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Legal Opinion Summary
Topic:Eligibility: May a Farm Credit System association finance a processing and marketing operation owned by foreign nationals?
ID Number:98-03
Issue Date:06/22/1998

A Farm Credit System (FCS) association asked whether it could finance a processing and marketing operation conducted in its state where the loan applicants were foreign nationals. OGC concluded that the association could finance the operation as long as the borrowers satisfied the eligibility requirements of 12 C.F.R. 613.3000 and 613.3010.

A processing and marketing operation is eligible for FCS financing under 613.3010 if the borrower or its owner: (1) is a bona fide farmer, rancher, or aquatic producer or harvester; and (2) regularly produces some portion of the throughput. This regulation does not require an eligible processing and marketing borrower or its owner to conduct an agricultural or aquatic operation in the United States. Non-resident foreign nationals who hold visas that permit them to own property or operate a business in the United States are eligible to borrow from an FCS association under 613.3000(a)(3). Additionally, legal entities that are owned by foreign nationals are eligible for FCS financing if they are established pursuant to the laws of the United States or any State thereof and are legally authorized to conduct a business.

(June 22, 1998)