy clarification but is not
covered in the new regulation; so the question whether previous policy
clarifications will remain in effect or if the new MAP regulation will
supersede the policy clarifications applies here as well.
Response: Domestic travel was addressed in a limited fashion in the
proposed rule at Sec. 1485.17(c)(25), which would have allowed, inter
alia, reimbursement, solely in connection with generic promotion, only
of domestic travel expenditures associated with meetings of
international organizations conducted in the United States. In response
to the comment, however, CCC has addressed domestic travel more
extensively in several new subsections of Sec. 1485.17(c).
New Sec. 1485.17(c)(24) lays out the conditions under which
domestic travel related to international retail, trade and consumer
exhibits and shows conducted in the United States can be reimbursed.
New Sec. 1485.17(c) (25) allows reimbursement for domestic travel
for seminars and educational training conducted in the United States.
New Sec. 1485.17(c) (26) allows reimbursement of domestic travel
expenditures of certain individuals accompanying foreign trade missions
or technical teams while traveling in the United States. This change
codifies MAP Notice 06-002. MAP Notice 06-002 will be removed from FAS'
Web site.
CCC has decided to eliminate the provision allowing reimbursement
of domestic travel expenditures for a MAP Participant's attendance at
meetings of international technical organizations when such meetings
are conducted in the United States.
These provisions are discussed in more detail in a later response.
Domestic travel expenditures are not reimbursable for brand
promotion activities.
The comments regarding E-ticketing and internet purchase of tickets
appear to refer to MAP Notice 02-004. This notice reminds MAP
Participants that the reimbursement of allowable travel expenses when
using E-Tickets is subject to the availability of sufficient
documentation to support the expenses, as is the case with all travel
expenses. The notice provides examples of information that such
documentation must include, such as the complete routing codes (i.e.,
layover and flight information for each segment of a trip in which a
change of airplane or flight designation is made) and the fare amount
charged (i.e., point-to-point faring). The notice also informs MAP
Participants that reimbursable travel expenditures include associated
reasonable and common fees that travel agents or other ticketing
sources may charge for providing E-Ticket itineraries, invoices and/or
receipts. The MAP final rule now sets broad guidance on the
reimbursement of a MAP Participant's domestic travel. CCC believes the
final rule's provisions provide sufficient guidance to MAP Participants
and does not believe it necessary to codify MAP Notice 02-004's
explanation of the particulars of program administration. MAP Notice
02-004 shall remain on the FAS Web site for informational purposes.
Comment: Six respondents asked for further clarification on the
types of activities in the U.S. that are reimbursable.
Response: In response to the comments, CCC has made a clarification
to Sec. 1485.10(c) that, to be reimbursable, all activities that occur
in the United States must develop, maintain, or expand the commercial
export market for the relevant U.S. agricultural commodity in
accordance with the MAP Participant's approved MAP program.
Comment: Fourteen respondents recommended that the threshold in the
regulations for Miscellaneous/Fixed Asset Category be raised to $500
and
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proposed that software be subject to the same threshold as fixed
assets.
Response: These comments refer to a threshold in Sec.
1485.23(d)(2) of the current MAP regulations. This provision was not
included in the proposed rule and is not included in the final rule.
Section 1485.30 of the MAP final rule provides the final property
standards for the program. In addition, MAP Participants are subject to
the applicable property management standards described in 7 CFR Parts
3015, 3016 and 3019, depending on the nature of the MAP Participant
organization.
Comment: One respondent stated more flexibility is needed for
electronic communications, which are becoming a more important part of
the marketing mix for Participants, both branded and generic.
Response: CCC believes that the flexibility provided in Sec.
1485.17(b)(1) and Sec. 1485.17(b)(16) is adequate.
Comment: Fourteen respondents stated that FAS refers to
miscellaneous communications devices in the new regulations but did not
address their usage costs and asked for clarification on whether these
costs were reimbursable.
Response: CCC believes the reimbursement of the usage costs of
various communications devices is already addressed by the various
provisions in the MAP final rule. Reimbursement of such communication
costs depends on the circumstances under which the communication took
place. For example, where usage costs of communications devices are
incurred by the MAP Participant's U.S. offices and staff, those costs
are not reimbursable pursuant to Sec. 1485.16(c) and Sec.
1485.17(d)(26). If usage costs of communications devices are incurred
while on eligible international or domestic travel for approved MAP
brand or generic promotion activities and are allowed under the U.S.
Federal Travel Regulations (41 CFR Parts 301 through 304), they are
potentially reimbursable as international or domestic travel
expenditures under the circumstances laid out in the applicable
provisions in Sec. 1485.17(b) and (c). If usage costs of
communications devices are incurred as part of the organization costs
for a MAP Participant's overseas office approved in its MAP program
agreement and such communications originate overseas, Sec.
1485.17(c)(11) provides that such communications costs are reimbursable
for generic promotions so long as the expenditure was made in
furtherance of an approved activity. Thus, the monthly service charge
for a caller usage plan with unlimited minutes that is incurred
primarily in furtherance of an approved activity would be fully
reimbursed under MAP. In contrast, under a caller usage plan that
charges by the minute, only charges for calls incurred in furtherance
of an approved activity would be reimbursed under MAP.
Section 1485.11 Definitions
CCC received 153 comments on this section. In response to the
comments, CCC has edited the definitions as set forth below. In
addition, CCC has made minor clarifications to the definitions of
``contribution,'' ``program year,'' ``SRTG,'' and ``supergrade.'' CCC
has also included a new definition for ``product samples.'' This
definition now codifies MAP Notice 11-003, and MAP Notice 11-003 will
be removed from FAS' Web site. Finally, CCC has added a new definition
for MAP Notice in the MAP final rule.
Comment: One respondent recommended that the generic promotions be
defined more broadly as ``using U.S. commodities from multiple U.S.
suppliers or in cases where only one U.S. supplier is selected to
supply the commodity in question, that multiple U.S. suppliers had the
opportunity to submit bids or compete for the business.'' This
respondent stated that as long as multiple U.S. companies had the
opportunity to compete for that business, it believed promotions with
these companies should be considered generic. Another respondent
commented that a generic promotion should not be required to support at
least two brands since this is difficult when a retailer carries only
one.
Response: CCC disagrees with the respondents' comments suggesting
that a generic promotion not be required to support at least two
brands, particularly in the case raised by the respondent, in which a
single company has been competitively selected over other bidders.
For clarity, CCC has moved the substance of proposed Sec.
1485.17(d), defining what may be considered a generic promotion
activity, from the section on MAP ``Reimbursement rules'' to the
definition of ``generic promotion'' in Sec. 1485.11. Original
subsections (e), (f), (g), (h), (i), (j), and (k) in Sec. 1485.17 have
been re-designated as (d), (e), (j), (f), (g), (h), and (i),
respectively.
Comment: Fourteen respondents recommended adding or clarifying
definitions for the following terms: Advertising, audits, contractors,
direct promotional costs, employees, foreign brand, negative
comparison, overhead costs, representative, small purchase threshold,
and theme.
Response: CCC disagrees with the respondents in regard to the need
for additional definitions of these terms, except that it has further
clarified the terms ``foreign brand'' and ``theme.'' The definition of
``generic promotion'' now refers to a foreign brand as ``a brand owned
primarily by foreign interests and being used to market a commodity or
product in a foreign market.'' Similarly, the definition of ``generic
promotion'' refers to the concept of a ``unified theme'' as ``a
dominant idea or motif.'' CCC has removed the term ``negative
comparison'' from that definition in response to a different comment.
Comment: Fourteen respondents questioned the definition of audits.
They stated that audits are mentioned in at least three places with
seemingly contradictory provisions.
Response: CCC notes the MAP final rule does not define ``audit.''
However, CCC does not believe it is necessary to define this term, as
CCC views this term as generally understood. In response to the
comments, however, CCC agrees that the use of the term ``audit'' in
Sec. 1485.21(d)(7) is confusing and has replaced the term ``audit''
with the term ``compliance review'' in Sec. 1485.21(d)(7).
Comment: Fourteen respondents commented that the use of
representatives (branded) in the phrase ``no more than two
representatives of a single brand participant to exhibit their
company's products at a foreign trade show'' implied that these
individuals have to be employees of the brand (as in Sec.
1485.17(b)(7)). These respondents suggested that this definition be
expanded to include others associated with the brand such as
distributors, consultants, etc.
Response: CCC agrees with the respondents. CCC has modified this
section (now Sec. 1485.17(b)(8)) to expand the list of eligible
representatives to include: Employees and board members of private
companies, employees or members of cooperatives, or any broker,
consultant, or marketing representative contracted by the company or
cooperative to represent the company or cooperative in sales
transactions. CCC notes that MAP Notice 99-003 is now obsolete and will
be removed from FAS' Web site.
Comment: Sixteen respondents commented that the proposed definition
for ``notifications'' has veered from the original purpose for
notifications, which is to notify CCC of significant changes to the MAP
Participant's strategic plan. The respondents asked FAS to clarify the
definition of notifications and stated the proposed rule would be
burdensome to the Participants.
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Response: CCC agrees with the commenters. Instead of changing the
definition of ``notification,'' however, CCC has modified Sec.
1485.14(i) to change when notifications will be required. Notifications
are now required only if a MAP Participant wishes to conduct an
entirely new activity or if the Participant wishes to increase the
funding level for existing, approved activities by more than $25,000 or
25%, whichever is greater. A MAP Participant may make significant
adjustments below that threshold without prior notification to CCC, but
must still submit a notification alerting CCC of such adjustments no
later than 30 days after the change. Finally, CCC has clarified that
minor adjustments to existing, approved activities and/or funding
levels do not require notification.
Comment: Three respondents recommended that the definition of a
small-sized entity be expanded for the program by establishing the size
eligibility standard to one not exceeding 150 percent of the current
Small Business Administration guidelines. The respondents stated that
this recommendation would better align the definition with the actual
practice in the food processing industry.
Response: CCC disagrees. CCC believes it is consistent with the
Administration's National Export Initiative to maintain the same
definition of small business as the Small Business Administration.
Comment: Fourteen respondents suggested the phrase, ``online to MAP
and any other USDA market promotion program * * *'' in the ``UES Web
site'' definition be changed to ``* * * and any other USDA market
development program * * *'' which is more accurate and the terminology
used in the subsequent definition of the Unified Export Strategy (UES).
Response: CCC agrees with the respondents and has changed the final
rule accordingly. In addition, CCC has added an explicit reference to
the MAP program to the end of the definition.
Comment: One comment was received recommending each definition be
given an identifying number or letter so that it is easier to indicate
which definition is being discussed.
Response: CCC disagrees. CCC believes that providing the
definitions alphabetically is adequate for identifying definitions.
Comment: Three respondents stated that because ``brand
participant'' is defined in the proposed regulation to mean only U.S.
agricultural cooperatives that are ``participating in the MAP brand
promotion of another MAP Participant,'' the proposed rule does not
appear to allow a cooperative to apply for funds to run its own brand
program. Therefore, they requested that Sec. 1485.11 (brand
participant) and Sec. 1485.13(a) be clarified to make it clear that
cooperatives will continue to be eligible to apply directly for a brand
promotion program.
One respondent stated that currently cooperatives are allowed to
contract directly with FAS to participate in the MAP program to promote
the brand that their farmers have developed, own and use, to maximize
their returns. This respondent stated that it should be allowed to
continue to do so, as this was what Congress intended.
One respondent stated that the reference to ``participating in the
brand promotion program of another MAP Participant'' does not always
apply and should be deleted from the definition.
Response: CCC agrees with these comments and has clarified these
sections. CCC has modified the definition of ``brand participant'' to
make clear that the term does not include any agricultural cooperatives
that are MAP Participants that apply for MAP funds to implement their
own brand programs. CCC has also modified the definition of ``brand
promotion'' to include U.S. agricultural cooperatives' promotion of
their own brand in their own brand program. CCC has also modified Sec.
1485.15 to delete the phrase ``third party'' before ``brand
participants'' as redundant, since the definition of brand participant
clearly refers to third parties and not the MAP Participant. CCC has
also modified Sec. 1485.17(b)(7) (now Sec. 1485.17(b)(8)) to make
clear that the travel expenses of representatives of MAP Participants,
including U.S. agricultural cooperatives running their own brand
programs, at brand promotions at trade shows are also reimbursable.
Finally, CCC has modified Sec. 1485.15(d) to refer to ``entity''
instead of ``company'' in noting that MAP Participants may not provide
assistance to a single entity for brand promotion in a single country
for more than 5 years.
Comment: One respondent stated that the proposed definition of
``foreign third party'' implies that the MAP Participant can select a
qualified foreign third party with whom to work. The commenter stated
if the proposed definition intends to imply that FAS must give approval
of foreign third parties with whom Participants work, then it must be
deleted.
Response: It is not CCC's intention that CCC would review or
approve foreign third parties with whom Participants wish to work. CCC
has clarified this definition accordingly to state that a foreign third
party is a foreign entity with whom a MAP Participant works to promote
the export of a U.S. agricultural commodity under the MAP program.
Comment: Three respondents commented that in light of the continued
development of agricultural products for non-food use, they proposed
that this rule be amended to insert ``non-durable'' between ``and any''
and ``product thereof, excluding tobacco.''
Response: CCC disagrees with the respondents' suggestion, as the
change would unnecessarily limit the scope of the program. CCC has
modified the definition of ``U.S. agricultural commodity'' to preserve
the scope of the program as covering all agricultural commodities,
regardless of the type of use to which the agricultural product is put.
The definition of U.S. agricultural commodity now refers to ``any
agricultural commodity, including any food, feed, fiber, forestry
product, livestock, or insect of U.S. origin or fish * * *''
Sec. 1485.12 Participation Eligibility
CCC received 2 comments on this section.
Comment: One respondent stated the current MAP regulations allow
U.S. agricultural cooperatives to be a MAP Participant. The proposed
rule retained this eligibility but qualified ``U.S. agricultural
cooperative'' with the term ``nonprofit.'' The respondent commented
that its understanding is that the term ``nonprofit'' in Sec.
1485.12(c) and elsewhere in the proposed regulations is not intended to
change the eligibility of cooperatives that are currently participating
in MAP and which are considered ``nonprofit'' in the sense that they
are entitled to tax treatment afforded by Subchapter T of the Internal
Revenue Code Section 1381. The respondent requested that FAS confirm
that ``a nonprofit U.S. agricultural cooperative'' as used in the
proposed regulations includes U.S. agricultural cooperatives that are
entitled to tax treatment afforded by Subchapter T of the Internal
Revenue Code (IRC) Section 1381.
Response: CCC confirms that U.S. agricultural cooperatives that are
entitled to tax treatment afforded by Subchapter T of the IRC Section
1381 are eligible to participate in the MAP program. CCC has deleted
the term ``nonprofit'' before ``U.S. agricultural cooperative'' as
unnecessary and potentially confusing. CCC has also modified the
definition of ``brand participant'' in Sec. 1485.11 and Sec.
1485.12(c) and made conforming edits
[[Page 29478]]
to Sec. 1485.13 and Sec. 1485.28(b) to delete the term ``nonprofit.''
Comment: One respondent stated its concern that the proposed
regulation Sec. 1485.13(a) states that ``applicants'' may apply for
the MAP program, but does not define the term ``applicant.'' The
respondent was also concerned that Sec. 1485.12 uses the term
``entities'' to describe who can ``participate'' in the MAP, while
Sec. 1485.13(a) uses the term ``applicant.'' The respondent was
concerned that the two sections do not cross reference each other and
that neither term is defined in Sec. 1485.11 ``Definitions.'' The
respondent also suggested the proposed regulations be revised as
necessary to make clear that ``a nonprofit U.S. agricultural
cooperative'' is one of the four entities eligible to participate in
MAP under Sec. 1485.12 and is also eligible to be an ``applicant'' and
apply directly for MAP under Sec. 1485.13(a), including for its own
brand promotion program.
Response: CCC does not share the respondent's concerns. CCC
believes it is unnecessary to define the terms ``applicant'' and
``entity.'' CCC believes that it is appropriate to use different terms
in Sec. 1485.13(a), which deals with those who actually apply to the
program and therefore are ``applicants,'' and Sec. 1485.12, which
deals with who, in theory, is eligible to apply. The MAP final rule is
clear that to participate in the MAP, an entity must be one of four
types of entities, one of which is a U.S. agricultural cooperative.
Implicit in the concept of being ``eligible'' to participate in the MAP
is the notion that eligible ``entities'' are also eligible to be
``applicants'' to the program.
Sec. 1485.13 Application Process
CCC received 94 comments on this section. CCC's responses are
below. In addition, CCC has included new Sec. 1485.13(d) and (e) to
comply with OMB regulations 2 CFR Part 25, ``Universal Identifier and
Central Contractor Registration (CCR)'' and 2 CFR Part 170, ``Reporting
Subaward and Executive Compensation Information.'' 2 CFR Sec. 25.200
directs federal agencies to include in their regulations issued on or
after September 14, 2010 requirements that all applicants for federal
financial assistance: (1) Be registered in the CCR prior to submitting
an application or plan; (2) maintain an active CCR registration with
current information at all times during which it has an active Federal
award or an application or plan under consideration by an agency; and
(3) provide its DUNS number in each application or plan it submits to
the agency. Similarly, pursuant to 2 CFR Sec. 170.200(b), any
regulations issued after September 14, 2010 and containing instructions
for applicants of grants and cooperative agreements, among other
assistance, must require applicants that do not qualify for an
exception under 2 CFR Sec. 170.110(b) to have the necessary processes
and systems in place to comply with Part 170's reporting requirements
if they receive funding.
Comment: Two respondents stated that under the current MAP
regulations a U.S. agricultural cooperative is eligible to be a MAP
Participant and in that capacity to apply directly to CCC for the
cooperative's own brand promotion program.
The respondents stated that the proposed regulation at Sec.
1485.13(a) appears to unintentionally change this by providing in the
fourth sentence that a MAP applicant (i.e., including a nonprofit U.S.
agricultural cooperative) ``may apply to conduct a generic promotion
program, a brand promotion program that provides MAP funds to brand
participants for branded promotion, or both.'' They requested that FAS
confirm that a nonprofit U.S. agricultural cooperative that applies to
CCC for its own brand promotion program would be considered a ``MAP
Participant,'' not a ``brand participant'' since it would enter into a
MAP agreement directly with CCC.
Response: CCC agrees with the respondents. CCC did not intend to
change this policy and has modified Sec. 1485.13(a) accordingly to
explicitly state that an applicant who is a U.S. agricultural
cooperative may also apply for funds to conduct its own brand promotion
program. As noted previously, CCC has also clarified the definition of
``brand participant'' in Sec. 1485.11 to exclude from that definition
any agricultural cooperatives that are MAP Participants that apply for
MAP funds to implement their own brand programs.
Comment: Twenty-one respondents submitted requests for FAS to
clarify that electronic copies of applications are no longer required
to be submitted through the UES system and only a hard copy is required
to be sent.
Response: CCC's intent was not to imply that only a hard copy be
sent. Applicants have always had a choice to submit either an
electronic copy or a hard copy of their application. CCC believes the
MAP final rule clearly maintains that choice, but encourages
organizations to submit their applications through the UES system,
because this format virtually eliminates paperwork and expedites the
FAS processing, review, and reimbursement cycles.
Comment: Twenty-one respondents questioned if the online version is
still required, could it be submitted in a reasonably short time
following the deadline?
Response: No. Electronic applications may not be submitted after
the deadline. CCC is required to publish a Notice of Funds Availability
annually in the Federal Register. This notice provides 60 days to
submit applications either electronically or by hard copy. Applications
are required to be submitted by the deadline that is published in the
annual notice.
Comment: Two respondents provided comments regarding Sec.
1485.13(a)(3)(i)(A) and Sec. 1485(a)(3)(i)(B). They stated they
support the requirement that Participants submit a strategic plan;
however, to reduce the complexity of the UES process, they recommended
that the plan submission remain separate from the current UES process.
Response: CCC disagrees. CCC will continue to approve applications
that it considers to present the best opportunities for developing and
expanding export markets for U.S. agricultural commodities. The
strategic planning process is a critical part of the application and
therefore must be provided within the UES process in order for the
applications to be evaluated in a consistent and equitable manner. This
is not a change from current practice.
Comment: Sixteen respondents provided similar comments that stated
that Sec. 1485.13(a)(1)(i)(R) & (S) both appear to require that the
applicant's proposed contribution be stated in both dollar terms and as
a percentage of CCC resources requested. They stated that they assume
this change is not the intention of CCC, because Sec. 1485.25 of the
proposed rule implies that the applicant has a choice between stating
its proposed contribution either in dollar terms or as a percentage, as
is the case under current MAP regulations. The respondents asked for
clarification.
Response: CCC agrees with the respondents and has changed the final
rule to clarify that the applicant has the choice to propose its
contribution in dollar terms or as a percentage of resources requested.
Section 1485.13(a)(1)(i)(R) & (S) have been eliminated and new Sec.
1485.13(a)(1)(i)(Q) requires applications to include: ``Value, in U.S.
dollars, of proposed contributions from the applicant or the
applicant's proposed contribution stated as a percentage of the total
dollar amount of CCC resources requested.''
Comment: Sixteen respondents stated that Sec. 1485.13(a)(3)(i)(M),
which
[[Page 29479]]
introduces the requirement for an evaluation plan as part of the MAP
application process, seems to imply that the current practice of
``performance measures'', Country Progress Reports and regular, formal
evaluations is not sufficient. The respondents stated that if this is
the case the evaluation plan could become an added bureaucratic burden
and asked for further clarification of CCC's intent with this new
requirement. They also asked for further clarification on whether the
evaluation plan is an additional requirement.
Response: The requirement for an evaluation plan is not a new
requirement. The Government Performance and Results Act (GPRA) of 1993
(5 U.S.C. 306; 31 U.S.C. 1105, 1115-1119, 3515, 9703-9704) requires
performance measurement of Federal programs, including MAP. Section
1485.13(a)(3)(D) of the prior MAP rule required ``[a] statement of
goals and the applicant's plans for monitoring and evaluating
performance towards achieving these goals.'' In addition, Sec.
1485.14(b)(6)(v) of the previous rule listed as one of the criteria
considered by CCC in choosing applications the adequacy of the
applicant's strategic plan in the following category ``Description of
an evaluation plan and suitability of the plan for performance
measurement.'' The new final rule merely clarifies the current
requirement to increase each applicant's opportunity for success. To
clarify that the evaluation plan is not a new requirement, CCC has
combined sub-paragraphs (M) and (E) into one sub-paragraph (E) in Sec.
1485.13(a)(3).
Comment: Fourteen respondents stated that the specific mention of
the submission of an ``evaluation plan'' in the application process
implied that the current submission of goals and performance measures
is no longer sufficient. The fourteen respondents also recommended that
if such a plan is required, that the Participant's submission be
permitted to be brief and generalized.
Response: As noted in response to the prior comment, in this final
rule, CCC has combined the current regulation's language on goals and
performance measures and the new proposed language on evaluation plans
into one single sub-paragraph (E) in Sec. 1485.13. CCC notes that
evaluation of MAP's effectiveness has been and will continue to be an
integral element of program planning and implementation. The adequacy
of the evaluation plan has been and will remain one of the criteria in
approving applications.
Comment: One respondent stated that both Sec. 1485.13(a)(1)(i)(J)
and Sec. 1485.14(c)(9) refer to evaluating a request for a brand
promotion program based on the percentage of CCC resources that will be
made available to small-sized entities. The comment stated that since
only small companies are eligible to participate in the branded
program, this reference does not appear to be needed and should be
deleted.
Response: CCC has deleted the references requested by the
respondent but for a different reason. The respondent is not correct
that only small companies are eligible to participate in the branded
program. U.S. agricultural cooperatives are also eligible to
participate in the branded program. CCC, however, does not intend for
small companies to receive preference over cooperatives. Accordingly,
there is no need to determine the percentage of resources made
available to small-sized entities, and CCC has eliminated both
sections. Large companies remain ineligible for branded programs.
Sec. 1485.14 Application Review and Formation of Agreements
CCC has edited Sec. 1485.14(b)(3) to make clear that the
preference given to organizations with the broadest producer
representation/industry participation applies only with respect to
nonprofit U.S. trade organizations. CCC has also clarified Sec.
1485.14(e) and (f) to reflect that the approval letter must also be
signed by the MAP Participant and that final agreement occurs when both
the program agreement or amendment and the approval letter are signed
by both parties. In addition, CCC received 130 comments on this
section, set forth below.
Comment: Fourteen respondents stated under Sec. 1485.14(c)(8) that
``overhead costs'' and ``direct promotional costs'' are not defined.
Response: CCC believes these terms are generally well-understood
and that ``direct promotional costs'' in specific is self-explanatory.
CCC, therefore, does not deem it necessary to define these terms in the
final rule. Moreover, this language remains unchanged from the current
rule that has been in place for 15 years. Section 1485.14(c) explains
the allocation factors used by CCC to determine which applications to
approve. Subsection (c)(8), which notes that CCC will review general
administrative and overhead costs compared to direct promotional costs,
merely reflects CCC's preference that program funds be used for
promotional expenses rather than administrative expenses. CCC has
modified Sec. 1485.14(c)(8) to make clear that CCC will review
proposed MAP-funded general administrative and overhead costs compared
to proposed MAP-funded direct promotional costs.
Comment: With respect to Sec. 1485.14(c)(8), fourteen respondents
questioned how CCC compares salaries of staff with technical expertise
and who execute programs with the fees of consultants who do similar
work. The respondents stated that they felt the wording made an overly
simplistic distinction between administration and promotional expenses.
Response: CCC disagrees that the wording of Sec. 1485.14(c)(8) is
overly simplistic. However, this comment raises an issue that requires
further clarification of Sec. 1485.11's definition of ``administrative
expenses or costs.'' The MAP final rule now deletes the phrase ``that
are not directly identifiable with a specific market promotion
activity'' from the proposed definition of administrative expenses or
costs. Administrative expenses or costs now are defined as those
``expenses or costs of administering, directing, and controlling an
organization that is a MAP Participant * * * [including costs related
to personnel (including, but not limited to, salaries, benefits,
payroll taxes, individual insurance, training)]'' regardless of whether
they are specifically identifiable with a specific market promotion
activity. As proposed Sec. 1485.16(c) and Sec. 1485.17(d)(26) made
clear, home office domestic administrative expenses, including salaries
of U.S. home office staff who execute MAP activities, are generally not
reimbursable under MAP, and the Participant must use its own funds to
pay any administrative costs of its U.S. offices. This is not a change
from the prior regulations. This change to the definition of
``administrative expenses or costs'' makes the definition consistent
with these sections.
Pursuant to Sec. 1485.17(c)(1) and (11), however, MAP funding is
available, for generic promotion only, to pay for the compensation of a
U.S. citizen employee or U.S. citizen contractor stationed overseas, as
well as the administrative costs for overseas offices approved in MAP
program agreements. In evaluating applications for MAP funding of
overseas offices, as reflected in Sec. 1485.14(c)(8), CCC generally
prefers that MAP funding be directed toward promotional expenses rather
than administrative expenses. It is true that salaries of overseas
office staff with technical expertise are still considered
administrative expenses even if the staff execute MAP activities,
whereas fees of consultants who do similar work would be classified as
promotional expenses.
[[Page 29480]]
However, applicants are free to explain in their applications what
promotional activities overseas office staff are anticipated to
conduct.
Comment: One respondent stated that the wording in Sec.
1485.14(c)(8) regarding factors affecting allocations does not provide
for any distinction when making allocation decisions between time
salaried staff spend on ``administrative functions'' (usually a minor
amount of time spent by higher paid staff) and time spent making use of
technical expertise to execute programs and provide information to
importers and processors, which are the main reasons for employing
higher paid staff.
Response: See response to prior comment. CCC does not believe that
Sec. 1485.14(c)(8) must distinguish between time salaried staff spends
on ``administrative functions'' and time salaried staff spends on
executing MAP activities. All time spent by salaried staff is
considered general administrative and overhead costs, not direct
promotional costs, as clarified in the revised definition of
``administrative expenses or costs.'' As noted in CCC's response above,
applicants are free to explain in their applications what promotional
activities overseas office staff are anticipated to conduct.
Comment: One respondent in a comment to Sec. 1485.29 stated
further clarification was needed regarding the eligibility of contracts
with U.S. based organizations that are retained to implement or assist
with approved international market development efforts. This respondent
stated the proposed regulations do not completely clarify those
domestic contracts that would be deemed eligible for reimbursement and
those that would not be.
Response: CCC's current practice is to reimburse MAP Participants'
expenditures for contracts with U.S. based organizations retained to
implement or assist with approved international market development
efforts, except when the U.S. based organization is also providing
administrative services to the MAP Participant's U.S. office(s). In
other words, if a U.S. based organization assumes any functions related
to the administration, direction or control of the MAP Participant's
U.S. office(s) in a program year, then no activity of any type
undertaken by this organization in the United States or overseas during
that program year, including direct promotional services overseas, will
be reimbursable with MAP funds. CCC has codified this current practice
in new Sec. 1485.17(b)(19).
Note that this prohibition does not apply when the U.S. based
organization is providing administrative services to an approved MAP
funded overseas office (as opposed to the U.S. home office). In that
case, the activities provided by the organization are reimbursable
whether they are administrative or direct promotion under the MAP final
rule, so long as the organization is not also providing administrative
services to the MAP Participant's U.S. office(s) in the same program
year.
Comment: Nineteen respondents provided similar comments in
reference to Sec. 1485.14(i), stating that the current notification
process serves CCC's and the Participant's purposes. A number of the
respondents stated that although they believed some formalization of
the process may be necessary, the proposed requirement to notify CCC of
any budgetary change that is at least $10,000 or more is burdensome.
They stated that approval is only relevant at the constraint level and
that acknowledgement of an activity level change would be more
appropriate. The respondents also recommended that notification level
be increased to $25,000, to reflect the greater impact of an activity
funded at this level.
Several of the comments stated that the language ``may make
adjustments only if it submits a notification'' implies that any change
to an activity, regardless of how minor, requires a notification. The
respondents suggested that while the regulations should certainly
provide that activities can be changed, details of when a notification
is required could be more appropriately addressed in a separate policy
clarification. One respondent stated that if CCC has identified the
need to track budget changes more closely, they recommend that it adopt
a policy based on a percentage change rather than a dollar value and
that the percentage be no less than 25 percent of an existing budget
amount. The respondent further stated that FAS staff should be required
to use the UES system for approving such changes and that approval
should not be based on a default period of 15 days.
Response: CCC disagrees that the ``current notification process''
serves CCC's purposes. However, in response to the above comments, CCC
has modified Sec. 1485.14(i) to reduce the burden of notifications,
adopting several of the changes requested by commenters. For example,
CCC has increased the threshold to $25,000 for requiring notification
to CCC of changes to existing activities. This notification must occur
before the change is implemented, but no approval is required.
Similarly, CCC will require notifications for adjustments below that
threshold only if the change is significant. No notification is
required for minor changes in existing, approved activities or for
deleting an activity.
Comment: Two respondents stated that MAP Participants' current
practice of reallocating funds among brand participants in the MAP
Participants' branded programs has allowed MAP Participants to expand
brand participation by as much as 40 percent per year. Therefore, they
strongly oppose proposed Sec. 1485.14(i)(2)(i), which would require
MAP Participants to notify CCC of any increase in the funding level for
existing, approved activities addressing a single constraint or
opportunity by more than $10,000 or 20 percent of the approved funding
level, whichever is greater. They further stated that imposing a hard
budget ceiling and requisite advance notification would severely limit
the flexibility for MAP Participants with branded programs to
reallocate funds from companies that are unable to utilize them in
favor of those that can.
Response: Respondents are mistaken that Sec. 1485.14(i)(2)(i)
requires a MAP Participant to notify CCC of any reallocation of funds
among the Participant's branded program participants. The notification
requirement does not apply at the brand company level for a MAP
Participant operating a brand program. The brand program is approved by
CCC at the program level, not at the company level. CCC simply approves
of the Participant's brand program in the aggregate; CCC does not
review or approve a MAP Participant's allocation of funds among brand
participants in its branded program.
Comment: Fourteen respondents stated they support the self-
certification requirement by small-sized entities participating in a
MAP Participant's activities in the branded program area. In addition,
CCC received some comments encouraging CCC to be consistent in its
policy to exclude large companies from the program. The respondents
stated that currently large companies cannot apply and receive MAP
funding directly; however, a marketing company representing a large
company may obtain assistance through a SRTG. The respondents
recommended that the applicant company as well as the brand owner be
required to certify that they meet SBA's criteria of being a small
company.
Response: CCC disagrees with respondents' recommendation that the
brand owner certify that it is a small company. It is not CCC's
intention to
[[Page 29481]]
limit the products that small export trading companies can market under
the MAP branded program, regardless of the size of the company
producing the product marketed. CCC believes that it is appropriate for
a small export trading company to promote its ability to consolidate
export shipments that include products made by a wide range of
companies.
Sec. 1485.15 Operational Procedures for Brand Programs
CCC received 32 comments on this section. CCC has also modified
Sec. 1485.15(c)(6) to include additional terms that are acceptable
origin identification, currently set forth in MAP Notice 97-020. In
addition, CCC has modified Sec. 1485.15(c)(6) to advise that CCC may
temporarily waive the U.S. origin labeling requirement where CCC has
determined that such labeling will likely harm sales rather than help
them.
Comment: Three respondents made similar comments in reference to
Sec. 1485.15(a). One respondent recommended that the requirement for
an annual submission of program operational procedures be changed to
require FAS approval only once, after which FAS would merely be
notified of any changes. Two respondents proposed that the review of
procedures and documents used to administer the branded program be
conducted during the annual compliance review.
Response: CCC disagrees with the recommendation to remove the
annual requirement and has retained the requirement for an annual
submission of program operational procedures even if there are no
substantial changes in the procedures. CCC expects that any MAP
Participant that is operating a brand program would review its
procedures and documents annually.
CCC disagrees with the respondents' proposal to have CCC review the
procedures during the annual compliance review in lieu of a separate
submission. The purpose of the CCC review is to approve a plan at the
start of a program year, before the program begins operation. Moreover,
during the compliance review, CCC may review the implementation of the
plan, rather than the plan itself.
In response to other comments requesting additional time for
implementation, CCC has delayed the effective date of this final rule
until the MAP Participant's 2013 program year (either 01/01/2013 or 07/
01/2013). CCC has deleted the requirement in Sec. 1485.15(a) that the
MAP Participant must submit its proposed brand program operational
procedures not later than 21 days prior to signing participation
agreements with brand participants. CCC has modified Sec. 1485.15(a)
to note that CCC will notify all new and existing MAP Participants in
writing in each Participant's annual approval letter and through the
FAS web site as to applicable submission dates and dates for approvals
of brand program operation procedures.
Comment: Two respondents commented on Sec. 1485.15(a). One
respondent requested that FAS confirm that Sec. 1485.15(a) does not
apply to a U.S. agricultural cooperative that is a MAP Participant and
operates the cooperative's own brand promotion program. Another
respondent commented that this section appears to apply to MAP
Participants that administer brand promotion programs on behalf of
third party brand participants that do not have a direct agreement with
CCC. The respondents requested clarification be made on whether this
section does not apply to U.S. nonprofit agricultural cooperatives that
are MAP Participants operating their own brand program.
Response: CCC confirms that Sec. 1485.15(a) applies only to MAP
Participants that operate brand promotion programs that include third
party brand participants, and does not apply to U.S. agricultural
cooperatives that operate their own brand programs. CCC has amended the
definition of brand participant in Sec. 1485.11 to make clear it does
not include a U.S. agricultural cooperative operating its own brand
program.
Comment: One respondent stated that Sec. 1485.15(b) and Sec.
1485.15(c) seem to imply that contracts between cooperatives and third
party participants be preapproved by CCC each year. The respondent
stated that this requirement is unreasonable and burdensome since
nonprofit farmer owned cooperatives carefully protect their farmer
members and their brand on each and every contract into which they
enter.
Response: CCC disagrees that Sec. 1485.15(b) and Sec. 1485.15(c)
imply that CCC pre-approves a MAP Participant's contracts with brand
participants. Section 1485.15(b) simply requires that the MAP
Participant's proposed operational procedures be pre-approved by CCC.
It does not require CCC to pre-approve individual contracts. Section
1485.15(c) simply sets forth items that must be addressed in each
contract with a brand participant. As discussed above, U.S.
agricultural cooperatives operating their own brand program are not
``brand participants.''
Comment: Six respondents stated that Sec. 1485.15(c)(7) should
include ``small-sized entity or cooperative.''
Response: CCC agrees and has made the requested change.
Comment: CCC received one comment asking whether a MAP Participant
who had previously received an approval from CCC to use origin
identification terms other than those appearing in the current
regulations would have to re-submit these terms again for approval when
the new regulations become effective.
Response: CCC understands the commenter to be referring to Sec.
1485.15(c)(6), which lays out the requirement that MAP activities
identify the U.S. origin of the promoted products. CCC considers that
an approval under the previous regulations would constitute an approval
under the new regulations. A MAP Participant would not have to re-
submit these terms again for approval under the new regulations.
CCC has also modified Sec. 1485.15(c)(6) to include additional
terms that are acceptable origin identification, currently set forth in
MAP Notice 97-020. Specifically, CCC has added the terms ``American'',
``United States of America'', as well as any state or territory of the
United States of America spelled out in its entirety. Section
1485.15(c)(6) also now clarifies that the use of approved origin terms
as a descriptor or in the name of the product (e.g., Texas style chili,
Bob's American Pizza) does not satisfy the product origin requirement.
Section 1485.15(c)(6) also now encourages the phrases ``product of '',
``grown in'' or ``made in'', but does not require them. MAP Notice 97-
020 will be removed from the FAS Web site.
In addition, CCC notes that in certain situations, CCC has
temporarily waived the requirement to identify the U.S. origin of
products promoted under the MAP brand program. For example, current MAP
Notice 09-007 temporarily waives this requirement for MAP brand
activities conducted in certain Middle East countries. Accordingly, CCC
has modified Sec. 1485.15(c)(6) to advise that CCC may temporarily
waive the U.S. origin labeling requirement where CCC has determined
that such labeling will likely harm sales rather than help them and
that such determinations will be announced to MAP Participants via a
MAP notice issued on FAS' Web site. MAP Notice 09-007 will continue to
be available on the Web site for informational purposes and reflects
CCC's current administration of the MAP program.
[[Page 29482]]
Comment: One respondent stated that 5 years is an unreasonable time
to keep records, stating that the IRS requires records to be kept for
only 3 years.
Response: CCC disagrees with the respondent. The Agricultural Trade
Act of 1978, as amended, at 7 U.S.C. 5662(a)(1) requires the Secretary
of Agriculture ``to require by regulation each exporter or other
participant under the [MAP and other] program[s] to maintain all
records concerning a program transaction for a period not to exceed 5
years after completion of the program transaction, and to permit the
Secretary to have full and complete access, for such 5-year period, to
such records.''
Comment: Five respondents asked CCC to clarify whether cooperatives
were still exempt from the 5-year graduation rule or if this had
changed.
Response: CCC understands the commenters to be referring to the
statutory provision in 7 U.S.C. Sec. 5623 note, which states that MAP
assistance may not be provided to promote a specific branded product in
a single market for more than 5 years unless the Secretary determines
that further assistance is necessary in order to meet the objectives of
the program. Currently, CCC exempts U.S. agricultural cooperatives from
the 5 year rule. CCC determined in 1998 that continued support for U.S.
agricultural cooperatives was necessary to meet MAP's objectives, and
that determination remains in place. CCC will publish this
determination in a MAP notice on the FAS Web site.
Comment: Three similar comments stated that the ``Sunset Rule''
should be deleted. The respondents suggested that if the rule is
maintained, then it should apply to a specific market and not to a
country. One respondent stated that the 5-year limitation is the single
greatest barrier to program participation and recommended that the
country limitation be extended to 8 years per market. Another
respondent recommended that export trading companies be considered for
exemption from the 5-year limitation, if it can be proven that any
additional marketing efforts after 5 years will be for different
products beyond those previously marketed.
Response: CCC understands the commenters to be referring to the
statutory provision in 7 U.S.C. Sec. 5623 note, which states that
``[t]he Secretary should not provide assistance under the [MAP] program
to promote a specific branded product in a single market for more than
5 years unless the Secretary determines that further assistance is
necessary in order to meet the objectives of the program.'' Because the
5-year limitation is established by statute, CCC cannot extend the
country limitation to 8 years as requested by the respondents. While
the statute provides the Secretary the discretion to waive the
graduation requirement in individual circumstances where the Secretary
believes such further assistance is necessary to achieve the goals of
MAP, CCC has no authority to ``delete'' the ``Sunset Rule'' as
requested by the commenters. CCC also disagrees with the comment that
the ``Sunset Rule'' be applied to a specific market and not to a
country. CCC has defined ``market'' in the proposed and final rules to
mean the country or countries targeted by an activity. Lastly, CCC does
not have any information that suggests that exempting export trading
companies from the 5-year limitation is necessary to achieve the goals
of MAP. CCC retains the discretion to waive the 5-year limitation, if
CCC determines that further assistance in a particular situation is in
the best interests of the MAP.
Comment: Two respondents commented that they supported continuing
exemptions for international shows that reflect a broad international
attendance.
Response: CCC understands the commenters to be referring to CCC's
practice, as reflected in MAP Notice 09-005, of not counting a
Participant's attendance at certain international trade shows when
determining whether a specific branded product has been promoted in a
single market for more than 5 years. CCC will continue this practice
and has codified it in Sec. 1485.15(d) of the MAP final rule.
Many international trade shows feature buyers and sellers from many
countries. Many of the shows are held in the same country annually or
biannually (e.g., SIAL and ANUGA are held in alternating years in
France and Germany, respectively). Many U.S. companies attend such
shows to meet with buyers from many countries, not just the host
countries. However, given that CCC may not provide assistance to a
single company for brand promotion in a single country for more than 5
years, many small brand companies would face graduation from a host
country after exhibiting at one of these international trade shows for
five years, even if the companies have had no other activities in that
country and participating in the show is used exclusively as a gateway
for developing customers in other countries.
Therefore, to further the objectives of MAP, CCC has determined
that brand participants' participation in certain international trade
shows in foreign countries will not be considered when determining such
participants' time in country for purposes of the 5 year graduation
requirement. Specifically, as reflected in MAP Notice 09-005, CCC has
compiled a list of international trade shows that CCC ``exempts'' from
the graduation requirement. A show on this list meets two requirements:
(1) It is a food or agricultural show, with no less than 30% of
exhibitors selling food or agricultural products, and (2) it is an
international show, meaning it targets buyers, distributors and the
like from more than one foreign country and no less than 15% of the
show's visitors are from countries other than the host country.
CCC is not planning on changing its practice and has codified MAP
Notice 09-005 in Sec. 1485.15(d). MAP Notice 09-005 will be removed
from the FAS Web site, as parts are now redundant with the final rule,
and a new MAP notice will be posted on FAS' Web site listing the
international trade shows that CCC ``exempts'' from the graduation
requirement. If a MAP Participant believes that a show should be added
to this list, the Participant should contact FAS.
Comment: One respondent stated that because they do not have the
facilities for conducting investigations of corporate ownership
structure, they proposed that the current process of self-certification
continue.
Response: CCC notes that Sec. 1485.15(c)(7) as proposed allowed
brand participants to self-certify as to status as a small-sized entity
and that the final rule continues the current process of self-
certification.
Sec. 1485.16 Contribution Rules
CCC received 20 comments on this section. Below are CCC's
responses. In addition, CCC has clarified in Sec. 1485.16(c) that a
MAP Participant's U.S. office's administrative costs may be included in
calculating the amount of contributions the MAP Participant contributes
to MAP activities. Similarly, CCC has clarified in Sec. 1485.16(d)(2)
that contributions are subject to the MAP regulations and the
applicable OMB circulars on cost principles, to the extent these
principles do not directly conflict with the provisions of this
subpart. In addition, CCC has removed the cross-reference to Sec.
1485.16(c) in Sec. 1485.16(d)(2) as unnecessary.
Comment: Fourteen respondents provided similar comments in
reference to Sec. 1485.16, stating it would be clearer to begin the
subpart by stating that any expense that is listed as eligible for
reimbursement can also be considered a
[[Page 29483]]
contribution if paid with industry funds. The respondents stated that
then the list would only need to state what is not eligible as a
contribution, the assumption being that anything that is not listed is
eligible. They stated this change would greatly reduce the confusion
over items which now appear in both places, sometimes with slightly
different wording.
Response: CCC believes that eligible contributions are clear as
presented in Sec. 1485.16. CCC notes that Sec. 1485.16(d)(2)(xxi)
specifically provides that ``the cost of any activity expressly listed
as reimbursable in this subpart'' may be considered a contribution if
paid with Participant or industry funds.
Comment: One respondent stated that this section does not
specifically mention industry travel expenses as being counted as a
contribution. This respondent stated that it urges FAS to specifically
state that industry travel and other industry expenditures that are in
support of the broader mission of Participants be listed as eligible to
count toward contributions.
Response: CCC allows domestic travel expenses paid by the
Participant to be counted as a contribution, pursuant to Sec.
1485.16(d)(2)(xvii). Additionally, at Sec. 1485.16(d)(2)(xxi), CCC
allows to be counted as a contribution the cost of any activity paid by
the Participant and expressly listed as reimbursable in this subpart,
which includes travel. In response to the comment, however, CCC has
modified the definition of ``contribution'' in Sec. 1485.11 to include
explicitly expenditures made by entities in the MAP Participant's
industry in support of the entities' related promotion activities in
the markets covered by the MAP Participant's agreement.
Comment: One respondent stated the proposed rule Sec.
1485.16(d)(2)(xvi) reads eligible contributions include ``fees for
participating in U.S. Government activities'' and it requested
clarification of the term ``U.S. Government activities.''
Response: From time to time, the U.S. Government financially
sponsors activities or endorses activities, particularly overseas, that
promote export opportunities. These could include trade shows, trade
missions, restaurant promotions, or a variety of other activities. To
clarify this further, CCC has modified Sec. 1485.16(d)(2)(xvi) to note
that the activities are ``U.S. government sponsored or endorsed export
promotion activities.'' CCC has made a corresponding edit to Sec.
1485.17(d)(21).
Comment: One respondent commented that the proposed regulation at
Sec. 1485.16(b) provides that ``in MAP brand promotion programs, a
brand participant shall contribute at least 50 percent of the total
eligible expenditures made on each approved brand promotion.'' It
suggested that to be consistent with the quoted language, and with the
understanding that a brand promotion program can be operated by a MAP
Participant, as well as a brand participant, the phrase ``a brand
participant'' in Sec. 1485.16(b) should be replaced with ``a brand
participant or Participant'' or similar language.
Response: CCC agrees with the comment and has modified Sec.
1485.16(b) accordingly.
Sec. 1485.17 Reimbursement
CCC received 330 comments on this section. Below are CCC's
responses to the comments. In addition, CCC has clarified various
provisions. For example, CCC has made explicit in Sec. 1485.17(b) that
reimbursements are subject to the MAP regulations and the applicable
OMB circulars on cost principles, to the extent these principles do not
directly conflict with the provisions of this subpart. CCC has also
modified Sec. 1485.17(c)(8) to codify CCC's current practice of
requiring MAP Participants to provide documentation establishing the
full fare economy class rate to support their reimbursement claims, as
well as clarify that international travel expenses for activities that
occur inside or outside the United States are reimbursable. In
addition, CCC has deleted Sec. 1485.17(c)(9), which provided that per
diem was reimbursable, because it is redundant with Sec. 1485.17(c)(8)
(which now explicitly includes per diem). Section 1485.17(c)(8) allows
the reimbursement of ``international travel expenditures,'' which
include transportation, per diem, and miscellaneous expenses.
CCC has also added Sec. 1485.17(b)(17), which allows for
reimbursement of international travel expenditures (e.g.,
transportation, per diem, and miscellaneous expenses) for brand
companies participating in foreign trade missions subject to certain
conditions. This codifies MAP Notice 03-004. MAP Notice 03-004 will be
removed from the FAS Web site.
Similarly, CCC has codified MAP Notice 01-004 in new Sec.
1485.17(b)(18). MAP Notice 01-004 describes CCC's longstanding practice
of limiting reimbursement of expenditures related to retail, trade, or
consumer exhibits or shows, whether held inside or outside the United
States, where USDA has sponsored or endorsed a U.S. pavilion at the
exhibit or show. In that situation, MAP funds are used to reimburse the
travel and/or non-travel expenditures of only those MAP Participants
located within the U.S. pavilion. CCC believes it is important to
maintain a unified U.S. presence at these shows, with all exhibitors
contributing fairly and supporting the U.S. pavilion. MAP Notice 01-004
will be removed from the FAS Web site.
Finally, CCC has added a cross reference to Sec. 1485.17(d) in
Sec. 1485.17(b) and Sec. 1485.17(c).
Comment: Three respondents provided similar comments in reference
to Sec. 1485.17(b)(4). Two comments stated that the rule as written
may be interpreted to allow the cost of product samples to be
reimbursed. The respondents stated that ``[a]s written, this rule may
be interpreted to allow the cost of promotional samples themselves to
be reimbursed. We feel that the existing approach, in which costs of
distributing samples are eligible, but the costs of the samples
themselves are not, remains appropriate within WTO eligibility. We
recommend that this be clarified.''
One comment stated that the current MAP regulations limit the
reimbursement of giveaways to U.S. dollars and suggested that the
maximum reimbursement be increased to reflect inflation since the
1980s.
One respondent stated that the purchase of samples locally on a
case-by-case basis with a maximum cost per sample not to exceed the
allowable cost of a premium should be allowed.
Response: CCC's practice has been and continues to be that the cost
of product samples is not reimbursable under MAP. In response to the
first commenters above, CCC has clarified this issue and modified Sec.
1485.17(b)(4), which provides that the costs of in-store and food
service promotions, product demonstrations, and distribution of
promotional samples are reimbursable. Section 1485.17(b)(4) now
explicitly notes that the purchase of product samples are not
reimbursable and replaces the term ``promotional samples'' with
``product samples.'' CCC also notes that Sec. 1485.17(d)(5) already
specifically prohibits the reimbursement of the cost of product
samples. In addition, as noted above, CCC has modified Sec. 1485.11 to
include a definition of ``product samples.''
CCC disagrees with the view that the costs of product samples
should be reimbursed.
CCC does not agree with the commenter requesting that the current
MAP regulation's limit on the
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reimbursement of giveaways be increased or that it be codified in the
MAP final rule. As noted above, CCC observes that the cost of samples
of the promoted MAP product are not reimbursable, regardless of whether
the samples are giveaways or not. Regarding the reimbursement of
giveaways of non-MAP promoted products in general, the MAP final rule
is written in a way to allow CCC to counter inflation, without unduly
limiting its flexibility. As discussed below in CCC's response to
similar comments, rather than specify a reimbursement amount for
giveaways in Sec. 1485.17(b)(11), CCC will set a reimbursement limit
during the course of its administration of MAP and change that limit,
as necessary, with appropriate notice to MAP Participants through
written MAP notices posted on FAS' Web site.
Comment: Three respondents commented in reference to Sec.
1485.17(b)(8) supporting the inclusion of eligibility of subscriptions.
All recommended that CCC change the wording to remove the words ``to
publications'' and instead state that ``CCC will reimburse in whole or
in part subscriptions that are of a technical, economic, or marketing
nature and relevant to the approved activities.''
One respondent proposed adding language to allow for expenditures
when the internet is used as a staff resource. It gave as an example
for market intelligence, economic data, and key policies and procedures
to be accessible via their internet site to their international offices
and U.S. staff worldwide.
Response: CCC agrees with the first general comment and has
modified Sec. 1485.17(b)(8) (now Sec. 1485.17(b)(9)), as some
appropriate subscriptions could be to web-based information that may
not traditionally be thought of as ``publications.'' CCC has also made
a corresponding change to Sec. 1485.16(d)(2)(x). CCC does not agree
with the second comment to add language to allow reimbursement of
internet expenditures because, as submitted, this appears to be a
function of the MAP Participant's home office, and, thus, is not
reimbursable under the program unless otherwise authorized in Sec.
1485.17(c)(22).
Comment: Fourteen respondents commented regarding proposed Sec.
1485.17(b)(9) (now Sec. 1485.17(b)(10)), which provided that the cost
of ``demonstrators, interpreters, translators, receptionists, and
similar temporary workers who help with the implementation of discrete
promotional activities'' is reimbursable. These respondents were
concerned with the use of the word ``discrete'' in the preceding
language. Several commented that they presume that the use of the term
``discrete'' applies to or refers to any approved activities such as
described in the regulations. The respondents stated that it would be
clearer to use the term ``individual'' rather than ``discrete,'' as
that might better define the activity.
Response: CCC agrees with the respondents and has made the
suggested change substituting the term ``individual'' for the term
``discrete'' in the final rule for clarity.
Comment: Fifteen respondents provided similar comments in regard to
proposed Sec. 1485.17(b)(10) (now Sec. 1485.17(b)(11)), which
provided that the cost of giveaways, awards, prizes, gifts and other
similar promotional materials is reimbursable, subject to such
reimbursement limitation as CCC may, from time to time, determine and
announce in writing to all MAP Participants and on the FAS Web site.
The respondents stated that they presume that announcements pertaining
to the reimbursement limitations will be in the form of Program
Announcements or similar instruments. Four stated that they agree with
the need for flexibility in this area and supported CCC's approach.
Response: CCC understands that the commenters are referring to
CCC's practice of issuing Market Access Program notices. MAP Notice 97-
002 currently sets out a $1.00 reimbursement limit for promotional
items (which does not include product samples). It also sets out the
conditions under which such reimbursement is available. CCC has
determined to codify MAP Notice 97-002, in part. Section
1485.17(b)(11), which allows reimbursement for giveaways, awards,
prizes, gifts and other similar promotional materials, now notes that
reimbursement is available only when: (1) the items are described in
detail with a per unit cost in an approved strategic plan and (2)
distribution of the promotional item is not contingent upon the
consumer, or other target audience, purchasing a good or service to
receive the promotional item.
CCC believes that specifying a dollar amount in the new MAP
regulations is unnecessarily restrictive and does not provide CCC
sufficient flexibility to deal with changing economic circumstances
such as inflation. Therefore, rather than specify a reimbursement
amount in Sec. 1485.17(b)(11), CCC will retain the proposed rule's
discretion. Thus, CCC will set a reimbursement limit during the course
of its administration of MAP and change that limit, as necessary, with
appropriate notice to MAP Participants through written MAP notices
posted on FAS' Web site. MAP Notice 97-002 will be removed from the FAS
Web site, and a new notice will be issued setting forth a reimbursement
allowance for giveaways, awards, prizes, gifts and other similar
promotional materials.
Comment: One respondent commented in reference to Sec.
1485.17(b)(12) and couponing. The commenter suggested that CCC allow
ads to be reimbursed if the ad contains coupons for other products but
does not contain a coupon for MAP Participant products.
Response: CCC confirms that reimbursement is allowed if ads contain
coupons for other products but do not contain a coupon for MAP
Participant products. In response to the commenter, CCC has revised
Sec. 1485.17(b)(12) (now Sec. 1485.17(b)(13)) to make clear that only
the design, production and distribution of coupons for products other
than the MAP Participant's promoted products are reimbursable.
In addition, CCC has revised Sec. 1485.17(b)(1), which allows
advertising to be reimbursed, including advertising of price discounts,
to make clear that advertising associated with coupons or price
discounts for MAP-promoted products is not reimbursable. CCC has also
modified both provisions to note that if otherwise reimbursable
advertising or coupon activities include both coupons or price
discounts for products other than the MAP Participant's promoted
products as well as for the MAP-promoted products, expenditures for
such activities will not be reimbursed in whole or in part (e.g.,
expenditures may not be prorated and submitted for reimbursement). This
codifies MAP Notice 05-001, which will be removed from the FAS Web
site.
Finally, CCC has modified Sec. 1485.17(d)(9) to clarify that CCC
will not reimburse the cost of any coupon redemption or price discounts
``of the MAP promoted commodity.''
Comment: Sixteen similar comments were received regarding Sec.
1485.17(b)(12) and the design, production and distribution of coupons.
The respondents requested that CCC clarify if this section is
applicable to both branded and generic. Three comments stated that they
strongly support the clarification to incorporate the eligibility of
coupon design, production and distribution.
In addition, eighteen respondents stated that clarification was
needed regarding what is covered as ``branded,'' as ``generic,'' or as
both, throughout the regulations. Two respondents stated that the
language listed in Sec. 1485.17(b)(1)
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through Sec. 1485.17(b)(15) seems to describe expenses eligible for
entities conducting a branded program, and that expenses listed from
Sec. 1485.17(c) through Sec. 1485.17(d) addressed generic only. They
requested clarification if this understanding was correct.
Another similar comment was received which stated that more
specificity was needed for branded and generic reimbursement rules. One
respondent stated that since Web site costs were previously not
considered an eligible branded expense and the eligibility of
subscription costs and audit costs do not appear to pertain to the
branded program, they would like confirmation that CCC now intended for
these expenses to be eligible for both the generic and branded
programs.
Two respondents stated that in reference to Sec. 1485.17(c)(16),
the proposed rule should make it clear that branded programs are
specifically included.
Response: CCC has modified Sec. 1485.17(b) to clarify that it
addresses both brand and generic promotional activities. Therefore, all
subparagraphs under Sec. 1485.17(b) are applicable to both generic and
branded programs, including Sec. 1485.17(b)(9) (allowing subscription
costs), Sec. 1485.17(b)(13) (allowing certain coupon costs), Sec.
1485.17(b)(14) (allowing certain audit costs) and Sec. 1485.17(b)(16)
(allowing Web site costs).
Section 1485.17(c) addresses generic promotional activities only.
Section 1485.17(d) was removed and the text of that section added
to the definition of generic promotion in Sec. 1485.11. Subsequent
subsections of Sec. 1485.17 have been reordered.
As discussed above, CCC does not reimburse the design, production
or distribution of coupons for the MAP Participant's promoted products.
CCC has modified Sec. 1485.17(b)(12) (now Sec. 1485.17(b)(13)) to
make this clear.
Finally, CCC disagrees with the respondents who requested that
branded programs be included in Sec. 1485.17(c)(15), which reimburses
market research for generic promotions only. That section will remain
applicable only to generic promotions.
Comment: Fourteen respondents commented in reference to ``audits''
referenced in Sec. 1485.17(b)(13) (which allowed for reimbursement of
an audit of a MAP Participant that was required by the applicable parts
of this title if the MAP is the Participant's largest source of federal
funding), Sec. 1485.17(c)(17) (which allowed for reimbursement of
independent evaluations or audits not otherwise required by CCC if
performed to ensure compliance with program agreement or regulatory
requirements), and Sec. 1485.17(e)(16) (which provided that CCC will
not reimburse Participants for independent evaluations or audits if CCC
determines such evaluation or audit is needed to confirm past or ensure
future program agreement or regulatory compliance). The respondents
requested further clarity on when CCC will pay for an audit. They also
stated that references to ``applicable parts of this title'' should be
avoided and instead, clear language should be provided. For example,
the respondents asked whether, in light of Sec. 1485.17(b)(13), which
provides for reimbursement for A-133 audits, Sec. 1485.17(c)(17) means
MAP will pay for other audits that give the Participant assurances that
it is in compliance with MAP rules, i.e., operational or forensic
audits. Six respondents also provided similar comments in reference to
Sec. 1485.17(e)(16), questioning if all financial audits were not
reimbursable. The respondents also asked if OMB Circular A-133 audits
were reimbursable given that this is not required by CCC but by the
federal government.
Response: In response to these comments, CCC has modified Sec.
1485.17(b)(13) (now Sec. 1485.17(b)(14)) to clarify that this section
refers to OMB Circular A-133 audits. Thus, for brand and generic
promotions, such audits are reimbursable if the MAP is the MAP
Participant's largest source of Federal funding.
Also in response to these comments, CCC has clarified Sec.
1485.17(c)(17) (now Sec. 1485.17(c)(16)). That section now provides
that it is subject to the limitations set out in Sec. 1485.17(d)(which
now lists items for which CCC will not reimburse Participants). CCC has
also deleted the reference to ensuring compliance with ``regulatory
requirements'' in this section. Section 1485.17(c)(16) now provides
that for generic promotions only, independent evaluations and audits
not otherwise required by CCC to ensure compliance with program
requirements are reimbursable. CCC observes, however, that, as noted in
new Sec. 1485.17(d)(31), expenditures associated with a MAP
Participant's creation or review of its fraud prevention program,
contracting procedures, or brand program operational procedures are not
reimbursable.
With respect to the comments questioning whether Sec.
1485.17(e)(16) prohibits reimbursement of all financial audits, CCC
confirms that 1485.17(e)(16) (now Sec. 1485.17(d)(16)) prohibits
reimbursement only of evaluations or audits that are required by CCC to
confirm past or to ensure future program agreement or regulatory
compliance. This is not a change from the current regulations. Finally,
CCC notes that this section does not prohibit reimbursement of OMB
Circular A-133 audits, which is specifically allowed, under the
appropriate circumstances, per Sec. 1485.17(b)(14).
CCC disagrees with the comments that the MAP final rule should
avoid references to ``applicable parts of this title.'' As noted in
Sec. 1485.10 of both the proposed and final rules, USDA regulations
other than the MAP final rule also apply to USDA recipients of federal
financial assistance. Some regulations apply to all MAP Participants.
Others apply only to certain categories of MAP Participants. Because of
the varied nature of MAP Participants, it would be unwieldy to specify
which other regulations apply and when for each provision in the MAP
final rule. However, in response to the comment, wherever the MAP final
rule has explicitly referred to ``applicable parts of this title,'' CCC
has added illustrative examples of what parts potentially apply to
different MAP Participants.
In addition, CCC notes that Sec. 1485.10(b) provides an
illustrative list of other USDA regulations of general application that
may apply to MAP and MAP Participants. The section also puts MAP
Participants on notice that they must comply with the relevant
provisions of the CCC Charter Act and Title VI of the Civil Rights Act
of 1964 and related civil rights regulations and policies.
Finally, in response to the comments, CCC has also added new Sec.
1485.10(b)(4), which lists additional laws and regulations that are
applicable to MAP Participants.
Comment: Fourteen similar comments stated that previous policy
guidance announced reimbursement of the costs of developing, updating,
and servicing non-branded web sites on the internet and stated that
they seek clarification on whether this new regulation supersedes the
previous guidance. Three comments also stated that they strongly
supported web site development expenses being eligible for both branded
and generic programs.
Response: CCC understands that the commenters are referring to
CCC's practice of issuing Market Access Program notices. CCC issues
these MAP notices for informational purposes. While these notices have
no legal effect, they alert MAP Participants to information regarding
the administration of the MAP program that
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CCC believes is beneficial to share with MAP Participants.
CCC confirms that the MAP final rule sets out the reimbursement
rules for MAP Participants and supersedes all prior inconsistent
guidance. Specifically, Sec. 1485.17(b)(15) (now Sec.
1485.17(b)(16)), applicable to both brand and generic activities, and
Sec. 1485.17(c)(31), applicable to generic activities, provide that
CCC will reimburse, in part or in whole, the cost of developing,
updating and servicing certain types of Web sites. In response to the
comments, however, CCC has modified Sec. 1485.17(c)(31) to include
additional conditions regarding Web site content that CCC currently
requires as a condition of reimbursement, as reflected in MAP Notice
01-003. MAP Notice 01-003 has thus been codified and will be removed
from FAS' Web site. Section 1485.17(c)(31) now provides that
expenditures associated with developing, updating, and servicing Web
sites on the Internet are reimbursable if the Web sites: (1) Contain a
message related to exporting or international trade, (2) include a
discernible ``link'' to the FAS/Washington homepage or an FAS overseas
homepage, and (3) have been specifically approved by the appropriate
FAS commodity division. Expenditures related to Web sites or portions
of Web sites that are accessible only to an organization's members are
not reimbursable. Reimbursement claims for Web sites that include any
sort of ``members only'' sections must be prorated to exclude the costs
associated with those areas subject to restricted access.
Finally, CCC notes that Sec. 1485.16(b) provides that in MAP brand
promotion programs, MAP Participants must contribute at least 50% of
the total eligible expenditures made on each approved brand promotion.
At this time, CCC reimburses qualified Web site expenses 100% for
generic promotions and 50% for brand promotions.
Comment: Ten respondents provided comments in regard to Sec.
1485.17(c)(8). They questioned under what circumstances business class
travel would be reimbursed. The commentators stated that they felt it
would be reasonable to be reimbursed for business class rate for
flights over a specific duration (i.e. over 12 hours).
Response: CCC recognizes that circumstances might arise where
business class flights may be necessary. Thus, CCC has modified Sec.
1485.17(c)(8) of the proposed rule. Originally, that section as
proposed provided that CCC would determine a policy regarding the
appropriate circumstances when business class rates would be acceptable
and announce that policy in writing to all MAP Participants and on the
FAS Web site. CCC has now articulated in Sec. 1485.17(c)(8) the
limited circumstances under which CCC, after prior written approval,
will reimburse air travel up to the business class rate. These
circumstances are the following:
(a) Regularly scheduled flights between origin and destination
points do not offer economy class (or equivalent) airfare and the MAP
Participant receives written documentation from its travel agent to
that effect at the time the tickets are purchased;
(b) Business class air travel is necessary to accommodate an
eligible traveler's disability. Such disability must be substantiated
in writing by a physician; and
(c) An eligible traveler's origin and/or destination are outside of
the continental United States and the scheduled flight time, beginning
with the scheduled departure time, ending with the scheduled arrival
time, and including stopovers and changes of planes, exceeds 14 hours.
In such case, per diem and other allowable expenses will also be
reimbursable for the day of arrival. However, no expenses will be
reimbursable for a rest period or for any non-work days (e.g.,
weekends, holidays, personal leave, etc.) immediately following the
date of arrival. Alternatively, in lieu of reimbursing up to the
business class rate in such circumstances, CCC will reimburse economy
class airfare plus per diem and other allowable travel expenses related
to a rest period of up to 24 hours, either en route or upon arrival at
the destination. For a trip with multiple destinations, each origin/
destination combination will be considered separately when applying the
14 hour rule for eligibility of reimbursement of business class travel
or rest period expenses. A stopover is the time a traveler spends at an
airport, other than the originating or destination airport, which is a
normally scheduled part of a flight. A change of planes is the time a
traveler spends at an airport, other than the originating or
destination airport, to disembark from one flight and embark on
another. All travel should follow a direct or usually traveled route.
Under no circumstances should a traveler select flights in a manner
that extends the scheduled flight time to beyond 14 hours in part to
secure eligibility for reimbursement of business class travel.
CCC believes that requiring CCC's prior written approval will allow
both MAP Participants and CCC to confirm that the Participants meet the
circumstances that may justify air travel in excess of the full fare
economy rate.
Comment: One respondent stated its opposition to Sec.
1485.17(e)(15), given that refundable airline tickets are often
``triple or more the cost of non-refundable tickets''. The respondent
stated that this rule has the effect of substantially increasing
overall travel costs under the program and also that the ability to
claim an occasional non-refundable airline ticket and associated fees,
especially for an international buyer (whose travel is both less
predictable and less accountable) would be vastly exceeded by the
overall higher costs for the less restrictive tickets.
The respondent also asked for clarification of ``travel restricted
by a U.S. government action'' and asked if denial by U.S. officials of
a visa request constituted a restriction by a U.S. Government action.
Response: CCC disagrees. Section 1485.17(e)(15) (now Sec.
1485.17(d)(15)) provides that CCC will not reimburse the cost of any
unused non-refundable airline tickets or associated fees, except where
travel was restricted by U.S. government action or advisory. The
commenter has provided no data that the effect of this proposed section
would increase overall travel costs under MAP. This is not a change
from the current MAP rule, and CCC does not have any reason to believe
that this policy has increased costs to the MAP program beyond what it
would have been had the commenter's proposal been adopted. Finally, CCC
notes that denial of a visa request would not constitute a restriction
by a U.S. Government action. ``Travel restricted by a U.S. government
action'' would include, for example, if all travel from a country was
prohibited due to an epidemic.
Comment: Several respondents questioned whether airline change fees
are reimbursable.
Response: Yes. Airline change fees are reimbursable provided that
such fees meet certain conditions. CCC understands that, in order to
most effectively use their MAP funding, Participants at times purchase
airline tickets at a price that is less than the full fare economy
rate. If a Participant purchases a ticket for less than the full fare
economy rate and subsequently changes the ticket, a change fee may be
incurred. CCC considers this change fee to be reimbursable up to the
point that the sum of the ticket purchase price and any ticket change
fees equal, but do not exceed, the full fare economy rate. To clarify,
if the sum of the ticket purchase price and any ticket change fees
exceed
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the full fare economy rate, only the full fare economy rate is
reimbursable. Section 1485.17(b)(8), Sec. 1485.17(b)(17) and Sec.
1485.17(c)(8) have been modified to specify that program-related
international air transportation, including any fees for modifying the
originally purchased ticket, will be reimbursed at a rate not to exceed
the full fare economy rate, as allowed under the U.S. Federal Travel
Regulations (41 CFR parts 301 through 304).
Comment: Seventeen respondents provided similar comments in
reference to Sec. 1485.17(c)(13), which stated that more flexibility
is needed for electronic communications, which are becoming a more
important part of the marketing mix for Participants, both branded and
generic. Fourteen of the respondents stated that the cost of service is
the largest component of the costs of most devices, such as
smartphones, and it is recommended that CCC include as reimbursable a
monthly allowance.
They stated that as with giveaways and international travel, the
determinant CCC statement may be added from time to time to allow for
future flexibility. One respondent stated that it recommends that the
cost of using these devices be included as reimbursable expenses and
that the provisions of the regulations avoid the burdensome
requirements of logging individual calls in minutes or sessions.
Another commented that the regulations should provide for payment of
monthly service fees for portable electronic devices for staff
stationed overseas, provided the devices are primarily used for
Participant market development purposes.
Response: Section 1485.17(c)(13) of the proposed rule provided
that, for generic promotions only, CCC would reimburse the cost of the
purchase, lease, or repair of, or insurance premiums for, capital goods
that have an expected useful life of at least 1 year, including
portable electronic communications devices (including mobile phones,
wireless email devices, personal digital assistants). That section does
not deal with reimbursability of usage costs of electronic devices. CCC
adopts Sec. 1485.17(c)(13) as proposed (now Sec. 1485.17(c)(12)).
As previously discussed in response to a comment, CCC believes the
reimbursability of the usage costs of various communications devices is
already adequately addressed by the various provisions in the MAP final
rule. Reimbursability of such communication costs depends on the
circumstances under which the communication took place. CCC refers to
its prior response on this issue.
CCC has issued several MAP notices that provide further information
on CCC's current practice of reimbursing telephone calls. MAP Notice
03-006 details CCC's allowances for program-related, emergency and
personal telephone and internet expenses while on eligible travel. This
Notice will remain on the FAS Web site. MAP Notice 99-009 (redundant
with MAP Notice 03-006) and MAP Notice 98-017 (discussing reimbursement
of wireless phone airtime devoted to program activities and now
redundant) will be removed from the FAS Web site.
CCC disagrees with the commenter who requested that the regulations
avoid the burdensome requirements of logging individual calls in
minutes or sessions to claim reimbursement. CCC notes that all
reimbursement claims must be substantiated by sufficient supporting
documentation per Sec. 1485.21(d)(6). In order to claim reimbursement
for usage costs, therefore, the MAP Participant must identify the costs
to be reimbursed. Thus, as CCC has noted above, the monthly service
charge for a caller usage plan with unlimited minutes must be incurred
primarily in furtherance of an approved activity and the Participant is
responsible for documenting that such plan was used primarily in
further of an approved activity. In contrast, under a caller usage plan
that charges by the minute, only charges for calls incurred in
furtherance of an approved activity would be reimbursed under MAP and
the Participant is responsible for detailing which calls are properly
reimbursed with MAP funds.
Comment: The respondents asked if Sec. 1485.17(e)(16) means that
CCC will reimburse for audits of subcontractors.
Response: No, all of the listings under Sec. 1485.17(e) (now Sec.
1485.17(d)) are not reimbursable.
Comment: One respondent stated that reimbursement for market
research should be moved under subheading (b), thus allowing for
reimbursement for market research under both generic and branded
programs.
Response: CCC disagrees with the suggested comment to make market
research eligible for both branded and generic programs. CCC intends
that market research funded under the program be available throughout
the relevant industry, not only to a single company or cooperative.
Comment: Four respondents provided similar comments in reference to
Sec. 1485.17(c)(20) (now Sec. 1485.17(c)(19)), which provides that
for generic promotions only, CCC will reimburse the cost of STRE (sales
and trade relations expenditures made on breakfast, lunch, dinner,
receptions, and refreshments at approved activities, including
miscellaneous courtesies such as checkroom fees, taxi fares and tips;
and decorations for a special promotional occasion). The respondents
requested that CCC clarify that STRE incurred in the United States at
approved activities that demonstrated a positive impact on agricultural
exports, be eligible for reimbursement under MAP. One commenter asked
for further clarification of STRE regulations incurred in foreign and
domestic markets.
Response: Generally, STRE incurred outside of the United States is
reimbursable. CCC, however, agrees that under certain limited
circumstances, STRE may be critical to the success of an activity being
carried out in the United States. Therefore, CCC has modified Sec.
1485.17(c)(19) to clarify that STRE incurred outside the United States
is reimbursable and that STRE incurred within the United States may be
reimbursed under MAP upon prior written approval by CCC. As with all
reimbursable expenses, such STRE must be incurred in conjunction with
an approved MAP activity.
In response to the request for further clarification of STRE, CCC
has codified, in part, MAP Notice 97-016 in Sec. 1485.17(c)(19). That
section now specifies that MAP Participants are required to use the
American Embassy representational funding guidelines for breakfasts,
lunches, dinners and receptions. MAP Participants may exceed Embassy
guidelines only when they have received written authorization from the
FAS Agricultural Counselor at the Embassy. The amount of unauthorized
STRE expenses that exceed the guidelines will not be reimbursed. MAP
Participants must pay the difference between the total cost of STRE
events and the appropriate amount as determined by the guidelines. MAP
Notice 97-016 will be removed from the FAS Web site.
Comment: Seven comments were received stating miscellaneous
courtesies such as checkroom fees, taxi fares and tips, and decorations
for special purposes should not fall under Sales and Trade Related
Expenses (STRE) and should be fully covered under MAP as separate
expense categories.
Response: Congress has given CCC discretion to operate and manage
the MAP. In doing so, CCC must balance benefits to MAP Participants
against limited financial resources. Under the current MAP regulations,
STRE incurred outside of the United States is reimbursable for generic
promotions
[[Page 29488]]
only. In response to other comments to the MAP proposed rule, CCC has
modified Sec. 1485.17(c)(19) to allow reimbursement of STRE incurred
in conjunction with an approved generic promotion taking place within
the United States upon prior written approval by CCC. CCC, however,
disagrees with these commenters that miscellaneous courtesies should be
considered separately from STRE.
Comment: One respondent commented that it did not see language that
includes authorization to use program funds to cover costs associated
with participation in trade shows and fairs held within the United
States. The respondent stated that many are international in nature and
have very strong participation from overseas, and it recommended that
the rules specifically include language to allow program funds to be
used for Participant staff to participate in such trade shows.
Response: CCC agrees with the commenter and has clarified this
issue in Sec. 1485.17(b)(7), Sec. 1485.17(c)(8) and Sec.
1485.17(c)(24) of this final rule. It has been CCC's practice to
reimburse non-travel expenditures associated with retail, trade and
consumer exhibits and shows held inside the United States under certain
circumstances. Accordingly, CCC has codified, in relevant part, MAP
Notice 09-006 in Sec. 1485.17(b)(7)) of the MAP final rule. Section
1485.17(b)(7) now provides, in part, that, for both generic and branded
promotions, non-travel expenditures associated with retail, trade and
consumer exhibits and shows held inside the United States are
reimbursable, subject to certain conditions set out in Sec.
1485.17(b)(7). In addition, the MAP final rule expands reimbursement to
other related expenses. Specifically, Sec. 1485.17(c)(24) now provides
that, for generic promotions only, domestic travel expenditures for
such exhibits and shows conducted in the United States are
reimbursable, subject to certain conditions and upon prior written
approval by CCC. Section 1485.17(c)(8) also now specifically allows
reimbursement of international travel expenses for an exhibit or show
held inside the United States, subject to certain conditions. For brand
promotion, neither domestic nor international travel expenses are
reimbursable for retail, trade, or consumer exhibits or shows held
inside the United States.
These sections allow reimbursement of eligible expenses related to
exhibits and shows held inside the United States only if the exhibit or
show is: (1) A food or agricultural show with no less than 30% of
exhibitors selling food or agricultural products, (2) an international
show that targets buyers, distributors and the like from more than one
foreign country and no less than 15% of its visitors are from countries
other than the host country, and (3) an exhibit or show that the MAP
Participant has not participated in within the last three years using
funds from a source other than the MAP.
MAP Notice 09-006 will be removed from the FAS Web site. A new MAP
notice will be posted on FAS' Web site listing the retail, trade and
consumer exhibits and shows held inside the United States for which MAP
reimbursement is currently allowed by CCC. In addition, MAP Notice 97-
004, which addresses when brand companies are allowed to use MAP funds
for expenses associated with domestic trade shows, is now inconsistent
with the MAP final rule and will be removed from FAS' web site.
Below is a chart summarizing the reimbursement rules for
international exhibits and shows held outside and inside the United
States:
----------------------------------------------------------------------------------------------------------------
Exhibits and shows outside U.S. Exhibits and shows inside U.S.
----------------------------------------------------------------------------------------------------------------
Generic promotion.................. Non-travel expenditures: Reimbursable Non-travel expenditures:
(Sec. 1485.17(b)(7)). Reimbursable subject to conditions
(Sec. 1485.17(b)(7)).
International travel expenditures: International travel expenditures:
Reimbursable (Sec. 1485.17(c)(8)). Reimbursable subject to conditions
(Sec. 1485.17(c)(8)).
Domestic travel expenditures:
Reimbursable subject to prior
written approval and subject to
conditions (Sec. 1485.17(c)(24)).
Brand promotion.................... Non-travel expenditures: Reimbursable Non-travel expenditures:
(Sec. 1485.17(b)(7)). Reimbursable subject to conditions
(Sec. 1485.17(b)(7)).
International travel: Reimbursable up International travel: Not
to 2 people (Sec. 1485.17(b)(8)). reimbursable.
Domestic travel: Not reimbursable.
----------------------------------------------------------------------------------------------------------------
Comment: Twenty-five respondents provided similar comments stating
that the phrasing was unclear in Sec. 1485.17(c)(24), which includes
``Expenditures associated with conducting international staff
conferences.'' The respondents requested that CCC clarify whether trade
shows, seminars, educational training, international staff conferences,
and meetings of international organizations are all eligible for
reimbursement in the United States and overseas. Several of the
respondents questioned if this included international conferences
taking place in the United States and if so, whether that included
travel. One respondent stated that it was unclear whether the
international travel costs associated with having the industry's trade
representative attend the conference would be eligible.
Twenty-five respondents commented in reference to Sec.
1485.17(c)(25) and asked for clarification of ``international
organizations.'' Three respondents proposed that the language be
amended to include ``and meetings of an international focus within the
United States.''
One stated that this section was confusing and implied that
reimbursement for travel for trade shows, seminars, and educational
training was authorized only for those events that are conducted
outside the United States. The respondent asked for clarification on
this and stated that it believed that was not the intent of CCC, as it
would severely limit the use of MAP funds to educate foreign target
audiences through courses and programs conducted in the United States.
Response: CCC agrees that the phrasing in Sec. 1485.17(c)(25) was
unclear and has replaced it with new Sec. Sec. 1485.17(c)(23)-(26).
Regarding commenters' request to clarify whether international
staff conferences conducted in the United States and overseas are
eligible for reimbursement, CCC observes initially that expenditures
related to international staff conferences are reimbursable for generic
promotions only. CCC has added a new Sec. 1485.17(c)(23), which
provides that non-travel expenditures related to conducting
international staff
[[Page 29489]]
conferences are reimbursable, regardless of whether the conferences are
held in or outside the United States. These conferences are gatherings
of the international staff of the MAP Participant. CCC further notes
that international travel expenditures to such conferences for MAP
Participants, whether held outside the United States or in the United
States, are already reimbursable in accordance with Sec.
1485.17(c)(8). Thus, under Sec. 1485.17(c)(8), international travel
costs associated with having the industry's trade representative attend
the Participant's staff conference would be eligible if the individual
is an employee or overseas contractor of the MAP Participant. Thus, in
sum, for generic promotions only, both international travel
expenditures and non-travel expenditures for international staff
conferences are reimbursable, whether the conference is held outside
the United States or in the United States. Domestic travel expenditures
to attend such international staff conferences are not reimbursable.
For brand promotions, no expenditures of any kind associated with
international staff conferences are eligible for reimbursement.
In response to commenters' request to clarify whether trade shows
conducted in the United States and overseas are eligible for
reimbursement, CCC has added new Sec. 1485.17(c)(24). That section
allows reimbursement, for generic promotions only, subject to Sec.
1485.17(b)(18), of domestic travel expenditures related to
international retail, trade and consumer exhibits and shows conducted
in the United States upon prior written approval by CCC. CCC refers to
its prior response to a similar comment above regarding eligibility of
domestic travel and non-travel expenditures associated with
participation in exhibits and shows held outside or inside the United
States.
In response to commenters' request to clarify whether seminars and
educational training conducted in the United States and overseas are
eligible for reimbursement, CCC has added new Sec. 1485.17(b)(6) and
new Sec. 1485.17(c)(25). Section 1485.17(b)(6) provides that, for both
generic and brand promotions, non-travel expenditures associated with
seminars and educational training, whether conducted inside or outside
the United States, are reimbursable. Further, for generic promotions,
international travel expenditures associated with seminars and
educational training conducted inside or outside the United States are
already reimbursable under Sec. 1485.17(c)(8). And, for generic
promotions, new Sec. 1485.17(c)(25) now reimburses domestic travel for
seminars and educational training conducted in the United States. For
brand promotions, no travel expenditures associated with seminars or
educational training, whether conducted inside or outside the United
States, are eligible for reimbursement. The chart below summarizes the
reimbursement rules for seminars and educational training.
----------------------------------------------------------------------------------------------------------------
Seminars and educational training Seminars and educational training
outside U.S. inside U.S.
----------------------------------------------------------------------------------------------------------------
Generic promotion.................. Non-travel expenditures: Reimbursable Non-travel expenditures:
(Sec. 1485.17(b)(6). Reimbursable subject to conditions
(Sec. 1485.17(b)(6)).
International travel expenditures: International travel expenditures:
Reimbursable (Sec. 1485.17(c)(8)). Reimbursable (Sec.
1485.17(c)(8)).
Domestic travel expenditures:
Reimbursable (Sec.
1485.17(c)(25)).
Brand promotion.................... Non-travel expenditures: Reimbursable Non-travel expenditures:
(Sec. 1485.17(b)(6)). Reimbursable (Sec.
1485.17(b)(6)).
International travel: Not International travel: Not
reimbursable. reimbursable.
Domestic travel: Not reimbursable.
----------------------------------------------------------------------------------------------------------------
CCC acknowledges the respondents' request for clarification of the
term ``international organizations'' and their request to reimburse
domestic travel to ``meetings of an international focus within the
United States.'' Due to difficulties in defining the criteria for
eligible international organizations and meetings with an international
focus, CCC has decided to eliminate the provision allowing
reimbursement of domestic travel expenditures for a MAP Participant's
attendance at meetings of international technical organizations and
declines to expand reimbursement to include ``meetings with an
international focus.'' Unless such attendance falls within another
covered category of reimbursement for domestic travel, domestic travel
for these purposes will not be reimbursable under the MAP final rule.
Finally, as noted previously, CCC has codified MAP Notice 06-002 in
new Sec. 1485.17(c)(26). That section now allows, for generic
promotion only, the reimbursement of domestic travel expenditures of a
MAP Participant employee, a MAP Participant board member, or a state
department of agriculture employee paid by the MAP Participant when
such individual accompanies foreign trade missions or technical teams
when such missions or teams are traveling in the United States. Such
trade missions or technical team visits must be identified in the MAP
Participant's UES and must have been approved by CCC. MAP Notice 06-002
will be removed from the FAS Web site.
Comment: Ten respondents commented in reference to Sec.
1485.17(c)(31) and questioned if this included educational seminars in
the United States and abroad. Three comments stated they supported the
inclusion of activities that are intended to improve market access and
therefore recommended the insertion of ``or other appropriate
activities'' following ``educational training'' and before ``designed
to improve market access.''
Response: CCC notes that Sec. 1485.17(c)(31) is now rendered
redundant by Sec. 1485.17(b)(6), Sec. 1485.17(c)(8), and Sec.
1485.17(c)(25). Non-travel expenditures associated with seminars and
educational training conducted inside or outside the United States are
already reimbursable as noted above pursuant to Sec. 1485.17(b)(6).
International and domestic travel expenditures for such activities are
reimbursable, for generic promotion only, pursuant to Sec.
1485.17(c)(8) and Sec. 1485.17(c)(25).
The intention of proposed Sec. 1485.17(c)(31) was to specifically
permit reimbursement of educational seminars, whether in the United
States or abroad, where such seminars are intended to address market
constraints such as temporary or permanent trade barriers. CCC,
however, agrees with the comments that other activities in addition to
educational training can achieve this objective. Given that, and the
fact educational training is already covered in other subsections of
the MAP final rule, CCC consequently has modified Sec. 1485.17(c)(31)
(now Sec. 1485.17(c)(32)) to permit reimbursement for expenditures not
otherwise prohibited from
[[Page 29490]]
reimbursement that are associated with an activity held in the United
States or abroad designed to improve market access by specifically
addressing temporary, permanent, or impending technical barriers to
trade that prohibit or threaten U.S. exports of agricultural
commodities.
Comment: Twenty respondents commented in reference to proposed
Sec. 1485.17(d) suggesting the sentence ``A generic promotion activity
may also involve the use of specific company names, logos or brand
names'' be clarified to read ``specific U.S. company names, logos, or
brand names.'' The respondents stated that the absence of this
clarification gives the impression that two foreign brands have to
participate in activities, which would be impossible in the case of
store brands. The respondents further commented on the phrase, ``At
least two U.S. companies participate.'' Several of the comments stated
that it was not often possible to garner two brands for participation
in a generic promotion where brands are specifically identified. One
respondent stated that this requirement was so onerous that it would
significantly affect their ability to conduct promotions at retail.
The respondents stated that some brands may choose not to
participate; so this new regulation would limit the ability of a MAP
Participant to undertake a generic promotion activity. They recommended
that if the MAP Participant can demonstrate that all available brands
are invited to participate then the final number of promotion
participants would not have an impact on the eligibility of the
activity for reimbursement.
Response: CCC agrees with the respondents in regard to adding the
clarification of ``U.S.'' to the reference to specific company names,
logos, or brand names, and has modified the definition of generic
promotion in Sec. 1485.11 accordingly. CCC has also added ``U.S.'' as
a qualifier for promoting separate items from multiple U.S. companies
under a generic promotion. However, CCC disagrees with the respondents
in regard to requiring two brands for participation and will keep this
requirement in the final rule to avoid any appearance of promoting a
single brand under a generic promotional activity. The text of proposed
Sec. 1485.17(d) has been moved into the definition of ``generic
promotion'' in Sec. 1485.11. Sec. 1485.17 has been re-ordered.
Comment: One respondent recommended that this section be rewritten
as follows: ``A generic promotion activity may include the promotion of
a foreign brand if the foreign brand uses the promoted U.S.
agricultural commodity. A generic promotion activity may also involve
the use of specific company names, logos, or brand names. However, in
that case, the MAP Participant must ensure that all U.S. and/or foreign
companies seeking to promote such U.S. agricultural commodity in the
market have an equal opportunity to participate in the market and that
at least two companies participate.''
Response: CCC disagrees with the respondent, and the final rule
will continue to reflect that a generic promotional activity may
include the promotion of a foreign brand only if the foreign brand uses
the promoted U.S. agricultural commodity from multiple U.S. suppliers.
The text of proposed Sec. 1485.17(d) has been moved into the
definition of ``generic promotion'' in Sec. 1485.11. Sec. 1485.17 has
been re-ordered.
Comment: Fifteen respondents stated in reference to Sec.
1485.17(d) that most foreign brands are developed for the local
companies to add value and be competitive in the market and are not
generally designed to be the way for U.S. products to enter the market.
The objective should be to encourage foreign brands to incorporate U.S.
agricultural commodities, but the phrase, ``and is the primary market
access to the targeted market for the U.S. agricultural commodity''
appears to limit it. The respondents questioned what exactly does the
phrase itself mean, and recommended that this section be rewritten or
deleted altogether.
Response: CCC believes that foreign brands are often very useful
for increasing U.S. exports generically. Multiple foreign brands may
use U.S. products, however, and a single foreign brand does not need to
provide the ``primary market access to the targeted market.'' Thus, CCC
agrees with the respondents and has modified the proposed text of Sec.
1485.17(d) to remove the phrase as requested. The text of proposed
Sec. 1485.17(d) has been moved into the definition of ``generic
promotion'' in Sec. 1485.11. Sec. 1485.17 has been re-ordered.
Comment: Sixteen respondents commented in reference to Sec.
1485.17(d) that since Participants are currently allowed to promote
foreign brands that are composed of U.S. commodities, this rule would
place the U.S. companies at a disadvantage because Participants could
promote their foreign competitors and not U.S. companies. The
respondents suggested removing this language to open it up to
Participants promoting U.S. company names, logos, or brand names that
compete with foreign brands in their market.
Response: CCC believes that Sec. 1485.17(d) in the proposed rule
has been misunderstood in reference to the promotion of a foreign
brand. Promoting a foreign brand constitutes a generic activity
promoting the U.S. commodity because the foreign brand uses the
promoted commodity from multiple U.S. suppliers. In contrast, promoting
a single U.S. brand would constitute a branded activity. While Sec.
1485.17(d) specifically states that a generic promotion activity may
also involve the use of multiple specific U.S. company names, logos, or
brand names, such branding must meet the conditions of Sec.
1485.17(d), which ensures that the activity remains ``generic''. The
text of proposed Sec. 1485.17(d) has been moved into the definition of
``generic promotion'' in Sec. 1485.11. Section 1485.17 has been re-
ordered. In addition, as discussed in the response to a prior comment,
CCC deleted the requirement that generic promotion activity may include
the promotion of a foreign brand only if the foreign brand is the
primary market access to the targeted market for the U.S. agricultural
commodity.
Comment: In reference to Sec. 1485.17(d) fourteen respondents
provided similar comments in regard to food service promotions. Several
stated that generally food service operators rely on one U.S. supplier
and the U.S. product is promoted as part of the food service item,
identifying the U.S. origin but not the brand. The new regulation
states, ``a generic promotion activity may include the promotion of a
foreign brand if the foreign brand uses the promoted U.S. agricultural
commodity from multiple U.S. suppliers''. The respondents stated this
is not always achievable and they recommend recognizing the broad
generic parameters achieved within the context of the entire activity
(food service/retail/bakery, etc.) within a market.
Response: CCC disagrees. CCC does not consider the promotion of a
foreign brand that uses only a single supplier to be generic promotion.
The text of proposed Sec. 1485.17(d) has been moved into the
definition of ``generic promotion'' in Sec. 1485.11. Section 1485.17
has been re-ordered.
Comment: One respondent commented in reference to Sec.
1485.17(e)(19) (now Sec. 1485.17(d)(19)), which provides that
membership fees in clubs and social organizations are not reimbursable.
The respondent asked for clarification whether fees paid to a
professional industry-related
[[Page 29491]]
organization would be eligible for reimbursement.
Response: CCC intends that fees paid to a professional, industry-
related organization would be eligible for reimbursement, and has added
new Sec. 1485.17(c)(33) to include such language for generic
promotions only. Membership fees for clubs and social organizations
remain ineligible.
Comment: Three respondents stated that Sec. 1485.17(e)(26) (now
Sec. 1485.17(d)(26)) conflicts with Sec. 1485.17(c)(23) (now Sec.
1485.17(c)(22)) and recommended that this be amended by adding ``except
as noted at Sec. 1485.17(c)(23).''
Response: CCC agrees with the respondents' comment and has amended
new Sec. 1485.17(d)(26) to reference Sec. 1485.17(c)(22).
Comment: Seventeen respondents commented in reference to Sec.
1485.17(e)(27) and suggested the phrase ``negative comparison'' be
removed. One respondent suggested that if CCC believed that the concept
needs to be addressed then the phrase should be replaced with
``derogatory''. Another questioned whether if a product from one MAP
Participant has a better functionality in an end product than that of
another MAP Participant, can such statement not be made. Another
respondent stated that it was unclear as to the definition of
``negative comparison'' and questioned if this regulation only refers
to comparing a U.S. source of the competitive product as compared to a
local source or making a generic statement that does not reference
national origin. This respondent requested that this regulation be
clarified to permit valid comparisons of a promoted product with that
of a locally produced or generically stated product. One stated that
the term ``negative'' was too general and also stated that it was not
possible to discuss advantages of one of its products without
suggesting something negative about some of its competitors' other
products. Two respondents stated that the words ``negative comparison''
may be too restrictive a term if it prevents the forthright statement
of facts and comparison of functionality and relative value of various
commodities and products in a given use. Several recommended revising
this section by removing the words ``negative comparison.''
Response: CCC agrees with the comments requesting the removal of
the phrase ``negative comparison'' and with the comment asking to
substitute ``derogatory'' in its place. CCC has modified Sec.
1485.17(e)(27) (now Sec. 1485.17(d)(27)) accordingly to prohibit
reimbursement of any expenditure on an activity that includes any
derogatory reference or comparison to other U.S. agricultural
commodities.
Comment: Four respondents commented on Sec. 1485.17(e)(28), which
provides that CCC will not reimburse the cost of any expenditure on an
activity that contradicts U.S. foreign policy. Respondents stated that
it was not clear how the exact standard of U.S. foreign policy is to be
determined and what constitutes a contradiction of that policy. One
stated that the regulation was too vague. Another stated that it agreed
with the spirit of the regulation but were unsure how it should
determine if it was contradicting U.S. foreign policy. The respondents
recommended further clarification.
Response: CCC agrees with the respondents that the U.S. foreign
policy that applies to MAP Participants is not clearly articulated in
the regulation. Moreover, independent regulations and Presidential
Executive Orders setting out foreign policy related to specially
designated nationals and other economic trade sanctions already apply
to MAP Participants independent of the MAP final rule. Accordingly, CCC
has deleted Sec. 1485.17(e)(28) from the final rule.
Comment: Two similar comments were made in reference to Sec.
1485.17(f). One respondent stated that it supports the applicability of
the GS-15 Step 10 salary cap as it relates to non-U.S. citizens;
however, it stated in the case of contractors (U.S. citizens or non-
U.S. citizens), application of this pay scale should be left to the
discretion of the Participant. The respondent stated that adherence to
the pay scale does not relieve Participants from having to
competitively bid the position; since the Participant will have to
competitively bid the position, the Participant should be allowed to
pay and be reimbursed for the bid amount, which is a compensation
amount that is reasonable for the market. Another respondent stated
that this method of rate-setting is unfair to companies in high cost
regions of the world and that it benefits those located in less
expensive areas, especially third-world countries.
Response: Sec. 1485.17(f) (now Sec. 1485.17(e)) refers to
employees or contractors who are hired to act as employees, rather than
contractors hired to undertake a specific activity. Thus, this is not a
bidding situation. CCC has modified the final rule to clarify that the
type of contractor subject to Sec. 1485.17(e) are ``contractors who
are hired to act as employees.'' If a MAP Participant chooses to employ
an employee or contractor at a salary rate higher than is permissible
in this section, then the MAP Participant must pay for the excess in
compensation itself.
Comment: Fourteen respondents commented in reference to Sec.
1485.17(g) stating that since this sentence appears in the middle of
the section, it is unclear as to what it applies. The respondents
suggested that this be moved to the last item under the section.
Response: CCC confirms that Sec. 1485.17(g) (now Sec. 1485.17(j))
refers to all of Sec. 1485.17. CCC agrees with the comment and has
modified Sec. 1485.17(j). That subsection now states ``CCC may
determine, at CCC's discretion, whether any cost not expressly listed
in Sec. 1485.17 will be reimbursed.''
Sec. 1485.18 Reimbursement Procedures
Comment: One respondent commented in reference to Sec.
1485.18(a)(5) that the requirement that claims for reimbursement
include the applicable cost category greatly complicates the accounting
process for Participants. The respondent stated that unless CCC has
some practical need for cost category information, it recommended
eliminating that reporting requirement.
Response: CCC disagrees. The requirement that claims for
reimbursement include cost category is not a new requirement. Moreover,
this information is necessary as CCC is often asked by Congress to
report expenditures by cost category.
Sec. 1485.19 Advances
CCC received 45 comments in regard to advances.
Comment: Fifteen respondents provided similar comments in reference
to Sec. 1485.19(b). Each respondent recommended that language be
included about the ability to apply for an advance in the current year
if there is an outstanding advance from the previous year. The
respondents stated that with the ability to apply for an advance for up
to 3 months after the end of a program year this clarification is
needed. They also stated that this was not spelled out in the new
regulations and might be confusing to newer Participants.
Response: CCC does not believe it is necessary to include language
about the ability to apply for an advance while there is an outstanding
advance from the previous year. In the proposed rule, CCC removed the
current rule's requirement that no advance will be made if an advance
from a previous program year is still open. Thus, CCC believes Sec.
1485.19(b) of the proposed rule, which does not contain any
[[Page 29492]]
prohibitions on a MAP Participant's request for an advance (except to
require that such Participant meet the criteria for advance payments
set forth in the applicable parts of this title, e.g., parts 3015,
3016, 3019), as written, allows Participants to apply for an advance in
the current year if there is an outstanding advance from the previous
year. In addition, CCC notes that the proposed rule already makes clear
that a Participant may apply for an advance for up to 3 months after
the end of its program year. The proposed rule provides, in part, that
``CCC will not approve any request for an advance submitted later than
3 months after the end of a MAP Participant's program year.''
Comment: Four respondents commented regarding security in reference
to Sec. 1485.19(b). Two of the respondents requested clarification as
to what circumstances would require submission of security and what
type of security would be expected. One commented that the regulation
was very vague and stated that they felt that a Participant capable of
``fronting security'' may not need an advance.
Response: Section 1485.19(b) provides, in part, that ``[i]f CCC
approves the request, prior to making an advance, CCC may require the
MAP Participant to submit security in a form and amount acceptable to
CCC to protect CCC's financial interests.'' USDA's uniform federal
assistance regulations, in 7 CFR Sec. 3015.17(a), already provide that
``[i]f the recipient is not a unit of government, the awarding agency
may require the recipient to carry adequate fidelity bond coverage
where the absence of coverage for the grant-supported activity is
considered as creat[ing] an unacceptable risk.'' Similarly, USDA's
uniform administrative requirements for grants and agreements with
nonprofit organizations, in 7 CFR Sec. 3019.21(d), provide that
``[t]he Federal awarding agency may require adequate fidelity bond
coverage where the recipient lacks sufficient coverage to protect the
Federal Government's interest.'' The proposed MAP rule explicitly
observed that 7 CFR parts 3105 and 3109 apply to the MAP and MAP
Participants (to the extent that they do not directly conflict with the
MAP final rule). Thus, to the extent that CCC needs to take precautions
to protect the federal government's interests, USDA's uniform
regulations already provide a way for CCC to do so.
To accommodate the respondents' request to clarify what
circumstances would require submission of security and what type of
security would be expected, CCC has decided to delete the sentence from
Sec. 1485.19(b) quoted above and to add to the end of Sec. 1485.19(b)
the following: ``When approving a request for an advance, CCC may
require the MAP Participant to carry adequate fidelity bond coverage
when the absence of such coverage is considered to create an
unacceptable risk to the interests of the MAP. Whether an
``unacceptable risk'' exists in a particular situation will depend on a
number of factors, such as, for example, the Participant's history of
performance in MAP; the Participant's perceived financial stability and
resources; and any other factors presented in the particular situation
that may reflect on the Participant's responsibility or the riskiness
of its activities.'' Thus, CCC will make a determination, based on the
applicable facts and circumstances presented by a particular MAP
Participant's advance request, whether the MAP Participant must obtain
fidelity bond coverage and in what amount.
Comment: Twenty-five respondents made similar comments in reference
to Sec. 1485.19(c). Fifteen stated that the requirement for a
quarterly financial statement to CCC for all funds advanced and all
interest earned is onerous. These respondents further stated that an
annual statement should suffice. Six of the comments received
recommended a waiver of interest for smaller advances. Four of the
respondents stated that Participants are expected to pay all expenses
in advance of reimbursement and that the financing of these costs are
significant and dramatically exceed any potential revenue generated by
interest income therefore they specifically oppose this rule.
Response: CCC agrees that requiring a quarterly statement on
advances is unnecessary, given the fact that such information should be
readily available in the UES system. Accordingly, CCC has deleted the
last sentence from Sec. 1485.19(c) requiring the submission of a
financial statement.
Sec. 1485.20 Employment Practices
CCC received 20 comments in regard to this section.
Comment: Twenty respondents commented in reference to Sec.
1485.20(a), which requires that MAP Participants enter into written
contracts with all employees and that all terms, conditions, and
related formalities of such contracts conform to governing local law.
The respondents stated that this rule was onerous and
counterproductive, and that they opposed this rule.
Response: CCC disagrees that this rule is counterproductive or
onerous. CCC is aware of several cases of MAP Participants being
involved in lawsuits involving the Participant's overseas employees.
The written employment contract protects Participants' and CCC's
interests. Furthermore, in order to properly perform its compliance and
monitoring functions, CCC requires documentation to support all MAP
expenditures. The written employment contract provides such
documentation for overseas employees.
Comment: Fourteen respondents asked if the intent was to require
employment contracts with MAP Participant employees in foreign
locations and suggested CCC restate this to be clear. Two questioned if
this was intended for foreign staff only and stated that contracts
would limit both the flexibility of the employer as well as employee
and provide a much more difficult environment in cases of
unsatisfactory performance by an employee. They also stated that it
could lead to substantially higher costs for Participants. One
commented that all of the 50 states are ``at-will employment states''
and that this doctrine covers employment practices for MAP Participants
with domestic U.S. staff. Two respondents commented that written
contracts should only be required by CCC in reference to employees paid
for with MAP funds.
Response: CCC intends that this section refers to the employment of
overseas employees who are paid in whole or in part with MAP funds and
has modified this section accordingly to require ``written contracts
with all overseas employees who are paid in whole or in part with MAP
funds.'' CCC disagrees with the comment that contracts would limit the
employer's and employee's flexibility and make it more difficult to let
go of an unsatisfactory employee. A written employment contract would
not eliminate the ability of employers to fire employees at will if the
contract includes an at-will clause. Similarly, an employment contract
can be written to reflect the flexibility desired by the parties to the
contract.
Sec. 1485.21 Financial Management
CCC received 18 comments in regard to this section.
Comment: Sixteen respondents provided comments in regard to Sec.
1485.21(c). Fourteen of the respondents stated that the record
retention policy is modified to delete the 5-year requirement without
specifying the required retention period. They stated that they assumed
it was included in 7 CFR part 1, subpart A--Official Records, but
questioned the
[[Page 29493]]
point of referencing this part when the required retention time could
be stated here.
One respondent commented that there were several references in this
section and others to ``applicable parts of this title'' and stated
that was very vague. They asked CCC to clarify the reference more
precisely. Another respondent stated they believed Sec. 1485.21(c)
pertained to employment records for non-U.S.-based employees and asked
that the regulation be restated to clarify this.
Response: CCC agrees with the respondents' recommendation of an
explicit statement of the required retention time. 7 U.S.C. Sec. 5662
requires, in part, that MAP Participants maintain all records
concerning a program transaction for a period not to exceed 5 years
after completion of the program transaction, and to permit the
Secretary to have full and complete access, for such 5-year period, to
such records. CCC has modified Sec. 1485.21(c) accordingly to require
retention of all records concerning a MAP program transaction for a
period of 5 years after completion of the program transaction, and to
permit CCC to have full and complete access, for such 5-year period, to
such records. Additionally, in response to the comment questioning
whether employment records had to be retained only for non-U.S.-based
employees, CCC has modified Sec. 1485.21(c) to explicitly state that
records shall include all documents related to employment of any
employees whose salaries are reimbursed in whole or in part with MAP
funds, whether such employees are based in the United States or
overseas.
In response to the comments that refer to ``applicable parts of
this title'' in the MAP final rule are vague, CCC refers to its prior
response to a similar comment.
Comment: One respondent referenced Sec. 1485.21(d)(6) and asked
for clarification of the term ``receipted paid bills.'' They stated in
the past ``stamped'' paid bills were not considered an acceptable form
of proof of payment and that instead there had to be evidence of a
financial transaction which involved a third party such as a bank.
Response: Receipted paid bills means bills for which receipt of
payment has been confirmed in writing by the payee. This language has
not been changed from the current regulation. CCC has not changed its
past practice. CCC believes this term is well understood and does not
believe it is necessary to codify any clarification.
Comment: One respondent commented on Sec. 1485.21(d)(7), which
requires MAP Participants to maintain documentation supporting
contributions. Such documentation must include the dates, purpose, and
location of the activity for which the cash or in-kind items were
claimed as a contribution; who conducted the activity; the
participating groups or individuals; and, the method of computing the
claimed contributions. The respondent stated that although the required
documentation referenced in this section was relatively easy for a MAP
Participant to provide, it was unreasonable to expect this level of
detail in reports from the U.S. industry.
Response: CCC disagrees. In order to properly perform its
compliance and monitoring functions, CCC requires documentation to
support all MAP contributions. If U.S. industry expenditures cannot be
supported by adequate documentation, such expenditures will not count
as eligible contributions. This language has not been changed from the
current regulation.
Sec. 1485.22 Reports
CCC received four comments in regard to Sec. 1485.22. One comment
supported the proposed rule. CCC's responses to these comments are
below. In addition, CCC has modified Sec. 1485.22(e) to clarify that
CCC can require a MAP Participant to submit an A-133 audit only when
CCC is designated the cognizant agency for audit.
Comment: One respondent commented on Sec. 1485.22(a), stating that
the format currently used to report contributions requires
identification of amounts by cost category and source, not by activity
code. The respondent stated that to track expenditures by activities
would be burdensome, and it recommended that CCC retain the current
format for reporting contributions.
Response: CCC agrees with the respondent and has modified the
section accordingly to delete the requirement to identify contributions
by activity.
Comment: Two respondents commented in reference to Sec.
1485.22(b), stating that in many cases, documentation of travel and
travel expenses were not received by the Participant until well beyond
the proposed 45 day period after travel. The respondents proposed that
the reference to ``completion of travel'' be replaced with ``submission
of claims for travel expenses.''
Response: CCC disagrees with the respondent. Travel expense
information is not required in trip reports. Moreover, this provision
has been in place for at least 15 years, and reporting has become
easier with the improvement in electronic technologies.
Sec. 1485.23 Evaluation
In reference to Sec. 1485.23(b), CCC received six comments
supporting the change in requirements for submission of the evaluation
report from 3 months to 6 months. They stated this change will result
in an improved ability to more accurately report the results of their
activities.
Sec. 1485.24 Compliance Reviews and Notices
CCC received 107 substantive comments in reference to Sec.
1485.24. CCC has also deleted the reference to ``a notice of
delinquency'' from Sec. 1485.24(e)(2). Pursuant to 7 CFR part 1403,
when a debt is due CCC, only an initial written demand for payment is
provided to the debtor.
Comment: Fifteen respondents recommended that CCC develop and
publish a realistic timeline for MAP Participants to come into
compliance with the new regulations after the effective date. The
respondents stated that compliance with the contracting guidelines and
anti-fraud requirements requires a reasonable length of time.
Response: CCC has delayed the effective date of the final rule
until the MAP Participant's 2013 program year (i.e., either 01/01/2013
or 07/01/2013). MAP Participants may, however, voluntarily choose to
comply with Sec. 1485.15(a)-(b), Sec. 1485.29(d) and Sec.
1485.31(a)(1) of the final rule in their 2012 program year.
In subsequent program years after 2013, a new MAP Participant,
including a former Participant that did not participate in the previous
program year, will be required to submit its initial brand program
operational procedures (as applicable), contracting guidelines and
anti-fraud program as set forth in its approval letter. Returning MAP
Participants will be required to submit their brand program operational
procedures (as applicable) and anti-fraud program, as set forth in
their approval letters.
Comment: Twenty-two respondents stated their concern in reference
to Sec. 1485.24(d). The respondents stated that they were concerned
that the proposed rule states ``the fact that a compliance review has
been conducted by USDA staff does not signify that a MAP Participant is
in compliance with its program agreement, approval letter and/or
applicable laws and regulations.''
[[Page 29494]]
Response: This language is included to signify that a compliance
review may not identify all occasions in which a Participant is out of
compliance. The fact that a compliance review had occurred and did not
uncover the non-compliant action is not a defense to any subsequent
determination by CCC that the Participant is not in compliance with its
program agreement, approval letter and/or applicable laws and
regulations. Similarly, a future compliance review may include findings
that were not identified in a previous review, although similar non-
compliant actions may have occurred during the time period covered by
the previous review.
Comment: Fifteen respondents questioned how a Participant can be
assured that it is in compliance with the MAP program if a compliance
review cannot be used as a basis for establishing program compliance.
Another respondent commented that Sec. 1485.24(d) seems to imply that
a compliance review means only that the auditor has not found
anything--yet. One respondent stated that when a Participant has acted
in good faith, the determination long after the fact that a given
practice was in error should not cause CCC to re-open previously
audited expenditures for reimbursement to CCC. Several of the
respondents stated that a successful review should be considered
confirmation that a Participant is in compliance with its program
agreement, approval letter and/or applicable laws and regulations. They
questioned what value a compliance review has if it doesn't attest to a
Participant's compliance.
Two respondents commented that the problems with this language are
further compounded by the current rarity of reviews and the extended
length of time it takes to receive the official concluding letter.
Fourteen comments stated that the compliance staff should develop an
approach that would be sufficient to cover all areas of the program and
give all Participants (MAP Participants and USDA staff) a sense of
confidence that a thorough review has been achieved.
Response: CCC disagrees. When requesting and accepting MAP funding,
MAP Participants become responsible for the effective control over all
funds, property, and other assets they receive from the federal
government. MAP Participants must act accordingly and institute their
own internal controls for safeguarding these funds.
CCC has a similar duty to ensure public funds are properly
expended. Compliance reviews are one way in which CCC discharges, in
part, this duty. The purpose of such reviews is to give assurance to
CCC, not MAP Participants. These reviews are not comprehensive
evaluations for Participants regarding their own internal controls and
systems. Moreover, even the most stringent review would not necessarily
bring about CCC's complete confidence that a Participant's program did
not include any non-compliant actions. As an example, fraudulent
behavior by a MAP Participant's contractor may initially appear to be
completely compliant upon review of well-crafted fraudulent
documentation. A subsequent whistleblower complaint, however, may
reveal the fraudulent activity. It is simply not possible for CCC to
confirm that an entire program is in compliance for any MAP
Participant, much less for all MAP Participants.
In short, whether or not CCC's compliance staff conducts a
compliance review of a MAP Participant's program and regardless of the
outcome of that review, the Participant retains the ultimate
responsibility, as a result of having accepted federal funds, for
running its program in compliance with all applicable laws and
regulations.
Comment: Fourteen respondents proposed that additional language be
added to this section, stating, ``Should USDA staff determine that a
MAP Participant is out of compliance, the MAP Participant will be
required as in (b) and (c) of this subpart to return to CCC the amount
of funding deemed to have been inappropriately spent for the reviewed
program year. Notice will be made of the particular error and shared
with all MAP Participants. A pattern of this error may be noted but the
MAP Participant will only be required to reimburse CCC for the
compliance finding resulting from the current review and at the time
the finding was made and going forward and not liable for previously
un-reviewed and undiscovered findings.''
Response: CCC disagrees with this comment. CCC does not agree that
all compliance findings are appropriate to share with other MAP
Participants. While compliance findings often are the results of errors
or misunderstandings, occasionally compliance findings involve
intentional actions taken to violate the regulations. Such actions are
often covered up by the perpetrator, and are sometimes not discovered
through normal compliance reviews. CCC will continue its current
practice of providing notice to MAP Participants of patterns of errors
or misunderstandings that it has discovered through compliance reviews
and that it deems appropriate to share with all MAP Participants. Also,
as noted in previous responses, CCC disagrees that MAP Participants
should not be liable for previously undiscovered instances of
noncompliance.
Comment: Nineteen respondents commented in reference to Sec.
1485.24(e)(1) stating that the reduction in the amount of time for a
Participant to respond to an audit finding from 60 to 30 days was an
unreasonably short period of time, an unwarranted reduction and an
onerous requirement. Several stated that staff members are not always
in-country to begin working on a response immediately and that 30 days
does not provide sufficient time for the Participant to research and
develop an adequate response or appeal.
Response: CCC concurs with the commenters that the reduction in
time to respond may create an onerous requirement as Participants are
often in travel status. Therefore, CCC has changed Sec.
1485.24(e)(1)'s period of time within which a MAP Participant may
submit a response to a compliance report or written notice back to 60
days. In addition, CCC has made a corresponding change to Sec.
1485.24(b) and (c), whereby if a MAP Participant notifies CCC within 30
days of the date of the written compliance report or written notice
that the Participant intends to file an appeal pursuant to Sec.
1485.24(e), the amount owed to CCC by the MAP Participant is not due
until the appeal procedures are finished and CCC has made a final
determination as to the amount owed.
Sec. 1485.25 Failure To Make Required Contribution
CCC received 17 comments in reference to Sec. 1485.25.
Comment: Sixteen respondents stated that they believed that the
time to remit payment for failure to make required contributions should
be 6 months after the program year ends, not 90 days. Two respondents
proposed the contributions should be within 6 months in order to be
consistent with the proposed rule at Sec. 1485.23(b), which states
that evaluation results be submitted within 6 months following the end
of the Participant's program year. They stated the evaluation process
is an essential component in determining a MAP Participant's
contribution level and therefore proposed that Sec. 1485.25 be amended
to read, ``a MAP Participant shall remit such payment within 6 months
after the end of the program year.''
Response: CCC agrees that the time to remit payment should be 6
months, because the MAP Participant has 6 months to develop its
contribution report and may not realize it has fallen
[[Page 29495]]
short in contributions until the report is complete. Section 1485.25
has been modified accordingly.
Sec. 1485.28 Ethical Conduct
CCC received 21 comments in reference to Sec. 1485.28.
Comment: One respondent commented on Sec. 1485.28(b), which states
that ``A MAP Participant may, however, collect check-off funds and
membership fees that are required for membership in the MAP
Participant.'' The commenter also refers to Sec. 1485.28(c), which
states, in part, that ``A MAP Participant shall not limit participation
in its MAP activities to members of its organization.'' The respondent
stated the two sections appear to be contradictory and further
questioned how a MAP Participant recruits members, if all companies
must have equal access to programs and information regardless of their
membership in the Participant organization. This respondent stated that
additionally, as the companies that are members are contributing
financial resources to satisfy the MAP's contribution requirements, it
is only fair that these companies derive some benefit over companies
that are non-members.
Nineteen respondents commented in reference to Sec. 1485.28(c)
stating that they would like to know what method a MAP Participant is
to use to incentivize membership (thus achieving the broadest base) if
no preference is permitted as a benefit of membership. They stated
that, while not excluding anyone from participating, it is possible to
give some limited preference, such as first notice of events, etc.
Three of the respondents stated that Sec. 1485.28(c) would require
non-members to participate in their marketing program using their
brand. These commentators state that a farmer-owned agricultural
cooperative cannot permit non-members to participate in the
cooperative's marketing program using the cooperative's brand. The
respondents believed this proposed rule was in direct contradiction
with these statutory requirements.
One respondent suggested the regulation should state that all
commercial entities must have equal opportunity to access program
information funded by MAP, but that such opportunity is provided only
through membership in a Participant organization.
Response: Section 1485.28(b) and Sec. 1485.28(c) are not
contradictory. Under Sec. 1485.28(b), a MAP Participant may collect
check-off funds and membership fees that are required for membership in
the MAP Participant. Section 1485.28(c) prohibits a MAP Participant
from limiting participation in its MAP activities to members of its
organization. The MAP final rule does not require equal access to the
MAP Participant's non-MAP-funded programs and information. To make
clearer that the requirement of open participation is limited to MAP
activities, CCC is modifying Sec. 1485.28(c) to require that
Participants agree to ensure that their MAP-funded programs and
activities are open to all otherwise qualified individuals and entities
on an equal basis and without regard to any non-merit factors.
It is CCC's intention that the benefits of the MAP should be made
broadly available throughout the relevant agricultural sector. Not all
MAP Participants are similarly structured, and some organizations are
far more inclusive than others. Because CCC cannot, and would not
desire to, instruct industry groups how to organize themselves, this
requirement is placed on those organizations that choose to participate
in the MAP. Participating organizations are free to charge reasonable
and documentable administrative fees to non-members that participate in
MAP-funded activities.
CCC notes that Sec. 1485.28(c) is not intended to require MAP
agricultural cooperatives to allow non-members to participate in their
marketing program using the cooperative's brands. In response to this
comment and the following comment, CCC has modified Sec. 1485.28(c)
accordingly to explicitly provide that this provision does not apply to
U.S. agricultural cooperatives when implementing their own brand
program.
Comment: One respondent asked that FAS clarify that Sec.
1485.28(c) and Sec. 1485.28(d) would not apply to nonprofit U.S.
agricultural cooperatives with their own brand program. If FAS
determines otherwise with respect to the document disclosure provision
Sec. 1485.28(c), the respondent asked that the provision be made clear
that it allows for the redaction of business-confidential information
from any documents provided pursuant to the provision.
Response: As noted above, CCC has modified Sec. 1485.28(c) in
response to a prior comment so that the provision does not apply to
agricultural cooperatives promoting their own brand program.
Furthermore, Sec. 1485.28(d) does not deal with brand promotion, but
speaks only to how MAP Participants select industry representatives to
participate in generic MAP activities. CCC has also modified Sec.
1485.28(d) to clarify that the provision applies only to generic
activities.
Sec. 1485.29 Contracting Procedures
CCC received 69 comments in reference to Sec. 1485.29. Responses
are set forth below.
Comment: Three respondents provided similar comments in reference
to Sec. 1485.29(b). One comment asked if this section applies to items
paid with MAP funds and income generated from programs or only the
former. Two questioned if the ``small purchase threshold referenced in
7 CFR part 3019 is set at $100,000, to whom do the contracting plan
requirements apply for contracts above $25,000?'' One respondent
questioned what contracting compliance procedures were affected by this
dollar threshold.
Response: CCC intends that any use of income generated by MAP
funded activities should be governed by the MAP regulation. CCC has
modified Sec. 1485.32 accordingly to state that the Participant's use
of such revenue or refunds generated from MAP-funded programs shall be
governed by 7 CFR Part 1485. Thus, Sec. 1485.29 would apply to items
paid, in whole or in part, with income generated from MAP programs.
Regarding the questions related to the $100,000 small purchase
threshold and the $25,000 contract requirement, CCC notes these are two
different thresholds that relate to two different provisions in the MAP
final rule. In addition, CCC notes that it has increased the $25,000
threshold to $35,000 in the MAP final rule as discussed below in
response to a different comment.
Proposed Sec. 1485.29(d) of the MAP final rule created a new
requirement for MAP Participants to submit a contracting plan that
lists each contract with an annual value of $25,000 or more. In the MAP
final rule, CCC changed Sec. 1485.29(d) to require that ``[e]ach MAP
Participant shall submit to CCC, for CCC approval, written contracting
guidelines for contracts that are funded, in whole or in part, with MAP
funds. CCC's approval of such contracting guidelines will remain in
place until CCC retracts its approval in writing or new guidelines are
approved that supersede them. Once approved by CCC, these contracting
guidelines shall govern all of a Participant's MAP-funded contracting
involving contracts with an annual value of $35,000 or more.'' Thus,
all MAP Participants must establish written contracting guidelines for
contracts that are funded in whole or in part by MAP funds and that
have an annual value of $35,000 or more. CCC also modified Sec.
1485.29(c) and (d) to
[[Page 29496]]
make clear that these provisions apply only to MAP-funded contracts.
In addition to this requirement for written contracting guidelines,
Sec. 1485.29(b) also provides that ``[a] MAP Participant shall comply
with the procurement standards set forth below and in the applicable
parts of this title when procuring goods and services and when engaging
in construction to implement program agreements (e.g., 7 CFR Parts
3015, 3016, and 3019). For purposes of this subpart, the ``small
purchase threshold'' referenced in 7 CFR part 3019 is the ``simplified
acquisition threshold'' established by 41 U.S.C. Sec. 134.'' Thus, the
small purchase threshold of $100,000 referenced in Sec. 1485.29(b)
relates to those procurement standards set out in part 3019 of this
title, which sets out the uniform administrative requirements for
nonprofit organizations.
To illustrate, both 7 CFR part 3019 and 7 CFR part 3016 contain
procurement requirements, some of which are tied to the ``simplified
acquisition threshold'' (previously ``the small purchase threshold'')
previously set out at 41 U.S.C. Sec. 403(11), now codified at 41
U.S.C. Sec. 134. See, e.g., 7 CFR Sec. 3019.44(e), 7 CFR Sec.
3016.36(d). This threshold was, at one time, $25,000. It was
subsequently increased to $100,000 by statute. Because the current 7
CFR part 3019 has not been updated to reflect the increase in that
threshold from $25,000 to $100,000 as set forth in 41 U.S.C. Sec.
403(11), now codified at 41 U.S.C. Sec. 134, CCC clarified the current
$100,000 threshold in proposed Sec. 1485.29(b). In response to these
comments, however, CCC believes that, to account for possible changes
to the simplified acquisition threshold that may occur in the future,
it would be best if the final rule referred to the statute fixing the
threshold rather than specify the currently applicable threshold.
Accordingly, CCC has modified Sec. 1485.29(b) to refer to the
threshold set at 41 U.S.C. Sec. 134 rather than a $100,000 threshold.
Comment: Thirty-one respondents stated that if the requirement to
submit contracting ``plans'' is retained, they proposed an increase to
the annual contract value greater than the current $25,000. A
suggestion was made for $100,000. Four comments stated that the total
cost is often not known until the bidding is completed. They stated
that this regulation was too intrusive and would lead to multiple re-
submittals of the contracting plan to account for new and revised
contracts. They stated that this policy should not require a listing
up-front of all contracts expected during that plan year.
Comment: CCC received thirty-one similar comments in reference to
Sec. 1485.29(d). All respondents opposed the regulation as written.
Fifteen respondents stated that they believed these contracting
requirements should apply only to those contracts that are fully funded
and reimbursable by MAP and not those that will be paid for with
industry funds (contributions). Several respondents stated that the
proposed rule was too onerous and that, at most, MAP Participants
should be required to provide a description of contracting guidelines,
not procedures that could be applied to different contracting
situations.
Comment: Eighteen respondents provided comments that ``contracting
guidelines'' should be substituted for ``contracting plan'' and that
once a plan (guideline) is approved in any given year, it should not
need to be reapproved, unless it changes in some fundamental way.
Comment: Seventeen respondents stated their strong opposition to
the proposed rule and stated that the rule presented a number of
challenges, including that the decision to use a contractor may not be
made until the award letter is received and individual projects are
approved. They stated that the timing of the award cycle would make
this proposed requirement impossible and create an onerous pre-approval
process that not only micromanages program implementation but would be
impossible under the timelines by which the program currently operates.
Comment: One respondent proposed a change in the wording in the
following passage to read, ``Prior to entering into any contracts
during a program year, a MAP Participant must submit to CCC for CCC
approval a written contracting (procedure manual).'' The commenter then
asked when the MAP Participant could anticipate receiving approval of
their contracting procedure manual. Another proposed that at most FAS
require that the Participant develop a description of contracting
procedures that could be applied to different contracting situations
and would remain applicable over multiple years.
Comment: Fourteen respondents questioned on what basis anyone at
CCC would be qualified to judge a Participant's contracting plan. They
stated conversely, if the judgment was only related to whether there
was a plan or whether it was adequately updated, then what was the
point? They stated that this set of requirements created the need for a
parallel notification process as Participants will be forced to amend
the plan with each new need.
Comment: Fifteen respondents commented in reference to Sec.
1485.29(d)(1) stating that much of this section was covered by
inference in Sec. 1485.28; so it should not need to be spelled out
here.
Comment: Three respondents stated they supported the regulation for
requiring an annual documented evaluation for in-country representation
in lieu of the current arbitrary process of rebidding every 3 years.
Response: The proposed rule established a requirement for a
contracting plan in Sec. 1485.29(d) because CCC has received many
questions about appropriate contracting procedures over recent years.
The proposal was not meant to be an onerous requirement. Rather, it was
meant to encourage MAP Participants to formalize their contracting
methods and intentions for a given year and to give MAP Participants
the opportunity to obtain in advance CCC review and pre-approval of the
Participants' contracting methods.
CCC understands that the bulk of the opposition to this proposal
stems from the requirement to list all contracts. CCC agrees that this
is unnecessary and actually detracts from the intended purpose. CCC has
accordingly modified Sec. 1485.29(d) to require that MAP Participants
establish contracting guidelines to follow as various contracting
situations arise. Individual contracts need not be identified.
Moreover, CCC has removed the requirement that a MAP Participant must
submit its contracting plan to CCC prior to entering into any contracts
during the program year. Rather, the MAP final rule now provides that
after CCC approves the initial contracting guidelines, such approval
will remain in place until CCC retracts its approval in writing or new
guidelines are approved that supersede them. As discussed above in
response to a separate comment, MAP Participants shall submit their
contracting guidelines to CCC as set forth in their approval letters.
The MAP final rule continues to allow the MAP Participant to modify and
resubmit these guidelines for reapproval at any time.
CCC agrees that these contracting requirements should apply only to
those contracts that are funded, in whole or in part, by MAP funds and
not those that are paid for with industry funds (contributions). CCC
has modified Sec. 1485.29(d) accordingly. CCC observes that this would
encompass all contracts funded in whole or in part with MAP funds,
which would include contracts with U.S.-based organizations that are
retained to implement or assist with approved international market
[[Page 29497]]
development efforts, if such contracts were funded by MAP.
CCC does not agree with the suggestions to increase the threshold
of $25,000 to $100,000 for contracts that are to be submitted in
contracting ``plans.'' First, CCC notes that the requirement no longer
requests contracts to be listed. Second, CCC observes that CCC chose
the $25,000 level in the proposed rule because that is the same
threshold that CCC has maintained since 1996, as reflected in MAP
Notice 05-005, for the contract competition requirement. Since 1996,
CCC has required MAP Participants to conduct an appropriate form of
competition at least every three years on all contracts valued at
$25,000. CCC believes that the $25,000 level is an appropriate level
not only for when competition should be conducted but also for
determining what contracts should be subject to written contracting
guidelines. However, in recognition that the $25,000 level should be
adjusted for inflation, using the Department of Labor's Bureau of Labor
Statistics inflation calculator, CCC has increased the minimum level to
$35,000, with the possibility of future increases through written
guidance announced to MAP Participants via a MAP notice issued on FAS'
Web site. Section 1485.29(d) has been modified accordingly. CCC notes
that MAP Notice 99-003 is now obsolete and will be removed from FAS'
Web site.
CCC disagrees that the substance of Sec. 1485.29(d)(1) can already
be inferred from Sec. 1485.28 and need not be spelled out in Sec.
1485.29(d)(1).
In response to the comment asking when the MAP Participant should
expect approval of its contracting procedures, CCC will try to complete
its review of contracting guidelines within 21 calendar days of
receipt.
Comment: A respondent suggested that if an activity is approved in
a particular city that MAP Participants be required to at least offer
qualified contractors in that city or country an opportunity to bid on
the project. The commenter further stated that contractor lists should
be obtained from the local post rather than requiring potential
contractors to register on a Web site. In addition, the commentator
stated that the post should review the activity before it begins.
Response: While CCC requires open, fair, and competitive
contracting practices, CCC cannot and does not deem it appropriate to
instruct MAP Participants in appropriate methods for identifying
potential contractors in every market in the world. In addition, some
FAS Posts could not review every activity in their markets.
Comment: Two respondents provided similar comments in reference to
Sec. 1485.29(d)(3) and stated that they understood the rationale for
this proposal was ensuring that contracting procedures were open, fair
and competitive. They stated that there are exceptions, especially in
the area of highly technical services where there is reasonable cause
to allow the same individual to draft specifications as to bid on them.
The respondents proposed that such circumstances be treated as a rare
exception and as one of the ``various situations'' for which ``separate
procedures'' are developed as cited in Sec. 1485.29(d)(2), to ensure
that such exceptional cases result in an open, fair, and competitive
contract.
Response: In response to the commenters' requests, CCC has modified
Sec. 1485.29(d)(3) to provide that MAP Participants' written
contracting guidelines may detail special situations where the
prohibitions in this subsection do not apply, such as in situations
involving highly specialized technical services or situations where the
services are not commonly offered in a specific market. As discussed
above, CCC must approve or disapprove of MAP Participants' contracting
guidelines.
Respondents question whether Sec. 1485.29(d)(2) authorizes MAP
Participants to develop separate procedures that would allow the same
individual to draft specifications to bid on the solicitation. Section
1485.29(d)(2) does not directly address this issue. Consequently, as
discussed above, CCC has modified Sec. 1485.29(d)(3) instead.
Comment: Six respondents stated that this section does not discuss
requirements for contracts of less than $25,000 (now $35,000).
Response: While the contracting guidelines required by Sec.
1485.29(d) apply only to contracts with an annual value of $35,000 or
more, contracts with an annual value of less than that threshold are
still subject to the remaining provisions of the MAP regulations,
including Sec. 1485.29(a)-(c), as well as other procurement provisions
of the applicable parts of this Title. For example, Sec. 1485.29(c)
indicates that all contracting should be fair, open, and competitive.
Sec. 1485.31 Anti-Fraud Requirements
CCC received 85 comments in reference to this section.
Comment: Twenty-one respondents provided similar comments in
reference to Sec. 1485.31(a)(1), stating that the regulation as
written was too intrusive and onerous. Several of the respondents
recommended either removing this regulation altogether and/or treating
it like Civil Rights training by developing course work based on what
was developed for the anti-fraud course offered by Western U.S.
Agricultural Trade Association. The respondents stated that FAS could
then require all MAP Participant staff and board with fiduciary
responsibilities to take the course and submit certification statements
to that effect.
Response: CCC disagrees. CCC's position is that anti-fraud efforts
should be more structured and intensive than in the past. Recent
incidents indicate fraud has the potential to cause considerable losses
to the government. In addition to the requirement that they develop a
fraud prevention program, MAP Participants are highly encouraged to
attend anti-fraud training courses.
Comment: Seventeen respondents stated that if necessary, this plan
should be developed once, submitted and approved and only be
resubmitted if there has been some fundamental change. As with the
contracting subpart, they questioned what the timing was for submission
of the MAP Participant's fraud prevention program and when the MAP
Participant should expect the program's approval.
Three respondents asked for clarification on when the information
needs to be submitted and if the review was to be done by an
independent third party or if it could be done in house. Two
respondents provided comments proposing that the annual submission take
place outside of the annual UES application process or that it be
completed as part of the regular compliance review process.
Response: CCC disagrees that plans should only be re-submitted if
there are fundamental changes to the plan. While an initial plan would
not need to be rewritten every year, CCC expects MAP Participants to
review their anti-fraud plans annually and to submit these plans each
year, regardless of whether they have fundamentally changed. CCC has
modified Sec. 1485.31(a)(1) to make clear that MAP Participants should
review their fraud prevention programs annually. While a plan may not
change dramatically from one year to the next, CCC expects that annual
reviews would yield the need for minor changes from time to time and
expects to review the current applicable plan for each program year. It
is not necessary that the plan be developed by an independent third
party if the MAP Participant has internal expertise.
[[Page 29498]]
As stated above in response to an earlier comment, it is expected
that a 2013 MAP Participant should submit its initial anti-fraud
program as directed in its approval letter. Thus, annual submission
will take place outside of the UES application process. In subsequent
program years, a new Participant, including a former Participant that
did not participate in the previous program year, will be required to
submit its initial anti-fraud program as set forth in its approval
letter. For continuing annual submissions, MAP Participants will submit
their plans as directed in their approval letters. CCC does not agree
that the anti-fraud submission should be completed as part of the
regular compliance review process. First, as noted above in response to
a similar request related to operational brand procedures, the purpose
of the CCC review is to approve a plan at the start of a program year,
before the program begins operation. Compliance reviews look at what
has historically happened. Moreover, during the compliance review, CCC
may review the implementation of the plan, rather than the plan itself.
In response to the comment asking when the MAP Participant should
expect approval of its program, CCC will endeavor to complete its
review within 21 calendar days of receipt.
Comment: Sixteen respondents questioned if a MAP Participant has
multiple locations with accounting responsibilities, does the annual
review have to include all locations or just the corporate headquarters
where the financial consolidation occurs?
Response: Because fraud can occur both at corporate headquarters
and field offices, CCC expects anti-fraud reviews to encompass all of a
Participant's offices.
Comment: One respondent commented that this section appears to
apply to exclude brand participants. The respondent stated that the
current fraud prevention program covered by A-133 covers this
requirement, and therefore it asserted that this regulation was
redundant and recommended that this regulation be eliminated or A-133
should be eliminated.
Response: The anti-fraud requirements are imposed on MAP
Participants, not brand participants that participate in the MAP
program through MAP Participants. CCC disagrees that Sec. 1485.31's
requirements are redundant with OMB Circular A-133. OMB Circular A-133
requires, in part, that subject entities (those who expend $500,000 or
more in federal awards) have an audit conducted. Such entities must
maintain appropriate internal controls. In contrast, the MAP final rule
applies to all MAP Participants (not just those who expend $500,000 or
more) and requires a specific proactive and preemptive fraud prevention
program. One of the objectives of the fraud prevention requirement is
to make MAP Participants more aware of the specific risk for brand
participants to defraud them. The MAP requirements are in addition to,
not in lieu of, the requirements of OMB Circular A-133.
Comment: Two respondents questioned if the cost of fraud prevention
review would be reimbursable.
Response: CCC does not intend for anti-fraud efforts to be
reimbursable with MAP funds. CCC has added Sec. 1485.17(d)(31) to
clarify this.
Comment: One respondent stated that it (the Participant) has
adhered to an internal controls document which includes language on
fraudulent behavior. It stated that it would like clarification of the
new anti-fraud preparation policies to ensure that its policies adhere
to MAP regulations.
Response: While CCC may provide anti-fraud training and guidance in
the future, given the differences in structure between classes of MAP
Participants, as well as differences between individual MAP
Participants, CCC does not believe CCC should dictate a single set of
anti-fraud procedures or a model anti-fraud plan for all MAP
Participants to use. The respondent may submit its internal controls
document to CCC by the time stated in its approval letter or any time
before that, at which time CCC will review this document and respond.
Comment: One respondent commented that it did not feel that each
Participant should be responsible for developing its own anti-fraud
program and that this would result in the application of different
security standards. This respondent stated it would be more efficient
and more economical if CCC, with the assistance of an outside
contractor, could develop a set of minimum anti-fraud procedures for
all Participants to use.
Response: While CCC may provide anti-fraud training and guidance in
the future, given the differences in structure between classes of MAP
Participants, as well as differences between individual MAP
Participants, CCC does not believe CCC should dictate a single set of
anti-fraud procedures or a model anti-fraud plan for all MAP
Participants to use.
Comment: Three respondents provided similar comments in reference
to Sec. 1485.31(a)(2). All three suggested that the language be
modified to read, ``notify CCC promptly when any instances of fraud
have been substantially determined.''
Response: CCC disagrees with the respondents and believes CCC
should be a part of any investigation early enough to determine if
fraud has occurred.
Sec. 1485.32 Program Income
CCC received six comments in regard to this issue.
Comment: One respondent stated that as an organization that
conducts activities spanning more than one program year, it felt there
were several challenges with this language. It stated that it does not
see a way to comply strictly with the proposed language and further
stated that it recommended that Participants be allowed to create a
program reserve (at an agreed upon level) from participation fees, with
the understanding that any funds above that level be remitted to CCC as
they occur and that the reserve fund itself remit to CCC if/when the
Participant terminates participation in the MAP program.
Comment: Four respondents stated they strongly support the proposed
revision.
Response: Proposed Sec. 1485.32 allowed the MAP Participant to
expend program income in furtherance of the MAP Participant's approved
MAP activities in the program year in which the program income was
received. CCC, however, acknowledges that a MAP Participant's program
can be funded over a multi-year basis. Therefore, given that the grant
period may be multi-year and certain activities may occur over more
than one calendar year, CCC has accordingly modified Sec. 1485.32 to
allow MAP Participants to use program income in furtherance of approved
MAP activities during the program period over which the MAP Participant
may expend the MAP funds, regardless of the specific program year that
the income was received. Thus, for example, if a MAP activity in
program year 1 yields a net revenue in program year 2 in a 3-year MAP
grant, the MAP Participant should apply that revenue to MAP activities
conducted in program year 2 or 3. CCC does not believe that allowing
MAP Participants to establish a reserve fund with program proceeds is
appropriate.
Sec. 1485.36 Paperwork Reduction Requirements
CCC received three comments to this section.
Comment: Three respondents recommended that CCC transition from
solely paper recordkeeping of MAP related files to electronic
recordkeeping.
Response: CCC understands the respondents' comments to refer to
CCC's
[[Page 29499]]
use of the UES, the standardized online Internet application used by
entities to apply to any USDA market development program, including the
MAP. MAP Participants currently use the UES to submit reimbursement
claims, trip reports, and other information to CCC under the MAP. While
CCC believes MAP Participants' use of the UES effectively reduces costs
and increases efficiencies, MAP Participants cannot transition solely
from paper recordkeeping to electronic recordkeeping. The MAP final
rule requires Participants to maintain records of expenditures and
contributions to substantiate their MAP activities. Such records must
include, inter alia, original receipts for all STRE (e.g., actual
vendor invoices or restaurant checks) and any other program-related
expenditure in excess of $75.00 (e.g., canceled checks, receipted paid
bills, contracts or purchase orders, per diem calculations, travel
vouchers, and credit memos). Where the original documentation is
provided in paper, MAP Participants must maintain and make such paper
documentation available for review for compliance and monitoring
purposes.
List of Subjects in 7 CFR Part 1485
Agricultural commodities, Exports.
For the reasons stated in the preamble, CCC amends 7 CFR part 1485
as follows:
PART 1485--GRANT AGREEMENTS FOR THE DEVELOPMENT OF FOREIGN MARKETS
FOR U.S. AGRICULTURAL COMMODITIES
0
1. The authority citation for 7 CFR part 1485 reads as follows:
Authority: 7 U.S.C. 5623, 5662-5663 and sec. 203, 402-403, Pub.
L. 95-501, as amended, 92 Stat 1685 and sec. 1302, Pub. L. 103-66,
107 Stat. 330.
0
2. Subpart B is revised to read as follows:
Subpart B--Market Access Program
Sec.
1485.10 General purpose and scope.
1485.11 Definitions.
1485.12 Participation eligibility.
1485.13 Application process.
1485.14 Application review and formation of agreements.
1485.15 Operational procedures for brand programs.
1485.16 Contribution rules.
1485.17 Reimbursement rules.
1485.18 Reimbursement procedures.
1485.19 Advances.
1485.20 Employment practices.
1485.21 Financial management.
1485.22 Reports.
1485.23 Evaluation.
1485.24 Compliance reviews and notices.
1485.25 Failure to make required contribution.
1485.26 Submissions.
1485.27 Disclosure of program information.
1485.28 Ethical conduct.
1485.29 Contracting procedures.
1485.30 Property standards.
1485.31 Anti-fraud requirements.
1485.32 Program income.
1485.33 Amendment.
1485.34 Noncompliance with an agreement.
1485.35 Suspension, termination, and closeout of agreements.
1485.36 Paperwork reduction requirements.
Subpart B--Market Access Program
Sec. 1485.10 General purpose and scope.
(a) This subpart sets forth the general terms, conditions, and
policies governing the Commodity Credit Corporation's (CCC) operation
of the Market Access Program (MAP).
(b)(1) In addition to the provisions of this subpart, other
regulations of general application issued by the U. S. Department of
Agriculture (USDA), including the regulations set forth in Chapter XXX
of this title, ``Office of the Chief Financial Officer, Department of
Agriculture,'' may apply to the MAP and MAP Participants, to the extent
that these regulations of general application do not directly conflict
with the provisions of this subpart. These include, but are not limited
to:
(i) 7 CFR part 1, subpart A--Official Records
(ii) 7 CFR part 3--Debt Management
(iii) 7 CFR part 15, subpart A--Nondiscrimination
(iv) 7 CFR part 3015--Uniform Federal Assistance Regulations
(v) 7 CFR part 3016--Uniform Administrative Requirements for Grants
and Cooperative Agreements to State and Local Governments
(vi) 2 CFR part 417--Government-wide Debarment and Suspension
(Nonprocurement)
(vii) 7 CFR part 3018--New Restrictions on Lobbying
(viii) 7 CFR part 3019--Uniform Administrative Requirements for
Grants and Other Agreements with Institutions of Higher Education,
Hospitals, and Other Nonprofit Organizations
(ix) 7 CFR part 3021--Government-wide requirements for drug-free
workplace (financial assistance)
(x) 7 CFR part 3052--Audits of States, Local Governments, and Non-
profit Organizations
(xi) 48 CFR part 31--Contract Cost Principles and Procedures of the
Federal Acquisition Regulations.
(2) In addition, relevant provisions of the CCC Charter Act (15
U.S.C. 714 et seq.) and any other statutory provisions that are
generally applicable to CCC are also applicable to the MAP and the
regulations set forth in this part.
(3) MAP Participants must also comply with Title VI of the Civil
Rights Act of 1964 and related civil rights regulations and policies.
(4) Other laws and regulations that apply to MAP Participants
include, but are not limited to:
(i) 2 CFR part 25--Universal Identifier and Central Contractor
Registration
(ii) 2 CFR part 170--Reporting Subaward and Executive Compensation
Information
(iii) 2 CFR part 175--Award Term for Trafficking in Persons
(iv) 2 CFR part 180--OMB Guidelines to Agencies on Governmentwide
Debarment and Suspension (Nonprocurement)
(v) 37 CFR part 401.1--Rights to Inventions Made by Nonprofit
Organizations and Small Business Firms Under Government Grants,
Contracts, and Cooperative Agreements
(vi) Executive Order 13224, as amended, Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit,
or Support Terrorism
(c) Under the MAP, CCC may provide grants to eligible U.S. entities
to conduct certain marketing and promotion activities aimed at
developing, maintaining, or expanding commercial export markets for
U.S. agricultural commodities and products. MAP Participants may
receive assistance for either generic or brand promotion activities.
While activities generally take place overseas, reimbursable activities
may also take place in the United States. CCC expects all activities
that occur in the United States for which MAP reimbursement is sought
to develop, maintain, or expand the commercial export market for the
relevant U.S. agricultural commodity in accordance with the MAP
Participant's approved MAP program. When considering eligible nonprofit
U.S. trade organizations, CCC gives priority to organizations that have
the broadest producer representation and affiliated industry
participation of the commodity being promoted.
(d) The MAP generally operates on a reimbursement basis.
(e) CCC's policy is to ensure that benefits generated by MAP
agreements are broadly available throughout the relevant agricultural
sector and that no single entity gains an undue advantage. CCC also
endeavors to enter into MAP agreements covering a broad array of
agricultural commodity sectors. The MAP is administered by personnel of
the Foreign Agricultural Service (FAS) acting on behalf of CCC.
[[Page 29500]]
Sec. 1485.11 Definitions.
For purposes of this subpart the following definitions apply:
Activity--a specific foreign market development effort undertaken
by a MAP Participant.
Administrative expenses or costs-- expenses or costs of
administering, directing, and controlling an organization that is a MAP
Participant. Generally, this would include expenses or costs such as
those related to:
(1) Maintaining a physical office (including, but not limited to,
rent, office equipment, office supplies, office d[eacute]cor, office
furniture, computer hardware and software, maintenance, extermination,
parking, business cards);
(2) Personnel (including, but not limited to, salaries, benefits,
payroll taxes, individual insurance, training);
(3) Communications (including, but not limited to, phone expenses,
internet, mobile phones, personal digital assistants, email, mobile
email devices, postage, courier services, television, radio, walkie
talkies);
(4) Management of an organization or unit of an organization
(including, but not limited to, planning, supervision, supervisory
travel, teambuilding, recruiting, hiring);
(5) Utilities (including, but not limited to, sewer, water,
energy);
(6) Professional services (including, but not limited to,
accounting expenses, financial services, investigatory services).
Approval letter--a document by which CCC informs an applicant that
its MAP application for a program year has been approved for funding.
This letter may also approve specific activities and contain terms and
conditions in addition to the program agreement. This letter requires a
countersignature by the MAP Participant before it becomes effective.
Attach[eacute]/Counselor--the FAS employee representing USDA
interests in the foreign country in which promotional activities are
conducted.
Brand participant--a small-sized U.S. for-profit entity, or a U.S.
agricultural cooperative that owns the brand(s) of the U.S.
agricultural commodity to be promoted or has the exclusive rights to
use such brand(s) and that is participating in the MAP brand promotion
program of another MAP Participant. This definition does not include
any U.S. agricultural cooperatives that are MAP Participants that apply
for MAP funds to implement their own brand programs.
Brand promotion--an activity that involves the exclusive or
predominant use of a single U.S. company name, or the logo or brand
name of a single U.S. company, or the brand of a U.S. agricultural
cooperative, or any activity undertaken by a MAP Participant in the
brand program.
CCC--the Commodity Credit Corporation, including any agency or
official of the United States delegated the responsibility to act on
behalf of CCC.
Contribution--an expenditure made by a MAP Participant, the U.S.
industry, or State agency in support of an approved activity. This
includes expenditures to be made by entities in the MAP Participant's
industry in support of the entities' related promotion activities in
the markets covered by the MAP Participant's agreement.
Credit memo--a commercial document, also known as a credit
memorandum, issued by the MAP Participant to a commercial entity that
owes the MAP Participant a certain sum. A credit memo is used when the
MAP Participant owes the commercial entity a sum less than the amount
the entity owes the Participant. The credit memo reflects an offset of
the amount the MAP Participant owes the entity against the amount the
entity owes to the MAP Participant.
Demonstration projects--activities involving the erection or
construction of a structure or facility or the installation of
equipment.
Expenditure--either payment via the transfer of funds or offset
reflected in a credit memo in lieu of a transfer of funds.
FAS--Foreign Agricultural Service, USDA.
FAS Web site--a Web site maintained by FAS providing information on
MAP. It is currently accessible at www.fas.usda.gov/mos/programs/map.asp.
Foreign third party--a foreign entity that a MAP Participant works
with to promote the export of a U.S. agricultural commodity under the
MAP program.
Generic promotion--an activity that is not a brand promotion but,
rather, promotes a U.S. agricultural commodity generally. A generic
promotion activity may include the promotion of a foreign brand (i.e.,
a brand owned primarily by foreign interests and being used to market a
commodity or product in a foreign market), if the foreign brand uses
the promoted U.S. agricultural commodity or product from multiple U.S.
suppliers. A generic promotion activity may also involve the use of
specific U.S. company names, logos or brand names. However, in that
case, the MAP Participant must ensure that all U.S. companies seeking
to promote such U.S. agricultural commodity in the market have an equal
opportunity to participate in the activity and that at least two U.S.
companies participate. In addition, an activity that promotes separate
items from multiple U.S. companies will be considered a generic
promotion only if the promotion of the separate items maintains a
unified theme (i.e., a dominant idea or motif) and style and is
subordinate to the promotion of the generic theme.
MAP--the Market Access Program.
MAP Notice--Market Access Program notices are documents that CCC
issues for informational purposes. These MAP notices are made available
electronically at http://www.fas.usda.gov/mos/programs/mnotice.html.
These notices have no legal effect. They are intended to alert MAP
Participants of various aspects of CCC's current administration of the
MAP program. For example, CCC issues MAP notices to alert MAP
Participants of procedures for requesting advances, applicable federal
pay scale rates, lists of economic and trade sanctions against certain
foreign countries, reporting formats and computer codes to use with the
UES.
MAP Participant or Participant--an entity that has entered into a
MAP program agreement with CCC.
Market--the country or countries targeted by an activity.
Notification--a document from the MAP Participant by which the MAP
Participant proposes to CCC changes to the activities and/or funding
levels in an approved MAP program agreement and/or approval letter.
Product samples--a representative part of a larger whole promoted
commodity or group of promoted commodities. Product samples include all
forms of a promoted commodity (e.g., fresh or processed), independent
of the ultimate utilization of the sample. Product samples might be
used in support of international marketing activities including, but
not limited to, displays, food process testing, cooking demonstrations,
or trade and consumer tastings.
Program agreement--a document entered into between CCC and a MAP
Participant setting forth the terms and conditions of approved
activities under MAP, including any subsequent amendments to such
agreement.
Program year--Unless otherwise agreed in writing between CCC and a
MAP Participant, a 12-month period during which a MAP Participant can
undertake activities consistent with this subpart and its program
agreement and approval letter with CCC.
Promoted commodity--a U.S. agricultural commodity the sale of
[[Page 29501]]
which is the intended result of a promotion activity.
Sales and trade relations expenditures (STRE)--expenditures made on
breakfast, lunch, dinner, receptions, and refreshments at approved
activities; miscellaneous courtesies such as checkroom fees, taxi fares
and tips; and decorations for a special promotional occasion.
Sales team--a group of individuals engaged in an approved activity
intended to result in specific sales.
Small-sized entity--a U.S. commercial entity that meets the small
business size standards published at 13 CFR part 121, Small Business
Size Regulations.
SRTG--the acronym for State Regional Trade Group. An SRTG is a
nonprofit association of state-funded agricultural promotion agencies.
Supergrade--a salary level above the reimbursable salary range
generally allowable under MAP, which CCC may approve on a case by case
basis. This salary level is available only for certain non-U.S.
employees who direct MAP Participants' overseas offices.
Temporary contractor--a contractor, typically a consultant or other
highly paid professional, that is hired on a short term basis to assist
in the performance of an activity.
Trade team--a group of individuals engaged in an approved activity
intended to promote the interests of an entire agricultural sector
rather than to result in specific sales by any of its members.
UES Web site--a Web site maintained by FAS through which applicants
may apply online to MAP and any other USDA market development program.
The Web site is currently accessible at www.fas.usda.gov/mos/ues/unified.asp.
Unified Export Strategy (UES)--is a standardized online Internet
application developed by USDA and available for use by entities to
apply to any USDA market development program, including the MAP.
U.S. agricultural commodity--any agricultural commodity, including
any food, feed, fiber, forestry product, livestock, or insect of U.S.
origin or fish harvested from a U.S. aquaculture farm or harvested by a
vessel as defined in Title 46 of the United States Code, in waters that
are not waters (including the territorial sea) of a foreign country,
and any product thereof, excluding tobacco. An agricultural commodity
shall be considered to be U.S. origin if it is comprised of at least 50
percent by weight, exclusive of added water, of agricultural
commodities grown or raised in the United States.
USDA--the United States Department of Agriculture.
U.S. for-profit entity--a firm, association, or other entity
organized or incorporated, located and doing business for profit in the
United States, and engaged in the export or sale of a U.S. agricultural
commodity.
Sec. 1485.12 Participation eligibility.
To participate in the MAP, an entity shall be:
(a) A nonprofit U.S agricultural trade organization;
(b) A nonprofit SRTG;
(c) A U.S. agricultural cooperative; or
(d) A State agency.
Sec. 1485.13 Application process.
(a) General application requirements. CCC will periodically publish
a Notice in the Federal Register that it is accepting applications for
participation in MAP. Applications shall be submitted in accordance
with the terms and requirements specified in the Notice and in these
regulations. Applicants are encouraged to submit a UES through the UES
Internet Web site, but are not required to do so. Applicants may apply
to conduct a generic promotion program and/or a brand promotion program
that provides MAP funds to brand participants for branded promotion. An
applicant who is a U.S. agricultural cooperative may also apply for
funds to conduct its own brand promotion program.
(1) Applicant and program information.
(i) All applications shall contain:
(A) The name, address, and Internet location of the home page of
the applicant organization;
(B) The name of the applicant's Chief Executive Officer;
(C) The name, telephone number, fax number, and email address of
the applicant's primary contact person;
(D) The name(s) of the person(s) responsible for managing the
proposed program;
(E) A description of the applicant organization, including the type
of organization of the applicant (e.g., nonprofit SRTG), its mission,
and the statutory authorities by which it is constituted and under
which it operates, if applicable;
(F) Tax exempt identification number of the applicant, if
applicable;
(G) Beginning and ending dates for proposed program year (mm/dd/yy-
mm/dd/yy);
(H) Dollar amount of CCC resources requested for generic
activities;
(I) Dollar amount of CCC resources requested for brand activities;
(J) Total dollar amount of CCC resources requested;
(K) Percentage of CCC resources requested for general
administrative expenses;
(L) A Dun and Bradstreet DUNS number for the applicant;
(M) A description of the applicant organization's membership and
membership criteria;
(N) A list of organizations affiliated with the applicant,
including parent organizations, subsidiaries, and partnerships;
(O) A description of the applicant's management and administrative
capability;
(P) A description of the applicant's prior export promotion
experience;
(Q) Value, in U.S. dollars, of proposed contributions from the
applicant or the applicant's proposed contribution stated as a
percentage of the total dollar amount of CCC resources requested; and
(R) Value, in U.S. dollars, of proposed contributions from other
sources.
(ii) [Reserved]
(2) Program justification.
(i) All applications shall contain:
(A) A description of the promoted U.S. agricultural commodity(s),
its harmonized tariff classification, the applicable commodity
aggregate code (available from the UES Web site) and the percentage of
U.S. origin content by weight, exclusive of added water;
(B) A description of the anticipated supply and demand situation
for the promoted U.S. agricultural commodity(s);
(C) The volume and value of exports of the promoted U.S.
agricultural commodity(s) to the targeted markets for the most recent
3-year period;
(D) If the proposal is for 2 or more years, an explanation why the
proposal should be funded on a multi-year basis; and
(E) A certification and, if requested by CCC, a written explanation
supporting the certification that any funds received will supplement,
but not supplant, any private or third-party funds or other
contributions to program activities. An explanation, if one is
requested, shall indicate why the applicant is unlikely to carry out
the activities without Federal financial assistance. In determining
whether Federal funds would supplement or supplant private or third-
party funds or contributions, CCC will consider the applicant's prior
overall marketing budget in the MAP program from year-to-year,
variations in promotional strategies within a country, and new markets.
(ii) [Reserved]
(3) Proposed program's strategic plan.
(i) All applications shall include a strategic plan that contains:
(A) A description of overall long term strategic goals to be
advanced by the
[[Page 29502]]
proposed activities for the ensuing 3-5 years;
(B) An explanation of the organization's strategic planning process
and identification of priority target markets, including a summary of
proposed budgets by country and commodity aggregate code;
(C) A description of the world market situation for the exported
U.S. agricultural commodity(s);
(D) A description of competition from other exporters;
(E) An evaluation plan describing the applicant's goals and the
applicant's plans for monitoring and evaluating performance towards
achieving these goals. This evaluation plan should set forth specific
goals and benchmarks set at regular intervals to be used to identify
results against identified constraints and opportunities and to measure
progress made in the target market. Evaluation of a proposed MAP
program's effectiveness will depend on a clear statement by the
applicant of goals, method of achievement, and expected results of
programming at regular intervals. The overall goal of the MAP and of
individual Participants' programming is to achieve or maintain sales
that would not have occurred in the absence of MAP funding. A MAP
Participant may modify and resubmit this plan for re-approval at any
time during the program year.
(F) For each target country, 5 years or as many years as are
available of:
(1) Historical U.S. export data;
(2) U.S. market share; and
(3) MAP funds received by the applicant;
(G) For each target country, 3 years of projected U.S. export data
and U.S. market share;
(H) Country strategy, including market constraint(s) impeding U.S.
exports (e.g., trade barriers) or opportunities present and the
strategy proposed to overcome constraints or take advantage of the
opportunities, previous activities in the country, and the projected
impact of the proposed program on U.S. exports;
(I) A justification for any proposed overseas office, including a
staffing plan listing job titles, position descriptions, salary ranges,
any request for approval of supergrade salaries, and an itemized
administrative budget;
(J) A description of any demonstration projects, if applicable;
(K) Data summarizing the applicant's historical and projected
exports, market share, and MAP budgets of the promoted U.S.
agricultural commodity(s);
(L) A written presentation of all proposed activities including:
(1) A short description of the relevant market constraint or
opportunity;
(2) A budget for each proposed activity, identifying the source of
funds.
(ii) Applications for brand promotion assistance shall also include
in their strategic plans:
(A) A description of how the brand promotion program will be
publicized to U.S. industry; and
(B) The criteria that will be used to allocate funds to U.S. for-
profit entities and U.S. agricultural cooperatives.
(b) CCC may request any additional information that it deems
necessary to evaluate an application, including, but not limited to,
performance measurement information.
(c) Special rules governing demonstration projects funded with CCC
resources.
(1) CCC will consider proposals for demonstration projects,
provided:
(i) No more than one such demonstration project per constraint is
undertaken within a market;
(ii) The constraint to be addressed in the target market is a lack
of technical knowledge or expertise;
(iii) The demonstration project is a practical and cost effective
method of overcoming the constraint; and
(iv) A third-party must participate in such project through a
written agreement with the MAP Participant.
(d) Universal Identifier and Central Contractor Registration (CCR)
(1) In accordance with 2 CFR Part 25, each entity that applies to
the MAP program and does not qualify for an exemption under 2 CFR
25.110 must:
(i) Be registered in the CCR prior to submitting an application or
plan;
(ii) Maintain an active CCR registration with current information
at all times during which it has an active Federal award or an
application or plan under consideration by CCC; and
(iii) Provide its DUNS number in each application or plan it
submits to CCC.
(2) [Reserved]
(e) Reporting Subaward and Executive Compensation Information. In
accordance with 2 CFR Part 170, each entity that applies to the MAP
program and does not qualify for an exception under 2 CFR 170.110(b)
must ensure it has the necessary processes and systems in place to
comply with the applicable reporting requirements of 2 CFR Part 170
should it receive MAP funding.
Sec. 1485.14 Application review and formation of agreements.
(a) General. CCC will, subject to the availability of funds,
approve those applications that it considers to present the best
opportunity for developing, maintaining, or expanding export markets
for U.S. agricultural commodities. The selection process, by its
nature, involves the exercise of judgment. CCC's choice of Participants
and proposed promotion projects requires that it consider and weigh a
number of factors, some of which cannot be mathematically measured--
e.g., market opportunity, market strategy, and management capability.
CCC may require that an applicant participate in the MAP through
another MAP Participant or applicant.
(b) Application review criteria. In assessing the likelihood of
success of the applications it receives and deciding which it will
approve, CCC will follow results-oriented management principles and
consider the following criteria:
(1) The effectiveness of program management;
(2) Soundness of accounting procedures;
(3) The nature of the applicant organization. With respect to
nonprofit U.S. trade organizations, preference will be given to those
organizations with the broadest base of producer representation of and
affiliated industry participation for the commodity being promoted;
(4) Prior export promotion experience;
(5) Appropriateness of staffing;
(6) Adequacy of the applicant's strategic plan in the following
categories;
(i) Description of target market conditions;
(ii) Description of and plan for addressing market constraints and
opportunities;
(iii) Breadth of industry participation in strategic planning
process;
(iv) Strategic prioritization identified in proposed plan;
(v) Export volume and value and market share goals in each target
country;
(vi) Description of evaluation plan and suitability of the plan for
performance measurement; and
(vii) Past program results and/or evaluations, including program
success stories.
(c) Allocation factors. CCC determines which applications to
approve and develops preliminary recommended funding levels for each
approved application based on the following factors, in addition to
those in paragraph (b) of this section. CCC determines final funding
levels after allocating available funds to approved applications on the
basis of criteria that will be fully described in each program year's
MAP announcement in the Federal Register:
(1) Size of the budget request in relation to projected value of
exports;
[[Page 29503]]
(2) Where applicable, size of the budget request in relation to
actual value of exports in prior years;
(3) Where applicable, Participant's past projections of exports
compared with actual exports;
(4) Level of contributions by the applicant and by all other
sources;
(5) Market share goals in target country(ies);
(6) The percentage by weight, exclusive of added water, of U.S.
agricultural commodities contained in the promoted products;
(7) The degree of value-added processing in the United States; and
(8) Proposed MAP-funded general administrative and overhead costs
compared to proposed MAP-funded direct promotional costs.
(d) Approval decision.
(1) CCC will approve those applications that it determines best
satisfy the criteria and factors specified above.
(2) Notification of decision. CCC will notify each applicant in
writing of the final disposition of its application.
(e) Formation of agreements. CCC will send a program agreement (or
amendment to an existing program agreement), an approval letter, and a
signature card to each approved applicant. The program agreement or
amendment and the approval letter will outline which activities and
budgets are approved and will specify any special terms and conditions
applicable to a MAP Participant's program, including any requirements
with respect to contributions and program evaluations. An applicant
that decides to accept the terms and conditions contained in the
program agreement or amendment and the approval letter must so indicate
by having its Chief Executive Officer (CEO) or designee sign the
program agreement or amendment and the approval letter and submit these
to CCC. Final agreement shall occur when the program agreement or
amendment and the approval letter are signed by both parties.
(f) Signature cards. The MAP Participant shall designate at least
two individuals in its organization to sign program agreements and
amendments, approval letters, reimbursement claims, and advance
requests. The MAP Participant shall submit the signature card signed by
those designated individuals and by the MAP Participant's CEO to CCC.
The Participant shall immediately notify CCC of any changes in
signatories and shall submit a revised signature card accordingly.
(g) UES ID and passwords. CCC will provide each MAP Participant
with IDs and passwords for the UES Web site, as necessary. MAP
Participants shall protect these IDs and passwords in accordance with
USDA's information technology policies that CCC will provide to MAP
Participants. MAP Participants shall immediately notify CCC whenever a
person who possesses the ID and password information no longer needs
such information or a person who is not authorized gains such
information.
(h) A MAP Participant through which small-sized U.S. for-profit
entities are participating in the MAP program shall obtain annual
certifications from all such entities that they are small-sized
entities or U.S. agricultural cooperatives as defined in these
regulations. The Participant shall retain these certifications in
accordance with the recordkeeping requirements of this subpart.
(i) Changes to activities and funding.
(1) Adding a new activity.
(i) A MAP Participant may not conduct a new activity without first
obtaining an approved activity budget for such change. To request
approval of such activity budget, the MAP Participant shall submit a
notification to CCC.
(ii) A notification for a new activity shall provide an activity
justification and identify any related adjustments to the approved
strategic plan, including changes in market, constraint, or opportunity
that the activity proposes to address. The notification shall contain
the activity description, the proposed budget, and a justification of
transfer of funds.
(iii) After receipt of the notification, CCC will inform the MAP
Participant via the UES Web site whether the requested budget is
approved.
(2) Modifying existing activities and their funding levels.
(i) A MAP Participant desiring to increase the funding level for
existing, approved activities addressing a single constraint or
opportunity by more than $25,000 or 25 percent of the approved funding
level, whichever is greater, must first submit a notification
explaining the adjustment to CCC before making such change.
(ii) A MAP Participant may make significant adjustments below that
threshold to the funding levels for existing, approved activities
without prior notification to CCC, only if it submits a notification
explaining the adjustments to CCC no later than 30 days after the
change. Minor adjustments to existing, approved activities and/or
funding levels do not require notification.
(iii) Notifications shall describe the activity, changes to the
activity, the existing funding level, the proposed funding level, and a
justification for transfer of funds, if applicable.
Sec. 1485.15 Operational procedures for brand programs.
(a) Where CCC approves an application by a MAP Participant to run a
brand promotion program that will include brand Participants, the MAP
Participant shall establish brand program operational procedures. The
MAP Participant annually shall submit to CCC for approval its proposed
brand program operational procedures for such program year. CCC will
notify all new and existing MAP Participants in writing in each
Participant's annual approval letter and through the FAS Web site as to
applicable submission dates for and dates for approvals of brand
program operation procedures. Such procedures shall include, at a
minimum, a brand program application, application procedures,
application review criteria, brand participant eligibility
requirements, a participation agreement, reimbursement requirements,
compliance requirements, reporting and recordkeeping requirements,
employment practices, financial management requirements, contracting
procedures, and evaluation requirements.
(b) The MAP Participant shall not enter into any participation
agreements with brand participants nor shall it implement any MAP brand
activities for the applicable program year unless and until CCC has
communicated in writing its approval of the proposed operational
procedures to the MAP Participant.
(c) Participation agreements between MAP Participants and brand
participants. Where CCC approves a MAP Participant's application to run
a brand promotion program that will include brand participants, the MAP
Participant shall enter into participation agreements with brand
participants. These agreements must:
(1) Specify a time period for such brand promotion and require that
all brand promotion expenditures be made within the MAP Participant's
approved program year;
(2) Make no allowance for extension or renewal;
(3) Limit reimbursable expenditures to those made in countries and
for activities approved in the brand participant's activity plan;
(4) Specify the percentage of promotion expenditures that will be
reimbursed, reimbursement procedures, and documentation requirements;
[[Page 29504]]
(5) Include a written certification by the brand participant that
it either owns the brand of the product it will promote or has
exclusive rights to promote the brand in each of the countries in which
promotion activities will occur;
(6) Require that all product labels, promotional material, and
advertising will identify the origin of the U.S. agricultural commodity
as ``American'', ``Product of the United States of America'', ``Product
of the U.S.'', ``Product of the U.S.A.'', ``Product of America'',
``Grown in the United States of America'', ``Grown in the U.S.'',
``Grown in the U.S.A.'', ``Grown in America'', ``Made in the United
States of America,'' ``Made in the U.S.'', ``Made in the U.S.A.'',
``Made in America'', or product of, grown in or made in any state or
territory of the United States of America spelled out in its entirety,
or other U.S. regional designation if approved in advance by CCC; that
such origin identification will be conspicuously displayed in a manner
easily observed as identifying the origin of the product; and that such
origin identification will conform, to the extent possible, to the U.S.
standard of \1/6\ inch (.42 centimeters) in height based on the lower
case letter ``o''. The use of the above terms as a descriptor or in the
name of the product (e.g., Texas style chili, Bob's American Pizza)
does not satisfy the product origin requirement. Phrases ``product of
'', ``grown in'' or ``made in'' are encouraged, but not required. A MAP
Participant may request an exemption from this requirement on a case-
by-case basis. All such requests shall be in writing and include
justification satisfactory to CCC that this labeling requirement would
hinder a MAP Participant's promotional efforts. CCC will determine, on
a case by case basis, whether sufficient justification exists to grant
an exemption from the labeling requirement. In addition, CCC may
temporarily waive this requirement where CCC has determined that such
labeling will likely harm sales rather than help them. Such
determinations will be announced to MAP Participants via a MAP notice
issued on FAS' Web site;
(7) Include a written certification by the brand participant that
it is either a small-sized entity as defined in this subpart or a U.S.
agricultural cooperative;
(8) Require that the brand participant submit to the MAP
Participant a statement certifying that any Federal funds received will
supplement, but not supplant, any private or third party funds or other
contributions to program activities; and
(9) Require the brand participant to maintain all original records
and documents relating to program activities for 5 calendar years
following the end of the applicable program year and make such records
and documents available upon request to authorized officials of the
U.S. Government.
(d) MAP Participants may not provide assistance to a single entity
including a entity reincorporated or re-organized under the same or
different name if the reincorporated or re-organized entity is
substantially similar to the pre-existing entity, for brand promotion
in a single country for more than 5 years. Such 5 years do not need to
be consecutive. Such 5-year period shall not begin prior to the 1994
program year or the brand participant's first program year, whichever
is later. In limited circumstances, CCC may waive the 5 year limitation
if CCC determines that further assistance is in the best interests of
the MAP. CCC shall, at its discretion, decide whether a reincorporated
or re-organized entity is substantially similar to the pre-existing
entity for purposes of applying this 5-year rule. Brand participants'
participation in certain international trade shows in foreign countries
will not be considered when determining such brand participants' time
in country for purposes of the 5 year graduation requirement. Such
shows must meet two requirements: They are food or agricultural shows,
with no less than 30% of exhibitors selling food or agricultural
products, and they are international shows, meaning they target buyers,
distributors and the like from more than one foreign country and no
less than 15% of each show's visitors are from countries other than the
host country. CCC will compile a list of international trade shows that
CCC exempts from the graduation requirement and such list will be
announced to MAP Participants via a MAP notice issued on FAS' Web site.
Sec. 1485.16 Contribution rules.
(a) In MAP generic promotion programs, a MAP Participant shall
contribute a total amount in goods, services, and/or cash equal to at
least 10 percent of the value of resources to be provided by CCC for
all generic promotion activities proposed to be undertaken by the MAP
Participant.
(b) In MAP brand promotion programs, a MAP Participant conducting
its own brand promotion or a brand participant shall contribute at
least 50 percent of the total eligible expenditures made on each
approved brand promotion.
(c) A MAP Participant must use its own funds and may not use MAP
program funds to pay any administrative costs of the MAP Participant's
U.S. office(s), including legal fees, except as set forth in this
subpart. Where the MAP Participant uses its own funds to pay for
administrative costs, such costs may be counted in calculating the
amount of contributions the MAP Participant contributes to MAP generic
or brand promotion programs.
(d) Eligible contributions.
(1) In calculating the amount of contributions that it will make,
and the contributions that the U.S. industry (including expenditures to
be made by entities in the applicant's industry in support of the
entities' related promotion activities in the markets covered by the
applicant's application) or State agency will make, the MAP applicant
may include the costs listed under paragraph (d)(2) of this section if:
(i) Expenditures will be made in furtherance of an approved
activity, and
(ii) The contributor has not been and will not be reimbursed by any
source for such costs.
(2) Subject to paragraph (d)(1) of this section, as well as
applicable cost principles (e.g., 2 CFR Parts 220, 225, and 230) to the
extent these principles do not directly conflict with the provisions of
this subpart, eligible contributions are:
(i) Cash;
(ii) Compensation paid to personnel;
(iii) The cost of acquiring materials, supplies or services;
(iv) The cost of office space;
(v) A reasonable and justifiable proportion of general
administrative costs and overhead;
(vi) Payments for indemnity and fidelity bond expenses;
(vii) The cost of business cards that target a foreign audience;
(viii) The cost of seasonal greeting cards;
(ix) Fees for office parking;
(x) The cost of subscriptions that are of a technical, economic, or
marketing nature and that are relevant to the approved activities of
the MAP Participant;
(xi) The cost of activities conducted overseas;
(xii) Credit card fees;
(xiii) The cost of any independent evaluation or audit that is not
required by CCC to ensure compliance with program agreement or
regulatory requirements;
(xiv) The cost of giveaways, awards, prizes and gifts;
(xv) The cost of product samples;
(xvi) Fees for participating in U.S. government sponsored or
endorsed export promotion activities;
[[Page 29505]]
(xvii) The cost of air and local travel in the United States;
(xviii) Payment of employee's or contractor's share of personal
taxes;
(xix) STRE and the cost associated with trade shows, seminars, and
entertainment conducted in the United States;
(xx) Other administrative expenses (e.g., supervisory travel from
the U.S. to an overseas office); and
(xxi) The cost of any activity expressly listed as reimbursable in
this subpart.
(3) The following are not eligible contributions:
(i) Any portion of salary or compensation of an individual who is
the target of an approved promotional activity;
(ii) Any expenditure, including that portion of salary and time
spent, related to promoting membership in the Participant organization
(sometimes referred to in the industry as ``backsell'');
(iii) Any land costs other than allowable costs for office space;
(iv) Depreciation;
(v) The cost of refreshments and related equipment provided to
office staff;
(vi) The cost of insuring articles owned by private individuals;
(vii) The cost of any arrangement that has the effect of reducing
the selling price of a U.S. agricultural commodity;
(viii) The cost of product development, product modifications, or
product research;
(ix) Slotting fees or similar sales expenditures;
(x) Membership fees in clubs and social organizations; and
(xi) Any expenditure for an activity prior to CCC's approval of
that activity.
(4) CCC shall determine, at CCC's discretion, whether any cost not
expressly listed in this section may be included by the MAP Participant
as an eligible contribution.
Sec. 1485.17 Reimbursement rules.
(a) A MAP Participant may seek reimbursement for an eligible
expenditure if:
(1) The expenditure was made in furtherance of an approved
activity; and
(2) The Participant has not been and will not be reimbursed for
such expenditure by any other source.
(b) Subject to paragraphs (a) and (d) of this section, as well as
applicable cost principles (e.g., 2 CFR Parts 220, 225, and 230) to the
extent these principles do not directly conflict with the provisions of
this subpart, for either brand or generic promotion activities, CCC
will reimburse, in whole or in part, the cost of:
(1) Production and placement of advertising, in print, electronic
media, billboards, or posters, which may include advertising the
availability of price discounts, except that advertising associated
with a coupon or price discount for the MAP promoted product is not
reimbursable. If advertising is related to both coupons or price
discounts for products other than the MAP Participant's promoted
products as well as for MAP-promoted products, expenditures for such
advertising will not be reimbursed in whole or in part (e.g.,
expenditures may not be prorated and submitted for reimbursement).
Electronic media includes, but is not limited to, radio, television,
electronic mail, internet, telephone, text messaging, and podcasting;
(2) Production and distribution of banners, recipe cards, table
tents, shelf talkers, and other similar point of sale materials;
(3) Direct mail advertising;
(4) In-store and food service promotions, product demonstrations to
the trade and to consumers, and distribution of product samples (but
not the purchase of the product samples);
(5) Temporary displays and rental of space for temporary displays;
(6) Expenditures, other than travel expenditures, associated with
seminars and educational training, whether conducted in the United
States or outside the United States;
(7) Subject to Sec. 1485.17(b)(18), expenditures, other than
travel expenditures, associated with retail, trade and consumer
exhibits and shows, whether held outside or inside the United States,
including participation fees, booth construction, transportation of
related materials, rental of space and equipment, and duplication of
related printed materials. However, with regard to non-travel
expenditures associated with retail, trade and consumer exhibits and
shows held inside the United States, such expenditures are reimbursable
only if the exhibit or show is: (1) a food or agricultural show with no
less than 30% of exhibitors selling food or agricultural products, (2)
an international show that targets buyers, distributors and the like
from more than one foreign country and no less than 15% of its visitors
are from countries other than the host country, and (3) an exhibit or
show that the MAP Participant has not participated in within the last
three years using funds from a source other than the MAP. CCC will
compile a list of approved retail, trade and consumer exhibits and
shows held inside the United States for which MAP reimbursement is
available and such list will be announced to MAP Participants via a MAP
notice issued on FAS' Web site;
(8) Subject to Sec. 1485.17(b)(18), international travel
expenditures, not to exceed the full fare economy rate, including any
fees for modifying the originally purchased airline ticket, per diem,
passports, visas and inoculations, as allowed under the U.S. Federal
Travel Regulations (41 CFR parts 301 through 304), for no more than two
representatives of a single brand participant (or MAP Participant
directly running its own brand program) to exhibit their company's (or
cooperative's) products at a retail, trade, or consumer exhibit or show
held outside the United States. Representatives may include employees
and board members of private companies, employees or members of
cooperatives, or any broker, consultant, or marketing representative
contracted by the company or cooperative to represent the company or
cooperative in sales transactions;
(9) Subscriptions that are of a technical, economic, or marketing
nature and that are relevant to the approved activities of the MAP
Participant;
(10) Demonstrators, interpreters, translators, receptionists, and
similar temporary workers who help with the implementation of
individual promotional activities, such as trade shows, in-store
promotions, food service promotions, and trade seminars;
(11) Giveaways, awards, prizes, gifts and other similar promotional
materials, subject to such reimbursement limitation as CCC may
determine and announce in writing to MAP Participants via a MAP notice
issued on FAS' Web site. Reimbursement is available only when: (1) The
items are described in detail with a per unit cost in an approved
strategic plan and (2) distribution of the promotional item is not
contingent upon the consumer, or other target audience, purchasing a
good or service to receive the promotional item;
(12) The design and production of packaging, labeling or origin
identification, to be used during the program year in which the
expenditure is made, if such packaging, labeling or origin
identification is necessary to meet the importing requirements of a
foreign country;
(13) The design, production, and distribution of coupons for
products other than the MAP Participant's promoted products. If such
activities include both coupons or price discounts for products other
than the MAP Participant's promoted products as well as for MAP-
promoted products,
[[Page 29506]]
expenditures for such activities will not be reimbursed in whole or in
part (e.g., expenditures may not be prorated and submitted for
reimbursement);
(14) An audit of a MAP Participant as required by Office of
Management and Budget Circular A-133 if the MAP is the MAP
Participant's largest source of Federal funding;
(15) The translation of written materials as necessary to carry out
approved activities;
(16) Expenditures associated with developing, updating, and
servicing Web sites on the Internet that clearly target a foreign
audience;
(17) International travel expenditures, not to exceed the full fare
economy rate, including any fees for modifying the originally purchased
airline ticket, per diem, passports, visas and inoculations, as allowed
under the U.S. Federal Travel Regulations (41 CFR parts 301 through
304), incurred for a foreign trade mission conducted outside the United
States that is an activity under an approved branded program and that
has met the following conditions:
(i) Trade mission travel for company (or cooperative)
representatives was identified as a separate approved activity in the
MAP Participant's UES;
(ii) The trade mission included representatives, as defined in
Sec. 1485.17(b)(8), from a minimum of five different companies (or
cooperatives), and no more than two representatives from each
participating company (or cooperative);
(iii) The appropriate FAS overseas office supported the trade
mission by dedicating meaningful funding or other resources (such as
facilities or staff time) to the activity; and
(iv)(A) The MAP Participant with the approved brand program
produced an itinerary or agenda for the trade mission that demonstrated
that company (or cooperative) representatives would be engaged for a
minimum of 6 hours per day (except for the first and last days of the
mission) in trade mission activities that include, at a minimum, each
of the following:
(1) A product showcase where the FAS overseas office approved an
invitation list of qualified buyers;
(2) Pre-arranged one-on-one business meetings; and
(3) Evaluation and feedback sessions with FAS staff and trade
mission sponsors.
(B) Reimbursement is conditional on the MAP Participant having
notified in writing the Attach[eacute]/Counselor in the destination
country in advance of the travel;
(18) Where USDA has sponsored or endorsed a U.S. pavilion at a
retail, trade and consumer exhibit or show, whether held outside or
inside the United States, MAP funds may be used to reimburse the travel
and/or non-travel expenditures of only those MAP Participants located
within the U.S. pavilion. Such expenditures must also adhere to the
standard terms and conditions of the U.S. pavilion organizer. Upon
written request, CCC may temporarily waive this subsection, on a case
by case basis, where: the trade show is segregated into product
pavilions, or a company's distributor or importer is located outside
the U.S. pavilion. Such waiver will be provided to the MAP Participant
in writing; and
(19) Contracts with U.S. based organizations when the only
contracted service such organizations provide to a MAP Participant is
carrying out a specific market promotion activity in the United States
directed to a foreign audience (e.g., a trade mission of foreign buyers
coming to the United States to visit U.S. exporters). Such contracts
may be reimbursable as a direct promotional expense. If a U.S. based
organization provides administrative services to the MAP Participant's
domestic home office during a program year, any direct promotional
services such organization provides to the Participant, whether for the
Participant's domestic or overseas offices, during the same program
year are not reimbursable.
(c) Subject to paragraphs (a) and (d) of this section, but for
generic promotion activities only, CCC will also reimburse, in whole or
in part, the cost of:
(1) Compensation and allowances for housing, educational tuition,
and cost of living adjustments paid to a U.S. citizen employee or a
U.S. citizen contractor stationed overseas, except CCC will not
reimburse that portion of:
(i) The total of compensation and allowances that exceed 125
percent of the level of a GS-15 Step 10 salary for U.S. Government
employees, and
(ii) Allowances that exceed the rate authorized for U.S. Embassy
personnel;
(2) Approved supergrade salaries for non-U.S. citizens and non-U.S.
contractors stationed overseas;
(3) Compensation of non-U.S. citizen staff employees or non-U.S.
contractors stationed overseas subject to the following limitations:
(i) Where there is a local U.S. Embassy Foreign Service National
(FSN) salary plan, CCC will not reimburse any portion of such
compensation that exceeds the compensation prescribed for the most
comparable position in the FSN salary plan, except for approved
supergrades, or
(ii) Where an FSN salary plan does not exist, CCC will not
reimburse any portion of such compensation that exceeds locally
prevailing levels, which the MAP Participant shall document by a salary
survey or other means, except for approved supergrades;
(4) A retroactive salary adjustment for non-U.S. citizen staff
employees or non-U.S. contractors stationed overseas that conforms to a
change in FSN salary plans, effective as of the date of such change;
(5) Accrued annual leave as of the time employment is terminated or
as of such time as required by local law;
(6) Overtime paid to clerical staff of approved MAP-funded overseas
offices;
(7) Temporary contractor fees for contractors stationed overseas,
except CCC will not reimburse any portion of any such fee that exceeds
the daily gross salary of a GS-15, Step 10 for U.S. Government
employees in effect on the date the fee is earned, unless a bidding
process reveals that such a contractor is not available at or below
that salary rate;
(8)(i) Subject to Sec. 1485.17(b)(18), international travel
expenditures, not to exceed the full fare economy rate, including any
fees for modifying the originally purchased airline ticket, per diem,
passports, visas and inoculations, for activities held outside the
United States or in the United States, as allowed under the U.S.
Federal Travel Regulations (41 CFR parts 301 through 304), except that
if the activity is participation in a retail, trade, or consumer
exhibit or show held inside the United States, international travel
expenditures are covered only if the exhibit or show is: (1) A food or
agricultural show with no less than 30% of exhibitors selling food or
agricultural products, (2) an international show that targets buyers,
distributors and the like from more than one foreign country and no
less than 15% of its visitors are from countries other than the host
country, and (3) an exhibit or show that the MAP Participant has not
participated in within the last three years using funds from a source
other than the MAP. CCC will compile a list of approved retail, trade
and consumer exhibits and shows held inside the United States for which
MAP reimbursement is available and such list will be announced to MAP
Participants via a MAP notice issued on FAS' Web site.
(ii) CCC generally will not reimburse any portion of air travel,
including any fees for modifying the originally purchased ticket, in
excess of the full fare economy rate or when the MAP Participant fails
to notify the Attach[eacute]/Counselor in the destination country in
advance of the travel, unless the CCC determines it was impractical to
provide such notice. If a traveler flies in
[[Page 29507]]
business class or a different premium class, the basis for
reimbursement will be the full fare economy class rate for the same
flight and the MAP Participant shall provide documentation establishing
such full fare economy class rate to support its reimbursement claim.
If economy class is not offered for the same flight or if the traveler
flies on a charter flight, the basis for reimbursement will be the
average of the full fare economy class rate for flights offered by
three different airlines between the same points on the same date and
the MAP Participant shall provide documentation establishing such
average of the full fare economy class rates to support its
reimbursement claim.
(iii) In very limited circumstances, the MAP Participant may be
reimbursed for air travel up to the business class rate (i.e., a
premium class rate other than the first class rate) upon prior written
approval by CCC. Such circumstances are:
(A) Regularly scheduled flights between origin and destination
points do not offer economy class (or equivalent) airfare and the MAP
Participant receives written documentation from its travel agent to
that effect at the time the tickets are purchased;
(B) Business class air travel is necessary to accommodate an
eligible traveler's disability. Such disability must be substantiated
in writing by a physician; and
(C) An eligible traveler's origin and/or destination are outside of
the continental United States and the scheduled flight time, beginning
with the scheduled departure time, ending with the scheduled arrival
time, and including stopovers and changes of planes, exceeds 14 hours.
In such case, per diem and other allowable expenses will also be
reimbursable for the day of arrival. However, no expenses will be
reimbursable for a rest period or for any non-work days (e.g.,
weekends, holidays, personal leave, etc.) immediately following the
date of arrival.
(iv) Alternatively, in lieu of reimbursing up to the business class
rate in such circumstances, CCC will reimburse economy class airfare
plus per diem and other allowable travel expenses related to a rest
period of up to 24 hours, either en route or upon arrival at the
destination. For a trip with multiple destinations, each origin/
destination combination will be considered separately when applying the
14 hour rule for eligibility of reimbursement of business class travel
or rest period expenses. A stopover is the time a traveler spends at an
airport, other than the originating or destination airport, which is a
normally scheduled part of a flight. A change of planes is the time a
traveler spends at an airport, other than the originating or
destination airport, to disembark from one flight and embark on
another. All travel should follow a direct or usually traveled route.
Under no circumstances should a traveler select flights in a manner
that extends the scheduled flight time to beyond 14 hours in part to
secure eligibility for reimbursement of business class travel;
(9) Automobile mileage at the local U.S. Embassy rate or rental
cars while in travel status;
(10) Other allowable expenditures while in travel status as
authorized by the U.S. Federal Travel Regulations (41 CFR parts 301
through 304);
(11) Organization costs for overseas offices approved in MAP
program agreements. Such costs include incorporation fees, brokers'
fees, fees to attorneys, accountants, or investment counselors, whether
or not employees of the organization, incurred in connection with the
establishment or reorganization of the overseas office, and rent,
utilities, communications originating overseas, office supplies,
accident liability insurance premiums, and routine accounting and legal
services required to maintain the overseas office;
(12) The purchase, lease, or repair of, or insurance premiums for,
capital goods that have an expected useful life of at least 1 year,
such as furniture, equipment, machinery, removable fixtures, draperies,
blinds, floor coverings, computer hardware and software, and portable
electronic communications devices (including mobile phones, wireless
email devices, personal digital assistants);
(13) Such premiums for health or accident insurance and other
benefits for foreign national employees that the employer is required
by law to pay;
(14) Accident liability insurance premiums for facilities used
jointly with third-party participants for MAP activities or for MAP-
funded travel of third-party participants;
(15) Market research, including research to determine the types of
products that are desired in a market;
(16) Independent evaluations and audits, if not otherwise required
by CCC, to ensure compliance with program requirements;
(17) Legal fees to obtain advice on the host country's labor laws;
(18) Employment agency fees;
(19) STRE incurred outside of the United States, and STRE incurred
in conjunction with an approved activity taking place within the United
States with prior written approval from CCC. MAP Participants are
required to use the appropriate American Embassy representational
funding guidelines for breakfasts, lunches, dinners and receptions. MAP
Participants may exceed Embassy guidelines only when they have received
written authorization from the FAS Agricultural Counselor at the
Embassy. The amount of unauthorized STRE expenses that exceed the
guidelines will not be reimbursed. MAP Participants must pay the
difference between the total cost of STRE events and the appropriate
amount as determined by the guidelines. For STRE incurred in the United
States, the MAP Participant should provide, in its request for
approval, the basis for determining its proposed expenses;
(20) Educational travel of dependent children, visitation travel,
rest and recuperation travel, home leave travel, emergency visitation
travel for U.S. overseas employees allowed under the Foreign Affairs
Manual published by the U.S. Department of State;
(21) Evacuation payments (safe haven) and shipment and storage of
household goods and motor vehicles;
(22) U.S. office(s) administrative support expenses for the
National Association of State Departments of Agriculture, the SRTGs,
and the Intertribal Agriculture Council;
(23) Non-travel expenditures associated with conducting
international staff conferences held either in or outside the United
States;
(24) Subject to Sec. 1485.17(b)(18), domestic travel expenditures,
as allowed under the U.S. Federal Travel Regulations (41 CFR parts 301
through 304), for international retail, trade and consumer exhibits and
shows conducted in the United States upon prior written approval by
CCC. Domestic travel expenses to such a show or exhibit are covered
only if the exhibit or show is: (1) A food or agricultural show with no
less than 30% of exhibitors selling food or agricultural products, (2)
an international show that targets buyers, distributors and the like
from more than one foreign country and no less than 15% of its visitors
are from countries other than the host country, and (3) an exhibit or
show that the MAP Participant has not participated in within the last
three years using funds from a source other than the MAP. CCC will
compile a list of approved retail, trade and consumer exhibits and
shows held inside the United States for which MAP reimbursement is
available and such list will be announced to MAP
[[Page 29508]]
Participants via a MAP notice issued on FAS' Web site;
(25) Domestic travel expenditures, as allowed under the U.S.
Federal Travel Regulations (41 CFR parts 301 through 304), for seminars
and educational training conducted in the United States;
(26) Domestic travel expenditures, as allowed under the U.S.
Federal Travel Regulations (41 CFR parts 301 through 304), for one home
office MAP Participant employee, one MAP Participant board member, or a
state department of agriculture employee paid by the MAP Participant,
when such individual accompanies foreign trade missions or technical
teams while traveling in the United States where the following
conditions are met:
(i) Such trade missions or technical team visits are identified in
the MAP Participant's UES;
(ii) Such trade missions or technical team visits have been
approved by CCC; and
(iii) The MAP-sponsored traveler submits a follow-up trip report to
CCC that includes the following:
(A) Purpose for the individual's participation;
(B) Any pre-arranged business meetings;
(C) Itinerary and/or agenda for the trip; and
(D) Feedback from sponsors and trade mission/technical team members
on the success of the trip.
(27) Approved demonstration projects;
(28) Expenditures related to copyright, trademark, or patent
registration, including attorney fees;
(29) Rental or lease expenditures for storage space for program-
related materials;
(30) Business cards that target a foreign audience;
(31) Expenditures associated with developing, updating, and
servicing Web sites on the Internet that: Contain a message related to
exporting or international trade, include a discernible ``link'' to the
FAS/Washington homepage or an FAS overseas homepage, and have been
specifically approved by the appropriate FAS commodity division.
Expenditures related to Web sites or portions of Web sites that are
accessible only to an organization's members are not reimbursable.
Reimbursement claims for Web sites that include any sort of ``members
only'' sections must be prorated to exclude the costs associated with
those areas subject to restricted access;
(32) Expenditures not otherwise prohibited from reimbursement that
are associated with activities held in the United States or abroad
designed to improve market access by specifically addressing temporary,
permanent, or impending technical barriers to trade that prohibit or
threaten U.S. exports of agricultural commodities; and
(33) Membership fees in professional, industry-related
organizations.
(d) CCC will not reimburse any cost of:
(1) Forward year financial obligations, such as severance pay,
attributable to employment of foreign nationals;
(2) Expenses, fines, settlements, judgments or payments relating to
legal suits, challenges or disputes;
(3) The design and production of packaging, labeling or origin
identification, except as specifically allowed in this subpart;
(4) Product development, product modification or product research;
(5) Product samples;
(6) Slotting fees or similar sales expenditures;
(7) The purchase of, construction of, or lease of space for
permanent, non-mobile displays, i.e., displays that are constructed to
remain permanently in the same location beyond one program year.
However, CCC may, at its discretion, reimburse the construction or
purchase of permanent displays on a case-by-case basis, if the
Participant sought and received prior written approval from CCC of such
construction or purchase;
(8) Rental, lease or purchase of warehouse space, except for
storage space for program-related material;
(9) Coupon redemption or price discounts of the MAP promoted
commodity;
(10) Refundable deposits or advances;
(11) Giveaways, awards, prizes, gifts and other similar promotional
materials in excess of the limitation that CCC will determine. Such
determination will be announced in writing via a MAP notice issued on
FAS' Web site;
(12) Alcoholic beverages that are not an integral part of an
approved promotional activity;
(13) The purchase, lease (except for use in authorized travel
status) or repair of motor vehicles;
(14) Travel of applicants for employment interviews;
(15) Unused non-refundable airline tickets or associated penalty
fees, except where travel was restricted by U.S. Government action or
advisory;
(16) Independent evaluations or audits, including evaluations or
audits of the activities of a subcontractor, if CCC determines that
such a review is needed in order to confirm past or to ensure future
program agreement or regulatory compliance;
(17) Any arrangement that has the effect of reducing the selling
price of a U.S. agricultural commodity;
(18) Goods, services and salaries of personnel provided by U.S.
industry or foreign third party;
(19) Membership fees in clubs and social organizations;
(20) Indemnity and fidelity bonds;
(21) Fees for participating in U.S. Government sponsored
activities, other than trade fairs and exhibits;
(22) Business cards that target a U.S. domestic audience;
(23) Seasonal greeting cards;
(24) Office parking fees;
(25) Subscriptions to publications that are not of a technical,
economic, or marketing nature or that are not relevant to the approved
activities of the MAP Participant;
(26) U.S. office(s) administrative expenses, including
communication costs, except as noted in Sec. 1485.17(c)(22) and except
that usage costs for communications devices incurred while on
reimbursable international or domestic travel for approved MAP brand or
generic promotion activities are reimbursable as eligible travel
expenditures as allowed under the U.S. Federal Travel Regulations (41
CFR Parts 301 through 304);
(27) Any expenditure on an activity that includes any derogatory
reference or comparison to other U.S. agricultural commodities;
(28) Payment of U.S. and foreign employees' or contractors' share
of personal taxes, except where a foreign country's laws require the
MAP Participant to pay such employees' or contractors' share;
(29) Any expenditure made for an activity prior to CCC's approval
of that activity;
(30) Contributions to a contingency reserve or any similar
provision made for events the occurrence of which cannot be foretold
with certainty as to time, intensity, or with an assurance of their
happening; and
(31) Expenditures associated with a MAP Participant's creation or
review of their fraud prevention program, contracting procedures, or
brand program operational procedures.
(e) Special rules for approval of supergrades.
(1) With respect to individuals who are not U.S. citizens and who
are hired by MAP Participants either as employees or contractors who
are hired to act as employees, ordinarily, CCC will not reimburse any
portion of such individual's compensation that exceeds the compensation
prescribed for the most comparable position in the FSN
[[Page 29509]]
salary plan applicable to the country in which the employee or
contractor works. However, a MAP Participant may seek a higher level of
reimbursement for a non-U.S. citizen employee or contractor who will be
employed as a country director or regional director by requesting that
CCC approve that employee or contractor as a supergrade.
(2) To request approval of a supergrade, the MAP Participant shall
provide CCC with a detailed description of both the duties and
responsibilities of the position and the qualifications and background
of the employee or contractor concerned. The Participant shall also
justify why the comparable FSN salary level is insufficient.
(3) Where a non-U.S. citizen employee or contractor will be
employed as a country director, the MAP Participant may request
approval for a ``Supergrade I'' salary level, equivalent to a grade
increase over the existing top grade of the FSN salary plan. The
supergrade and its step increases are calculated as the percentage
difference between the second highest and the highest grade in the FSN
salary plan, with that percentage applied to each of the steps in the
top grade. Where the non-U.S. citizen employee or contractor will be
employed as a regional director, with responsibility for activities
and/or offices in more than one country, the MAP Participant may
request approval for a ``Supergrade II'' salary level, which is
calculated relative to a ``Supergrade I'' in the same way the latter is
calculated relative to the highest grade in the FSN salary plan.
(4) A U.S. citizen with dual citizenship with another foreign
country or countries shall not be considered a non-U.S. citizen.
(f) For a brand promotion activity, CCC will reimburse no more than
50 percent of the total eligible expenditures made on that activity.
(g) CCC will reimburse for expenditures made after the conclusion
of a MAP Participant's program year provided:
(1) The activity was approved by CCC prior to the end of the
program year;
(2) The activity was completed within 30 calendar days following
the end of the program year; and
(3) All expenditures were made for the activity within 6 months
following the end of the program year.
(h) A MAP Participant shall not use MAP funds for any activity or
any expenses incurred by the MAP Participant prior to the date of the
program agreement or after the date the program agreement is suspended
or terminated, except as otherwise permitted by CCC.
(i) Except as otherwise provided in this subpart, MAP-funded travel
shall conform to U.S. Federal Travel Regulations (41 CFR parts 301
through 304) and MAP-funded air travel shall conform to the
requirements of the Fly America Act (49 U.S.C. 40118). The MAP
Participant shall notify the Attach[eacute]/Counselor in the
destination countries in writing in advance of any proposed travel.
(j) CCC may determine, at CCC's discretion, whether any cost not
expressly listed in Sec. 1485.17 will be reimbursed.
Sec. 1485.18 Reimbursement procedures.
(a) Participants are required to use CCC's Internet-based UES
system to request reimbursement for eligible MAP expenses. Claims for
reimbursement shall contain the following information:
(1) Activity type--brand or generic;
(2) Activity number;
(3) Commodity aggregate code;
(4) Country code;
(5) Cost category;
(6) Amount to be reimbursed;
(7) If applicable, any reduction in the amount of reimbursement
claimed to offset CCC demand for refund of amounts previously
reimbursed and reference to the relevant compliance report or written
notice; and
(8) If applicable, any amount previously claimed that has not been
reimbursed.
(b) All claims for reimbursement shall be submitted by the MAP
Participant's U.S. office to CCC.
(c) CCC will not reimburse a claim for less than $10,000, except
that CCC will reimburse a final claim for a MAP Participant's program
year for a lesser amount.
(d) CCC will not reimburse claims submitted later than 6 months
after the end of a MAP Participant's program year.
(e) If CCC overpays a reimbursement claim, the MAP Participant
shall repay CCC within 30 days of such overpayment the amount of the
overpayment either by submitting a check payable to CCC or by
offsetting its next reimbursement claim. The MAP Participant shall make
such payment in U.S. dollars, unless otherwise approved in advance by
CCC.
(f) If a MAP Participant receives a reimbursement or offsets an
advanced payment which is later disallowed, the MAP Participant shall
repay CCC within 30 days of such disallowance the amount disallowed
either by submitting a check payable to CCC or by offsetting its next
reimbursement claim. The MAP Participant shall make such payment in
U.S. dollars, unless otherwise approved in advance by CCC.
(g) MAP funds may be expended by MAP Participants only on
legitimate, approved activities as set forth in the program agreement
and approval letter. If a MAP Participant discovers that MAP funds have
not been properly spent, it shall notify CCC and shall within 30 days
of its discovery repay CCC the amount owed either by submitting a check
payable to CCC or by offsetting its next reimbursement claim. The MAP
Participant shall make such payment in U.S. dollars, unless otherwise
approved in advance by CCC.
(h) The MAP Participant shall report any actions that may have a
bearing on the propriety of any claims for reimbursement in writing to
CCC.
Sec. 1485.19 Advances.
(a) Policy. In general, CCC operates the MAP on a reimbursable
basis.
(b) Exception. A MAP Participant for generic promotion activities
may request an advance of MAP funds from CCC, provided the MAP
Participant meets the criteria for advance payments set forth in the
applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, and
3019). CCC will not approve any request for an advance submitted later
than 3 months after the end of a MAP Participant's program year. At any
given time, total payments advanced shall not exceed 40 percent of a
MAP Participant's approved generic activity budget for the program
year. CCC will not advance funds to a MAP Participant for brand
promotion activities. When approving a request for an advance, CCC may
require the MAP Participant to carry adequate fidelity bond coverage
when the absence of such coverage is considered to create an
unacceptable risk to the interests of the . Whether an ``unacceptable
risk'' exists in a particular situation will depend on a number of
factors, such as, for example, the Participant's history of performance
in MAP; the Participant's perceived financial stability and resources;
and any other factors presented in the particular situation that may
reflect on the Participant's responsibility or the riskiness of its
activities.
(c) Interest. A MAP Participant shall deposit and maintain in an
insured bank account in the United States all funds advanced by CCC.
The account shall be interest-bearing, unless the exceptions in the
applicable parts of this title apply (e.g., 7 CFR Parts 3015, 3016 and
3019). Interest earned by the MAP Participant on funds advanced by CCC
is not program income. The MAP Participant shall remit any interest
earned on the
[[Page 29510]]
advanced funds to the appropriate entity as set forth in the applicable
parts of this title.
(d) Refunds due CCC. A MAP Participant shall fully expend all
advances on approved generic promotion activities within 90 calendar
days after the date of disbursement by CCC. By the end of the 90
calendar days, the MAP Participant must submit reimbursement claims to
offset the advance and submit a check made payable to CCC for any
unexpended balance. The MAP Participant shall make such payment in U.S.
dollars, unless otherwise approved in advance by CCC.
Sec. 1485.20 Employment practices.
(a) A MAP Participant shall enter into written contracts with all
overseas employees who are paid in whole or in part with MAP funds and
shall ensure that all terms, conditions, and related formalities of
such contracts conform to governing local law.
(b) A MAP Participant shall in its overseas offices conform its
office hours, work week, and holidays to local law and to the custom
generally observed by U.S. commercial entities in the local business
community.
(c) A MAP Participant may pay salaries or fees in any currency
(U.S. or foreign). Participants should consult local laws regarding
currency restrictions.
Sec. 1485.21 Financial management.
(a) A MAP Participant shall implement and maintain a financial
management system that conforms to generally accepted accounting
principles. A MAP Participant's financial management system shall
comply with the standards set forth in the applicable parts of this
title (e.g., 7 CFR Parts 3015, 3016 and 3019).
(b) A MAP Participant shall institute internal controls and provide
written guidance to commercial entities participating in its activities
to ensure their compliance with these regulations.
(c) A MAP Participant shall retain all records concerning a MAP
program transaction for a period of 5 years after completion of the
program transaction and permit CCC to have full and complete access,
for such 5-year period, to such records. These records shall include
all documents related to employment of any employees whose salaries are
reimbursed in whole or in part with MAP funds, whether such employees
are based in the United States or overseas, such as employment
applications, contracts, position descriptions, leave records, salary
changes, and all records pertaining to contractors.
(d) A MAP Participant shall maintain its records of expenditures
and contributions in a manner that allows it to provide information by
activity plan, country, activity number, and cost category. Such
records shall include:
(1) Receipts for all STRE (actual vendor invoices or restaurant
checks, rather than credit card receipts);
(2) Original receipts for any other program-related expenditure in
excess of $75.00. CCC may, from time to time, determine a different
minimum level and announce that minimum level in writing to all MAP
Participants via a MAP notice issued on the FAS Web site;
(3) The exchange rate used to calculate the dollar equivalent of
expenditures made in a foreign currency and the basis for such
calculation;
(4) Copies of reimbursement claims;
(5) An itemized list of claims charged to each of the MAP
Participant's CCC resources accounts;
(6) Documentation with accompanying English translation supporting
each reimbursement claim, including original evidence to support the
financial transactions such as canceled checks, receipted paid bills,
contracts or purchase orders, per diem calculations, travel vouchers,
and credit memos; and
(7) Documentation supporting contributions. These must include the
dates, purpose, and location of the activity for which the cash or in-
kind items were claimed as a contribution; who conducted the activity;
the participating groups or individuals; and, the method of computing
the claimed contributions. MAP Participants must retain and make
available for compliance review documentation related to claimed
contributions.
(e) Upon request, a MAP Participant shall provide to CCC originals
of documents supporting reimbursement claims.
Sec. 1485.22 Reports.
(a)End-of-Year Contribution Report. Not later than 6 months after
the end of its program year, a MAP Participant shall submit two copies
of a report that identifies, by cost category and in U.S. dollar
equivalent, contributions made by the Participant, the U.S. industry,
and the States during that program year. A suggested format of a
contribution report is available from FAS. Foreign third party
contributions are not included in the end-of-year contribution report.
(b)Trip reports. Not later than 45 days after completion of travel
(other than local travel), a MAP Participant shall electronically
submit a trip report. The report must include the name(s) of the
traveler(s), purpose of travel, itinerary, names and affiliations of
contacts, and a brief summary of findings, conclusions,
recommendations, and specific accomplishments.
(c) Research reports. Not later than 6 months after the end of its
program year, a MAP Participant shall submit a report on any research
conducted pursuant to the approved MAP program.
(d) Evaluation reports. Not later than 6 months after the end of
its program year, a MAP Participant shall submit a report on any
evaluations conducted in accordance with the approved MAP program.
(e) Where CCC is designated the cognizant agency for audit, CCC may
require the MAP Participant to submit to CCC an annual OMB Circular A-
133 audit in accordance with 7 CFR Part 3052. If CCC requires an
additional audit with respect to a particular agreement, the MAP
Participant shall arrange for such audit and shall submit to CCC, in
the manner to be specified by CCC, such audit of the agreement.
(f) CCC may require the submission of additional reports.
(g) A MAP Participant's program agreement and/or approval letter
shall specify to whom the Participant shall submit the reports required
in this section.
Sec. 1485.23 Evaluation.
(a) Policy. (1) The Government Performance and Results Act (GPRA)
of 1993 (5 U.S.C. 306; 31 U.S.C. 1105, 1115-1119, 3515, 9703-9704)
requires performance measurement of Federal programs, including the
MAP. Evaluation of the MAP's effectiveness will depend on a clear
statement by Participants of goals to be met within a specified time,
schedule of measurable milestones for gauging success, plan for
achievement, and assessment of results of activities at regular
intervals. The overall goal of the MAP and of individual Participants'
programming is to achieve or maintain sales that would not have
occurred in the absence of MAP funding. A MAP Participant that can
demonstrate such sales, taking into account extenuating factors beyond
the Participant's control, will have met the overall objective of the
GPRA and the need for evaluation.
(2) Evaluation is an integral element of program planning and
implementation, providing the basis for the strategic plan. The
evaluation results guide the development and scope of a MAP
Participant's program, contributing to program accountability,
[[Page 29511]]
and providing evidence of program effectiveness.
(b) All MAP Participants must report annual results against their
target market and/or regional constraint/opportunity performance
measures. These are outcome results usually based on multiple
activities and should demonstrate progress made in the market. This
report shall be completed and submitted to CCC no later than 6 months
following the end of the Participant's program year.
(c) MAP Participants conducting a branded program must also
complete a brand promotion evaluation. A brand promotion evaluation is
a review of the U.S. and foreign commercial entities' export sales to
determine whether the activity achieved the goals specified in the
approved MAP program. This evaluation shall be completed and submitted
to CCC no later than 6 months following the end of the Participant's
program year.
(d) When appropriate or required by CCC, a MAP Participant shall
complete a program evaluation. A program evaluation is a review of the
MAP Participant's entire program, or an appropriate portion of the
program as agreed to by the MAP Participant and CCC, to determine the
effectiveness of the MAP Participant's strategy in meeting specified
goals. Actual scope and timing of the program evaluation shall be
determined by the MAP Participant and CCC and specified in the approval
letter. A MAP Participant shall submit, via a cover letter to CCC, an
executive summary that assesses the program evaluation's findings and
recommendations and proposed changes in program strategy or design as a
result of the evaluation. In addition to the requirements set forth in
the applicable parts of this title (e.g., 7 CFR Parts 3015, 3016, and
3019), a program evaluation shall contain:
(1) The name of the party conducting the evaluation;
(2) The scope of the evaluation;
(3) A concise statement of the market constraint(s)/
opportunity(ies) and the goals specified in the approved strategic
plan;
(4) A description of the evaluation methodology;
(5) A description of export sales achieved;
(6) A summary of the findings, including an analysis of the
strengths and weaknesses of the program(s); and
(7) Recommendations for future programs.
(e) On an annual basis, or more often when appropriate or required
by CCC, a MAP Participant shall complete and submit program success
stories. CCC will announce to all MAP Participants in writing via a MAP
notice issued on the FAS Web site the detailed requirements for
completing and submitting program success stories.
Sec. 1485.24 Compliance reviews and notices.
(a) USDA staff may conduct compliance reviews of MAP Participants'
activities under the MAP program. MAP Participants shall cooperate
fully with relevant USDA staff conducting compliance reviews and shall
comply with all requests from USDA staff to facilitate the conduct of
such reviews.
(b) Upon conclusion of the compliance review, USDA staff will
provide either a written compliance report or a letter to the MAP
Participant. USDA staff will issue a compliance report if it appears
that CCC may be entitled to recover funds from that Participant and/or
it appears that the Participant is not complying with any of the terms
or conditions of the program agreement, approval letter, or the
applicable laws and regulations. The compliance report will explain the
basis for any recovery of funds from the Participant. Within 30 days of
the date of the compliance report, the MAP Participant shall repay CCC
the amount owed either by submitting a check payable to CCC or by
offsetting its next reimbursement claim. The MAP Participant shall make
such payment in U.S. dollars, unless otherwise approved in advance by
CCC. If, however, a MAP Participant notifies CCC within 30 days of the
date of the compliance report that the Participant intends to file an
appeal pursuant to Sec. 1485.24(e), the amount owed to CCC by the MAP
Participant is not due until the appeal procedures are concluded and
CCC has made a final determination as to the amount owed. In the
absence of any finding of funds due to CCC or other non-compliance, CCC
will issue a letter to the MAP Participant. If, as a result of a
compliance review, CCC determines that further review is needed in
order to ensure compliance with the requirements of MAP, CCC may
require the Participant to contract for an independent audit.
(c) In addition, CCC may notify a MAP Participant in writing at any
time if CCC determines that CCC may be entitled to recover funds from
the Participant. CCC will explain the basis for any recovery of funds
from the Participant in the written notice. The MAP Participant shall
within 30 days of the date of the notice repay CCC the amount owed
either by submitting a check payable to CCC or by offsetting its next
reimbursement claim. The MAP Participant shall make such payment in
U.S. dollars, unless otherwise approved in advance by CCC. If, however,
a MAP Participant notifies CCC within 30 days of the date of the
written notice that the Participant intends to file an appeal pursuant
to Sec. 1485.24(e), the amount owed to CCC by the MAP Participant is
not due until the appeal procedures are concluded and CCC has made a
final determination as to the amount owed.
(d) The fact that a compliance review has been conducted by USDA
staff does not signify that a MAP Participant is in compliance with its
program agreement, approval letter and/or applicable laws and
regulations.
(e) Appeals.
(1) A MAP Participant may, within 60 days of the date of the
compliance report or written notice from CCC, submit a written response
to CCC appealing the report or notice. CCC, at its discretion, may
extend the period for response.
(2) After review of the Participant's response, CCC shall determine
whether the Participant owes any funds to CCC and will inform the
Participant in writing of the basis for the determination. CCC will
initiate action to collect such amount by providing the Participant a
written demand for payment of the debt pursuant to Debt Settlement
Policies and Procedures, 7 CFR part 1403.
(3) Within 30 days of the date of the determination, the
Participant may request in writing that CCC reconsider the
determination and shall submit in writing the basis for such
reconsideration. The Participant may also request a hearing.
(4) If the Participant requests a hearing, CCC will set a date and
time for the hearing. The hearing will be an informal proceeding. A
transcript will not ordinarily be prepared unless the Participant bears
the cost of a transcript; however, CCC may in its discretion have a
transcript prepared at CCC's expense.
(5) CCC will base its final determination upon information
contained in the administrative record. The Participant must exhaust
all administrative remedies contained in this section before pursuing
judicial review of a determination by CCC.
Sec. 1485.25 Failure to make required contribution.
A MAP Participant's required contribution will be specified in the
approval letter. If the MAP Participant's required contribution is
specified as a dollar amount and the MAP Participant does not make the
required contribution, the MAP Participant shall
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pay to CCC in dollars the difference between the amount actually
contributed and the amount specified in the approval letter. If the MAP
Participant's required contribution is specified as a percentage of the
total amount reimbursed by CCC, the MAP Participant may either return
to CCC the amount of funds reimbursed by CCC to increase its actual
contribution percentage to the required level or pay to CCC in dollars
the difference between the amount actually contributed and the amount
of funds necessary to increase its actual contribution percentage to
the required level. A MAP Participant shall remit such payment within
six months after the end of its program year. The MAP Participant shall
make such payment in U.S. dollars, unless otherwise approved in advance
by CCC.
Sec. 1485.26 Submissions.
For all permissible methods of delivery, submissions required by
this subpart shall be deemed submitted as of the date received by CCC.
Sec. 1485.27 Disclosure of program information.
(a) Documents submitted to CCC by MAP Participants are subject to
the provisions of the Freedom of Information Act (FOIA), 5 U.S.C. 552,
7 CFR part 1, subpart A--Official Records, and specifically 7 CFR 1.12,
Handling Information from a Private Business.
(b) Any research conducted by a MAP Participant pursuant to a MAP
program agreement and/or approval letter shall be subject to the
provisions relating to intangible property in the applicable parts of
this title (e.g., 7 CFR Parts 3015, 3016, and 3019).
Sec. 1485.28 Ethical conduct.
(a) A MAP Participant shall conduct its business in accordance with
the laws and regulations of the country in which an activity is carried
out and in accordance with applicable U.S. Federal, state and local
laws, and regulations. A MAP Participant shall conduct its business in
the United States in accordance with applicable Federal, state and
local laws and regulations. All MAP Participants must comply with the
regulations in the applicable parts of this title (e.g., 7 CFR Parts
1485, 3015, 3016, 3018, 3021, 3019, and 3052).
(b) Except for a U.S. agricultural cooperative or a U.S. for-profit
entity, neither a MAP Participant nor its affiliates shall make export
sales of U.S. agricultural commodities and products covered under the
terms of the applicable MAP agreement. Nor shall such entities charge a
fee for facilitating an export sale. A MAP Participant may, however,
collect check-off funds and membership fees that are required for
membership in the MAP Participant. For the purposes of this paragraph,
``affiliate'' means any partnership, association, company, corporation,
trust, or any other such party in which the Participant has an
investment other than in a mutual fund.
(c) A MAP Participant shall not limit participation in its MAP
activities to members of its organization. Participants shall ensure
that their MAP-funded programs and activities are open to all otherwise
qualified individuals and entities on an equal basis and without regard
to any non-merit factors. The MAP Participant shall publicize its
program and make participation possible for commercial entities
throughout the relevant commodity sector or, in the case of SRTGs,
throughout the corresponding region. This includes providing to such
commercial entities, upon request, a copy of any document in its
possession or control containing market information developed and
produced under the terms of its MAP agreement. The Participant may
charge a fee not to exceed the costs for assembling, duplicating and
distributing the materials. This paragraph does not apply to U.S.
agricultural cooperatives when implementing their own brand program.
(d) A MAP Participant shall select U.S. agricultural industry
representatives to participate in generic MAP activities such as trade
teams, sales teams, and trade fairs based on criteria that ensure
participation on an equitable basis by a broad cross section of the
U.S. industry. If requested by CCC, a MAP Participant shall submit such
selection criteria to CCC for approval.
(e) All MAP Participants should endeavor to ensure fair and
accurate fact-based advertising. Deceptive or misleading promotions may
result in cancellation or termination of a Participant's MAP agreement
and the recovery of CCC funds related to such promotions from the
Participant.
(f) The MAP Participant must report any actions or circumstances
that may have a bearing on the propriety of its MAP program to the
appropriate Attach[eacute]/Counselor, and its U.S. office shall report
such actions or circumstances in writing to CCC.
Sec. 1485.29 Contracting procedures.
(a) Neither CCC nor any other agency of the U.S. Government nor any
official or employee of CCC, FAS, USDA, or the U.S. Government has any
obligation or responsibility with respect to MAP Participant contracts
with third parties.
(b) A MAP Participant shall comply with the procurement standards
set forth below and in the applicable parts of this title when
procuring goods and services and when engaging in construction to
implement program agreements (e.g., 7 CFR Parts 3015, 3016, and 3019).
For purposes of this subpart, the ``small purchase threshold''
referenced in 7 CFR part 3019 is the ``simplified acquisition
threshold'' established by 41 U.S.C. 134.
(c) Each MAP Participant shall establish contracting procedures for
contracts that are funded, in whole or in part, with MAP funds that are
open, fair, and competitive.
(d) Each MAP Participant shall submit to CCC, for CCC approval,
written contracting guidelines for contracts that are funded, in whole
or in part, with MAP funds. CCC will notify all new and existing MAP
Participants in writing in each Participant's annual approval letter
and through the FAS web site as to applicable submission dates for and
dates for approvals of contracting guidelines. CCC's approval of such
contracting guidelines will remain in place until CCC retracts its
approval in writing, or until new guidelines are approved that
supersede them. Once approved by CCC, these contracting guidelines
shall govern all of a Participant's MAP-funded contracting involving
contracts with an annual value of $35,000 or more. CCC may determine a
different minimum value and announce that minimum value in writing to
all MAP Participants via a MAP notice issued on the FAS Web site. The
guidelines shall indicate the method for evaluating proposals received
for all contract competitions, the method for monitoring and evaluating
performance under contracts, and the method for initiating corrective
action for unsatisfactory performance under contracts. The MAP
Participant may modify and resubmit these guidelines for re-approval at
any time. In addition to the requirements set forth in the applicable
parts of this title (e.g., 7 CFR Parts 3015, 306, 3019), these
guidelines shall include, at a minimum, the following:
(1) Procedures for developing and publicizing requests for
proposals, invitations for bids, and similar documents that solicit
third party offers to provide goods or services. Solicitations for
professional and technical services shall be based on clear and
accurate descriptions of and requirements related to the services to be
procured. Such procedures must include a conflict-of-interest provision
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that states that no employee, officer, board member, or agent thereof
of the MAP Participant will participate in the review, selection, award
or administration of a contract if a real or apparent conflict of
interest would arise. Such a conflict would arise when an employee,
official, board member, agent, or the employee's, officer's, board
member's, agent's family, partners, or an organization that employs or
is about to employ any of the parties indicated herein, has a financial
or other interest in the firm selected for an award. Procedures shall
provide that officers, employees, board members, and agents thereof
shall neither solicit nor accept gratuities, favors, or anything of
monetary value from contractors or subcontractors. Procedures shall
also provide for disciplinary actions to be applied for violations of
such standards by officers, employees, board members or agents thereof;
(2) Procedures for reviewing proposals, bids, or other offers to
provide goods and services. Separate procedures shall be developed for
various situations, including, but not limited to: solicitations for
highly technical services; solicitations for services that are not
common in a specific market; solicitations that yield receipt of three
or more bids; solicitations that yield receipt of fewer than three
bids;
(3) Requirements to conduct all contracting in an openly
competitive manner. Individuals who develop or draft specifications,
requirements, statements of work, invitations for bids, and/or requests
for proposals for procurement of any goods or services, and such
individuals' families or partners, or an organization that employs or
is about to employ any of the aforementioned, shall be excluded from
competition for such procurement. MAP Participants' written contracting
guidelines may detail special situations where the prohibitions in this
subparagraph do not apply, such as in situations involving highly
specialized technical services or situations where the services are not
commonly offered in a specific market;
(4) Requirements to perform and document in the procurement files
some form of price or cost analysis, such as a comparison of price
quotations to market prices or other price indicia, to determine the
reasonableness of the offered prices in connection with every
procurement action that is governed by the contracting guidelines;
(5) Requirements to conduct an appropriate form of competition
every 3 years on all multi-year contracts that are governed by the
contracting guidelines. However, contracts for in-country
representation are not required to be re-competed after the initial
reward. Instead, the performance of in-country representation must be
evaluated and documented by the MAP Participant annually to ensure that
the terms of the contract are being met in a satisfactory manner; and
(6) Requirements for written contracts with each provider of goods,
services, or construction work. Such contracts shall require such
providers to maintain adequate records to account for funds provided to
them by the MAP Participant.
(e) A MAP Participant may undertake MAP promotional activities
directly or through a domestic or foreign third party. However, the MAP
Participant shall remain responsible and accountable to CCC for all MAP
promotional activities and related expenditures undertaken by such
third party and shall be responsible for reimbursing CCC for any funds
that CCC determines should be refunded to CCC in relation to such
third-party's promotional activities and expenditures.
Sec. 1485.30 Property standards.
The MAP Participant shall insure all MAP-funded real property and
equipment acquired in furtherance of program activities and safeguard
such against theft, damage and unauthorized use. The Participant shall
promptly report any loss, theft, or damage of property to the insurance
company.
Sec. 1485.31 Anti-fraud requirements.
(a) All MAP Participants.
(1) All MAP Participants annually shall submit to CCC for approval
a detailed fraud prevention program. CCC will notify all new and
existing MAP Participants in writing in each Participant's annual
approval letter and through the FAS web site as to applicable
submission dates for and dates for approvals of fraud prevention
programs. MAP Participants should review their fraud prevention
programs annually. The fraud prevention program shall, at a minimum,
include an annual review of physical controls and weaknesses, a
standard process for investigating and remediation of suspected fraud
cases, and training in risk management and fraud detection for all
current and future employees. The MAP Participant shall not conduct or
permit any MAP promotion activities to occur unless and until CCC has
communicated in writing approval of the MAP Participant's fraud
prevention program.
(2) The MAP Participant, within five business days of receiving an
allegation or information giving rise to a reasonable suspicion of
misrepresentation or fraud that could give rise to a claim by CCC,
shall report such allegation or information in writing to such USDA
personnel as specified in the Participant's MAP program agreement and/
or approval letter. The MAP Participant shall cooperate fully in any
USDA investigation of such allegation or occurrence of
misrepresentation or fraud and shall comply with any directives given
by CCC or USDA to the MAP Participant for the prompt investigation of
such allegation or occurrence.
(b) MAP Participants with brand programs.
(1) The MAP Participant may charge a fee to brand participants to
cover the cost of the fraud prevention program.
(2) The MAP Participant shall repay to CCC funds paid to a brand
participant through the MAP Participant on claims that the MAP
Participant or CCC subsequently determines are unauthorized or
otherwise non-reimbursable expenses within 30 days of the MAP
Participant's determination or CCC's disallowance. The MAP Participant
shall repay CCC by submitting a check to CCC or by offsetting the MAP
Participant's next reimbursement claim. The MAP Participant shall make
such payment in U.S. dollars, unless otherwise approved in advance by
CCC. A MAP Participant operating a brand program in strict accordance
with an approved fraud prevention program, however, will not be liable
to reimburse CCC for MAP funds paid on such claims if the claims were
based on misrepresentations or fraud of the brand participant, its
employees or agents, unless CCC determines that the MAP Participant was
grossly negligent in the operation of the brand program regarding such
claims. CCC shall communicate any such determination to the MAP
Participant in writing.
Sec. 1485.32 Program income.
Any revenue or refunds generated from an activity, e.g.,
participation fees, proceeds of sales, refunds of value added taxes
(VAT), the expenditures for which have been wholly or partially
reimbursed with MAP funds, shall be used by the MAP Participant in
furtherance of its approved MAP activities in the program period during
which the MAP funds are available for obligation by the MAP
Participant. The use of such revenue or refunds shall be governed by 7
CFR Part 1485. Interest earned on funds advanced by CCC is not program
income.
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Sec. 1485.33 Amendment.
A program agreement may be amended in writing with the consent of
CCC and the MAP Participant.
Sec. 1485.34 Noncompliance with an agreement.
If a MAP Participant fails to comply with any term in its program
agreement or approval letter, CCC may take one or more of the
enforcement actions set forth in the applicable parts of this title
(e.g., 7 CFR Parts 3015, 3016, and 3019) and, if, appropriate, initiate
a claim against the MAP Participant, following the procedures set forth
in this subpart. CCC may also initiate a claim against a MAP
Participant if program income or CCC-provided funds are lost due to an
action or omission of the MAP Participant.
Sec. 1485.35 Suspension, termination, and closeout of agreements.
A program agreement may be suspended or terminated in accordance
with the suspension and termination procedures in the applicable parts
of this title (e.g., 7 CFR Parts 3015, 3016, 3019). If an agreement is
terminated, the applicable parts of this title will apply to the
closeout of the agreement (e.g., 7 CFR Parts 3015, 3016, 3019).
Sec. 1485.36 Paperwork reduction requirements.
The paperwork and recordkeeping requirements imposed by this
subpart have been approved by OMB under the Paperwork Reduction Act of
1980. OMB has assigned control number 0551-0026 for this information
collection.
Dated: May 4, 2012.
Suzanne E Heinen,
Administrator, Foreign Agricultural Service, and Vice President,
Commodity Credit Corporation.
[FR Doc. 2012-11601 Filed 5-16-12; 8:45 am]
BILLING CODE 3410-10-P