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between the cooperating sponsor(s) and the U.S. Government. The Food for Freedom Program Agreement may be specific, listing the kinds and quantities of commodities to be supplied, program objectives, criteria for eligibility of recipients, plan for distribution of commodities, and other specific program provisions in addition to the provisions set forth in this part; or it will state that the cooperating sponsor will comply with this part and such other terms and conditions as set forth in other AID programing documents.

means nonpenal,

(i) "Institutions" public or nonprofit private establishments that are operated for charitable or welfare purposes where needy persons reside and receive meals, including, but not limited to, homes for the aged, mentally and physically handicapped, refugee camps, and leprosy asylums.

(j) "Intergovernmental organizations" means agencies sponsored and supported by the United Nations organization (except the World Food Program and UNRWA) or by two or more nations, one of which is the United States of America.

(k) "Maternal-child feeding, school and other child feeding programs":

(1) Maternal and preschool feeding programs means programs conducted for expecting and lactating mothers and for children below the usual enrollment age for the primary grade at public schools.

(2) School feeding programs refers to programs conducted for the benefit of children enrolled in schools.

(3) Other child feeding programs refers to programs designed to reach preschool or school age, needy children in summer camps, child care centers, orphanages, day playgrounds, nurseries, and similar activities.

(1) "Needy persons" means individuals who are in need of food assistance because of their economic condition. Special consideration shall be given to assistance to needy persons engaged in community and other self-help activities designed to alleviate the causes of the need for such assistance.

(m) "Nonprofit" means that the residue of income over operating expenses accruing in any activity, project, or program is used solely for the operation_of such activity, project, or program.

(n) "Recipient agencies" means schools, institutions, welfare agencies, disaster relief organizations, and public or private agencies whose food distribu

tion functions are sponsored by the cooperating sponsor and who receive commodities for distribution to eligible recipients. A cooperating sponsor may be a recipient agency.

(o) "Recipients" means persons who are eligible to receive commodities for their own use in accordance with the terms and conditions of the Food for Freedom Program Agreement.

(p) "Refugees" means persons who are in need because (1) they fled or were expelled from their country of nationality or residence and are living in a country other than the one in which they hold or have held citizenship, or (2) they fled from their homes as a result of civil strife and are living in a part of their country of nationality or residence other than that in which they normally earned a livelihood.

(q) "School" means a public or nonprofit private facility, or an activity within such facility, which has as its primary purpose the education (except theological education) of children at educational levels which are comparable to high school or under in the United States.

(r) "United Nations Relief and Works Agency" is an intergovernmental organization established by the United Nations for the relief of Palestine refugees in the Near East and supported through contributions of goods and funds by the United States and other donor countries. U.S. commodities and funds are provided under the authority of 68 Stat. 844 of 1954, as amended, 22 U.S.C., paragraph 1927.

(s) "USDA" means the U.S. Department of Agriculture.

(t) "Voluntary agency" means the American National Red Cross and any U.S. voluntary nonprofit agency registered with, and approved by, the Advisory Committee on Voluntary Foreign Aid of the Agency for International Development.

(u) "Welfare agencies" means public or nonprofit private agencies that provide care, including food assistance, to needy persons who are not residents of institutions.

(v) "World Food Program" is an intergovernmental organization sponsored jointly by the United Nations and the Food and Agriculture Organization and supported through contributions of commodities, services and funds by the United States and other donor countries. U.S. commodities and services to the World Food Program are provided under

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The cooperating sponsor shall enter into a written agreement with AID by signing a Food for Freedom Program Agreement which shall incorporate by reference or otherwise the terms and conditions set forth in this part. If the cooperating sponsor is a voluntary agency or an intergovernmental organization, both the foreign government and the cooperating sponsor shall, where practicable, sign the Food for Freedom Program Agreement. If for any reason such signing is not practicable, then the voluntary agency or intergovernmental organization shall enter into a separate written agreement with the foreign government which shall include therein by reference or otherwise the conditions set forth in this part. § 211.4

Availability of commodities.

(a) Distribution and use of commodities. Commodities shall be available for distribution and use in accordance with the provisions of the Food for Freedom Program Agreement and this part.

(b) Transfer of title and delivery. (1) Unless the Food for Freedom Program Agreement provides otherwise, title to the commodity shall pass to the cooperating sponsor at the time and place of delivery f.o.b. or f.a.s. vessels at the U.S. ports, except that in the case of voluntary agencies and intergovernmental organizations, title may pass at the discretion of USDA at other points in the United States.

(2) Voluntary agencies and intergovernmental organizations shall make the necessary arrangements to accept commodities at the points of delivery designated by the USDA.

(c) Processing, handling, transportation, and other costs: (1) The United States will pay processing, handling, transportation, and other incidental costs incurred in making commodities available to cooperating sponsors free on board (f.o.b.) or free along side (f.a.s.) vessel at U.S. ports, or free at inland destinations in the United States except as otherwise provided in this paragraph

(c).

(2) Voluntary agencies and intergovernmental organizations shall reimburse the United States for expenses incurred

at their request and for their accommodation which are in excess of those which the United States would have otherwise incurred in making delivery (i) at the lowest combination of inland and ocean transportation costs to the United States as determined by the United States or (ii) in sizes and types of packages announced as available.

(3) All costs and expenses incurred subsequent to the transfer of title in the United States to cooperating sponsors, except general average contributions and marine salvage costs, shall be borne by them: Provided, That, upon the determination that it is in the interests of the program to do so, the United States may pay or make reimbursement for ocean transportation costs from U.S. ports to the designated ports of entry abroad or in the case of landlocked countries, transportation charges from U.S. ports to designated points of entry abroad.

(d) Transportation authorization. A transportation authorization will be issued to cover the ocean freight paid directly by the United States. When CCC contracts for ocean carriage, disbursement to the carriers shall be made by CCC upon presentation of Standard Form 1113 and three copies of 1113A (Public Voucher for Transportation Charges), together with three copies of the related onboard ocean bill of lading, one copy of which must contain the following certification signed by an authorized representative of the steamship company:

I certify that this document is a true and correct copy of the original on-board ocean bill of lading under which the goods herein described were loaded on the above-named vessel and that the original and all other copies thereof have been clearly marked as not to be certified for billing.

(Name of Steamship Company) By: (Authorized Representative) Such vouchers should be submitted to: Director, Ocean Transportation Division, Foreign Agricultural Service, U.S. Department of Agriculture, Washington, D.C. 20250. As provided in AID Regulation 2 (Part 202 of this chapter), voluntary agencies booking their own vessels will be reimbursed for ocean freight authorized by the United States upon presentation to AID/W (or to a U.S. Bank holding an AID Letter of Commitment) of proof of payment to the ocean carrier.

(e) General average. CCC shall (1) be responsible for settling general average and marine salvage claims, (2) retain the authority to make or authorize any disposition of commodities which have not commenced ocean transit or of which the ocean transit is interrupted, and receive and retain any monetary proceeds resulting from such disposition, (3) in the event of a declaration of general average, initiate and prosecute, and retain all proceeds of, cargo loss and damage claims against ocean carriers and (4) receive and retain any allowance in general average.

(f) Shipping instructions-(1) Shipments booked by CCC. Requests for shipment of commodities shall originate with the cooperating sponsor and shall be submitted to USAID or Diplomatic Post for clearance and transmittal to AID/W. AID/W shall, through cables, airgrams or letters to USAID or Diplomatic Posts, provide cooperating sponsors (and where applicable voluntary agency headquarters) with names of vessels, expected times of arrival (ETAs), and other pertinent information on shipments booked by CCC. At the time of exportation of commodities, applicable ocean bills of lading shall be sent airmail, or by the fastest means available, by the freight forwarder, representing CCC, to USDA, to USAID or Diplomatic Posts (and where applicable to USAID Controller, voluntary agency headquarters, and voluntary agency field representatives), and to the consignee in sufficient time to advise of the arrival of the shipment.

(2) Shipments booked by voluntary agency or intergovernmental organization. Requests for shipment of commodities shall originate with the cooperating sponsor and shall be cleared by the USAID or Diplomatic Post before transmittal to the voluntary agency's or intergovernmental organization's headquarters for concurrence and issuance. USAID or Diplomatic Post shall promptly clear voluntary agency and intergovernmental organization requests for shipment of commodities or, if there is reason for delay or disapproval, advise the cooperating sponsor and AID/W within seven (7) days of receipt of requests for shipment. After the voluntary agency or intergovernmental organization headquarters concurs in the request and issues the order, the original will be sent to USDA with a copy to the USAID or Diplomatic Posts. Headquarters of voluntary agencies and intergovern

mental organizations which book their own shipments shall provide their representatives and the USAID or Diplomatic Posts with the names of vessels, expected times of arrival (ETAs) and other pertinent information on shipments booked. At the time of exportation of commodities, applicable ocean bills of lading shall be sent airmail or by the fastest means available by the freight forwarder, representing the voluntary agency or intergovernmental organization, to USDA, to the USAID or Diplomatic Post (and where applicable to USAID Controller and voluntary agencies' representatives), and to the consignee in the country of destination in sufficient time to advise of the arrival of the shipment. However, voluntary agencies will also forward cable advice of actual exportation to their program directors in countries within the Caribbean area which are supplied by vessels having a rapid and short run from U.S. port to destination.

(g) Tolerances. Delivery by the United States to the cooperating sponsor at point of transfer of title within a tolerance of 5 percent (2 percent in the case of quantities over 10,000 metric tons) plus or minus, of the quantity ordered for shipment shall be regarded as completion of delivery. There shall be no tolerance with respect to the ocean carrier's responsibility to deliver the entire cargo shipped and the United States assumes no obligation for failure by an ocean carrier to complete delivery to port of discharge.

§ 211.5 Obligations of cooperating

sponsors.

(a) Plan of operation. Each cooperating sponsor shall submit to the USAID or Diplomatic Post for the approval of AID/W, within such times and on the forms prescribed by AID/W, a description of the programs it is sponsoring or proposes to sponsor. This description will provide basic information for preparation and amendment of Food for Freedom Program Agreements.

(b) Program supervision. Cooperating sponsors shall provide adequate supervisory personnel for the efficient operation of the program, including personnel to organize, conduct, review, and control distribution of commodities, and, in accordance with AID guidelines, to make internal audits, including warehouse inspections, physical inventories, and enduse checks. Maximum use of volunteer

personnel shall be encouraged, but voluntary agencies shall be represented by a U.S. citizen, resident in the country of distribution or other nearby country approved by AID/W, who is appointed by and responsible to the voluntary agency for distribution of commodities in accordance with the provisions of this part. Intergovernmental organizations and the American National Red Cross shall be represented by a person appointed by and responsible to the intergovernmental organization or the American National Red Cross for the supervision and control of the program in the country of distribution in accordance with the provisions of this part.

(c) Internal audits. Cooperating sponsors shall normally conduct, or arrange to have conducted, at least one comprehensive internal audit annually, or a series of audit examinations which, when combined, will represent a complete review of the Title II program(s) under their jurisdiction. In the event a cooperating sponsor considers such annual comprehensive audit, or series of audits, unnecessary under the circumstances, such cooperating sponsor shall consult the USAID for the purpose of obtaining USAID agreement to an audit schedule other than the normal annual schedule. Copies of reports of these comprehensive audit examinations shall be submitted to USAIDS or Diplomatic Posts as required in § 211.10(b) (3). In the case of programs administered by cooperating governments and intergovernmental organizations, responsibility for conducting internal audit examinations shall be determined by AID/W on a case-by-case basis.

(d) Commodity requirements. Each cooperating sponsor shall submit to the USAID or Diplomatic Post, within such times and on the form prescribed by AID/W, estimates of requirements showing the quantities of commodities required for each program proposed. Requirements shall be summarized for all programs in the country on a form prescribed by AID/W.

(e) Determination of eligibility. Cooperating sponsors shall be responsible for determining that the recipients and recipient agencies to whom they distribute commodities are eligible in accordance with the terms and conditions of the Food for Freedom Program Agreement and this part. Cooperating sponsors shall impose upon recipient agencies responsibility for determining that

the recipients to whom they distribute commodities are eligible. Commodities shall be distributed free of charge except as provided in paragraph (i) of this section, or as otherwise authorized by AID/W.

(f) No discrimination. Cooperating sponsors shall distribute commodities only to eligible recipient agencies and eligible recipients without regard to nationality, race, color, or religious or political beliefs, and shall impose similar conditions upon distribution by recipient agencies.

(g) Public recognition. To the maximum extent practicable, and with the cooperation of the host Government, adequate public recognition shall be given in the press, by radio, and other media that the commodities have been furnished by the people of the United States (and, where applicable, under special programs such as the Alliance for Progress Program). At distribution centers the cooperating sponsor shall, to the extent feasible, display banners, posters, or similar media which shall contain information similar to that prescribed for containers in § 211.6(c). Recipients' individual identification cards shall, insofar as practicable, be imprinted to contain such information.

(h) Containers-(1) Markings. Unless otherwise specified in the Food for Freedom Program Agreement, when commodities are packaged for shipment from the United States, bags and other containers shall be marked with the CCC contract number or other identification, the AID emblem, the Alliance for Progress emblem where applicable, and the following information stated in English and, as far as practicable, in the language of the country receiving the commodity: (i) Name of the commodity.

(ii) Furnished by the people of the United States of America.

(iii) Not to be sold or exchanged (where applicable).

Emblems or other identification of voluntary agencies and intergovernmental organizations may also be added.

(2) Disposal of containers. Cooperating sponsors may dispose of containers, other than containers provided by carriers, in which commodities are received in countries having approved Title II programs, by sale or exchange, or distribute the containers free of charge to eligible food or fiber recipients for their personal use. If the containers are to be

used commercially, the cooperating sponsor must arrange for the removal or obliteration of U.S. Government markings from the containers prior to such

use.

(i) Use of funds. In addition to funds accruing to cooperating sponsors from the sale of containers, funds may also be available from charges made in maternal, preschool, school, and other childfeeding programs where payment by the recipients will be encouraged on the basis of ability to pay. Funds from these sources shall be used for payment of program costs such as transportation, storage, handling, insect and rodent control, rebagging of damaged or infested commodities, and other program expenses specifically authorized by AID to carry out the objectives of the program for which the commodities were furnished. Funds may also be used for payment of indigenous and/or third country personnel including those employed to make internal audits and inspections. However, such funds may not be used to purchase land, to acquire or construct buildings, or to make alterations in existing buildings. Actual out-of-pocket expenses incurred in effecting any sale of containers may be deducted from the sales proceeds.

(j) No displacement of sales. The donation of commodities furnished for these programs shall not result in increased availability for export by the foreign country of the same or like commodities and shall not interfere with or displace sales in the recipient country which might otherwise take place. This requirement may be waived by AID/W to meet emergency or disaster situations.

(k) Commodities borrowed or exchanged. After the date of program approval by AID/W, but before arrival at foreign destination of commodities authorized herein, the cooperating sponsor may, with prior approval of the USAID or Diplomatic Post, borrow same or similar commodities from local sources to meet program requirements provided that: (1) Such of the commodities borrowed as are used in accordance with the terms of the applicable Food for Freedom Program Agreement will be replaced on an equivalent value basis at the time and place that the exchange takes place, as determined by mutual agreement between the cooperating sponsor and the USAID or Diplomatic Post; (2) packaged commodities which are borrowed shall be ap

propriately identified in the language of the country of distribution as having been furnished by the people of the United States; and (3) suitable publicity shall be given to the exchange of commodities as provided in paragraph (g) of this section and containers for borrowed commodities shall be marked to the extent practicable in accordance with § 211.6(c). Transfers of commodities may be made between approved Title II programs to meet emergency disaster requirements or to improve efficiency of operation (for example, to meet temporary shortages due to delays in ocean shipments or inland transportation, or to provide for more rapid distribution of stocks in danger of deterioration). Such transfers must be made at no cost to the U.S. Government and with the concurrence of the cooperating sponsors concerned and with the approval of the USAID or Diplomatic Post. The USAID or Diplomatic Post may, however, provide funds to pay the costs of transfers to meet emergency and/or disaster requirements in which case AID/W shall be advised promptly of the details of the transfer. Commodities transferred as described above shall not be replaced by the U.S. Government unless AID/W authorized such replacement in advance.

(1) Disposal of excessive stock of commodities. If commodities are on hand which cannot be utilized in accordance with the applicable Food for Freedom Program Agreement, the cooperating sponsor shall promptly advise USAID or the Diplomatic Post of the quantities, location, and condition of such commodities, and, where possible shall propose an alternate use of the excess stocks. USAID or Diplomatic Post shall determine the most appropriate use of the excess stocks, and with prior AID/W concurrence, shall issue instructions for disposition. Transportation costs and other charges attributable to transferring commodities from one program to another within the country shall be the responsibility of the cooperating sponsor, except that in case of disaster or emergency, AID/W may authorize the use of disaster or emerency funds to pay for the costs of such transfers.

§ 211.6 Processing, repackaging, and labeling commodities.

(a) Commercial processing and repackaging. Cooperating sponsors may ar

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