Description of Transportation and Storage, Description of Any Reprocessing or Repackaging, and Logistics Plan *
Example 1 (Storage not Needed for Monetization Commodities) ABC will nominate a freight agent in the U.S. to arrange for delivery of the commodities in Elbonia. Elbonia has three ports. One port that may be used is the port of Emeraldi. The port of Emeraldi receives regular shipments of packaged and bulk commodities and has adequate facilities for receiving and berthing large vessels of both bulk and packaged commodities. It is well equipped with three berths of which one is for bulk grains, and has a depth of 11 meters. The port of Emeraldi also has a bonded warehouse and several silos for bulk grains with total capacity of 100,000 tons. Two other storage sites exist within a 15-mile radius from the port, and each site has 60,000 tons of storage capacity for packaged products. However, since ABC has arranged with the buyer to have the cargo offloaded directly into railcars for the delivery to the buyer’s warehouse or distribution center, no storage needs are expected. A representative of ABC will be present at the port to receive the commodity and to witness the offloading. Upon receipt of shipping documents, ABC will notify the buyer when the commodity is expected to arrive at the port in Elbonia. ABC has made arrangements with the buyer for the commodity to be offloaded into railcars for delivery to the buyer’s warehouse. ABC will not repackage the commodities. ABC will arrange to ship the green peas from the port to its warehouse in Dry Valley. ABC will distribute the peas to the chosen workers after they finish distributing advertisements. Example 2 (Storage Needed) ABC will nominate a freight agent in the U.S. to arrange for delivery of the commodities in Elbonia. Elbonia has three ports. One port that may be used is the port of Emeraldi. This port receives regular shipments of packaged commodities and has adequate facilities for receiving and berthing large vessels. It is well equipped with two berths and has a depth of 11 meters. It also has a secured bonded warehouse should immediate storage become necessary. Two other storage sites exist within a 15-mile radius from the port, and each has a storage capacity of 30,000 tons. Upon receipt of shipping documents, ABC will notify the buyer(s) when the commodity is expected to arrive at the port of Emeraldi in Elbonia. ABC will arrange to have the commodity offloaded into rail cars and delivered to its warehouses in Emeraldi and Diamondi. ABC’s warehouses are located within a secure compound with 24-hour security provided. Proper identification is required to enter the compound. Neither warehouse will be shared with any other organizations. Only ABC=s warehouse manager will have keys to the warehouse complexes. There will be no duplicate keys at other locations. Commodities will be released from each warehouse using a standard waybill which tracks the amount of commodity released. Warehouse locations and the amount to be stored in each region are as follows below: Warehouse Location Amount to be stored (MT) Diamondi 5,000 Emeraldi 3,100 Totals 8,100 ABC has no plans to reprocess or repackage the donated commodities. ABC will arrange to ship the green peas from the port to its warehouse in Dry Valley. ABC will distribute the peas to the chosen workers after they finish distributing advertisements.

Duty Free Entry (Section 8, 7 C.F.R. 1499.5) *  
The Government of Elbonia passed a law in 1995 that provides duty- and tax-free entry for all commodities used for humanitarian purposes. Commodities must be used for direct feeding or barter activities with residents who receive assistance from the Ministry of Welfare. ABC has discussed its program with relevant ministries and confirmed that any donated food used in barter activity will be exempt from duties and taxes. Article I, (A) of the July 23, 1995 Agreement Between the Government of the United States of America and the Government of Elbonia Regarding Cooperation to Facilitate Humanitarian and Technical Economic Assistance states the following: "Commodities, supplies, and other property provided or utilized in connection with United States assistance programs may be imported free from any tariffs, dues, customs duties, import taxes, and other similar taxes or charges imposed by Elbonia, or any subdivision thereof." The Government of Elbonia will apply a 20-percent VAT on the soybean oil and soybeans. ABC will arrange for the buyer to pay this tax before receiving the commodities at ABC's warehouse.

Economic Impact (Section 9, 7 C.F.R. 1499.5) *  
Elbonia consumes 300,000 MT of vegetable oil, and 300,000 MT of green peas each year. Green peas are not produced in Elbonia, therefore, the country must rely solely on imports. To meet the demand for vegetable oil, Elbonia must import about one-half of its needs. Imports are relatively low for vegetable oil (20,000 MT annually from Italy, Argentina and Nigeria) and peas (less than 200 MT annually from Australia and the United States). The sale of the soybean oil is small relative to overall demand estimated at 300,000 MT annually, and the sale will most likely involve numerous mid-size wholesalers from throughout the country. Therefore, the donated commodities will not affect local production, prices, or marketing. Elbonia produces approximately 200,000 metric tons of soybeans annually and has an annual need for 1-2 million metric tons. Therefore, the sale of 5,000 tons of soybeans, which represents less than 1 percent of demand, will not have a negative impact on local production.

Other Remarks

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