Export Trade Certificate of Review

DEPARTMENT OF COMMERCE

International Trade Administration

Export Trade Certificate of Review

ACTION: Notice of application to amend certificate.

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SUMMARY: The Office of Export Trading Company Affairs (``OETCA''),

International Trade Administration, Department of Commerce, has

received an application to amend an Export Trade Certificate of Review.

This notice summarizes the proposed amendment and requests comments

relevant to whether the amended Certificate should be issued. Applicant

has requested and been denied expedited review.

FOR FURTHER INFORMATION CONTACT: W. Dawn Busby, Director, Office of

Export Trading Company Affairs, International Trade Administration,

(202) 482-5131. This is not a toll-free number.

SUPPLEMENTARY INFORMATION: Title III of the Export Trading Company Act

of 1982 (15 U.S.C. 4001-21) authorizes the Secretary of Commerce to

issue Export Trade Certificates of Review. A Certificate of Review

protects the holder and the members identified in the Certificate from

state and federal government antitrust actions and from private, treble

damage antitrust actions for the export conduct specified in the

Certificate and compliance with its terms and conditions. Section

302(b)(1) of the Act and 15 CFR 325.6(a) require the Secretary to

publish a notice in the Federal Register identifying the applicant and

summarizing its proposed export conduct.

Request for Public Comments

Interested parties may submit written comments relevant to the

determination whether an amended Certificate should be issued. If the

comments include any privileged or confidential business information,

it must be clearly marked and a nonconfidential version of the comments

(identified as such) should be included. Any comments not marked

privileged or confidential business information will be deemed to be

nonconfidential. An original and five copies, plus two copies of the

nonconfidential version, should be submitted no later than 20 days

after the date of this notice to: Office of Export Trading Company

Affairs, International Trade Administration, Department of Commerce,

Room 1800H, Washington, D.C. 20230. Information submitted by any person

is exempt from disclosure under the Freedom of Information Act (5

U.S.C. 552). However, nonconfidential versions of the comments will be

made available to the applicant if necessary for determining whether or

not to issue the Certificate. Comments should refer to this application

as ``Export Trade Certificate of Review, application number 96-2A003.''

The Rice Millers' Association's (``RMA'') original Certificate was

issued on August 16, 1996 (61 FR 43733, August 26, 1996). A summary of

the application for an amendment is as follows.

Summary of the Application

Applicant: Rice Millers' Association, 4301 North Fairfax Drive,

Suite 305, Arlington, Virginia 22203-1616.

Contact: Cynthia H. Tough, Vice President of International Affairs

for the USA Rice Federation. Telephone: (703) 351-8161.

Application No.: 96-2A003.

Date Deemed Submitted: July 25, 1997.

Proposed Amendment: RMA seeks to amend its Certificate by (1)

modifying the Export Trade Activities and Methods of Operation under

which it proposes to allocate the U.S. portion of the E.U.'s tariff

rate quotas (``TRQs'') for semi-milled and milled rice and brown rice

and (2) expanding the eligibility for Membership in the RMA Certificate

to include any persons, firms, or corporations of U.S. nationality that

have been actively engaged in the exportation of rice from the United

States in each of the past two calendar years. RMA's Certificate would

be amended in relevant part as follows:

Export Trade Activities and Methods of Operation

RMA will administer a program for allocating the U.S. share of the

European Union (EU) tariff rate quotas (``TRQs'') for milled rice and

brown rice (roughly 38,000 tons of milled rice and 8,000 tons of brown

rice) agreed to as compensation to the United States for the EU

enlargement, to include Austria, Finland, and Sweden, as follows:

A. Administration of ETCR

(a) The program will be administered by an Administrator, selected

by the Membership, and not engaged in the production, milling,

distribution, or sale of rice. The President of the USA Rice

Federation, and such employees and contractors of the Federation as he

or she may designate, will work closely with the Administrator as

necessary for the smooth operating of the RMA/ETCR.

(b) The Administrator may request of Members statistical

information, to be provided on a confidential basis, concerning their

participation in the RMA/ETCR, including the disposition of TRQ

Certificates, and may prepare compilations of such data, in such form

as not to disclose confidential information.

B. Acquisition and Transfer of TRQ Certificates

(a) Certificates shall be offered to the Membership on open tender.

The certificates issued by the RMA/ETCR will specify the quantity and

type of rice (milled or brown) covered, and shall be valid for certain

time periods or tranches. The quantity of rice covered by the total

number of Certificates will reflect the total amount of U.S. rice to be

imported into the EU under the TRQs.

(b) Certificates shall be valid only for the tranche covered by the

import license, and shall expire at the end of such tranche.

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(c) A minimum of thirty calendar days before the opening of each

tranche of the TRQs, the Administrator shall notify each Member of the

RMA/ETCR that it is entitled to bid for TRQ Certificates, and shall

specify the quantity and type of rice (milled or brown) and the time

period covered by the tranche.

(d) Together with the first bid it submits for TRQ Certificates in

a given year of operation of the RMA/ETCR, a Member shall lodge with

the Administrator an irrevocable bond or equivalent surety instrument

as provided in the Operating Agreement. The bond shall be forfeited to

the RMA/ETCR in the event that, at any time during the year, the Member

fails to pay for or fails to take delivery of Certificates awarded to

it.

(e) To be considered, a bid must: (i) Specify the type of rice

(milled or brown); (ii) state the quantity, in metric tonnes, of rice

for which the bidder proposes to purchase Certificates; (iii) indicate

the price or prices for which the Member proposes to acquire

Certificates; and (iv) be signed by a responsible official of a Member

of the RMA/ETCR. A bid not satisfying these criteria, or a bid not

submitted within the stipulated response period, shall be returned to

the Member by the Administrator, and shall not be considered further.

(f) The Administrator shall award Certificates for the available

tonnage to the highest bidder(s) for each type of rice. In the event

that identical bids are received, the Administrator shall award

Certificates on a pro rata basis, in proportion to the quantities

requested by the bidders.

(g) The contents of the bids shall be treated by the Administrator

as confidential, releasing to the public only the names of the

successful bidder(s), quantity, type of rice and price of their bids.

(h) Successful bidders shall be awarded Certificates evidencing

their eligibility to export stated quantities of milled and brown rice

into the customs territory of the EU under the TRQ during a specified

shipment period. Payment for the Certificates, in accordance with the

terms of the bid, must be made to the Administrator within the time

period provided in the Operating Agreement. If a bidder fails to pay

for Certificates awarded, all bids submitted by that bidder shall be

deemed canceled, and the Administrator shall revoke the award and

distribute the bidder's Certificates to the next highest bidder.

(i) In the event that the total quantity of bids received is less

than the size of the relevant TRQ tranche, the unused portion shall, to

the extent consistent with EU law, be carried over to a succeeding

tranche. In any tranche as to which EU law prohibits such carry-over,

should the total quantity of bids received be less than the total

quantity available in the tranche, the unused portion shall be offered

to all of the successful bidders, in proportion to the size of their

respective awards, at the lowest bid price.

(j) Certificates, once issued and paid for, shall be freely

transferable.

C. Disposition of Tender Proceeds

(a) The Administrator shall aggregate the proceeds of all tenders

for TRQ Certificates, and all interest accrued thereon, at the end of

each year of operation of the program, and shall distribute them as

follows:

(b)(1) In the first year of operations, the Administrator shall

remit to the RMA/ETCR 5% of the total proceeds of the tenders for that

year to pay all administrative and legal expenses incurred by the RMA/

ETCR in calendar year 1996 and through conclusion of the first year of

operations.

(2) The remainder of the 5% portion of the proceeds shall be

distributed as follows:

(i) To each Member, any documented expenses that it incurred for

third-party legal fees in calendar years 1996 and 1997 in connection

with the establishment of an ETC for administration of the TRQs,

(ii) To each Member that shipped a minimum of 500 metric tonnes of

milled rice to the EU in calendar year 1996, and which has not already

received a distribution pursuant to this subparagraph (2), and

(iii) To each Member that shipped a minimum of 500 metric tonnes of

brown rice to the EU in calendar year 1996, and which has not already

received a distribution pursuant to this subparagraph (2).

In no event, may the distribution to any Member under this

subparagraph exceed $25,000.

(3) If there are insufficient funds available to make payments

provided for in subparagraph (2), the amount that each Member would

otherwise be entitled to receive will be reduced by a pro-rata amount

so that the total distributions will be equal to the amount available

for this purpose. If the distributions under subparagraph (2) should

not result in the complete distribution of the funds available for this

purpose, any amount left over shall be distributed according to the

formula and sequence set out in paragraph (e).

(c) In the years after the first year, the Administrator shall

remit to the RMA/ETCR 2% of the total proceeds of the tenders for the

year, to pay administrative and legal expenses related to the RMA/ETCR.

If the actual administrative expenses differ from the stated amount by

more than 1% of the total proceeds, then the percentage to which the

RMA/ETCR shall be entitled in the following year shall be adjusted up

or down accordingly.

(d) If requested by the RMA/ETCR, the Administrator shall be

permitted to make advances against administrative cost requirements

during the course of the year.

(e) For the first two years of operation, the Administrator shall

pay to those Members qualifying as ``Historical Shippers'' the amount

of $75 for each tonne of their average annual shipments of brown and

milled rice to Austria, Sweden, and Finland during the period 1990-1994

(``the Historical Shippers Portion''). Of the proceeds remaining after

distribution of the amounts provided for in paragraphs (b) and (c) and

distribution of the Historical Shippers Portion, the Administrator

shall distribute:

(i) 45% divided one-third to the Rice Foundation for rice-related

research projects; and two-thirds for international development

activities to be managed by the USA Rice Federation (``Industry

Promotion Portion'').

(ii) 10% to the All Exporters Fund to be paid out to Members in

proportion to their relative shares of the export trade of all rice

from the United States to all destinations in the world except the

European Union, on a milled-equivalent basis, during the preceding

year.

(iii) the remainder to Members of the RMA/ETCR, in proportion to

their relative shares of the export trade of all milled and brown rice

to the EU, on a milled-equivalent basis, during the preceding year

(``the EU Exporters Pool'').

(f) After the second year of operation of this Agreement, the

Administrator shall distribute the proceeds remaining after the

distribution provided in paragraph (c), by deducting and setting aside

the Historical Shippers Portion, and by distributing the remainder as

follows:

(i) 45% to the Industry Promotion Portion, to be distributed in

accordance with paragraph (e)(i);

(ii) 10% to the All Exporters Fund, to be distributed in accordance

with paragraph (e)(ii); and

(iii) The remainder of the proceeds, together with the Historical

Shippers Portion, to the EU Exporters Pool, to be distributed in

accordance with paragraph (e)(iii).

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(g) For the purposes of the above Export Trade Activities and

Methods of Operation, all references to ``years of operation'' shall

mean years beginning on the date the first tranche opens, and ending on

the day before the anniversary of that date.

Definitions

``Member'' means a member of RMA who has been certified as a

``Member'' within the meaning of Section 325.1(l) of the Regulations

and as listed in Attachment I. Members must sign the Operating

Agreement of the RMA/ETCR in order to participate in the certified

activities. Any U.S. company that has been actively engaged in the

exportation of rice from the United States in each of the past two

calendar years, and that wishes to participate in the activities

covered by this certificate, may join RMA's membership by executing the

Operating Agreement, paying a non-refundable membership fee of $3,000

per calendar year, and requesting that RMA file for an amending

certificate. Membership will remain open until December 31, 1997, and

thereafter, shall be open to qualified companies during specified

months in the year. Any RMA member that is not a listed Member may join

RMA's export trade certificate of review by requesting that RMA file

for an amended certificate. All of the rights of Members would become

effective as of the date of approval of their Membership by the

Department of Commerce. A Member may withdraw from coverage under this

certificate at any time by giving written notice to RMA, a copy of

which RMA will promptly transmit to the Secretary of Commerce and the

Attorney General.

Dated: August 4, 1997.

W. Dawn Busby,

Director, Office of Export Trading Company Affairs.

[FR Doc. 97-20929 Filed 8-7-97; 8:45 am]

BILLING CODE 3510-DR-F