AID 11 (FEMPORARY (9.1-A01) Printed soul hd by Har A, how, 94 Rastvari, New York, NY 100h4 #101612 APPLICATION FOR APPROVAL OF COMMODITY ELIGIBILITY As a condition for securing a determination of commodity eligibility preparatory to the receipt by the supplier of funds made available by the United States under the Foreign Assistance Act of 1961, as amended, in payment in whole or in part in the transaction described and for the commodity identified on this form, the undersigned, acting on behalf of the supplier whose name appears in block 5 above and authorized to bind the supplier, agrees with and certifies to A.I.D. as follows: 1. The supplier is beneficiary of a letter of credit covering the transaction described on this form or has with the importer whose name appears in block 6 a contract which provides for payment terms other than by letter of credit and which advises that the sale will be financed from A.I.D. funds. 2. The supplier has filled in the applicable portions of this form and certifies to the correctness of the information shown herein. 3. The supplier agrees that the commodity will be shipped and invoiced in accordance with the information shown herein; that if any change in commodity identification takes place after A.I.D. has approved this transaction, the supplier will resubmit this form to A.1.D. for review and further approval for financing in light of the changed conditions of the sale; and that this Commodity Approval Application, which the supplier proposes to use as a basis for securing payment from A.1.D. funds, is in every respect the original application approved by A.I.D. The supplier acknowledges that any item, other than an item described on this form by the supplier and approved by A.1.D. below, is ineligible for A.I.D. financing with respect to the sale transaction for which this form must be submitted as a condition for payment. 4. The supplier certifies that the commodity is new or, if not new, that the condition classification has been entered in block 15 on the reverse of this form. 3. The supplier certifies that the commodity is of first quality or, if other than first quality, that the quality is entered in block 15 on the reverse of this form. 6. With respect to any commodity which the supplier proposes to furnish from the United States, the supplier certifies that he is an individual, resident in the United States; a non-resident citizen of the United States; a corporation or partnership organized under the laws of the United States; or a controlled foreign corporation (within the meaning of § 957 et seq. of the Internal Revenue Code) as attested by current information on file with the Internal Revenue Service of the United States (on IRS Form 959, 2952, 3646, or any substitute or successor forms) submitted by shareholders of the corporation. If the supplier is a controlled foreign corporation without a regular place of business in the United States, the supplier appoints any shareholder or officer thereof agent for the supplier to receive service of process in the United States in connection with any dispute arising between the supplier and A.I.D. and relating to the commodity sale financed by A.I.D. 7. The supplier has not received notice directly by mail or indirectly by publication in the Federal Register or otherwise that A.I.D. has suspended or debarred him pursuant to A.I.D. Regulation 8 (22 CFR Part 208) from eligibility to receive A.ID. funds. GENERAL. Section 201.11(k) of A.I.D. Regulation 1 declares that as a condition for A.I.D. financing for a commodity sale transaction, A.1.D. must make, in writing, a determination of commodity eligibility on the Commodity Approval Application. Section 201.52(a)(10) of the Regulation states that to secure payment in connection with any sale governed by the Regulation, a supplier must submit to the paying bank one copy of this form, countersigned by A.I.D. A supplier should submit to A.1.D. for prior approval an original and one Copy for each request for payment which he proposes to submit to the paying bank. A.1.D. will approve this form, if the form is properly executed by the supplier and if A.I.D. has no objection to financing the commodity which the supplier has described If AID. refuses to give its approval, the Agency will return the form with an explanation for the refusal. OBTAINING FORMS. Forms may be obtained in limited quantities from banks holding A.1.D. letters of commitment, field offices of the Department of Commerce, or the Distribution Branch, Agency for International Development, Washington, D.C. 20523. Forms may be reproduced provided the reproduction is identical in content, size, color, and format. Forms may also be overprinted supplie me an ་་ COMPLETING FORMS: TRANSACTION IDENTIFICATION-BLOCK 1: Enter the number of the A.I.D. authorizing document. This number will appear on the letter of credit. It should also appear in the purchase order from the importer or other contract document. BLOCK 2: Enter the letter of credit number, date, and the name of the confirming or advising U.S. bank. If the transaction is not financed by letter of credit, enter the applicable term of payment, e... sight draft collection or open account. BLOCK 3: Enter in this block the total reaccou muneration which is to be received for the sale of goods. If part of the remuneration is to be made by a person other than A.I.D. (such as the importer), state separately the contract amount to be financed from AID. funds and the additional amount to be paid from other sources. If payment from non-A.I.D. funds is to be made in a non-dollar currency, indicate the currency. A payment by the importer in local currency to the supplier's local agent is to be considered part of the remuneration received by the supplier for the sale of the commodity. BLOCK 4: Check the appropriate box to indicate the relationship of the supplier to the United States. This information is relevant to supplier's certification 6. If "Other" box is checked, furnish explanation of relationship in black 15 on the reverse of source and does not have a regular place of business in the United States. be must indicate a US payment address. In completing block 5. care should be taken to center the information in order to permit use of window envelopes in returning forms to the supplier. (Note similar arrangements made for supplier's use of preprinted ALD address on the reverse of the form) COMMODITY IDENTIFICATION-BLOCKS 7 AND 8 Enter the US. Department of Commerce Schedlate D 7 digit code(s) and describe the commodity, plving size, spantity And rat word beptbut if the connaity Faster thr OVA, DODE 11 slipt Dealerst fatem Tumbes, it kipiwn, and voter kentifying dala ch as spejat fomania, which will hulp teleutils the contestaty MUTHCODEDE LLEMN 1 the kiptur ni is made upp vid vomunalities beating shiftering 'e in code. Il codes, vt II the comically description Vortex Spuite aully within the same a lo dute. Il cafe, must be turnished by each vide i des option. Space for this paper p Valed in block 14. Separate forms AlD2-11 must be executed and sulanitted if (a) there is insufficient space in bhicks 7 through 9 and block 14 to it all codes and descriptions involved, or if (b) the entries in blocks 10 through 1 are not conimen to all commodities listed on the form. BLOCK 9: Enter the unit price les the commodity ( A5/ OB port of loading) and name of rest of FOB plant price the estimated inland freight and handling charges to the named port of loading. This information is not for the purpose of a price preaudit but is requested to provide A.ID with an order of price magnitude, for statistical purposes, and for program planning purposes. BLOCK 10: Enter the source country of the commodity as defined in $6 201 01(q) and 201.11(b) of A. I.D. Regulation 1. BLOCK 11: Indicate whether the produced commodity contains components umparted from a country other than that shown in block 10. BLOCK 12 If the 'You" but has been checked in block 11, where the name of each front fram whit by Frangone als ways tildæines atsl the betal Fred for united to the cramentals BEGON E4, 11 He singdier in a ratiborg mengopolia la mar bags jean what is mnd the prolori 114, manalar torti, pazakot, na m the name and arbitra of the parslan er and the stunts, wanaid pati bat li per Hos informatbug is proper wallet at jonjama rade wind is in Ipued eindjet infrutaiko pervinly tripled to be summitted to A Lit kadri intea o Juris of credu BLOCK 14. This space is for use in tram naviti probrú két run. See instructions above concerning blocks 7 through 9. BLOCK 19; This Hick may be used to furnish explanation of, or additional information in connectin with, any entries on the form. In addition, if a used commodity leg, remull rehabilitated) or a commandity of secondary quality to jest, remnant A NORTH AMERICAN ROCKWELL CORP. The requirement for AID/W approval of commodity transactions on Form AID-11 prior to payment is designed to satisfy the desires of Congress as expressed in Section 604(f) of the FA Act. It was introduced in recognition of the fact that AID Missions, except in the case of specific capital projects, did not give advance approval of individual transactions for AID financing. This left purchases made under AID commodity import programs uncovered except on a post facto basis. In recognition of the problem which Mr. Orr has outlined to the Committee, A.I.D. announced in paragraph 1 of Small Business Memo No. 68-18 dated June 28, 1968, that suppliers could apply to AID/W for approval of a transaction as soon as a firm contract was in effect instead of awaiting the issuance of a letter of credit. A copy of that Memo is attached for inclusion in the record. Under AID financing, the importer is required by Section 201.21 of AID Regulation 1 to inform the supplier of that fact and to also identify the AID loan or grant under which financing is to be provided. This should make it possible for U.S. suppliers to seek early approval of AID financing eligibility. In his own interest, we believe that a supplier would want to know the source from which a foreign purchaser will obtain the foreign exchange needed to finance a purchase, before starting production of a piece of equipment. In the absence of some assurance that a letter of credit will actually be opened by the time the equipment is ready for shipment, regardless of the source of the financing, a supplier is, of course, risking the possibility of being unable to obtain payment for his sale. AID SMALL BUSINESS MEMO APPLICATION FOR APPGOVAL OF COMMODITY ELIGIBILITY (FORM AID-11) This Small Business Memorandum supplements SBM No. 68-10 dated May 3, 1968 and SBM No. 68-12 dated May 29, 1968 with regard to the completion of the "Application for Approval of Commodity Eligibility" (Form AID-11) which suppliers are required to submit to AID for prevalidation of commodity eligibility as a prerequisite for AID financing. 1. A supplier may apply for a determination and validation of commodity eligibility for AID financing, prior to the receipt of a letter of credit, provided that there is a firm contract in effect. Under the circumstances, the supplier/ applicant will identify, under Block #2 of the Form AID-11, the contract or accepted order and the date thereof, and will submit a copy of said contract or accepted order as an attachment to the application form. 2. A supplier who makes several shipments under the same contract and letter of credit may submit a Form AID-11 for the entire contract which would be reviewed by AID for determination of commodity eligibility on an overall basis. Whenever the supplier knows in advance that partial shipments may be made, the supplier will note in Block #15 of the Form AID-11 that partial shipments may be made against the subject contract. The validated Form AID-11 will be presented to the U.S. bank when requesting payment for the first of the contemplated shipments. For each subsequent partial shipment, the supplier will be required to submit to the U.S. bank a reproduction of the original validated Form AID-11 with the following manually signed certification, either endorsed on or attached to the reproduction : I hereby certify that the partial shipment for which payment is being requested from AID funds is being made under the contract covered by the original validated Form AID-11 of which this is a true copy. Typed or Printed Name and Title Signature of Authorized Date 3. Some suppliers have indicated that it would be difficult to determine the unit price FAS/FOB Port of Loading for commodities which are customarily quoted FOB Plant. Consequently, in completing Block #9 of Form AID-11, suppliers who are unable to compute a unit price FAS/FOB Port of Loading may enter the unit price of the commodity to be shipped on the basis of FOB or FAS named point and footnote the estimated inland freight cost, if available, in an explanatory entry under Block #15. However, in the case of the following commodities, which are subject to an eligibility test based on maximum FAS value per unit, suppliers cannot be permitted any alternative and must enter the unit price FAS Port of Loading in Block #9 of the Form AID-11: a. Television receivers and tuners. b. Radio receivers and tuners. c. Passenger automobiles and chassis (including station wagons). 4. Advertising materials will not be approved for AID financing. 5. Commodity descriptions in the English language must be provided in connection with any contracts, invoices, or accepted orders submitted as attachments to the Form AID-11. 6. Inquiries with regard to commodity eligibility and to this new procedure should be addressed to the Commodity Eligibility Review Branch, Financial Review Division, Office of the Controller, Agency for International Development, Washington, D.C. 20523. (Telephone Number: Area Code 202—DUdley 3–2691 or Dudley 3-2692). PELLERIN MILNOR CORP. PELLERIN MILNOR CORP., SELECT COMMITTEE ON SMALL BUSINESS, Congress of the United States (Attention of Mr. Joe L. Evins, Representative). GENTLEMEN: It was a pleasure to receive your recent notification that there will be hearings by the House Small Business Sub-Committee and to AID Finance purchases. Our firm is a small business firm which manufactures commercial laundry machinery with which we market throughout the world. 1. We have made an attempt to participate in AID and financed projects but the complexity of the machinery and the administrative work that has to be done in order to satisfy all the regulations and requirements are really prohibitive for a small business firm. 2. Another problem is that since there is a tremendous variety of goods procured with AID funds, and the only source of obtaining information on procurements is the AID Small Business Memorandum, it is necessary to read a tremendous volume of material searching for procurements of interest. This in itself is almost prohibitive. We would suggest as an alternative that AID compile a list of firms for various product categories and notify those firms on procurements in which they are interested. 3. It would further assist Small Business Firms in competing for this business if the specifications for the products purchased with AID funds would (wherever possible) be patterned after Federal specifications (with which we are all familiar) rather than on a brand-name basis. The "brand-name or equal" method of buying would naturally favor larger business firms. Foreign buyers, in a legitimate effort to be conscientious, would naturally insist on the brand-names because they are not familiar enough to make intelligent comparisons. 4. It would also be helpful if certain AID business was reserved for small business firms... such as done in the case of Defense buying. We sincerely hope these comments are helpful to you. Very truly yours, PELLERIN MILNOR CORP., PELLERIN MILNOR CORP. Admittedly, AID documentation and other special requirements exceed those which are normally required in domestic trade and, to a lesser extent, those which are required under normal commercial export practices. They are, however, the minimum which we believe are necessary to satisfy the requirements of the Foreign Assistance Act; to discharge our responsibilities for the proper disbursement of appropriated funds; and to control the abuses which have come to light in the past under more lenient requirements. In spite of these extra requirements, many small U.S. manufacturing companies have found that they are not too onerous to permit them to participate in furnishing the goods which AID finances for export. During the last six months of calendar year 1968, for example, AID financed the export of products produced by a total of 1,294 small business firms in the United States. Exporting is a specialized business requiring specialized knowledge and experience to be successful. Many small (and large) manufacturing firms in the United States have found that the use of Combination Export Managers to promote, market, and arrange for the shipment of their products overseas is an effective means of avoiding these problems themselves. |