Warehouse Receipts

Section 281 Section 281.60  Warehouse Receipts a)         Warehouse Receipt Forms Warehouse receipts shall be either a written or an electronic document and must comply with the requirements of Article 7 of the Uniform Commercial Code, except to the extent inconsistent with the Code, in which instance the provisions of the Code prevail.  A licensee may issue warehouse receipts by use of a written warehouse receipt system, an electronic warehouse receipt system, or both. 1)         Paper warehouse receipts shall include the following information: A)        Class of warehouse (I or II). B)        The legal name of the entity operating the warehouse. C)        If a license covers multiple locations, at which location delivery was made and date of delivery. D)        The kind and the grade factors of the grain as prescribed by the Official Grain Standards (7 CFR 810, January 2007). E)        The number of bushels stored. F)         The words "Negotiable" or "Non-negotiable" according to the nature of the receipt, conspicuously printed or stamped on the receipt. 2)         Electronic Warehouse Receipts (EWR) A)        An EWR must be in the format prescribed in the applicable provider agreement. B)        An EWR issued in accordance with the Code shall not be denied legal effect, validity, or enforceability on the grounds that the information is generated, sent, received or stored by electronic or similar means. C)        A warehouseman shall not be required to issue a warehouse receipt in electronic form. D)        If a warehouseman licensed under the Code elects to issue EWRs, and if the depositor or other holder prefers a paper receipt, the warehouseman shall cancel the EWR and reissue a paper receipt. E)        A warehouseman intending to issue or issuing EWRs under the Code shall: i)         issue an EWR through only one authorized provider annually; ii)        inform the Department of the identity of its provider 60 calendar days in advance of first issuing an EWR through that provider.  The Department may waive or modify this 60-day requirement; iii)       before issuing an EWR, request and receive from FSA or the Department a range of consecutive warehouse receipt numbers that the warehouseman will use consecutively for issuing their EWRs; iv)       cancel an EWR only when it is the holder of the EWR; v)        receive written authorization from FSA at least 30 calendar days before changing providers.  Upon authorization, a warehouseman may request its current provider to transfer, and that provider shall transfer, its EWR data from the current provider's CFS to the CFS of the authorized provider it selects; vi)       notify all holders of EWRs in the CFS at least 30 calendar days before changing providers, unless otherwise allowed or required by FSA; and vii)       For purposes of subsection (a)(2)(E)(iv), the warehouseman is considered a "holder" solely for the purpose of canceling an electronic warehouse receipt on the electronic warehouse receipt system and the warehouseman shall in no way be considered the owner of the grain that was covered by the cancelled electronic warehouse receipt, absent evidence of sale of that grain to the warehouseman. F)         EWR Rights and Obligations An EWR establishes the same rights and obligations with respect to an agricultural product as a paper warehouse receipt and possesses the following attributes: i)          The holder of an EWR will be entitled to the same rights and privileges as the holders of a paper warehouse receipt. ii)         Only the current holder of the EWR may transfer the EWR to a new holder. iii)        The identity of the holder must be kept confidential by the provider. iv)        Only one person may be designated as the holder of an EWR at any one time. v)         A warehouse operator may not issue an EWR on a specific identity-preserved or commingled lot of grain or any portion thereof while another valid warehouse receipt representing the same specific identity-preserved or commingled lot of grain remains not cancelled.  No two warehouse receipts issued by a warehouseman may have the same warehouse receipt number or represent the same lot of grain. vi)        Holders and warehousemen may authorize any other user of their provider to act on their behalf with respect to their activities with this provider.  This authorization must be in writing and acknowledged and retained by the warehouseman and provider. b)         Printing 1)         Warehouse receipts, other than EWRs, shall be printed by a person authorized to print those receipts by the Department.  The Department shall authorize persons to print warehouse receipts if they are printed in accordance with the Code and this Part and if they have registered in accordance with Section 10-25 of the Code.  All warehouse receipts shall be: A)        Printed only for licensees. B)        Numbered consecutively either at the time of printing or through the control of a computer generated system, and the numbers shall not be duplicated. C)        A complete record of receipts printed shall be retained by the printer for 5 years, showing for whom printed, the number printed, and the consecutive numbers that were printed on the receipts. 2)         A duplicate copy of any invoice rendered for printing warehouse receipts shall be forwarded by the printer to the Department at the same time as billing is made to the warehouseman.  The invoice shall show for whom printed, the consecutive numbers that were printed on the receipts, type of receipt (whether negotiable or non-negotiable), and number of receipts printed. c)         Paper Warehouse Receipts as Collateral 1)         Warehousemen issuing negotiable warehouse receipts for collateral purposes shall properly endorse those receipts on the reverse to the secured party. 2)         The warehouseman's obligation represented by an outstanding warehouse receipt endorsed for collateral purposes shall not be cancelled until the warehouseman has the outstanding receipt back in its possession and it has been properly cancelled.  The warehouseman may cancel the outstanding obligation represented by a warehouse receipt in lieu of having the actual receipt in its possession, provided that the secured party has presented the warehouseman with a written confirmation of release of the warehouse receipt.  The confirmation shall at a minimum contain the date of release, the receipt numbers and the signature of the secured party warehouse receipt holder.  The confirmation shall be provided by written or electronic documentation. d)         Electronic Warehouse Receipts as Collateral 1)         Warehousemen issuing a negotiable EWR for collateral purposes shall properly endorse the receipt to the secured party. 2)         The warehousemen's obligation represented by an outstanding EWR shall be cancelled upon transfer by the holder. e)         Issuance and Cancellation of Paper Warehouse Receipts 1)         A negotiable or non-negotiable warehouse receipt shall be issued by the warehouseman to the depositor, on demand by the depositor, for grain delivered into storage.  When no warehouse receipt was originally issued to the depositor, except for grain bank accounts, the warehouseman shall issue a warehouse receipt on the stored grain prior to the next harvest season. In the case of a Class II warehouseman, only non-negotiable warehouse receipts shall be issued. 2)         On the date that a printed warehouse receipt is cancelled, the receipt shall be plainly marked across its face with the word "cancelled".  The cancelled receipt shall also be marked with the date and the name of the person cancelling the receipt, the means by which the receipt was cancelled (i.e., check number, monetary wire transfer or delivery from storage) and shall thereafter be void.  The daily position record shall accurately reflect the date of cancellation of all warehouse receipts. f)         Numbering of Receipts If warehouse receipts are to be issued from multiple locations or for specific commodities, the warehousemen shall maintain separate numerical series of warehouse receipts for each location or commodity.  The receipts must have an 8 digit number with the first (leftmost) digit being a numeric prefix to indicate the specific location or commodity.