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Trade Sanctions

ASTA, as a member of the Ag-Trade Coalition, signed onto a coalition letter addressed to the Bureau of Export Administration and the U.S. Treasury Department regarding concerns in the new Trade Sanctions Reform and Export Enhancement Act (TSREEA).

September 5, 2001

Ms. Kristin Mortimer
Regulatory Policy Division
Bureau of Export Administration
U.S. Department of Commerce
Washington, DC 20230

Mr. David W. Mills
Chief of Policy Planning and Program Division
U.S. Department of Treasury/Main Annex
Washington, DC 20220

Dear Ms. Mortimer and Mr. Mills:

The undersigned organizations wish to submit these comments in response to the July 12, 2001, Federal Register notice seeking public input on the recently issued regulations pertaining to the Trade Sanctions Reform and Export Enhancement Act (TSREEA).

We are pleased that the regulations have been issued and now permit the issuance of licenses for potential agricultural export transactions with Cuba, Iran, Libya and Sudan. However, we have a number of concerns regarding the commercial viability of the process these regulations establish for the issuance of licenses and request specific changes to the regulations to ensure that the legislative intent of the TSREEA is fulfilled in a manner that fosters commercial exports.

First, we believe that the regulations governing licensing applications for Iran, Libya and Sudan are more onerous than the prior licensing regime and thereby contravene the intent of the legislators as stipulated in Section 906 (a) (1) which states that "licenses shall be no more restrictive than license exceptions administered by the Department of Commerce or general licenses administered by the Department of Treasury." Previously, exporters selling to these countries could execute contracts directly with a limited list of pre-approved buyers or other non-terrorist entities that were not specifically designated on the Special Designated Nationals list. Under the TSREEA licensing procedures, individual buyers must be approved by the U.S. government.

Second, whereas attempts were made by the agencies involved to provide a reasonable turnaround on TSREEA related licensing requests, the length of the licensing process will in fact curtail export opportunities and potentially expose exporters to significant price risk. Global buying and selling of agricultural commodities occurs in a very dynamic environment wherein multiple sellers from several nations compete simultaneously to win contracts. The proposed licensing process for all four countries will impede the timely execution of contracts and likely result in the loss of export sales to our competitors as buyers are not willing or able, for commercial reasons, to wait the minimum 10 or more days to confirm contracts.

Moreover, there should be no requirement for exporters seeking export licenses to reveal proprietary information such as the buyer, price and quantity of the sale. This licensing approach necessitates either an executory contract or, if acceptable, a letter of intent. The price fluctuations that are certain to occur while the exporter is awaiting confirmation of the license could expose the seller to serious price risks, or cause the buyer to go elsewhere for the sale. We question the need for collection of price, quantity and other specific contract information when TSREEA does not stipulate the need to include this data in the mandated Congressional reporting requirements. Information currently collected by USDA for export sales reporting should suffice.

Finally, exporters desiring to sell to Cuba should not have to separately request a shipping license. Such a license should automatically be granted once authorization is received to export the food or agricultural commodity to Cuba.

It is imperative that the regulations be modified to fulfill the Congressional intent of TSREEA and to address the important shortcomings of the proposed procedures. We, therefore, respectfully request the adoption of a special designated nationals list (of ineligible buyers due to suspected terrorist activities), a significantly shorter turnaround time for license confirmation with immediate approval for buyers that have been previously licensed and the minimization of contract information collection sufficient to fulfill Congressional reporting requirements.

Thank you for this opportunity to provide comments on the regulations pertaining to the TSREEA. We urge the adoption of these requested changes to ensure that the regulations conform with the spirit of the TSREEA and result in increased export sales for U.S. agriculture.

Sincerely,

American Crop Protection Association
American Farm Bureau Federation
American Feed Industry Association
American Meat Institute
American Seed Trade Association
American Soybean Association
Cargill, Incorporated
Farmland Industries, Inc.
Food Distributors International
Grocery Manufacturers of America
National Association of Animal Breeders
National Association of Wheat Growers
National Barley Growers Association
National Chicken Council
National Corn Growers Association
National Grange
National Milk Producers Federation
National Oilseed Processors Association
National Pork Producers Council
National Potato Council
National Renderers Association
North American Export Grain Association
North American Millers' Association
Northwest Horticultural Council
Pet Food Institute
Rice Millers' Association
U.S. Dairy Export Council
U.S. Grains Council
U.S. Meat Export Federation
U.S. Rice Producers Association
U.S. Rice Producers' Group
U.S. Wheat Associates, Inc.
Washington State Potato Commission
Wheat Export Trade Education Committee
World Perspectives Inc.

cc:
The Honorable Ann Veneman
The Honorable Colin Powell
The Honorable Robert B. Zoellick