RULE 1: The shipment of foreign cotton against any contract specifying U.S. growth is hereby declared to be a fraudulent practice and a violation of the rules of the Federated Associations.
RULE 2: The shipment of reginned, blended or recleaned cotton which reginning, blending or recleaning shall have taken place after its original baling, unless specified and described as such in the contract, is hereby declared to be a fraudulent practice and a violation of the rules of this Association.
RULE 3: The shipment of raingrown cotton against a contract for irrigated cotton or of irrigated cotton against a contract for raingrown, except by mutual consent, is hereby declared to be an unfair trade practice and a violation of the rules of the Federated Members. Cotton should be described by specific territories of growth, but, as used herein and where the terms “raingrown” or “irrigated” are used without more detail growth specifications, the first shall be interpreted to mean all cotton of U.S. growth other than that grown in California, Arizona, New Mexico (excepting cotton grown in Lea County, New Mexico), and the Pecos and El Paso Valleys of Texas, which shall be regarded as irrigated. Where cotton is sold on type, actuals or description, when no growth is specified in the contract, it shall be understood that USA growth is required. Where USA growth is specified in the contract, any cotton grown in the United States of America, except reginned cotton, may be shipped.
Nothing herein shall be interpreted to preclude more detailed stipulations between the buyer and seller as to territories of growth. Any deviation from such stipulation, except by mutual consent, is an unfair trade practice and a violation of the rules of the Federated Associations.
RULE 4: Where cotton is sold on Government Class or Green Card Class, the adulteration or misrepresentation of the official USDA class in the form of green cards, computer printouts or tag lists is hereby declared to be a fraudulent practice and a violation of the Special Rules of this Association.
Cotton shipped in accordance with any sale specifying USDA/HVI Classification shall include all of the quality data specified in the USDA/HVI classification, including extraneous matter, and shall be binding on the seller unless agreed otherwise by the parties to the contract.
RULE 5: The removal of any bale tag indicating origin or growth, the failure to replace any such tag on recovered bales and the failure to report to the Secretary a request to remove tags or otherwise to obscure origin or growth shall constitute unfair trade practices and violate the rules of the Federated Association. This shall not apply to metal band tags removed in the compressing process nor to mill tags.
RULE 6: A buyer may request of the seller, within 90 days of the last day of unloading, evidence that cotton shipped him in satisfaction of their contract is not in violation of Rules 1, 2, 3, 4, and/or 5 of the Special Rules. This request should be sent to the seller by mail and a copy may be forwarded to the Administrative Office of this Association in Memphis. If the buyer is not satisfied with the evidence submitted or if the seller does not respond within 30 days, the buyer may then lodge a formal complaint with the Fair Practices Committee of the Association by forwarding, in writing, to the Administrative Office of the ACSA, factual information pertinent to a review of the complaint together with reasonable and prima facie evidence in support of the buyer’s claim that a violation has occurred, with copy to the seller.
The Fair Practices Committee, after determining that the complaint is properly before the Committee, shall then request in writing of the seller evidence that the cotton was not shipped in violation of Rules 1, 2, 3, 4 and/or 5. If the seller fails to respond in writing to this request within 30 days or within the time specified in an extension of time, such extension to be approved by majority of the Committee voting, then the Committee will proceed to judge the complaint on the evidence at hand and that which it may choose to secure from other sources.
If the Committee finds for the buyer, he shall be awarded a penalty of four cents (4 cents) per pound for any violation determined by the Committee to be intentional, in addition to any other rights he may have or damages he may recover under arbitration and appeal procedures otherwise provided for in the applicable rules and contract terms. In any case in which the Committee determines that the violation was not willful and intentional, it may reduce the penalty.
The Secretary of the ACSA shall promptly notify the buyer and the seller of the Committee’s decision and awards, if any.
RULE 7: If the Fair Practices Committee finds a member of the Federated Associations may be guilty of a violation of any of the Special Rules, or of the Rules or By-Laws of this Association, or of violating fair practices, the Committee shall report the same to the Federated Association or Federated Association(s) whose member is involved, together with a copy of the Committee’s complete file for handling in accordance with its By-Laws and Rules. If, after a hearing, the Federated Association suspends or expels its member as a result of the violation, it shall notify the American Cotton Shippers Association and the member shall be automatically be suspended or expelled from this association and from any other Federated Association of which he or she is a member. The Federated Association and/or the American Cotton Shippers Association shall announce this suspension or expulsion to the party or parties filing a complaint, if there was a complaint filed, and may make the action public as they deem appropriate. Any hearing may be conducted by electronic means. The affected party or parties shall be informed of the charges in advance and be provided an opportunity to be heard at the hearing.
RULE 8: A member shall be fully responsible for any violation of these Special Rules by any subsidiary, affiliated, financed or controlled shipper; or by any broker, agency or intermediary of any kind acting for or at the request of such member or financed by such member.
RULE 9: The seller shall, upon request of the buyer, furnish to the buyer adequate proof that the cotton shipped was of the contract origin or growth specified or was not reginned or foreign cotton, or where applicable, the government class represented was genuine. The seller may present his evidence to the proper Federated Association or recognized Cotton Exchange, at his option, and the certificate of such Association or Exchange that it has examined such proof and regards it as sufficient shall constitute such adequate proof.
RULE 10: Refusal or failure of a buyer or seller to pay any final arbitration award rendered by an arbitral body having jurisdiction and which is recognized by this Association or a Federated Association within 90 days from the date of the award shall constitute a violation of the Rules of this Association.
Complaint by a buyer or seller of a refusal or failure to perform an arbitration award or of action inconsistent with fair practice or of violation of Rules or By-Laws may be made to the appropriate Federated Association and/or to the Rules, By-Laws and Fair Practices Committee c/o the Administrative Office of this Association in Memphis in writing with supporting documents attached.
If a complaint is made to or referred to a Federated Association, it shall conduct a prompt hearing on such complaint, with notice to the member and the complaining party, and take appropriate action. If it fails to conduct a hearing within a time deemed reasonable by the Rules, By-Laws and Fair Practices Committee, or if it conducts a hearing and fails to take action which the Rules, By-Laws and Fair Practices Committee considers appropriate, the Rules, By-Laws and Fair Practices Committee may refer this Complaint to the Board of Directors of this Association for a hearing pursuant to Article 6 of this Association’s By-laws.
In cases of action inconsistent with fair practice or violation of the Rules or By-laws that is not deemed sufficiently serious to justify suspension or expulsion, after hearing, the Rules, By-Laws and Fair Practices Committee, or the boards of the Federated Association or of this Association, may fine the member. Any hearing may be conducted by electronic means. The affected party or parties shall be informed of the charges in advance and be provided an opportunity to be heard at the hearing.
RULE 11: It shall be a violation of the Rules of the Federated Associations for any member to sign or cause to be signed, a Letter of Indemnity to ocean carriers in exchange for a clean bill of lading.
RULE 12: The Special Rules will apply to any growth of cotton handled by ACSA members as specified in their sales contract.
The Special Rules will not apply with respect to year of growth.
RULE 13: Where a certificate of micronaire and/or pressley designates an independent laboratory as the source of testing, any misrepresentation shall be deemed to be a violation of these Special Rules and the Rules of the Federated Associations.
RULE 14: The shipment of gin motes, cleaned gin motes or recleaned gins motes, unless otherwise described as such in the contract, is hereby declared to be a fraudulent practice and a violation of the rules of this Association. The Fair Practices Committee shall award a penalty of 15 of the stated contract value which shall be payable to the buyer, notwithstanding other damages awarded through arbitration procedures and/or litigation.
RULE 15: Deliberate submission of false samples for approval shall be a fraudulent practice and a violation of the Special Rules of this Association
RULE 16: Members storing cotton in warehouses that are members of the Cotton Warehouse Association of America or other warehouse associations with similar membership requirements or warehouses that include in their tariff an agreement or requirement to arbitrate all disputes are deemed to have consented to arbitrate such disputes pursuant to the Rules established by the Cotton Warehouse Association of America and the American Cotton Shippers Association and agree to be bound by the decision rendered.