Frequently Asked Questions
What is AARQ?
The Association for the Administration of Rice Quotas, Inc. (AARQ) is a not-for-profit corporation formed to administer the tariff-rate quotas (TRQs) for milled and brown rice granted by the European Union (EU) to the United States under the U.S. – EU Enlargement Agreement signed July 22, 1996. The company operates as an Export Trading Company (ETC) and has received an Export Trade Certificate of Review from the U.S. Department of Commerce covering its activities in administering the quota. AARQ uses an independent administrator to run its TRQ auctions.
How much is the quota?
The annual quota volume for milled rice has been stable at 38,721 metric tons. Rice within the quota will enter the EU duty free. The quota is assigned through an open-tender auction process. The quota for brown rice was abolished pursuant to Commission Regulation (EC) No. 965/2006 of June 29, 2006.
How does the auction operate?
The schedule of AARQ auctions is behind the “Auctions” tab. Bidders must submit a performance security on or before the AARQ auction day equal to $50,000 or the value of their bid(s), whichever is less. On the auction day, bidders must complete and submit the Bid Form to AARQ's independent administrator which specifies the quantity and the price per metric ton for each bid. The quota is awarded to bidders offering the highest price per metric ton until the full amount of quota available in the auction has been allocated. Detailed auction instructions and eligibility requirements for participation are available behind the “Auctions” tab.
What is an Export Trading Company (ETC)?
An Export Trading Company is ". . . a person, partnership, association or similar organization, organized and operating principally for the purpose of (A) exporting goods produced in the United States; or (B) facilitating the exports of goods produced in the United States by providing one or more export trade services." » [15 U.S.C § 4002(a)(4)].
What happens after the auction?
Successful bidders in an AARQ auction may use their quota rights to import rice into the EU duty-free. The AARQ Administrator will issue tariff-rate quota (TRQ) certificates designating the quantity and form of rice covered. Under EU regulations, the AARQ TRQ Certificates can be used to enter U.S. rice into the EU under TRQs only in tandem with import licenses issued to EU importers by the EU.
For 2021 the EU has a new scheme for submitting an application for an import license:
Under the new scheme, valid for all TRQ periods starting as of the January 1, 2021 subperiod:
The first applications for import licenses valid as of January 1, 2021 need to be lodged November 23 – 30, 2020.
Subsequently, applications for import licenses must be lodged (a) in the first seven calendar days of the month preceding the beginning of the subperiod, or (b) within the first seven calendar days of each month during the subperiod.
For more information please refer to Commission Delegated Regulation (EU) 2020/760 and Commission Implementing Regulation (EU) 2020/761.
What happens if a winning bidder can't use the total amount of the quota that it obtains in the auction?
TRQ certificates are fully transferable. If a party cannot use the certificates it obtained in the auction, it can sell or transfer them to another exporter.
When will the awarded quota expire?
Certificates issued in the auctions will be valid for entry into the EU through December 31 of the year in which they were issued.
TRQ certificates issued in an Open Tender Process that are not presented with an import license application by an EU importer during the first seven business days of the month prior to the tranche (i.e., January, April, or July) will remain valid for any subsequent tranche (i.e., April, July or September).
The holder (including a transferee) of a TRQ Certificate must transmit the certificate to an EU importer who will apply for an import license during the first seven calendar days of the January - August in that year.
Does AARQ assist bidders in obtaining and shipping rice?
No. AARQ’s sole functions are to operate the open-tender auction and to allocate the net auction proceeds. Successful bidders in AARQ auctions acquire rice and arrange for the export. AARQ has no role in the acquisition, sale or export of rice.
What are the auction proceeds used for?
Proceeds from the auction are used first to cover operating expenses including legal, accounting and administrative costs. Of the remaining proceeds at the end of each year of operations, 22 percent is distributed to The Rice Foundation for research, 39 percent is distributed to AARQ members documenting exports of U.S. paddy, brown or milled rice to the EU, and 39 percent is distributed to AARQ members documenting exports of U.S. paddy, brown or milled rice to Non-EU destinations.