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personnel shall be encouraged, but vol- the recipients to whom they distribute untary agencies shall be represented by commodities are eligible. Commodities a U.S. citizen, resident in the country of shall be distributed free of charge exdistribution or other nearby country ap- cept as provided in paragraph (i) of this proved by AID/W, who is appointed by section, or as otherwise authorized by and responsible to the voluntary agency AID/W. for distribution of commodities in accord- (f) No discrimination. Cooperating ance with the provisions of this part. sponsors shall distribute commodities Intergovernmental organizations and the only to eligible recipient agencies and American National Red Cross shall be eligible recipients without regard to narepresented by a person appointed by and tionality, race, color, or religious or poresponsible to the intergovernmental litical beliefs, and shall impose similar organization or the American National conditions upon distribution by recipient Red Cross for the supervision and control agencies. of the program in the country of distri- (g) Public recognition. To the maxibution in accordance with the provisions mum extent practicable, and with the of this part.

cooperation of the host Government, (c) Internal audits. Cooperating spon- adequate public recognition shall be given sors shall normally conduct, or arrange to in the press, by radio, and other media have conducted, at least one comprehen- that the commodities have been fursive internal audit annually, or a series nished by the people of the United of audit examinations which, when com

States (and, where applicable, under spebined, will represent a complete review cial programs such as the Alliance for of the Title II program(s) under their Progress Program). At distribution cenjurisdiction. In the event a cooperating ters the cooperating sponsor shall, to the sponsor considers such annual compre

extent feasible, display banners, posters, hensive audit, or series of audits, unnec- or similar media which shall contain inessary under the circumstances, such formation similar to that prescribed for cooperating sponsor shall consult the containers in § 211.6(c). Recipients' inUSAID for the purpose of obtaining

dividual identification cards shall, insoUSAID agreement to an audit schedule far as practicable, be imprinted to conother than the normal annual schedule. tain such information. Copies of reports of these comprehensive

(h) Containers—(1) Markings. Unaudit examinations shall be submitted less otherwise specified in the Food for to USAIDs or Diplomatic Posts as re

Freedom Program Agreement, when quired in § 211.10(b) (3). In the case of commodities are packaged for shipment programs administered by cooperating

from the United States, bags and other governments and intergovernmental or- containers shall be marked with the CCC ganizations, responsibility for conducting contract number or other identification, internal audit examinations shall be the AID emblem, the Alliance for Progdetermined by AID/W on a case-by-case ress emblem where applicable, and the basis.

following information stated in English (d) Commodity requirements. Each and, as far as practicable, in the language cooperating sponsor shall submit to the of the country receiving the commodity: USAID or Diplomatic Post, within such (i) Name of the commodity. times and on the form prescribed by (ii) Furnished by the people of the AID/W, estimates of requirements show- United States of America. ing the quantities of commodities re- (iii) Not to be sold or exchanged quired for each program proposed. Re- (where applicable). quirements shall be summarized for all

Emblems or other identification of volunprograms in the country on a form pre

tary agencies and intergovernmental orscribed by AID/W.

ganizations may also be added. (e) Determination of eligibility. Co

(2) Disposal of containers. Cooperatoperating sponsors shall be responsible for determining that the recipients and

ing sponsors may dispose of containers,

other than containers provided by carrecipient agencies to whom they distrib

riers, in which commodities are received ute commodities are eligible in accordance with the terms and conditions of

in countries having approved Title II the Food for Freedom Program Agree

programs, by sale or exchange, or disment and this part. Cooperating spon

tribute the containers free of charge to sors shall impose upon recipient agen- eligible food or fiber recipients for their cies responsibility for determining that personal use. If the containers are to be used commercially, the cooperating spon- propriately identified in the language of sor must arrange for the removal or the country of distribution as having obliteration of U.S. Government mark- been furnished by the people of the ings from the containers prior to such United States; and (3) suitable publicity use.

shall be given to the exchange of com(i) Use of funds. In addition to funds modities as provided in paragraph (g) accruing to cooperating sponsors from of this section and containers for borthe sale of containers, funds may also be rowed commodities shall be marked to available from charges made in mater- the extent practicable in accordance nal, preschool, school, and other child- with $ 211.6(c). Transfers of commodifeeding programs where payment by the ties may be made between approved recipients will be encouraged on the Title II programs to meet emergency basis of ability to pay. Funds from these disaster requirements or to improve efsources shall be used for payment of ficiency of operation (for example, to program costs such as transportation, meet temporary shortages due to delays storage, handling, insect and rodent con- in ocean shipments or inland transportrol, rebagging of damaged or infested tation, or to provide for more rapid discommodities, and other program ex- tribution of stocks in danger of deteriopenses specifically authorized by AID to ration). Such transfers must be made at carry out the objectives of the program no cost to the U.S. Government and with for which the commodities were fur- the concurrence of the cooperating sponnished. Funds may also be used for pay- sors concerned and with the approval ment of indigenous and/or third coun- of the USAID or Diplomatic Post. The try personnel including those employed USAID or Diplomatic Post may, howto make internal audits and inspections. ever, provide funds to pay the costs of However, such funds may not be used to transfers to meet emergency and/or purchase land, to acquire or construct disaster requirements in which case buildings, or to make alterations in AID/W shall be advised promptly of the existing buildings. Actual out-of-pocket details of the transfer. Commodities expenses incurred in effecting any sale transferred as described above shall not of containers may be deducted from the be replaced by the U.S. Government unsales proceeds.

less AID/W authorized such replace(j) No displacement of sales. The ment in advance. donation of commodities furnished for (1) Disposal of excessive stock of comthese programs shall not result in in- modities. If commodities are on hand creased availability for export by the which cannot be utilized in accordance foreign country of the same or like com- with the applicable Food for Freedom modities and shall not interfere with or Program Agreement, the cooperating displace sales in the recipient country sponsor shall promptly advise USAID which might otherwise take place. This or the Diplomatic Post of the quantirequirement may be waived by AID/W ties, location, and condition of such to meet emergency or disaster situations. commodities, and, where possible shall (k) Commodities borrowed or er

propose an alternate use of the exchanged. After the date of program ap- cess stocks. USAID or Diplomatic proval by AID/W, but before arrival Post shall determine the most approat foreign destination of commodities priate use of the excess stocks, and authorized herein, the cooperating spon- with prior AID/W concurrence, shall issor may, with prior approval of the sue instructions for disposition, TransUSAID or Diplomatic Post, borrow same portation costs and other charges attribor similar commodities from local utable to transferring commodities from sources to meet program requirements one program to another within the counprovided that: (1) Such of the com- try shall be the responsibility of the modities borrowed as are used in ac- cooperating sponsor, except that in case cordance with the terms of the appli- of disaster or emergency, AID/W may cable Food for Freedom Program Agree- authorize the use of disaster or emerment will be replaced on an equivalent ency funds to pay for the costs of such value basis at the time and place that transfers. the exchange takes place, as determined by mutual agreement between the co

$ 211.6 Processing, repackaging, and

labeling commodities. operating sponsor and the USAID or Diplomatic Post; (2) packaged commod- (a) Commercial processing and reities which are borrowed shall be ap- packaging. Cooperating sponsors may ar

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range for processing commodities into displayed at the distribution center. Redifferent end products and for packaging cipients' individual identification cards or repackaging commodities prior to shall to the maximum extent practicable distribution. When commercial facilities be imprinted to contain such informaare used for processing, packaging, or tion. repackaging, cooperating sponsors shall (c) Labeling. If prior to distribution, enter into written agreements for such the cooperating sponsor arranges for services. The agreements must have the packaging or repackaging donated comprior approval of USAID or Diplomatic modities the cartons, sacks, or other Post in the country of distribution. containers in which the commodities Copies of the executed agreements shall are packed shall be plainly labeled be provided to the USAID or Diplomatic with the AID emblem, and where appliPost. Agreements for such services shall cable the Alliance for Progress emblém, provide as a minimum that:

in the language of the country in which (1) No part of the commodities deliv- the commodities are to be distributed, ered to the processing, packaging, or with the following information: repackaging company shall be used to (1) Name of commodity. defray processing, packaging, repack- (2) Furnished by the people of the aging, or other costs, except as provided United States of America. in subparagraph (2) of this paragraph. (3) Not to be sold or exchanged (where

(2) When the milling of grain is au- applicable). thorized in the cooperating country, the

Emblems or other identification of volunUnited States will not pay any part of the

tary agencies and intergovernmental orprocessing costs, directly or indirectly,

ganizations may also be added. except that with the prior approval of

(d) Where commodity containers are AID/W, the value of the offal may be

not used. When the usual practice in a used to offset such part of the processing

country is not to enclose the end product costs as it may cover.

in a container, wrapper, sack, etc., the (3) The party providing such services

cooperating sponsor shall, to the extent shall :

practicable, display banners, posters, or (i) Fully account to the cooperating

other media, and imprint on individual sponsor for all commodities delivered to

recipient identification cards information the processor's possession and shall

similar to that prescribed in paragraph maintain adequate records and submit

(c) of this section. periodic reports pertaining to the performance of the agreement;

§ 211.7

Arrangements for entry and (ii) Be liable for the value of all com

handling in foreign country. modities not accounted for as provided (a) Costs at discharge ports. Except as in § 211.9(g);

otherwise agreed upon by AID/W and (iii) Return or dispose of the contain- provided in the applicable shipping coners in which the commodity is received

tract or in paragraph (d) of this section, from the cooperating sponsor according the cooperating sponsor shall be responto instructions from the cooperating sible for all costs, (1) beyond the end of sponsor;

ship's tackle in the case of packaged (iv) Plainly label cartons, sacks, or cargo, (2) beyond the discharge end of other containers containing the end discharge spout in the case of bulk cargo product in accordance with paragraph discharged mechanically, (3) accruing (c) of this section.

from the time discharging commences in (b) Use of cooperating sponsor facili- the case of bulk cargo bagged in the ties. When cooperating sponsors utilize ship’s hold, or dischargeä in bulk by their own facilities to process, package, slings, (4) for distributing the commodity or repackage commodities into different as provided in the Food for Freedom end products, and when such products Program Agreement to end users and (5) are distributed for consumption off the for demurrage, detention, and overtime. premises of the cooperating sponsor, the The cooperating sponsor shall also be cooperating sponsor shall plainly label responsible for wharfage, taxes, dues, the containers as provided in paragraph and port charges assessed against the (c) of this section, and banners, posters, cargo whenever stated separately in the or similar media, which shall contain in- applicable tariff or shipping contract, and formation similar to that prescribed in for lighterage (when not a custom of the paragraph (c) of this section, shall be port) and lightening costs when assessed as a charge separate from the freight the USAID or Diplomatic Post shall imrate.

mediately arrange for inspection by a (b) Duty, taxes, and consular invoices. public health official or other competent Commodities shall be admitted duty free authority. If the commodity is deterand exempt from all taxes. Consular in- mined to be unfit for human consumpvoices shall not be required unless spe- tion, the USAID or Diplomatic Post shall cific provision is made in the Food for dispose of it in accordance with the Freedom Program Agreement. If re- priority set forth in paragraph (b) of quired, they shall be issued without cost this section. Expenses incidental to the to the cooperating sponsor or to the Gov- handling and disposition of the damaged ernment of the United States.

commodity shall be paid by USAID or the (c) Storage facilities and transporta- Diplomatic Post from the sales proceeds, tion in foreign countries. Cooperating from CCC Account No. 20 FT 401 or from sponsors shall make all necessary ar- special Title II, Public Law 480 Agrirangements for receiving the commodi- cultural Commodity Account. The net ties and assume full responsibility for proceeds of sales shall be deposited with storage and maintenance of commodi- the U.S. Disbursing Officer, American ties from time of delivery at port of entry Embassy, for the credit of CCC Account abroad or, in the case of landlocked coun- No. 20 FT 401. tries, other designated points of entry (b) After delivery to cooperating abroad agreed upon between the co- sponsor. If after arrival in a foreign operating sponsor and AID. Before rec- country it appears that the commodity, ommending approval of a program to or any part thereof, may be unfit for the AID/W, USAID, or Diplomatic Post shall use authorized in the Food for Freedom obtain from the cooperating sponsor, as- Program Agreement, the cooperating surance that provision has been made for sponsor shall immediately arrange for internal transportation, and for storage inspection of the commodity by a public and handling which are adequate by local health official or other competent aucommercial standards. The cooperating thority approved by USAID or the Diplosponsor shall be responsible for the main- matic Post. If no competent local tenance of commodities in such manner authority is available, the USAID or as to assure distribution of the com- Diplomatic Post may determine whether modities in good condition to recipient the commodities are unfit for human agencies or eligible recipients.

consumption, and if so may direct dis(d) Inland transportation in inter- posal in accordance with subparagraphs mediate countries. In the case of land- (1) through (4) of this paragraph. locked countries, transportation in the The cooperating sponsor shall arrange intermediate country to a designated in- for the recovery for authorized use of land point of entry in the recipient coun- that part designated during the inspectry shall be arranged by the cooperating tion as suitable for program use. If, after sponsor unless otherwise provided in the inspection, the commodity (or any part Food for Freedom Program Agreement thereof) is determined to be unfit for or other program document. Voluntary authorized use, the cooperating sponsor agencies and intergovernmental organi- shall notify USAID or the Diplomatic zations shall handle claims arising from Post of the circumstances pertaining to loss or damage in the intermediate coun- the loss or damage as prescribed in try, in accordance with § 211.9(e). Other § 211.9(f). With the concurrence of cooperating sponsors shall assign any USAID or the Diplomatic Post, the comrights that they may have to any claims modity determined to be unfit for that arise in the intermediate country to authorized use shall be disposed of in the USAID which shall pursue and retain following order of priority: the proceeds of such claims.

(1) By transfer to an approved Food § 211.8 Disposition of commodities un. for Freedom Program for use as livestock fit for authorized use.

feed. AID/W shall be advised promptly (a) Prior to delivery to cooperating

of any such transfer so that shipments sponsor at discharge port or point of

from the United States to the livestock entry. If the commodity is damaged prior

feeding program can be reduced by an to delivery to the cooperating sponsor equivalent amount. (other than a voluntary agency or an (2) Sale for the most appropriate intergovernmental organization) at dis- use, i.e., animal feed, fertilizer, or charge port or point of entry overseas, industrial use, at the highest obtainable 315

price. When the commodity is sold all U.S. Government markings shall be obliterated.

(3) By donation to a governmental or charitable organization for use as animal feed or for other nonfood use.

(4) If the commodity is unfit for any use, or if disposal in accordance with subparagraph (1), (2), or (3) of this paragraph is not possible, the commodity shall be destroyed, under the observation of a representative of USAID or Diplomatic Post if practicable, in such manner as to prevent its use for any purpose. Expenses incidental to the handling and disposition of the damaged commodity shall be paid by the cooperating sponsor unless it is determined by the USAID or the Diplomatic Post that the damage could not have been prevented by the proper exercise of the cooperating sponsor's responsibility under the terms of the Food for Freedom Program Agreement. Actual expenses incurred in effecting any sale may be deducted from the sales proceeds and the net proceeds shall be deposited with the U.S. Disbursing Officer, American Embassy, with instructions to credit the deposit to CCC ACcount No. 20 FT 401. The cooperating sponsor shall promptly furnish USAID or the Diplomatic Post a written report of all circumstances relating to the loss and damage and shall include in this report, or a supplemental report, a certification by a public health official or other competent authority of the exact quantity of the damaged commodity disposed of because it was determined to be unfit for human consumption. $ 211.9 Liability for loss and damage or

improper distribution of commodi

ties. (a) Fault of cooperating sponsor prior to loading on ocean vessel. If a voluntary agency or intergovernmental organization books cargo for ocean transportation and is unable to have a vessel at the U.S. port of export for loading in accordance with the agreed shipping schedule, the voluntary agencies and intergovernmental organizations shall immediately notify the USDA. The USDA will determine whether the commodity shall be (1) moved to another available outlet; (2) stored at the port for delivery to the voluntary agencies or intergovernmental organizations until a vessel is available for loading; or (3) disposed of as the USDA may deem proper. When addi

tional expenses are incurred by CCC as a result of a failure of the voluntary agency or intergovernmental organization, or their agent (4) to meet the agreed shipping schedule, or (5) to make necessary arrangements to accept commodities at the points of delivery designated by CCC, and it is determined by CCC that the expenses were incurred because of the fault or negligence of the voluntary agency or intergovernmental organization, or their agents, the voluntary agency or intergovernmental organization shall reimburse CCC for such expenses or take such action as directed by CCC.

(b) Fault of others prior to loading on ocean vessel. Upon the happening of any event creating any rights against a warehouseman, carrier, or other person for the loss of or damage to a commodity occurring between the time title is transferred to a voluntary agency or intergovernmental organization and the time the commodity is loaded on board vessel at designated port of export, the voluntary agencies or intergovernmental organizations shall immediately notify CCC and promptly assign to CCC any rights to claims which may accrue to them as a result of such loss or damage and shall promptly forward to CCC all documents pertaining thereto. CCC shall have the right to initiate and prosecute, and retain the proceeds of all claims for such loss or damage.

(c) Ocean carrier loss and damage(1) Outturn reports for claims against ocean carriers. (i) Cooperating sponsors shall obtain an outturn report immediately following each vessel's discharge. The report shall show the quantity and condition of the commodities delivered and the amount of shortage or damage, if any. Wherever possible, reports showing damage or short outturn must be certified by an independent cargo surveyor. The cooperating sponsor shall obtain a certification by a public health official or similar competent authority of the condition of the commodity in any case where a damaged commodity appears to be unfit for its intended use and a certificate of disposition of any commodity determined to be unfit for its intended use.

(ii) In the event of cargo loss and damage, the cooperating sponsor shall provide the names and addresses of individuals who were present at the time of discharge and during survey and can verify the quantity lost or damaged. In

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