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FEDERAL REGISTER

Document Type: 
CREST
Collection: 
General CIA Records
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP86-00244R000100190026-8
Release Decision: 
RIPPUB
Original Classification: 
K
Document Page Count: 
78
Document Creation Date: 
December 9, 2016
Document Release Date: 
May 18, 1999
Sequence Number: 
26
Case Number: 
Publication Date: 
July 1, 1972
Content Type: 
REGULATION
File: 
AttachmentSize
PDF icon CIA-RDP86-00244R000100190026-8.pdf11.16 MB
Body: 
ILLEGIB Approved Roy Release 2001/08/09: CI SATUR Ulm I-1 WASH IN Volume 37 ? Number 128 Pages 13071-13150 PART I - (Part II begins on page 13147) 1111111111 HIGHLIGHTS OF THIS ISSUE This listing does not affect the legal status of any document published in this issue. Detailed table of contents appears inside. NATIONAL CAPITAL ENVIRONMENT?Planning Comm. proposes protective amendments 13135 FALSE PRACTICE UNDER SERVICEMEN'S GROUP LIFE INS.?VA rules against misleading reference to SGLI by reinsurers and converters 13091 CABLE TV?FCC notice( of Advisory Committee open meeting 7-10-72 13127 PRICE COMMISSION/COST OF LIVING COUN- CIL?IRS issues rulings on rent increases for extra services; eligibility of public utilities for small business exemption; new par checking service charges by banks, and other matters (12 documents) 13113-13116 MAIL RATES?Postal Service adopts changes; effective 7-6-72 13147 COLOMBIAN COTTONS?Committee for Imple- mentation of Textile Agreements puts restraints on some categories , 13123 FOREIGN DIRECT INVESTMENTS?Commerce Dept liberalizes rules 13086 DISASTER AID?.Office of Emergency Prepared- ness declares 13 more New York and Maryland Counties eligible for help following floods (2 docu- ments) 13135,13136 METHOMYL RESIDUES?EPA establishes in- secticide tolerance ? 13091 (Continued Inside) Approved For Release 2001/08/09 : CIA-RDP86-00244R0001001-90026-8 Approved For Allerl'ase 2001/08/09 : CIA-RDP86-0024400100190026-8 Just Released ??????????????????=?111? CODE OF FEDERAL REGULATIONS (Revised as of June 1, 1972) Title 7?Agriculture (Parts 700-749) $2. 00 Title 17?Commodity and Securities Exchanges 2. 75 Title 18?Conservation of Power and, Water Resources (Part 150-End) 2. 00 [A. Cumulative checklist of CFR issuances for 1972 appears in the first issue of the Federal Register each month under Title 1] Order from Superintendent of Documents, United States Government Printing Office, Washington, D.C. 20402 FIDE Published daily, Tuesday through Saturday (no publication on Sundays, Mondays, or? REGISTER' on the day after an official Federal holiday), by the Office of the Federal Register. National 4s. Archives and Records Service, General Services Administration, Washington, D.C. 20408, Area Code 202 44,:e041- ' Phone 962-8626 pursuant to the authority contained in the Federal Register Act, approved July 28, :.935 (49 Stat. 500, as amended: 44 U.S.C., Ch. 15), under regulations prescribed by the Administrative Committee of the Federal Register, ap- proved by the President (1 CPR Ch. I). Distribution is made only by. the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. The FEDERAL REGISTER will be furnished by mail to subscribers, free of postage, for $2.50 per month or $25 per year, payablE in advance. The charge for individual copies is 20 cents for each issue, 'or 20 cents for each group of pages as actually bound. Remit checl: or money order, made payable to the Superintendent of Documents, U.S. Government Printing Office, Washington, D.O. 20402. The regulatory material appearing herein is keyed to the Coos or FEDERAL REGULATIONS, which is published, under 50 titles, pursuant to section 11 of the Federal Register Act, as amended (44 U.S.C. 1510). The CODE OF FEDERAL REGULATIONS is Bold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each month. There are no restrictions on the republication of material appearing in the FEDERAL REGISTER or the CODE OF FEDERAL REGULATIONS. Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved Pee Release 2R.OBID2 ? CL4.-RDP&A-002,fR000100190026-8 H LIU tiTS?t,onxin ECONOMIC POLICY? Federal Reserve System notice of Open Market Committee directives and actions for current quarter (2 documents) Price Commission to publish biweekly list of State and Federal agencies whose rules on public utilities comply with guidelines 13134 13136 UNFAIR TRADE PRACTICES?FTC issues cease and desist orders against Nationwide Safti- Brake Distributors and Charnita (2 documents) FLOOD INSURANCE PURCHASE ENCOUR- AGED?HUD amendments to reduce premiums and assure agents minimum commissions; effec- tive 7-10-72 13077, 13080 13098 AGRICULTURAL MARKETING SERVICE Rules and Regulations Cherries grown in certain states; assessment procedure; correc- tion 13083 Handling limitations: Lemons grown in California and Arizona 13082 Valencia oranges grown in Ari- zona and designated part of California 13082 Shipment limitations: Fresh pears, plums, and peaches grown in California 13083 Proposed Rule Making Cherries grown in certain states; free and restricted percentages for 1972-73 fiscal period 13109 Handling limitations: Dried prunes produced in Calif_ 13110 Fresh prunes grown in desig- nated counties in Idaho and in Malheur County, Oreg 13108 Onion imports; grade, size, and maturity requirements 13109 AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE Rules and Regulations Indemnity payment program; bee- keeper; correction 13082 AGRICULTURE DEPARTMENT See Agricultural Marketing Serv- ice; Agricultural Stabilization and Conservation Service; Com- modity Credit Corporation; Forest Service. ATOMIC ENERGY COMMISSION Notices Arkansas Power & Light Co.; no- tice and order for hearing on reception of evidence 13122 Northern Indiana Public Service Co.; notice an dorder for pre- hearing conference 13122 Toledo Edison Co. et al.; notice and order for evidentiary hear- ing 13123 Trustees of Columbia University, New York City; extension of completion date for construc- tion permit 13123 Contents COMMERCE DEPARTMENT See Foreign Direct Investments Office; Import Programs Office. COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS Notices Cotton textiles; entry or with- drawal from warehouse for con- sumption of products produced or manufactured in Colombia__ 13123 COMMODITY CREDIT CORPORATION Rules and Regulations Peanuts; 1972 crop farm-stroed loan and purchase program____ 13084 EMERGENCY PREPAREDNESS OFFICE Notices Major disaster, amendments: Maryland 13135 New York 13136 ENVIRONMENTAL PROTECTION AGENCY Rules and Regulations Methomyl; establishment of toler- ances for residues 13091 Notices Ciba-Geigy Corp.; withdrawal of petition for food additive 13127 ENVIRONMENTAL QUALITY COUNCIL Notices Environmental impact state- ments; availability 13124 FEDERAL AVIATION ADMINISTRATION Rules and Regulations Airworthiness directives; certain Rolls Royce Dart model en- gines 13084 Transition areas; alteration (2 documents) 13085 FEDERAL COMMUNICATIONS COMMISSION Notices Cable television advisory group; notice and date of open meet- ing 13127 FEDERAL INSURANCE ADMINISTRATION Rules and Regulations Flood insurance; premium rate re- ductions and minimum commis- sion 13098 Flood insurance program: Areas eligible for sale of insur- ance 13098 Identification of special hazard areas 13099 FEDERAL MARITIME COMMISSION Notices Agreements filed: City of Long Beach and Na- tional Molasses Co Continental North Atlantic Westbound Freight Confer- ence International Passenger Ship Association Trans-Pacific Passenger Con- ference Victoria Steamship Co., Ltd., and Hapag-Lloyd, A.G Den Norske Amerikalinje A/S; revocation of certificate of fi- nancial responsibility 13329 13127 13127 13128 13128 13128 FEDERAL POWER COMMISSION Notices Alaska Power Survey Advisory Committee; prescribed proce- dures 13130 Alaska Power Survey Executive Advisory Committee; designa- tion of membership and chair- manship 13130 (Continued on next page) 13073 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 .01016-' 13074 Approved For Release 2001/08/09 ? CIA-RDP86-00244R006100190026-8 CONTENTS Hearings, etc.: Luda R. Davies, et al 13129 Natural (las Pipeline Company of. America, et al 13132 Public Utility District No. 1, Douglas County, Washington_ 13132 FEDERAL RESERVE SYSTEM Rules and Regulations Bank holding companies; non- banking activities; Celt correc- tion 13084 Proposed Rule Making Securities credit transactions; same-day substitutions; conver- tible "Hedge" transactions; cor- rection 13112 Notices Acquisitions of banks: Exchange Bancorporation, Inc.. 13133 First United Bancorporation, Inc 13133 United Bank Corporation of New York 13134 Federal. Open Market Committee: Continuing authority directive with respect to domestic open market operations 13134 Current economic policy direc- tive, March 21, 1972 13134 FEDERAL REGISTER ADMINISTRATIVE COMMITTEE CFR checklist 13077 FEDERAL TRADE COMMISSION Rules and Regulations Prohibited trade practices; cease and desist orders: Charnita, Inc., and Charles G. 1 Rist 3077 Kenrec Sports Inc., et al_ 13079 Leo Payne Pontiac Inc., and Leo 1 Payne 3079 Nationwide Sal ti-Brake Distrib- utors, Inc., et al 13080 U.S. General Supply Corp., et al 13081 FISH AND WILDLIFE SERVICE Rules and Regulations Public access, use, and recreation; Ruby Lake National Wildlife Refuge, Nev 13097 FOREIGN DIRECT INVEST- MENTS OFFICE Rules and Regulations Foreign direct investments 13086 FOREST SERVICE Notices Transfer of national forest lands to the Mescalero Apache tribe; availability of final environ- mental statement 13117 GENERAL SERVICES ADMINISTRATION Rules arid Regulations Cost Accounting Standards Board; interim policies and procedures_ 13092 Motor vehicle accident; Operator's reporting on Standard Form 91.. 13096 Notices Paint, oil alkyd (modified) , exter- ior, fume resistant, lead free, ready mixed, white and tints; industry specification develop- ment conference HOUSING AND URBAN DEVELOPMENT DEPARTMENT ?See Federal Insurance Adminis- tration; Interstate Land Sales Office. 13135 IMPORT PROGRAMS OFFICE Notices Decisions on applications for duty-free entry of scientific articles: Bluefield State College Brookhaven National Labora- tory George Washington University Medical School Research Foundation of State University of New York, et al_ Pulls University School of Medicine University of Chicago University of Massachusetts Medical School et al University of Pittsburgh School of Medicine et al., correction_ Veterans Administration Hos- pital, Iowa City, Iowa__ Boston University School of Medi- cine et al.; applications for duty-free entry of scientific articles 13117 13118 13119 13119 13120 13121 13121 13122 13122 13117 INTERIOR DEPARTMENT See Fish and Wildlife Service; Land Management Bureau. INTERNAL REVENUE SERVICE Proposed Rule Making Importation of distilled spirits, wines, and beer; issuance of and accounting for red strip stamps 13100 Notices Cost of Living Council Rulings: Small business exemption?di- rector's fees____ 13113 State-owned residential prop- erty which is leased and sub- leased 13113 Cost of Living Council and Price Commission Joint Rulings: Commodity future transac- tions . 13115 Decrease in services; rent in- crease _ . 13114 Rehabilitated dwelling DS a structure . 13114 Rental increase where property is devoted to mixed use_____ 13116 Small business exemption for public utilities_ 13116 Price Commission Rulings: Additional motel units 131:14 Increase in services; rent de- crease 131.15 Index pricing.. 131:.13 New charge for par chek 13113 "Transactions''' of sta tenants 13113 INTERSTATE COMMERCk COMMISSION Notices Feed grains to New England; ek tablishment of lake-rail route\ and rates 3137 Loss and damage claims; prac- tices of regulated carriers re- k garding processing A 139 Mack Transportation Co.; trans- portation of hardware ii 138 Niagara Frontier Tariff Bureau, Inc. and Southern Motor Car- riers; section 5a applications_ 11133 Assignment of hearings 1 14) Fourth section applications for relief 1113.) Motor carriers: Board transfer proceedings 1 L41) Temporary authority applica- tions (2 documents) ___ 13141, 1L43 INTERSTATE LAND SALES OFFICE Rules and Regulations Delegations of basic authority and functions; amendment 1 LABOR DEPARTMENT Notices General Electric Co.; investiga- tion regarding certification of eligibility of workers to apply for adjustment assistance 191 1l 37 LAND MANAGEMENT BURE L) Rules and Regulations Partial revocation and reclama- tion withdrawals: Arizona 13 07 California 13 36 Oregon 13 36 Idaho; withdrawal for Ririe Dam and Reservoir Project 13 37 Notices Colorado; partial termination of proposed withdrawal and reser- vation of lands_ 13 .7 NATIONAL CAPITAL PLANNING COMMISSION Notices Policies and procedures; protec- tion and enhancement of en- vironmental quality 131j 5 NATIONAL HIGHWAY TRAFFI SAFETY ADMINISTRATION Rules and Regulations Federal motor vehicle safety standards; glazing materials; correction 130 r Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved PerRelease 2001/0q/ahiEgirli-RDP86-00t4C000100190026-8 Proposed Rule Making Tire identification and record- keeping; change in method of assigning tire size code; correc- tion 13112 13075 SECURITIES AND EXCHANGE TRANSPORTATION DEPARTMENT COMMISSION Notices Hearings, etc.: POSTAL SERVICE Ohio Edison Co Tanger Industries Topper Corp Notices Certain permanent postal rates and fees; effective date 13148 PRICE COMMISSION Notices State of New York Public Service Commission et al.; certificates of compliance 13136 See Federal Aviation Administra- tion; National Highway Traffic Safety Administration. 13136 13137 13136 TREASURY DEPARTMENT See Internal Revenue Service. VETERANS ADMINISTRATION Rules and Regulations Servicemen's group life insurance; improper practice 13091 List of CFR Parts Affected The following numerical guide is a list of the parts of each title of the Code of Federal Regulations affected by documents published in today's issue. A cumulative list of parts affected, covering the current month to date, appears following the Notices section of each issue beginning with the second issue of the month. In the last issue of the month the cumulative list will appear at the end of the issue. A cumulative guide is published separately at the end of each month. The guide lists the parts and sections affected by documents published since January 1, 1972, and specifies how they are affected. 3 CFR EXECUTIVE ORDER: 5600 (revoked by PLO 5219) 7623 (revoked by PLO 5219) 7 CFR 760 908 910_ 917_ 930 1421 .13096 _13096 13082 13082 13082 13083 13083 13084 14 CFR 39_ 71 (2 documents) 15 CFR 1000 16 CFR 13 (5 documents) 13084 _ 13085 13086 -- 13077, 13079-43081 38 CFR 9 40 CFR 180 41 CFR 1-1 1-3._ 1-15 101-39 43 CFR 13091 13091 13092 13092 13094 13096 PROPOSED RULES: 24 CFR PUBLIC LAND ORDERS: 925_ 13108 1700 13097 5219_ 13096 930 1133110099 13098 5220 13096 980 11991141? 13098 5221 13097 993 13110 1915 13099 5222 13097 12 CFR 26 CFR 49 CFR 571 13097 225 13084 PROPOSED RULES: PROPOSED Rum: PROPOSED RULES: 194 13100 574 13112 207 220 13112 13112 201 250 13100 13100 50 CFR 221 13112 251 13100 28 13097 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved NV' Release 2001/08/09: CIA-RDP86-002R000100190026-8 Rules and Regulations Title 1 GENERAL PROVISIONS Chapter 1-Administrative Committee of the Federal Register CFR CHECKLIST 1972 Issuances This checklist, prepared by the Office of the Federal Register, is published in the first issue of each month. It is ar- ranged in the order of CFR titles, and shows the issuance date and price of re- vised volumes of the Code of Federal Regulations issued to date during 1972. New units issued during the month are announced on the inside cover of the daily FEDERAL REGISTER as they become available. Order from Superintendent of Docu- ments, Government Printing Office, Washington, D.C. 20402. CFR unit (Rev, as of Jan. 1, 1972) : - Title Price 1 $1.00 3 1971 Compilation 1. 25 4 55 5 1.75 6 (Rev. June 1, 1972) 1. 25 7 Parts: 0-45 2. '75 46-51 1. 75 52 3.25 53-209 3. 25 700-749 2. 00 750-899 1.25 900-944 1. 75 945-980 1.00 981-999 1.00 1000-1059 1.75 1060-1119 1.75 1120-1199 1. 50 1200-1499 2.00 1500-end_ 2. 50 8 1.00 9 2.00 10 1.75' 11 [Reserved] 12 Parts: 1-299 3. 00 300-end 2. 75 L3 1. 25 14 Parts: 1-59 3. 00 60-199 2. 75 200-end 3. 25 15 2.00 16 Parts: 0-149 3. 25 150-end 2.00 17 2.75 18 Parts: 1-149 2.00 150-end 2.00 19 2.75 20 Parts 01-399 1. 25 21 Parts: 1-119 1. 75 120-129 1. 50 147-299 1.25 300-end 60 Title Price 22 $1.75 23 55 24 3.25 25 1.75 26 Parts: 1 (?? 1.301-1.400) 1. 00 1 (?? 1.401-1.500) 1.50 1 (?? 1.501-1.640) 1. 25 1 ( ?? 1.641-1.850) 1.75 1 (?? 1.851-1.1200) 2.00 2-29 1.25 30-39 1.50 40-169 2.00 170-299 3.75 300-499 1.50 500-599 1. 75 600-end .60 27 .45 28 1.00 29 Parts: 0-499- 1.75 900-end.. 4. 00 30 2.75 31 2.50 32 Parts: 1-8 3.50 9-39 2. 50 400-589 2. 50 590-699 1. 00 700-799 3. 50 1000-1399 .75 1400-1599 1. 50 -1600-end 1. 00 32A 1.50 33 Parts: 1-199 2.50 200-end 1. 75 34 [Reserved] 36 1.25 37 .70 38 3.50 39 2.00 40 1.75 41 Chapters: 1-2 2. 75 3-5D 2.00 6-17 3.75 19-100 1.25 101-end 2. 75 42 1.75 43 Parts: 1-999 1. 50 1000-end 2.75 44 35 45 Parts: 1-199 2. 00 200-end 2. 00 46 Parts: 66-145 2. '75 146-149 3. 75 150-199 2. 75 , 200-end 3. 00 47 Parts: 0-19 1.75 20-69 2.50 70-79 1. 75 80-end 2.75 48 [Reserved] 13077 Title Price 49 Parts: 1-99 $0. 60 100-199 3.75 200-999 2. 00 1000-1199 1.25 1200-1299 3. 00 1300-end 1. 25 50 1.25 General Index 1.75 Title 16 COMMERCIAL PRACTICES Chapter I-Federal Trade Commission [Docket No. 88291 PART 13-PROHIBITED TRADE PRACTICES Charnita, Inc., and Charles G. Rist Subpart-Advertising falsely or mis- leadingly: ? 13.73 Formal regulatory and statutory requirements: 13.73-92 Truth in Lending Act; ? 13.155 Prices: 13.155-95 Terms and conditions; 13.155-95 (a) Truth in Lending Act. Subpart-Misrepresenting oneself and goods-Goods: ? 13.1623 Formal regu- latory and statutory requirements: 13.1623-95 Truth in Lending Act; ? 13.1823 Terms and conditions: 13.1823-20 Truth in Lending Act. Sub- part-Neglecting, unfairly or decep- tively, to make material disclosure: ? 13.1852 Formal regulatory and stat- utory requirements: 13.1852-75 Truth in Lending Act; ? 13.1892 Sales con- tract, right-to-cancel provision; ? 13.1905 Terms and conditions: 13.1905-60 Truth in Lending Act. (Sec. 6, 38 Stat. 721; 15 U.S.C. 46. Interpret or apply sec. 5, 38 Stat. 719, as amended, 82 Stat. 146, 147; 15 U.S.C. 45, 1601-1605) [Cease and desist order, Charnita, Inc., et al., Fairfield, Pa., Docket No. 8829, June 6, 19721 In the Matter of Charnita, Inc., a Cor- poration, and Charles G. Rist, Indi- vidually and as an Officer of Said Corporation. Order requiring a Fairfield, Pa., real estate firm to cease violating the Truth in Lending Act by failing to disclose to customers the total cash price, the total downpayment, the unpaid balance of the cash price, the finance charges, the an- nual percentage rate, failing to give cus- tomers notice of their right to rescind within 3 days, and other disclosures re- quired by Regulation Z of the said Act. The order to cease and desist, includ- ing further order requiring report of compliance therewith, is as follows: It is ordered, That respondents Char- nita, Inc., a corporation, and its officers, and Charles G. Rist, individually and as FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 13078 Approved For Release 2001/08/09 .? CIA-RDP86-00244R600100190026-8 RULES AND REGULATIONS an officer of said corporation, and re- spondents' agents, representatives and employees, directly or through any cor- porate or other device, in connection With any consumer credit sale of real property or in any advertisement to aid, .promote, or assist directly or indirectly any extension of credit, as "credit sale" and "advertisement" are defined in Reg- ulation Z (12 CFR Part 226) of the Truth in Lending Act (Public Law 90- 321, 15 U.S.C. 1601 et seq.), do forthwith cease and desist from: 1. Failing to use the term "cash price" to designate the cash price of the prop- erty which is the subject of the trans.ac- tons as required by ? 226.8(c) (1) of Reg- ulation Z. 2. Failing to disclose the amount of any downpayment in money as the "cash downpayment," using that term, as required by ? 226.8(c) (2) of Regula- tion Z. 3. Failing to disclose the difference between the cash price and the cash downpayment using the term "unpaid balance of cash price," as required by ? 226.8(c) (3) of Regulation Z. 4. Failing to disclose the sum of the cash price, all charges other than the cash price which are included in the amount financed but which are not part of the finance charge, and the finance charge, using the term "deferred Pay- ment price," as required by ? 226.8(c) (13) (11) of Regulation Z. 5. Failing to identify respondent Charnita, Inc., as the creditor, as re- quired by ? 226.8(a) of Regulation Z. 6, Failing, in connection with any offer of a discount for prompt payment, to make the separate disclosures re- quired by ? 226.8(o), as amended, of Regulation Z, on the invoice or other evidence of sale, as required thereby. 7. Failing, in connection with any offer of a discount for prompt payment, to exclude from the amount of the cash price the greatest amount of discount for prompt payment of which the cus- tomer may avail himself under the terms of the offer, as required by ? 226.8(c) (1) of Regulation Z. 8. Failing, in connection with any offer of a discount for prompt payment, to itemize the amount of the discount as part of the finance charge, as required by ?1226.8(c) (8) (i) and 226.8(o), as amended, of Regulation Z, and to in- clude that amount in the finance charge when disclosing the amount of the finance charge as required by ? 226.8(c) (8) (1) of Regulation Z and when com- puting the annual percentage rate, as required by ?? 126.8(b) (2) and 226.8(o), as amended, of Regulation Z. 9. Stating in any advertisement the period of repayment, without stating all of the following items, in the manner and form prescribed by ? 226.8 of Regulation Z, as required by ? 226.10(d) (2) of Regu- lation Z: (a) The cash price; (b) The amount of the downpayment required; (c) The number, amount, and due dates or period of repayments scheduled to repay the indebtedness; (d) The amount of finance charge expressed as an annual percentage rate; and (e) The deferred payment price. 10. Failing, in any transaction arising In the future in which a customer has the right to rescind as provided in ? 226.9 of Regulation Z, to provide the customer with the notice of right to rescind, in the form and manner pro- vided in that section prior to consum- mation of the transaction and in con- nection therewith to provide a question seeking a statement in writing designat- ing whether or not said customer expects to use the lot as his principal place of residence. ? 11. Failing, in any consumer credit transaction or advertisement, to make all disclosures, determined in accordance with ?? 226.4 and 226.5 of Regulation Z, In the manner, form, and amount re- quired by ?? 226.6, 226.8, 226.9, and 226.10 of Regulation Z. - 12. Failing to deliver a copy of this order to cease and desist to all presents and future employees or other persons engaged in the sale of respondents' real property or in the creation of any ad- vertisement therefor, and to secure from each such employee or other person a signed statement acknowledging receipt of said order. It is further ordered, That respondent Charnita., Inc. shall within thirty (30) days from the date hereof make a clear and conspicuous inquiry in writing, in the manner and form shown on Appen- dixes A and B attached hereto; via reg- istered. mail with return receipt required and with - enclosed self-addressed and stamped envelope to all customers who purchased property from respondent on or after July 1, 1969 and in which re- spondent has retained or acquired or will retain or acquire a security interest. It is further ordered, That within sixty (60) days from the date hereof, in the event that all of the questionnaires (Ap- pendix B)1 have not been completed and returned to respondent Charnita, Inc., respondent shall employ an independent contractor with interviewing capabilities which is acceptable to the Federal Trade Commission to telephone, and if neces- sary to meet in person, each customer who fails to return the questionnaire and to provide him with the information cons tattled in the letter set forth :in Appendix A in order to elicit his response to and signature on the questionnaire. It is further ordered, That respondent Charnita?. Inc. shall maintain adequate records? to be furnished upon the re- quest of the Federal Trade Commission, which disclose the dates and manner in which customers were contacted pur- suant to the above procedures and the dates and manner in which customers responded thereto. It is further ordered, That respondent Charnita. Inc. shall cease to remain in violation of the Truth in Lending Act 1. Copies of Appendixes A and B may be ob- tained at Federal Trade Commission Build- ing, Room 130, Sixth and Pennsylvania Ave. NW. by delivering, Within ten (10) clays after receipt by it of notice from its customers (or from the independent contractor) regarding their expected use of the prop- erty in question, notice of the customer's right to rescind, in the manner and form set forth in ? 226.9(b) of Regulation Z, to each customer who purchased real property from it in any credit transac- tion consummated on or after July 1, 1969 and in which the customer has or shall notify respondent pursuant to the procedures set forth above that he ex- pected to use that property as his jcrinci- pal place of residence and in which respondent has retained or acquired, or will retain or acquire, a security interest therein. Provided, however, That this portion of this order shall not apply to customers who have previously sold the property purchased from Charnita, Inc. It is further ordered, That respondents Charnita, Inc., a corporation, and its of- ficers, and Charles G. Rist, individually and as an officer of said corporation,, and respondents' agents, representatives and employees, directly or through any cor- porate or other device, in connection with any consumer credit sale of real property or in any advertisement to aid, promote, or assist directly or indirectly any ex- tension of credit, as "credit sale' and "advertisement" are defined in Regula- tion Z (12 CFR. Part 226) of the Truth in Lending Act (Public Law 90- 1. 15 U.S.C. 1601 et seq.) do forthwith ease and desist from failing to identify tra..etr security interest as required by ? 226.'8 (b) (5) of Regulation Z together with all other required, disclosures, as required by ? 226.8(a) of Regulation Z. It is further ordered. That the enceP- tions of respondents Charnita, Inc., and Charles G. Rist to the findings, conclu- sions, and order of the hearing examiner be, and they hereby are, denied, and that the exceptions of counsel supporting the complaint to said findings, conclusions, and -order be, and they hereby are,. granted in part and denied in part. It is further ordered, That the ex- aminer's findings, conclusions, and order, as modified and supplemented herein, be, and they hereby are, adopted as the findings, conclusions, and order of the Commission. It is further ordered, That respondent corporation shall forthwith distribute a copy of this order to each of its operat- ing subsidiaries and divisions. It is further ordered, That respondents. notify, the Commission at least thirty (30) days prior to any proposed change in the corporate respondent, such as dis- solution, assignment or sale resulting in the emergence of a successor corpora- tion, the creation or dissolution of sub- sidiaries which may affect compliance obligations arising out of the order or . any other change in the corporation. which may affect compliance elongations . arising out of the order. It is further ordered, That respondents herein shall, within three (3) months after service upon them of this order, file with the Commission a report In writing setting forth in detail the man- ner and form in which they are com- plying with this order and shall, within FEDERAL REGISTER, VOL. 37,, NO. 128-SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For Release 2001/08/09 : -RDP86-00244R000100190026-8 six (6) months thereafter, file a further report in writing setting forth in detail the manner and form in which they have complied therewith. Issued: June 6, 1972. By the Commission. [SEAL] CHARLES A. TOBIN, Secretary. [Fa Doc.72-10066 Filed 6-30-72;8:50 am] Moolet VC. 0-22261 PART 13?PROHIBITED TRADE PRACTICE'S Kenrec Sports Inc., et al. Subpart?Advertising falsely or mis- leadingly: ? 13.1'15 Quality of product fp.. serzfeei ? 13.190 Results; ? 13.195 Safety -13.195-50 - Product; ? 13.265 Tests and investigations. Subpart?Mis- representing oneself and goods?Goods: I 13.1715 Quality; ? 13.1730 Results; 13.17.02 Tests, purported. Subpart? NegleCting, unfairly or deceptively, to ina.ke friaterial disclosure: ? 13.1886 QUality, grade or type; ?13.1B90 Safety. (Sec. 6, 38 Stat, 721; 15 `Ii.8-.c. 46. Interprets or applies see. 5, 38 Stat. 719, as amended; 15 U.Q. -45) [Cease and desist order, 2re.nreo 3 'tots Inc., et al., New York, N.Y., or .. 0-2226, May 23, 19721 Zi the Matter of IfenreeSorts Inc., a Corporation, Dennis Eichler and Era Waldman; Individually and as Qficers Or said Corporation. t order requiring a New York 'Clty seller of a swimming-aid device to cease misrepreSenting the device as a Swim Teacher, that the device assures Ideal body poSition, has been tested and 41Spiroirell by experts in the United States and abroad, misprepresenting the device as safe and secure and requiring on any future packaging and advertising, a settlegent that the device is not a life preSe_ er. ?nui .,order to cease and desist, includ- ing further order requiring report of compliance therewith, is as follows: It is ordered, That respondents Kenrec Sports Inc., a corporation, and Its officers, and Dennis Eichler and Ezra Waldman, individually and as officers and directors of said corporation, and resPolidents' agents, representatives, employees, successors and assigns, di- rectly or through any corporate or other device, in connection with the advertis- ing, offering for sale, sale or distribution of a swimming-aid device designated "Berne Swim Teacher " or any other de- vice of similar design; construction or intended use', in commerce as "com- merce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, directly or by Implication, that: 1. Such device is a Swim Teacher and can teach swimming in three easy steps or any number of steps. 2. Such device assures ideal body positioning in the water for the swift development of correct swimming motions. No. 128?Pt. 1-2 '4S Rtiltr`ANDItOUI.ATIONS 3. Such device has been tested and approved as to any and all aspects, in- cluding safety, by European and United States swimming experts, including- Don Schollantler, unless said device has been .subjected to practical and effective tests under controlled conditions. t. Such device is safe and secure by the use of such phrases as "Completely Safe and Dependable," "Designed and Made with Your Safety gin Mind," "An --ro-YerCircle of Safety Sports Prod- not," or any other language of similar rt. . Such device can be used with con- fidence on irifants and children to over- come their fear of the water and teach them to swim unless respondents shall state clearly and conspicuously and in immediate conjunction with any such representation that such device Is not a life preserear, sheuld not he used by non- swiminers vithout pitter supervision and should be used only in shallow water. It is frrther ordered, That on all future packages, brochures, flyers, or other pieces of advertising material describ- ing said device or any other device of similar dean, construction, or intended use, respondetts affirmatively disclose in clear and conspicuous language that said device is not a life preserver, should not be used by nonsWimraers without proper supervision and in all cases should be TASed only in shallow water. It is further ordered, That respondents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent such as dis- solution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of this order. It is further ordered, That respondents distribute a copy of this order to all op- erating divisions and subsidiaries of said corporation and also distribute a copy of. this, order to all of respondents' per- sonnel involved in the formulation and Implementation of respondents' business policies and all other personnel engaged In the advertising, marketing and sale of respondents' products. It is further ordered, That respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing set- ting forth in detail the manner and form in which they have complied with this order. Issued: May 23, 1972. By the Commission. [SEAL] CHARLES A. ToBIN, Secretary. (PR Doc.72-10042 Filed 6-30-72;8:46 am] [Docket No. 0-2229] PART I3?PROHIBITED TRADE PRACTICES Leo Payne Pontiac, Inc., and Leo Payne Subpart?Advertising falsely or mis- leadingly: 1 13.73 Formai regulatory FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 13079 and statutory requirements: 13.73-92 Truth in Lending Act; ? 13.155 Prices: 13.155-95 Terms and conditions; 13.155- 95(a) Truth in Lending Act. Subpart? Misrepresenting oneself and goods? Goods: ? 13.1623 Formal regulatory and statutory requirements: 13.1623-95 Truth in Lending Act; ? 13.1823 Terms and conditions: 13.1823-20 Truth in Lending Act. Subpart?Neglecting, un- fairly or deceptively, to make material disclosure: ? 13.1852 Formal regulatory and statutory requirements: 13.1852-75 Truth in Lending Act; ? 13.1905 Terms and conditions: 13.1905-60 Truth in Lending Act. (Sec. 6, 38 Stat. 721; 15 U.S.C. 46. Interpret or apply sec. 5, 38 Stat. 719, as amended, 81' Stat. 146, 147; 15 U.S.C. 45, 1601-1805) [Cease and desist order, Leo Payne Pontiac, Inc., et al., Lakewood, Colo., Docket No. 0-2229, June 1, 1972] In the Matter of Leo Payne Pontiac, inc., a Corporation, and Leo Payne, In- dividually and as an Officer of Said Corporation. Consent order requiring a Lakewood, Colo., dealer and seller of automobiles, campers and mobile homes to cease vio- lating the Truth in Lending Act by fail- ing to list the cash price, the downpay- ment required, the annual percentage rate, the deferred payment price, and any other disclosures required by Regulation Z of the said Act. The order to cease and desist, includ- ing further order requiring report of compliance therewith, is as follows: It is ordered, That respondents Leo Payne Pontiac, Inc., a corporation, and Leo Payne, individually and as an officer of said corporation, trading under said corporate name or under any trade name or names, their successors and assigns. and respondents' agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the arrange- ment, extension, or advertisement of consumer credit in connection with the sale of automobiles, motor homes campers, travel trailers, or other prod- ucts or services, as "advertisement" and "consumer credit" are defined in Regu- lation Z (12 CFR Part 226) of the Truth In Lending Act (Public Law 90-321, 15 U.S.C. 1601 et seq.), do forthwith cease and desist from: 1. Causing to be disseminated to the public in any manner whatsoever any ad- vertisement to aid, promote, or assist directly or indirectly, any extension ot consumer credit, which advertisement states the amount of the downpayment required, or that no downpayment is re- quired, the amount of any installment payment, the dollar amount of any fi- nance charge, the number of installments or the period of repayment, or that there is no charge for credit, unless it states all of the following items in the manner and form as required by ? 226.10(d) (2) of Regulation Z: a. The cash price; b. The amount of the downpayment required or that no downpayment is required, as applicable; 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For Release 2001/08/09: 13080 c. The number, amount, and due dates or Period of payments scheduled to re- pay the indebtedness if the credit is eztended; d. The amount of the finance charge expreeeed as an annual percentage rate; and e. The deferred payment price or the sum of the payments, as applicable. 2. Falling to print the term "annual percentage rate" more conspicuously th,axi other ?terminology required by Regulate:an Z, when that termis required to be used by Regulation Z. 3. Failing, in any consumer credit traneaetion or , advertisement, to make all the disclosures, determined In accord- IAP,17#? Witi)sit24.6.4. and_226.5 of Regula- In the manner, form, and amount required by ?? 226.6, 226.7, 226.8, 226.9, IneiL229,19 of Regulation Z. 4. Failing to deliver a copy of this order tnenalieseetand. desist to all present and future personnel of respondents engaged in any aspect of preparation, creation, and placing of , advertising, all persons eagaged in reviewieur the legal sufficiency of advertising, and all present and future ageneica engaged In Preparation, crea- tion, and Placing of adyertising on behalf of respondents, and failing to secure from each such person or agency a signed. statement acknewledging receipt of said order. , It is further ordered, That respondents shall, within sixty (60) days after serv- ice upon them ef this order, file, indi- vidually, with tile Commission, a report In writing, setting forth in detail the manner and form in which each of them has complied with this order. It is further ordered, That respondents notify the Commission . at least thirty (80) days prior to any proposed change In the corporate respondent such as dis- solution, assignment, or sale resulting in the emergence of a successor corpora- tion, the creation or dissolution of sub- sidiaries, or any other change in the corporation which may affect compliance obligations arising out of the order. Issued; June 1, 1972. By the Commission. fawn CHARLES A. TOBIN, Secretary. [PS 1)oc.72-.10043 Filed 6-30-72;8:46 am] [Docket No. 0-2227] PART 13?PROHIBITED TRADE PRACTICES. Nationwide Safti-Brake Distributers, Inc., et al. Subpart?Advertising falsely or mis- leadingly: ? 13.15 Business status, ad- vantages, or connections: 13.15-105 Identity; 13,..15-2a5 Personnel or staff; 13.15-270 Size end extent; ? 13.155 Prices: 13.155-5 Additional charges un- mentioned; 13.155-10 Bait. Subpart? Misrepresenting ,oneself and goods? Business status, advantages, or connec- tions: ? 13.1440, identity; ? 13.1520 Personnel or sta. ? 13.1555 Size, ex- tent, or equipment; Misrepresenting IA-RDP86-00244R000100190026-8 ? ..I.E.k4544,MGVIATIONA . oneself and goods?Goods: ? 13.1685 Nature: 13.1685-15 By misleading trade or corporate name; Misrepresenting one- self and goods--Prices: ? 13.1778 Ada- tionul costs unmentioned; ?13.1770 Bait. Subpart?Neglecting, unfairly or deceptively, to make material disclosure; ? 13.1855 Identity; ? 13,1882 Prices. Subpart?Using misleading name?Ven- dor: ? 13,2385 Identity. . (Sec. 6. 35 Stat, 721; 15 U.S.C. 46. interprets or applies sec. S. 38*Stat. 719. as arnerated; 15 U.S.C. 45) [Cease and deciat order, Na- tionwide Sa/ti-Brake Distributbra. imp., et al, Rockville, Md., Docket No. C-2227, May 25, 197211 In the Matter of Nationwide .Saftt-Brake Distributors, Inc., a Corporation; Gleba etivertising Ca., lam; a Cor- poration:. Market Tire Co., ef Mary- land, Inc.., a Corporation, and Allan iteetnent. Deeii Latelco, Individii- a and as officers of Market Tire co., of Afferylancl, Inc. Consent order requiring a. Reckville, Md.., seller and distributor of automabile parts, including brake parts, and its par- ent company to cease misrepresenting prices of particular automotive repair services, representing that any merchan- dise or service is for sale when in fact it is not: using deceptive representations An, order to obtain prospective customers, misrepresenting respondent's size and extent, and using the word "Safti" or any other similar misrepresentation in re- spondent's trade name or service mark within 1 year. The order to cease and desist, including further order requiring report of com- pliance therewith, is as follows: It is ordered,. That respondents Na- tionwide Saftt-Brake Distributors, Ince a corporation, Globe Advertising Co., Ince a corporation, Market Tire Co. of Mary- land, Inc., a corporation, their successors and assigns and their officers, and Allan Bratman and David Lawson, individually and as officers of Market Tire Co. of Maryland, Inc. and each of said respond- ents trading as Nationwide I3afti-Brake Centers or under any other trade name or names, and respondents' agents, rep- resentatives, and employees directly or through any corporation, subsidiary, di- vision, or other device, in connection with the advertising, offering for sale, sale or distribution of automobile brake repair services, 9r any other products or services, in cenemerce, as "commerce" is defined in the Federal Trade Commis- sion Act, do forthwith cease and desist from: 1. Advertising the price of particular automotive repair aervices such as relin- ing brakes? unless in immediate con- junction therewith disclosure is made, in a prominent place and in legible type that additional aharges may be required, which additional charges are listed covering usual and customary parts and/or labor for the repair services ad- vertised; or in lieu thereof, clearly dis- closing in Immediate conjunction with the advertised price, and in the same type size, the current average total cost at the time of publication for such Sera- ices, including the additional parts and labor normally required. 2. Representing, orally or in writing, directly or by implication, that any Tier- chandise or service is offered for sale when the purpose of the representation is not to sell such merchandise or serv- ice in the represented manner; or mis- representing, in any manner, the nature, cost, or extent of any such service or re- lated parts necessary to repair automo- tive components. 3. Using, in any manner, a sales plan or procedure wherein false, misleading, or deceatneazepresentations are made in order to Obtain prospects for the sabt of merchandise or services. 4. Failing to disclose in all media ad- vertising in close conjunction with re- spondents' trade name and servicenta,rk "Nationwide Safti-Brake Centers" the geographic trading area or areas where respondent in fact does business, or otherwise misrepresenting apart from said trade name and servicernark usage that respondents' business serves a geographic area larger than is the feet. 5. Using the word "Sant" or any other word, term or phrase of similar import or meaning in respondents' trade name or servicemark; provided, however, that respondents shall be permitted to phase out such term: (a) In all media ad- vertising within 1 month from the date this order is accepted, (b) in all sta- tionary, invoices, and other business forms (and in-store promotional mane- rial) as the current supply Is exhausted, but no later than 1 year from the date this order is accepted, and (el in all store signs within 1 year from the date this order is; accepted. It is further ordered, That respondents deliver a copy of this order to each of their operating departments and divi- sions engaged in the advertising, offering for sale, sale or distribution to the pub- lic at retail of automobile brake repair services or any other products or services and to the manager and employees of each present and every future retail out- let owned and operated by responderes, and obtain a signed statement acknowl- edging receipt of said order from each individual receiving a copy of same. It is further ordered, That respond- ents maintain for at least a two (2) year period, copies of all advertisements, in- cluding television and radio advertise- ments, direct mail and in-store solicita- tion literature, and any other such promotional material made for the pur- poses of offering for sale, sale or die- tribution to the public at retail of automobile brake repair services or any other products or services. It is further ordered, That respond eats maintain for at least a one (1) year period, full and adequate records which. disclose the facts upon which repre- sentations of the type dealt with in para- graphs 1 and 2 of this order are based, and from which the validity of such claim can be established. It is further ordered. That respond- ents notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondents FEDERAL REGISTER, VOL. 37, N. 1211?SATURDAY, A1LY 1, 1972 Niue - 13094 Approved ForqeleaskunplAWORE6a1M86-002447Z600100190026-8 prime contractor, submit it direct to'the contracting officer and auditor having cognizance of the prime contractor's fa- cility. The contracting officer for the prime contractor shall furnish copies to the contracting officer and auditor cog- nizant of the subcontractor for use in administration of the Cost Accounting Standards clause. (d) Postaward submission of the sub- contractor's disclosure statement (see ? 1-.3.1203(d)) must be approved by the contracting officer having cognizance of the prime contractor. (e) A determination that it is im- practicable to secure a subcontractor's disclosure statement must be made in accordance with ? 1-3.1203(e). ? 1-3.1207 Contract price adjustments. (a) Modifications to disclosure state- mei tts or established practices. Para- graph (a) (4) of the Cost Accounting Standards clause (Attachment B) pro- vides for adjustment of the contract price due to changes in the disclosure state- ment. The cognizant contracting officer Is responsible for obtaining the contrac- tor's proposal and for the conduct of all negotiations of such adjustments to all Government prime contracts. When a prime contractor is also a subcontractor, the contracting officer shall advise the contracting officer having cognizance of the applicable prime contract of the re- sults of his negotiations. (b) Failure to comply with Cost Ac- counting Standards clause. Paragraph (a) (5) of the Cost Accounting Stand- ards clause (Attachment B) provides for an adjustment of the prime contract price or cost allowance, as appropriate, if the contractor or a subcontractor fails to comply with an applicable cost ac- counting standard or fails to follow any disclosed accounting practice and such failure results in any increased cost paid by the Government. The cognizant con- tract auditor shall be responsible for the conduct of audits as necessary to disclose such failures. The cognizant contracting officer shall negotiate all resultant prime contract adjustments, including appli- cable interest. (c) Conduct of negotiations of defense and nondefense contracts and execution of supplemental agreements. Negotia- tions pursuant to (a) and (b) of this ? 1-3.1207 shall be conducted on behalf of all Government agencies including, but not limited to, DOD, NASA, AEC, and GSA. The cognizant contracting officer shall invite representatives of the Gov- ernment agencies involved to participate in negotiations of adjustments when the price of any of their contracts will be in- creased or decreased by $10,000 or more. At the conclusion of negotiations the fol- lowing actions shall be taken by the ad- ministrative contracting officer: (1) Execute supplemental agreements to DOD contracts. If additional funds are required, request them from the appro- priate procurement contracting officer; and (2) Advise contracting officers of other Government agencies of the results of his negotiations. Such agencies shall ex- ecute necessary supplemental agreements in the amounts negotiated. ? 1-3.1208 Contract administration by other Government agencies. In some instances the contracting offi- cer cognizant of a contractor will be the representative of a Government agency other than DOD. A list of such assign- ments will be published from time to time in DOD Defense Procurement Circulars and in FPR Bulletins. In such cases, contracting officers of other Gov- ernment agencies shall perform for DOD all functions in ?? 1-3.1205, 1-3.1208, and 1-3.1207 which DOD contracting officers perform for other Government agencies. PART 1-15--CONTRACT COST PRINCIPLES AND PROCEDURES d. Section 1-15.109 is added, as follows: ? 1-15.109 Definitions. As used in this Part 1-15 (except for Subpart 1-15.31, the words and phrases defined in this parargaph shall have the meanings set forth below: (a) "Profit center," the smallest or- ganizationally independent segment of a company which has been charged by management with profit and loss responsibilities. (b) "Accumulating costs," the collect- ing of cost data in an organized manner, such as through a system of accounts. (c) "Actual costs," amounts deter- mined on the basis of costs incurred, as distinguished from forecasted costs. In- cludes standard costs properly adjusted for applicable variance. (d) "Allocate," to assign ail item of cost, or a group of items of cost, to one or more cost objectives. This term in- cludes both direct assignment of cost and the reassignment of a share from an in- direct cost pool. (e) "Cost objective," a function, orga- nizational subdivision, contract, or other work unit for which cost data are desired and for which provision is made to ac- cumulate and measure the cost of proc- esses, products, jobs, capitalized projects, etc. (f) "Direct cost," any cost which is Identified specifically with a particular final cost objective. Direct costs are not limited to items which are incorporated in the end product as material or labor. Costs identified specifically with a con- tract are direct costs of that contract. All costs identified specifically with other final cost objectives of the contractor are direct costs of those cost objectives. (g) "Estimating costs," the process of forecasting a future result in terms of cost, based upon information available at the time. (h) "Final cost objective," a cost ob- jective which has allocated to it both direct and indirect costs, and in the con- tractor's accmulation system, is one of the final accumulation points. (i) "Indirect cost," any cost not di- rectly identified with a single final cost objective, but identified with two or more final cost objectives or with at least one intermediate cost objective. (j) "Indirect cost pools," groupings of incurred costs identified with two or more cost objectives but not identified specifi- cally with any final cost objective. (k) "Pricing," the process of establish- ing the amount or amounts to be paid in return for goods or services. (1) "Proposal," any offer or other sub- mission used as a basis for pricing a con- tract, contract modification, or termina- tion settlement, or for securing payments thereunder. (m) "Reporting costs," provision of cost information to others. The reporting of costs involves selecting relevant cost data and presenting it in an intelligible manner for use by the recipient. e. Section 1-15.201-2 is revised, as follows: ? 1-15.201-2 Factors affecting allow- ability of costs. Factors to be considered in determin- ing the allowability of individual items of cost include (a) reasonableness, (b) allocability, (c) standards promulgated by the Cost Accounting Standards Board, if applicable, otherwise, generally ac- cepted accounting principles and prac- tices appropriate to the particular cir- cumstances, and (d) any limitations or exclusions set forth in this Subpart 1-15.2 or otherwise included in the con- tract as to types or amounts of cost Items. When a contractor has disclosed his accounting practices in accordance with Cost Accounting Standards Board rules, regulations, and standards and any such practices are inconsistent with any of the provisions of this Subpart 1-15.2, costs resulting from such inconsistent practices shall not be allowed in excess of the amount that would have resulted from the use of practices consistent with this Subpart 1-15.2. f. Section 1-15.201-4 is revised, as follows: ? 1-15.201-4 Definition of allocability. A cost is allocable if it is assignable or chargeable to one or more cost objectives (see ? 1-15.109(e) ) in accordance with the relative benefits received or other equitable relationship. Subject to the foregoing, a cost is allocable to a Govern- ment contract if it: (a) Is incurred specifically for the contract; (b) Benefits both the contract and other work, or both Government work and other work, and can be distributed to them in reasonable proportion to the benefits received; or (c) Is necessary to the overall opera- tion of the business, although a direct relationship to any particular cost objec- tive cannot be shown. g. Section 1-15.202 is revised, as fol- lows: ? 1-15.202 Direct costs. (a) A direct cost is any cost which is Identified specifically with a particular final cast objective (see ? 1-15.109 (f ) ) . No final cost objective shall have allocated to it as a direct cost any cost it other costs, incurred for the same purpose in like circumstances, have been included FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For.Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 RULES AND REGULATIONS Standards Board (see 4 CFR Part 331 et seq.) requires the development of cost accounting standards to be used in con- nection with negotiated national defense contracts and disclosure of cost account- ing practices to be used in such contracts. Such cost accounting standards and dis- closure of cost accounting practices shall also be used in connection with nego- tiated nondefense contracts. ? 1-3.1202 Definitions. When used in this subpart, the words and terms defined in 4 CFR Part 331 et seq. shall have the meanings set forth therein. In addition, the words and terms defined in this paragraph shall have the meanings set forth below: (a) "Net awards" means the obligated Value of negotiated national defense prime contracts, awarded in the report- ing period, minus cancellations, termi- nations, and other credit transactions relating thereto. (b) "Company" includes all divisions, subsidiaries, and affiliates of the con- 'tractor under common control. ,? 1-3.1203 Prime contractor disclosure statement. (a) Solicitation notice. The notice en- titled Disclosure Statement?Cost Ac- counting Practices and Certification set forth in Attachment A shall be inserted in all solicitations which are likely to result in a negotiated contract exceed- ing $100,000, except when the price is (1) based on established catalog or mar- ket prices of commercial items sold in substantial quantities to the general pub- lic, or (2) set by law or regulation. (b) Preaward submission of disclosure statements. Each offeror submitting an offer which could result in a negotiated contract exceeding $100,000, except when the price is based on established catalog or market prices of commercial items sold in substantial quantities to the gen- eral public or prices set by law or regu- lation, shall furnish copies of his disclosure statements to the offices listed in ? 1-3.1203(c) concurrently with the submission of his proposal to the con- tracting officer. However, the offeror need not furnish the disclosure state- ment when he has executed the certifi- cate of monetary exemption or the certificate of previously submitted dis- closure statement (see Attachment A) . More than one disclosure statement may be required in connection with the award of a contract (see 4 CFR 351.4(a) ) . Award of a contract shall not be made until a determination has been made by the contracting officer or his authorized representative that a disclosure state- ment is adequate (see ? 1-3.1205(a) ) un- less, in order to protect the interests of the Government, the contracting officer waives this requirement. In this event, a determination shall be made as soon after award as possible. (c) Distribution of disclosure state- ments. The offeror shall distribute his Disclosure Statements as follows: (1) Original and one copy to the cog- nizant contracting officer; (2) One copy to the cognizant con- tract auditor; and (3) One copy to the Cost Accounting Standards Board, 441 G Street NW., Washington, DC 20548. (d) Post award submission of disclo- sure statements. Postaward submission of disclosure statements may be author- ized only when the contracting officer has made a written determination that such authorization is essential (1) to the national defense, (2) because of the pub- lic exigency, or (3) to avoid undue hard- ship. Each determination shall set forth facts which clearly support the determi- nation to authorize postaward submis- sion, and a copy of the determination shall be included in the contract file. Authorization issued pursuant to this paragraph shall specify the period of time, not to 'exceed 90 days after con- tract award, within which disclosure must be made. (e) Determination by agency head that it is impracticable to secure disclo- sure statements. If the head of the agency (see ? 1-1.204) determines that it is impracticable to secure the disclo- sure statements in accordance with the clause set forth in Attachment B and this' subpart., he may authorize award of such contract without obtaining such statements. This authority shall not be delegated. He shall, within 30 days there- after, submit a report to the Cost Ac- counting Standards Board, setting forth all material facts. (f) Privileged and confidential infor- mation in disclosure statements. If the offeror or contractor notifies the con- tracting officer that the disclosure state- ment contains trade secrets and com- mercial or financial information which Is privileged and confidential, the dis- closure! statement will be protected and and will not be released outside the Gov- ernment (see paragraph (a) (1) of the Cost Accounting Standards clause set forth in Attachment B) . (g) Amendment of disclosure state- ments. Amendments of a disclosure statement after contract award shall be processed in accordance with 4 CFR 351.12 and 1-3.1207. , ? 1-3.1204 Contract clause. The Cost Accounting Standards clause set forth in Attachment 13 shall be in- serted in all negotiated contracts exceed- ing $100,000 except when the price is based on established catalog or market prices of commercial items sold in sub- stantial quantities to the general public or is set by law or regulation. ? 1-3.1205 Review of prime contractor disclosure statements. (a) Contracting officer and auditor' support responsibility. When the Depart- ment of Defense (DOD) has contract ad- ministration cognizance of a contractor, required disclosure statements shall be reviewed by the cognizant administra- tive contracting officer and contract au- ditor for all Government agencies in- cluding, but not limited to, DOD, NASA, AEC, and GSA (see ? 1,3.1208 with re- spect to contract administration by other Government agencies). (b) Determination, of adequacy. The cognizant contract auditor shall perform 12093 an initial review of a disclosure state- ment to ascertain whether it adequately describes the offeror's cost accounting practices. In order to be deemed adequate the disclosure statement must be cur- rent, accurate, and complete. Upon com- pletion of this initial review the results shall be reported to the contracting offi- cer. When he determines that adequate disclosure has not been made, he shall identify the areas of inadequacy and re- quest a revised statement from the of- feror, and so advise the auditor. When the contracting officer determines that the disclosure statement is adequate, he shall notify the offeror in writing with a copy to the auditor. In addition., the notice shall state that a disclosed prac- tice shall not, by virtue of such disclo- sure, be deemed to be a proper, ap- proved, or agreed to practice for pricing proposals or accumulating and reporting contract perfermance cost data. The con- tract may be awarded when it is deter- mined that an adequate disclosure has been made (see ? 1-3.1203 (b) ) . (c) Determination of compliance. Subsequent to the issuance of the above notification, a more detailed review of the disclosure statement shall be made by the auditor to ascertain whether the disclosed practices are in compliance with Part 1-15 or ASPR section XV, as applicable, and the Cost Accoeuating Standards. The auditor shall advise the contracting officer of his findings. When it is determined by the contracting offi- cer that any disclosed practice is not In compliance, he shall notify the offeror or contractor, with a copy to the auditor. This notice shall require the offesar or contractor to advise the contracting offi- cer and the auditor of the correctisre ac- tion taken or to be taken to bring the practices into compliance. A revised dis- closure statement may be requited. In addition, adjustment of the prime! con- tract price or cost allowance in accord- ance with ? 1-3.1207(b) may be required. Noncomplian.ces which cannot be re- solved by the contracting officer should be referred to the Government depart- ment or agency having contract admin- istration cognizance and, if necessary, coordinated with any other Government department or agency concerned. The contracting officer shall also advise higher authority of disclosed practices which are not in compliance and which would have any effect on the pricing of contracts under negotiation. ? 1-3.1206 Subcontractor disclosure - statements. (a) Disclosure statements furnished by a subcontractor pursuant to the Cost Ac- counting Standards clause should, ex- cept as provided in (b) or (c) of f this ? 1-3.1206, be submitted to the :prime contractor or higher tier subcontractor. (b) A subcontractor may satisfy, the requirement to submit disclosure state- ments by identifying to the prime con.- tractor or higher tier subcontractor the contracting officer to whom hiedisclosure statement was previously submitted. (c) When a subcontractor coraiders that his disclosure statement contatas in- formation that is privileged and confi- dential, he may, with the approval of the FEDERAL REGISTER, VOL. 37, NO. 128--SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved ForZelease 2001/08/09 : CIA-RDP86-00244ga00100190026-8 13092 RULES AND REGULATIONS (Sec. 408(d) (2), 68 Stat, 512; 21 U.S.C. 346a without limitation, the application of the tracts, and, if they do endorse the ex- (d) (2) ) contract cost principles and procedures tension, whether they favor the appli- Dated: June 26, 1972. In FPR 1-15 (41 Celt, Part 1-15) for con- cation of the procedures in 11-3.1207(c) tracts with both commercial (profitmak- to nondefense contracts. WILLIAM M. UPHOLT, ing) and nonprofit institutions or orga- 7. Explanation of changes. Deputy Assistant Administrator nizations. This regulation does not apply for Pesticides Programs, to contracts with educational institutions PART 1-1?GENERAL [FR Doc.72-10079 Filed 6-30-'72;8:48 am] subject to FPR 1-15.3 (41 (Aoki. 1-15.3). Subpart 1-1.4?Procurement Any provision of the FPR which is incon- sistent Responsibility and Authority with promulgations of the Cost Title 41?PUBLIC CONTRACTS Accounting Standards Board is super- a. Section 1-1.406 is added, as follows: seded by the Board's rules to the extent of the inconsistency. ? 1-1.406 Cost Accounting Standards. AND PROPERTY MANAGEMENT b. All solicitations (1) issued on or The contracting officer or his author- after July 1, 1972, which are likely to re- ized representative shall: Chapter I?Federal Procurement suit in negotiated defense contracts ex- (a) Determine the adequacy of prime Regulations ceeding $100,000, and (2) issued on or contractor's disclosure statements (see atter October 1, 1972, which are likely to ? 1-3.1203(a)) ; [Federal Procurement Regs.; Temporary result iri nondefense contracts exceeding (b) Determine whether prime con- Reg. 27] $100,000, shall include the solicitation no- tractor's disclosure statements are in MISCELLANEOUS AMENDMENTS TO tice set forth in Attachment A and the compliance with Part 1-15 and Cost CHAPTER contract clause set forth in Attachment Accounting Standards; B, except when the price is based on (c) Determine contractor compliance To: Heads of Federal agencies, established catalog or market prices of with Cost Accounting Standards and dis- Subject: Revision of regulations pur- commercial items sold in substantial closure statements, if applicable; and suant to Public Law 91-379, as imple- quantities to the general public or prices (d) Negotiate price adjustments and mented by the Cost Accounting Stand- set by law or regulation. However, agen- execute supplemental agreements pur- ards Board. cies may make the procedures for the use suant to the Cost Accounting Standards 1. Purpose. This regulation prescribes of the solicitation notice and contract clause set forth in Attachment B. Interim policies and procedures to im- clause applicable to nondefense contracts b. Section 1-3.809 is amended to add plement the Cost Accounting Standards on or after July 1, 1972, if they wish to paragraph (c) (4) which reads as Board (CASB) rules and regulations with do so. follows: respect to negotiated national defense c. The contract clause set forth in contracts in excess of $100,000 in ac- Attachment B below shall also be in- ? 1-3.809 Contract audit as a pricing cordance with the requirements of Public serted in all the negotiated defense con- aid. Law 91-379. In the interest of maintain- tracts described in subparagraph b, * ing uniform Government-wide procure- above, that are awarded on or after Oc- (c) * ment policies and procedures, it also tober 1, 1972, regardless of the solicita- (4) In accordance with Subpart 1- adopts such rules and regulations for ne- tion date. Although the solicitation no- 3.12, Cost Accounting Standards, and gotiated nondefense contracts in excess tice and contract clause are not required Part 1-15, Contract Cost Principles and of $100,000. in solicitations issued prior to July 1, Procedures, the cognizant contract audi- 2. Effective date. This regulation is ef- 1972, it is recommended that they be in- tor shall be responsible for making tee- fective upon publication in the FEDERAL eluded when it is contemplated that the ommendations to the contracting officer REGISTER (7-1-72) except as otherwise contract will be awarded on or after Oc- as to whether: provided by paragraph 5. tober 1, 1972. If, in this situation, award (i) A contractor's disclosure state- 3. Expiration date. This regulation will is made prior to October 1, the clause ment (see ? 1-3.1203 (a) ), submitted as continue in effect until canceled, shall not be included in the contract, a condition of contracting, adequately 4. Background. The initial promulga- d. The regulations of the Cost Ac- describes the actual or proposed cost tion of the Cost Accounting Standards counting Standards Board provide that accounting practices as required by Pub- Board (4 CFR Part 331 et seq.) author- the requirements for filing a disclosure lic Law 91-379, 50 U.S.C. App. 2168, as ized by Public Law 91-379, 50 U.S.C. App, statement applies only to a company implemented by the Cost Accounting 2:168, appeared in the FEDERAL REGISTER which, together with its subsidiaries, re- Standards Board; of February 29, 1972 (37 F.R. 4139). The ceived net awards of negotiated national (ii) A contractor's disclosed cost ac- regulation prescribes Cost Accounting defense prime contracts totaling more counting practices are in compliance Standards, rules, and regulations ap- than $30 million during the period with Part 1-15 and applicable Cost Ac- plicable to the negotiation of national July 1, 1970, through June 30, 1971. After counting Standards; defense contracts and requires the dis- October 1, 1972, a company shall file a (iii) A contractor's or subcontractor's closure of cost accounting practices to be disclosure statement where negotiated failure to comply with applicable Cost usedStandards or to follow con- used in such contracts. In the interest national defense prime contracts which of maintaining uniform Government- it has been awarded total more than $30 sistently his disclosed cost accounting wide procurement policies and pro- million. Contractors or subcontractors practices has resulted or may result in cedures, this regulation adopts such Cost who did not receive net negotiated na- any increased cost paid by the Govern- Accounting Standards for both the nego- tonal defense prime contract awards in ment; and tiated defense and nondefense contracts that amount during the specified period (iv) A contractor's or subcontractor's of the civilian executive agencies. It also are not required to file a disclosure state- proposed price changes, submitted as a parallels DOD Defense Procurement Cir, ment at this time. Such contractors and result of changes made to previously dis- cular 99, May 4, 1972. subcontractors shall submit the certifi- closed or established cost accounting 5. Agency implementation. a. Pending cate of monetary exemption set forth in practices, are fair and reasonable. the issuance of a permanent amendment Attachment A below. to the Federal Procurement Regulations 6. Comments by agencies. Agencies PART 1-3?PROCUREMENT BY (PPR), in carrying out procurement are invited to comment on this regula- NEGOTIATION operations agencies, with respect to tion during the 60 days following publi- negotiated defense and nondefense con- cation in the FEDERAL REGISTER. Such Subpart 1-3.12?Cost Accounting tracts, shall follow the policies and comments will be considered in connec- Standards procedures set forth in the PPR (41 CFR tion with the codification of the regula- c. Subpart 1-3.12 is added, as follows: 1-1.000 et seq.), except as they may be in- tion in the FPR. In this connection, consistent with the promulgations of the agencies are specifically requested to ? 1-3.1201 General. Cost Accounting Standards Board (such indicate whether they endorse extension Public Law 91-379, 50 U.S.C. App. 2168, as 4 Celt Part 331 et seq.). This includes, of the CASB rules to nondefense con- as implemented by the Cost Accounting FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For?oRelease 2001/08/09 ? CIA-RDP86-00244R000100190026-8 RULES AND REGULATIONS and to the extent of the amount of pro- ceeds of such borrowing by the overseas finance subsidiary that have been trans- ferred by the overseas finance subsidiary to other affiliated foreign nationals in such scheduled area pursuant to ? 1000.- 1403(a) (2) and are held by such affiliated foreign nationals at the time of assumption, (3) The amount of such assumption that exceeds the aggregate amount of transfers of capital pursuant to sub- paragraphs (1) and (2) of this para- graph shall constitute foreign borrow- ing substituted for borrowing by a direct investor from its overseas finance sub- sidiary pursuant to ? 1000.1406(a) to the extent that proceeds of such borrowing by the overseas finance subsidiary have been transferred by the overseas finance subsidiary to the direct investor in a bor- rowing that is outstanding at the time of assumption and would qualify as pro- ceeeis borrowing under ? 1000.1401(e) if such borrowing and the underlying bor- rowing by the overseas finance subsidiary were continuously outstanding for at least 12 months. (4) The amount of such assumption that exceeds the aggregate amount of transfers of capital pursuant to subpara- graphs (1) and (2) and substituted foreign borrowing pursuant to subpara- graph (3) of this paragraph shall con- stitute foreign borrowing made by the direct investor on the date of assumption. (c) An assumption under paragraph (a) or (b) of this section shall be re- ported on the books and records main- tained by the direct investor under ?11000.203(b), 1000.601 and 1000.1402 (b). (Sec. 5, Act of Oct. 6, 1917, 40 Stat. 415, as amended, 12 U.S.C. 95a; E.O. 11387, Jan. 1, 1968, 33 P.R. 47) The amendments hereby adopted shall be effective as of July 1, 1972. WILLIAM V. HOYT, Director, Office of Foreign Direct Investments. June 26, 1972. IFR Doc.72-9897 Filed 6-30-72;8:45 am] Title 38--PENSIONS, BONUSES, AND VETERANS' RELIEF Chapter I--Veterans Administration PART 9?SERVICEMEN'S GROUP LIFE INSURANCE Improper Practice On page 10086 of the FEDERAL REGISTER of May 19, 1972, there was published a notice of proposed rule making to issue a regulation concerning improper prac- tice under Servicemen's Group Life In- surance. Interested persons were given 30 days in which to submit comments, suggestions, or objections regarding the proposed regulations. No written objections have been re- ceived and the proposed regulation is hereby. adopted without change and is set forth below. Effective date. This VA regulation is effective the date of approval. Approved; June 26, 1972. By direction of the Administrator. [SEAL] FRED B. RHODES, Deputy Administrator. Amend ? 9.28 by adding subdivision (vi) to paragraph (d) (3) to read as follows: ? 9.28 Criteria for reinsurers and con- verters. (d) e * (3) * * (vi) The use of written or oral refer- ences to Servicemen's Group Life Insur- ance or conversions of Servicemen's Group Life Insurance in connection with the attempted sale of an insurance pol- icy which would not be, in fact, a con- version policy or a policy issued in lieu of a conversion, if those references might lead a person addressed to believe there Is a connection between the policy being sold and coverage under Servicemen's Group Life Insurance or a conversion of it. FR Doc.72-10053 Filed 6-30-72; 8:48 am] Title 40--PROTECTION OF ENVIRONMENT Chapter I---Environmental Protection Agency SUBCHAPTER E.?PESTICIDES PROGRAMS PART 180?TOLERANCES AND EX- EMPTIONS FROM TOLERANCES FOR PESTICIDE CHEMICALS IN OR ON RAW AGRICULTURAL COM- MODITIES Methomyl A petition (PP 1P1021) was filed by E. I. du Pont de Nemours lk Co., Inc., Wilmington, Del. 19898, in accordance with provisions of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 346a), proposing establishment of tolerances for residues of the insecticide methonayl (S-methyl N - 1 (methylearbamoyl) thioacetinaidate) in or on the raw agri- cultural commodities vines (forage) of beans, peas, and soybeans at 10 parts per million; lettuce, endive (escarole), Chinese cabbage, and salsify tops at 5 parts per million; and beans, peas, and soybeans (each in succulent and dry form) at 2 parts per million. Subsequently, the petitioner amended the petition by (a) reducing the pro- posed tolerance on soybeans from 2 parts per million to 0.2 part per million; (b) withdrawing the commodities Chinese cabbage, peas (with pods), pea vines, and salsify tops; and (c) changing the commodities beans and soybeans (each 130)1 in succulent and dry form) to beans (succulent) and soybeans. The Fish and Wildlife Service of the Department of the Interior stated that it has no objections to the tolerances. Based on consideration given data submitted in the petition and other rel- evant material, it is concluded that: 1. The pesticide is useful for the pur- pose for which the tolerances are being established. 2. The proposed usages are not rea- sonably expected to result in residues of the insecticide in eggs, meat, milk, or poultry. The usages are classified in the category specified in ? 180.6(a) (3) . 3. The tolerances established by this order will protect the public health. Therefore, pursuant to provisions of the Federal Food, Drug, and Cosmetic Act (sec. 408(d) (2), 68 Stat. 512; 21 U.S.C. 346a(d) (2) ), the authority trans- ferred to the Administrator of the En- vironmental Protection Agency (36 P.R. 15623), and the authority delegated by the Administrator to the Deputy Assist- ant Administrator for Pesticides Pro- grams (36 FR. 9038), ? 180.253 is amended by revising the paragraphs '10 parts per million * * *", "5 parts per million * * *", and "0.2 part per mil- lion * * *" and by inserting the new paragraph "2 parts per million * * 5" after the paragraph "5 parts per mil- lion * *" as follows: ? 180.253 Methomyl ; tolerances for residues. 10 parts per million in or on alfalfa, bean forage, corn fodder and forage, and soybean forage. 5 parts per million in or on cabbage, endive (escarole), and lettuce. 2 parts per million in or on beans (succulent). 0.2 part per million (negligible roil- due) in or on the commodity groups fruiting vegetables, leafy vegetables (ex- cept cabbage, endive (escarole), SL ed lettuce), root crop vegetables, and scy- beans. Any person who will be adversely af- fected by the foregoing order may at any time within 30 days after its date of publication in the FEDERAL REGISTER file with the Hearing Clerk, Environmeneal Protection Agency, Room 3125, South Agriculture Building, 12th Street and Independence Avenue SW., Washington, DC 20460, written objections thereto in quintuplicate. Objections shall show wherein the person filing will be adversely affected by the order and specify with particularity the provisions of the order deemed objectionable and the grounds for the objections. If a hearing is re- quested, the objections must state the Issues for the hearing. A hearing will be granted if the objections are supported by grounds legally sufficient to justify the relief sought. Objections may be ac- companied by a memorandum or brief in support thereof. Effective date. This order shall be- come effective on its date of publication in the FEDERAL REGISTER (7-1-72). FEDERAL REGISTER, VOL 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved Fo:fitlease 2001/08/09 : CIA-RDP86-0024414100100190026-8 13090 RULES AND REGULATIONS to this section shall be excluded in calcu- lating the amount of the net transfer of capital made by the direct investor to such affiliated foreign nationals in such scheduled area during the year 1973. 5. Section 1000.324(d) is amended to read as follows: ? 1000.324 Long-term foreign borrow- ing. * * (d) "Available proceeds" means pro- ceeds of long-term foreign borrowing (as defined in paragraph (c) of this section) less (1) amounts allocated to positive direct investment and deducted under ? 1000.306(e), and (2) amounts expended prior to July 1, 1972 in transfers of cap- ital to affiliated foreign nationals other than Canadian affiliates as defined in ? 1000.1101(a) and deducted under ? 1000.313(d) (1). 6. Section 1000.505(c) is amended to read as follows: ? 1000.505 Transfers between affiliated foreign nationals. (c) For purposes hereof, the immedi- ate parent of a partnership referred to in ? 1000.304(a) (1) is the direct investor or affiliated foreign national which is the partner, the immediate parent of a busi- ness venture referred to in ? 1000.304 (a) (2) is the direct investor, and the im- mediate parent of a business venture re- ferred to in ? 1000.304(a) (3) is the cor- poration or partnership on whose behalf the business venture is conducted. 7. Section 1000.1403(b) is amended to read as follows: ? 1000.1403 Transfers of overseas pro- ceeds; foreign balances. (b) Foreign balances. (1) Foreign bal- ances, as defined in ? 1000.203(a) (1), held in liquid form by an overseas finance subsidiary, other than (i) avail- able overseas proceeds and (ii) funds contributed to an overseas finance sub- sidiary as original or additional equity capital, shall be included in the compu- tation of liquid foreign balances held by the direct investor for purposes of ? 1000.203 (c) . (2) [Revoked] 3. Section 1000.1404(a) (2) is amended to read as follows: ? 1000.1404 Repayment of overseas bor- rowing and proceeds borrowing. (a) * * * (2) The amount of any repayment by the direct investor of overseas borrow- ing or proceeds borrowing that exceeds the aggregate amount of reduction of available proceeds pursuant to subpara- graph (1) of this paragraph shall con- stitute a transfer of capital to each scheduled area in proportion to and to the extent that the direct investor has expended or allocated to each such scheduled area available proceeds of long-term foreign borrowing and has made a deduction under ? 1000.203(d) (2), ? 1000.203(d) (3), ? 1000.306(e), or ?1000.313(d) (1). Overseas proceeds so expended or allocated shall be reduced in the amount of transfers of capital to scheduled areas prescribed by this sub- paragraph. 9. Section 1000.1405(c) is amended to read as follows: ? 1000.1105 Authorized repayments. ? * (c) For the purposes of ? 1000.1002 (b) and (c), the term "transfer of capital" shall include a transfer of capital attrib- utable to a repayment of overseas bor- rowing pursuant to ? 1000.1404(a). 10. Section 1000.1406 is added: ? 1000.1406 Substitution of borrowing. (a) To the extent that a foreign bor- rowing (as defined in ? 1000.324(a) (1) ) is substituted for a proceeds borrowing, as defined in ? 1000.1401(e), or for other borrowing by a direct investor from its overseas finance subsidiary that would qualify as a proceeds borrowing under ? 1000.1401(e) if such borrowing and the underlying borrowing by the overseas fi- nance subsidiary were continuously out- standing for at least 12 months, such foreign borrowing shall, for the purposes of this part, be treated as a continuance of such proceeds borrowing or other bor- rowing by the direct investor from its overseas finance subsidiary: Provided, That repayment of such foreign bor- rowing shall reduce proceeds of long- term foreign borrowing or involve a transfer of capital, or both, as prescribed under ?? 1000.324(c) and 1000.312(a) (7). (b) To the extent that a proceeds bor- rowing, as defined in ? 1000.1401(e) , or other borrowing by a direct investor from its overseas finance subsidiary that would qualify as a proceeds borrowing under ? 1000.1401(e) if such borrowing and the underlying borrowing by the overseas finance subsidiary were continuously out- standing for at least 12 months, is substi- tuted for a foreign borrowing (as defined in ? 1000.324(a) (1) ), such proceeds bor- rowing or other borrowing by the direct investor from its overseas finance sub- sidiary 'shall, for the purposes of this part, be treated as a continuance of such foreign borrowing: Provided, That re- payment of such borrowing from the overseas finance subsidiary or underlying foreign borrowing shall have the effect prescribed under ? 1000.1404. (c) A substitution under paragraph (a) or (b) of this section shall be made on the books and records maintained by the direct investor under ?? 1000.203 (b) , 1000.601, and 1000.1402(b). 11. Section 1000.1407 is added: ? 1000.1407 Assumption of debt obliga- tion incurred by overseas finance subsidiary. (a) To the extent that a direct in- vestor, pursuant to an election under sec- tion 4912(c) of the Internal Revenue Code of 1954, as amended, assumes the obligation to repay overseas borrowing incurred by an overseas finance sub- sidiary, such assumption is foreign bor- rowing as defined in ? 1000.324(a) (1) and also shall have the effect prescribed by subparagraphs (1) through (5) of this paragraph: (1) To the extent of available overseas proceeds of such overseas borrowing held by the overseas finance subsidiary at the time of assumption, such assumption shall constitute a transfer of capital by the direct investor to the overseas fi- nance subsidiary. (2) The amount of such assumption that exceeds the amount of the transfer of capital pursuant to subparagraph (1) of this paragraph shall constitute a transfer of capital by the direct investor to each scheduled area in proportion to and to the extent of the amount of over- seas proceeds of such overseas borrowing that have been transferred by the over- seas finance subsidiary to other affiliated foreign nationals in such scheduled area pursuant to ? 1000.1403(a) (2) and are held by such affiliated foreign nationals at the time of assumption. (3) The amount of such assumption that exceeds the aggregate amount of transfers of capital pursuant to subpara- graphs (1) and (2) of this paragraph shall constitute foreign borrowing sub- stituted for proceeds borrowing pursuant to ? 1000.1406(a) to the extent that over- seas proceeds of such overseas borrowing have been transferred by the overseas finance subsidiary to the direct investor in a proceeds borrowing, as defined in ? 1000.1401(e) , that is outstanding at the time of assumption. (4) The amount of such assumption that exceeds the aggregate amount of transfers of capital pursuant to subpara- graphs (1) and (2) and substituted for- eign borrowing pursuant to subpara- graph (3) of this paragraph shall con- stitute foreign borrowing made by the direct investor on the date of the assumption. (5) Overseas proceeds of such over- seas borrowing shall be reduced by the amount of such assumption or the amount of such proceeds, whichever is less. (b) To the extent that a direct in- vestor, pursuant to an election under sec- tion 4912(c) of the Internal Revenue Code of 1954, as amended, assumes the obligation to repay borrowing incurred by an overseas finance subsidiary that would qualify as overseas borrowing if it were continuously outstanding for at least 12 months but at the time of such assumption has not so qualified, such assumption is foreign borrowing as de- fined in ? 1000.324(a) (1) and also shall have the effect prescribed by subpara- graphs (1) through (4) of this para- graph: (1) To the extent that proceeds of such borrowing by the overseas finance subsidiary are held by the overseas fi- nance subsidiary at the time of assump- tion, such assumption shall constitute a transfer of capital by the direct investor to the overseas finance subsidiary. (2) The amount of such assumption that exceeds the amount of the transfer of capital pursuant to subparagraph (1) of this paragraph shall constitute a transfer of capital by the direct investor to each scheduled area in proportion to FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 01111k olalk Approved For-Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 RULES AND REGULATIONS corporation or partnership if the busi- ness venture is conducted within a for- eign country which is not assigned to the same scheduled area as the country of organization. For purposes of determining whether a business venture conducted on behalf of a foreign corporation or partnership is a separate affiliated foreign national, Canada shall be deemed to be in a sched- uled area other than Schedule B. (b) (1) A corporation or partnership referred to in paragraph (a) (1) of this section is an affiliated foreign national in the scheduled area in which the foreign country under whose laws it is organized is located. A business venture referred to in paragraph (a) (2) or (3) of this section is an affiliated foreign national in the scheduled area in which the business is conducted: Provided, That, if such a business venture is conducted in more than one scheduled area during any year, the scheduled area in which the business venture is conducted for the greatest Period of time during such year shall, for purposes of this section, be deemed the only scheduled area in which the business venture is conducted during such year. (2) The term "10 percent interest," when used with respect to any corpora- tion, partnership or business venture referred to in paragraph (a) of this sec- tion, means (i) 10 percent or more of the. total combined voting power of all out- standing securities of such corporation or (ii) 10 percent or more of the profit interest in such partnership or business venture. Whether a person within the United States directly or indirectly owns a 10 percent interest in a corporation, partnership or business venture referred to in paragraph (a) of this section shall be determined in accordance with the provisions of ?? 1000.901 and. 1000.902. (3) For purposes of this part, the term "incorporated affiliated foreign national" includes a corporation described in para- graph (a) (1) of this section and the term "unincorporated affiliated foreign national" includes a partnership de- scribed in paragraph (a) (1) of this sec- tion and a business venture described in paragraph (a) (2) or (3) of this section. (4) Notwithstanding the provisions of paragraph (a) of this section and the foregoing provisions of this paragraph (b) , the Secretary retains full power, with respect to any person within the United States, to determine that any person is an affiliated foreign national of such per- son within the United States and to determine the scheduled area in which such affiliated foreign national is located. (c) Notwithstanding the provisions of paragraphs (a) and (b) of this section, a corporation, partnership or business ven- ture referied to in paragraph (a) of this section shall not be considered an affili- ated foreign national of a person within the United States if the operations of such corporation, partnership or busi- ness venture consist solely of charitable, educational, religious, scientific, literary or other similar activities not engaged In for profit. (d) Notwithstanding the provisions of paragraphs (a) and (b) of this section, a business venture referred to in paragraph (a) (2) or (3) of this section shall not be considered an affiliated foreign national of a person within the United States dur- ing any year if (1) the business venture does not have or involve, at any time dur- ing such year, gross assets of more than $50,000 (valued at the greatest of cost, book value, replacement value or market value) ; or (2) the business venture is commenced during such year and is not reasonably expected to be conducted within one or more foreign countries for more than 12 consecutive months; or (3) the business venture is terminated during such year and was not in fact conducted within one or more foreign countries for more than 12 consecutive months. :3. Section 1000.306(e) is amended to read as follows:, ? 7[000.305 Positive anti negative direct investment. (e) (1) There shall be deducted from positive direct investment in a scheduled area during any year, as calculated under paragraph (a) of this section, an amount equal to any available proceeds (as defined in ? 1000.324(d) ) allecated by the direct investor to such positive direct investment for such year. Avail- able proceeds shall be allocated to such positive direct investment for such year If (i) an entry is made in the books and records maintained by the direct investor under H 1000.203(b) and 1000.601; (ii) the allocation and deduction is reported on the next annual report of the direct investor (Form FDI-102F) filed for the year for which the deduction is made; and (iii) the proceeds, as of the end of the year for which the deduction is made and thereafter, are not held, directly or indirectly, in the form of foreign bal- ances or in the form of securities (in- cluding debt obligations, equity interests and any other type of investment con- tract) of foreign nationals or in the form of any other foreign property: Provided, That proceeds so allocated may at any time be expended in making transfers of capital to affiliated foreign nationals. In addition, available proceeds of long-term foreign borrowing 'nada on or before February 28, 1973 (including available proceeds so treated under ? 1000.1403 (a) (1) as the result of proceeds borrow- ing made on or before February 28, 1973) shall be allocated to such positive direct Investment for the year 1972 if book- keeping entries and a report on Form FBI-102F for 1972 are made with respect to such allocation, as required under this section, and such proceeds, as of Febru- ary 28, 1973, are not held, directly or Indirectly, in the foam of foreign bal- ances or in the form of securities of foreign nationals or in the form of any other foreign property: Provided, That proceeds so allocated may at any time be expended in making transfers of capi- tal to affiliated foreign nationals. (2) [Revoked] s s 4. Section 1000.313 (d) and (0) are amended to read as follows: 1:3089 ? 1000.313 Net transfer of capital. (d) In calculating the amount of the net transfer of capital made by a direct investor to a scheduled area during any period (including the years 1965 and 1966) pursuant to paragraph (c) of this section: (1) [Revoked] ' (2) There shall be included all trans- fers of funds or other property as a re- sult of which the direct investor became a direct investor in any affiliated foreign national and all transfers of funds or other property to or on behalf of or for. the benefit of such affiliated foreign na- tional made by or on behalf of or for the. benefit of such direct investor within 12 months (whether or not during the pe- riod for which the calculation is being. made) prior to the date of the transfer by which it became a direct investor in such affiliated foreign national, te the same extent as if the direct investor had been a direct investor in such affiliated foreign national during such 12-month period. (e) (1) In calculating the a.mourit of the net transfer of capital made t17 a direct investor to all affiliated foreign nationals in any scheduled area during the year 1972, the direct investor may Include transfers of capital by incorpo- rated affiliated foreign nationals and decreases in net assets of unincorporated affiliated foreign nationals in such sched- uled area that are recognized upon re- payments of debt obligations outstand- ing as of December 31, 1972, by such affiliated foreign nationals to the direct investor during January 1973 or, as al- ternatively elected by the direct investor,: during January and February 1973: Pro-. vided, That the direct investor has trade. a worldwide negative net transfer of. capital during the period elected under this section: And provided further, That. the aggregate amount of such transfera of capital and decreases in net assets in- cluded in calculating the amounts of the net transfers of capital made by the di- rect investor during the year 1972 does not exceed the amount of such worldwide negative net transfer of capital. (2) The worldwide net transfer of capi- tal by a direct investor during the period elected by the direct investor under this section means the algebraic sum of the net transfers of capital by the direct In- vestor to all incorporated and unincorpo- rated affiliated foreign nationals hi all scheduled areas during such period. (3) Any transfer of capital or decrease. in net assets that is included in calcu- lating the amount of a net transfea of; capital made by a direct investor to all, affiliated foreign nationals in any sched- uled area during the year 1972 pursuant! 1A11 references to ? 1000.313(d) (1) refer to that section prior to its revocation a na- tive July 1, 1972. Former ? 1000.313(cl (1) read as follows: "(1) There shall be deducted an amount equal to the proceeds of long-term fontgn borrowing actually expended in making transfers of capital to affiliated foreign na- tionals in such scheduled area during Fitch period." FEDERAL REGISTER, VOL. 37, NO. 120?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved Fo;lieleina09M8kitoRWP86-0024A00100190026-8 13088 borrowing will reduce proceeds as pro- vided under section 324(c) or involve a transfer of capital under section 312 (a) (7) . Similarly, a proceeds borrowing that is substituted for foreign borrowing may qualify the foreign borrowing as a long-term foreign borrowing under sec- tion 324(a) (2), but the repayment of the proceeds borrowing will have the effect provided under section 1404. 9. Assumption by a DI of borrowing by its OFS. Under new section 1407, a DI making an election under IRC section 4912(c) may assume an obligation of its OFS to repay overseas borrowing or bor- rowing that would qualify as overseas borrowing if it were continuously out- standing for at least 12 months. The effect of an assumption of overseas bor- rowing will be determined by serial ap- plication of the following rules: (1) To the extent of available overseas proceeds held by the OFS at the time of the assumption, the DI will be charged with a transfer of capital to the OFS. At the same time, however, the assump- tion will constitute a foreign borrowing by the DI in an amount equal to the DI's transfer of capital to the OFS. If such borrowing qualifies as long-term foreign borrowing under section 324(a) (2), available proceeds thereof may be de- ducted from positive direct investment by allocation under section 306(e) . (ii) In proportion to and to the extent of overseas proceeds that have been transferred by the OFS under section 1403(a) (2) to other AFNs of the DI and are held by such AFNs at the time of assumption, the DI will be charged with transfers of capital to such AFNs. The assumption will also constitute a foreign borrowing by the DI in an amount equal to the total transfers of capital to such AFNs. If such borrowing qualifies as long-term foreign borrowing under sec- tion 324(a) (2), available proceeds there- of may be deducted from positive direct investment by allocation under section 306 (e) . (Ili) To the extent of overseas pro- ceeds which have been transferred to the DI in proceeds borrowing under section 1403(a) (1) that is outstanding at the time of assumption, the DI will not be charged with a transfer of capital. The assumption will constitute a foreign bor- rowing by the DI that has been substi- tuted for proceeds borrowing under sec- tion 1406. The foreign borrowing involved in the assumption will be treated as rl continuance of the borrowing by the DI from its OFS that is repaid (without effect under the regulations) in connec- tion with the assumption. (iv) Any additional amount of as- sinned obligation that is not covered Under paragraphs (i) through (iii) will constitute foreign borrowing by the DI, but not a transfer of capital. Such amount should correspond to the dif- ference between the aggregate principal amount of the obligation that was as- sumed and the amount of funds or other property received by the OFS after the Initial offering expenses were deducted. Finally, an assumption will reduce overseas proceeds of the overseas bor- rowing which the DI has obligated itself to repay by the amount of the assumed obligation or the amount of such over- seas proceeds, whichever is less. The above rules, appropriately ad- justed, apply also to assumption of bor- rowing that would qualify as overseas borrowing if outstanding for at least 12 months. Any assumption of an OFS's debt obli- gation under section 1407 must be re- corded by the DI in the books and records required to be maintained under sec- tions 203(b) and 1402(b). The DI should identify the specific borrowing it has be- come obligated to repay and reflect its application of the rules of sections 1406 and 1407 to the assumption. No provision has been added to the regulations relating to a DI's assumption of debt obligations of an international finance subsidiary (IFS), as defined in section 323(a). A DI and its IFS are considered a single person under section 323(b). Any assumption of an IFS's ob- ligation, if made pursuant to an election under IRC section 4912(c), would not bring about any change in a DI's foreign borrowing under section 324. 10. Effect on 1970 General Bulletin and Supplement No. 1. The "1970 General Bulletin" and "Supplement No. 1" thereto interpret the regulations as in effect for 1971 and will continue to do so for 1972 to the extent not affected by these or any subsequent amendments. Material in these documents relating to the holding, allocation and expenditure of available proceeds of long-term foreign borrow- ing, and to OFSs, should be used care- fully in view of these amendments. The amended sections are as follows: 1. Section 1000.203 is amended to read as follows: ? 1000.203 Liquid foreign balances. (c) Each direct investor is hereby re- quired to limit the amount of liquid for- eign balances held at the end of any month (other than Canadian foreign balances, as defined in ? 1000.1105(a) ) to the sum of (1) the amount of available proceeds (as defined in ? 1000.324(d) ) of such direct investor at the end of such month, plus (2) the greater of (i) the average end-of-month amount of such balances (other than available proceeds In the form of such balances, and Canadian foreign balances) held by such direct investor during 1965 and 1966 (whether or not a direct investor at that time) or (ii) $100,000. (d) (1) [Revoked] (2) A direct investor which, during 1968 or any succeeding year, expended proceeds of long-term foreign borrowing and made a deduction from net transfer of capital to a scheduled area under ? 1000.313(d) (1) may thereafter deduct, during 1969 or any succeeding year, from positive direct investment in a different scheduled area, an amount equal to all or a part of such expended proceeds as are allocated pursuant to this subpara- graph. Proceeds shall be allocated in a different scheduled area pursuant to this subparagraph if (1) an entry is made in the books and records maintained by the direct investor under paragraph (b) of this section and ? 1000.601; (ii) the al- location and the deduction from positive direct investment in a different scheduled area are reported on the next annual re- port of the direct investor (Form FDI- 102F) flied for the year for which the deduction is made; and (iii) the proceeds with respect to which such deduction is made, as of the end of the year for which the deduction is made and thereafter, are not held, directly or indirectly, in the form of foreign balances or in the form of securities (including debt obligations, equity interests and any other type of investment contract) of foreign nationals or in the form of any other foreign prop- erty: Provided, That such proceeds may remain expended in an affiliated foreign national or again be expended at any time in making transfers of capital to affiliated foreign nationals. The direct in- vestor shall be deemed at the time of such deduction from positive direct invest- ment in a different scheduled area to have made a transfer of capital equal to the amount of such deduction to the scheduled area in which the deduction from net transfer of capital under ? 1000.313(d) (1) was previously made. The direct investor may thereafter con- tinue to change the scheduled area in which a deduction from positive direct investment is made, up to the amount of proceeds of long-term foreign borrowing expended in making the original transfer of capital for which a deduction under ? 1000.313(d) (1) was made: Provided, That each time such change occurs, the direct investor shall be deemed to have made a transfer of capital to the im- mediately previous scheduled area in the amount of the deduction from positive direct investment in the subsequent scheduled area. 2. Section 1000.304 is amended to read as follows: ? 1000.304 Affiliated foreign national. (a) Except as provided in paragraphs (b) (4), (c), and (d) of this section, the term "affiliated foreign national" of a person within the United States includes each of the following in which such per- son owns, directly or indirectly, a 10- percent interest: (1) A corporation or partnership or- ganized under the laws of a foreign coun- try (including all business ventures con- ducted by employees or partners of such corporation or partnership on behalf of such corporation or partnership within any foreign countries assigned to the same scheduled area as the country of organization) ; (2) A business venture conducted within a foreign country on behalf of such person within the United States by such person or by employees or partners of such person; and (3) A business venture conducted on behalf of a corporation or partnership organized under the laws of a foreign country by employees or partners of such FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 011% 0104 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 RULES AND REGULATIONS In the AFNto which the transfer of capi- tal was made by the DI. Except for pro- ceeds that are expended in making a transfer of capital, however, the prohibi- tion against holding allocated proceeds in any form of foreign property remains in effect. DIs are cautioned that deductions un- der section 313(d) (1) must be made for all transfers of capital made with avail- able proceeds prior to July 1, 1972. Avail- able proceeds that were so expended prior to such date may not be allocated to positive direct investment under amended section 306(e) (1) . Also, the repayment of long-term foreign borrowing at any time will continue to involve a transfer of capital under section 312(a) (7) or sec- tion 1404(a) (2) to the extent that a de- duction for expenditure of available proceeds of such borrowing was made Under section 313(d) (1) . Amended sec- tion 203(d) (2) provides for allocation where a deduction for expenditure of available proceeds previously was made Under section 313(d) (1) . Amended sec- tion 324(d) reduces available proceeds Where such proceeds were expended prior to July 1, 1972. Amended section 1404(a) (2) provides for the recognition of a transfer of capital upon repayment of an overseas borrowing where a deduc- tion for expenditure of available proceeds previously was made under section 313(d) (1). 5. AtIocation to 1972 positive direct in- vestment. The amendment to section 306(e) (1) permits a DI to deduct from positive direct investment made during 1972 an amount equal to any available proceeds of long-term foreign borrowing (or proceeds borrowing from the DI's overseas finance subsidiary) made on or before February 28, 1973, that are allo- cated to such positive direct investment, provided (1) the DI makes the appro- priate bookkeeping entries for allocation, (2) the allocation and deduction are re- ported on the DI's Form. FDI-102F for 1972, and (3) the proceeds, as of Febru- ary 28, 1973, are not held, directly or in- directly, in any form of foreign property. However, such proceeds may be ex- pended by the DI in making a transfer of capital to an "AFN at any time on or after July 1, 1972. Thus, a DI may reduce positive direct investment made during 1972 by allo- cating available proceeds of any long- term foreign borrowing that is outstand- ing on February 28, 1973. Such borrow- ing may be made during January or February 1973, or may have been made by the DI during 1972 or a prior year. The 12-month maturity test for long- term foreign borrowing will, of course, apply to any borrowing of which avail- able proceeds are allocated, i.e., the bor- rowing, as refinanced, must be continu- ously outstanding for at least 12 months. It should be noted by DI's that they may allocate to positive direct invest- ment made during 1972 any proceeds that are available for allocation on De- cember 31, 1972, notwithstanding the re- payment of the underlying long-term foreign borrowing during January or February 1973. Such repayment will in- volve a transfer of capital during 1973. No. 128?Pt. I-3 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 6. Repayment of debt by AFN to DI: prior-year treatment. The amendment to secion 313(e) permits a DI, in calculating a net transfer of capital made during 1972, to treat as repaid during 1972 any debt obligation or other credit of an AFN that was outstanding on December 31, 1972, and is in fact repaid by the AFN to the DI during January or February 1973. The aggregate amount of repayments re- ceiving this prior-year treatment may not exceed the worldwide negative net trans- fer of capital to all non-Canadian AFNs that is made by the DI during such 2- month period. If the DI makes a positive net transfer of capital to all non-Ca- nadian AFNs during such period, prior- year treatment of repayments is not available. Alternatively, a DI may treat as re- paid during 1972 any debt obligation or other credit of an AFN that was out- standing on December 31, 1972, and is in fact repaid by the AM to the DI on or before January 31, 1973. If the DI elects this 1-month period, the aggregate amount of repayments receiving prior- Year treatment may not exceed the worldwide negative net transfer of capi- tal to all non-Canadian AFNs that is made by the DI during January 1973. Prior-year treatment is not available un- der this alternative if the DI makes a positive net transfer of capital to all non-Canadian AFNs during January. In calculating the net transfer of capi- tal to determine whether prior-year treatment of repayments is available, the aggregate of all transfers of capital made during the relevant 1- or 2-month period by all non-Canadian incorporated AFNs to the DI is subtracted from the aggre- gate of all transfers of capital made during such period by the DI to its non- Canadian incorporated AFNs, and the result is added to the net transfer of capital made by the DI to all of its non- Canadian unincorporated AFNs during such period. This calculation is made on a worldwide basis by all Dls, without re- gard to the election of worldwide or schedular allowables for 1972. Transfers of capital resulting from the repayment of long-term foreign borrowing during the 1- or 2-month period must be in- cluded. A DI shall exclude from this cal- culation any transfers of capital that are deemed to occur as the result of condi- tions imposed by specific authorization or compliance settlement. If a DI makes a, negative net transfer of capital, calculated as described above, repayments of qualifying debt obliga- tions or other credits by AFNs to the DI during the 1- or 2-month period in 1973 that is elected for such purpose may be treated as having been made from their respective scheduled. areas during 1972. The aggregate amount of repayments se- lected by the DI to receive such prior- year treatment may not exceed the worldwide negative net transfer of capi- tal. However, such repayments are not required to be made from a particular scheduled area in which there is a nega- tive net transfer of capital. The effect of prior-year treatment of repayments is to reduce direct invest- 1O87 ment made by the DI during 1972 for all purposes, including compliance and the calculation of amounts specifically au- thorized. For example, prior-year treat- ment may reduce the amount 4)f mer- chandise export credit relief available under a specific authorization issued for 1972. It should be noted that repayments during 1973 that are treated as having occurred during 1972 will be excluded from the calculation of direct investment made during 1973, which will increase correspondingly. 7. Authorized repayment of overseas borrowing. Amended section 1405(c) clarifies the inclusion of repayraent of overseas borrowing within the meaning of the term. "transfer of capital" as used in section 1002 (b) and (c). 8. Interchange of borrowing by DI and OFS. Under section 1406, a DI may substitute foreign borrow:mg for borrowing by the DI from its OFS, or vice versa, and treat the later borrowing as a continuance of the borrowing for which it was substituted. The two types of borrowing that may be interchanged under section 1406 are (i) foreign bor- rowing, as defined in section 324(a) (1) , and (ii) proceeds borrowing as defined in section 1401(e), or borrowing by a DI from its OFS that would qualify as proceeds borrowing under section 1401 (e) if such borrowing and the underlying borrowing by the OFS were continuously outstanding for at least 12 months. All or a portion of a borrowing of cue type may be substituted for an equal amount of the other type of borrowing. A bor- rowing that is substituted for an earlier borrowing must be made on or before the date of repayment of the earlier torrOw- ing. The DI must record a substitution on the books and records required under sections 203 (b) , 601 and 1402 (b) . The original and substitute borrowings are tacked together for the purpose of determining the period during which the original borrowing is treated as having been outstanding. Substitution .may be used to qualify a foreign borrowing as long-term foreign borrowing under sec- tion 324(a) (2), or to qualify a borrowing by a DI from its OFS as proceeds bor- rowing under section 1401(e) . The bor- rowing for which another borrowing has been substituted may be repaid to the extent of the substitution witholt any reduction of available proceeds or charge for a transfer of capital. A borrowing by an OFS underlying a borrowing by the DI from the OFS may likewise be repaid without any reduction of available pro- ceeds or charge for a transfer of capital, to the extent that foreign borrowing is substituted for the borrowing by .[;:he DI from the OFS. Although a substitute borrowing is treated as a continuance of the earlier borrowing, the repayment of the substi- tute borrowing will have the effect pro- vided under the regulations for ::?epay- ment of the substitute type of borrDwin.g. Thus, foreign borrowing that is substi- tuted for borrowing by the DI from its OFS may qualify the earlier bon owing as proceeds borrowing under section 1401(e), but the repayment of the foreign FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 13086 R?`I Approved or eleanuni1/ACInia&NR6-00244R000100190026-8 Title 15?COMMERCE AND FOREIGN TRADE Chapter X?Office of Foreign Direct Investments, Department of Com- merce PART 1000?FOREIGN DIRECT INVESTMENT REGULATIONS Miscellaneous Amendments EOITORTAL Nan : The Foreign Direct Invest- ment Regulations appear in Title 15, Chap- ter X, Part 1000 of the Code of Federal Regu- lations (CFR). All sections of the Foreign Direct Investment Regulations contained in CFR are preceded by the designation "1000" (e.g. t 1000.312). The "1000" prefix has, for convenience, been eliminated from the sec- tion references contained in the explanatory material below. The abbreviations "DI" and "APR" are used to refer to "direct investor" and "affiliated foreign national." On May 20, 1972, a notice of proposed rule making was published in the FEDERAL REGISTER (37 P.R. 10380) with respect to certain amendments to the Foreign Di- rect Investment Regulations (the "regu- lations") proposed by the Office of For- eign Direct Investments (the "Office") . After consideration of all comments and suggestions presented by interested persons with respect to the proposed amendments, such amendments, with certain modifications and conforming amendments which do not involve any material substantive changes, are hereby adopted, effective July 1, 1972, as set forth below. These amendments relieve restrictions or are editorial in nature. The amendments (i) permit substitu- tion of foreign borrowing by a DI for borrowing by the DI from its overseas finance subsidiary (OFS), and vice versa, (ii) provide for the assumption by a DI of obligations incurred by its OFS, provide greater flexibility for holding and allocation of available proceeds of long- term foreign borrowing, and (iv) extend the period for DIs to engage in transac- tions in order to comply with the regula- tions during 1972. In addition, corrections and other editorial changes are made. The amendments are described below. Prior to allocating available proceeds of long-term foreign borrowing under section 306(e), many DIs have used such proceeds for domestic purposes. 'Thereafter, proceeds that were not specifically distinguishable could not be held in the form of liquid foreign bal- ances under the section 203(c) exemp- tion for available proceeds, although the amount of such proceeds remained available for allocation. Under the amendment to section 203(c), the exemp- tion for available proceeds corresponds to the amount that is available for allocation. Many DIs have expended available proceeds of long-term foreign borrowing In making transfers of capital, although their allowables were sufficient to au- thorize positive direct investment with- out the deduction for expenditure of available proceeds that has been required under section 313(d) (1). In cases where the DI elected the historical or earn- ings allowables under section 504, the unneeded deduction for the expendi- ture of available proceeds was remedied by the carryforward allowable which it generated. A DI which elected the min- imum allowable under section 503 or section 507, however, has been unable to carry forward unused allowable. The revocation of section 313(d) (1) removes this barrier to the free use of funds for transfers of capital that are within a DIs allowables. Proceeds of long-term foreign borrowing that are expended in making transfers of capital on or after July 1, 1972 remain available for alloca- tion under section 306(e) when required for compliance. Correspondingly, an amendment to section 306(e) permits expenditure of available proceeds in making transfers of capital to AFNs, without deduction, at any time before or after the allocation of such proceeds. The revocation for 1971 of the prohibi- tion against a positive net transfer of capital under section 203(d) (1) is to be made permanent. The 2-month alloca- tion and negative transfer of capital pro- visions that applied only to the 1971 compliance year are retained in sub- stantially the same form for the 1972 compliance year in sections 306(e) (1) and 313(e) , respectively. Under the amendment to section 306(e) (1), a DI is permitted to deduct from positive direct investment made during 1972 an amount equal to available proceeds of long-term foreign borrowing (or proceeds borrowing from its OFS) made on or before February 28, 1973. Under the amendment to section 313(e), a DI is permitted to treat as repaid during 1972 any debt obligations or other credits of AFNs that are outstanding on Decem- ber 31, 1972, and are in fact repaid by the AFNs to the DI during the month of January 1973 or, as alternatively elected by the DI, during January and February 1973. The aggregate amount of repay- ments receiving this prior-year treat- ment may not exceed the worldwide negative net transfer of capital to all non-Canadian AFNs that is made by the DI during the period elected. Under section 3(a) of the Interest Equalization Tax Extension Act of 1971 (the "Act"), a U.S. person may assume certain debt obligations incurred by a finance subsidiary and elect under sec- tion 4912(c) of the Internal Revenue Code of 1954, as amended (IRC), to have such obligations treated as obligations of a foreign obligor. The acquisition by U.S. persons of such obligations is subject to the Interest Equalization Tax. The elec- tion is also available with respect to certain debt obligations issued by U.S. corporations and partnerships. Under this procedure, interest payments to non- resident aliens and foreign corporations are not subject to withholding of U.S. income tax at source. It is recognized that a substantial U.S. balance of pay- ments benefit will be realized upon return of OFS equity capital to the United States following assumption by U.S. per- sons of indebtedness incurred by the OFSs. In order to further this objective, various legislative proposals are at pres- ent under consideration to supplement the provisions of the Act. H.R. 9040 would accommodate U.S. estate tax provisions to the section 4912(c) election procedure. The present amendments to the regu- lations facilitate the assumption by a DI of obligations incurred by its OFS (section 1407) and permit the inter- change of DI and OFS borrowing (section 1406). Additional changes in the regulations (i) correct the numbering of paragraphs and citations contained in sections 304 and 505(c), (ii) reflect the revocation of sections 203(d) (1) and 313(d) (1), and (iii) clarify the meaning of section 1405 (c ) . The amendments are described in greater detail as follows: 1. Liquid foreign balance exemption for available proceeds. Amended section 203(c) provides that a DI must limit the amount of non-Canadian liquid foreign balances held at the end of any month to an amount determined by adding to- gether (1) the amount of the DI's avail- able proceeds of long-term foreign bor- rowing, calculated at the end of such month under section 324, plus (2) a minimum amount of $100,000 or, if greater, the average end-of-month amount of non-Canadian liquid foreign balances (excluding available proceeds) that were held by the direct investor during 1965 and 1966. Under amended section 203(c) the average amount of historical liquid for- eign balances of the DI is calculated in the same manner as the calculation un- der the former section 203(c), i.e., both Canadian foreign balances and available proceeds are excluded from the calcula- tion of the historical amount. Conse- quently, DIs will not be required to re- calculate this amount as reported on Forms FDI-102 previously filed with the Office. 2. Revocation of prohibition against positive net transfer of capital. Section 203(d) (1) has prohibited a DI electing historical or earnings allowables from making a positive net transfer of capital during a year at the end of which the DI holds available proceeds in the form of foreign property. This section, which was revoked for compliance year 1971, is now permanently revoked. Amended section 1403(b) reflects the revocation of sec- tion 203(d) (1) 3. Definition of affiliated foreign na- tional. Sections 304 and 505(c) are amended to correct numbering and cita- tion errors within the sections. 4. Allocation and expenditure of avail- able proceeds. Section 313(d) (1) is re- voked, thereby removing from the regu- lations the mandatory deduction for expenditure of available proceeds of long-term foreign borrowing. Instead, available proceeds that are expended by a DI in making a transfer of capital on or after July 1, 1972 remain available for allocation and may be allocated as re- quired by the DI to achieve compliance with the regulations. A corresponding amendment to section 306(e) permits proceeds that are so expended and sub- sequently allocated to remain expended FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 oll Approved For- Release 2001/08/09 : C1A-RDP86-00244R0001400190026-8 RULES AND REGULATIONS requires replacement or incorporation of Modification 1455 on first stage (low pressure) impellers that are not so modified before the accumulation of 11,000 flights on an impeller and the re- placement of impellers incorporating Modification 1455 before the accumula- tion of 11,000 flights after the incorpo- ration of that modification. Since it was found that immediate cor- rective action was required, notice and Mtblic procedure thereon was imprac- ticable and contrary to the public interest and good cause existed for making the May 31, 1972, airworthiness directives effective immediately as to all known U.S. operators of aircraft equipped with Rolls Royce Dart Model 542-4, -4K, -10, -10J, and --10K engines by telegram dated May 31, 1972. These conditions still exist and their airworthiness directive adopted May 31, 1972, is hereby published in the FEDERAL REGISTER as an amendment to ? 39.13 of Part 39 of the Federal Aviation Regulations to make it effective as to all persons. Rotas RoYCE, Applies to series Dart Model 542-4, -41C, -10, -103, and -10K engines. These engines are installed on but not necessarily limited to those Convair Model 840/440 airplanes (commonly known as Convair 600 and 640) which have the subject engines installed as a result of modification and NAMC Y5-11 airplanes. Compliance is required as indicated. To prevent possible fatigue failure of first stage (low pressure) impellers, accomplish the following: .(a) For first stage (low pressure) im- peller that does not incorporate Rolls Royce Dart Modification 1455, within the next 109 flights after the effective date of this Al) or before the accumulation of 11,000 flights on that impeller, whichever occurs later, comply with subparagraph (c) (1) or (e) (2) and thereafter comply with paragraph (d) or (e) as applicable. (b) For a first stage (low pressure) im- peller that incorporates Rolls Royce Dart Modification 1455, within the next 100 flights after the effective date of this AD or before the accumulation of 11,000 Sights after the Incorporation of Rolls Royce Dart Modifica- tion 1455, whichever occurs later, comply with subparagraph (c) (1) or .(o)(2) and comply with paragraph (d) or (e) as applicable. (c) Comply with subparagraph (1) or (2) of this paragraph as prescribed in paragraphs (a), (b), (d), and (e). (1) Remove the first stage (low pressure) impeller from service and replace it with- (i) A first stage (low pressure) impeller that does not incorporate Rolls Royce Dart Modification 1455 and which has accumu- lated less than 11,000 flights in service; or (11) A first stage (low pressure) impeller that incorporates Rolls Royce Dart Modifica- tion 1455 and which has accumulated less than 11,000 flights in service since the in- corporation of that modification. (2) For an impeller that does not have Rolls Royce Dart Modification 1455 incor- porated, incorporate that modification. (d) For an impeller that has been installed in compliance with subparagraph (c) (1) (1), before the accumulation of 11,000 flights on that taapeller comply with subparagraph (c) (1) or (c) (2). (e) For an impeller that has been installed In compliance with subparagraph (c) (1) (II) Or modified. in accordance with subparagraph (c) (2) , before the accumulation of 11,000 flights since the incorporation of Rolls Royce Dart Modification 1455 on that impeller comply with subparagraph (0) (1). (f) For the purpose of complying with this AD, a flight shall consist of an engine operating sequence consisting of an engine start, takeoff operation, landing, and engine shutdown. The number of flights may be de- termined by actual count or, subject to ac- ceptance by the assigned FAA Maintenance Inspector, may be calculated by dividing the compressor section's time in service by the operator's fleet average time per flight for airplanes equipped with the subject type engines. This AD supersedes the telegraphic AD on the same subject issued on April 13, 1972. Nora: Rolls Royce Dart Alert Service Bulle- tin No. DA 72-391 Revision 1, dated May 1, 1972 refers to this matter. This amendment is effective upon pub- lication in the FEDERAL REGISTER (7-1-72) as to all persons except those persons to whom it was made immediately effec- tive by the telegram dated May 31, 1972, which contained. this amendment. (Secs. 313(a), 601, 603, Federal Aviation Act of 1958, 49 U.S.C. 1354(a), 1421, 1423; sec. 6(0),, Department of Transportation Act, 49 U.S.C. 1655(c) ) Issued in 'Washington, D.C., on June 21, 1972. J. A. FERRA:RESE, Acting Director, Flight Standards Service. [ER Doc.72-10027 Filed 6-30-72;8:50 am] [ Airspace Docket No. 72-NE-6] PART 71-DESIGNATION OF FEDERAL AIRWAYS, AREA LOW ROUTES, CONTROLLED AIRSPACE AND RE- PORTING POINTS Alteration of Transition Area The Federal Aviation Administration is amending ? 71.181 of Part 71 of the Federal Aviation Regulations so as to alter the North Conway, N.H., Transition Area (37 FR. 2253). On March 16, 1972, the Federal Avia- tion Administration published an amend- ment, on Page 5488 of the FEDERAL REGIS- TER (37 P.R. 5488) which altered the de- scription of the Whitefield, N.H., 1,200- foot Transition Area, Included in this alteration was a deletion of the refer- ence to the Whitened RBN and a sub- stitution in its place of a reference to the Dalton, N.H.,. REM. Action is taken herein to make a similar change to the description of the North Conway, N.H., 1,200-foot Transition Area so as to make its description consistent with that of the Whitened, N.H., 1,200-foot Transi- tion Area. The alteration to the bound- ary of the North Conway 1,200-foot Transition Area resulting from this change will be minor in nature. Since the amendment is minor in na- ture and is one in which members of the public are not particularly interested, notice and public procedure thereon are unnecessary and good cause exists for making this -amendment effective in less than thirty (30) days. In view of the following, the Federal Aviation Administration, having coni- 13085 pleted review of the airspace require- ments in the terminal airspace of ?,;:he aforementioned location, amends Part 71 of the Federal Aviation Regulations as follows effective upon publication in the FEDERAL REGISTER (7-1-72) : 1. Amend ? 71.181 of Part 71 of he Federal Aviation Regulations by deleang the phrase "Whitefield, N.H., REN (44?21'58" N., 7133'00" W.)" and in- serting in lieu thereof the phrase "Dal- ton, N.H., RBN (44?21'43" N., 71?41'08" W.)." (Sec. 307(a), Federal Aviation Act of 1658, 49 U.S.C. 1848(a).; sec. 6(c), Department; of Transportation Act, 49 U.S.C. 1655(c)) Issued in Burlington, Mass., on June 21, 1972. FERRIS J. HOWLAND, Director, New England Region, LFR Doc.72-10028 Filed 8-30-72;8:45 am: [Airspace Docket No. 72-GL-31] PART 71-DESIGNATION OF FEDERAL AIRWAYS, AREA LOW ROUTES, CONTROLLED AIRSPACE, AND R PORTING POINTS POINTS Alteration of Transition Area The purpose of this amendment to Part 71 of the Federal Aviation Regula- tions is to alter the Peoria, Ill., transition area. The instrument approach procedure to the Ingersoll Airport, Canton, fli., his been revised. The revision has changed the airspace requirement by decreasing the amount required to protect the pro- cedure. This airspace is combined with Peoria, Ill., under the Peoria designation. This alteration imposes no additional burden on any person, therefore, notine and public procedure hereon al)e unnecessary. In consideration of the foregoing, Part 71 of the Federal Aviation Regula- tions is amended effective 0901 G.M.1:., August 17, 1972, as hereinafter set forte.: In ? 71.181 (37 P.R. 2143), the follow- ing transition area is amended to read: PEORIA, ILL. That airspace extending upward from 710 feet above the surface within a 9-mile radics of the Greater Peoria Airport (latitude 40?- 39'47" N., longitude 89?41'22" W.); within a, 7 mile radius of the Ingersoll Airport (let:, tude 40'34'10" N., longitude 90'04'24" W.): within 9.5 miles south and 4.5 miles north cf the Peoria VORTAC 279' radial, extending from the VORTAC to 18.5 miles west of the VORTAC; within 9.5 miles southwest and 4.5 miles northeast of the Greater Peoria Air- port ILS localizer northwest course, extend- ing from 8.5 miles northwest of the airport to 22 miles northwest of the airport; and within 6.5 miles northwest and 5 miles southeast of the Peoria VORTAC 052* radial, extending from the VORTAC to 12 milo3 northeast of the VORTAC. (Sec. 307(a), Federal Aviation Act of 195B, 49 U.S.C. 1348(a); sec. 6(c), Department of Transportation Act, 49 U.S.C. 1655(c)) Issued in Des Plaines, Ill., on June 5, 1972. LYLE-K. BROWN, Director, Great Lakes Region. [FR Doc.72-10029 Filed 6-30-72;8:45 am] FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 ',ref Approved Farl(elease 2001/08/09 :_CIA-ROP86-00244R000100190026-8 13084 RULES AND REGULATIONS handled. Each handler shall pay inter- est of 1 percent per month on any un- paid balance beginning 30 days after date of billing. Dated: June 27, 1972. ARTHUR E. BROWNE, Acting Director, Fruit and Vege- table Division, Agricultural Marketing Service. [FR Doc.72-10075 Filed 6-30-72;8:50 am] Chapter XIV-Commodity Credit Cor- poration, Department of Agriculture SUBCHAPTER B-LOANS, PURCHASES, AND OTHER OPERATIONS NCO Grain Price Support Regs., 1972 Crop Peanut Farm-Stored Loan and Purchase Supp.] PART 1421-GRAIN AND SIMILARLY HANDLED COMMODITIES Peanut Loan and Purchase Program On page 2844 of the FEDERAL REGISTER of February 8, 1972, there was pub- lished a notice of proposed rule making relating to a loan and purchase pro- gram for 1972 crop peanuts. Interested persons were given 30 days In which to submit written comments, suggestions, or objections regarding the proposed program. None of the written comments, suggestions or objections re- ceived pertained to the aspects of the loan and purchase program covered by this subpart. The General Regulations Governing Price Support for the 1970 and Subse- quent Crops of Grain and Similarly Han- dled Commodities (35 F.R. 7363) and any amendments thereto (hereinafter re- ferred to as "the general regulations") and the 1970 and Subsequent Crops Peanut Farm-Stored Loan and Pur- chase Supplement (35 F.R. 12706) and any amendments thereto (hereinafter referred to as "the continuing supple- ment"), which contain regulations of a general nature with respect to loan and purchase operations, are further supplemented by revising ?? 1421.291- 1421.294 to read as follows, effective as to the 1972 crop of peanuts. The mate- rial previously appearing in these sec- tions remains in full force and effect as to the crops to which it was applicable. Subpart-1972 Crop Farm-Stored Peanut Loan and Purchase Program Sec. 1421.291 Purpose. 1421.292 Availability. 1421.293 Maturity of loans. 1421.294 Loan and purchase rates. AVTHOMAT: The provisions of this sub- part issued under 82 Stat. 1070, as amended, 15 U.S.C. 714 (b) and (c); 63 Stat. 1051, as amended, 7 1441, 1421, 1423, 1425. ? 1421.291 Purpose. This supplement, together with the ap- plicable provisions of the general regu- lations and the provisions of the contin- uing supplement, apply to farm-stored loans and purchases for the 1972 crop of peanuts. ? 1421.292 Availability. (a) Farm-stored loans. Producers must request a loan on 1972 crop eligible pea- nuts on or before March 31, 1973. (b) Purchases. Producers desiring to offer eligible peanuts not under loan for purchase must execute and deliver to the appropriate county ASCS office, on or before April 30, 1973, a Purchase Agreement (Form CCC-614) indicating the approximate quantity of 1972 crop peanuts he may sell to CCC. ? 1421.293 Maturity of loans. Unless demand is made earlier, farm- stored loans on farmers' stock peanuts will mature on April 30, 1973. ? 1421.294 Loan and purchase rates. (a) Loan rate. Subject to the dis- counts specified in paragraph (b) of this section, the loan rates for farmers' stock peanuts placed under farm-stored loan shall be the following rates by types per ton: Dollars 1 Type: per ton Virginia 286 Runner 281 Southeast Spanish 274 Southwest Spanish 270 Valencia (suitable for cleaning and roasting in southwest) a 286 1 These rates may be increased. The in- crease, if any, will be made by an amend- ment to this section issued shortly after August 1, 1972. 2 The price for all Valencia-type peanuts In the Southeast and Virginia-Carolina areas and for those Valencia-type peanuts in the Southwest area which are not suitable for cleaning and roasting will be the same as for Spanish-type peanuts in the same area. (b) Location adjustments to support prices. The loan rates specified in para- graph (a) of this section shall be subject to the following discounts for farmers' stock peanuts placed under a f arm- stored loan in the States specified where peanuts are not customarily shelled or crushed: State: Arizona Arkansas California 33 Louisiana 7 Mississippi 10 Missouri 10 Tennessee 25 Dollars per ton 25 10 (c) Settlement values. The support prices, premiums, and discounts for use in computing the settlement value, under ? 1421.289(b) (2) of the continuing sup- plement, of peanuts acquired by CCC under loan or purchase shall be those specified in ? 1446.44 of the 1972 crop peanut warehouse storage loan and shel- ler purchase supplement, including the location adjustments specified therein for peanuts delivered to CCC in States where peanuts are not customarily shelled or crushed. Effective date. These regulations shall be effective upon publication in the FED- ERAL REGISTER (7-1-72). KENNETH E. FRICK, Executive Vice President, Commodity Credit Corporation. JUNE 26, 1972. [FR Doc.72-10114 Filed 6-30-72;8:52 am] Title 12 BANKS AND BANKING Chapter II-Federal Reserve System PART 225-BANK HOLDING COMPANIES CFR Correction The heading for ? 225.4 appearing on page 542 of title 12, parts 1 to 299, revised as of January 1, 1972 is in error. As corrected, the heading reads as folows: ? 225.4 Nonbanking activities. Title 14-AERONAUTICS AND SPACE Chapter I-Federal Aviation Adminis- tration, Department of Transportation [Docket No. 12032; Amdt. 39-1179] PART 39-AIRWORTHINESS DIRECTIVES Rolls Royce Dart Model 542-4, -4K, -10, -10J, and -10K Engines Pursuant to the authority delegated to me by the Administrator (14 CFR ? 11.89) , an airworthiness directive was adopted April 13, 1972, and made effec- tive immediately, by telegram, to all known operators of airplanes equipped with Rolls Royce Dart Model 542-4, -4K, -10, -10J, and -10K engines incorpo- rating Rolls Royce Dart Modification 1455 because of a recent in-flight failure of a first stage (low pressure) impeller which resulted in destruction of an en- gine and other damage to the airplane. The directive established a service life of 13,000 flights after the incorporation of Modification 1455 for first stage (low pressure) impellers so modified. Based on further examination of failed and high time impellers and information ob- tained from spin testing, the FAA de- termined that safety required the service lives of those impellers to be reduced to 11,000 flights after the in- corporation of Modification 1455. The FAA also determined that that service life also applied to impellers that do not incorporate Modification 1455. There- fore, the airworthiness directive adopted April 13, 1972, was superseded by a tele- graphic AD adopted May 31, 1972, that FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1,t 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Pik Approved For-Release 2001/08/09 : CIA-RDP86-00244?)NRO 100190026-8 RULES AND REGULATIONS the committee, and information concern- ing* such provisions and effective time has been disseminated among handlers of such lemons; it is necessary, in order to effectuate the declared policy of the act, to make this section. effective during the period herein specified; and compli- ance with this section will not require any special preparation on the part of persons subject hereto which cannot be completed on or before the effective date hereof. Such committee meeting was held on June 27,, 1972. (b) Order. (1) The quantity of lemons grown in California and Arizona which may be handled during the period July 2, 1972, through July 8, 1972, is hereby fixed at 250,000 cartons. (2) As used in this section "handled" and "carton(s)" have the same meaning as when used In the said amended mar- keting agreement and order. (Secs. f-19, 48 Stat. 31, as amended; 7 U.S.C. 601474) Dated: June 29, 1972. PAUL A. NICHOLSON, Deputy Director, Fruit and Veg- etable Division, Agricultural ' Marketing Service. [FR Doc.72-10158 Filed 6-30-72;8:54 am] [Fear Reg. 1] PART 917-FRESH PEARS, PLUMS, AND PEACHES GROWN IN CALI- FORNIA Limitation of Shipments Findings. (1) Pursuant to the market- ing agreement, as amended, and Order No. 917, as amended (7 CFR Part 917), regulating the handling of fresh pears, plums, and peaches grown in California, effective under the applicable provisions of the Agricultural Marketing Agree- ment Act of 1937, as amended (7 U.S.C. 601-674), and upon the basis of the rec- ommendations of the Pear Commodity Committee, established under the afore- said amended marketing agreement and order, and upon other available infor- mation, it is hereby found that the limi- tation of shipments of pears, as herein- after provided, will tend to effectuate the declared policy of the act. (2) This action reflects the Depart- ment's appraisal of the need for regula- tio:n, and of the crop and current and prospective market conditions. Ship- ments of pears from the production area are expected to begin on or about July 2, 1972. The grade and size requirements provided herein are designed to prevent the handling, on and after July 2, 1972, of any pears which do not comply with such requirements, so as to provide con- sumers with good quality fruit, consis- tent with the overall quality of the crop, while improving returns to producers pursuant to the declared policy of the act.. The container marking require- ments, included herein, are necessary to assure that containers are properly marked as to variety for inspection iden- tification. (3) It is hereby further found that it Is impracticable, unnecessary, and con- trary to the public interest to give pre- liminary notice, engage in public rule-making procedure, and postpone the effective date of this regulation until 30 days after publication thereof in the FEDERAL REGISTER (5 U.S.C. 553) in that, as hereinafter set forth, the time inter- vening between the date when informa- tion upon which this regulation is based became available and the time when this regulation must become effective in order to effectuate the declared policy of the act is insufficient; a reasonable time is permitted, under the circumstances, for preparation for such effective time; and good cause exists for making the provisions hereof effective not later than July 2, 1972. A reasonable determination as to the supply of, and the demand for, such pears must await the development of the crop thereof, and adequate infor- mation thereon was not available to the Pear Commodity Committee until June 21, 1972, on which date an open meeting was held, after giving due notice thereof, to consider the need for, and the extent of, regulation of shipments of such pears. Interested persons were afforded an opportunity to submit information and views at this meeting; the recom- mendation and supporting information and regulation during the period speci- fied herein were promptly submitted to the Department after such meeting was held; shipments of the current crop of such pears are expected to begin on or about the effective date hereof; this regulation should be applicable to all such shipments in order to effectuate the declared. policy of the act; the provisions of this regulation are identical with the aforesaid recommendation of the com- mittee; information concerning such provisions and effective time has been disseminated among handlers of such pears; and compliance with the pro- visions of this regulation will not require of handlers any preparation therefor which cannot be completed by the effec- tive time hereof. ? 917.428 Pear Regulation 1. (a) Order. During the period July 2, 1972, through August 2, 1972, no handler shall ship: (1) Bartlett, Max-Red (Max-Red Bartlettt. Red Bartlett), or Rosired (Rosired Bartlett) varieties of pears which do not grade at least U.S. Combi- nation, with not less than 80 percent, by count, of the pears grading at least U.S. No. 1; (2) Any box or container of Bartlett, Max-Red (Max-Red Bartlett, Red Bart- lett), or Rosired (Rosired Bartlett) varieties of pears unless such pears are of a size not smaller than the size known commercially as size 165: Provided, That a handler may ship, during any day from any shipping point, a quantity of such pears which are smaller than the size known commercially as size 165 if (i) such smaller pears are not smaller than the size known commercially as size 180, and. (ii) the quantity of such smaller pears shipped from such shipping point 13083 does not, at the end of any day during the aforesaid period, exceed 5.20.3 per- cent of such handler's total shipments of such pears, shipped from the same shipping point, which are not smaller than the size known commercially as size 165; or (3) Any box or container of pears of any variety unless such box or container is stamped or otherwise marked, in. plain sight and in plain letters, on one Outside end with the name of the variety, if known, or when the variety is not known, the words "unknown variety." (b) Definitions. (1) Terms used in the amended marketing agreement and order shall, when used herein, have the same meaning as is given to the respec- tive term in said amended marketing agreement and order. (2) "Size known commercially as size 165" means a size of pear that will pack a standard pear box, packed in accord- ance with the specifications of a saand- ard pack, with 165 pears and with the 22 smallest pears weighing not less than 5% pounds. (3) "Size known commercially E6i size 180" means a size of pear that will pack a standard pear box, packed in accord- ance with the specifications of a stand- ard pack, with five tiers, each tier having six rows with six pears in each row: and with the 21 smallest pears weighing not less than 5 pounds. (4) "Standard pear box" means the container so designated in section 93599 of the Agricultural Code of California,. (5) "U.S. No. 1," "U.S. Combinatnn," and "standard pack" shall have the same meaning as when used in the U.S. Stand- ards for Pears (Summer and Fall), 7 CFR 51.1260-51.1280. (Secs. 1-19, 48 Stat. 31, as amended; 7 U.S.C. 601-674) Dated: June 29, 1972. PAUL A. NICHOLSON, Deputy Director, Fruit a rd Vegetable Division, Agricul- tural Marketing Service. [FR Doc.72-10159 Filed 6-30-72;8:54 am] PART 930-CHERRIES GROWN IN MICHIGAN, NEW YORK, WISCON- SIN, PENNSYLVANIA, OHIO, VIR- GINIA, WEST VIRGINIA, AND MARYLAND Subpart-Rules and Regulations ASSESSMENT PROCEDURE; CORRECTION In the FEDERAL REGISTER Issue Of Jan- uary 5, 1972, ? 930.107 of Subpart-Roles and Regulations (37 P.R. 273), ? 930.:t06 was incorrectly referenced as ? 930.:.04 and is hereby corrected to read as follows: ? 930.107 Assessment procedure. Upon receipt of pack completion re- port as required by ? 930.106, each han- dler shall be assessed an amount per ton as determined by the board and ap- proved by the Secretary, on all cherries FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved FodifteleassAq1/MOlieeetegi36-0024A00100190026-8 13082 (o) Misrepresenting, directly or by implication, that there is a limited supply of mail order catalogs available. (p) Misrepresenting, directly or by implication, the amount of savings avail- able to purchasers of respondents' mer- chandise. (q) Failing to maintain adequate rec- ords which disclose the facts upon which all representations as to wholesale and retail prices of merchandise, claims of savings afforded to purchasers, and rep- resentations of similar import and mean- ing are based, and from which the valid- ity of any such claims can be established. It is further ordered, That the corpo- rate respondent maintain a business tele- phone and list such number in the offi- cial telephone directory for its location and in all of its mail order catalogs. It is further ordered, That respondents shall maintain full and adequate records of purchaser's orders and shipments of merchandise so that requests for re- ? funds, claims or adjustments may be made for nondelivered merchandise or for any other reason. It is further ordered, That respond- ents notify the Commission at least 30 days prior to any proposed changes in the corporate respondent such as dis- solution, assignment or sale resulting in the emergence of a successor corpora- tion, the creation or dissolution of sub- sidiaries or any other changes in the corporation which may affect compli- ance obligations arising out of the order. It is further ordered, That respond- ents deliver a copy of this order to cease and desist to all personnel of respondents responsible for the preparation, creation, production or publication of the adver- tising of all products covered by this order. It is further ordered, That respond- ents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the man- ner in which they have complied with this order: Provided, however, That with respect to those portions of the order which require changes to be made in respondents' mail order catalog which is published semiannually in January and August, a second such report shall be filed within sixty (60) days after June 1, 1972, the date upon which all changes in respondents' catalog required by the terms of this order shall take effect. Issued: May 23, 1972. By the Commission. [MIA CHARLES A. ToBIN, Secretary. [29M D08.72-10045 Plied 6-80-72;8:46 gm] Title 7?AGRICULTURE Chapter VII?Agricultural Stabiliza- tion and Conservation Service (Agricultural Adjustment), Depart- ment of Agriculture SUBCHAPTER C?SPECIAL PROGRAMS [Rev. 1] PART 760?INDEMNITY PAYMENT PROGRAMS Subpart--Beekeeper Indemnity Payment Program Correction In F.R. Doc. 72-8793, appearing at page 11670, in the issue of Saturday, June 10, 1972, the word "without" in the second line of ? 760.113(b) (2) , should read "withhold". Chapter IX?Agricultural Marketing Service (Marketing Agreements and Orders; Fruits, Vegetables, Nuts), Department of Agriculture [Valencia Orange Reg. 397, Amdt. 1] PART 908?VALENCIA ORANGES GROWN IN ARIZONA AND DESIG- NATED PART. OF CALIFORNIA Limitation of Handling (a) Findings. (1) Pursuant to the mar- keting agreement, as amended, and Or- der No. 908, as amended (7 CFR Part 908) , regulating the handling of Valencia oranges grown in Arizona and designated part of California, effective under the applicable provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674) , and upon the basis of the recommendation and in- formation submitted by the Valencia Orange Administrative Committee, es- tablished under the said amended mar- keting agreement and order, and upon other available information, it is hereby found that the limitation of handling of such Valencia oranges, as hereinafter provided, will tend to effectuate the de- clared policy of the act. (2) It is hereby further found that it is impracticable and contrary to the pub- lic interest to give preliminary notice, engage in public rule-making procedure, and postpone the effective date of this amendment until 30 days after publica- tion thereof in the FEDERAL REGISTER (5 U.S.C. 553) because the time intervening between the date when information upon which this amendment is based became available and the time when this amend- ment must become effective in order to effectuate the declared policy of the act is insufficient; and this amendment re- lieves restriction on the handling of Va- lencia oranges grown in Arizona and des- ignated part of California. (b) Order, as amended. The provisions in paragraphs (b) (1) (i), (ii), and (iii) of ? 908.697 (Valencia Reg. 397, 37 F.R. 12306) during the period June 23, through June 29, 1972, are hereby amended to read as follows: ? 908.697 Valencia Orange Regulation 397. (b) Order. (1) 5 " (1) District 1: 259,600 cartons; (ii) District 2: 308,000 cartons; (iii) District 3:133,000 cartons. ? (Secs. 1-19, 48 Stat. 31, as amended; 7 U.S.C. 601-674) Dated: June 28, 1972. ARTHUR E. BROWNE, Acting Director, Fruit and Vege- table Division, Agricultural Marketing Service. [FR Doc.72-10102 Filed 6-30-72;8:51 am] [Lemon Reg. 540] PART 910?LEMONS GROWN IN CALIFORNIA AND ARIZONA Limitation of Handling ? 910.840 Lemon Regulation 540. (a) Findings. (1) Pursuant to the marketing agreement, as amended, and Order No. 910, as amended (7 CFR Part 910; 36 F.R. 9061) , regulating the han- dling of lemons grown in California and Arizona, effective under the applicable provisions of the Agricultural Market- ing Agreement Act of 1937, as amended (7 U.S.C. 601-674), and upon- the basis of the recommendations and informa- tion submitted by the Lemon Adminis- trative Committee, established under the said amended marketing agreement and order, and upon other available infor- mation, it is hereby found that the lim- itation of handling of such lemons, as hereinafter provided, will tend to ef- fectuate the declared policy of the act. (2) It is hereby further found that it is impracticable and contrary to the public interest to give preliminary notice, engage in public rule-making procedure, and postpone the effective date of this section until 30 days after publication hereof in the FEDERAL REGISTER (5 U.S.C. 553) because the time intervening be- tween the date when information upon which this section is based became avail- able and the time when this section must became effective in order to effectuate the declared policy of the act is insuffi- cient, and a reasonable time is permitted, under the circumstances, for preparation for such effective time; and good cause exists for making the provisions hereof effective as hereinafter set forth. The committee held an open meeting during the current week, after giving due notice thereof, to consider supply and market conditions for lemons and the need for regulation; interested persons were af- forded an opportunity to submit infor- mation and views at this meeting; the recommendation and supporting infor- mation for regulation during the period specified herein were promptly submitted to the Department after such meeting was held; the provisions of this section, including its effective time, are identical with the aforesaid recommendation of FEDERAL REGISTER, VOL 37, NO. 128?SATURDAY, JUtY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 00% Approved For Release 2411/0/09.; CIA-RDP86-00244R000100190026-8 ne5 AND REGULATIONS such as dissolution, assignment or sale resulting in the emergence of a succes- sor corporation, the creation or dissolu- tion of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order. It is further ordered, That respond- ents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the man- ner and form in which they have com- plied with this order. Issued: May 23, 1072. By the Commission. tsnael CHARLES A. TOBIN, Secretary. [FR Doc.72-10044 Filed 6-30-72;8:46 am) [Docket No. C-2225] PART 13?PROHIBITED TRADE PRACTICES U.S. General Supply Corp. et al. Subpart?Advertising falsely or mis- leadingly: ? 13.15 Business status, ad- vantages, or, connections: 13.15-185 Mall order house advantage; ? 13.70 Fictitious or misleading guarantees; ? 13.155 Prices: 13.155-5 Additional charges unmentioned; 13.155-40 Exag- gerated as regular and customary; 18.155-80 Retail as cost, wholesale, dis- counted, etc.; ? 13.180 Quantity: 13.180- 30 In stock; ? 13.185 Refunds, repairs, and replacements; ? 13.260 Terms and conditions. 8ubpart?Misrepresenting oneself and goods?Goods: ? 13.1647 Guarantees; ? 13.1720 Quantity; ? 13.- 1725 Refunds; ? 13.1760 Terms and con- ditions; Misrepresenting oneself and goods--Prices: ? 13.1778 Additional costs unmentioned; ? 13.1805 Exaggerated as regular and customary; ? 13.1820 Retail as cost, wholesale, etc., or discounted. Subpart?Neglecting, unfairly or decep- tively, to make material disclosure; ? /3.1882 Prices: (Sec. 6,38 Stat. 721; 15 CSC. 46. Interprets or applies sec. 5,38 Stat. 719, as amended; 15 U.S.C. 45 [Cease and desist order, U.S. Gen- eral Supply Corp. et al., Jericho, N.Y. Docket No. C-2225, May 23, 19721 In the Matter of U.S. General Supply Corp., a Corporation, and Harold Rashbaum and Murray Harrow In- dividually and as Officers of Said Corporation. Consent order requiring a Jericho, N.Y., mail order firm to cease failing to make shipments within specified time limits, failing to disclose that not all items advertised are kept in stock, but are drop-shipped by the manufacturer, failing to make complete refunds within specified time limits, misrepresenting that all items shipped are insured, re- gardless of purchase price, failing to in- dicate fee for respondent's catalog, using comparative inflated prices, and keeping Inadequate records of purchase orders. Corporate respondent is further required to maintain a business telephone and to list the number in the official telephone directory for its location and in all of its mail order catalogs. The order to cease and desist, includ- ing further order requiring report of compliance therewith, is as follows: It is ordered, That respondent 'U.S. General Supply Corp., a corporation, its subsidiary and affiliated corporations, its successors and assigns, arid respondents Harold Rashbaum and Murray Harrow. individually, and as officers of said cor- porate respondent, and respondents' agents, representatives, officers and em- ployees, directly of through any corpo- rate or other device or under any other name or names, in respondents' adver- tisements, catalogs, or in any other ad- vertising mateiral, in connection with the offering for sale, sale, and distribu- tion of tools, hardware, home appliances, office equipment, auto supplies, garden equipment and any other article of mer- chandise, in commerce, as "commerce" is defined in the Federal Trade Commis- sion Act? to forthwith cease and desist from: (a) Failing to make shipments of ad- vertised merchandise within the time period specified in respondents' adver- tisements, catalogs or in any other ad- vertising material when payment for such goods has been received, or if no time is specified, within a reasonable time not to exceed 21 days, and if ship- ment is not made within said period, to offer in writing to promptly refund the full purchase price therefor to the pur- chaser, except as hereinafter provided in paragraphs (b), (c), and (d) for drop- shipped merchandise. Upon request for said refund, the return of the full pur- chase price shall be made within 15 days from the date of the receipt of said writ- ten request. (b) Failing to clearly and conspicu- ously disclose in its catalog* and in all other advertising materials, where spe- cific items of merchandise are mentioned, all of those items which are not stocked in respondents' warehouse but are drop- shipped at respondents' request directly to their customers by any manufacturer or supplier. (c) Failing, in its catalog and in all other advertising materials, to ade- quately inform all purchasers of drop- shipped merchandise, ordered and paid for, that refunds are available within 15 days from the date of receipt of any written request therefor, if the mer- chandise has not been received within the time specified in respondents' cata- log or hi any other advertising material, or within 21 days where no time period has been specified. (d) Failing to make refunds of all monies paid by purchasers of drop- shi:pped merchandise within 15 days from the date of receipt of any written request therefor made in accordance with the conditions set forth in para- graph (c) above. (e) Failing to disclose in its mail order catalog, when representations are made that merchandise is insured, that only parcels of merchandise in excess of a i13081 given dollar amount are insured by re- spondents or that parcels below such dollar amount are not insured. (f) Representing, directly or by Impli- cation, that delivery of all merchandise is guaranteed or assured unless tOi the terms and conditions relating to respond.- ents' replacement of any merchandise not received by purchasers is clearly and conspicuously stated. (g) Failing when requested, punsaant to a guarantee of satisfaction money back guarantee, or a full refund guaran- tee, to refund either by cash or by check, the full purchase price of merchandise, together with all charges paid by the purchasers in connection with such pur- chase, voluntarily, and within the time specified in respondents' advertisements, or if no time is specified, within a rea- sonable time not to exceed 15 class, or failing to make any other refunds to which a purchaser is entitled within 15 days from the date of the receipt of the written request for such refund. (h) Misrepresenting, directly sc by implication, the dollar amount or quan- tity of merchandise which is in stock in respondents' warehouse at any elven time or that any specific item of mer- chandise is in stock in said warehouse when in fact said merchandise may be shipped directly to the purchaser by sup- pliers other than respondents. (i) Representing, directly or by im- plication, that respondents are whole- salers unless they in fact: (1) Make a substantial arid significant number of sales to retailers, and (2) sell items which they offer at wholesale prices, at psices which do not exceed those usually and customarily paid by retailers for such merchandise to any source of supply, (j) Representing, directly or by impli- cation, that respondents offer merchan- dise for sale at wholesale prices, at the lowest wholesale prices, or at prices which do not exceed the prices usnallyand cus- tomarily paid by retailers for such mer- chandise to any source of supply 'unless they, in fact, sell items which they offer at wholesale prices, at prices which do not exceed those usually and customarily paid by retailers for such merchandise. (k) Failing to disclose in all advertis- ing offering its mail order catalog for sale that a fee of $1, or any amount, is re- quired on all orders under a certain dcllar amount. (1) Failing to disclose, clearly and con- spicuously, that charges for postage, in- surance, or any other fee or charge in ? connection with the return of mercha,n- dise, or of the catalog itself, shall be berm by the purchaser. (m) Representing, directly or by . cation, that any products are guaranteed, unless the nature and extent of the guar- antee, the identity of the guarantor, The obligations, if any, of the consumer who : purchases said guaranteed product, coed the manner in which said guarantor will perform thereunder are clearly and con- spicuously disclosed. (n) Utilizing comparative retail prises which are inflated above the usual and customary current selling prices for such products in retail stores throughout the country. FEDERAL REGISTER, VOL. 37? NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For\itease 2001/08/09 : CIA-RDP86-00244114100100190026-8 RULES AND REGULATIONS 13095 in any indirect cost pool to be allocated to that or any other final cost objective. Costs identified specifically with the con- tract are direct costs of the contract and are to be charged directly thereto. Costs identified specifically with other final cost objectives of the contractor are di- rect costs of those cost objectives and are not to be charged to the contract directly or indirectly. (b) Any direct cost of minor dollar amount may be treated as an indirect cost for reasons of practicality where the accounting treatment for such cost is consistently applied to all final Cost ob- jectives, provided that such treatment produces results which are substantially the same as the results which would have been obtained if such costs had been treated as a direct cost. h. Section 1-15.203 (a) and (d) is amended, as follows: 1-15.203 Indirect costs. (a) An indirect cost (see ? 1-15.109 (i) ) is one which, because of its incurrence for common or joint objectives, is not readily subject to treatment as a direct cost. Any direct cost of minor dollar amount may be treated as an indirect cost for reasons of practicality under the circumstances set forth in ? 1-15.202(b). After direct costs have been determined and charged directly to the contract or other work as appropriate, indirect costs are those remaining to be allocated to the several cost objectives. No final cost objective shall have allocated to it as an indirect cost any cost if other costs, in- curred for the same purpose in like cir- cumstances, have been included as a di- rect cost of that or any other final cost objective. ? (d) The method of alloca? tion of in- direct costs must be based on the par- ticular circumstances involved. The method shall be in accordance with standards promulgated by the Cost Ac- counting Standards Board, if applicable to the contract. Otherwise, the method shall be in accordance with generally ac- cepted accounting principles. When Cost Accounting Standards Board standards are not applicable to the contract, the contractor's established practices, if in accordance with generally acceptable ac- counting principles, shall generally be acceptable. However, the method used by the contractor may require examination when: * ROD KREGER, Acting Administrator of General Services. 311NE 29, 1972. ATTACHMENT A DISCLOSURE STATEMENT?COST ACCOUNTING PRACTICES AND CERTIFICATION Any contract in excess of $100,000 result- ing from this solicitatiqn, except when the price negotiated is based on: (a) Established catalog or market prices of commercial items sold in substantial quantities to the general public, or (b) prices set by law or regulation, shall be subject to the requirements of the Cost Accounting Standards Board. Any No. 128?Pt. I-4 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 offeror submitting a proposal which, if ac- cepted, will result in a contract subject to the requirements of the Cost Accounting Standards Board must, as a condition of con- tracting, submit a Disclosure Statement as required by regulations of the Board. The Disclosure Statement muErtsbe submitted as a part of the offeror's proposal under this solicitation (see 1, below) unless (1) the offeror, together with all divisions, sub- sidiaries, and affiliates under common con- trol, did not receive net awards of negotiated defense prime contracts during the period July 1, 1970, through June 30, 1971, totaling more than $30 million (see 2, below), (11) the offeror has already submitted a Disclosure Statement disclosing the practices used in connection with the pricing of this proposal (see 3, below), or (111) postawarcl submission has been authorized by the Contracting Officer. CAUTION A practice disclosed in a Dis- closure Statement shall not, by virtue of such disclosure, be deemed to be a proper, approved, or agreed to practice for pricing proposals or accumulating and reporting contract performance cost data. Check the appropriate box below: o 1. Certificate of Concurrent Submission of Disclosure Statements The offeror hereby certifies that he has submitted, as a part of his proposal under this solicitation, copies of the Disclosure Statements as follows: (1) Original and one copy to the cognizant Contracting officer: (it) one copy to the cognizant contract audi- tor; and OW one copy to the Cost Account- ing Standards Board, 441 G Street NW., Washington, DC 20548. (Date of Disclosure Statement.) (Name and address of cognizant Contract- ing Officers where filed.) The offeror further certifies that practices used in estimating costs in pricing this pro- posal are consistent with the cost account- ing practices disclosed in the Disclosure Statements. ID 2. Certificate of Monetary Exemption The offeror hereby certifies that, together with all divisions, subsidiaries, and affiliates under common control, he did not receive net awards of negotiated national defense prime contracts during July 1, 1970, through June 30, 1971, totaling more than $30 million. D 3. Certificate of Previously Submitted Dis- closure Statements The offeror hereby certifies that the Dis- closure Statements were filed, as follows: (Date of Disclosure Statement.) (Name and address of cognizant Contract- ing Officers where filed.) The offeror further certifies that practices used in estimating costs in pricing this pro- posal are consistent with the dost account- ing practices disclosed in this Disclosure Statement. ATTACHMENT B COST ACCOUNTING STANDARDS (a) Unless the Cost Accounting Standards Board has prescribed rules or regulations exempting the Contractor or this contract from standards, rules, and regulations pro- mulgated pursuant to 50 U.S.C. App. 2168 (Public Law 91-379, August 15, 1970), the Contractor, in connection with this contract shall: (1) By submission of a Disclosure State- ment, disclose in writing his cost account- ing practices as required by regulations of the Cost Accounting Standards Board. The required disclosures must be made prior to contract award unless the Contracting Offi- cer provides a written notice to the Con- tractor authorizing postaward submission in accordance with regulations of the Cost Accounting Standards Board. The practices disclosed for this contract shall be the same as the practices currently disclosed and ap- plied on all other contracts and subcontracts being performed by the Contractor and which contain this Cost Accounting Standards clause. If the Contractor has marked the Dis- closure Statement to indicate that it con- tains trade secrets and commercial or finan- cial information which is privileged and ccin- fidential, the Disclosure Statement will be protected and will not be released outside of the Government. (2) Follow consistently the cost account- ing practices disclosed pursuant to (1) above, in accumulating-and reporting con- tract performance cost data concerning this contract. If any change in disclosed prac- tices is- made for the purposes of any con- tract or subcontract subject to Cost Ac- counting Standards Board requirements, the change must be applied prospectively to this contract, and the Disclosure Statement must be amended accordingly. If the contract price or cost allowance of this contract is affected by such changes, adjustment shall be made in accordance with subparagraph (a) (4) or (a) (5), below as appropriate. . (3) Comply with all Cost Accounting standards in effect on the date of award of this contract or if the Contractor has submitted cost or pricing data, on the date of final agreement on price as shown on the Contractor's signed certificate of current cost or pricing data. The Contractor shall also comply with any Cost Accounting Standard which hereafter becomes applicable to a contract or subcontract of the Con- tractor. Such compliance shall be required prospectively from the date of applicability to such contract or subcontract. (4) (A) Agree to an equitable adjustment as provided in the Changes clause of this contract if the contract cost is affected by a Disclosure Statement change which the Contractor is required to make pursuant to (3), above. If the Contractor has not been required to file a Disclosure Statement but is required pursuant to (a) (3), above, to change an established practice, then an equitable adjustment shall similarly be agreed to. (B) Negotiate with the Contracting Officer to determine the terms and conditions under which any Disclosure Statement change other than changes under (4) (A) , above, may be made. A change to a Disclosure Statement may be proposed by either the Government or the Contractor: Provided, however, That no agreement may be made under this provision that will increase costs paid by the United States under this contract. (5) Agree to an adjustment of the contract price or cost allowance, as appropriate, if he or a subcontractor fails to comply with an applicable Cost Accounting Standard or to follow any practice disclosed pursuant to subparagraphs (a) (1) and (a) (2), above, and such failure results in any increased costs paid by the United States. Such ad- justment shall provide for recovery of the increased costs to the United States to- gether with interest thereon computed at the rate determined by the Secretary of the Treasury pursuant to Public Law 92-41, 85 Stat. 97, or 7 percent per annum, whichever is less, from the time the payment by the United States was made to the time the adjustment is effected. (b) If the parties fail to agree whether the Contractor or subcontractor has complied with an applicable Cost Accounting Stana- ard, rule, or regulation of the Cost Account- ing Standards Board and as to any cost ad- justment demanded by the United States, such failure to agree shall be a dispute con- cerning a question of fact within the mean- ing of the Disputes clause of this contract. FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 0114, Approved Fortlease 2001/08/09 : CIA-RDP86-00244R000100190026-8 13096 RULES AND REGULAnONS (c) The Contractor shall permit any au- . thorized representatives of the head of the agency, the Cost Accounting Standards Board, or the Comptroller General of the United States to examine and make copies of any documents, papers, or records relat- ing to compliance with the requirements of this clause. (d) The Contractor shall include in all negotiated subcontracts which he enters into the substance of this clause except para- graph (b), and shall require such inclusion In ell, other subcontracts of any tier, except that this requirement shall apply only to negotiated subcontracts in excess of $100,000 where the price negotiated is not based on: (I) Established catalog or market prices of commercial items sold in substantial quan- tities to the general public; or (ii) Prices set by law or regulation. Noss: 1. Subcontractors shall be required to submit their Disclosure Statements to the Contractor. However, if a subcontractor has previously submitted his Disclosure State- ment to a Government Contracting Officer he may satisfy that requirement by certifying to the Contractor the date of such State- ment and the address of the Contracting Officer. 2. In any case where a subcontractor deter- mines that the Disclosure Statement "in- formation is privileged and confidential and declines to provide it to his Contractor or higher tier subeontractor, the Contractor may authorize direct submission of that sub- contractor's Disclosure Statement to the same Government offices to which the Contractor was required to make submission of his Dis- closure Statement. Such authorization shall in no way relieve the Contractor of liability as provided in paragraph (a) (5) of this clause. In view of the foregoing and since the contract may be subject to adjustment under this clause by reason of any failure to comply with rules, regulations, and Stand- ards of the Cost Accounting Standards Board In connection with covered subcontracts, it is expected that the Contractor may wish to Include a clause in each such subcontract requiring the subcontractor to appropriately indemnify the Contractor. However, the in- clusion of such a clause and the terms there- of are matters for negotiation arid agreement between the Contractor and the subcon- tractor, provided that they do not conflict with the duties of the Contractor under its contract with the-Government. It is also ex- pected that any subcontractor subject to' such indemnification will generally require substantially similar indemnification to be submitted by his subcontractors. (e) The terms defined in section 331.2 of Part 3:31 of Title 4, Code of Federal Regula- tions (4 CFR 331.2) shall have the same meanings herein. As there defined, "nego- tiated subcontract" means "any subcontract except a firm fixed-price subcontract made by a Contractor or subcontractor after re- ceiving offers from at least two firms not asso- ciated with each other or such Contractor or subcontractor, providing (1) the solicitation to all competing firms,is identical, (2) price Is the only consideration in selecting the sub- contractor from among the competing firms solicited, arid (3) the lowest offer received in compliance with the solicitation from among those solicited is accepted." [FR Doc.72-10157 Filed 8-30-72;8:53 am] Chapter 101?Federal Property Management Regulations SUBCHAPTER 0?TRANSPORTATION AND MOTOR VEHICLES PART 101-39?INTERAGENCY MOTOR VEHICLE POOLS Subpart 1011-39.49?Forms and Reports OpERATOR'S REPORT OF MOTOR VEHICLE ACCIDENT This amendment illustrates the revised June 1971 edition of Standard Form 91, Operator's Report of Motor Vehicle Accident. ? Section 101-39.4903 is revised to illus- trate the June 1971 edition of Standard Form 91. ? 101-39.1903 Standard Form 91, Op- erator's Report of Motor-Vehicle Accident. NOTE: 'Standard Form 91, as illustrated in ? 101-39.4903, is filed as part of the original document. (Sec. 205(c) , 63 Stat. 390; 40 U.S.C. 486(c) ) 1r4ective date. This amendment is ef- fective upon publication in the FEDERAL REGISTER (7-1-72). Dated: June 26, 1972. . G. C. GARDNER, Jr., Acting Administrator. [FR Doc72-10067 Filed 6-30-72;8:49 am] Title 43--PUBLIC LANDS: INTERIOR Chapter II?Bureau of Land Manage- ment, Department of the Interior APPENDIX--PUBLIC LAND ORDERS [Public Land Order 52191 [Oregon 8764, 90401 OREGON Revocation of Executive Orders Nos. 5600 and 7623; Partial Revocation of Reclamation Project Withdrawal By virtue of the authority vested in the President, and pursuant to Execu- tive Order No. 10355 of May 26, 1952 (17 P.R. 4831), and by virtue of the author- ity contained in section 3 of the Act of June 17, 1902, as amended and supple- mented, 43 U.S.C. 416 (1970), it is ordered as follows: 1. The Executive Orders No. 5600 of April 5600 of April 16, 1931, and No. 7623 of May 29, 1937, withdrawing lands for an agricultural field station in aid of programs of the Department of Agricul- ture, are hereby revoked as to the fol- lowing described lands: [Oregon 87641 WILLAMETTE MERIDIAN T.4N.;11.28E., Sec. 14, SysSE%SW%; See. 22, SW% , SEYsNW1/4, SiiiNE%; Sec. 23, NW. The land described contains 460 acres. 2. The Secretary's Order of August 16, 1905, withdrawing lands for the Urca- tilla Reclamation Project, is hereby re- voked as to the following descrited lands: [Oregon 90401 WILLAMETTE MERIDIAN T. 4 N., R. 28 E., Sec. 15, SI/2SE%; Sec. 22, 30/2/4112. The land described contains 240 acres. The total of the areas described ag- gregates 700 acres in Umatilla County. All of the lands described are patented. The title to the lands de- scribed in paragraph 1 was transferred to the State of Oregon pursuant to the Act of September 23, 1950, 64 Stat. 81, a portion of which it is contempla;ed will be reconveyed to the United States by the State. Inquiries concerning the lands should be addressed to the Chief, Branch. of Lands and Minerals Operations, Bureau of Land Management, Portland, Oreg. 97208. HARRISON LOESCH, Assistant Secretarysof the Interior'. JUNE 27, 1972. [PR Doc.72-10046 Filed 6-30-72;8:46 am] [Public Land Order 52201 [Sacramento 5095] CALIFORNIA Partial Revocation of Reclamation Project Withdrawal By virtue of the authority contained in section 3 of the Act of June 17, 190:, as amended and supplemented, 43 U.S.C. 416 (1970), it is ordered as follows: 1. The departmental order of NON'em- ber 4, 1913, 'withdrawing lands for the Iron Canyon Project, is hereby revcked so far as it affects the following described land: MOUNT DIABLO MERIDIAN T, 29 N., R. 3 W.. Sec. 32, NW1/4NE 1/4. The area described aggregates 40 acres in Tehama County. 2. This revocation is made in furtier- ance of an exchange under section 8 of the Act of June 28, 1934, as amended, 43 U.S.C. 315g (1970), by which the offered lands will benefit a Federal land pro- gram. Accordingly, the land describEd in this order is hereby classified, pursuant to section 7 of said Act, 43 U.S.C. 315f (1970), as suitable for such exchange. The land, therefore, will not be subject to other use or disposition under the public land laws in the absence IA a modification or revocation of such classi- fication (43 CFR 2440.4). HARRISON LOESCE, Assistant Secretary of the Interior. JUNE 27, 1972. (FB Doo.72-10047 Filed 6-30-72;8:46 am] FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY to- 1972 Approved For Release 2001/08/09 : CIA-RqP86-00244R000100190026-8 Approved For Release 2001/08/09 : CIA-RDP86-0024414800100190026-8 RULES AND REGULATIONS [Public Land Order 5221] [Idaho 20191 IDAHO Withdrawal for Ririe Dam and Reservoir Project By virtue of the authority vested in the President an pursuant to Executive Order No. 10355 of May 26, 1952 (17 P.R. 4831) , it is ordered as follows: Subject to valid existing rights, the following described public lands are here- by withdrawn from all forms of appro- priation under the public land laws, in- cluding the mining laws (30 U.S.C., ch. 2), but not from leasing under the min- eral leasing laws, and reserved for use by the Corps of Engineers, Department of the Army, in connection with the opera- tion and maintenanoe of the Ririe Dam and Reservoir Project: BOISE MERIDIAN T. 6 N., R. 39 E., Sec. 30, lots 15,17,18,19. The area described aggregates 43.93 acres in Madison County. HARRISON LO-ESCH, Assistant Secretary of the Interior. JUNE 27, 1972. [FR Doc.72-10048 Filed 6-30-'72;8:46 am] [Public Land Order 5222] [Arizona 5393] ARIZONA Partial Revocation of Reclamation Withdrawal By virtue of the authority contained in section 3 of the Act of June 17, 1902, as amended and suppleinented, 43 U.S.C. 416 (1970), it is ordered as follows: 1. Public Land Order_No. 3835 of Sep- tember 27, 1965, withdrawing lands for the proposed Buttes Dam and Reservoir, Middle Gila River Project, is hereby re- voked so far as it affects the following described land: GILA AND SALT RIVER MERIDIAN T. 4 S., R.. 14 E., Sec. 8, NE1/4SWV4 , SIASW1/4. The areas described aggregate 120 acres in Pinal County. 2. This revocation is made in further- ance of an exchange under section 8 of the Act of June 28, 1934, as amended, 43 U.S.C. 315g (1970), by which the offered lands will benefit a Federal land pro- gram. Accordingly, the land described in this order is hereby classified, pursuant to section 7 of said Act, 43 U.S.C. 315f (1970), as suitable for such exchange. The lands, therefore, will not be subject to other use or disposition under the pub- lic land laws in the absence of a modifi- cation or revocation of such classification (43 CFR 2440.4). HARRISON LOESCH, Assistant Secretary of the Interior. JUNE 27, 1972. [FR Doc,72-10049 Filed 6-30-72;8:46 am] Title 49 TRANSPORTATION Chapter V?National Highway Traffic Safety Administration [Docket No. 71-1; Notice 31 PART 57]?FEDERAL MOTOR VEHICLE SAFETY STANDARDS Glazing Materials Correction ? In F.R. Doc. 72-9283 appearing at page 12237 of the issue for Wednesday, June 21, 1972, the following corrections are made in ? 571.205: 1. In paragraph 55.1.2 the line "85.1.2.2 may be used in the locations of" should be inserted between the third and fourth lines. 2. In paragraph 85.1.2.3, line 4, the ref- erence to "55.2.1" should read "S5.1.2.1". Title 50?WILDLIFE AND FISHERIES Chapter I?Bureau of Sport Fisheries and Wildlife, Fish and Wildlife Service, Department of the Interior PART 28?PUBLIC ACCESS, USE, AND RECREATION Ruby Lake National Wildlife Refuge, Nev. The following special regulation is is- sued and is effective on date of publica- tion-In the FEDERAL. REGISTER (7-1-72). ? 28.28 Special regulations; public ac- cess, use, and recreation for individ- ual wildlife refuge areas. NEVADA RUBY LAKE- NATIONAL WILDLIFE REFUGE Boating is permitted in the South Sump with conventional hull boats and canoes, exclusive of amphibious, all- terrain, or any other type of craft ca- pable of cross-country travel on or im- mediately over land, water, sand, marsh, swampland, or other natural terrain. Boats with motors are restricted to the area posted for powerboating dur- ing the waterfowl nesting season. The powerboating area is posted and de- lineated on maps available at refuge headquarters. The provisions of this special regula- tion supplement the regulations which govern recreation on wildlife refuge areas generally, which are set forth in 13097 Title 50, Code of Federal Regulations, Part 28, and are effective through De- cember 31, 1972. JOHN D. FINDLAY, Regional Director, Bureau of Sport Fisheries and Wildlife. JUNE 20, 1972. [FR Doc.72-10069 Filed 6-30--72;8 :49 alnl Title 24?HOUSING AND URBAN DEVELOPMENT Chapter IX?Office of Interstate Land Sales Registration, Department of Housing and Urban Development [Docket No. R-72-199] PART 1700?INTRODUCTION Subpart B?Delegations of Basic Authority and Functions ACT/NG ADMINISTRATOR The delegations of authorities and re- sponsibilities to the Director of the Ex- amination Division and the Director of the Administrative Proceedings Division are delegated, and the designation for Acting Administrator is amended to de- lete from the order of succession the Director of the Examination Division and the Director of the Administrative Proceedings Division, and to provide that the Assistant Deputy Administrator be designated after the Deputy Adminis- trator as Acting Administrator. This amendment relates to agency management, and therefore notice of proposed rule making and postponement of the effective date are unnecessary. Accordingly, 24 CFR Part 1700, Sub- part B?Delegations of Basic Authority and Functions, is amended as follows: ? 1700.80 [Deleted] ? 1700.85 [Deleted] A. Delete ?? 1700.80 and 1700.85 and their headings from the table of contents. B. Delete ?? 1700.80 and 1710.85. C. Change ? 1700.90 to read as follows: ? 1700.90 'Acting Administrator. The Deputy Administrator and the Assistant Deputy Administrator in the order named, are designated by the Ad- ministrator to act in his place and stead in the event of his absence or inability to act, having the title of "Acting Ad- ministrator" with the powers, duties, and rights delegated by the Secretary's Dele- gation of Authority published in the FEDERAL REGISTER on March 9, 1972, 37 P.R. 5071. Effective date. This amendment is ef- fective on June 28, 1972. GEORGE K. BERNSTEIN, Interstate Land Sales Administrator. [FR Doc.72-10163 Filed 6-30-72;8:51 am] FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 #011% Approved Foritelease 2001/08/09: CIA-RDP86-00244R000100190026-8 13098, [Docket No. 11-72-2001 PART 1911?INSURANCE COVERAGE AND RATES Flood Insurance; Premium Rate Re- ductions ancl Minimum Commissions Section 1308 of the National Flood In- surance Act of 1968 (42 U.S.C. 4015) di- rects the Secretary to prescribe by regu- lation the premium rates to be charged for flood insurance under the program, "consistent with the objective of making flood insurance available where neces- sary at reasonable rates so as to encour- age prospective insureds to purchase such insurance" and with the purposes of the Act. Daring the current calendar year, particularly as a result of recent flood disaster, it has become evident that many persons have refrained from the purchase of Federal flood Insurance be- cause they believe the applicable premi- ums are uneconomic, despite the high susceptibility of their properties to loss or damage in the event of flooding. An additional result of this low level consumer interest in the purchase of flood insurance has been that communi- ties have been slow to adopt adequate local ordinances to regulate new con- struction in their flood-prone areas in order to reduce or avoid future losses, which ordinances are required in order to retain their eligibility for the sale of flood insurance. In some instances, local officials have actually considered with- drawing from the flood insurance pro- gram rather than attempting to meet the required land use standards. RULES AND REGULATIONS On the basis of these cumulative indi- cations that existing premium rates do not sufficiently encourage the purchase of flood insurance to fully carry out the objectives of the Act, the Federal In- surance Administrator has determined that a reduction in chargeable rates is required, and the new premium rates are promulgated in the following regu- lation. In addition, in an effort to en- courage insurance agents and brokers to make a greater effort to make the avail- ability of flood insurance known to their customers, the Administrator has deter- mined that a :minimum commission of $10 per policy will be paid. Because of the immediate threat of the hurricane season and the corre sponding need for more widespread flood Insurance in Gulf and Atlantic coastal communities, and inasmuch as these changes confer only a public benefit and involve no detriment it has been deter- mined that notice and public procedure thereon are impractical, and that good cause exists to make them effective at an early date. Authority: The following amendments to Subchapter B issued under the Na- tional Flood Insurance Act of 1968, 42 U.S.0 4001-4127. Subchapter B of Chapter X of Title 24 is amended as follows: 1. The table in paragraph (a) of ? 1911.9 of Part 1.911 is revised to read as .follows: ? 1911.9 Establishment of rhargeablo rates. (a) RATES TOR NEW AND RENEWAL POLICIES Type of structure Value of strueture Rate Rate per year per year per $100 per $100 coverage eoverag) on strue- on eon- tun:. tents (1) Single family rest- dential. (2) All other residential. (3) All non- residential (including hotels and motels with normal oc- cupancy of less than 6 months in duration). $17,500 and under. $0.25 $0.21 17,501-35,000 .30 .41. 35,001 and over .35 .41 30,000 and under .... .25 .21. 30,001-60,000? .30 .41. 60,001 and oven.... .35 .45. 30,000 and under. .90 .7/ 30,001-60,000 .50 .11 60,001 and over .60 . if 2. The table of sections under Subpart A of Part 1912 is amended by adding at the end thereof a new ? 1912.4, to read as follows: Sec. 1912,4 Minimum commissions. 3. Subpart A of Part 1912 is amended by adding a new ? 1912.4, to read as follows: ?1912.4 Minimum commissions. The annual commission which shall be paid to any licensed agent or broker with respect to each policy he duly procures for an eligible purchaser shall not be less than $10. Effective date. These regulations shall be effective July 10, 1972. GEORGE K. BERNSTEIN, Federal Insurance Administrator. [PR Doe.72-10164 Filed 6-30-72;8:54 am] Chapter X?Federal Insurance Administration, Department of Housing and Urban Development SUBCHAPTER B?NATIONAL FLOOD INSURANCE PROGRAM PART 1914?AREAS ELIGIBLE FOR THE SALE OF INSURANCE List of Eligi131e. Communities Section 1914.4 is amended by adding in alphabetical sequence a new entry to the table. This entry differs from prior entries to the table in that a complete chronology of effective dates appears for each listed community. Each date appearing in the FEDERAL REGISTER, VOL. 37, NO. 126?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For*elease 2001/08/09 : C1A-RDP86-00244i4800100190026-8 RULES AND REGULATIONS 13099 last column of the table is followed by a designation which indicates whether the date signifies the effective date of the au- thorization of the sale of flood insurance in the area under the emergency or under the regular flood insurance program. The entry reads as follows: ? 1914.4 List of eligible communities. ? ? ? ? Effective date of State County Location Map No. State map repository Local map repository authorization of sale of flood Insurance for area ? * * ? ? ? ? ? ? ? ? ? * 5 ? ? ? ? ? ? ? Louisiana Acadia Crowley I 22 001 0520 01 State Department of Public Works, City Hall, Corner of Avenue F and Aug. 28, 1971. through Post Office Box 44155, Capitol Fifth St., Crowley, La. 70526. Emergency. I 22 001 0520 04 Station, Baton Rouge, LA. 70804. Tune 30, 1972. Louisiana Insurance Department, Regular. Box 44214, Capitol Station, Baton Rouge, LA 70804. Missouri St. Charles St. Peters June 30, 1972. Emergency. New Jersey Essex Nutley Do. New York Nassau Long Beach I 36 059 3360 02_ ..... New York State Department of En- City Hall, 1 West Chester St., Long March 6, 1071. vironmental Conservation, Division Beach, NY 11561. Emergency. of Resources Management Services, Juno 30, 1972. Bureau of Water Management, Regular. Albany, N.Y. 12201. New York State Insurance Depart- ment, 123 William St., New York, NY 10038, and 324 State St., Albany, NY 12201. Do Suffolk Westhampton I 36 103 6610 02 _do Village Office, Municipal Bldg., Stm- Feb. 26,1971. Beach. set Ave., Westhampton Beach, N.Y. Emergency. 11978. June 30, 1972. Regular. Pennsylvania... Delaware Glenolden June 30, 1972. Borough. Emergel 1 c,:s . Do Berks Kutztown Do. Borough. Do ...... _ _ Lyeoming Muncy Borough Do. Do Allegheny Reserve Do. Township. (National Flood Insurance Act of 1968 (title XIII of the Housing and Urban Development Act of 1968), effective Jan. 28, 1960 (33 F.R. 17804, Nov. 28, 1968), as amended (secs. 408-410, Public Law 91-152, Dec. 24, 1969), 42 U.S.C. 4001-4127; and Secretary's delegation of authority to Federal Insurance Administrator, 34 F.R. 2680, Feb. 27, 1969) Issued: June 23, 1972. [FR Doc.72-9986 Filed 6 30-72;8:45 am] GEORGE K. BERNsTEIN, Federal Insurance Administrator. PART 1915?IDENTIFICATION OF SPECIAL HAZARD AREAS List of Communities With Special Hazard Areas Section 1915.3 is amended by adding in alphabetical sequence a new entry to the table, which entry reads as follows: ? 1915.3 List of communities with special hazard areas. ? a a a ? Effective date of Identification of State County Location Map No. State map repository Local map repository areas which have special flood hazards ? ? ? ? ? ? ? ? ? * ? * ? * ? ? ? ? * ? ? Louisiana Acadia Crowley H 22 001 0520 01 State Department of Public Works, City Hall, Corner of Avenue F and Aug. 28, 1971. through Post Office Box 44155, Capitol Sta- Fifth St., Crowley, La. 70526. tion., Baton Rouge, LA 70804. H 22 001 0520 04 Louisiana Insurance Department, Boz 44214, Capitol Station, Baton Rouge, LA 70804. Missouri St. Charles St. Peters June 30, 1972. New Jersey Essex Nutley Do. New York Nassau Long Beach H 36 059 3360 02_ New York State Department of En- City Hall, 1 West Chester St., Long Mar. 6, 1971. vironmental Conservation, Division Beach, NY 11561. of Resources Management Services, Bureau of Water Management, Albany, N.Y. 12201. New York State Insurance Depart- ment, 123 William St., New York, NY 10038, and 824 State St., Albany, NY 12210. Do Suffolk Westhampton 11 86 103 6610 02 do Village Office, Municipal Bldg., Sun- Feb. 26, 1971. ? Beach. set Ave., Westhampton Beach, N.Y. 11978. Pennsylvania._ Delaware Glenolden June 80, 1972. Borough. Do Berks Kutztown Do. Borough. Do Lycoming ... _ . ___ Muncy Borough Do. Do Allegheny Reserve Town- Do. ship. (National Flood Insurance Act of 1968 (title XIII of the Housing and Urban Development Act of 1968), effective Jan. 28, 1969 (38 P.R. 17804, Nov. 28, 1968), as amended (secs. 408-410. Public Law 91-152, Dec. 24, 1969), 42 U.S.C. 4001-4127; and Secretary's delegation of au- thority to Federal Insurance Administrator, 84 F.R. 2680, Feb. 27, 1969) Issued: June 23, 1972. GEORGE K. BERNSTEIN, Federal Insurance Administrator. [FR Doc.72-9987 Filed 6-30-72;8:45 am] FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 13100 Approved Fortlease 2001/08/09 : CIA-RDP86-00244R000100190026-8 Proposed Rule Making DEPARTMENT OF THE TREASURY !Internal Revenue Service [ 26 CIFR Parts 194, 201, 250, 251 IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER Issuance of and Accounting for Red Strip Stamps Notice is hereby given that the regu- lations set forth in tentative form are proposed to be prescribed by the Com- missioner of Internal Revenue and the Commissioner of Customs, with the ap- proval of the Secretary of the Treasury or his delegate. Prior to final adoption of such regulations, consideration will be given to any data, views, or arguments pertaining thereto which are submitted in writing, in duplicate, to the Director, Alcohol, Tobacco and Firearms Division, Internal Revenue Service, Washington, D.C. 20224, within the period of 30 days from the date of publication of this no- tice in the FEDERAL REGISTER. Any writ- ten comments or suggestions not specifi- cally designated as confidential in ac- cordance with .26 CFR 601.601(b) may be inspected by any person upon written request. Any person submitting written comments or suggestions who desires an opportunity to comment orally at a pub- lic hearing on these proposed regulations should submit his request, in writing, to the Director, Alcohol, Tobacco and Fire- arms Division, within the 30-day period. In such a case, a public hearing will be held and notice of the time, place, and date will be published in a subsequent issue of the FEDERAL REGISTER, unless the person or persons who have re- quested a hearing withdraw their re- quests for a hearing before notice of hearing has been filed with the Office of the Federal Register. The proposed reg- ulations are to be issued under the au- thority contained in section '7805 of the Internal Revenue Code of 1954 (68A Stat. 917; 26 U.S.C. 7805) . [SEAL] JOHNNIE M. WALTERS, Commissioner of Internal Revenue. EDWIN P. RAINS, Acting Commissioner of Customs. In order to (1) prescribe new pro- cedures to be followed by importers for strip stamp accounting, records, and re- ports; (2) provide for the issuance of strip stamps by assistant regional com- missioners, alcohol, tobacco and fire- arms; (S) recognize the change in name of the Alcohol, Tobacco and Firearms function and the change in the organi- zational structure of the Bureau of Cus- toms; and (4) make miscellaneous con- forming and editorial changes, the reg- ulations in 26 CPR Parts 194, 201, 250 and 251 are amended as follows:: PARAGRAPH A. 26 CFR Part 194 is amended as follows: Section 194.254 is amended by (1) de- leting the word "obtain" from the next to the last sentence; and (2) making an editorial change. As amended, ? 194.254 reads as follows: ? 194.254 Replacement of strip stamps found by dealer to be mutilated or missing. Containers requiring restamping, as described in ? 194.253, shall be set aside by the dealer and application for neces- sary stamps submitted with Form 428, in duplicate, to the assistant regional commissioner. Copies of Form 428 may be obtained from the assistant regional commissioner. In every case the applica- tion shall state the cause of mutilation or absence of stamps and submit evidence that the spirits are eligible for stamping under section 5205(e), I.R.C. Such evi- dence may consist of invoices covering purchase of the spirits, in addition to other available documents. Such applica- tion shall be signed by the dealer or his authorized agent under the penalties of perjury immediately below a declaration, worded as follows: I declare under the penalties of perjury that I have examined this application and to the best of my knowledge and belief it is true and correct. If the assistant regional commissioner is satisfied from the evidence submitted that the mutilation or absence of the stamps has been satisfactorily explained, he will approve the requisition for stamps, Form 428, and deliver the stamps to the applicant by mail with instructions in regard to affixing them to the con- tainers, or by a representative of his office. If an overprinted stamp is to be re- Placed by the dealer, the word "Re- stamped," the name of the dealer, and the date of restamping shall be im- printed, or written in ink, in lieu of over- printing the replacement stamp. (72 Stat. 1358; 26 U.S.C. 5205) PAR. B. 26 CFR Part 201 is amended as follows: 1. Section 20:1.11 is amended by chang- ing the definition of "Director of Cus- toms" to reflect recent changes in the organizational structure of the Bureau of Customs. As amended, ? 201,11 reads as follows: ? 201.11 Meaning of terms. * * Director of customs. The officer who has jurisdiction over all customs activi- ties of a customs district, including dis- trict directors of customs at headquarters ports of the district (except the district of New York, N.Y.) ; the area directors of customs in the district of New York, N.Y.; the regional commissioner, of cus- toms, and, as applicable, port directors at ports not designated as headquarters ports. 2. Section 201.543 is amended to provide for: (1) Strip stamps to be obtained from assistant regional commis- sioners instead of from district direc- tors; and (2) strip stamps being de- livered by an alternate method to be shipped directly to the proprietor instead of being shipped to the assigned officer. As amended, ? 201.543 reads as follows: ? 201.543 Procurement of strip stamps. (a) General. Strip stamps may be ob- tained, without charge, by the proprie- tor, in reasonable anticipation of current needs, from the assistant re- gional commissioner of the region in which the plant is located, by requisi- tion on Form 428 approved by the as- signed officer. Such stamps may not be procured by one proprietor from an- other or transferred to another plant operated by the same proprietor, except on authorization by the assistant re- gional commissioner. Requisition shall be for full sheets of such stamps. On receipt of the stamps the proprietor shall verify the quantity received and acknowledge receipt thereof, noting any discrepancies, on both copies of Form 428 returned by the assistant regional commissioner, forward one copy of the Form 428 to the assistant regional com- missioner, and retain one copy in his files. (b) Alternative method. When the as- sistant regional commissioner determines that the interests of the Government will be best served thereby, the stamps may be shipped directly to the proprietor from a location other than the office of the assistant regional commissioner. In such case, the assistant regional com- missioner shall notify the proprietor that the strip stamps will be delivered by an alternative method and inform him of the minimum quantity, if any, of each size stamp which may be requisitioned on any particular Form 428. Upon approval of Form 128, two copies of the form shall be returned to the pro- prietor. Upon receipt, of the stamps, the proprietor shall: (1) Indicate the serial numbers (if any) of the stamps re- ceived and acknowledge receipt thereof, noting any discrepancies, on both copies of Form 428, and (2) return one copy to the assistant regional commissioner, and retain one copy in his files. (72 Stat. 1358; 26 U.S.C. 5205) PAR. C. 26 CPR Part 250 is amended as follows: 1. Section 250.11 is amended by chang- ing the definitions of "Assistant re- gional commissioner" and "Director of customs." As amended, ? 250.11 reads as follows: FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For*lease 2001/08/09: CIA-RDP86-0024414800100190026-8 PROPOSED RULE MAKING 13101 ? 250.11 Meaning of terms. Assistant regional commissioner. An assistant regional commissioner (alco- hol, tobacco and firearms) who is re- sponsible to, and functions under the di- rection and supervision of, a regional commissioner of internal revenue. Director of Customs. The officer who has jurisdiction over all customs activi- ties of a customs district, including dis- trict directors of customs at headquar- ters ports of the district (except the district of New York, N.Y.) ; the area di- rectors of customs in the district of New York, N.Y.; the regional commissioner of customs, and, as applicable, port directors at ports not designated as headquarters ports. 2. Section 250.41 is amended by adding a proviso at the end thereof. As amended, ? 250.41 reads as follows: ? 250.41 Destruction of marks and brands. The marks, brands, and serial num- bers required by this part to be placed on barrels, casks, or similar containers, or cases, shall not be removed, or ob- scured or obliterated, before the contents thereof have been removed; but when barrels, casks, or similar containers (ex- cept for beer and wine) are emptied, all such marks, brands, and serial numbers shall be effaced and obliterated by the person removing the contents: Provided, That, the marks, brands, and serial num- bers on such containers emptied on the premises of a distilled spirits plant quali- fied under the provisions of Part 201 of this chapter need not be effaced or oblit- erated. (72 Stat. 1368; 26 U.S.C. 5205) 3. Section 250.62 is amended by: (1) Making a clarifying change; and (2) de- leting obsolete provisions relating to powers of attorney. As amended, ? 250.62 reads as follows: ? 250.62 Corporate surety. Surety bonds may be given only with corporate sureties holding certificates of authority from, and subject to the limita- tions prescribed by, the Secretary of the Treasury of the United States, as set forth in the current revision of U.S. Treasury Department Circular 570. (61 Stat. 648;6 U.S.C. 6, 7) 4. Two new sections, ?? 250.62a and 250.62b, are added to prescribe require- ments relating to filing of powers of at- torney and execution of powers of attor- ney, respectively. As added, new ?? 250.62a and 250.62b read as follows: ? 250.62a Filing of powers of attorney. Each bond, and each consent to changes in the terms of a bond, shall be accompanied by a power of attorney authorizing the agent or officer who exec- uted the bond or consent to so act on be- half of the surety. The Officer-in-Charge who is authorized to approve the bond may, when he deems it necessary, re- quire additional evidence of the author- ity of the agent or officer to execute the bond or consent. (61 Stat. 648; 6 U.S.C. 6,7) ? 250.6211 Execution of powers of attor- ney. The power of attorney shall be pre- pared on a form provided by the surety company and executed under the cor- porate seal of the company. If the power of attorney submitted is other than a manually signed original, it shall be ac- companied by certification of its validity. (61 Stat. 648; 6 U.S.C. 6,7) ? 250.75 [Amended] 5. Section 250.75 is amended by de- leting the words "Alcohol and Tobacco Tax." immediately following the words "Assistant Regional Commissioner," and Inserting instead the words "Alcohol, Tobacco and Firearms." 6. Section 250.138 is amended to: (1) Provide that the Director may authorize labels to be affixed so as to partially ob- scure strip stamps; and (2) make an edi- torial change. As amended, ? 250.138 reads as follows: ? 250.138 Affixing strip stamps. Strip stamps shall be securely affixed to the containers with a strong adhesive, and shall be affixed in such a manner that on opening the container the stamp will be broken and a portion thereof, suf- ficient to identify the kind of stamp placed thereon, will remain attached to the container or to a cap or seal which is permanently affixed thereto. Strip stamps affixed to containers shall not be concealed or obscured in any manner ex- cept that: (a) The Director, Alcohol, Tobacco and Firearms Division, may authorize labels to be affixed so as to partially obscure strip stamps, if he finds that a need therefor exists, and if he finds that the manner of affixing such labels does not obscure essential infor- mation on the strip stamps which is not clearly shown on the bottle or on the labels affixed to the bottle, and (b) any such stamp may be covered by a cup, cap, seal, carton, wrapping, or other de- vice which can be readily removed with- out injury to the stamp or which is suf- ficiently transparent to permit all data on the stamp to be read. If a cup, cap, or seal is placed over a stamp, a portion of the stamp must remain plainly visible. If containers are enclosed in sealed opaque cartons, such cartons and wrappings on such cartons must bear the words, "This package may be opened for examination by Internal Revenue Officers." Internal revenue and customs officers have the right to open such cartons or wrappings and examine the container. If there is doubt as to the propriety of the use of any cup, cap, or seal, the closure and container should be submitted to the Di- rector, Alcohol, Tobacco and Firearms Division, for approval. (72 Stat. 1358; 26 U.S.C. 5205) 7. Section 250.163 is amended to pro- vide that persons responsible for release of liquors from customs custody who do not take physical possession of the liquors shall keep commercial records which reflect the release of the liquors. As amended, ? 250.163 reads as follows: ? 250.163 General requirements. Except as provided in ? 250.164, every person, other than a tourist, bringing liquor into the United States from Puerto Rico shall keep records and render re- ports of the physical receipt and dispo- sition of such liquors in accordance with Part 194 ("Liquor Dealers") of this chapter: Provided, That if the person who is responsible for release of the liquors from customs custody does not take physical possession of the liquors, he shall keep commercial records re- flecting such release; such records shall identify the kind and quantity of the liquors released, the name and ad- dress of the person receiving the liq- uors from customs custody, and shall be filed chronologically by release dates. Records and reports will not be required under this part with respect of liquors while in customs custody. (72 Stat. 1342, 1395; 26 U.S.C. 5114, 5555) 8. Section 250.207 is amended by adding a proviso at the end thereof. As amended, ? 250.207 reads as follows: ? 250.207 Destruction of marks and brands. The marks, brands, and serial num- bers required by this part to be placed on barrels, casks, or similar containers, or cases, shall not be removed, or ob- scured or obliterated, before the con- tents thereof have been removed; but when barrels, casks, or similar contain- ers (except for beer and wine) are emptied, all such marks, brands, and serial numbers shall be effaced and ob- literated by the person removing the contents: Provided, That, the marks, brands and serial numbers on such con- tainers emptied on the premises of a distilled spirits plant qualified under the provisions of Part 201 of this chapter need not be effaced or obliterated. (72 Stat. 1358; 26 U.S.C. 5205) 9. Section 250.233 is amended to (1) provide that the Director may authorize labels to be affixed so as to partially ob- scure strip stamps; and (2) make an editorial change. As amended, ? 250.233 reads as follows: ? 2541.233 Affixing strip stamps. Strip stamps shall be securely affixed to the container with a strong adhesive, and shall be affixed in such manner that on opening the container the stamp will be broken and a portion thereof, suf- ficient to identify the kind of stamp placed thereon, will remain attached to the container or to a cap or seal which is permanently affixed thereto. Strip stamps affixed to containers shall not be concealed or obscured in any manner ex- cept that (a) the Director, Alcohol, To- bacco and Firearms Division, may au- thorize labels to be so affixed as to par- tially obscure strip stamps, if he finds that a need therefor exists, and if he finds that the manner of affixing such FEDERAL REGISTER, VOL 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 fro% Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 13102 PROPOSED RULE MAKING labels does not obscure essential infor- mation on the strip stamp which is not clearly shown on the bottle or on the labels affixed to the bottle, and (b) any such stamp may be covered by a cup, cap, seal, carton, wrapping, or other de- vice which can be readily removed with- out injury to the stamp or which is suffi- ciently transparent to permit all data on the stamp to be read. If a cup, cap, or seal is placed over a stamp, a portion of the stamp must remain plainly visible. If containers are enclosed in sealed opaque cartons, such cartons and wrap- pings on such cartons must bear the words, "This package may be opened for examination by Internal Revenue Offi- cers." Internal revenue and customs offi- cers have the right to open such cartons or wrappings and examine the container. If there is doubt as to the propriety of the use of any cup, cap, or seal, the closure and container should be submitted to the Director, Alcohol, Tobacco and Fire- arms Division, for approval. (72 Stat. 1358; 26 U.S.C. 5205) 10. Sections 250.234, 250.235, 250.236, and 250.237 are amended In their entire- ty. As amended, ?? 250.234, 250.235, 250.236, and 250.237 read as follows: ? 250.234 Power of attorney. If an importer gives power of attor- ney to another person to sign Form 96 or Form 428, such power of attorney shall be executed on Form 1534 and, in the case of Forms 96, filed with the as- sistant regional commissioner of the re- gion in which the importer's business is located or, in the case of Forms 428, the assistant regional commissioner with whom the requisition will be filed. When either of the above forms is signed by an agent, the name of the importer shall be given, followed by the signature of the agent and the words "Attorney in Fact". ? 250.235 Breach of regulations, or failure to properly account for strip stamps. The assistant regional commissioner shall refuse to approve any further req- uisitions, Form 428, when he has knowl- edge that the importer has failed to fur- nish a satisfactory accounting for strip stamps, as prescribed in this part, or has failed to comply with any of the provi- sions of this part. The assistant regional commissioner may require of the im- porter, at a specified time and place, an immediate accounting of all strip stamps outstanding in the name of the importer as a means of determining whether, there has been unlawful diversion or use of strip stamps and may also require that all unused strip stamps be recalled and delivered so they may be counted. If the assistant regional commissioner has evi- dence that any of the provisions of this part have been willfully violated, he shall take appropriate action. He shall also refuse to approve any further requisi- tions when he has knowledge that the importer has failed to furnish a satis- factory accounting for strip stamps in any other region. (72 Stat. 1358; 26 U.S.C. 5205) ? 27,0.236 Conditions. Red strip stamps, requisitioned by, and issued to, an importer or his agent as provided in this subpart, may be sent to a bottler or exporter in the Virgin Is- lands to be affixed to containers of dis- tilled spirits. (72 Stat. 1358; 26 U.S.C. 5205) ? 250.237 Requisition, Form 428. Requisition on Form 428 for red strip stamps shall be made by the importer, or by his agent pursuant to filing a Form 1534 as provided in ? 250.234, or by the subsequent purchaser of the distilled spirits as provided in ? 250.256. The name, address, and permit number of the Importer (or subsequent purchaser) shall be shown, and if the requisition is prepared by an agent located at an ad- dress other than that of the importer, the address. of the agent shall be shown. The requisition shall be serially num- bered by the importer, and if one or more agents at locations other than that of the importer also place requisitions, each agent shall maintain a separate se- ries of serial numbers prefixed by a let- ter designation assigned by the importer, e.g., A-1, A-.2. The Form 428 shall be submitted to the assistant regional com- missioner of the region in which the place of business of the importer, or of his agent, or of the subsequent pur- chaser, as the case may be, is located. A certified, photostatic or similar type of reproduced copy of the importer's per- mit issued pursuant to the Federal Alcohol Administration Act and regula- tions issued thereunder shall be fur- nished to the assistant regional com- missioner of a region other than the re- gion in which the importer's place of business is located either before or at the time the first requisition is presented for approval. All strip stamps issued on Form 428 shall, for each location at which an accounting of stamps is re- quired by ? 250.2701, be accounted for on a first-in- first-out basis. (72 Stat. 1358; 26 U.S.C. 5205) ?? 250.238 and 250.239 [Revoked] 11. Sections 250.238 and 25(1.239 are revoked. 12. Section 250.240 and its heading are amended to provide that requisitions for strip stamps will be approved, and the stamps issued, by the assistant regional commissioner, As amended, ? 250.240 reads as follows: ? 250.240 Approval of requisition and issuance of stamps. The assistant regional commissioner will approve Form 428 and issue the stamps if he-- (a) Is satisfied: (1) That the importer is the holder of an importer's permit issued under the Federal Alcohol Administration Act and the regulations in 27 CFR Part 1 and (2) That the quantity requisitioned is reasonable and necessary; and (b) Has no information on which a denial of requisition should be made un- der the provisions of ? 250.235. When satisfied that Form 428 may te approved, the assistant regional corn- missioner shall enter the serial numbers of the stamps issued and the date or Issue and approve all copies of the form. He shall then deliver the stamps to the applicant, and, if the stamps are mailed, or are delivered to anyone other than thE applicant, two copies of the Form 42E shall accompany the stamps. Upon re- ceipt of the stamps, the applicant shall acknowledge receipt on both copies of Form 428 and return one copy to thE assistant regional commissioner whe issued the stamps and, if an agent, one copy to the importer. In each instancE when the assistant regional commis- sioner approves a requisition which has been submitted by an agent of an im- porter, the assistant regional commis- sioner shall immediately forward a copy of Form 428 to the importer, and, if the importer's place of business is located in another region, the assistant regional commissioner shall forward a copy to the assistant regional commissioner of the region in which the importer's place of business is located. If a requisition is disapproved for any reason, the assist- ant regional commissioner shall return a copy of Form 428 marked "disap- proved" to the applicant. (72 Stat. 1358; 26 U.S.C. 5205) 13. A new section, ? 250.240a, is added to prescribe requirements relating to issuance of stamps by an alternative' method. As added, new ? 250.240a reads as follows: ? 250.240a Alternative method for issu- ance of stamps. (a) Action by assistant regional com- missioner. When the assistant regional commissioner determines that the inter- est of the Government will be best served thereby, strip stamps may be shipped directly to the applicant, as shown on Form 428, from a location other than the office of the assistant regional com- missioner. In such case, the assistant regional commissioner shall notify the applicant that strip stamps will be de- livered by an alternative method and inform him of the minimum quantity, if any, of each size of stamp which may be requisitioned on any particular Form 428. Upon approval of Form 428, two copies of the form shall be returned to the applicant, and, if the Form 428 was prepared by an agent of an importer, a copy of the form shall be forwarded to the importer and, if applicable, to the assistant regional commissioner of the region in which the importer's place of business is located. (b) Action by applicant. Upon receipt of the stamps, the applicant shall (1) indicate the serial numbers (if any) of the stamps received and acknowledge re- ceipt of the stamps on both copies of Form 428, and (2) return one copy to the assistant regional commissioner to whom the Form 428 was submitted for approval and, if an agent, one copy to the importer. (72 Stat. 1358; 26 U.S.C. 5205) FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For Release 2001/08/09 : CIA-RDP86-00244R0W00190026-8 PROPOSED RULE MAKING ? 250.241 [Revoked] 14. Section 250.241 is revoked. 15. Section 250.242 is amended by (1) deleting the requirement that the over- printing of stamps be verified by the di- rector of customs; and (2) making an , editorial change. As amended, ? 250.242 reads as follows: ? 250.242 Overprinting of red strip stamps. The importer, or his agent, or the sub- sequent purchaser of the distilled spirits, as the case may be, shall have the red a strip stamps indelibly and legibly over- printed, at his own expense, with the permit number of the importer in whose name the stamps were requisitioned: Provided, That if the importer is an agency of a State or a political subdi- vision thereof, or the District of Colum- bia, the stamps will be overprinted with the name of the State or with "District of Columbia," or with a recognized abbreviation thereof. (72 Stat. 1358; 26 U.S.C. 5205) ? 250.244 [Revoked] 16. Section 250.244 is revoked. 17. Sections 250.245 and 250.246, and their headings, are amended by chang- ing the requirements relating to the tak- ing of credit for red strip stamps used. As amended, ?? 250.245 and 250.246 read as follows: ? 250.245 Credit for red strip stamps on distilled spirits deposited in a foreign- trade zone. When red strip stamps are affixed in the Virgin Islands to containers of dis- tilled spirits and, on arrival in the United States, the spirits are deposited in a foreign-trade zone, Form 1627 shall be prepared and distributed in accordance with the instructions on the form, and credit shall be taken for the stamps on the importer's daily record of strip stamps in the manner provided in ? 250.246. In addition, and as a condition of obtaining approval froni the director of customs for admission of the spirits to the zone, the importer or his agent and the zone grantee shall state on the zone application that if such spirits are subsequently exported from the zone the red strip stamps will be effectively de- stroyed or voided under customs super- vision prior to exportation. The director of customs will not approve such expor- tation and will not execute a permit of delivery until the red strip stamps have been effectively destroyed or voided as provided in ? 250.252a. (48 Stat. 999, as amended, 72 Stat. 1358; 19 U.S.C. 81c, 26 U.S.C. 5205) ? 250.246 Credit for red strip stamps on arrival of distilled spirits. On arrival of a shipment of spirits, the importer who requisitioned the stamps, the importer filing the customs entry papers, or the agent of either shall pre- pare Part 1 of Form 1627. Form 1627 Shall be furnished to customs officials with the entry papers for execution of Part 11 or 111 by the appropriate cus- toms official. If Form 1627 is prepared by anyone other than the importer who requisitioned the stamps, a copy of the form shall be forwarded to such im- porter at the time the original and one copy are furnished to customs such importer at the time the original and one copy are furnished to customs officials. On receipt of Form 1627 prop- erly executed as to Part 11 or 111, the importer who requisitioned the stamps, or in whose name the stamps were req- uisitioned, may take credit for the stamps on his daily record of strip stamps. (72 Stat. 1358; 26 U.S.C. 5205) ?? 250.247 and 250.248 [Revoked] 18. Seetions 250.247 and 250.248 are revoked. 19. Section 250.249 is amended to pro- vide for discrepancies in shipments to be recorded on Form 1627 by the customs officer. As amended, ? 250.249 reads as follows: ? 250.249 Irregularities or discrepan- cies in shipments. In case any irregularities or discrep- ancies are found, the director of customs at the port of entry will make demand for redelivery of unexamined packages, and will not release examined or rede- livered packages until satisfactory ex- planation and/or proper corrections have been made. The customs officer will enter any discrepancies as to red strip stamps on Form 1627. (72 Stat. 1358; 26 U.S.C. 5205) ?? 250.250 and 250.251 [Revoked] 20. Sections 250.250 and 250.251 are revoked. 21. Section 250.252 and its heading are amended to apply only to the destruc- tion of strip stamps in the Virgin Is- lands and to change the requirements relative thereto. As amended, ? 250.252 reads as follows: ? 250.252 Destruction of red strip stamps in the Virgin Islands. When for any reason a Virgin Islands bottler or exporter has on hand a quan- tity of red strip stamps which are not to be affixed to containers for shipment to the United States, and it is imprac- tical to return such stamps to the im- porter from whom they were received or to transfer them to another bottler or exporter conducting operations for the Importer, the assistant regional com- missioner of the region in which the im- porter's place of business is located may, on application, in triplicate, by the importer, authorize the destruction of the stamps in the Virgin Islands. The application shall show the size, quan- tity, and serial numbers of the stamps, the name and address of the Virgin Is- lands bottler or exporter who has pos- session of the stamps, and the reasons why destruction in the Virgin Islands is requested. If the assistant regional commissioner approves the application for destruction he will return two copies, marked "approved," to the importer who will forward both copies, together with Form 1627, in duplicate, with the perti- nent entries in Part 1 completed, to the 13103 Virgin Islands bottler or exporter. On receipt of the approved application, the stamps may be destroyed provided such destruction is under the supervision of an authorized representative of the Gov- ernor of the Virgin Islands (including an officer of the Board of Control of Alcoholic Beverages). Upon destruction of the stamps, the Virgin Islands bot- tler or exporter and the representative shall complete the applicable portions of Part IV of Form 1627. The original Form 1627 and one copy of the approved application shall be returned to the im- porter who filed the application. Such importer may then take credit for the stamps on his strip stamp record and on Form 96. (72 Stat. 1358; 26 U.S.C. 5205) 22. Two new sections, ?? 250.252a and 250.252b, are added to prescribe re- quirements relating to the destruction of ? red strip stamps on containers in cus- toms custody which are diverted for ex- portation or withdrawn free of tax, re- spectively. As added, new ?? 250.252a and 250.252(b), read as follows: ? 250.252a Destruction of red strip stamps on containers in customs custody. When containers of distilled spirits to which red strip stamps were affixed prior to arrival in the United States are di- verted for exportation, including return to the Virgin Islands bottler or exporter, by the importer, the strip stamps shall be effectively destroyed by the importer or his representative under customs su- pervision, prior to exportation: Provided, That the director of customs may au- thorize the importer to void, rather than destroy, such stamps under customs su- pervision. When voiding of red strip stamps has been authorized, they shall be voided by legibly stamping thereon, with indelible ink and in boldface capi- tal letters no smaller than 10-point type, the word "Voided" or the word "cancelled". (72 Stat. 1358; 26 U.S.C. 5205) ? 250.252b Destruction of red strip stamps; spirits withdrawn free of tax. When distilled spirits imported from the Virgin Islands are to be withdrawn from customs custody free of tax for entry into the United States, the red strip stamps affixed to the containers shall be effectively destroyed by the im- porter or his representative, under cus- toms supervision, prior to such with- drawal. (72 Stat. 1358; 26 U.S.C. 5205) ?? 250.253 and 250.254 [Revoked] 23. Sections 250.253 and 250.254 are revoked. 24. Section 250.255 is amended by deleting the requirement that strip stamps be placed in customs custody. As amended, ? 250.255 reads as follows: ? 250.255 Conditions. Distilled spirits in containers coming Into the United States from the Virgin Islands without having red strip stamps No. 128-Pt. I-5 'FEDERAL REGISTER, VOL. 37, NO. 128-SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09_: CIA-RDP86-00244R000100190026-8 Approved Release 2001/08/09 : CIA-RDP86-0024000100190026-8 13101 attached may not be released from cus- toms custody until a stamp has been affixed to each container, under the supervision of a customs officer. (72 Stat. 1358; 26 U.S.C. 5205) 25. Section 250.256 is amended by (1) making a conforming change; and (2) including a cross-reference to new ? 250.240a. As amended, ? 250.256 reads as follows: ? 250.256 Requisition, Form 428. Requisition for red strip stamps shall be made by the original importer, or his agent: Provided, That if the importer has gone out of business the requisition shall lie made by the person having title to the distilled spirits. The requisition -hall be submitted in accordance with 250.237. Approval of the requisition shall be subject to the provisions of ? 250.290 or ? 250.240a, as the case may be. (72 Stat. 1358; 26 U.S.C. 5205) ? 250.257 [Revoked] 26. Section 250.257 is revoked. 27. Section 250.270 is amended to pre- scribe new requirements relating to the daily record of strip stamps. As amended, ? 250.270 reads as follows: e 250.270 Daily record of stiip stamps. (a) For each day during which a transaction in red strip stamps occurs, the importer shall maintain a daily rec- ord accounting for all strip stamps pro- cured by him and by his agents. The rec- ord shall show by size (small or stand- ard) the number received, used, lost, mutilated, destroyed, or otherwise dis- posed of, and outstanding at the begin- ning and end of the day. Each entry showing stamps received shall be sup- ported by the related Form 428, which shall be identified on the record by date and, serial number. The record shall also show the number and size of bottles to which the stamps were affixed, except that bottles of less than 1/2-pint capacity shall be recorded as one item. Each credit taken on the record shall be sup- ported by Form 1627, which shall be identified on the record by date and se- rial number as the authority for such credit. The stamp record shall also be supported by customs forms covering spirits which have been diverted for ex- portation, destroyed while in a foreign- trade zone, or returned to the bottler or ex:porter in the Virgin Islands. If the im- porter has more than one place of busi- ness from which he requisitions stamps, 'a daily record shall be maintained on the premises of each place of business. Each daily record of strip stamps shall be sup- plemented by an accounting of strip stamps showing, for each separate loca- tion at which there are stamps for which the importer is accountable, (1) the name and address of the business and (2) the quantity of stamps outstanding at the beginning of the day, the quanti- ties received, used, transferred to other locations, lost, mutilated, destroyed, or otherwise disposed of, and the quantity outstanding at the end of the day. PROPOSED RULE MAKING (72 Stat. 1358; 26 U.S.C. 5205) , 28. Section 250.271 is amended to pro- vide that the report of strip stamps shall be filed quarterly, instead of annually, and shall be filed with the assistant re- gional commissioner. As amended, ? 250.271 reads as follows: e 250.271 Report of strip stamps, Form 96. The imposter shall prepare on Form 96, in duplicate, a quarterly report for the periods ending March 31, June 30, September 30, and December 31 of each year. The report shall account for all strip stamps procured (including stamps procured by his agents at locations other than that of the business of the im- porter) , used, lost, mutilated, destroyed, or otherwise disposed of during the pe- riod, and shall show the number of stamps outstanding at the beginning and end of the period. If the importer has more than one iplace of business froni which he requisitions stamps, he shall prepare a separate report on Form 96 for each such place of business. The assist- ant regional commissioner may require the importer to supplement each report with such information as he deems nec- essary. The original of Form 96 shall be submitted to the assistant regional com- missioner of the region in Which the im- porter's place of business is located not later than the 10th day of the month next succeeding the period for which rendered. The copy of Form 96 shall be retained by the importer and filed with the records required by ? 250.270. (72 Stat. 1358; 26 U.S.C. 5205) 29. Section 250.272 is amended to pro- vide that persons responsible for release of 1:iquors from customs custody who do not take physical possession of the liquors shall keep comthercial records which re- flect the release of the liquors. As amended, ? 250.272 reads as follows: ? 250.272 General requirements. Except as provided in ? 250.273, every person, other than a tourist, bringing liquors into the United States from the Virgin Islands shall keep such records and render reports of the physical re- ceipt and disposition of such liquors as are required to be kept by a wholesale or retail dealer, as applicable, under the provisions of Part 194 of this chapter. Any importer who is responsible for re- lease of the liquors from customs cus- tody and who does not take physical pos- session of the liquors shall keep commer- cial records reflecting such release; such records shall identify the kind and quan- tity of the liquors released, the name and address of the person receiving the liquors from customs custody, and shall be filed chronologically by release dates. Records and reports will not be required under this part With respect of liquors while in customs custody. (72 Stat. 1342, 1345; 28 U.S.C. 5114, 5124) 30. Section 250.275 is amended by (1) deleting the reference to the director of customs; and (2) making conforming changes. As amended, ? 250.275 reads as follows: ? 250.275 Filing. If the importer maintains loose-leaf records of receipt or disposition, one legi- ble copy of each such record shall be marked or stamped "Government File Copy", and shall be filed not later than the close of the business day next sue- ceeding that on which the transaction occurred. All records required by this part, and legible copies of all reports re- quired by this part to be submitted to the assistant regional commissioner shall be filed separately, chronologically, and in numerical sequence within each date, at the importer's place of business tc which they relate: Provided. That on ap- plication, in duplicate, the assistant regional commissioner may authorize the files, or any individual file, to be maintaied at other premises under control of the importer, if he finds that such maintenance will not delay the timely filing of any document, or cause undue inconvenience to internal revenue or Cus- toms officers desiring to examine such files. Supporting documents, such as con- signors' invoices, delivery receipts, bills of lading, etc., or exact copies thereof, may be filed in accordance with the 1m porter's customary practice. (72 Stat. 1342, 1391; 26 U.S.C. 5114, 5505) 31. Section 250.277 is amended to (1) Provide that unused stamps shall be sub- mitted to the assistant regional commis- sioner; and (2) make related changss. As amended, ? 250.277 reads as follows: ? 250.277 Procedure. The importer who discontinues or sells his business shall recall from his agents, and his bottlers or exporters in the Virgin Islands, all unused stamps in their custody. He shall submit his entre stock of unused stamps, accompanied by a report, in duplicate, of inventory, by size and quantity, to the assistant re- gional commissioner. The same proce- dure may be followed by an importer who has unused stamps for which he has no further use for any reason. The as- sistant regional commissioner shall then destroy the stamps and, after such ,le- struction, note the action taken on both copies of the inventory. He shall retain the original and return the copy of the Inventory to the importer. In the case of discontinuance or sale of the business, the importer shall, within 5 days of the receipt of the returned copy of the inventory, note the disposition of the stamps on Form 96, mark the report "Final", and submit it to the assistant regional commissioner. (72 Stat. 1358; 26 U.S.C. 5205) 32. A new subpart, Subpart Q, is stded to provide for the application for and approval of alternate methods and :pro- cedures. As added, new Subpart Q reads as follows: Subpart 0?Miscellaneous Provisions ? 250.331 Alternate methods or p roee- dures. (a) Application. A person bringing li- quors into the United States from Puerto Rico or the Virgin Islands who desires to FEDERAL REGISTER, VOL. 37, NO. 128--SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved For Release 2001/08/09 : CIA-RDP86-00244R0W00190026-8 PROPOSED RULE MAKING use an alternate method or procedure In lieu of a method or procedure pre- scribed by this part shall file application, In triplicate, with the assistant regional commissioner of the region in which his place of business is located. If such per- son has several places of business at which he desires to use such alternate method or procedure, a separate appli- cation shall be submitted for each. Each application shall: (1) Specify the name, address, and permit number of the person to which it relates; (2) State the purpose for which filed; and (3) Specifically describe the alternate method or procedure and set forth the reasons therefor. No alternate method or procedure re- lating to the assessment, payment, or collection of tax shall be authorized under this paragraph. (b) Approval. When an application for use of an alternate method or proce- dure i4 received, the assistant regional commissioner shall determine whether the approval thereof would unduly hin- der the effective administration of this part or would result in Jeopardy to the revenue. The assistant regional com- missioner shall forward two copies of the application to the Director. Alcohol, To- bacco and Firearms Division, together with a report of his findings and his rec- ommendation. The Director, Alcohol, To- bacco and Firearms Division, may ap- prove the alternate method or procedure If he finds that: (1) Good cause has been shown for the use of the alternate method or procedure; (2) The alternate method or proce- dure is within the purpose of, and con- sistent with the effect intended by, the specifically prescribed method or proce- dure, and affords equivalent security to the revenue; and (3) The alternate method or proce- dure will not be contrary to any provi- sion of law, and will not result in any Increase in cost to the Government or hinder the effective administration of this part. No alternate method or procedure shall be used until approval has been received from the Director, Alcohol, Tobacco and Firearms Division. Authorization for the alternate method or procedure may be withdrawn whenever in the judgment of the Director, Alcohol, Tobacco and Fire- arms Division, the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such authorization. (Sec. 7805, Internal Revenue Code, 68A Stat. 917; 26 U.S.C. 7805) PAR. D. 26 CFR Part 251 is amended as follows: 1. Section 251.11 is amended by (1) changing the definitions of "Assistant regional commissioner" and "Director of customs." As amended, ? 251.11 reads as follows: ? 251.11 Meaning of terms. ? ? ? Assistant regional commissioner. An assistant regional commissioner (alcohol, tobacco, and firearms) who is responsi- ble to and functions under the direction and supervision of, a regional commis- sioner of internal revenue. Director of customs. The officer who has Jurisdiction over all customs activ- ities of a customs district, including dis- trict directors of customs at headquarters ports of the district (except the district of New York, N.Y.) ; the area directors of customs in the district of New York, N.Y.; the regional commissioner of cus- toms, and, as applicable, port directors at ports not designated as headquarters Ports. ? 251.49 [Amended] 2. The statutory citation at the end of ? 251.49 is corrected to read "(76 Stat. 72, as amended; 19 U.S.C. 1202)." 3. Section 251.64 is amended to pre- scribe revised requirements relating to the procurement and issuance of strip stamps. As amended, ? 251.64 reads as follows: ? 251.64 Requisition, Form 428. Requisition on Form 428 for red strip stamps shall be made by the importer, or by his agent pursuant to filing a Form 1534 as provided in ? 251.64a, or by the subsequent purchaser of the distilled spirits as provided in ?251.111. The name, address, and permit number of the importer (or subsequent purchaser) shall be shown, and if the requisition is prepared by an agent located at an ad- dress other than that of the importer, the address of the agent shall be shown., The requisition shall be serially num- bered by the importer, and if one or more agents at locations other than that of the importer also place requisitions, each agent shall maintain a separate series of serial numbers prefixed by a letter designation assigned by the importer, e.g., A-1, A-2. The Form 428 shall be submitted to the assistant regional com- missioner of the region in which the place of business of the importer, or of his agent, or of the subsequent purchaser, as the case may be, is located. A certi- fied, photostatic or similar type of repro- duced copy of the importer's permit Issued pursuant to the Federal Alcohol Administration Act and regulations Issued thereunder shall be furnished to the assistant regional commissioner of a region other than the region in which the importer's place of business is lo- cated either before or at the time the first requisition is presented for approval. Notwithstanding the provisions of Part 250 of this chapter, an importer or his agent procuring spirits from abroad and from the Virgin Islands may include stamps for both purposes on one requisi- tion. All strip stamps issued on Form 428 shall, for each location at which an accounting of stamps is required by ? 251.130, be accounted for on a first-in first-out basis. (72 Stat. 1358; 26 U.S.C. 5205) 4. Section 251.64a is amended to: (1) Provide that powers of attorney shall be filed with the assistant regional commis- 13105 sioner; and (2) make a number of related changes. As amended, ? 251.64a reads as follows: ? 251.64a Power of attorney. If an importer gives power of attorney to another person to sign Form 96 or Form 428, such power of attorney shall be executed on Form 1534 and, in the case of Form 96, filed with the assistant regional commissioner of the region in which the importer's business is located or, in the case of Form 428, the assistant regional commissioner with whom the requisition will be filed. When either of the above forms is signed by an agent, the name of the importer shall be given, followed by the signature of the agent and the words "Attorney in Fact." ?? 251.65 and 251.65a [Revoked I 5. Sections 251.65 and 251.65a are revoked. 6. Section 251.66 and its heading are amended to provide that requisitions for strip stamps will be approved, and the stamps issued, by the assistant regional commissioner. As amended, ? 251.66 reads as follows: ? 251.66 Approval of requisition and issuance of stamps. The assistant regional commissioner will approve Form 428 and issue the stamps if he? (a) Is satisfied: (1) That the importer is the holder of importer's permit issued under the Fed- eral Alcohol Administration Act and the regulations in 27 CFR- Part 1 and (2) That the quantity requisitioned is reasonable and necessary; and (b) Has no information on which a denial of a requisition should be made under the provisions of ? 251.92. When satisfied that Form 428 may be approved, the assistant regional com- missioner shall enter the serial numbers of the stamps issued and the date of Issue and approve all copies of the farm. He shall then deliver the stamps to the applicant, and, if the stamps are mailed, or are delivered to anyone other than the applicant, two copies of the Form 428 shall accompany the stamps. Upon re- ceipt of the stamps, the applicant shall acknowledge receipt on both copies of Form 428 and return one copy to the as- sistant regional commissioner who Issued the stamps and, if an agent, one copy to the importer. In each instance when the assistant regional commis- sioner approves a requisition which has been submitted by an agent of an im- porter, the assistant regional commis- sioner shall immediately forward a COPY of Form 428 to the importer, and, if the Importer's place of business is located in another region, the assistant regional commissioner shall forward a copy to the assistant regional commissioner of the region in which the importer's place of business is located. If a requisition is dis- approved for any reason, the assistant regional commissioner shall return a copy of Form 428 marked "disapproved" to the applicant. (72 Stat. 1358; 26 U.S.C. 5205) FEDERAL REGISTER, VOL. 37, NO. 128?SATURDAY, JULY 1, 1972 Approved For Release 2001/08/09 : CIA-RDP86-00244R000100190026-8 Approved Fookelease 2001/08/09 : CIA-RDP86-00240P000100190026-8 13106 7. A new section, ? 251.66a, is added to prescribe requirements relating to is- suance of stamps by an alternative method. As added, new ? 251.66a reads as follows: ? 251.66a Alternative method for issu- ance Of stamps. (a) Action be assistant regional com- missioner. When the assistant regional commissioner determines that the inter- est of the Government will be best served thereby, strip stamps may be shipped directly to the applicant, as shown on Form 428, from a location other than the office of the assistant regional commis- sioner. In such case, the assistant re- gional commissioner shall notify the applicant that strip stamps will be de- livered by an alternative method and in- form him. of the minimum quantity, if any, of each size of stamp which may be requisitioned on any particular Form 428. Upon approval of Form 428, two copies of the form shall be returned to the applicant, and, if the Form 428 was prepared by an agent of an importer, a copy of the form shall be forwarded to the importer and, if applicable, to the assistant regional commisskmer of the region in which the importer's place of business is located. (b) Action by applicant. Upon receipt of the stamps, the applicant shall (1) indicate the serial numbers (if any) of the stamps received and adknowledge re- ceipt of the stamps on both copies of Form 428, and (2) return one copy to the assistant regional commissioner to whom the Form 428 was submitted for approval and, if an( agent, one copy to the importer. (72 Stat. 1358; 26 U.S.C. 5205) ? 251.67 [Revoked] ? 8. Section 251.67 is revoked. O. Election 251.68 is amended to (1) delete) the requirement that the over- printing of stamps be verified by the di- rector of customs; and (2) make an edi- torial change. As amended, ? 251.68 reads as follows; ? 251.68 Overprinting of red strip stamps. The importer, or his agent, or the sub- sequent purchaser of the distilled spirits, as the case may be, shall have the red strip stamps indelibly and legibly over- printed, at his own expense, with the per- mit number of the importer in whose name the stamps were requisitioned; Provided, That if the importer is an agency- of a State or a political sub- division thereof, or the District of Colum- bia, the stamps will be -overprinted with the name of the State or with "District of Columbia." or with a recognized ab- breviation thereof. (72 Stat. 1358; 26 U.S.C. 5205) 10. Section 251.69 is amended to (1) provide that the Director may authorize labels to be affixed so as to partially ob- scure strip stamps; and (2) make an editorial change. As amended, ? 251.69 reads as follows: PROPOSED RULE MAKING ? 251.69 Affixing strip stamps. Strip stamps shall be securely affixed to the container with a strong adhesive, and shall be affixed in such a manner that on opening the container the stamp will be broken and a portion thereof, suffi- cient to identify the kind of stamp placed thereon, will remain attached to the con- tainer or to a cap or seal which is perma- nently affixed thereto. Strip ? stamps affixed to containers shall not be con- cealed or obscured in any manner except that (a) the Director, Alcohol, Tobacco and Firearms Division, may authorize labels to be so affixed as to partially ob- scure strip stamps, if he finds that a need therefor exists, and if he finds that the manner of affixing such labels does not obscure essential information on the strip stamps which is not clearly shown on the bottle or on the labels affixed to the bottle, and (b) any such stamp may be covered by a cup, cap, seal, carton, wrapping, or other device which can be readily removed without injury to the stamp or which is sufficiently trans- parent to permit all data on the stamp to be read. If a cup, cap, or seal is placed over a stamp, a portion of the stamp must remain plainly visible. If contain- ers are enclosed in sealed opaque cartons, such cartons or wrappings on such car- tons must bear the words, "This package may be opened for examination by Internal Revenue Officers." internal revenue and customs officers have the right to open such cartons or wrappings and examine the container. If there is doubt as to the propriety of the use of any cup, can or seal, the closure and con- tainer should be submitted to the Direc- tor, Alc,obea, Tobacco and Firearms Division, for approval. (72 Stat. 1358; 26 13.13.C. 5205) 11. Section 251.72 is amended to make its provisions applicable to spirits which are returned to a foreign bottler or ex- porter. As amended, ? 251.72 reads as follows: ? 251.72 Exportation of imported dis- tilled spirits; red strip stamps. When imported distilled spirits to which red strip stamps were affixed prior to arrival in the United States are di- verted for exportation purposes, includ- ing return to the foreign bottler or ex- porter, by the importer, the strip stamps shall be effectively destroyed by the im- porter or his representative under cus- toms supervision, prior to exportation: Provided, That the director of customs may authorize the importer to void, rather than destroy, such strip stamps under customs supervision. When void- ing of red strip stamps has been author- ized, they shall be voided by legibly stamping thereon, with indelible ink and in boldface capital letters no smaller than 10-point type, the word "Voided" or the word "'Cancelled." Red strip stamps affixed to distilled spirits origi- nating in the United States, evidencing the tax or indicating compliance with the provisions of chapter 51, I?R.C., shall not be removed, at or prior to the time of exportation. (72 Stat. 1358; 26 U.S.C. 5205) 12. Section 251.80 is amended to delete the requirement that stamps to be sent to a foreign bottler or exporter be requi- sitioned specifically for that purpose. As amended, ? 251.80 reads as follows; ? 251.80 Conditions. Red strip stamps, requisitioned by, and issued to, an importer or his agent as provided in this part, may be sent to a bottler or exporter in a foreign country to be affixed to containers of distilled spirits. (72 Stat. 1358; 26 U.S.C. 5205) ?? 251.81, 251.82, 251.83, and 251.85 [Revoked] 13. Sections 251.81, 251.82, 251.83, and 251.85 are revoked. 14. Sections 251.85a and 251.86 and their headings are amended by changing the requirements relating to the taking of credit for red strip stamps used, and ? 251.85a is further amended by provid- ing for stamps to be voided. As amended, ?? 251.85a and 251.86 read as follows: ? 251.85a Credit for red strip stamps on distilled spirits deposited in a foreign. trade zone. When red strip stamps are affixed abroad to containers of imported distilled spirits and, on arrival in the United States, the spirits are deposited in a for- eign-trade zone, Form 1627 shall be pre- pared and distributed in accordance with the instructions on the form, and credit shall be taken for the stamps on the ha. porter's daily record of strip stamps in the manner provided in ? 251.86. In addi- tion, and as a condition of obtaining ap- proval from the director of customs for admission of the spirits to the zone, the importer or his agent and the zone gran- tee shall state on the zone application that if such spirits are subsequently ex- ported from the zone the red strip stamps will be effectively destroyed or voided under customs supervision prior to ex- portation. The director of customs will not approve such exportation and will not execute a permit of delivery until the red strip stamps have been effectively destroyed or voided as provided in ? 251.72. (48 Stat: 999, as amended, 72 Stat. 1358; 19 U.S.C. 81e, 26 U.S.C. 5205) ? 251.86 Credit for red strip stamps os arrival of distilled spirits. On arrival of a shipment of imported spirits, the importer who requisitioned the stamps, the importer filing the =- toms entry papers, or the agent of either shall prepare Part 1 of Form 1627. Form 1627 shall be furnished to customs offi- cials with the entry papers for execution of Part 11 or 111 by the appropriate cus- toms official. If Form 1627 is prepared by anyone other than the importer who requisitioned the stamps, a copy of the form shall be forwarded to such Ira- porter at the time the original and
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