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WASHINGTON, Aug. 2, 2002 – The Commodity Credit Corporation is revising its policy regarding the assessment of liquidated damages under the Dairy Export Incentive Program (DEIP). The new policy, which will be included in the appropriate Invitation for Offers to Acquire a CCC Bonus, is effective for all agreements entered into on or after the date of this Notice.

In accordance with 7 CFR Part 1494.201 (w), the terms and conditions of the Invitation for Offers issued under the DEIP will prevail if they contain terms or conditions that are inconsistent with 7 CFR 1494 Subpart B. This notice is to inform interested parties that, effective for agreements dated on or after the date of this Notice and until further notice, CCC will no longer hold the exporter harmless for the payment of liquidated damages to CCC even though the exporter establishes that failure to perform under the DEIP agreement was due to causes solely without the exporter’s fault or negligence and that the exporter had taken the necessary action to export the required quantity of the eligible commodity and enter it into the eligible country. Liquidated damages will be assessed against the exporter unless the exporter can establish that such failure to perform was due to actions taken by the U.S. government or that the dairy product was lost after leaving the United States.

This action is being taken to help minimize cancellations under the DEIP program. The exporter’s failure to perform under the agreement may cause losses to CCC, such as damages to CCC’s domestic price support program, storage charges and administrative and other costs resulting from the purchase of a like quantity of cancelled product.

The liquidated damage rate will remain at 10 percent of the sale contract value. Information about DEIP, including Invitations for Offers when issued, is available on the Internet at or by calling the Operations Division, Export Credits, Foreign Agricultural Service, at (202) 720-3224 or (202) 720-6211.

FAS news releases are available on the Internet at and by fax polling. Callers should set their fax machines for polling and dial (202) 720-1728. For additional information about Web or fax access, contact FAS Public Affairs Division at (202) 720-7115.

#PR 0210-02

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