[Federal Register: July 20, 1998 (Volume 63, Number 138)] [Rules and Regulations] [Page 38751-38752] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr20jy98-9] ======================================================================= ----------------------------------------------------------------------- INTERNATIONAL DEVELOPMENT COOPERATION AGENCY Agency for International Development 22 CFR Part 228 RIN 0412-AA37 Rules on Source, Origin and Nationality for Commodities and Services Financed by USAID: Miscellaneous Amendments AGENCY: United States Agency for International Development (USAID), IDCA. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: USAID is amending its regulation on source, origin and nationality for commodities and services financed by USAID by revising two rules, one on system determinations for commodities and one on ocean transportation eligibility, and by clarifying waiver provisions. The final rule amends the coverage on systems determinations to allow components of a commodity system to be shipped to a cooperating country without first being shipped to and assembled in an eligible country. This should reduce the cost of these transactions by reducing unnecessary shipments. The rules on eligibility of transshipments are amended to require that suppliers obtain a determination from USAID that direct service on U.S. a flag vessel is not available before transshipment from a U.S. flag to a non-U.S. flag vessel will be eligible for USAID financing. This will ensure compliance with Cargo Preference requirements that direct U.S. flag service be used when available. DATES: Effective September 18, 1998. FOR FURTHER INFORMATION CONTACT: Kathleen O'Hara, Office of Procurement, Policy Division (M/OP/P) USAID, Washington, DC 20523-. Telephone: (202) 712-4759, facsimile: (202) 216-3395, e-mail address: kohara@usaid.gov. SUPPLEMENTARY INFORMATION: The regulation at 22 CFR part 228 was published as a final rule September 15, 1996 (61 FR 53615). After operating under the regulation for a year a few areas have been identified that need some additional coverage or clarification. USAID published a proposed rule to amend 22 CFR part 228 on January 23, 1998 (63 FR 3506). The only comment received was from the American Maritime Congress which affirmed its support for the revisions to the ocean transportation eligibility policy. The rule is being amended as proposed. List of Subjects in 22 CFR Part 228 Administrative practice and procedure, Commodity procurement, Grant programs--foreign relations. Accordingly 22 CFR part 228 is amended as follows: PART 228--[AMENDED] 1. The authority citation continues to read as follows: Authority: Sec. 621, Pub. L. 87-195, 75 Stat. 445 (22 U.S.C. 2381), as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 1979 Comp., p. 435. 2. In Sec. 228.11, paragraph (e) is revised as follows: Sec. 228.11 Source and origin of commodities. * * * * * (e) Systems determination. When a system consisting of more than one produced commodity is procured as a single separately priced item, USAID may determine that the system itself shall be considered a produced commodity. When a determination is made to treat a system as a produced commodity, component commodities which originate from other than an authorized source country may be shipped directly to, and the system assembled in, the cooperating country, unless USAID specifically determines that assembly and shipment take place in an authorized source country. Transportation costs must still meet the requirements in subpart C of this part in order for them to be eligible for USAID financing. USAID, or the importer in the case of a Commodity Import Program, shall inform the supplier of any system determination. * * * * * 3. Section 228.21 is amended by adding a sentence at the end of paragraph (a) and revising paragraph (c)(4) as follows: Sec. 228.21 Ocean transportation. (a) * * * USAID's policy on implementation of the Cargo Preference Act is in USAID's Automated Directives System, Chapter 315. * * * * * (c)* * * (4) USAID will finance costs incurred on vessels under flag registry of any Geographic Code 935 country if the costs are part of the total cost on a through bill of lading that is paid to a carrier for initial carriage on a vessel which is eligible in accordance with paragraphs (c)(1), (2) or (3) of this section; provided that for shipments originating on a U.S. flag vessel with transshipment to a non-U.S. flag vessel, the supplier must obtain a determination that direct serve on a U.S. flag vessel is not available from USAID's Office of Procurement, Transportation Division, 1300 Pennsylvania Avenue NW., Washington, DC 20523-7900. 4. Section 228.51, paragraph (a) is amended by revising the introductory paragraph and paragraph (a)(1) as follows: Sec. 228.51 Commodities. (a) Waiver criteria. Any waiver must be based upon one of the criteria listed in this section. Waivers to Geographic Code 899 or Code 935 which are justified under paragraph (a)(2) or (3) of this section may only be authorized on a case-by-case basis. A waiver may be authorized when: (1) A commodity required for assistance is of a type that is not produced in or available for purchase in [[Page 38752]] the United States; in addition, for waivers to any country or Geographic code beyond Code 941 and the cooperating country, the commodity is of a type that is not produced in or available for purchase in any country in Code 941 or the cooperating country. * * * * * 5. Section 228.53 is amended by revising the introductory paragraph and paragraph (a) as follows: Sec. 228.53 Suppliers of services--privately owned commercial suppliers and non-profit organizations. Waiver criteria. Any waiver must be based upon one of the criteria listed in this section. Waivers to Geographic Code 899 or Code 935 which are justified under paragraph (b) or (c) of this section may only be authorized on a case-by-case basis. A waiver may be authorized when: (a) Services required for assistance are of a type that are not available for purchase in the United States; in addition, for waivers to any country or Geographic Code beyond Code 941 and the cooperating country, the services are of a type that are not available for purchase in any country in Code 941 or the cooperating country. * * * * * Dated: May 26, 1998. Marcus L. Stevenson, Procurement Executive. [FR Doc. 98-19253 Filed 7-17-98; 8:45 am] BILLING CODE 6116-71-M