[Title 19 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2008 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]

          

          19


          Parts 141 to 199

          Revised as of April 1, 2008


          Customs Duties
          



________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2008
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

[[Page ii]]

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[[Page iii]]




                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 19:
          Chapter I--Bureau of Customs and Border Protection, 
          Department of Homeland Security; Department of the 
          Treasury (Continued)                                       3
  Finding Aids:
      Table of CFR Titles and Chapters........................     647
      Alphabetical List of Agencies Appearing in the CFR......     665
      Chapter I Subject Index.................................     675
      List of CFR Sections Affected...........................     791

[[Page iv]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 19 CFR 141.0 refers 
                       to title 19, part 141, 
                       section 0.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
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    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
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[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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[[Page vii]]


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    Raymond A. Mosley,
    Director,
    Office of the Federal Register.
    April 1, 2008.







[[Page ix]]



                               THIS TITLE

    Title 19--Customs Duties is composed of three volumes. The first two 
volumes, parts 0 to 140 and parts 141 to 199 contain the regulations in 
Chapter I--Bureau of Customs and Border Protection, Department of 
Homeland Security; Department of the Treasury. The third volume, part 
200 to end, contains the regulations in Chapter II--United States 
International Trade Commission; Chapter III--International Trade 
Administration, Department of Commerce; and Chapter IV--Bureau of 
Immigration and Customs Enforcement, Department of Homeland Security. 
The contents of these volumes represent all current regulations issued 
under this title of the CFR as of April 1, 2008.

    A Subject Index to Chapter I--Bureau of Customs and Border 
Protection, Department of Homeland Security; Department of the Treasury 
appears in the Finding Aids section of the first two volumes.

    For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.


[[Page 1]]



                        TITLE 19--CUSTOMS DUTIES




                  (This book contains parts 141 to 199)

  --------------------------------------------------------------------
                                                                    Part

chapter i--Bureau of Customs and Border Protection, 
  Department of Homeland Security; Department of the 
  Treasury (continued)......................................         141

[[Page 3]]



   CHAPTER I--BUREAU OF CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF 
        HOMELAND SECURITY; DEPARTMENT OF THE TREASURY (CONTINUED)




  --------------------------------------------------------------------


  Editorial Note: Nomenclature changes to chapter I appear by T.D. 95-
78, 60 FR 50021, Sept. 27, 1995, and by CBP Dec. 07-82, 72 FR 59167, 
Oct. 19, 2007.
Part                                                                Page
141             Entry of merchandise........................           5
142             Entry process...............................          46
143             Special entry procedures....................          61
144             Warehouse and rewarehouse entries and 
                    withdrawals.............................          71
145             Mail importations...........................          83
146             Foreign trade zones.........................          95
147             Trade fairs.................................         132
148             Personal declarations and exemptions........         136
151             Examination, sampling, and testing of 
                    merchandise.............................         171
152             Classification and appraisement of 
                    merchandise.............................         203
158             Relief from duties on merchandise lost, 
                    damaged, abandoned, or exported.........         220
159             Liquidation of duties.......................         228
161             General enforcement provisions..............         245
162             Inspection, search, and seizure.............         246
163             Recordkeeping...............................         273
171             Fines, penalties, and forfeitures...........         289
172             Claims for liquidated damages; penalties 
                    secured by bonds........................         318
173             Administrative review in general............         322
174             Protests....................................         323
175             Petitions by domestic interested parties....         331
176             Proceedings in the Court of International 
                    Trade...................................         334
177             Administrative rulings......................         336
178             Approval of information collection 
                    requirements............................         354
181             North American Free Trade Agreement.........         358
191             Drawback....................................         523

[[Page 4]]

192             Export control..............................         636
193-199

[Reserved]

[[Page 5]]



PART 141_ENTRY OF MERCHANDISE--Table of Contents




Sec.
141.0 Scope.
141.0a Definitions.

   Subpart A_Liability for Duties and Requirement To Enter Merchandise

141.1 Liability of importer for duties.
141.2 Liability for duties on reimportation.
141.3 Liability for duties includes liability for taxes.
141.4 Entry required.
141.5 Time limit for entry.

         Subpart B_Right To Make Entry and Declarations on Entry

141.11 Evidence of right to make entry for importations by common 
          carrier.
141.12 Right to make entry of importations by other than common carrier.
141.13 Right to make entry of abandoned or salvaged merchandise.
141.14 Deceased or insolvent consignees and court-appointed 
          administrators.
141.15 Bond for production of bill of lading or air waybill.
141.16 Disposition of documents.
141.17 Entry by nonresident consignee.
141.18 Entry by nonresident corporation.
141.19 Declaration of entry.
141.20 Actual owner's declaration and superseding bond of actual owner.

                      Subpart C_Powers of Attorney

141.31 General requirements and definitions.
141.32 Form for power of attorney.
141.33 Alternative form for noncommercial shipment.
141.34 Duration of power of attorney.
141.35 Revocation of power of attorney.
141.36 Nonresident principals in general.
141.37 Additional requirements for non-resident corporations.
141.38 Resident corporations.
141.39 Partnerships.
141.40 Trusteeships.
141.41 Surety on Customs bonds.
141.42 Protests.
141.43 Delegation to subagents.
141.44 Designation of Customs ports in which power of attorney is valid.
141.45 Certified copies of power of attorney.
141.46 Power of attorney retained by customhouse broker.

      Subpart D_Quantity of Merchandise To Be Included In an Entry

141.51 Quantity usually required to be in one entry.
141.52 Separate entries for different portions.
141.53 Procedure for separate entries.
141.54 Separate entries for consolidated shipments.
141.55 Single entry summary for shipments arriving under one 
          transportation entry.
141.56 Single entry summary for multiple transportation entries 
          consigned to the same consignee.
141.57 Single entry for split shipments.
141.58 Single entry for separately arriving portions of unassembled or 
          disassembled entities.

                 Subpart E_Presentation of Entry Papers

141.61 Completion of entry and entry summary documentation.
141.62 Place and time of filing.
141.63 Submission of entry summary documentation for preliminary review.
141.64 Review and correction of entry and entry summary documentation.
141.65 [Reserved]
141.66 Bond for missing documents.
141.67 Recall of documentation.
141.68 Time of entry.
141.69 Applicable rates of duty.

                           Subpart F_Invoices

141.81 Invoice for each shipment.
141.82 Invoice for installment shipments arriving within a period of 10 
          days.
141.83 Type of invoice required.
141.84 Photocopies of invoice for separate entries of same shipment.
141.85 Pro forma invoice.
141.86 Contents of invoices and general requirements.
141.87 Breakdown on component materials.
141.88 Computed value.
141.89 Additional information for certain classes of merchandise.
141.90 Notation of tariff classification and value on invoice.
141.91 Entry without required invoice.
141.92 Waiver of invoice requirements.

                  Subpart G_Deposit of Estimated Duties

141.101 Time of deposit.
141.102 When deposit of estimated duties, estimated taxes, or both not 
          required.
141.103 Amount to be deposited.
141.104 Computation of duties.
141.105 Voluntary deposit of additional duties.

                    Subpart H_Release of Merchandise

141.111 Carrier's release order.
141.112 Liens for freight, charges, or contribution in general average.
141.113 Recall of merchandise released from Customs and Border 
          Protection custody.

    Authority: 19 U.S.C. 66, 1448, 1484, 1624.
    Subpart F also issued under 19 U.S.C. 1481;

[[Page 6]]

    Subpart G also issued under 19 U.S.C. 1505;
    Section 141.1 also issued under 11 U.S.C. 507(a)(7)(F), 31 U.S.C. 
191, 192;
    Section 141.4 also issued under 19 U.S.C. 1202 (General Note 3(e); 
Chapter 86, Additional U.S. Note 1; Chapter 89, Additional U.S. Note 1; 
Chapter 98, Subchapter III, U.S. Notes 3 and 4; Harmonized Tariff 
Schedule of the United States), 1498;
    Section 141.19 also issued under 19 U.S.C. 1485, 1486;
    Section 141.20 also issued under 19 U.S.C. 1485, 1623;
    Section 141.66 also issued under 19 U.S.C. 1490, 1623;
    Section 141.68 also issued under 19 U.S.C. 1315;
    Section 141.69 also issued under 19 U.S.C. 1315;
    Section 141.88 also issued under 19 U.S.C. 1401a(d), 1402(f);
    Section 141.90 also issued under 19 U.S.C. 1487;
    Section 141.112 also issued under 19 U.S.C. 1564;
    Section 141.113 also issued under 19 U.S.C. 1499, 1623.

    Source: T.D. 73-175, 38 FR 17447, July 2, 1973, unless otherwise 
noted.



Sec. 141.0  Scope.

    This part sets forth general requirements and procedures for the 
entry of imported merchandise, except entries under carnet, and entries 
for transportation in bond or exportation, for foreign-trade zones, or 
for trade fairs, which are covered in parts 114, 18, 146, and 147 of 
this chapter. More specific requirements and procedures in addition to 
those in this part are set forth in parts 143, 144, and 145 of this 
chapter for consumption, appraisement and informal entries, for 
warehouse entries, and for mail entries.



Sec. 141.0a  Definitions.

    Unless the context requires otherwise or a different definition is 
prescribed, the following terms shall have the meanings indicated when 
used in connection with the entry of merchandise:
    (a) Entry. ``Entry'' means that documentation required by Sec. 
142.3 of this chapter to be filed with the appropriate Customs officer 
to secure the release of imported merchandise from Customs custody, or 
the act of filing that documentation. ``Entry'' also means that 
documentation required by Sec. 181.53 of this chapter to be filed with 
Customs to withdraw merchandise from a duty-deferral program in the 
United States for exportation to Canada or Mexico or for entry into a 
duty-deferral program in Canada or Mexico.
    (b) Entry summary. ``Entry summary'' means any other documentation 
necessary to enable Customs to assess duties, and collect statistics on 
imported merchandise, and determine whether other requirements of law or 
regulation are met.
    (c) Submission. ``Submission'' means the voluntary delivery to the 
appropriate Customs officer of the entry summary documentation for 
preliminary review or of entry documentation for other purposes.
    (d) Filing. ``Filing'' means:
    (1) The delivery to Customs of the entry documentation required by 
section 484(a), Tariff Act of 1930, as amended (19 U.S.C. 1484(a)), to 
obtain the release of merchandise, or
    (2) The delivery to Customs, together with the deposit of estimated 
duties, of the entry summary documentation required to assess duties, 
collect statistics, and determine whether other requirements of law and 
regulation are met, or
    (3) The delivery to Customs, together with the deposit of estimated 
duties, of the entry summary documentation which shall serve as both the 
entry and the entry summary.
    (e) Presentation. ``Presentation'' is used only in connection with 
quota-class merchandise and is defined in Sec. 132.1(d) of this 
chapter.
    (f) Entered for consumption. ``Entered for consumption'' means that 
an entry summary for consumption has been filed with Customs in proper 
form, with estimated duties attached. ``Entered for consumption'' also 
means the necessary documentation has been filed with Customs to 
withdraw merchandise from a duty-deferral program in the United States 
for exportation to Canada or Mexico or for entry into a duty-deferral 
program in Canada or Mexico (see Sec. 181.53 of this chapter).
    (g) Entered for warehouse. ``Entered for warehouse'' means that an 
entry summary for warehouse has been filed with Customs in proper form.
    (h) Entered temporarily under bond. ``Entered temporarily under 
bond''

[[Page 7]]

means that an entry summary supporting a temporary importation under 
bond has been filed with Customs in proper form.
    (i) Released conditionally. ``Released conditionally'' means any 
release from Customs custody before liquidation.

[T.D. 79-221, 44 FR 46816, Aug. 9, 1979, as amended by T.D. 84-213, 49 
FR 41184, Oct. 19, 1984; T.D. 96-14, 61 FR 2911, Jan. 30, 1996]



   Subpart A_Liability for Duties and Requirement To Enter Merchandise



Sec. 141.1  Liability of importer for duties.

    (a) Time duties accrue. Duties and the liability for their payment 
accrue upon imported merchandise on arrival of the importing vessel 
within a Customs port with the intent then and there to unlade, or at 
the time of arrival within the Customs territory of the United States if 
the merchandise arrives otherwise than by vessel, unless otherwise 
specially provided for by law.
    (b) Payment of duties--(1) Personal debt of importer. The liability 
for duties, both regular and additional, attaching on importation, 
constitutes a personal debt due from the importer to the United States 
which can be discharged only by payment in full of all duties legally 
accruing, unless relieved by law or regulation. Payment to a broker 
covering duties does not relieve the importer of liability if the duties 
are not paid by the broker. The liability may be enforced 
notwithstanding the fact that an erroneous construction of law or 
regulation may have enabled the importer to pass his goods through the 
customhouse without payment. Delivery of a Customs bond with an entry is 
solely to protect the revenue of the United States and does not relieve 
the importer of liabilities incurred from the importation of merchandise 
into the United States.
    (2) Means of payment. An importer or his agent may pay Customs by 
using any of the applicable means provided in Sec. 24.1(a).
    (3) Methods of payment. An importer may pay duties either:
    (i) Directly to Customs whether or not a licensed customhouse broker 
is used; or
    (ii) Through a licensed customhouse broker. When an importer uses a 
broker and elects to pay by check or bank draft, the importer may issue 
the broker either:
    (A) One check or bank draft payable to the broker covering both 
duties and the broker's fees and charges, in which case the broker shall 
pay the duties to Customs on behalf of the importer, or
    (B) Separate checks or bank drafts, one covering duties payable to 
the ``U.S. Customs Service,'' for transmittal by the broker to Customs, 
and the other covering the broker's fees and charges. The importer's 
check or bank draft for duties shall be delivered to Customs by the 
broker.
    (c) Claim against estate of importer. The claim of the Government 
for unpaid duties against the estate of a deceased or insolvent importer 
has priority over obligations to creditors other than the United States. 
To the extent that a broker or a surety pays duties on behalf of an 
importer which files for bankruptcy protection, the broker or surety 
shall be entitled to assume the priority status of Customs under section 
507(a)(7) of the Bankruptcy Code for that portion of Customs claim which 
the surety or broker has paid.
    (d) Lien against merchandise. The liability for duties also 
constitutes a lien upon the merchandise imported which may be enforced 
while such merchandise is in the custody or subject to the control of 
the United States.
    (e) States and their instrumentalities. Neither the States nor their 
instrumentalities are entitled to any constitutional exemption from the 
payment of Customs duties.
    (f) Unordered merchandise. There shall be no liability for the 
payment of duties on the part of anyone to whom merchandise is consigned 
without his authority, if he refuses it. Such merchandise shall be 
treated as unclaimed (see part 27 of this chapter).

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 82-134, 47 
FR 32419, July 27, 1982; T.D. 92-58, 57 FR 27160, June 18, 1992; T.D. 
97-82, 62 FR 51770, Oct. 3, 1997]

[[Page 8]]



Sec. 141.2  Liability for duties on reimportation.

    Dutiable merchandise imported and afterwards exported, even though 
duty thereon may have been paid on the first importation, is liable to 
duty on every subsequent importation into the Customs territory of the 
United States, but this does not apply to the following:
    (a) Personal and household effects taken abroad by a resident of the 
United States and brought back on his return to this country (see Sec. 
148.31 of this chapter);
    (b) Professional books, implements, instruments, and tools of trade, 
occupation, or employment taken abroad by an individual and brought back 
on his return to this country (see Sec. 148.53 of this chapter);
    (c) Automobiles and other vehicles taken abroad for noncommercial 
use (see Sec. 148.32 of this chapter);
    (d) Metal boxes, casks, barrels, carboys, bags, quicksilver flasks 
or bottles, metal drums, or other substantial outer containers exported 
from the United States empty and returned as usual containers or 
coverings of merchandise, or exported filled with products of the United 
States and returned empty or as the usual containers or coverings of 
merchandise (see Sec. 10.7(b), (c), (d), and (e) of this chapter);
    (e) Articles exported from the United States for repairs or 
alterations, which may be returned upon the payment of duty on the value 
of repairs or alterations at the rate or rates which would otherwise 
apply to the articles in their repaired or altered conditions (see Sec. 
10.8 of this chapter);
    (f) Articles exported for exhibition under certain conditions (see 
Sec. Sec. 10.66 and 10.67 of this chapter);
    (g) Domestic animals taken abroad for temporary pasturage purposes 
and returned within 8 months (see Sec. 10.74 of this chapter);
    (h) Articles exported under lease to a foreign manufacturer (see 
Sec. 10.108 of this chapter); or
    (i) Any other reimported articles for which free entry is 
specifically provided.



Sec. 141.3  Liability for duties includes liability for taxes.

    The importer's liability for duties includes a liability for any 
internal revenue taxes which attach upon the importation of merchandise, 
unless otherwise provided by law or regulation.



Sec. 141.4  Entry required.

    (a) General. All merchandise imported into the United States is 
required to be entered, unless specifically excepted.
    (b) Exceptions. The following are the exceptions to the general 
rule:
    (1) The exemptions listed in General Note 3(e) to the Harmonized 
Tariff Schedule of the United States (HTSUS).
    (2) Vessels (not including vessels classified in headings 8903 and 
8907 and subheadings 8905.90.10 and 8906.00.10 or in Chapter 98, HTSUS, 
such as under subheadings 9804.00.35 or 9813.00.35). See also Chapter 
89, Additional U.S. Note 1, HTSUS.
    (3) Instruments of international traffic described in Sec. 10.41a 
and Sec. 10.41b(b) of this chapter, under the conditions provided for 
in those sections. See also Chapter 98, Subpart III, U.S. Notes 3 and 4, 
HTSUS.
    (4) Railway locomotives classified in heading 8601 or 8602, HTSUS, 
and freight cars classified in heading 8606, HTSUS, on which no duty is 
owed (see paragraph (d) of this section). See Chapter 86, Additional 
U.S. Note 1, HTSUS; see also 19 CFR part 123 for reporting requirements 
for railway equipment brought into the United States from Canada or 
Mexico.
    (c) Undeliverable articles. The exemption from entry for 
undeliverable articles under General Note 19(e), HTSUS, is subject to 
the following conditions:
    (1) The person claiming the exemption must submit a certification 
(documentary or electronic) that:
    (i) The merchandise was intended to be exported to a foreign 
country;
    (ii) The merchandise is being returned within 45 days of departure 
from the United States;
    (iii) The merchandise did not leave the custody of the carrier or 
foreign customs;
    (iv) The merchandise is being returned to the United States because 
it

[[Page 9]]

was undeliverable to the foreign consignee; and
    (v) The merchandise was not sent abroad to receive benefit from, or 
fulfill obligations to, the United States as a result of exportation.
    (2) Upon request by CBP, the person claiming the exemption shall 
provide evidence required to support the claim for exemption.
    (d) Railway locomotives and freight cars. For railway locomotives 
and freight cars described in Additional U.S. Note 1 of Chapter 86, 
HTSUS, to be excepted and released in accordance with paragraph (b)(4) 
of this section, the importer must first file a bond on CBP Form 301, 
containing the bond conditions set forth in either Sec. 113.62 or 
113.64 of this chapter.
    (e) Informal entry. Merchandise qualifying for informal entry by 
regulation, pursuant to 19 U.S.C. 1498, is exempt from formal entry 
under 19 U.S.C. 1484 and this part, but must be entered as required 
under applicable regulations (see part 143, subpart C, and Sec. Sec. 
10.151 through 10.153, 128.24, 145.31, 145.32, 148.12, 148.13, 148.51, 
and 148.62 of this chapter).

[T.D. 94-51, 59 FR 30295, June 13, 1994; T.D. 95-29, 60 FR 18348, Apr. 
11, 1995; 60 FR 21043, May 1, 1995; T.D. 97-82, 62 FR 51770, Oct. 3, 
1997; T.D. 00-81, 65 FR 68887, Nov. 15, 2000; T.D. 02-14, 67 FR 15098, 
Mar. 29, 2002; T.D. 02-28, 67 FR 36097, May 23, 2002; CBP Dec. 04-28, 69 
FR 52600, Aug. 27, 2004; CBP Dec. 05-31, 70 FR 53062, Sept. 7, 2005]



Sec. 141.5  Time limit for entry.

    Merchandise for which entry is required will be entered within 15 
calendar days after landing from a vessel, aircraft or vehicle, or after 
arrival at the port of destination in the case of merchandise 
transported in bond. Merchandise for which timely entry is not made will 
be treated in accordance with Sec. 4.37 or Sec. 122.50 or Sec. 123.10 
of this chapter.

[T.D. 02-65, 67 FR 68035, Nov. 8, 2002]



         Subpart B_Right To Make Entry and Declarations on Entry



Sec. 141.11  Evidence of right to make entry for importations by common carrier.

    (a) Merchandise not released directly to carrier. Except where 
merchandise is released directly to the carrier in accordance with 
paragraph (b) of this section, one of the following types of evidence of 
the right to make entry shall be filed in connection with the entry of 
merchandise imported by common carrier:
    (1) A bill of lading or air waybill, presented by the holder 
thereof, properly endorsed when endorsement is required under the law. A 
nonnegotiable bill of lading, or air waybill, may not be endorsed by the 
named consignee to give someone else the right to make entry. If the 
person making entry intends to use the original bill of lading or air 
waybill to obtain a duplicate bill of lading, duplicate air waybill, or 
carrier's certificate from the carrier, the exchange shall be made 
before the entry is filed, and the duplicate bill of lading, duplicate 
air waybill, or carrier's certificate shall be used to make entry in 
accordance with paragraph (a) (3) or (4) of this section. For purposes 
of this part, the rights of the consignor relating to an air waybill as 
prescribed by the Warsaw Convention (49 Stat. 3017) shall be protected.
    (2) An extract from a bill of lading or air waybill certified to be 
genuine by the carrier bringing the merchandise to the port of entry. 
Customs officers shall not certify extracts from bills of lading or air 
waybills.
    (3) A certified duplicate bill of lading or air waybill, with the 
carrier's certificate being in substantially the following form:

           Duplicate Bill Of Lading or Air Waybill Certificate

                                                        ----------, 19--
    The undersigned carrier, bringing the within-described merchandise 
to this port, hereby certifies that this signed copy of the bill of 
lading or air waybill is genuine and may be used for the purpose of 
making Customs

[[Page 10]]

entry as provided for in section 484(i), Tariff Act of 1930.
________________________________________________________________________
                                                       (Name of carrier)
________________________________________________________________________
                                                                 (Agent)

    (4) A carrier's certificate, which may be executed on the official 
entry form, or, in appropriate cases, by means of a rubber-stamped or 
typewritten combined carrier's certificate and release order with one 
signature on a copy of the bill of lading, airway bill, shipping 
receipt, or other comparable document. The rubber-stamped or typewritten 
certificate shall be in substantially the following form, which may be 
varied to include any of the qualifications on release shown in Sec. 
141.111(d):

                                                       Date ------------
    The undersigned carrier, to whom or upon whose order the articles 
described herein or in the attached document must be released, hereby 
certifies that the consignee named in this document is the owner or 
consignee of such articles within the purview of section 484(h), Tariff 
Act of 1930. In accordance with the provisions of section 484(j), Tariff 
Act of 1930, authority is hereby given to release the articles covered 
by the aforementioned statement to such consignee.

________________________________________________________________________
                                                       (Name of carrier)
________________________________________________________________________
                                                                 (Agent)

    (5) A blanket carrier's release order on an appropriately modified 
bill of lading or air waybill covering any or all shipments which will 
arrive at the port on the carrier's conveyance during the period 
specified in the release order.
    (6) A shipping receipt or other document presented in lieu of a bill 
of lading or air waybill shall be accepted as authority for making entry 
only if it bears a carrier's certificate in accordance with paragraph 
(a)(4) of this section, or if entry is made by the actual consignee in 
person or in his name by a duly authorized agent.
    (b) Merchandise released directly to carrier. Where, in accordance 
with subsection (j) of section 484, Tariff Act of 1930, as amended (19 
U.S.C. 1484), merchandise is released from Customs custody (either under 
immediate delivery procedures in accordance with the provisions of 
subpart C of part 142 of this chapter, or after an entry has been filed 
in accordance with subpart A of part 142 of this chapter, or after an 
entry summary, which shall serve as both the entry and entry summary has 
been filed with estimated duties attached where appropriate in 
accordance with subpart B of part 142 of this chapter), to the carrier 
by whom the merchandise was brought to the port, the delivery of the 
merchandise by the carrier to the person filing the entry summary with 
estimated duties attached shall be deemed to be the certification 
required by subsection (h), section 484, Tariff Act of 1930. Customs 
responsibility under this optional entry procedure is limited to the 
collection of duties, and constitutes no representation whatsoever 
regarding the right of any person to obtain possession of the 
merchandise from the carrier. Consequently, no Customs official shall be 
liable to any person in respect to the delivery of merchandise released 
from Customs custody in accordance with the provisions of this 
paragraph.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-394, 43 
FR 49787, Oct. 25, 1978; T.D. 82-224, 47 FR 53727, Nov. 29, 1982; T.D. 
87-75, 52 FR 20068, May 29, 1987; T.D. 90-87, 55 FR 47052, Nov. 9, 1990; 
T.D. 97-82, 62 FR 51770, Oct. 3, 1997]



Sec. 141.12  Right to make entry of importations by other than common carrier.

    When merchandise is not imported by a common carrier, possession of 
the merchandise at the time of arrival in the United States shall be 
deemed sufficient evidence of the right to make entry.



Sec. 141.13  Right to make entry of abandoned or salvaged merchandise.

    Underwriters of abandoned merchandise or salvors of merchandise 
saved from a wreck who are unable to produce a bill of lading, air 
waybill, certified duplicate bill of lading or air waybill, or carrier's 
certificate, shall produce evidence satisfactory to the port director of 
their right to act.

[T.D. 78-394, 43 FR 49787, Oct. 25, 1978]

[[Page 11]]



Sec. 141.14  Deceased or insolvent consignees and court-appointed administrators.

    The executor or administrator of the estate of a deceased consignee, 
the receiver or other legal representative of an insolvent consignee, or 
the representative appointed in any action or proceeding at law to act 
for a consignee shall not be permitted to make entry unless he produces 
a duly endorsed bill of lading or air waybill, a carrier's certificate, 
or a duplicate bill of lading or air waybill, executed in accordance 
with subsections (h) or (i) of section 484, Tariff Act of 1930, as 
amended (19 U.S.C. 1484), showing him to be the consignee for Customs 
purposes.

[T.D. 78-394, 43 FR 49787, Oct. 25, 1978]



Sec. 141.15  Bond for production of bill of lading or air waybill.

    (a) When appropriate. If the person desiring to make entry is unable 
to present a bill of lading, air waybill, or other evidence of right to 
make entry in accordance with Sec. 141.11, the port director may accept 
a bond for the production of a bill of lading or air waybill under the 
provisions of section 484(c), Tariff Act of 1930, as amended (19 U.S.C. 
1484(c)). The bond shall be for the production of a bill of lading or 
air waybill, unless the person making entry intends to produce a 
carrier's certificate or certified duplicate bill of lading or air 
waybill. In that case, no bond is required because section 484(c) does 
not apply to entries made on a carrier's certificate or certified 
duplicate bill of lading or air waybill. If the port director is in 
doubt as to the propriety of accepting entry on a bond for the 
production of a bill of lading or air waybill, he shall request 
authority to do so from the Commissioner of Customs.
    (b) Form. The bond shall be on Customs Form 301 and contain the bond 
conditions set forth in Sec. 113.69 of this chapter.
    (c) Documents acceptable to satisfy bond. A bond given for the 
production of a bill of lading or air waybill shall be considered as 
canceled upon production of a bill of lading or air waybill, and may be 
considered as satisfied but shall not be canceled upon the production of 
a carrier's certificate or certified duplicate bill of lading or air 
waybill.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-394, 43 
FR 49788, Oct. 25, 1978; T.D. 84-213, 49 FR 41184, Oct. 19, 1984]



Sec. 141.16  Disposition of documents.

    (a) Bill of lading or air waybill. When the return of the bill of 
lading or air waybill to the person making entry is requested in 
accordance with section 484(j), Tariff Act of 1930, as amended (19 
U.S.C. 1484(j)), the port director shall obtain a receipt showing 
sufficient data from the bill of lading or air waybill to completely 
identify it and enable the auditor to verify the production of proper 
evidence of the right to make entry. The receipt shall also show any 
freight charges and weights that appear on the bill of lading or air 
waybill. The port director shall then return the bill of lading or air 
waybill to the person making entry with a notation thereon to the effect 
that entry has been made for the merchandise.
    (b) Other documents. When any of the other documents specified in 
Sec. 141.11(a) (2) through (6) is used in making entry, it shall be 
retained by the port director as evidence that the person making entry 
is authorized to do so.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-394, 43 
FR 49788, Oct. 25, 1978]



Sec. 141.17  Entry by nonresident consignee.

    A nonresident consignee has the right to make entry, but any bond 
taken in connection with the entry shall have a resident corporate 
surety or, when a carnet issued under part 114 of this chapter is used 
as an entry form, an approved resident guaranteeing association.



Sec. 141.18  Entry by nonresident corporation.

    A nonresident corporation (i.e., one which is not incorporated 
within the Customs territory of the United States or in the Virgin 
Islands of the United States) shall not enter merchandise for 
consumption unless it:
    (a) Has a resident agent in the State where the port of entry is 
located who

[[Page 12]]

is authorized to accept service of process against such corporation; and
    (b) Files a bond on Customs Form 301, containing the bond conditions 
set forth in Sec. 113.62 of this chapter having a resident corporate 
surety to secure the payment of any increased and additional duties 
which may be found due.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 84-213, 49 
FR 41184, Oct. 19, 1984]



Sec. 141.19  Declaration of entry.

    (a) Declaration by consignee. The consignee in whose name an entry 
is made under the provisions of section 484, Tariff Act of 1930, as 
amended (19 U.S.C. 1484), shall execute the declaration specified in 
section 485(a), Tariff Act of 1930, as amended (19 U.S.C. 1485(a)) on:
    (1) The entry summary for merchandise entered for consumption, for 
warehouse, or for temporary importation under bond, or
    (2) The rewarehouse or the bonded manufacturing warehouse entry.

The declaration need not be under oath. When the consignee is a 
partnership, any partner may execute the declaration, and when the 
consignee is a corporation any officer of the corporation may execute 
the declaration.
    (b) Declaration by agent of consignee--(1) Authorized agent with 
knowledge of the facts. When entry is made in a consignee's name by an 
agent who has knowledge of the facts and who is authorized under a 
proper power of attorney by that consignee to make declarations in 
accordance with section 485(f), Tariff Act of 1930, as amended (19 
U.S.C. 1485(f)), a declaration on the entry or entry summary executed by 
that agent is sufficient and no bond to produce a declaration of the 
consignee is required.
    (2) Other agents. When entry is made in a consignee's name by an 
agent who does not meet the qualifications in paragraph (b)(1) of this 
section either:
    (i) A declaration of the consignee on Customs Form 3347-A shall be 
filed with the entry documentation or entry summary or
    (ii) A charge for the production of the declaration shall be made 
against the bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.62 of this chapter. No separate bond of the agent 
shall be required, since a charge against the bond on Customs Form 301, 
containing the bond conditions set forth in Sec. 113.62 of this chapter 
satisfies the requirements of section 485(c), Tariff Act of 1930, as 
amended (19 U.S.C. 1485(c)).
    (3) Nominal consignee. A nominal consignee who makes entry in his 
own name is not considered an agent within the purview of section 
485(c), Tariff Act of 1930, as amended (19 U.S.C. 1485(c)), and he shall 
execute a declaration in accordance with paragraph (a) of this section.
    (c) Books, newspapers, and periodicals. In the case of successive 
importations of books, magazines, newspapers, and periodicals within the 
scope of section 485(b), Tariff Act of 1930, as amended (19 U.S.C. 
1485(b)), one declaration filed at the time of arrival of the first 
importation will be sufficient.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 79-221, 44 
FR 46816, June 4, 1979; T.D. 84-213, 49 FR 41184, Oct. 19, 1984]



Sec. 141.20  Actual owner's declaration and superseding bond of actual owner.

    (a) Filing--(1) Declaration of owner. A consignee in whose name an 
entry summary for consumption, warehouse, or temporary importation under 
bond is filed, or in whose name a rewarehouse entry or a manufacturing 
warehouse entry is made, and who desires, under the provisions of 
section 485(d), Tariff Act of 1930, as amended (19 U.S.C. 1485(d)), to 
be relieved from statutory liability for the payment of increased and 
additional duties shall declare at the time of the filing of the entry 
summary or entry documentation, as provided in Sec. 141.19(a), that he 
is not the actual owner of the merchandise, furnish the name and address 
of the owner, and file with the port director within 90 days from the 
time of entry (see Sec. 141.68) a declaration of the actual owner of 
the merchandise acknowledging that the actual owner will pay all 
additional and increased duties. The declaration of owner shall be filed 
on Customs Form 3347.
    (2) Bond of actual owner. If the consignee desires to be relieved 
from contractual liability for the payment of

[[Page 13]]

increased and additional duties voluntarily assumed by him under the 
single-entry bond which he filed in connection with the entry 
documentation and/or entry summary, or under his continuous bond against 
which the entry and/or entry summary is charged, he shall file a bond of 
the actual owner on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.62 of this chapter, with the port director within 90 
days from the time of entry.
    (b) Appropriate party to execute and file. Neither the declaration 
of the actual owner nor the bond of the actual owner shall be accepted 
unless executed by the actual owner or his duly authorized agent, and 
filed by the nominal consignee or his duly authorized agent.
    (c) Nonresident actual owner. If the actual owner is a nonresident, 
the actual owner's declaration shall not be accepted as compliance with 
section 485(d), Tariff Act of 1930, as amended (19 U.S.C. 1485(d)), 
unless there is filed therewith the owner's bond on Customs Form 301, 
containing the bond conditions set forth in Sec. 113.62 of this 
chapter, with a resident corporate surety.
    (d) Filing of declaration of owner for purposes other than relief 
from liability. Nothing in this section shall be construed to prevent 
the nominal consignee from filing the actual owner's declaration without 
the superseding bond for purposes other than relief from statutory 
liability for the payment of increased and additional duties under the 
provisions of section 485(d), Tariff Act of 1930, as amended (19 U.S.C. 
1485(d)).

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 74-212, 39 
FR 28420, Aug. 7, 1974; T.D. 79-221, 44 FR 46816, Aug. 9, 1979; T.D. 84-
213, 49 FR 41184, Oct. 19, 1984]



                      Subpart C_Powers of Attorney



Sec. 141.31  General requirements and definitions.

    (a) Limited or general power of attorney. A power of attorney may be 
executed for the transaction by an agent or attorney of a specified part 
or all the Customs business of the principal.
    (b) [Reserved]
    (c) Minor agents. A power of attorney to a minor shall not be 
accepted.
    (d) Definitions of resident and nonresident. For the purposes of 
this subpart, ``resident'' means an individual who resides within, or a 
partnership one or more of whose partners reside within, the Customs 
territory of the United States or the Virgin Islands of the United 
States, or a corporation incorporated in any jurisdiction within the 
Customs territory of the United States or in the Virgin Islands of the 
United States. A ``nonresident'' means an individual, partnership, or 
corporation not meeting the definition of ``resident.''

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 84-93, 49 FR 
17754, Apr. 25, 1984]



Sec. 141.32  Form for power of attorney.

    Customs Form 5291 may be used for giving power of attorney to 
transact Customs business. If a Customs power of attorney is not on a 
Customs Form 5291, it shall be either a general power of attorney with 
unlimited authority or a limited power of attorney as explicit in its 
terms and executed in the same manner as a Customs Form 5291. The 
following is an example of an acceptable general power of attorney with 
unlimited authority:

                  KNOW ALL MEN BY THESE PRESENTS, THAT

--------------------------------------------
 (Name of principal)
---------------------------------------- ,
(State legal designation, such as corporation, individual, etc.) 
residing at ------------------------------ and doing business under the 
laws of the State of ------------, hereby appoints______________________
________________________________________________________________________
    (Name, legal designation, and address)
as a true and lawful agent and attorney of the principal named above 
with full power and authority to do and perform every lawful act and 
thing the said agent and attorney may deem requisite and necessary to be 
done for and on behalf of the said principal without limitation of any 
kind as fully as said principal could do if present and acting, and 
hereby ratify and confirm all that said agent and attorney shall 
lawfully do or cause to be done by virtue of these presents until and 
including ------------, (date) or until notice of revocation in writing 
is duly given before that date.
    Date --------------------, 19----;.

[[Page 14]]

________________________________________________________________________
                                                 (Principal's signature)



Sec. 141.33  Alternative form for noncommercial shipment.

    An individual (but not a partnership, association, or corporation) 
who is not a regular importer may appoint another individual as his 
unpaid agent for Customs purposes by executing a power of attorney 
applicable to a single noncommercial shipment by writing, printing, or 
stamping on the invoice, or on a separate paper attached thereto, the 
following statement:

--------------------------; of
 (Name)
________________________________________________________________________
 (Address)
is hereby authorized to execute, as an unpaid agent who has knowledge of 
the facts, pursuant to the provisions of section 485(f), Tariff Act of 
1930, as amended, the consignee's and owner's declarations provided for 
in section 485 (a) and (d), Tariff Act of 1930, as amended, and to enter 
on my behalf or for my account the goods described in the attached 
invoice which contains a true and complete statement of the facts 
concerning the shipment.
    Date ------------------, 19----.
________________________________________________________________________
                                                 (Signature of importer)
________________________________________________________________________
                                                               (Address)



Sec. 141.34  Duration of power of attorney.

    Powers of attorney issued by a partnership shall be limited to a 
period not to exceed 2 years from the date of execution. All other 
powers of attorney may be granted for an unlimited period.

[T.D. 84-93, 49 FR 17754, Apr. 25, 1984]



Sec. 141.35  Revocation of power of attorney.

    Any power of attorney shall be subject to revocation at any time by 
written notice given to and received by the port director.



Sec. 141.36  Nonresident principals in general.

    A power of attorney executed by a nonresident principal shall not be 
accepted unless the agent designated thereby is a resident and is 
authorized to accept service of process against such nonresident.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 84-93, 49 FR 
17754, Apr. 25, 1984]



Sec. 141.37  Additional requirements for nonresident corporations.

    If a nonresident corporation has not qualified to conduct business 
under state law in the state in which Customs district the agent is 
empowered to perform the delegated authority, the power of attorney 
shall be supported by documentation establishing the authority of the 
grantor designated to execute the power of attorney on behalf of the 
corporation.

[T.D. 84-93, 49 FR 17754, Apr. 25, 1984]



Sec. 141.38  Resident corporations.

    A power of attorney shall not be required if the person signing 
Customs documents on behalf of a resident corporation is known to the 
port director to be the president, vice president, treasurer, or 
secretary of the corporation. When a power of attorney is required for a 
resident corporation, it shall be executed by a person duly authorized 
to do so.

[T.D. 84-93, 49 FR 17754, Apr. 25, 1984]



Sec. 141.39  Partnerships.

    (a)(1) General. A power of attorney granted by a partnership shall 
state the names of all members of the partnership. One member of the 
partnership may execute a power of attorney in the name of the 
partnership for the transaction of all its Customs business.
    (2) Limited partnership. A power of attorney granted by a limited 
partnership need only state the names of the general partners who have 
authority to bind the firm unless the partnership agreement provides 
otherwise. A copy of the partnership agreement must accompany the power 
of attorney. For this purpose, a partnership or limited partnership 
means any business association recognized as such under the laws of the 
state where the association is organized.
    (b) Change in partners. When a new firm is formed by a change in 
membership, no power of attorney filed by the

[[Page 15]]

antecedent firm shall thereafter be recognized for any Customs purpose.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 86-204, 51 
FR 42999, Nov. 28, 1986]



Sec. 141.40  Trusteeships.

    A trustee may execute a power of attorney for the transaction of 
Customs business incident to the trusteeship.



Sec. 141.41  Surety on Customs bonds.

    Powers of attorney to sign as surety on Customs bonds are subject to 
the requirements set forth in part 113 of this chapter.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 74-227, 39 
FR 32023, Sept. 4, 1974]



Sec. 141.42  Protests.

    Powers of attorney to file protests are subject to the requirements 
set forth in Sec. 174.3 of this chapter.



Sec. 141.43  Delegation to subagents.

    (a) Resident principals. Except as otherwise provided for in 
paragraph (c) of this section, the holder of a power of attorney for a 
resident principal cannot appoint a subagent except for the purpose of 
executing shippers' export declarations. A subagent so appointed cannot 
delegate his power.
    (b) Nonresident principals. Except as otherwise provided for in 
paragraph (c) of this section, an agent who has power of attorney for a 
nonresident principal may execute a power of attorney delegating 
authority to a subagent only if the original power of attorney contains 
express authority from the principal for the appointment of a subagent 
or subagents. Any subagent so appointed must be a resident authorized to 
accept service of process in accordance with Sec. 141.36.
    (c) Customhouse brokers. A power of attorney executed in favor of a 
licensed customhouse broker may specify that the power of attorney is 
granted to the broker to act through any of its licensed officers or 
authorized employees as provided in part 111 of this chapter.



Sec. 141.44  Designation of Customs ports in which power of attorney is valid.

    Unless a power of attorney specifically authorizes the agent to act 
thereunder at all Customs ports, the name of each port where the agent 
is authorized to act thereunder shall be stated in the power of 
attorney. The power of attorney shall be filed with any port director, 
in a sufficient number of copies for distribution to each port where the 
agent is to act, unless exempted from filing by Sec. 141.46. The port 
director with whom a power of attorney is filed, irrespective of whether 
his port is named therein, shall approve it, if it is in the correct 
form and the provisions of this subpart are complied with, and forward 
any copies intended for other ports as appropriate.



Sec. 141.45  Certified copies of power of attorney.

    Upon request of a party in interest, a port director having on file 
an original power of attorney document (which is not limited to 
transactions in a specific Customs location) will forward a certified 
copy of the document to another port director.

[T.D. 95-77, 60 FR 50020, Sept. 27, 1995]



Sec. 141.46  Power of attorney retained by customhouse broker.

    Before transacting Customs business in the name of his principal, a 
customhouse broker is required to obtain a valid power of attorney to do 
so. He is not required to file the power of attorney with a port 
director. Customhouse brokers shall retain powers of attorney with their 
books and papers, and make them available to representatives of the 
Department of the Treasury as provided in subpart C of part 111 of this 
chapter.



      Subpart D_Quantity of Merchandise To Be Included in an Entry



Sec. 141.51  Quantity usually required to be in one entry.

    All merchandise arriving on one conveyance and consigned to one 
consignee must be included on one entry, except as provided in Sec. 
141.52. In addition, a shipment of merchandise that

[[Page 16]]

arrives by separate conveyances at the same port of entry in multiple 
portions, either as a shipment split by the carrier or as components of 
a large unassembled or disassembled entity, may be processed under a 
single entry, as prescribed, respectively, in Sec. Sec. 141.57 and 
141.58.

[CBP Dec. 06-11, 71 FR 31925, June 2, 2006]



Sec. 141.52  Separate entries for different portions.

    If the port director is satisfied that there will be no prejudice 
to: Import admissibility enforcement efforts; the revenue; and the 
efficient conduct of Customs business, separate entries may be made for 
different portions of all merchandise arriving on one vessel or vehicle 
and consigned to one consignee under any of the following circumstances:
    (a) Each portion of a consolidated shipment addressed to one 
consignee for various ultimate consignees may be entered separately 
under the procedure set forth in Sec. 141.54.
    (b) One or more of the enclosed packages in a packaged package may 
be entered separately under any appropriate form of formal or informal 
entry. No entry is required for an enclosed package which contains 
merchandise unconditionally free of duty and not exceeding $250 in 
value. A packed package is an outer package in which are contained inner 
packages addressed for delivery to two or more different persons, as 
described in section 484(f), Tariff Act of 1930, as amended (19 U.S.C. 
1484(f)). Each outer container shall be marked to indicate that it is a 
packed package.
    (c) The consignee desires to enter different portions under 
different forms of entry, for transportation to different ports of 
entry, or for warehousing in separate warehouses.
    (d) Appraisement is being withheld upon merchandise of the class or 
kind for which a separate entry is tendered.
    (e) The several portions of the consignment for which separate 
entries are tendered are covered by separate bills of lading.
    (f) The consignment consists of different classes of merchandise 
which are to be processed by different Customs commodity specialist 
teams.
    (g) The consignment contains merchandise subject to entry under a 
bond given to assure accounting for final disposition, such as a 
temporary importation under bond.
    (h) The consignment consists of different importations which arrived 
under a consolidated entry for immediate transportation made pursuant to 
Sec. 18.11(g) of this chapter.
    (i) A special application is submitted to the Commissioner of 
Customs with the recommendation of the port director concerned and is 
approved by the Commissioner.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 84-171, 49 
FR 31253, Aug. 3, 1984; T.D. 84-213, 49 FR 41184, Oct. 19, 1984; T.D. 
85-38, 50 FR 8723, Mar. 5, 1985]



Sec. 141.53  Procedure for separate entries.

    When separate entries for one consignment are made in accordance 
with Sec. 141.52 (b) through (i), the following procedures shall apply:
    (a) The entries shall be presented simultaneously when practicable.
    (b) A separate consignee's declaration shall be filed for each 
entry.
    (c) Each entry shall cover whole packages or not less than 1 ton of 
bulk merchandise, except when a portion of the merchandise is entered 
under a temporary importation bond in accordance with Chapter 98, 
Subchapter XIII, Harmonized Tariff Schedule of the United States (19 
U.S.C. 1202).
    (d) When separate entries are made for merchandise covered by a 
single bill of lading or air waybill, the provisions of Sec. 141.54 
shall be complied with, except that the endorsement on the bill of 
lading or air waybill required by Sec. 141.54(b) shall read as follows:

    As portions of the within-described merchandise will be covered by 
separate entries, the undersigned consignee expressly waives the right 
granted by section 484(j), Tariff Act of 1930, as amended, to have this 
bill of lading or air waybill returned.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-394, 43 
FR 49788, Oct. 25, 1978; T.D. 89-1, 53 FR 51256, Dec. 21, 1988]

[[Page 17]]



Sec. 141.54  Separate entries for consolidated shipments.

    When separate entries for consolidated shipments are made in 
accordance with Sec. 141.52(a), the following procedures shall apply 
except where the merchandise is released directly to the carrier in 
accordance with Sec. 141.11(b):
    (a) Deposit of evidence of right to make entry. The nominal 
consignee of a consolidated shipment covering merchandise for various 
ultimate consignees who desire to make separate entries shall deposit 
with the port director evidence of the right to make entry as set forth 
in Sec. 141.11(a), and such evidence shall be permanently retained by 
the port director.
    (b) Waiver of right to have bill of lading or air waybill returned. 
If a bill of lading or air waybill is filed, it shall contain the 
following endorsement signed by the consignee named therein:

    As the within-described merchandise belongs to various ultimate 
consignees who desire to make separate entries therefor, the undersigned 
consignee thereof hereby expressly waives the right granted by section 
484(j), Tariff Act of 1930, as amended, to have this bill of lading or 
air waybill returned.

    (c) Certificate by nominal consignee. Except when an authority to 
make entry for a portion of a consolidated shipment is executed on the 
entry form in the space provided, at the time of depositing the bill of 
lading, air waybill, or other document, the named consignee shall 
produce a certificate prepared and signed by him for each portion of the 
shipment for which separate entry is desired. The authority to make 
entry carried by such a certificate may be transferred by endorsement. 
The certificate shall be in the following form:

                                                    Port of ------------
                                        ------------------------, 19----

                         Authority To Make Entry

    Of merchandise imported at ------------------------, 19----, per --
----------, from ------------ shipped by ------------, consigned to ----
--------, endorsed to ------------, covered by \1\------------ dated --
----------, 19----, at ------------ on file with the port director at --
----------.
---------------------------------------------------------------------------

    \1\ Insert ``bill of lading,'' ``air waybill,'' ``certified 
duplicate bill of lading,'' ``certified duplicate air waybill,'' 
``carrier's certificate,'' or ``shipping receipt.''

------------------------------------------------------------------------
       Marks                 Numbers                 Description
------------------------------------------------------------------------
 
 
 
 
------------------------------------------------------------------------

    (We) (I) ------------------------, the consignee(s) in the above-
mentioned document covering merchandise for various ultimate consignees, 
hereby authorize ------------ or order to make Customs entry for the 
above described merchandise.
________________________________________________________________________
                                                          (Consignee(s))

    (d) Verification of certificate. When a certificate on a separate 
document as described in paragraph (c) of this section is presented, it 
shall be compared with the supporting document and after being initialed 
by the ministerial clerk shall be returned to the consignee for 
transmittal to the person who will make entry. When an entry is received 
having executed in the space provided thereon an authority to make entry 
for a portion of a consolidated shipment, such authority shall be 
compared with the supporting document.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-394, 43 
FR 49788, Oct. 25, 1978]



Sec. 141.55  Single entry summary for shipments arriving under one transportation entry.

    Except for merchandise subject to a quantitative or tariff-rate 
quota, port directors are authorized to accept one entry summary for 
consumption or for warehouse for the entire quantity of merchandise 
covered by an entry for immediate transportation after the arrival of 
any part of the merchandise at the port of destination or at a place of 
deposit outside the port as may be authorized in accordance with Sec. 
18.11(c) of this chapter.

[T.D. 79-221, 44 FR 46817, Aug. 9, 1979]

[[Page 18]]



Sec. 141.56  Single entry summary for multiple transportation entries consigned to the same consignee.

    (a) Requirement. Port directors may accept one entry summary for 
consumption or for warehouse for merchandise covered by multiple entries 
for immediate transportation, subject to the requirements of Sec. 
142.17(a) of this chapter, provided the merchandise covered by each 
immediate transportation entry is released at the port of destination 
under a separate entry, in accordance with Sec. 142.3 of this chapter.
    (b) Limitation. A single entry summary for multiple transportation 
entries shall not be accepted for any merchandise listed in Sec. 
142.17(b) of this chapter.
    (c) Information on the entry summary. Each entry for immediate 
transportation shall be identified separately on the entry summary by 
the immediate transportation entry number and the corresponding entry 
number.

[T.D. 79-221, 44 FR 46817, Aug. 9, 1979]



Sec. 141.57  Single entry for split shipments.

    (a) At election of importer of record. At the election of the 
importer of record, Customs may process a split shipment, pursuant to 
section 484(j)(2), Tariff Act of 1930 (19 U.S.C. 1484(j)(2)), under a 
single entry, as prescribed under the procedures set forth in this 
section.
    (b) Split shipment defined. A ``split shipment'', for purposes of 
this section, means a shipment:
    (1) Which may be accommodated on a single conveyance, and which is 
delivered to and accepted by a carrier in the exporting country under 
one bill of lading or waybill, and is thus intended by the importer of 
record to arrive in the United States as a single shipment;
    (2) Which is thereafter divided by the carrier, acting on its own, 
into different portions which are transported and consigned to the same 
party in the United States; and
    (3) Of which the first portion and all succeeding portions arrive at 
the same port of entry in the United States, as listed in the original 
bill of lading or waybill; and all the succeeding portions arrive at the 
port of entry within 10 calendar days of the date of the first portion. 
If any portion of the shipment arrives at a different port, such portion 
must be transported in-bond to the port of destination where entry of 
the shipment is made.
    (c) Notification by importer of record. The importer of record must 
notify Customs, in writing, that the shipment has been split at the 
carrier's initiative, that the remainder of the shipment will arrive by 
subsequent conveyance(s), and that an election is being made to file a 
single entry for all portions. The required notification must be given 
as soon as the importer of record becomes aware that the shipment has 
been split, but in all cases notification must be made before the entry 
summary is filed.
    (d) Entry or special permit for immediate delivery. In order to make 
a single entry for a split shipment or obtain a special permit for the 
release of a split shipment under immediate delivery, an importer of 
record may follow the procedure prescribed in paragraph (d)(1) or (d)(2) 
of this section, as applicable.
    (1) Entry or special permit after arrival of entire shipment. An 
importer of record may file an entry at such time as all portions of the 
split shipment have arrived at the port of entry (see paragraph (b)(3) 
of this section). In the alternative, again after the arrival of all 
portions of a split shipment at the port of entry, the importer of 
record may instead file a special permit for immediate delivery provided 
that the merchandise is eligible for such a permit under Sec. 
142.21(a)--(f) and (h) of this chapter. In either case, the importer of 
record must file Customs Form (CF) 3461 or CF 3461 alternate (CF 3461 
ALT) as appropriate, or electronic equivalent, with Customs. The entry 
or special permit must indicate the total number of pieces in, as well 
as the total value of, the entire shipment as reflected on the 
invoice(s) covering the shipment.
    (2) Special permit prior to arrival of entire shipment. As provided 
in Sec. 142.21(g) of this chapter, an importer of record may also file 
a special permit for immediate delivery after the arrival of the first 
portion of a split shipment at the port of entry (see paragraph (b)(3) 
of this section), but before the arrival of the entire shipment at such 
port, thus qualifying the split shipment for

[[Page 19]]

incremental release, under paragraph (e) of this section, as each 
portion of the shipment arrives at the port of entry (see paragraph 
(g)(2)(ii) of this section). In such case, a CF 3461 or CF 3461 ALT as 
appropriate, or electronic equivalent, must be filed with Customs. As 
each portion arrives at the port of entry, the importer of record must 
submit a copy of the CF 3461/CF 3461 ALT, adjusted to reflect the 
quantity of that particular portion relative to the quantity contained 
in the entire split shipment (see paragraph (b)(1) of this section); 
however, if both the carrier and the importer of record are automated, 
such adjustments may instead be made electronically through the Customs 
ACS (Automated Commercial System). In the event that an entry has been 
pre-filed with Customs (see Sec. 142.2(b) of this chapter), 
notification to Customs by the importer of record that a single entry 
will be filed for shipments released incrementally will serve as a 
request that the pre-filed entry be converted to an application for a 
special permit for immediate delivery (see Sec. 142.21(g) of this 
chapter). The special permit must indicate the total number of pieces 
in, as well as the total value of, the entire shipment as reflected on 
the invoice(s) covering the shipment. Customs may limit the release of 
each portion of the split shipment upon arrival at the port of entry, as 
permitted under this paragraph, due to the need to examine the 
merchandise in accordance with paragraph (f) of this section.
    (e) Release. To secure the separate release upon arrival of each 
portion of a split shipment at the port of destination under paragraph 
(d)(2) of this section, the carrier responsible for initially splitting 
the shipment must present to Customs, either on a paper manifest or 
through an authorized electronic data interchange system, manifest 
information relating to the shipment that reflects exact information for 
each portion of the split shipment. The carrier responsible for 
splitting the shipment must notify other obligated entities (such as 
another carrier or freight forwarder) that have submitted electronic 
manifest information to Customs about the shipment that was split so 
that these parties can update their manifest information to Customs.
    (f) Examination. Customs may require examination of any or all parts 
of the split shipment. For split shipments subject to the immediate 
delivery procedure of paragraph (d)(2) of this section, Customs reserves 
the right to deny incremental release should such an examination of the 
merchandise be necessary. The denial of incremental release does not 
preclude the use of the procedures specified in paragraph (d)(1) of this 
section.
    (g) Entry summary--(1) Entry. For merchandise entered under 
paragraph (d)(1) of this section, the importer of record must file an 
entry summary within 10 working days from the time of entry.
    (2) Release for immediate delivery--(i) Release under paragraph 
(d)(1) of this section. For merchandise released under a special permit 
for immediate delivery pursuant to paragraph (d)(1) of this section, the 
importer of record must file the entry summary, which serves as both the 
entry and the entry summary, within 10 working days after the 
merchandise or any part of the merchandise is authorized for release 
under the special permit or, for quota class merchandise, within the 
quota period, whichever expires first (see Sec. 142.23 of this 
chapter).
    (ii) Release under paragraph (d)(2) of this section. For merchandise 
released under a special permit for immediate delivery pursuant to 
paragraph (d)(2) of this section, the importer of record must file the 
entry summary, which serves as both the entry and the entry summary, 
within 10 working days from the date of the first release of a portion 
of the split shipment. The filed entry summary must reflect all portions 
of the split shipment which have been released, to include quantity, 
value, correct classification and rate of duty. The entry summary cannot 
include any portions of the split shipment which have not been released.
    (3) Duty payment. With the entry summary filed under paragraphs 
(g)(1) and (g)(2)(i) and (g)(2)(ii) of this section, the importer of 
record must attach estimated duties, taxes and fees applicable to the 
released merchandise.

[[Page 20]]

If the entry summary is filed electronically, the estimated duties, 
taxes and fees must be scheduled for payment at such time pursuant to 
the Automated Clearinghouse (see Sec. 24.25 of this chapter).
    (h) Classification. For purposes of section 484(j)(2), Tariff Act of 
1930 (19 U.S.C. 1484(j)(2)), the merchandise comprising the separate 
portions of a split shipment included on one entry will be classified as 
though imported together.
    (i) Separate entry required--(1) Untimely arrival. The importer of 
record must enter separately those portions of a split shipment that do 
not arrive at the port of entry within 10 calendar days of the portion 
that arrived there first (see paragraph (b)(3) of this section).
    (2) Different rates of duty for identically classified merchandise. 
An importer of record will be required to file a separate entry for any 
portion of a split shipment if necessary to preclude the application of 
different rates of duty on a split shipment entry for merchandise that 
is classifiable under the same subheading of the Harmonized Tariff 
Schedule of the United States (HTSUS).
    (j) Requirement of importer of record to review entry and maintain 
evidence substantiating splitting of shipment--(1) Review of entry. The 
importer of record will be responsible for reviewing the total 
manifested quantity shown on the CF 3461/CF 3461 ALT, or electronic 
equivalent, in relation to all portions of the split shipment that 
arrived at the port of entry under paragraph (b)(3) of this section 
within the specified 10 calendar day period. At the conclusion of the 
specified 10 calendar day period, the importer of record must make any 
adjustments necessary to reflect the actual amount, value, correct 
classification and rate of duty of the merchandise that was released 
incrementally under the split shipment procedures. If all portions of 
the split shipment do not arrive within the required 10 calendar day 
period, the importer of record must file an additional entry or entries 
as appropriate to cover any remaining portions of the split shipment 
that subsequently arrive (see paragraph (i)(1) of this section).
    (2) Evidence for splitting of shipment; recordkeeping. The importer 
of record must maintain sufficient documentary evidence to substantiate 
that the splitting of the shipment was done by the carrier acting on its 
own, and not at the request of the foreign shipper and/or the importer 
of record. This documentation should include a copy of the originating 
bill of lading or waybill under which the shipment was delivered to the 
carrier in the country of exportation or other supporting documentary 
evidence, such as a letter from the carrier confirming that the 
splitting of the shipment was done by the carrier on its own initiative. 
This documentary evidence as well as all other necessary records 
received or generated by or on behalf of the importer of record under 
this section must be maintained and produced, if requested, in 
accordance with part 163 of this chapter.
    (k) Single entry limited; exclusions from single entry under 
incremental release procedure--(1) Quota/visa merchandise. Merchandise 
subject to quota and/or visa requirements is excluded from incremental 
release under the immediate delivery procedure set forth in paragraph 
(d)(2) of this section and Sec. 142.21(g) of this chapter. 
Additionally, if by splitting a shipment any portion of it is subject to 
quota, no portion of the split shipment may be released incrementally.
    (2) Other merchandise. In addition, the port director may deny the 
use of the incremental release procedure set forth in paragraph (d)(2) 
of this section and Sec. 142.21(g) of this chapter, as circumstances 
warrant.
    (3) Limited single entry available. For merchandise described in 
paragraphs (k)(1) and (k)(2) of this section, that is excluded from the 
immediate delivery procedure of paragraph (d)(2) of this section and 
Sec. 142.21(g) of this chapter, the importer of record may still file a 
single entry or special permit for immediate delivery under paragraph 
(d)(1) of this section covering the entire split shipment of such 
merchandise following, and to the extent of, its arrival within the 
required 10 calendar day period.

[T.D. 03-09, 68 FR 8719, Feb. 25, 2003]

[[Page 21]]



Sec. 141.58  Single entry for separately arriving portions of unassembled or disassembled entities.

    (a) At election of importer of record. At the election of the 
importer of record, an unassembled or disassembled entity arriving on 
multiple conveyances as contemplated under section 484(j)(1), Tariff Act 
of 1930 (19 U.S.C. 1484(j)(1)), may be processed as a single entry, as 
prescribed under the procedures set forth in this section.
    (b) Unassembled or disassembled entities covered. An unassembled or 
disassembled entity for purposes of this section is an entity which:
    (1) Cannot, due to its size or nature, be shipped on a single 
conveyance, and is thus imported in an unassembled or disassembled 
condition;
    (2) Is ordered, invoiced and is classifiable under the Harmonized 
Tariff Schedule of the United States (HTSUS), as a single entity and is 
consigned to one person in the United States;
    (3) Is imported on more than one conveyance to the same port of 
entry in the United States; and
    (4) Involves the first portion and all succeeding portions arriving 
at the same United States port of entry within either:
    (i) 15 calendar days after the unlading of the first portion or 
arrival at the destination port if transported in bond for entities 
entered under the ``hold all'' method permitted in paragraph (d)(1) of 
this section; or
    (ii) 10 calendar days after the release of the first portion under 
special permit procedures for entities released incrementally as 
permitted in paragraph (d)(2) of this section.
    (c) Application by importer. The importer of record must apply to 
file a single entry covering an entity described in paragraph (b) of 
this section. Applications may be made either by appropriately 
annotating a Customs and Border Protection (CBP) Form 3461, CBP Form 
3461 ALT, or electronic equivalent, or by submitting a letter to CBP. 
The required application must be made no later than 5 working days in 
advance of the arrival of the first conveyance. Justification for the 
need for more than one conveyance must be provided in the application, 
which must include an affirmative statement that the entity cannot, due 
to its size or nature, be shipped on one conveyance. A copy of the 
relevant invoice or purchase order, or electronic equivalent, must 
accompany the application, along with the proposed appropriate single 
tariff number under the HTSUS. The port director will notify the 
applicant of the approval or denial of the application within 3 working 
days of the receipt of the application.
    (d) Entry or special permit for immediate delivery. In order to make 
a single entry for portions of an entity covered under this section that 
arrive at different times, an importer of record must follow the 
procedure prescribed in paragraphs (d)(1) or (d)(2) of this section, as 
applicable.
    (1) Entry or special permit after arrival of all portions (Hold 
All). An importer may file an entry at such time as all portions of the 
entity have arrived at the same port of entry in the United States. Any 
portion that arrives at a different port must be transported in-bond to 
the destination port where entry will be made. In the alternative, the 
importer may file a special permit for immediate delivery after arrival 
of all portions of the entity provided that it is eligible for such a 
permit under Sec. 142.21(a)-(d), (f) and (i) of this chapter.
    (2) Special permit for immediate delivery after arrival of first 
portion (Incremental Release). As provided in Sec. 142.21(h) of this 
chapter, an importer of record may file an application for a special 
permit for immediate delivery after the arrival of the first portion of 
the entity covered by paragraph (b) of this section, and its remaining 
portions may be released incrementally pursuant to the requirements set 
forth in paragraph (e) of this section. All portions of the shipment 
must timely arrive at the same port of entry in the United States. Any 
portion that arrives at a different port must be transported in-bond to 
the destination port where entry will be made.
    (e) Release. If an importer wishes to secure release of an entity 
under paragraph (d)(1) of this section after the entity's arrival, the 
importer must file with CBP a CBP Form 3461 or CBP

[[Page 22]]

Form 3461 ALT, as appropriate, or electronic equivalent. To secure the 
separate release upon arrival of each portion of a shipment under 
paragraph (d)(2) of this section, the importer must file with CBP a CBP 
Form 3461 or CBP Form 3461 ALT, as appropriate, or electronic equivalent 
after arrival of the first portion. As each successive portion arrives, 
the importer must submit a copy of the originally submitted CBP Form 
3461/CBP Form 3461 ALT, annotated to specifically identify that 
particular portion. The CBP Form 3461/CBP Form 3461 ALT must indicate 
the order of the arriving portion in relation to the entire shipment as 
reflected on the invoice (for example, third of six portions). If both 
the carrier and the importer are automated, such adjustments may be made 
electronically through the CBP Automated Commercial System (ACS). The 
release of each portion upon arrival as permitted under this paragraph 
may be restricted due to CBP's need to examine the merchandise in 
accordance with paragraph (f) of this section. In addition, the importer 
of record must present to CBP either on paper or through an authorized 
electronic equivalent, specific and detailed information supplementing 
the CBP Form 3461 or 3461 ALT, relating to the merchandise on each 
conveyance which reflects exact information for that portion of the 
ordered entity (for example, detailed packing lists).
    (f) Examination. CBP may require examination of any or all portions 
of the entity. CBP reserves the right to deny the release of each 
portion of such shipments as they arrive (i.e., incremental release) 
should such an examination of the merchandise be necessary. The denial 
of incremental release does not preclude the use of the procedures 
specified in paragraph (d)(1) of this section.
    (g) Entry summary. (1) For merchandise entered under paragraph 
(d)(1) of this section, an entry summary must be filed within 10 working 
days from the time of entry. For merchandise released under a special 
permit for immediate delivery, the entry summary, which serves as both 
the entry and entry summary, must be filed within 10 working days after 
the first portion of the entity is authorized for release under the 
special permit.
    (2) For merchandise released under a special permit for immediate 
delivery pursuant to paragraph (d)(2) of this section, the entry 
summary, which serves as both the entry and the entry summary, must be 
filed within 10 working days from the date of the first release of a 
portion of the unassembled or disassembled entity. However, the entry/
entry summary for the entity cannot be filed before the last portion of 
the entity which is to be included on the entry has arrived.
    (3) Duty payment. At the time the entry summary is filed under 
paragraphs (g)(1) and (g)(2) of this section, estimated duties, taxes 
and fees must be attached. If the entry summary is filed electronically, 
the estimated duties, taxes and fees must be scheduled for payment at 
such time pursuant to the Automated Clearinghouse procedures (see 19 CFR 
24.25).
    (h) Classification. Except as provided in paragraph (j) of this 
section, for purposes of section 484(j)(1), Tariff Act of 1930 (19 
U.S.C. 1484(j)(1)), the merchandise comprising the separate portions of 
an entity covered by paragraph (b) of this section included on one entry 
will be classified as though imported together. Any spare parts 
accompanying a portion of an entity must be classified and entered 
separately.
    (i) When separate entry and entry summary required. When all 
portions of an entity do not arrive at the port of entry within the time 
constraints of paragraphs (b)(4)(i) and (ii) of this section, as 
applicable, a separate entry and entry summary must be filed for each 
portion that has already arrived, and for each portion that subsequently 
will arrive on separate conveyances. The merchandise included on each 
separate entry shall be classified in its condition as imported. Each 
entry would reflect the quantities, values, classifications and rates of 
duty, as appropriate, of the various components conveyed in each 
shipment, and not the value or classification of the ordered single 
entity.
    (j) Exclusions. Merchandise subject to quota and/or visa 
requirements is entirely excluded from the procedures set

[[Page 23]]

forth in this section. Also, CBP reserves the right for the port 
director to deny use of the incremental release procedure and only 
release the shipment in its entirety as circumstances warrant, such as 
in the case where a particular shipment has been selected for 
examination.

[CBP Dec. 06-11, 71 FR 31925, June 2, 2006]



                 Subpart E_Presentation of Entry Papers



Sec. 141.61  Completion of entry and entry summary documentation.

    (a) Preparation. (1) Entry and entry summary documentation shall be 
prepared on a typewriter, or with ink, indelible pencil, or other 
permanent medium. The entry summary shall be signed by the importer (see 
Sec. 101.1 of this chapter). Entries, entry summaries, and accompanying 
documentation shall be on the appropriate forms specified by the 
regulations and shall set forth clearly all required information. All 
copies shall be legible.
    (2) An importer may omit from entry summary, Customs Form 7501, the 
marks and numbers previously provided for packages released or 
withdrawn.
    (b) ``Signing of the entry''. The signing of the consignee's 
declaration on the entry summary for merchandise entered for 
consumption, for warehouse, or for temporary importation under bond, in 
accordance with Sec. 141.19, shall be regarded as the ``signing of the 
entry'' required by section 484(d), Tariff Act of 1930, as amended (19 
U.S.C. 1484(d)). For a rewarehouse or a bonded manufacturing warehouse 
entry, the signing of the consignee's declaration on the entry 
documentation shall satisfy 19 U.S.C. 1484(d).
    (c) Identification number for merchandise subject to an antidumping 
or countervailing duty order. The entry summary filed for merchandise 
subject to an antidumping or countervailing duty order shall include the 
unique identifying number assigned by the Department of Commerce, 
International Trade Administration. Any entry summary filed for 
merchandise subject to an antidumping or countervailing duty order not 
containing the identifying number shall be rejected.
    (d) Importer number. The importer number shall be reported on 
Customs Form 7501 as follows:
    (1) Generally. Except as provided in paragraph (d)(2) of this 
section, the importer number of the importer of record and the consignee 
number of the ultimate consignee shall be reported for each entry 
summary and for each drawback entry. When the importer of record and the 
ultimate consignee are the same, the importer number may be entered in 
both spaces provided on Customs Form 7501 (boxes 10 and 12) or the 
importer number may be entered in the space provided for the importer 
(box 12) and the word ``SAME'' may be entered in the space provided for 
the ultimate consignee (box 10).
    (2) Exception. In the case of a consolidated entry summary covering 
the merchandise of more than one ultimate consignee, the importer number 
shall be reported on Customs Form 7501 (box 12) and the notation 
``CONSOLIDATED'' shall be made in the space provided for the consignee 
number (box 10).
    (3) When refunds, bills, or notices of liquidation are to be mailed 
to agent. If an importer of record desires to have refunds, bills, or 
notices of liquidation mailed in care of his agent, the agent's importer 
number shall be reported on Customs Form 7501 in the box designated 
``Reference No'' (box 22). In this case, the importer of record shall 
file, or shall have filed previously, a Customs Form 4811 authorizing 
the mailing of refunds, bills, or notices of liquidation to the agent.
    (4) Broker No. If a broker is used, the broker's number shall be 
reported in the appropriate location on Customs Form 7501.
    (e) Statistical information--(1) Information required on entry 
summary or withdrawal form--(i) Where form provides space--(A) Single 
invoice. For each class or kind of merchandise subject to a separate 
statistical reporting number, the applicable information required by the 
General Statistical Notes, Harmonized Tariff Schedule of the United 
States (HTSUS), shall be shown on the entry summary, Customs Form 7501; 
the transportation entry and manifest

[[Page 24]]

of goods, Customs Form 7512, when used to document an incoming vessel 
shipment proceeding to a third country by means of an entry for 
transportation and exportation, or immediate exportation.
    (B) Multiple invoices. If a class or kind of merchandise from the 
same country of origin subject to the same statistical reporting number 
is included in more than one invoice, the importer may, at his option 
(1) list each invoice separately on the appropriate form listed under 
paragraph (e)(1)(i)(A) of this section and for each class or kind of 
merchandise within each invoice subject to a separate statistical 
reporting number, report the applicable information required by the 
General Statistical Notes, HTSUS; or (2) combine the information for 
each class or kind of merchandise and report it under one statistical 
reporting number for all invoices. When consolidating information from 
several invoices under one reporting number, a worksheet itemizing the 
entered value of the merchandise from each invoice in the manner 
prescribed in paragraph (f)(2)(ii) of this section shall be attached to 
the appropriate form.
    (ii) Where form does not provide space. In addition to the 
information required by paragraph (e)(1)(i) of this section, statistical 
information for which spaces are not provided on the appropriate form, 
shall be shown as follows:
    (A) The name, the abbreviated designation or 4 digit code of the 
country of registry (flag) of the vessel expressed in terms of Annex B, 
HTSUS, shall be placed in the block on the entry document for the name 
of the importing vessel or carrier.
    (B) The notation ``Y'' or ``N'' as appropriate, shall be placed in 
column 33 of Customs Form 7501, and in the top right hand portion of 
Customs Form 7519, to identify the transaction as one between a buyer 
and a seller who are related in any manner, or as one between a buyer 
and a seller who are not so related.
    (C) The charges (aggregate cost of freight, insurance and all other 
charges), shall be listed on Customs Form 7501 in column 33. The charges 
shall be listed on Customs Form 7519 in the rate column.
    (2) Responsibility. The person filing the form is responsible for 
providing the information required by paragraph (e)(1) of this section. 
If the information required by subparagraph General Statistical Note 
1(a)(xiv)(xvii), HTSUS, cannot be obtained readily, the person filing 
the form shall provide reasonable estimates of the required information. 
The acceptance of an estimate for a particular transaction does not 
relieve the person filing the form from obtaining the necessary 
information for similar future transactions. The port director may 
require additional documentation to substantiate the statistical 
information required by paragraph (e)(1) of this section. The importer 
shall give an appropriate bond for the production of the required 
documentation, as follows:
    (i) Except for merchandise entered for warehouse, the documentation 
shall be produced within 50 days after the entry summary (or the entry, 
if there is no entry summary) is required to be filed.
    (ii) If merchandise is entered for warehouse, the documentation 
shall be produced within 2 months after the date of withdrawal, except 
that if an invoice is part of the documentation, the invoice shall be 
produced within 50 days after the entry summary for warehouse is 
required to be filed.

The port director may grant a reasonable extension of time to produce 
the required documentation for good cause shown. (See Sec. 141.91(d) 
for bond requirements relating to failure to produce an invoice.)
    (3) Estimates of statistical information. When the person filing the 
form estimates any of the values or charges, as provided for in General 
Statistical Note 1(b)(ii), HTSUS, except Canadian rail and truck 
charges, he shall place either ``(estimate)'', ``(est)'', or (``E'') 
after the amount of each value or charge.
    (4) Rejection of form. The port director shall reject a form for 
failure to provide required statistical information if the information 
is omitted or if the information provided clearly appears on its face, 
or is known to the Customs officer, to be erroneous.
    (5) Penalty procedures; when not invoked. Penalty procedures 
relating to

[[Page 25]]

erroneous statistical information shall not be invoked against any 
person who in good faith attempts to comply with the statistical 
requirements of the General Statistical Note, HTSUS.
    (f) Value of each invoice--(1) Single invoice. If the entry, entry 
summary, or withdrawal documentation, as specified in paragraph 
(e)(1)(i) of this section, covers a single invoice, the invoice 
information shall be restated to show:
    (i) Gross amount of the invoice;
    (ii) Deduction of the aggregate amount of any non-dutiable charges 
involved in the amount;
    (iii) Further deduction of the aggregate of any deductions from the 
invoice values to make entered values; and
    (iv) Addition of the aggregate of any dutiable charges not included 
in the gross amount of the invoice and of any other additions to the 
invoice values to make entered values. The final amount in the summary 
computations shall represent the aggregate of the entered values of all 
the merchandise covered by the invoice. The required information shall 
be shown on a worksheet attached to the form or placed across columns 30 
and 31 on Customs Form 7501 and in the same general location on Customs 
Forms 7505, 7506.
    (2) Multiple invoices. (i) If the importer or his agent elects the 
first option specified in paragraph (e)(1)(i)(B) of this section, the 
information required to be restated by paragraph (f)(1) of this section 
for a single invoice shall be restated for each invoice. The required 
information shall be shown on a worksheet attached to the form or placed 
across columns 30 and 31 on Customs Form 7501.
    (ii) If the importer or his agent elects the second option specified 
in paragraph (e)(1)(i)(B) of this section, the information required to 
be restated by paragraph (f)(1) of this section for a single invoice 
shall be restated for each invoice. The final amount in the summary 
computation shall represent the aggregate of the entered values of all 
the merchandise on each of the multiple invoices. The required 
information shall be shown on an attached worksheet.
    (iii) The worksheet also shall contain:
    (A) A statistical reporting number restatement for the merchandise 
from each invoice subject to the same statistical reporting number from 
the same country of origin, and
    (B) An aggregate total value which represents the entered value.
    (iv) To permit the identification of the merchandise entered under 
each reporting number, each class or kind of merchandise, from one 
country reported under a single statistical reporting number shall be 
coded identically on each invoice and on the worksheet.

[T.D. 79-221, 44 FR 46817, Aug. 9, 1979, as amended by T.D. 81-260, 46 
FR 49841, Oct. 8, 1981; T.D. 84-129, 49 FR 23167, June 5, 1984; T.D. 84-
192, 49 FR 35486, Sept. 10, 1984; T.D. 87-75, 52 FR 20068, May 29, 1987; 
T.D. 89-1, 53 FR 51256, Dec. 21, 1988; T.D. 95-81, 60 FR 52295, Oct. 6, 
1995; T.D. 97-82, 62 FR 51770, Oct. 3, 1997]



Sec. 141.62  Place and time of filing.

    (a) Place. An application for immediate delivery and entry, entry 
summary, or withdrawal documentation shall be filed at the customhouse 
or at any other Customs location approved by the director of the port 
where the merchandise is to be or has been released.
    (b) Time--(1) Normal business hours. (i) Except as provided in 
paragraph (b)(2) of this section, an application for immediate delivery 
or entry documentation shall be filed when the customhouse is open for 
the general transaction of business, or when Customs has established a 
regular tour of duty in accordance with Sec. 101.6(f) of this chapter.
    (ii) Except as provided in paragraph (b)(2) of this section, entry 
summary or withdrawal documentation shall be filed when the customhouse 
is open for the general transaction of business, as provided in Sec. 
101.6 of this chapter.
    (2) Overtime services--(i) Generally. Except as provided in 
paragraph (b)(2)(ii) of this section, an application for immediate 
delivery or entry documentation may be filed when the customhouse is not 
open for the general transaction of Customs business and no regular tour 
of duty has been established;

[[Page 26]]

and entry summary or withdrawal documentation may be filed when the 
customhouse is not open for the general transaction of business, if:
    (A) The person desiring to transact business has applied for and 
received authorization for overtime services on a reimbursable basis, as 
provided for in Sec. 24.16 of this chapter, and
    (B) Overtime services of Customs officers are available.
    (ii) Quota-class merchandise. Overtime shall not be authorized for 
the presentation of entry summary documentation which serves as both the 
entry and entry summary or withdrawal documentation, for quota-class 
merchandise without Headquarters authorization. If Headquarters 
authorization is granted, the time of delivery of the entry summary or 
withdrawal documentation, with the estimated duties attached, or without 
the estimated duties attached, if the entry/entry summary information 
and a scheduled statement date have been successfully received by 
Customs via the Automated Broker Interface, shall be the time of 
presentation for quota purposes. However, if an entry summary or 
withdrawal for quota-class merchandise is delivered inadvertently during 
overtime hours without Headquarters authorization, the time of 
presentation for quota purposes shall be the opening of business on the 
next business day.

[T.D. 79-221, 44 FR 46818, Aug. 9, 1979, as amended by T.D. 89-104, 54 
FR 50498, Dec. 7, 1989]



Sec. 141.63  Submission of entry summary documentation for preliminary review.

    (a) Before arrival of merchandise. Entry summary documentation may 
be submitted at the customhouse for preliminary review, without 
estimated duties attached, within such time before arrival of the 
merchandise as may be fixed by the port director--
    (1) If the entry summary documentation will be filed at time of 
entry to serve as both the entry and the entry summary, as provided in 
Sec. 142.3(b) of this chapter, or
    (2) In the case of quota-class merchandise, if the entry summary for 
consumption will be presented at time of entry, as provided in Sec. 
132.11a of this chapter. Estimated duties shall not be accepted before 
arrival of the merchandise within the port limits.
    (b) After arrival of merchandise. Entry summary documentation may be 
submitted at the customhouse for preliminary review, without estimated 
duties attached, within such time after arrival of quota-class 
merchandise as may be fixed by the port director, if the entry summary 
for consumption will be presented at the opening of the quota period, as 
provided in Sec. 132.12(a) of this chapter. Estimated duties shall not 
be accepted before the opening of the quota period.
    (c) For merchandise entered other than at port of arrival. If 
merchandise is to arrive or has arrived at one port and the importer 
wishes to file his entry documentation at another port to which the 
merchandise is destined, he may do so upon approval of the port director 
at the port of destination. The director of the destination port may 
then authorize release of the merchandise, after its importation at the 
port of arrival, or postpone its release if he believes it is necessary 
for examination or other purposes.

[T.D. 79-221, 44 FR 46819, Aug. 9, 1979, as amended by T.D. 87-78, 52 FR 
24155, June 29, 1987]



Sec. 141.64  Review and correction of entry and entry summary documentation.

    Entry and entry summary documentation may be reviewed before 
acceptance to ensure that all entry and statistical requirements are 
complied with and that the indicated values and rates of duty appear to 
be correct. If any errors are found, the entry and the entry summary 
documentation shall not be considered to have been filed in proper form 
and shall be returned to the importer for correction.

[T.D. 79-221, 44 FR 46819, Aug. 9, 1979, as amended by T.D. 99-64, 64 FR 
43266, Aug. 10, 1999]



Sec. 141.65  [Reserved]



Sec. 141.66  Bond for missing documents.

    Unless otherwise prescribed in these regulations, a bond on Customs 
Form 301, containing the bond conditions set

[[Page 27]]

forth in Sec. 113.62 or Sec. 113.69 of this chapter, as appropriate, 
may be given for the production of any required document which is not 
available at the time of entry. (See Sec. 141.91 for the procedure 
applicable to incomplete or missing invoices.)

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 84-213, 49 
FR 41184, Oct. 19, 1984]



Sec. 141.67  Recall of documentation.

    The importer may recall the entry and entry summary documentation at 
any time before the effective time of entry set forth in Sec. 141.68. 
The entry shall be considered canceled, and documents shall be returned 
to the importer.

[T.D. 79-221, 44 FR 46819, Aug. 9, 1979]



Sec. 141.68  Time of entry.

    (a) When entry documentation is filed without entry summary. When 
the entry documentation is filed in proper form without an entry 
summary, the ``time of entry'' shall be:
    (1) The time the appropriate Customs officer authorizes the release 
of the merchandise or any part of the merchandise covered by the entry 
documentation, or
    (2) The time the entry documentation is filed, if requested by the 
importer on the entry documentation at the time of filing, and the 
merchandise already has arrived within the port limits; or
    (3) The time the merchandise arrives within the port limits, if the 
entry documentation is submitted before arrival, and if requested by the 
importer on the entry documentation at the time of submission.
    (b) When entry summary serves as entry and entry summary. When an 
entry summary serves as both the entry documentation and entry summary, 
in accordance with Sec. 142.3(b) of this chapter, the time of entry 
shall be the time the entry summary is filed in proper form with 
estimated duties attached except as provided in Sec. 142.13(b).
    (c) When merchandise is released under the immediate delivery 
procedure. The time of entry of merchandise released under the immediate 
delivery procedure shall be the time the entry summary is filed in 
proper form, with estimated duties attached.
    (d) Quota-class merchandise. The time of entry for quota-class 
merchandise shall be the time of presentation of the entry summary or 
withdrawal for consumption in proper form, with estimated duties 
attached, or if the entry/entry summary information and a valid 
scheduled statement date (pursuant to Sec. 24.25 of this chapter) have 
been successfully received by Customs via the Automated Broker 
Interface, without the estimated duties attached, as provided in Sec. 
132.11a of this chapter.
    (e) When merchandise has not arrived. Merchandise shall not be 
authorized for release, nor shall an entry or an entry summary which 
serves as both the entry and entry summary be considered filed or 
presented, until the merchandise has arrived within the port limits with 
the intent to unlade.
    (f) Informal mail entry. The time of entry of merchandise under an 
informal mail entry, Customs Form 3419 or 3419A or Customs Form 368 or 
368A, is the time the preparation of the entry documentation by a 
Customs employee is completed.
    (g) Withdrawal from warehouse for consumption. The time of entry of 
merchandise withdrawn from warehouse for consumption (the process 
preparatory to the issuance of a permit for the release of the 
merchandise to or upon the order of the warehouse proprietor) is when:
    (1) Customs Form 7501 is executed in proper form and filed together 
with any related documentation required by these regulations to be filed 
at the time of withdrawal, and
    (2) Estimated duties, if any, required to be paid at the time of 
withdrawal have been deposited.

Unless the requirements of this paragraph and section 315(a), Tariff Act 
of 1930, as amended (19 U.S.C. 1315(a)), including the deposit of 
estimated duties, if any, are completed within 60 days from the date of 
presentation of Customs Form 7501, the request for withdrawal shall be 
considered abandoned.
    (h) Appraisement entry, informal entry, combined entry for 
rewarehouse and withdrawal for consumption, and entry under carnet. The 
time of entry of merchandise under an appraisement entry, or

[[Page 28]]

informal entry, Customs Form 7501, an informal entry, Customs Form 368 
or 368A (serially numbered) (or other form prescribed in Sec. 143.23 or 
elsewhere in the chapter for use as an informal entry), a combined entry 
for rewarehouse and withdrawal for consumption, Customs Form 7519, or an 
A.T.A. carnet issued under part 114 of this chapter, shall be the time 
the specified form is executed in proper form and filed, together with 
any related documents required by these regulations, and estimated 
duties, if any, have been deposited. If merchandise eligible for 
informal entry is released under a special permit for immediate delivery 
and Customs Form 368 or 368A (serially numbered) or 7501 is filed in 
accordance with Sec. 142.23 of this chapter, the time of entry shall be 
the time Customs Form 368 or 368A or 7501 is filed in proper form, 
together with any related documents required by this chapter, and 
estimated duties, if any, have been deposited. However, if merchandise 
eligible for informal entry is released under the entry documentation 
set forth in Sec. 142.3(a) of this chapter and Customs Form 368 or 368A 
(serially numbered) or 7501 is filed in accordance with Sec. 142.23, 
the time of entry shall be in accordance with paragraph (a) of this 
section.
    (i) Exportation to Canada or Mexico of goods imported into the 
United States under a duty-deferral program defined in Sec. 181.53 of 
this chapter. When merchandise in a U.S. duty-deferral program is 
withdrawn for exportation to Canada or Mexico or for entry into a duty-
deferral program in Canada or Mexico, the date of entry is the date the 
entry is required to be filed under Sec. 181.53(a)(2)(iii) of this 
chapter.

[T.D. 79-221, 44 FR 46819, Aug. 9, 1979, as amended by T.D. 84-129, 49 
FR 23167, June 5, 1984; T.D. 87-75, 52 FR 26142, July 13, 1987; T.D. 89-
104, 54 FR 50498, Dec. 7, 1989; T.D. 91-73, 56 FR 42527, Aug. 28, 1991; 
T.D. 92-56, 57 FR 24944, June 12, 1992; T.D. 95-81, 60 FR 52295, Oct. 6, 
1995; T.D. 96-14, 61 FR 2911, Jan. 30, 1996; T.D. 99-64, 64 FR 43266, 
Aug. 10, 1999]



Sec. 141.69  Applicable rates of duty.

    The rates of duty applicable to merchandise shall be the rates in 
effect at time of entry, as specified in Sec. 141.68, except as 
otherwise specifically provided for by Executive Order, and in the 
following cases:
    (a) Warehouse entries. Merchandise entered for warehouse is dutiable 
at the rates in effect at the time withdrawal from warehouse for 
consumption is made in accordance with Sec. 141.68(g).
    (b) Merchandise entered for immediate transportation. Merchandise 
which is not subject to a quantitative or tariff-rate quota and which is 
covered by an entry for immediate transportation made at the port of 
original importation, if entered for consumption at the port designated 
by the consignee or his agent in such transportation entry without 
having been taken into custody by the port director for general order 
under section 490, Tariff Act of 1930, as amended (19 U.S.C. 1490), 
shall be subject to the rates in effect when the immediate 
transportation entry was accepted at the port of original importation.
    (c) Overcarried merchandise returned to port of entry. If 
merchandise which has been entered for consumption, but not yet released 
from Customs custody, is removed from the port or place of intended 
release because of overcarriage, inaccessibility, strike, act of God, or 
unforeseen contingency, and is returned to such port or place within 90 
days after removal, such merchandise shall be subject to the rates in 
effect at the time of the original entry, provided the merchandise is 
identified with the original entry by the usual Customs examination and 
by any documentary evidence as to its movement between its removal and 
return which the port director may reasonably require. A new entry shall 
be required, unless the original entry has not been liquidated and the 
consignee at the time of original importation and at the time of return 
is the same person.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 79-221, 44 
FR 46820, Aug. 9, 1979; T.D. 90-34, 55 FR 17597, Apr. 26, 1990; T.D. 97-
82, 62 FR 51771, Oct. 3, 1997]



                           Subpart F_Invoices



Sec. 141.81  Invoice for each shipment.

    A commercial invoice shall be presented for each shipment of 
merchandise at the time the entry summary is

[[Page 29]]

filed, subject to the conditions set forth in these regulations. Except 
in the case of installment shipments provided for in Sec. 141.82, an 
invoice shall not represent more than one distinct shipment of 
merchandise by one consignor to one consignee by one vessel or 
conveyance.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-53, 43 FR 
6069, Feb. 13, 1978; T.D. 79-221, 44 FR 46820, Aug. 9, 1979; T.D. 85-39, 
50 FR 9612, Mar. 11, 1985; T.D. 93-66, 58 FR 44130, Aug. 19, 1993]



Sec. 141.82  Invoice for installment shipments arriving within a period of 10 days.

    (a) One invoice sufficient. Installments of a shipment covered by a 
single order or contract and shipped from one consignor to one consignee 
may be included in one invoice if the installments arrive at the port of 
entry by any means of transportation within a period of not to exceed 10 
consecutive days.
    (b) Preparation of invoice. The invoice shall be prepared in the 
manner provided for in this subpart and, when practicable, shall show 
the quantities, values, and other invoice data with respect to each 
installment, the date of shipment of each installment, and the car 
number or other identification of the importing conveyance in which it 
was shipped.
    (c) Pro forma invoice. If the required invoice is not filed with the 
first entry of an installment series, a pro forma invoice shall be filed 
with each entry made before the required invoice is produced, and in 
accordance with Sec. 141.91 a bond shall be given, or charge against a 
continuous bond made, for the production of the required invoice. 
Liquidated damages will accrue in the case of each entry if more than 6 
months expire without the production of an invoice for such entry.
    (d) Informal entry. Any bona fide installment valued at not over 
$2,000 (except for articles valued in excess of $250 classified in 
Sections VII, VIII, XI, and XII; Chapter 94; and Chapter 99, Subchapters 
III and IV. Harmonized Tariff Schedule of the United States may be 
entered on an informal entry in accordance with subpart C of part 143 of 
this chapter, in which case such installment need not be considered in 
connection with invoice requirements for the balance of the series.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 75-27, 40 FR 
3449, Jan. 22, 1975; T.D. 78-53, 43 FR 6069, Feb. 13, 1978; T.D. 84-213, 
49 FR 41184, Oct. 19, 1984; T.D. 85-123, 50 FR 29954, July 23, 1985; 
T.D. 89-1, 53 FR 51256, Dec. 21, 1988; T.D. 89-82, 54 FR 36026, Aug. 31, 
1989; T.D. 93-66, 58 FR 44130, Aug. 19, 1993; T.D. 98-28, 63 FR 16417, 
Apr. 3, 1998]



Sec. 141.83  Type of invoice required.

    (a)-(b) [Reserved]
    (c) Commercial invoice. (1) A commercial invoice shall be filed for 
each shipment of merchandise not exempted by paragraph (d) of this 
section. The commercial invoice shall be prepared in the manner 
customary in the trade, contain the information required by Sec. Sec. 
141.86 through 141.89, and substantiate the statistical information 
required by Sec. 141.61(e) to be given on the entry, entry summary, or 
withdrawal documentation.
    (2) The port director may accept a copy of a required commercial 
invoice in place of the original. A copy, other than a photostatic or 
photographic copy, shall contain a declaration by the foreign seller, 
the shipper, or the importer that it is a true copy.
    (d) Commercial invoice not required. A commercial invoice shall not 
be required in connection with the filing of the entry, entry summary, 
or withdrawal documentation for merchandise listed in this paragraph. 
The importer, however, shall present any invoice, memorandum invoice, or 
bill pertaining to the merchandise which may be in his possession or 
available to him. If no invoice or bill is available, a pro forma (or 
substitute) invoice, as provided for in Sec. 141.85, shall be filed, 
and shall contain information adequate for the examination of 
merchandise and the determination of duties, and information and 
documentation which verify the information required for statistical 
purposes by Sec. 141.61(e). The merchandise subject to the foregoing 
requirements is as follows:
    (1) [Reserved]
    (2) Merchandise not intended for sale or any commercial use in its 
imported condition or any other form, and not

[[Page 30]]

brought in on commission for any person other than the importer.
    (3)-(4) [Reserved]
    (5) Merchandise returned to the United States after having been 
exported for repairs or alteration under subheadings 9802.00.40 and 
9802.00.60, Harmonized Tariff Schedule of the United States (19 U.S.C. 
1202).
    (6) Merchandise shipped abroad, not delivered to the consignee, and 
returned to the United States.
    (7) Merchandise exported from continuous Customs custody within 6 
months after the date of entry.
    (8) Merchandise consigned to, or entered in the name of, any agency 
of the U.S. Government.
    (9) Merchandise for which an appraisement entry is accepted.
    (10) Merchandise entered temporarily into the Customs territory of 
the United States under bond or for permanent exhibition under bond.
    (11) Merchandise provided for in section 466, Tariff Act of 1930 (19 
U.S.C. 1466), which pertain to certain equipment, repair parts, and 
supplies for vessels.
    (12) Merchandise imported as supplies, stores, and equipment of the 
importing carrier and subsequently made subject to entry pursuant to 
section 446, Tariff Act of 1930, as amended (19 U.S.C. 1446).
    (13) Ballast (not including cargo used for ballast) landed from a 
vessel and delivered for consumption.
    (14) Merchandise, whether privileged or nonprivileged, resulting 
from manipulation or manufacture in a foreign trade zone.
    (15) Screenings contained in bulk importations of grain or seeds.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-53, 43 FR 
6069, Feb. 13, 1978; T.D. 79-221, 44 FR 46820, Aug. 9, 1979; T.D. 82-
224, 47 FR 53728, Nov. 29, 1982; T.D. 84-213, 49 FR 41184, Oct. 19, 
1984; T.D. 85-39, 50 FR 9612, Mar. 11, 1985; T.D. 89-1, 53 FR 51256, 
Dec. 21, 1988; T.D. 93-66, 58 FR 44130, Aug. 19, 1993; T.D. 94-24, 59 FR 
13200, Mar. 21, 1994; T.D. 97-82, 62 FR 51771, Oct. 3, 1997]



Sec. 141.84  Photocopies of invoice for separate entries of same shipment.

    (a) Entries at one port. If by reason of accident or short shipment 
a portion of the quantity covered by one invoice fails to arrive, or if 
for any other reason only a portion of the quantity covered by one 
invoice is entered under one entry, a photocopy of the commercial 
invoice used in connection with the first entry, covering the quantity 
to be entered under another entry, may be used in connection with the 
subsequent entry of any portion of the merchandise not cleared under the 
first entry.
    (b) Entries from foreign-trade zone at one port. A photocopy of the 
invoice filed with the first entry for consumption from a foreign-trade 
zone of a portion of the merchandise shown on the invoice will not be 
required for any subsequent entry for consumption from that zone at the 
same port of a portion of any merchandise covered by such invoice, if a 
pro forma invoice is filed and identifies the entry first made and the 
invoice then filed.
    (c) Entries at different ports. When portions of a single shipment 
requiring a commercial invoice are entered at different ports, the 
importer may submit to the port director where the original invoice or 
latest photocopy of the original invoice is on file, two photocopies of 
the latest of such invoices to be certified as to merchandise previously 
received, and the official seal affixed thereto.
    (d) Pro forma invoice. In a case in which a portion of the shipment 
is entered at the first port on a pro forma invoice, an entry at a 
subsequent port may be made by means of a new pro forma invoice which 
may cover only the merchandise then entered.
    (e) Photocopy to satisfy bond for invoice. A properly certified 
photocopy of a commercial invoice presented within 6 months after the 
date of entry may be accepted to cancel the charges against the bond 
given for the production of the commercial invoice.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 84-213, 49 
FR 41184, Oct. 19, 1984; T.D. 85-39, 50 FR 9612, Mar. 11, 1985]



Sec. 141.85  Pro forma invoice.

    A pro forma invoice submitted in accordance with any provision of 
this chapter shall be in substantially the following form:

[[Page 31]]

                            Pro Forma Invoice

Importers Statement Of Value Or The Price Paid In The Form Of An Invoice

    Not being in possession of a commercial seller's or shipper's 
invoice I request that you accept the statement of value or the price 
paid in the form of an invoice submitted below:
Name of shipper_________________________________________________________
address ------------------------
Name of seller__________________________________________________________
address ------------------------;.
Name of consignee_______________________________________________________
address ------------------------.
Name of purchaser_______________________________________________________
address ------------------------.

    The merchandise (has) (has not) been purchased or agreed to be 
purchased by me.
    The prices, or in the case of consigned goods the values, given 
below are true and correct to the best of my knowledge and belief, and 
are based upon: (Check basis with an ``X'')
    (a) The price paid or agreed to be paid (--) as per order dated ----
--------.
    (b) Advices from exporter by letter (--) by cable (--) dated ------
------.
    (c) Comparative values of shipments previously received (--) dated 
------------.
    (d) Knowledge of the market in the country of exportation (--) ----
--------.
    (e) Knowledge of the market in the United States (if U.S. Value) (--
) ------------.
    (f) Advices of the Port Director (--) ------------.
    (g) Other (--) ------------.

----------------------------------------------------------------------------------------------------------------
                                                             D--Unit        E--Total
 A--Case marks     B--Manufacturer's      C--Quantities      purchase       purchase      F--Unit      G--Total
    numbers        item No. symbol or       and full          price          price        foreign      foreign
                         brand             description      (currency)     (currency)      value        value
----------------------------------------------------------------------------------------------------------------
                 .....................  ................  .............  .............  ...........  ...........
                 .....................  ................  .............  .............  ...........  ...........
----------------------------------------------------------------------------------------------------------------
Check which of the charges below are, and which are not included in the prices listed in columns ``D'' and
  ``E'':


------------------------------------------------------------------------
                                                                  Not
                      Amount                         Included   included
------------------------------------------------------------------------
Packing...........................................  .........  .........
Cartage...........................................  .........  .........
Inlandfreight.....................................  .........  .........
Wharfage and loading abroad.......................  .........  .........
Lighterage........................................  .........  .........
Ocean freight.....................................  .........  .........
U.S. duties.......................................  .........  .........
Other charges (identify by name and amount).......  .........  .........
 Total............................................  .........  .........
------------------------------------------------------------------------

    Country of origin ------------------------.
    If any other invoice is received, I will immediately file it with 
the Port Director.
________________________________________________________________________
                                                    (Signature of person
                                                         making invoice)
________________________________________________________________________
                                                   (Title and firm name)

Date____________________________________________________________________

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 85-39, 50 FR 
9612, Mar. 11, 1985]



Sec. 141.86  Contents of invoices and general requirements.

    (a) General information required on the invoice. Each invoice of 
imported merchandise, shall set forth the following information:
    (1) The port of entry to which the merchandise is destined;
    (2) The time when, the place where, and the person by whom and the 
person to whom the merchandise is sold or agreed to be sold, or if to be 
imported otherwise than in pursuance of a purchase, the place from which 
shipped, the time when and the person to whom and the person by whom it 
is shipped;
    (3) A detailed description of the merchandise, including the name by 
which each item is known, the grade or quality, and the marks, numbers, 
and symbols under which sold by the seller or manufacturer to the trade 
in the country of exportation, together with the marks and numbers of 
the packages in which the merchandise is packed;
    (4) The quantities in the weights and measures of the country or 
place from which the merchandise is shipped, or in the weights and 
measures of the United States;
    (5) The purchase price of each item in the currency of the purchase, 
if the merchandise is shipped in pursuance of a purchase or an agreement 
to purchase;
    (6) If the merchandise is shipped otherwise than in pursuance of a 
purchase or an agreement to purchase, the value for each item, in the 
currency in which the transactions are usually made, or, in the absence 
of such value, the price in such currency that the manufacturer, seller, 
shipper, or owner would have received, or was willing to receive, for 
such merchandise if sold in the ordinary course of trade and in the

[[Page 32]]

usual wholesale quantities in the country of exportation;
    (7) The kind of currency, whether gold, silver, or paper;
    (8) All charges upon the merchandise itemized by name and amount, 
including freight, insurance, commission, cases, containers, coverings, 
and cost of packing; and if not included above, all charges, costs, and 
expenses incurred in bringing the merchandise from alongside the carrier 
at the port of exportation in the country of exportation and placing it 
alongside the carrier at the first United States port of entry. The cost 
of packing, cases, containers, and inland freight to the port of 
exportation need not be itemized by amount if included in the invoice 
price, and so identified. Where the required information does not appear 
on the invoice as originally prepared, it shall be shown on an 
attachment to the invoice;
    (9) All rebates, drawbacks, and bounties, separately itemized, 
allowed upon the exportation of the merchandise;
    (10) The country of origin of the merchandise; and,
    (11) All goods or services furnished for the production of the 
merchandise (e.g., assists such as dies, molds, tools, engineering work) 
not included in the invoice price. However, goods or services furnished 
in the United States are excluded. Annual reports for goods and 
services, when approved by the port director, will be accepted as proof 
that the goods or services were provided.
    (b) Nonpurchased merchandise shipped by other than manufacturer. 
Each invoice of imported merchandise shipped to a person in the United 
States by a person other than the manufacturer and otherwise than 
pursuant to a purchase or agreement to purchase shall set forth the time 
when, the place where, the person from whom such merchandise was 
purchased, and the price paid therefor in the currency of the purchase, 
stating whether gold, silver, or paper.
    (c) Merchandise sold in transit. If the merchandise is sold on the 
documents while in transit from the port of exportation to the port of 
entry, the original invoice reflecting the transaction under which the 
merchandise actually began its journey to the United States, and the 
resale invoice or a statement of sale showing the price paid for each 
item by the purchaser, shall be filed as part of the entry, entry 
summary, or withdrawal documentation. If the original invoice cannot be 
obtained, a pro forma invoice showing the values and transaction 
reflected by the original invoice shall be filed together with the 
resale invoice or statement.
    (d) Invoice to be in English. The invoice and all attachments shall 
be in the English language, or shall have attached thereto an accurate 
English translation containing adequate information for examination of 
the merchandise and determination of duties.
    (e) Packing list. Each invoice shall state in adequate detail what 
merchandise is contained in each individual package.
    (f) Weights and measures. If the invoice or entry does not disclose 
the weight, gage, or measure of the merchandise which is necessary to 
ascertain duties, the consignee shall pay the expense of weighing, 
gaging, or measuring prior to the release of the merchandise from 
Customs custody.
    (g) Discounts. Each invoice shall set forth in detail, for each 
class or kind of merchandise, every discount from list or other base 
price which has been or may be allowed in fixing each purchase price or 
value.
    (h) Numbering of invoices and pages--(1) Invoices. When more than 
one invoice is included in the same entry, each invoice with its 
attachments shall be numbered consecutively by the importer on the 
bottom of the face of each page, beginning with No. 1.
    (2) Pages. If the invoice or invoices filed with one entry consist 
of more than two pages, each page shall be numbered consecutively by the 
importer on the bottom of the face of each page. The page numbering 
shall begin with No. 1 for the first page of the first invoice and 
continue in a single series of numbers through all the invoices and 
attachments included in one entry.
    (3) Both invoices and pages. When applicable, both the invoice 
number and the page number shall be shown at the bottom of each page. 
For example, if an entry covers one invoice of one page and a second 
invoice of two pages, the

[[Page 33]]

numbering at the bottom of the pages shall be as follows:

Inv. 1, p. 1.
Inv. 2, p. 2.
Inv. 2, p. 3.

    (i) Information may be on invoice or attached thereto. Any 
information required on an invoice by any provision of this subpart may 
be set forth either on the invoice or on an attachment thereto.
    (j) Name of responsible individual. Each invoice of imported 
merchandise shall identify by name a responsible employee of the 
exporter, who has knowledge, or who can readily obtain knowledge, of the 
transaction.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 79-221, 44 
FR 46820, Aug. 9, 1979; T.D. 85-39, 50 FR 9612, Mar. 11, 1985]



Sec. 141.87  Breakdown on component materials.

    Whenever the classification or appraisement of merchandise depends 
on the component materials, the invoice shall set forth a breakdown 
giving the value, weight, or other necessary measurement of each 
component material in sufficient detail to determine the correct duties.



Sec. 141.88  Computed value.

    When the port director determines that information as to computed 
value is necessary in the appraisement of any class or kind of 
merchandise, he shall so notify the importer, and thereafter invoices of 
such merchandise shall contain a verified statement by the manufacturer 
or producer of computed value as defined in Sec. 402(e), Tariff Act of 
1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. 
1401a(e)).

[T.D. 87-89, 52 FR 24445, July 1, 1987]



Sec. 141.89  Additional information for certain classes of merchandise.

    (a) Invoices for the following classes of merchandise, classifiable 
under the Harmonized Tariff Schedule of the United States (HTSUS), shall 
set forth the additional information specified: [75-42, 75-239, 78-53, 
83-251, 84-149.]

    Aluminum and alloys of aluminum classifiable under subheadings 
7601.10.60, 7601.20.60, 7601.20.90, or 7602.00.00, HTSUS (T.D. 53092, 
55977, 56143)--Statement of the percentages by weight of any metallic 
element contained in the article.
    Articles manufactured of textile materials, Coated or laminated with 
plastics or rubber, classifiable in Chapter(s) 39, 40, and 42--Include a 
description indicating whether the fabric is coated or laminated on both 
sides, on the exterior surface or on the interior surface.
    Bags manufactured of plastic sheeting and not of a reinforced or 
laminated construction, classified in Chapter 39 or in heading 4202--
Indicate the gauge of the plastic sheeting.
    Ball or roller bearings classifiable under subheading 8482.10.50 
through 8482.80.00, HTSUS (T.D. 68-306)--(1) Type of bearing (i.e., 
whether a ball or roller bearing); (2) If a roller bearing, whether a 
spherical, tapered, cylindrical, needled or other type; (3) Whether a 
combination bearing (i.e., a bearing containing both ball and roller 
bearings, etc.); and (4) If a ball bearing (not including ball bearing 
with integral shafts or parts of ball bearings), whether or not radial, 
the following: (a) outside diameter of each bearing; and (b) whether or 
not a radial bearing (the definition of radial bearing is, for Customs 
purposes, an antifriction bearing primarily designed to support a load 
perpendicular to shaft axis).
    Beads (T.D. 50088, 55977)--(1) The length of the string, if strung; 
(2) The size of the beads expressed in millimeters; (3) The material of 
which the beads are composed, i.e., ivory, glass, imitation pearl, etc.
    Bed linen and Bedspreads--Statement as to whether or not the article 
contains any embroidery, lace, braid, edging, trimming, piping or 
applique work.
    Chemicals--Furnish the use and Chemical Abstracts Service number of 
chemical compounds classified in Chapters 27, 28 and 29, HTSUS.
    Colors, dyes, stains and related products provided for under heading 
3204, HTSUS--The following information is required: (1) Invoice name of 
product; (2) Trade name of product; (3) Identity and percent by weight 
of each component; (4) Color Index number (if none, so state); (5) Color 
Index generic name (if none so state); (6) Chemical Abstracts Service 
number of the active ingredient; (7) Class of merchandise (state whether 
acid type dye, basic dye, disperse dye, fluorescent brightener, soluble 
dye, vat dye, toner or other (describe); (8) Material to which applied 
(name the material for which the color, dye, or toner is primarily 
designed).
    Copper (T.D. 45878, 50158, 55977) articles classifiable under the 
provisions of Chapter 74, HTSUS--A statement of the weight of articles 
of copper, and a statement of percentage of copper content and all other 
elements--by weight--to articles classifiable according to copper 
content.

[[Page 34]]

    Copper ores and concentrates (T.D. 45878, 50158, 55977) classifiable 
in heading 2603, and subheadings 2620.19.60, 2620.20.00, 2620.30.00, and 
heading 7401--Statement of the percentages by weight of the copper 
content and any other metallic elements.
    Cotton fabrics classifiable under the following HTSUS headings: 
5208, 5209, 5210, 5211, and 5212--(1) Marks on shipping packages; (2) 
Numbers on shipping packages; (3) Customer's call number, if any; (4) 
Exact width of the merchandise; (5) Detailed description of the 
merchandise; trade name, if any; whether bleached, unbleached, printed, 
composed of yarns of different color, or dyed; if composed of cotton and 
other materials, state the percentage of each component material by 
weight; (6) Number of single threads per square centimeter (All ply 
yarns must be counted in accordance with the number of single threads 
contained in the yarn; to illustrate: a cloth containing 100 two-ply 
yarns in one square centimeter must be reported as 200 single threads); 
(7) Exact weight per square meter in grams; (8) Average yarn number use 
this formula:
[GRAPHIC] [TIFF OMITTED] TC14NO91.156

(9) Yarn size or sizes in the warp; (10) Yarn size or sizes in the 
filling; (11) Specify whether the yarns are combed or carded; (12) 
Number of colors or kinds (different yarn sizes or materials) in the 
filling; (13) Specify whether the fabric is napped or not napped; and 
(14) Specify the type of weave, for example, plain, twill, sateen, 
oxford, etc., and (15) Specify the type of machine on which woven: if 
with Jacquard (Jacq), if with Swivel (Swiv), if with Lappet (Lpt.), if 
with Dobby (Dobby).
    Cotton raw See Sec. 151.82 of this chapter for additional 
information required on invoices.
    Cotton waste (T.D. 5044)--(1) The name by which the cotton waste is 
known, such as ``cotton card strips''; ``cotton comber waste''; ``cotton 
lap waste''; ``cotton sliver waste''; ``cotton roving waste''; ``cotton 
fly waste''; etc.; (2) Whether the length of the cotton staple forming 
any cotton card strips covered by the invoice were made is less than 
3.016 centimeters (1\3/16\ inches) or is 3.016 centimeters (1\3/16\ 
inches) or more.
    Earthenware or crockeryware composed of a nonvitrified absorbent 
body (including white granite and semiporcelain earthenware and cream-
colored ware, stoneware, and terra cotta, but not including common 
brown, gray, red, or yellow earthenware), embossed or plain; common 
salt-glazed stoneware; stoneware or earthenware crucibles; Rockingham 
earthenware; china, porcelain, or other vitrified wares, composed of a 
vitrified nonabsorbent body which, when broken, shows a vitrified, 
vitreous, semi-vitrified, or semivitreous fracture; and bisque or parian 
ware (T.D. 53236)--(1) If in sets, the kinds of articles in each set in 
the shipment and the quantity of each kind of article in each set in the 
shipment; (2) The exact maximum diameter, expressed in centimeters, of 
each size of all plates in the shipment; (3) The unit value for each 
style and size of plate, cup, saucer, or other separate piece in the 
shipment.
    Fish or fish livers (T.D. 50725, 49640, 55977) imported in airtight 
containers classifiable under Chapter 3, HTSUS--(1) Statement whether 
the articles contain an oil, fat, or grease which has had a separate 
existence as an oil, fat, or grease, (2) The name and quantity of any 
such oil, fat, or grease.
    Footwear, classifiable in headings 6401 through 6405 of the HTSUS--
    1. Manufacturer's style number.
    2. Importer's style and/or stock number.
    3. Percent by area of external surface area of upper (excluding 
reinforcements and accessories) which is:

Leather a. --------%
Composition Leather b. --------%
Rubber and/or plastics c. --------%
Textile materials d. --------%
Other (give separate e. --------%
Percent for each f. --------%
Type of material)

    4. Percent by area of external Surface area of outersole (excluding 
reinforcements and accessories) which is:

Leather a. --------%
Composition Leather b. --------%
Rubber and/or plastics c. --------%
Textile materials d. --------%
Other (give separate e. --------%
Percent for each f. --------%
Type of material)

    You may skip this section if you choose to answer all questions A 
through Z below.
    I. If 3(a) is larger than any other percent in 3 and if 4(a) is 
larger than any other percent in 4, answer questions F, G, L, M, O, Q, 
R, S, and X.
    II. If 3(a) is larger than any other percent in 3 and if 4(c) is 
larger than any other percent in 4, answer questions F, G, L, M, N, O, 
Q, S and X.

[[Page 35]]

    III. If 3(a) plus 3(b) is larger than any single percent in 3 and if 
4(d), 4(e) or 4(f) is larger than any other percent in 4, stop.
    IV. If 3(c) is larger than any other percent in 3 and if 4(a) or 
4(b) is larger than any other percent in 4, stop.
    V. If 3(c) is larger than any other percent in 3 and if 4(c) is 
larger than any other percent in 4, answer questions B, E, F, G, H, J, 
K, L, M, N, O, P, T and W.
    VI. If 3(d) is larger than any other percent in 3 and if 4(a) plus 
4(b) is larger than any single percent in 4, answer questions C and D.
    VII. If 3(d) is larger than any other percent in 3 and if 4(c) is 
larger than any other percent in 4, answer questions A, C, J, K, M, N, P 
and T.
    VIII. If 3(d) is larger than any other percent in 3 and if 4(d) is 
larger than any other percent in 4, answer questions U, Y and Z.
    IX. If the article is made of paper, answer questions V and Z.
    If the article does not meet any of conditions I through IX above, 
answer all questions A through Z, below.
________________________________________________________________________
________________________________________________________________________
A Percent of external surface area of upper (including leather 
reinforcements and accessories)
Which is leather ----------%
B Percent by area of external surface area of upper (including all 
reinforcements and accessories).
Which is rubber and/or plastics ----------%
C Percent by weight of rubber and/or plastics is ----------%
D Percent by weight of textile materials plus rubber and/or plastics is 
----------%
E Is it waterproof?
F Does it have a protective metal toe cap?
G Will it cover the wearer's ankle bone?
H Will it cover the wearer's knee cap?
I [Reserved.]
J Is it designed to protect against water, oil, grease, or chemicals, or 
cold or inclement weather?
K Is it a slip-on?
L Is it a downhill or cross-country skiboot?
M Is it serious sports footwear other than skiboots? (Chapter 64 
subheading note defines sports footwear.)
N Is it a tennis, basketball, gym, or training shoe or the like?
O Is it made on a base or platform of wood?
P Does it have open toes or open heels?
Q Is it made by the (lipped insole) welt construction?
R Is it made by the turned construction?
S Is it worn exclusively by men, boys or youths?
T Is it made by an exclusively adhesive construction?
U Are the fibers of the upper, by weight, predominately vegetable 
fibers?
V Is it disposable, i.e., intended for one-time use?
W Is it a ``Zori''?
X Is the leather in the upper pigskin?
Y Are the sole and upper made of woolfelt?
Z Is there a line of demarcation between the outer sole and upper?

    The information requested above may be furnished on CF 5523 or other 
appropriate format by the exporter, manufacturer or shipper.
    Also, the following information must be furnished by the importer or 
his authorized agent if classification is claimed under one of the 
subheadings below:
    If subheading 6401.99.80, 6402.19.10, 6402.30.30, 6402.91.40, 
6402.99.15, 6402.99.30, 6406.11.40, 6404.11.60, 6404.19.35, 6404.19.40, 
or 6404.19.60 is claimed:
    Does the shoe have a foxing or foxing-like band? If so, state its 
materials(s).
    Does the sole overlap the upper other than just at the front of the 
toe and/or at the back of the heel?
    Definitions for some of the terms used in questions A to Z above: 
For the purpose of this section, the following terms have the 
approximate definitions below. If either a more complete definition or a 
decision as to its application to a particular article is needed, the 
maker or importer of record (or the agent of either) should contact 
Customs prior to entry of the article.
    a. In an exclusively adhesive construction, all of the piece(s) of 
the bottom would separate from the upper or from each other if all 
adhesives, cements, and glues were dissolved. It includes shoes in which 
the pieces of the upper are stitched to each other, but not to any part 
of the bottom. Examples include:
    1. Vulcanized construction footwear;
    2. Simultaneous molded construction footwear;
    3. Molded footwear in which the upper and the bottom are one piece 
of molded rubber or plastic, and
    4. Footwear in which staples, rivets, stitching, or any of the 
methods above are either primary or just extra or auxiliary, even though 
adhesive is a major part of the reason the bottom will not separate from 
the upper.
    b. Composition leather is made by binding together leather fibers or 
small pieces of natural leather. It does not include imitation leathers 
not based on natural leather.
    c. Leather is the tanned skin of any animal from which the fur or 
hair has been removed. Tanned skins coated or laminated with rubber and/
or plastics are ``leather'' only if the leather gives the material its 
essential character.
    d. A line of demarcation exists if one can indicate where the sole 
ends and the upper begins. For example, knit booties do not normally 
have a line of demarcation.

[[Page 36]]

    e. Men's, boys' and youths' sizes cover footwear of American youths 
sizes 11\1/2\ and larger for males, and do not include footwear commonly 
worn by both sexes. If more than 4% of the shoes sold in a given size 
will be worn by females, that size is ``commonly worn by both sexes.''
    f. Footwear is designed to protect against water, oil or cold or 
inclement weather only if it is substantially more of a protection 
against those items than the usual shoes of that type. For example, 
leather oxfords will clearly keep one's feet warmer and drier than going 
barefoot, but they are not a protection in this sense. On the other hand 
the snow-jobber is the protective version of the nonprotective jogging 
shoe.
    g. Rubber and/or plastics includes any textile material visibly 
coated (or covered) externally with one or both of those materials.
    h. Slip-on includes:
    1. A boot which must be pulled on.
    2. Footwear with elastic cores which must be stretched to get it on, 
but not bootwear having a separate piece of elasticized fabric which 
forms a full circle around the foot or ankle.
    i. Sports footwear includes only:
    (1) Footwear which is designed for a sporting activity and has, or 
has provision for, the attachment of spikes, sprigs, cleats, stops, 
clips, bars or the like;
    (2) Skating boots (without skates attached), ski boots and cross-
country ski footwear, wrestling boots, boxing boots and cycling shoes.
    j. Tennis shoes, basketball shoes, gym shoes, training shoes and the 
like covers athletic footwear other than sports footwear, whether or not 
principally used for such athletic games or purposes.
    k. Textile materials are made from cotton, other vegetable fibers, 
wool, hair, silk or man-made fibers. Note: Cork, wood carboard and 
leather are not textile materials.
    l. In turned construction, the upper is stitched to the leather sole 
wrong side out and the shoe is then turned right side out.
    m. Vegetable fibers include cotton, flax and ramie, but do not 
include either rayon or plaiting materials such as rattan or wood 
strips.
    n. Waterproof footwear includes footwear designed to protect against 
penetration by water or other liquids, whether or not such footwear is 
primarily designed for such purposes.
    o. Welt footwear means footwear constructed with a welt, which 
extends around the edge of the outer sole, and in which the welt and 
shoe upper are sewed to a lip on the surface of the insole, and the 
outer sole is sewed or cemented to the welt.
    p. A zori has an upper consisting only of straps or thongs of molded 
rubber or plastic. This upper is assembled to a foamed rubber or plastic 
sole by means of plugs.
    Fur products and furs (T.D. 53064)--(1) Name or names (as set forth 
in the Fur Products Name Guide (16 CFR 301.0) of the animal or animals 
that produced the fur, and such qualifying statements as may be required 
pursuant to Sec. 7(c) of the Fur Products Labeling Act (15 U.S.C. 
69e(c)); (2) A statement that the fur product contains or is composed of 
used fur, when such is the fact; (3) A statement that fur product 
contains or is composed of bleached, dyed, or otherwise artificially 
colored fur, when such is the fact; (4) A statement that the fur product 
is composed wholly or in substantial part of paws, tails, bellies, or 
waste fur, when such is the fact; (5) Name and address of the 
manufacturer of the fur product; (6) Name of the country of origin of 
the furs or those contained in the fur product.
    Glassware and other glass products (T.D. 53079, 55977)--Classifiable 
under Heading 7013 HTSUS--Statement of the separate value of each 
component article in the set.
    Gloves-- State if the merchandise has a plastics or a rubber 
exterior. (See Chapter 59, Note 2(a)(3)).
    Grain or grain and screenings (T.D. 51284)--Statement on Customs 
invoices for cultivated grain or grain and screenings that no screenings 
are included with the grain, or, if there are screenings included, the 
percentage of the shipment which consists of screenings commingled with 
the principal grain.
    Handkerchiefs--(1) State the exact dimensions (length and width) of 
the merchandise; (2) If of cotton indicate whether the handkerchief is 
hemmed and whether it contains lace or embroidery.
    Hats or headgear--(1) If classifiable under subheading 6502.00.40 or 
6502.00.60, HTSUS--Statement as to whether or not the article has been 
bleached or colored; (2) If classifiable under subheadings 6502.00.20 
through 6502.00.60 or 6504.00.30 through 6504.00.90, HTSUS--Statement as 
to whether or not the article is sewed or not sewed, exclusive of any 
ornamentation or trimming.
    Hosiery--(1) Indicate whether a single yarn measures less than 67 
decitex. (2) Indicate whether the hosiery is full length, knee length, 
or less than knee length. (3) Indicate whether it contains lace or net.
    Iron or steel classifiable in Chapter 72 or headings 7301 to 7307, 
HTSUS (T.D. 53092, 55977)--Statement of the percentages by weight or 
carbon and any metallic elements contained in the articles, in the form 
of a mill analysis or mill test certificate.
    Iron oxide (T.D. 49989, 50107)--For iron oxide to which a reduced 
rate of duty is applicable, a statement of the method of preparation of 
the oxide, together with the patent number, if any.
    Machines, equipment and apparatus-- Chapters 84 and 85, HTSUS--A 
statement as to the use or method of operation of each type of machine.

[[Page 37]]

    Machine parts (T.D. 51616)--Statement specifying the kind of machine 
for which the parts are intended, or if this is not known to the 
shipper, the kinds of machines for which the parts are suitable.
    Machine tools: (1) Headings 8456 through 8462--machine tools covered 
by these headings equipped with a CNC (Computer Numerical Control) or 
the facings (electrical interface) for a CNC must state so; (2) Headings 
8458 through 8463--machine tools covered by these headings if used or 
rebuilt must state so; (3) Subheading 8456.30.10--EDM: (Electical 
Discharge Machines) if a Traveling Wire (Wire Cut) type must state so. 
Wire EDM's use a copper or brass wire for the electrode; (4) Subheading 
8457.10.00--Machining Centers. Must state whether or not they have an 
ATC (Automatic Tool Changer). Vertical spindle maching centers with an 
ATC must also indicate the Y-travel; (5) Subheading 8458.11.0030 through 
8458.11.0090--horizontal lathes: numerically controlled. Must indicate 
the rated HP (or KW rating) of the main spindle motor. Use the 
continuous rather than the 30 minute rating.
    Madeira embroideries (T.D. 49988)--(1) With respect to the materials 
used, furnish: (a) country of production; (b) width of the material in 
the piece; (c) name of the manufacturer; (d) kind of material, 
indicating manufacturer's quality number; (e) landed cost of the 
material used in each item; (f) date of the order; (g) date of the 
invoice; (h) invoice unit value in the currency of the purchase; (i) 
discount from purchase price allowed, if any; (2) With respect to the 
finished embroidered articles, furnish: (a) manufacturers's name, design 
number, and quality number; (b) importer's design number, if any; (c) 
finished size; (d) number of embroidery points per unit of quantity; (e) 
total for overhead and profit added in arriving at the price or value of 
the merchandise covered by the invoice.
    Motion-picture films--(1) Statement of footage, title, and subject 
matter of each film; (2) Declaration of shipper, cameraman, or other 
person with knowledge of the facts identifying the films with the 
invoice and stating that the basic films were to the best of his 
knowledge and belief exposed abroad and returned for use as newsreel; 
(3) Declaration of importer that he believes the films entered by him 
are the ones covered by the preceding declaration and that the films are 
intended for use as newsreel.
    Paper classifiable in Chapter 48--Invoices covering paper shall 
contain the following information, or will be accompanied by 
specification sheets containing such information:
    (1) Weight of paper in grams per square meter; (2) Thickness, in 
micrometers (microns); (3) If imported in rectangular sheets, length and 
width of sheets, in cm; (4) if imported in strips, or rolls, the width, 
in cm. In the case of rolls, the diameter of rolls in cm; (5) Whether 
the paper is coated or impregnated, and with what materials; (6) Weight 
of coating, in grams per square meter; (7) Percentage by weight of the 
total fiber content consisting of wood fibers obtained by a mechanical 
process, chemical sulfate or soda process, chemical sulfite process, or 
semi-chemical process, as appropriate; (8) Commercial designation, as 
``Writing'', ``Cover'', ``Drawing'', ``Bristol'', ``Newsprint'', etc.; 
(9) Ash content; (10) Color; (11) Glaze, or finish; (12) Mullen bursting 
strength, and Mullen index; (13) Stretch factor, in machine direction 
and in cross direction; (14) Tear and tensile readings; in machine 
direction, in cross direction, and in machine direction plus cross 
direction; (15) Identification of fibers as ``hardwood'' where 
appropriate; (16) Crush resistance; (17) Brightness; (18) Smoothness; 
(19) If bleached, whether bleached uniformly throughout the mass; (20) 
Whether embossed, perforated, creped or crinkled.
    Plastic plates, sheets, film, foil and strip of headings 3920 and 
3921--(1) Statement as to whether the plastic is cellular or 
noncellular; (2) Specification of the type of plastic; (3) Indication of 
whether or not flexible and whether combined with textile or other 
material.
    Printed matter classificable in Chapter 49--Printed matter entered 
in the following headings shall have, on or with the invoices covering 
such matter, the following information: (1) Heading 4901--(a) Whether 
the books are: dictionaries, encyclopedias, textbooks, bound newspapers 
or journals or periodicals, directories, bibles or other prayer books, 
technical, scientific or professional books, art or pictorial books, or 
``other'' books; (b) if ``other'' books, whether hardbound or 
paperbound; (c) if ``other'' books, paperbound, other than ``rack 
size'': number of pages (excluding covers). (2) Heading 4902--(a) 
Whether the journal or periodical appears at least four times a week. If 
the journal or periodical appears other than at least four times a week, 
whether it is a newspaper supplement printed by a gravure process, is it 
a newspaper, business or professional journal or periodical, or other 
than these; (3) Heading 4904--Whether the printed or manuscript music is 
sheet music, not bound (except by stapling or folding); (4) Heading 
4905--(a) Whether globes or not; (b) if not globes, whether in book form 
or not; (c) in any case, whether or not in relief; (5) Heading 4908--
Whether or not vitrifiable; (6) Heading 4904--Whether post cards, 
greeting cards, or other; (7) Heading 4910--(a) Whether or not printed 
on paper by a lithographic process; (b) if printed on paper by a 
lithographic process, the thickness of the paper, in mm; (8) Subheading 
4911.91--(a) Whether or not printed over 20 years at time of 
importation; (b) if printed not over 20 years at time of importation, 
whether suitable for use in the production of articles of heading 4901; 
(c) if not

[[Page 38]]

printed over 20 years at time of importation, and not suitable for use 
in the production of articles of heading 4901, whether the merchandise 
is lithographs on paper or paperboard; (d) if lithographs on paper or 
paperboard, under the terms of the immediately preceding description, 
thickness of the paper or paperboard, and whether or not posters; (e) in 
any case, whether or not posters; (f) in any case, whether or not 
photographic negatives or positives on transparent bases; (g) Subheading 
4911.99--If not carnets, or parts thereof, in English or French, whether 
or not printed on paper in whole or in part by a lithographic process.
    Pulp classifiable in Chapter 47--(1) Invoices covering chemical 
woodpulp, dissolving grades, in Heading 4702 shall state the insoluble 
fraction (as a percentage) after 1 hour in a caustic soda solution 
containing 18% sodium hydroxide (NaOH) at 20 [deg]C; (2) Subheading 
4702.00.0020--Pulp entered under this subheading shall in addition 
contain on or with the invoice the ash content as a percentage to the 
third decimal point, by weight.
    Refrigeration equipment (1) Refrigerator-freezers classifiable under 
subheading 8418.10.00 and (2) refrigerators classifiable under 
subheading 8418.21.00--(a) Statement as to whether they are compression 
or absorption type; (b) Statement of their refrigerated volume in 
liters. (3) Freezers classifiable under subheading 8418.30.00 and 
8418.40.00--Statement as to whether they are chest or upright type. (4) 
Liquid chilling refrigerating units classifiable under subheadings 
8418.69.0045 through 8418.69.0060--Statement as to whether they are 
centrifugal open-type, centrifugal hermetic-type, absorption-type or 
reciprocating type.
    Rolling mills--Subheadings 8455.30.0005 through 8455.30.0085. Rolls 
for rolling mills: Indicate the composition of the roll--gray iron, cast 
steel or other--and the weight of each roll.
    Rubber products of Chapter 40--(1) Statement as to whether combined 
with textile or other material; (2) Statement whether the rubber is 
cellular or noncellular, unvulcanized or vulcanized, and if vulcanized, 
whether hard rubber or other than hard rubber.
    Screenings or scalpings of grains or seeds (T.D. 51096)--(1) Whether 
the commodity is the product of a screening process; (2) If so, whether 
any cultivated grains have been added to such commodity; (3) If any such 
grains have been added, the kind and percentage of each.
    Textile fiber products (T.D. 55095)--(1) The constituent fiber or 
combination of fibers in the textile fiber product, designating with 
equal prominence each natural or manufactured fiber in the textile fiber 
product by its generic name in the order of predominance by the weight 
thereof if the weight of such fiber is 5 per centum or more of the total 
fiber weight of the product; (2) The percentage of each fiber present, 
by weight, in the total fiber content of the textile fiber product; (3) 
The name, or other identification issued and registered by the Federal 
Trade Commission, of the manufacturer of the product or one or more 
persons subject to Sec. 3 of the Textile Fiber Products Identification 
Act (15 U.S.C. 70a) with respect to such product; (4) The name of the 
country where processed or manufactured. See also ``Wearing Apparel'' 
below.
    Tires and tubes for tires, of rubber or plastics--(1) Specify the 
kind of vehicle for which the tire is intended, i.e., airplane, bicycle, 
passenger car, on-the-highway light or heavy truck or bus, motorcycle; 
(2) If designed for tractors provided for in subheading 8701.90.10 or 
for agricultural or horticultural machinery or implements provided for 
in Chapter 84 or in subheading 8716.80.10, designate whether the tire is 
new, recapped, or used; pneumatic or solid; (3) Indicate whether the 
tube is designed for tires provided for in subheading 4011.91.10, 
4011.99.10, 4012.10.20, or 4012.20.20.
    Tobacco (including tobacco in its natural state) (T.D. 44854, 
45871)--(1) Specify in detail the character of the tobacco in each bale 
by giving (a) country and province of origin, (b) year of production, 
(c) grade or grades in each bale, (d) number of carrots or pounds of 
each grade if more than one grade is packed in a bale, (e) the time 
when, place where, and person from whom purchased, (f) price paid or to 
be paid for each bale or package, or price for the vega or lot if 
purchased in bulk, or if obtained otherwise than by purchase, state the 
actual market value per bale; (2) If an invoice covers or includes bales 
of tobacco which are part of a vega or lot purchased in bulk, the 
invoice must contain or be accompanied by a full description of the vega 
or lot purchased; or if such description has been furnished with a 
previous importation, the date and identity of such shipment; (3) 
Packages or bales containing only filler leaf shall be invoiced as 
filler; when containing filler and wrapper but not more than 35 percent 
of wrapper, they shall be invoiced as mixed; and when containing more 
than 35 percent of wrapper, they shall be invoiced as wrapper.
    Watches and watch movements classifiable in Chapter 91 of the 
HTSUS--For all commercial shipments of such articles, there shall be 
required to be shown on the invoice, or on a separate sheet attached to 
and constituting a part of the invoice, such information as will reflect 
with respect to each group, type, or model, the following:
    (A) For watches, a thorough description of the composition of the 
watch cases, the bracelets, bands or straps; the commercial description 
(ebauche caliber number, ligne size and number of jewels) of the 
movements

[[Page 39]]

contained in the watches; and the type of battery (manufacturer's name 
and reference number), if the watch is battery-operated;
    (B) For watch movements, the commercial description (ebauche caliber 
number, ligne size and number of jewels). If battery-operated, the type 
of battery (manufacturer's name and reference number);
    (C) The name of the manufacturer of the exported watch movements and 
the name of the country in which the movements were manufactured.
    Wearing apparel--(1) All invoices for textile wearing apparel should 
indicate a component material breakdown in percentages by weight for all 
component fibers present in the entire garment, as well as separate 
breakdowns of the fibers in the (outer) shell (exclusive of linings, 
cuffs, waistbands, collars and other trimmings) and in the lining. (2) 
For garments which are constructed of more than one component or 
material (combinations of knit and not knit fabric or combinations of 
knit and/or not knit fabric with leather, fur, plastic including vinyl, 
etc.), the invoice must show a fiber breakdown in percentages by weight 
for each separate textile material in the garment and a breakdown in 
percentages by weight for each nontextile material for the entire 
garment; (3) For woven garments--Indicate whether the fabric is yarn 
dyed and whether there are ``two or more colors in the warp and/or 
filling''; (4) For all-white T-shirts and singlets--Indicate whether or 
not the garment contains pockets, trim, or embroidery; (5) For 
mufflers--State the exact dimensions (length and width) of the 
merchandise.
    Wood products--(1) Wood sawn or chipped lengthwise, sliced or 
peeled, whether or not planed, sanded or finger-jointed, of a thickness 
exceeding 6 mm (lumber), classifiable under Chapter 44, heading 4407, 
HTSUS, and wood continuously shaped along any of its edges or faces, 
whether or not planed, sanded or finger-jointed: Coniferous: Subheading 
4409.10.90 and Nonconiferous: Subheading 4409.20.90, HTSUS, and dutiable 
on the basis of cubic meters--
    Quantity in cubic meters (m) before dressing; (2) Fiberboard of wood 
or other ligneous materials whether or not bonded with resins or other 
organic substances, under Chapter 44, Heading 4411, HTSUS, and 
classifiable according to its density--Density in grams per cubic 
centimeter (cm); (3) Plywood consisting solely of sheets of wood, 
classifiable under Chapter 44, Subheading 4412.11, 4412.12, and 4412.19, 
HTSUS, and classifiable according to the thickness of the wood sheets--
Thickness of each ply in millimeter (mm).
    Wool and hair--See Sec. 151.62 of this chapter for additional 
information required on invoices.
    Wool products, except carpets, rugs, mats, and upholsteries, and 
wool products made more than 20 years before importation (T.D. 50388, 
51019)--(1) The percentage of the total fiber weight of the wool 
product, exclusive of ornamentation not exceeding 5 per centum of said 
total fiber weight, of (a) wool; (b) reprocessed wool; (c) reused wool; 
(d) each fiber other than wool if said percentage by weight of such 
fiber is 5 per centum or more; and (e) the aggregate of all other 
fibers; (2) the maximum percentage of the total weight of the wool 
product, of any nonfibrous loading, filling, or adulterating matter; and 
(3) the name of the manufacturer of the wool product, except when such 
product consists of mixed wastes, residues, and similar merchandise 
obtained from several suppliers or unknown sources.
    Woven fabric of man-made fibers in headings 5407, 5408, 5512, 5513, 
5514, 5515, 5516--
    (1) State the exact width of the fabric;
    (2) Provide a detailed description of the merchandise, (trade name, 
if any);
    (3) Indicate whether bleached, unbleached, dyed, of yarns of 
different colors and/or printed;
    (4) If composed of more than one material, list percentage by weight 
in each;
    (5) Identify the man-made fibers as artificial or synthetic, 
filament or staple, and state whether the yarns are high tenacity. 
Specify the number of turns per meter in each yarn;
    (6) Specify yarn sizes in warp and filling;
    (7) Specify how the fabric is woven (plain weave, twill, sateen, 
dobby, jacquard, swivel, lappet, etc.);
    (8) Indicate the number of single threads per square centimeter in 
both warp and filling;
    (9) Supply the weight per square meter in grams;
    (10) Provide the average yarn number using this formula:
    [GRAPHIC] [TIFF OMITTED] TC14NO91.157
    
    (11) For spun yarns, specify whether combed or carded.
    (12) For filament yarns, specify whether textured or not textured.

[[Page 40]]

    Yarns--(1) All yarn invoices should show: (a) Fiber content by 
weight; (b) whether single or plied; (c) whether or not put up for 
retail sale (See Section XI, Note 4, HTSUS); (d) whether or not intended 
for use as sewing thread;
    (2) If chief weight of silk--show whether spun or filament;
    (3) If chief weight of cotton--show:
    (a) Whether combed or uncombed
    (b) Metric number (mn)
    (c) Whether bleached and/or mercerized;
    (4) If chief weight of man-made fiber--show:
    (a) Whether filament, or spun, or a combination of filament and spun
    (b) If a combination of filament and spun--give percentage of 
filament and spun by weight.
    (5) If chief weight of filament man-made fiber--show:
    (a) Whether high tenacity (See Section XI, note 6 HTSUS).
    (b) Whether monofilament, multifilament or strip
    (c) Whether texturized
    (d) Yarn number in decitex
    (e) Number of turns per meter
    (f) For monofilaments--show cross sectional dimension in millimeters
    (g) For strips--show the width of the strip in millimeters (measure 
in folded or twisted condition if so imported).

[T.D. 73-175, 38 FR 17447, July 2, 1973]

    Editorial Note: For Federal Register citations affecting Sec. 
141.89, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



Sec. 141.90  Notation of tariff classification and value on invoice.

    (a) [Reserved]
    (b) Classification and rate of duty. The appropriate subheading of 
the Harmonized Tariff Schedule of the United States (19 U.S.C. 1202), 
and the rate of duty shall be noted by the importer in the left-hand 
portion of the invoice, next to the articles to which they apply.
    (c) Value. The importer shall show in clear detail on the invoice or 
on an attached statement the computation of all deductions from total 
invoice value, such as nondutiable charges, and all additions to invoice 
value which have been made to arrive at the aggregate entered value. In 
addition, the entered unit value for each article on the invoice shall 
be shown where it is different from the invoiced unit value.
    (d) Importer's notations in blue or black ink. All notations made on 
the invoice by the importer or broker shall be in blue or black ink.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51262, Dec. 21, 1988; T.D. 99-64, 64 FR 43266, Aug. 10, 1999]



Sec. 141.91  Entry without required invoice.

    If a required invoice is not available in proper form at the time 
the entry or entry summary documentation is filed and a waiver is not 
granted in accordance with Sec. 141.92, the entry or entry summary 
documentation shall be accepted only under the following conditions:
    (a) The port director is satisfied that the failure to produce the 
required invoice is due to a cause beyond the control of the importer;
    (b) The importer files:
    (1) A written declaration that he is unable to produce such invoice, 
and
    (2) Any seller's or shipper's invoices available to him or, if none 
are available, a pro forma invoice in accordance with Sec. 141.85;
    (c) The invoices and other documents contain information adequate 
for the examination of merchandise, the determination of estimated 
duties, if any, and statistical purposes; and
    (d) The importer files a bond on Customs Form 301, containing the 
bond conditions set forth in Sec. 113.62 of this chapter, in an amount 
equal to one and one-half the invoice value of the merchandise, for the 
production of the required invoice, which must be produced within 120 
days after the date of the filing of the entry summary (or the entry, if 
there is no entry summary) documentation, unless the invoice is needed 
for statistical purposes. If needed for statistical purposes, the 
invoice shall be produced within 50 days after the date of the entry 
summary (or the entry, if there is no entry summary) is required to be 
filed, unless a reasonable extension of time is granted by the port 
director for good cause shown.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 79-221, 44 
FR 46821, Aug. 9, 1979; T.D. 84-213, 49 FR 41184, Oct. 19, 1984; T.D. 
85-167, 50 FR 40363, Oct. 3, 1985; T.D. 93-66, 58 FR 44130, Aug. 19, 
1993]

[[Page 41]]



Sec. 141.92  Waiver of invoice requirements.

    (a) When waiver may be granted. The port director may waive 
production of a required invoice when he is satisfied that either:
    (1) The importer cannot by reason of conditions beyond his control 
furnish a complete and accurate invoice; or
    (2) The examination of merchandise, final determination of duties, 
and collection of statistics can be effected properly without the 
production of the required invoice.
    (b) Documents to be filed by importer. As a condition to the 
granting of a waiver, the importer shall file the following documents 
with the entry:
    (1) Any invoice or invoices received from the seller or shipper;
    (2) A statement pointing out in exact detail any inaccuracies, 
omissions, or other defects in such invoice or invoices;
    (3) An executed pro forma invoice in accordance with Sec. 141.85; 
and
    (4) Any other information required by the port director for either 
appraisement or classification of the merchandise, or for statistical 
purposes.
    (c) Satisfaction of bond liability. The liability under the bond on 
Customs Form 301, containing the bond conditions set forth in Sec. 
113.62 of this chapter for the production of a correct invoice shall be 
deemed satisfied when a waiver has been granted pursuant to this 
section.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-53, 43 FR 
6070, Feb. 13, 1978; T.D. 79-221, 44 FR 46821, Aug. 9, 1979; T.D. 84-
213, 49 FR 41184, Oct. 19, 1984; 49 FR 44867, Nov. 9, 1984; T.D. 93-66, 
58 FR 44130, Aug. 19, 1993]



                  Subpart G_Deposit of Estimated Duties



Sec. 141.101  Time of deposit.

    Estimated duties shall either be deposited with the Customs officer 
designated to receive the duties at the time of the filing of the entry 
documentation or the entry summary documentation when it serves as both 
the entry and entry summary, or be transmitted to Customs according to 
the statement processing method as described in Sec. 24.25 of this 
chapter, except in the following cases:
    (a) Merchandise released under entry documentation. In the case of 
merchandise released under the entry documentation listed in Sec. 142.3 
of this chapter before filing of the entry summary, deposit of estimated 
duties shall be made at the time the entry summary is filed unless the 
merchandise is entered for warehouse. If the merchandise is entered for 
warehouse, estimated duties shall be deposited in accordance with 
paragraph (b) of this section.
    (b) Warehouse entry. In the case of merchandise entered for 
warehouse, deposit of estimated duties shall be made at the time the 
withdrawal for consumption is presented.
    (c) Informal mail entry. In the case of merchandise entered under an 
informal mail entry, duties shall be paid to the postal employee at the 
time he delivers the merchandise to the addressee (see part 145 of this 
chapter).
    (d) Appraisement entries. In the case of merchandise entered under 
an appraisement entry, deposit of estimated duties shall be made 
immediately after notification by the appropriate Customs officer of the 
amount of duties due.
    (e) Entry for transportation or under bond. No deposit of estimated 
duties is applicable in the case of merchandise entered for 
transportation or temporarily imported under bond, entered for permanent 
exhibition under bond, entered for a trade fair under bond or entered 
under bond for similar reasons.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 79-221, 44 
FR 46821, Aug. 9, 1979; T.D. 84-213, 49 FR 41184, Oct. 19, 1984; 49 FR 
44867, Nov. 9, 1984; T.D. 89-104, 54 FR 50498, Dec. 7, 1989]



Sec. 141.102  When deposit of estimated duties, estimated taxes, or both not required.

    Entry or withdrawal for consumption in the following situations may 
be made without depositing the estimated Customs duties, or estimated 
taxes, or both, as specifically noted:
    (a) Cigars and cigarettes. A qualified dealer or manufacturer may 
enter or withdraw for consumption cigars, cigarettes, and cigarette 
papers and tubes without payment of internal revenue

[[Page 42]]

tax in accordance with Sec. 11.2(a) of this chapter.
    (b) Bulk distilled spirits transferred to the bonded premises of a 
distilled spirits plant. An importer may transfer distilled spirits in 
bulk to the bonded premises of a distilled spirits plant, without the 
payment of tax, under the provisions of section 5232(a), Internal 
Revenue Code of 1986 (26 U.S.C. 5232(a)), and the regulations of the 
Bureau of Alcohol, Tobacco and Firearms (27 CFR part 251).
    (c) Deferral of payment of taxes on alcoholic beverages. An importer 
may pay on a semimonthly basis the estimated internal revenue taxes on 
all the alcoholic beverages entered or withdrawn for consumption during 
that period, under the procedures set forth in Sec. 24.4 of this 
chapter.
    (d) Government entries. If a shipment is entered or withdrawn for 
consumption by a U.S. Government department or agency, or an authorized 
representative thereof, no deposit of estimated Customs duties or taxes 
shall be required if a stipulation is furnished in lieu of the bond. The 
proper department or agency will then be billed after liquidation of the 
entry for any duties or charges due. The stipulation shall be in the 
following form:

I, ------------------------------------ (title), a duly authorized 
representative of the___________________________________________________
________________________________________________________________________
(name of U.S. Government department or agency) stipulate and agree on 
behalf of such department or agency that all applicable provisions of 
the Tariff Act of 1930, as amended, and the regulations thereunder, and 
of all other laws and regulations, relating to__________________________
________________________________________________________________________
 (type of entry)
________________________________________________________________________
entry No. ------------, of ------------ (date) will be observed and 
complied with in all respects.
________________________________________________________________________
                                                             (Signature)

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-329, 43 
FR 43455, Sept. 26, 1978; T.D. 84-213, 49 FR 41184, Oct. 19, 1984; T.D. 
89-65, 54 FR 28414, July 6, 1989; T.D. 92-31, 57 FR 10989, Apr. 1, 1992]



Sec. 141.103  Amount to be deposited.

    Estimated duties shall be deposited in an amount to sufficiently 
cover the prospective duties on each item being entered or withdrawn.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 99-64, 64 FR 
43266, Aug. 10, 1999]



Sec. 141.104  Computation of duties.

    In computing estimated duties, fractional parts of dollars and 
quantities shall be rounded off in accordance with Sec. 159.3 of this 
chapter.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 99-64, 64 FR 
43266, Aug. 10, 1999]



Sec. 141.105  Voluntary deposit of additional duties.

    If either the importer of record or the actual owner whose 
declaration and superseding bond have been filed in accordance with 
Sec. 141.20 desires, he may estimate, on the basis of information 
contained in the entry papers or obtainable from the port director, the 
probable amount of unpaid duties which will be found due on the entire 
entry and deposit them in whole or in part with the port director. The 
deposit shall be tendered in writing in the following form in the number 
of copies required for the purposes of local administration, and an 
official receipt shall be given for the deposit:

                                          Date ------------------------.
To the Port Director,___________________________________________________
------------------------------------.
    Tender is hereby voluntarily made of $------------ as a supplemental 
deposit of estimated duties and taxes on ------------ entry No. --------
----, dated ------------, in the name of ------------. Please provide an 
official receipt.
________________________________________________________________________
                                  (Importer of record) or (actual owner)
________________________________________________________________________
 (Street address)
________________________________________________________________________
(City) (State)



                    Subpart H_Release of Merchandise



Sec. 141.111  Carrier's release order.

    (a) When required. Except where release is made directly to the 
carrier in accordance with Sec. 141.11(b), no merchandise shall be 
released from Customs custody until a release order has been executed by 
the carrier, or, in the

[[Page 43]]

case of merchandise in a bonded warehouse, by the warehouse proprietor.
    (b) Form of release. The release order may be executed on any of the 
following documents:
    (1) [Reserved]
    (2) The official entry form;
    (3) A combined carrier's certificate and release order issued in 
accordance with Sec. 141.11(a)(4); or
    (4) If a certified duplicate bill of lading or air waybill is used 
for entry purposes in accordance with Sec. 141.11(a)(3), the carrier's 
release order may be endorsed thereon in substantially the following 
form:

    In accordance with the provisions of section 484(j), Tariff Act of 
1930, authority is hereby given to release the articles covered by this 
certified duplicate bill of lading or air waybill to: ------------------
------.

    (c) Blanket release order. Merchandise may be released to the person 
named in the bill of lading or air waybill in the absence of a specific 
release order from the carrier, if the carrier concerned has filed a 
blanket order authorizing release to the owner or consignee in such 
cases. A carrier's certificate in the form shown in Sec. 141.11(a)(4), 
may be modified and executed to make it a blanket release order for the 
shipments covered by a blanket carrier's release order under Sec. 
141.11(a)(5).
    (d) Qualified release order. In the case of merchandise which is 
entered for warehousing, for transportation in bond, for exportation, or 
is to be admitted to a foreign trade zone, the release order may be 
qualified as follows:
    (1) ``For transfer to the bonded warehouse designated in the 
warehouse entry,'' if the merchandise is entered for warehousing;
    (2) ``For transfer to the bonded carrier designated in the 
transportation entry,'' if the merchandise is entered for transportation 
in bond;
    (3) ``For transfer to the carrier designated in the export entry,'' 
if the merchandise is entered for exportation; or
    (4) ``For transfer to the foreign trade zone designated in Customs 
Form 214,'' if the merchandise is to be admitted to a foreign trade 
zone.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 78-394, 43 
FR 49788, Oct. 25, 1978; T.D. 86-16, 51 FR 5063, Feb. 11, 1986; T.D. 87-
75, 52 FR 20068, May 29, 1987; T.D. 90-87, 55 FR 47052, Nov. 9, 1990]



Sec. 141.112  Liens for freight, charges, or contribution in general average.

    (a) Definitions. The following are general definitions for the 
purposes of this section:
    (1) Freight. ``Freight'' means the charges for the transportation of 
the goods from the place of shipment in the foreign country to the final 
destination in the United States.
    (2) Charges. ``Charges'' means the charges due to or assumed by the 
claimant of the lien which are incident to the shipment and forwarding 
of the goods to the destination in the United States, but does not 
include the purchase price, whether advanced or to be collected, nor 
other claims not connected with the transportation of the goods.
    (3) General average. ``General average'' means the liability to 
contribution of the owners of a cargo which arises when a sacrifice of a 
part of such cargo has been made for the preservation of the residue or 
when money is expended to preserve the whole. It only arises from 
actions impelled by necessity.
    (4) Claimant. ``Claimant'' means a carrier, customs broker or the 
successors or assigns of either.
    (b) Notice of lien. A notice of lien for freight, charges, or 
contribution in general average pursuant to section 564, Tariff Act of 
1930, as amended (19 U.S.C. 1564), shall be filed with the port director 
on Customs Form 3485, signed by the authorized agent of the claimant and 
certified by him.
    (c) Preliminary notice of lien for contribution in general average. 
When the cargo of a vessel is subject to contribution in general 
average, a preliminary notice thereof may be filed with the port 
director and individual notices of lien filed thereafter. Upon receipt 
of a preliminary notice, the port director shall withhold release of any 
merchandise imported in the vessel for 2 days (exclusive of Sunday and 
holidays)

[[Page 44]]

after such merchandise is taken into Customs custody, unless proof is 
submitted that the claim for contribution in general average has been 
paid or secured.
    (d) Merchandise entered for immediate transportation. A notice of 
lien upon merchandise entered for immediate transportation shall be 
filed by the claimant with the port director at the destination.
    (e) Limitations on acceptance of notice of lien. A notice of lien 
shall be rejected and returned with the reason for rejection noted 
thereon if it is filed after any of the following actions have been 
taken concerning the merchandise:
    (1) Release from Customs custody;
    (2) Forfeiture under any provision of law;
    (3) Sale as unclaimed or abandoned merchandise under section 491 or 
559, Tariff Act of 1930, as amended (19 U.S.C. 1491 or 1559); or
    (4) Receipt and acceptance of a notice of abandonment to the 
Government under section 506(1) or 563(b), Tariff Act of 1930, as 
amended (19 U.S.C. 1506(1) or 1563(b)).
    (f) Forfeited or abandoned merchandise. The acceptance of a notice 
of lien shall not in any manner affect the order of disposition and 
accounting for the proceeds of sales of forfeited and abandoned property 
provided for in Subpart D of part 127 and Sec. Sec. 158.44 and 162.51 
of this chapter.
    (g) Bond may be required. When any doubt exists as to the validity 
of a lien filed with the port director, he may require a bond on Customs 
Form 301, containing the bond conditions set forth in Sec. 113.62 of 
this chapter, to hold him harmless from any liability which may result 
from withholding the release of the merchandise.
    (h) Satisfaction of lien. The port director shall not adjudicate any 
dispute respecting the validity of any lien, but when the amount of such 
lien depends upon the quantity or weight of merchandise actually landed, 
the port director shall hold the lien satisfied upon the payment of an 
amount computed upon the basis of the official Customs report of 
quantity and weight. In all other cases, proof that the lien has been 
satisfied or discharged shall consist of a written release or receipt 
signed by the claimant and filed with the port director, showing payment 
of the claim in full.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 74-114, 39 
FR 32023, Apr. 3, 1974; T.D. 84-213, 49 FR 41184, Oct. 19, 1984; T.D. 
88-7, 53 FR 4962, Feb. 19, 1988; T.D. 97-82, 62 FR 51771, Oct. 3, 1997]



Sec. 141.113  Recall of merchandise released from Customs and Border Protection custody.

    (a)(1) Merchandise not legally marked. Certain merchandise is 
required to be marked or labeled pursuant to the following provisions:
    (i) Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), 
pertaining to marking with country of origin;
    (ii) Textile Fiber Products Identification Act (15 U.S.C. 70);
    (iii) Wool Products Labeling Act (15 U.S.C. 68);
    (iv) Fur Products Labeling Act (15 U.S.C. 69); and
    (v) Chapter 91, Additional U.S. Note 4, Harmonized Tariff Schedule 
of the United States (HTSUS), pertaining to special marking for watch 
and clock movements, cases, and dials.
    (2) If such merchandise is found after release to be not legally 
marked, the port director may demand its return to CBP custody for the 
purpose of requiring it to be properly marked or labeled. The demand for 
marking or labeling shall be made not later than 30 days after the date 
of entry in the case of merchandise examined in public stores, and 
places of arrival, such as docks, wharfs, or piers. Demand may be made 
no later than 30 days after the date of examination in the case of 
merchandise examined at the importer's premises or such other 
appropriate places as determined by the port director.
    (b) Textiles and textile products. For purposes of determining 
whether the country of origin of textiles and textile products subject 
to the provisions of Sec. 102.21 or Sec. 102.22 of this chapter, as 
applicable, has been accurately represented to CBP, the release from CBP 
custody of any such textile or textile product shall be deemed 
conditional during the 180-day period following the date of release. If 
the port director finds during the conditional release period that a 
textile or textile product is

[[Page 45]]

not entitled to admission into the commerce of the United States because 
the country of origin of the textile or textile product was not 
accurately represented to CBP, he shall promptly demand its return to 
CBP custody. Notwithstanding the provisions of paragraph (h) of this 
section and Sec. 113.62(l)(1) of this chapter, a failure to comply with 
a demand for return to CBP custody made under this paragraph shall 
result in the assessment of liquidated damages equal to the value of the 
merchandise involved.
    (c) Food, drugs, devices, and cosmetics--(1) Conditional release 
period. For purposes of determining the admissibility of any food, drug, 
device, or cosmetic imported pursuant to section 801(a) of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 381(a)), as amended, the release 
from CBP custody of any such product will be deemed conditional. Unless 
extended in accordance with paragraph (c)(2) of this section, the 
conditional release period will terminate upon the earliest occurring of 
the following events:
    (i) The date that FDA issues a notice of refusal of admission;
    (ii) The date that FDA issues a notice that the merchandise may 
proceed; or
    (iii) Upon the end of the 30-day period following the date of 
release.
    (2) Extension of conditional release period. The conditional release 
period provided under this paragraph (c) may be extended. The FDA must 
issue a written or electronic notice of sampling, detention, or other 
FDA action to the bond principal (i.e., importer of record) within 30 
days of the release of the merchandise in order for the extension of the 
conditional release period to be valid.
    (3) Issuance of a redelivery notice. If FDA refuses admission of a 
food, drug, device or cosmetic into the United States, or if any notice 
of sampling or other request is not complied with, FDA will communicate 
that fact to the CBP port director who will demand the redelivery of the 
product to CBP custody. CBP will issue a notice of redelivery within 30 
days from the date the product was refused admission by the FDA or from 
the date FDA determined the noncompliance with a notice of sampling or 
other request. The demand for redelivery may be made contemporaneously 
with the notice of refusal issued by the FDA. Notwithstanding the 
provisions of paragraph (i) of this section, a failure to comply with a 
demand for redelivery made under this paragraph (c) will result in the 
assessment of liquidated damages equal to three times the value of the 
merchandise involved unless the port director has prescribed a bond 
equal to the domestic value of the merchandise pursuant to Sec. 12.3(b) 
of this Chapter.
    (d) Other merchandise not entitled to admission. If at any time 
after entry the port director finds that any merchandise contained in an 
importation is not entitled to admission into the commerce of the United 
States for any reason not enumerated in paragraph (a), (b), or (c) of 
this section, he shall promptly demand the return to CBP custody of any 
such merchandise which has been released.
    (e) Request for samples or additional examination packages not 
complied with by importer. If the importer has not promptly complied 
with a request for samples or additional examination packages made by 
the port director pursuant to Sec. 151.11 of this chapter, the port 
director may demand the return of the necessary merchandise to CBP 
custody.
    (f) Demand to importer of record or actual owner. A demand for the 
return of merchandise to CBP custody shall be made on the importer of 
record, except that it shall be made on the actual owner if an actual 
owner's declaration and superseding bond have been filed in accordance 
with Sec. 141.20 before the date of the demand.
    (g) Form of demand. A demand for the return of merchandise to CBP 
custody shall be made on Customs Form 4647 or other appropriate form, or 
by letter. One copy, with the date of mailing or delivery noted thereon, 
shall be retained by the port director and made part of the entry 
record.
    (h) Time limitation. A demand for the return of merchandise to CBP 
custody shall not be made after the liquidation of the entry covering 
such merchandise has become final.
    (i) Demand not complied with. When the demand of the port director 
for return of merchandise to CBP custody is

[[Page 46]]

not complied with, liquidated damages shall be assessed, except in the 
case of merchandise entered under chapter 98, subchapter XIII, HTSUS (19 
U.S.C. 1202), in an amount equal to the value of the merchandise not 
returned or three times the value of the merchandise not returned if the 
merchandise is restricted or prohibited merchandise or alcoholic 
beverages, as determined at the time of entry. The amount of liquidated 
damages to be assessed on merchandise entered under chapter 98, 
subchapter XIII, HTSUS is set forth in Sec. 10.39(d)(3) of this 
chapter.

[T.D. 73-175, 38 FR 17447, July 2, 1973, as amended by T.D. 74-227, 39 
FR 32023, Sept. 4, 1974; T.D. 89-1, 53 FR 51262, Dec. 21, 1988; T.D. 92-
84, 57 FR 40607, Sept. 4, 1992; T.D. 93-66, 58 FR 44130, Aug. 19, 1993; 
T.D. 94-95, 59 FR 61800, Dec. 2, 1994; T.D. 99-64, 64 FR 43266, Aug. 10, 
1999; T.D. 01-26, 66 FR 16854, Mar. 28, 2001; CBP Dec. 05-32, 70 FR 
58016, Oct. 5, 2005; CBP Dec. 07-02, 72 FR 4429, Jan. 31, 2007]



PART 142_ENTRY PROCESS--Table of Contents




Sec.
142.0 Scope.

                      Subpart A_Entry Documentation

142.1 Definitions.
142.2 Time for filing entry.
142.3 Entry documentation required.
142.3a Entry numbers.
142.4 Bond requirements.
142.5 [Reserved]
142.6 Invoice requirements.
142.7 Examination of merchandise.
142.8 Failure to file entry timely.

                  Subpart B_Entry Summary Documentation

142.11 Entry summary form.
142.12 Time for filing or submission for preliminary review.
142.13 When entry summary must be filed at time of entry.
142.14 Delinquent payment of Customs bills.
142.15 Failure to file entry summary timely.
142.16 Entry summary documentation.
142.17 One entry summary for multiple entries.
142.17a One consolidated entry summary for multiple ultimate consignees.
142.18 Entry summary not required for prohibited merchandise.
142.19 Release of merchandise under the entry summary.

             Subpart C_Special Permit for Immediate Delivery

142.21 Merchandise eligible for special permit for immediate delivery.
142.22 Application for special permit for immediate delivery.
142.23 Time limit for filing documentation after release.
142.24 Special permit.
142.25 Discontinuance of immediate delivery privileges.
142.26 Delinquent payment of Customs bills.
142.27 Failure to file documentation timely.
142.28 Withdrawal or entry summary not required for prohibited 
          merchandise.
142.29 Other procedures applicable.

                         Subpart D_Line Release

142.41 Line Release.
142.42 Application for Line Release processing.
142.43 Line Release application approval process.
142.44 Entry number range.
142.45 Use of bar code by entry filer.
142.46 Presentation of invoice and assignment of entry number.
142.47 Examinations of Line Release transactions.
142.48 Release procedure.
142.49 Deletion of C-4 Code.
142.50 Line Release data base corrections or changes.
142.51 Changing election of entry or immediate delivery.
142.52 Port-wide and multiple port acceptance of Line Release.

    Authority: 19 U.S.C. 66, 1448, 1484, 1624.

    Source: T.D. 79-221, 44 FR 46821, Aug. 9, 1979, unless otherwise 
noted.



Sec. 142.0  Scope.

    This part sets forth requirements and procedures relating to (a) the 
entry of merchandise, as authorized by section 484, Tariff Act of 1930, 
as amended (19 U.S.C. 1484), and (b) special permits for immediate 
delivery of merchandise, as authorized by section 448(b), Tariff Act of 
1930, as amended (19 U.S.C. 1448(b)).



                      Subpart A_Entry Documentation



Sec. 142.1  Definitions.

    For definitions of ``entry'', ``entry summary'', ``submission'', 
``filing'', ``presentation'', ``entered for consumption'', ``entered for 
warehouse'', and ``entered temporarily under bond'', as

[[Page 47]]

these terms relate to the entry of merchandise, see Sec. 141.0a of this 
chapter.

(R.S. 251, as amended, secs. 623, as amended, 624, 46 Stat. 759, as 
amended (19 U.S.C. 66, 1623, 1624))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 84-213, 49 
FR 41184, Oct. 19, 1984]



Sec. 142.2  Time for filing entry.

    (a) General rule: After arrival of merchandise. Merchandise for 
which entry is required will be entered within 15 calendar days after 
landing from a vessel, aircraft or vehicle, or after arrival at the port 
of destination in the case of merchandise transported in bond.
    (b) Before arrival of merchandise--(1) Entry. The entry 
documentation required by Sec. 142.3(a) may be submitted before the 
merchandise arrives within the limits of the port where entry is to be 
made, in which case the time of entry shall be the time specified in 
Sec. 141.68(a).
    (2) When entry summary serves as entry. The entry summary when it 
will be filed at time of entry to serve as both the entry and the entry 
summary, as provided in Sec. 142.3(b), may be submitted for preliminary 
review in accordance with Sec. Sec. 141.63(a) and 142.12(a)(2).

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 02-65, 67 FR 
68035, Nov. 8, 2002]



Sec. 142.3  Entry documentation required.

    (a) Contents. Except as provided in paragraph (b) of this section, 
the entry documentation required to secure the release of merchandise 
shall consist of the following:
    (1) Entry. Customs Form 3461 (appropriately modified), except that 
Customs Form 7533 (appropriately modified), in duplicate, may be used in 
place of Customs Form 3461 for merchandise imported from a contiguous 
country. The form used shall be prepared in accordance with Sec. 
141.61(a)(1) of this chapter.
    (2) Evidence of the right to make entry. Evidence of the right to 
make entry, as set forth in Sec. 141.11 of this chapter.
    (3) Commercial invoice. A commercial invoice, except that in those 
instances listed in Sec. 141.83(d) of this chapter where a commercial 
invoice is not required, a pro forma invoice or other acceptable 
documentation listed in that section may be submitted in place of a 
commercial invoice.
    (4) Packing list. A packing list, where appropriate.
    (5) Other documentation. Other documents which may be required by 
Customs or other Federal, State, or local agencies for a particular 
shipment.
    (6) Identification. When merchandise is imported having been sold, 
or consigned, to a person in the United States, the name, street 
address, and appropriate identification number of that person, as 
provided in Sec. 24.5 of this chapter, shall be shown on the entry 
documents (CF 3461, 3461 ALT, 7501). When, at the time of immediate 
delivery, entry or release, there is no known buyer, the name, street 
address, and appropriate identification number (as above) of the 
premises in the United States to which the merchandise is to be 
delivered must be shown on the entry or release documents.
    (b) Entry summary filed at time of entry. When the entry summary is 
filed at time of entry, in accordance with Sec. 142.12(a)(1) or Sec. 
142.13.
    (1) Customs Form 3461 or 7533 shall not be required, and
    (2) Customs Form 7501, or 3311, as appropriate (see Sec. 142.11), 
shall serve as both the entry and the entry summary documentation if the 
additional documentation set out in paragraphs (a)(2), (3), (4), and (5) 
of this section and Sec. 142.16(b) is filed.
    (c) Extra copies. The port director may require additional copies of 
the documentation.

(R.S. 251, as amended (19 U.S.C. 66), secs. 484, 624, 46 Stat. 722, as 
amended, 759 (19 U.S.C. 1484, 1624); sec. 301, 80 Stat. 379 (5 U.S.C. 
301), Pub. L. 95-410 (Oct. 3, 1978); Pub. L. 96-511 (Dec. 11, 1980))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 84-129, 49 
FR 23167, June 5, 1984; T.D. 90-92, 55 FR 49884, Dec. 3, 1990]



Sec. 142.3a  Entry numbers.

    (a) Placement on CBP Forms. The importer or broker shall place an 11 
character entry number on the entry and corresponding entry summary 
documentation. For documentation prepared on data processing equipment,

[[Page 48]]

the number shall be printed directly on the form. For manually prepared 
documentation, the number shall be pre-printed in a machine readable 
format specified by CBP. The same number shall not be used for more than 
one entry transaction.
    (b) Format. The following format, including hyphens, must be used 
when showing the entry number:

                              XXX-NNNNNNN-N

XXX represents an entry filer code assigned by CBP, NNNNNNN is a unique 
number which is assigned by the broker or importer, and N is a check 
digit computed from the first 10 characters based on a formula provided 
by CBP.

    (1) Assignment of entry filer code. CBP will assign a unique 3 
character (alphabetic, numeric, or alpha numeric) entry filer code to 
all licensed brokers filing CBP entries. CBP will assign an entry filer 
code to certain importers filing CBP entries based on importer entry 
volume, frequency of entry filing, and other considerations. The broker 
or importer shall use this assigned code as the beginning three 
characters of the number for all CBP entries, regardless of where the 
entries are filed.
    (2) Entry filer assigned number. For each entry, the broker or 
importer shall assign a unique 7 digit number. This number shall not be 
assigned to more than one transaction.
    (3) Check digit. The broker or importer is responsible for ensuring 
that the check digit is computed by data processing equipment.
    (c) Pulication of entry filer codes. CBP shall make available 
electronically a listing of filer codes and the importers, consignees, 
and customs brokers assigned those filer codes. The listing will be 
updated periodically.
    (d) Misuse of the entry filer code. The Assistant Commissioner, 
Office of International Trade, or his designee may refuse to allow use 
of an assigned entry filer code if it is misused by the importer or 
broker.
    (e) Alternative procedure. If an importer does not have an assigned 
entry filer code, or if the Assistant Commissioner, Office of 
International Trade, or his designee, in accordance with paragraph (d) 
of this section refuses to allow use of an assigned entry filer code, 
the importer or broker shall obtain forms with a CBP assigned pre-
printed machine readable entry number with a computed check digit. These 
forms will be available for sale by CBP and must be obtained and used 
before the merchandise may be released from CBP custody.

[T.D. 86-106, 51 FR 19167, May 28, 1986, as amended by T.D. 98-25, 63 FR 
12996, Mar. 17, 1998]



Sec. 142.4  Bond requirements.

    (a) At the time of entry. Except as provided in Sec. 10.101(d) of 
this chapter, or paragraph (c) of this section, merchandise shall not be 
released from Customs custody at the time Customs receives the entry 
documentation or the entry summary documentation which serves as both 
the entry and the entry summary, as required by Sec. 142.3 unless a 
single entry or continuous bond on Customs Form 301, containing the bond 
conditions set forth in Sec. 113.62 of this chapter, executed by an 
approved corporate surety, or secured by cash deposits or obligations of 
the United States, as provided for in Sec. 113.40 of this chapter, has 
been filed. When any of the imported merchandise is subject to a tariff-
rate quota and is to be released at a time when the applicable quota is 
filled, the full rates shall be used in computing the estimated duties 
to determine the amount of the bond.
    (b) If entry summary is filed after entry. (1) Except as provided in 
Sec. 141.102(d) of this chapter, if the entry summary is filed after 
the entry, the bond filed at the time of entry, as required by paragraph 
(a) of this section or by Sec. 142.19, shall continue to be obligated 
unless a superseding bond is filed, as provided in Sec. 141.20 of this 
chapter, or unless a bond of the type described in paragraph (a) of this 
section is filed under the circumstances described in paragraph (b)(2) 
of this section. If a superseding bond is filed, or if a bond is filed 
under the circumstances described in paragraph (b)(2) of this section, 
the obligations of the initial bond shall be terminated as to any 
liability which may accrue after the superseding or other bond becomes 
effective.
    (2) If entry is made in the name of an agent, supported by the 
agent's bond, or in the name of a principal, supported

[[Page 49]]

by the principal's bond, and the entry summary thereafter is filed in 
the name of the other party, the party named in the entry summary shall 
file a bond on Customs Form 301, containing the bond conditions set 
forth in Sec. 113.62 of this chapter. In this circumstance, the bond 
obligation of the party in whose name entry was made shall be 
terminated, as to liability which may accrue after the bond filed by the 
party named in the entry summary becomes effective, and the party filing 
the entry summary need not file the separate declaration of the actual 
owner and the superseding bond otherwise required under Sec. 141.20 of 
this chapter.
    (c) Waiver of surety or cash deposit. (1) The port director may 
waive the requirement for surety or cash deposit on the bond required by 
this section when (i) the value of the merchandise which the bond 
secures does not exceed $2,500, (ii) the entry summary documentation is 
filed and estimated duties, if any, are deposited prior to release of 
the merchandise and (iii) the importer has not been delinquent or 
otherwise remiss in any transaction with Customs.
    (2) This authority to waive surety or cash deposit does not apply to 
(i) quota merchandise, (ii) any type of merchandise which, in the 
opinion of the port director, cannot be easily appraised or classified, 
or (iii) any type of merchandise where there may be, in the opinion of 
the port director based on past experience, a question of redelivery.

(R.S. 251, as amended, secs. 623, as amended, 624, 46 Stat. 759, as 
amended (19 U.S.C. 66, 1623, 1624))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 84-213, 49 
FR 41184, Oct. 19, 1984; T.D. 85-161, 50 FR 38981, Sept. 26, 1985]



Sec. 142.5  [Reserved]



Sec. 142.6  Invoice requirements.

    (a) Contents. The commercial invoice, or the documentation 
acceptable in place of a commercial invoice in those instances listed in 
Sec. 141.83(d) of this chapter, shall be furnished with the entry and 
before release of the merchandise is authorized. The commercial invoice 
or other acceptable documentation shall contain:
    (1) An adequate description of the merchandise.
    (2) The quantities of the merchandise.
    (3) The values or approximate values of the merchandise.
    (4) The appropriate eight-digit subheading from the Harmonized 
Tariff Schedule of the United States. If the importer is uncertain of 
the appropriate subheading number, Customs shall assist him at his 
request. The port director may waive this requirement if he is satisfied 
that the information is not available at the time release of the 
merchandise is authorized.
    (5) The name and complete address of the foreign individual or firm 
who is responsible for invoicing the merchandise, ordinarily the 
manufacturer/seller, but where the manufacturer is not the seller, the 
party who sold the merchandise for export to the U.S., or made the 
merchandise available for sale.
    (b) Information not required when filing entry. In addition to the 
information specified in paragraph (a) of this section, the commercial 
invoice or substitute document filed with the entry documentation also 
may include any other invoice information required by Sec. Sec. 141.86 
through 141.89 of this chapter. However, if this information does not 
appear on the invoice or substitute document filed with the entry 
documentation, it shall be included in the invoice or substitute 
document delivered at the time the entry summary documentation is filed.

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979; T.D. 80-26, 45 FR 3901, Jan. 
21, 1980, as amended by T.D. 90-25, 55 FR 12343, Apr. 3, 1990; T.D. 90-
78, 55 FR 40167, Oct. 2, 1990]



Sec. 142.7  Examination of merchandise.

    No merchandise for which the entry documentation required by Sec. 
142.3 has been filed shall be released until it has been examined, or 
until adequate samples have been taken in the case of merchandise which 
is to be classified and appraised by means of samples, unless this 
requirement is waived by the port director in accordance with section 
499, Tariff Act of 1930, as amended (19 U.S.C. 1499).

[[Page 50]]



Sec. 142.8  Failure to file entry timely.

    Merchandise for which timely entry is not filed as required by Sec. 
142.2 shall be treated in accordance with Sec. 4.37 and part 127 of 
this chapter.



                  Subpart B_Entry Summary Documentation



Sec. 142.11  Entry summary form.

    (a) Customs Form 7501. The entry summary shall be on Customs Form 
7501 unless a different form is prescribed elsewhere in this chapter. 
Customs Form 7501 shall be used for merchandise formally entered for 
consumption, formally entered for warehouse, or rewarehouse in 
accordance with Sec. 144.11 of this chapter, and formally entered 
temporarily under bond under Sec. 10.31 of this chapter. The entry 
summary for merchandise which may be entered free of duty in accordance 
with Sec. 10.1 (g) or (h) of this chapter may be on Customs Form 3311 
instead of on Customs Form 7501. For merchandise entitled to be entered 
under an informal entry, see Sec. 143.23 of this chapter.
    (b) Extra copies. The port director may require additional copies of 
the entry summary.

(R.S. 251, as amended (19 U.S.C. 66), secs. 484, 624, 46 Stat. 722, as 
amended, 759 (19 U.S.C. 1484, 1624); sec. 301, 80 Stat. 379 (5 U.S.C. 
301), Pub. L. 95-410 (Oct. 3, 1978); Pub. L. 96-511 (Dec. 11, 1980))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 84-129, 49 
FR 23167, June 5, 1984; T.D. 84-213, 49 FR 41185, Oct. 19, 1984]



Sec. 142.12  Time for filing or submission for preliminary review.

    (a) At option of importer--(1) Filing. Except as provided in Sec. 
142.13, the importer may file the entry summary documentation at the 
time of entry in which case the entry summary, with estimated duties 
attached, shall serve as both the entry and the entry summary.
    (2) Submission for preliminary review. If the importer intends to 
file the entry summary documentation at the time of entry, he may submit 
the entry summary documentation for preliminary review before arrival of 
the merchandise, in accordance with Sec. 141.63(a) of this chapter. 
After preliminary review is completed, the entry summary shall be 
returned to the importer for filing in accordance with paragraph (a)(1) 
of this section.
    (b) When required. If the importer is not required to file the entry 
summary documentation at the time of entry under the provisions of Sec. 
142.13, or if he does not elect to do so, the entry summary 
documentation shall be filed, with estimated duties attached, within 10 
working days after the time of entry.
    (c) Estimated duties. Estimated duties, if any, shall be deposited 
in accordance with the provisions of subpart G of part 141 of this 
chapter.



Sec. 142.13  When entry summary must be filed at time of entry.

    (a) Authority of port director. The port director may require that 
the entry summary documentation be filed and that estimated duties, if 
any, be deposited at the time of entry before the merchandise is 
released if the importer:
    (1) Has failed repeatedly to file timely entry summary documentation 
without justification,
    (2) Has not taken prompt action to settle a claim for liquidated 
damages issued under Sec. 142.15 for failure to file entry summary 
documentation timely, or a claim for liquidated damages issued under the 
basic importation and entry bond for failure to deposit estimated 
duties, taxes and charges timely, as provided in such bond. ``Prompt 
action'' means that the importer, within the time specified in a claim 
for liquidated damages, shall petition for relief or pay the amount 
claimed and, in appropriate cases, file the entry summary documentation 
and deposit estimated duties, if any, or
    (3) Has repeatedly delivered entry summary documentation, which is 
incomplete or which contains erroneous information.
    (4) Is substantially or habitually delinquent in the payment of 
Customs bills. See Sec. 142.14.
    (b) Special classes of merchandise--(1) Quota-class merchandise. 
Quota-class merchandise shall not be released upon delivery of entry 
documentation before presentation of:

[[Page 51]]

    (i) An entry summary for consumption with estimated duties attached; 
or
    (ii) A withdrawal for consumption with estimated duties attached; or
    (iii) An entry summary for consumption, without the estimated duties 
attached, if the entry/entry summary information and a valid scheduled 
statement date have been successfully received by Customs via the 
Automated Broker Interface. (See part 132 and Sec. 24.25 of this 
chapter.)
    (2) Other classes of merchandise. Entry summary documentation, with 
estimated duties attached, or a withdrawal for consumption with 
estimated duties attached, or an entry summary for consumption, without 
the estimated duties attached if the entry/entry summary information and 
a valid scheduled statement date have previously been transmitted to 
Customs via the Automated Broker Interface (see Sec. 24.25 of this 
chapter) shall be filed at the time of entry before release of any other 
merchandise of a class designated by Customs Headquarters.
    (c) [Reserved]
    (d) Brokers; restriction. A broker shall not circumvent an action 
taken under this section by applying for release of the importer's 
merchandise in the broker's name and under the broker's bond.

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 89-104, 54 
FR 50498, Dec. 7, 1989; T.D. 93-37, 58 FR 30984, May 28, 1993; T.D. 95-
77, 60 FR 50020, Sept. 27, 1995]



Sec. 142.14  Delinquent payment of Customs bills.

    The following procedure shall be followed if an importer is 
substantially or habitually delinquent in the payment of Customs bills:
    (a) Notice. The importer shall be advised in writing by the port 
director in which he is substantially or habitually delinquent that he 
shall file the entry summary documentation with estimated duties 
attached, before his merchandise may be released from Customs custody at 
that port. The notice shall state the reason for the action and advise 
the importer that if payment of all his delinquent Customs bills is not 
made within 10 working days from the date of the notice, he shall be 
required to file the entry summary document with estimated duties 
attached, before his merchandise may be released. In either case, the 
entry summary shall serve as both the entry and the entry summary.
    (b) Removal of requirement by port. If the importer pays all his 
delinquent Customs bills within 10 working days after the date of the 
notice, the requirement shall be removed, and the importer need file 
only the entry documentation specified in Sec. 142.3 to secure release 
of his merchandise.
    (c) Removal of requirement by Headquarters. If the importer has not 
paid all his delinquent Customs bills within 10 working days after the 
date of the notice, he also shall be required to file the entry summary 
documentation, with estimated duties attached, at each Customs port. In 
this case, the entry summary shall serve as both the entry and the entry 
summary. This requirement shall remain in effect in each port of entry 
until notification is received from Headquarters that the requirement is 
removed and that the importer need submit only the entry documentation 
listed in Sec. 142.3 to secure release of his merchandise.



Sec. 142.15  Failure to file entry summary timely.

    If the entry summary documentation is not filed timely, the port 
director shall make an immediate demand for liquidated damages in the 
entire amount of the bond in the case of a single entry bond. When the 
transaction has been charged against a continuous bond, the demand shall 
be for the amount that would have been demanded if the merchandise had 
been released under a single entry bond. Any application to cancel 
liquidated damages incurred shall be made in accordance with part 172 of 
this chapter.

(R.S. 251, as amended, secs. 623, as amended, 624, 46 Stat. 759, as 
amended (19 U.S.C. 66, 1623, 1624))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 84-213, 49 
FR 41185, Oct. 19, 1984]



Sec. 142.16  Entry summary documentation.

    (a) Entry summary not filed at time of entry. When the entry 
documentation

[[Page 52]]

is filed before the entry summary documentation, one copy of the entry 
document and the commercial invoice, or the documentation filed in place 
of a commercial invoice in the instances listed in Sec. 141.83(d) of 
this chapter, shall be returned to the importer after Customs authorizes 
release of the Merchandise. The importer may use these documents in 
preparing the entry summary, Customs Form 7501, and shall file them with 
the entry summary documentation within the time period stated in Sec. 
142.12(b). The entry summary documentation also shall include any other 
documents required for a particular shipment unless a bond for missing 
documents is on file, as provided in Sec. 141.66 of this chapter.
    (b) Entry summary filed at time of entry. When the entry summary 
documentation is filed at time of entry, the documentation listed in 
Sec. 142.3 shall be filed at the same time, except that Customs Form 
3461 or 7533 shall not be required. The importer also shall file any 
additional invoice required for a particular shipment.

(R.S. 251, as amended (19 U.S.C. 66), secs. 484, 624, 46 Stat. 722, as 
amended, 759 (19 U.S.C. 1484, 1624); sec. 301, 80 Stat. 379 (5 U.S.C. 
301), Pub. L. 95-410 (Oct. 3, 1978); Pub. L. 96-511 (Dec. 11, 1980))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979; T.D. 80-26, 45 FR 3901, Jan. 
21, 1980, as amended by T.D. 84-129, 49 FR 23168, June 5, 1984]



Sec. 142.17  One entry summary for multiple entries.

    (a) Requirements. Except as provided in paragraph (b) of this 
section, the port director may permit the filing of one entry summary 
for merchandise the subject of separate entries if:
    (1) The merchandise has the same country of exportation, and the 
same country of origin,
    (2) The merchandise arrives by land, by the same vessel or by the 
same air carrier,
    (3) The merchandise is consigned to the same consignee,
    (4) The time between the date of the first entry and the date of the 
last entry does not exceed 1 week,
    (5) The entry summary document is filed within 10 working days from 
the date of the first entry, and
    (6) Each entry is identified separately by entry number on the entry 
summary.
    (b) Merchandise not eligible. One entry summary shall not be used 
for multiple entries of the following:
    (1) Quota-class merchandise,
    (2) Prohibited merchandise,
    (3) Merchandise subject to restrictions which require processing and 
documentation more frequently than on a weekly basis,
    (4) Merchandise for which liquidation has been withheld, and
    (5) Merchandise classifiable under the same Harmonized Tariff 
Schedule of the United States subheading number, to the eight-digit 
level having different rates of duty for which entries or immediate 
transportation entries have been filed. However, this provision is not 
applicable in the following circumstances:
    (i) Entries. Entries may be consolidated if the time of entry is:
    (A) Before the date of change in rate of duty, or
    (B) On or after the date of change in rate of duty.
    (ii) Immediate transportation entries. Immediate transportation 
entries may be consolidated if the date of acceptance is:
    (A) Before the date of change in the rate of duty, or
    (B) On or after the date of change in rate of duty.
    (c) Entry documentation not in proper form. If an entry summary 
covering multiple entries refers to entry documentation which is not in 
proper form, the entry summary and the entry documentation shall be 
returned for correction.

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 89-1, 53 FR 
51262, Dec. 21, 1988]



Sec. 142.17a  One consolidated entry summary for multiple ultimate consignees.

    (a) Applicability. The port director may permit a broker as nominal 
consignee to file a consolidated entry summary in his own name under his 
own bond covering shipments of like or similar merchandise consigned to 
various ultimate consignees provided that all the merchandise is:

[[Page 53]]

    (1) Imported on the same day,
    (2) Itemized as to each category of merchandise by Harmonized Tariff 
Schedule of the United States Annotated subheading to the ten-digit 
level, and
    (3) Released on the same day, either under the entry documentation 
specified in Sec. 142.3, or under a special permit for immediate 
delivery. A consolidated entry summary may be filed for merchandise 
arriving by land, by the same vessel, or by the same air carrier.
    (b) Information required on the entry summary--(1) Separate listing 
according to ultimate consignee. The broker shall list separately on the 
face of the consolidated entry summary the merchandise for each ultimate 
consignee, together with the appropriate entry or special permit 
numbers.
    (2) If different land carriers are involved. If merchandise arriving 
by different land carriers is included on one entry summary, necessary 
information pertaining to each carrier shall be shown on the face of the 
entry summary, related to the applicable shipment.

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 89-1, 53 FR 
51262, Dec. 21, 1988]



Sec. 142.18  Entry summary not required for prohibited merchandise.

    (a) Exportation or destruction of prohibited merchandise. If 
merchandise released at time of entry is later found to be prohibited, 
the port director shall demand its return to Customs custody in 
accordance with Sec. 141.113 of this chapter, and an entry summary and 
the deposit of estimated duties, if any, shall not be required provided:
    (1) An entry for exportation, Customs Form 7512, or an application 
to destroy the merchandise under Customs supervision is made within 10 
days after the time of entry, and the exportation or destruction is 
accomplished promptly, or
    (2) An entry for transportation and exportation, Customs Form 7512, 
is made within 10 days after the time of entry and domestic carriage of 
the merchandise does not conflict with the requirements of another 
Federal agency.
    (b) Procedures for exportation or destruction. The exportation or 
destruction of prohibited merchandise as required by paragraph (a) shall 
be in accordance with Sec. Sec. 158.41 and 158.45(c) of this chapter.



Sec. 142.19  Release of merchandise under the entry summary.

    Merchandise, for which an entry summary serves as both an entry and 
an entry summary, shall not be released from Customs custody until a 
bond has been filed, or the entry has been liquidated, as follows:
    (a) Bond. Merchandise not designated for examination may be released 
to, or upon the order of, the carrier if a bond is filed on Customs Form 
301, containing the bond conditions set forth in Sec. 113.62 of this 
chapter. Merchandise designated for examination may be released under 
the bond after examination has been completed if:
    (1) It has been found to be truly and correctly invoiced,
    (2) It is entitled to admission into the commerce of the United 
States, and
    (3) Its release is not precluded by any law or regulation. If 
merchandise is entered by or on behalf of a United States Government 
department or agency, the stipulation prescribed in Sec. 141.102(d) of 
this chapter shall be accepted in place of a bond.
    (b) After liquidation. If a bond has not been filed in accordance 
with paragraph (a) of this section, the merchandise shall not be 
released before:
    (1) The entry has been liquidated and the full amount of all duties 
and taxes due, including dumping or other special duties and charges, 
has been paid, or the right to free entry established.
    (2) The port director determines that the merchandise may be 
admitted into the commerce of the United States, and
    (3) All documents relating to the merchandise which are required by 
law or regulation have been filed.

(R.S. 251, as amended, secs. 623, as amended, 624, 46 Stat. 759, as 
amended (19 U.S.C. 66, 1623, 1624))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 84-213, 49 
FR 41185, Oct. 19, 1984]

[[Page 54]]



             Subpart C_Special Permit for Immediate Delivery



Sec. 142.21  Merchandise eligible for special permit for immediate delivery.

    Merchandise may be released under a special permit for immediate 
delivery, in accordance with section 448(b), Tariff Act of 1930, as 
amended (19 U.S.C. 1448(b)), in the following circumstances:
    (a) Contiguous countries. At the discretion of the port director, 
merchandise arriving by land from Canada or Mexico may be released under 
a special permit for immediate delivery provided the importer has on 
file a bond on CBP Form 301, containing the bond conditions set forth in 
Sec. 113.62 of this chapter. An entry summary shall be filed in 
accordance with Sec. 142.22(b)(1), and estimated duties, if any, shall 
be deposited, within the time period specified in Sec. 142.23 for all 
merchandise from contiguous countries released under a special permit 
except for fresh fruits and vegetables for human consumption released 
under the provisions of paragraph (b) of this section.
    (b) Fresh fruits and vegetables. (1) An application for a special 
permit for immediate delivery may be made for the transportation of 
fresh fruits and vegetables for human consumption arriving from Canada 
or Mexico to the importer's premises within the port of importation, but 
removed from the area immediately contiguous to the border.
    (2) The application shall be accompanied by a continuous bond on CBP 
Form 301, containing the bond conditions set forth in Sec. 113.62 of 
this chapter.
    (3) The fresh fruits and vegetables shall be transported to the 
importer's premises in the vehicles in which they crossed the border or, 
if transshipment is necessary in vehicles provided by the importer. The 
fresh fruits and vegetables may be examined at the importer's premises. 
Those portions without commercial value may be disposed of in accordance 
with the provisions of Sec. 158.11(b) of this chapter, and the balance 
shall be entered for consumption or transported in bond under an entry 
for immediate transportation without appraisement or under an entry for 
transportation and exportation.
    (c) Agency of U.S. Government. Merchandise may be released under the 
immediate delivery procedure if the shipment is consigned to or for the 
account of any agency or office of the United States Government, or to 
an officer or official of any such agency in his official capacity, as 
provided in Sec. 10.101 of this chapter.
    (d) Articles of a trade fair. Articles for a trade fair may be 
released under the immediate delivery procedure, as provided in Sec. 
147.13 of this chapter.
    (e) Quota-class merchandise--(1) Tariff rate quotas. At the 
discretion of the port director, merchandise subject to a tariff-rate 
quota may be released under a special permit for immediate delivery 
provided the importer has on file a bond on CBP Form 301, containing the 
bond conditions set forth in Sec. 113.62 of this chapter. However, 
merchandise subject to a tariff-rate quota may not be incrementally 
released under a special permit for immediate delivery as provided in 
paragraphs (g) and (h) of this section. Nor is such merchandise eligible 
for release under a special permit pursuant to 19 CFR 141.58(d)(1). 
Where a special permit is authorized, an entry summary will be properly 
presented pursuant to Sec. 132.1 of this chapter within the time 
specified in Sec. 142.23, or within the quota period, whichever expires 
first. If proper presentation is not made until after the tariff-rate 
quota is filled, the merchandise shall not be entitled to the quota rate 
of duty, and the importer shall pay duties at the over-quota rate.
    (2) Absolute quotas. At the discretion of the port director, 
perishable merchandise of a class approved by CBP Headquarters which is 
subject to an absolute quota may be released under a special permit for 
immediate delivery for removal to the importer's premises, or to any 
other location approved by the port director, until an entry summary is 
properly presented pursuant to Sec. 132.1 of this chapter. However, 
merchandise subject to an absolute quota under this paragraph may not be 
incrementally released under a special permit for immediate delivery as 
provided in paragraphs (g) and (h) of this section. Nor is such 
merchandise eligible for release under a special permit pursuant to 
Sec. 141.58(d)(1) of this chapter.

[[Page 55]]

Where a special permit is authorized, a proper entry summary must be 
presented for merchandise so released within the time specified in Sec. 
142.23, or within the quota period, whichever expires first. If the 
absolute quota is filled before the importer has properly presented an 
entry summary, he may either present an entry summary for warehouse or, 
under CBP supervision, export or destroy the merchandise.
    (f) Release from warehouse followed by warehouse withdrawal for 
consumption. Merchandise may be released from warehouse under a special 
permit:
    (1) At the discretion of the port director when:
    (i) The warehouse is located a considerable distance from the 
customhouse and actual release of the merchandise from the warehouse may 
not be effected within the next full business day after the day of the 
payment of duty, and
    (ii) The port has sufficient manpower to permit such practice;
    (2) The importer shall have on file a bond on CBP Form 301, 
containing the bond conditions set forth in Sec. 113.62 of this 
chapter; and
    (3) The immediate delivery permit shall be annotated to state that a 
warehouse withdrawal for consumption will be filed for this merchandise.
    (g) Split shipments. Merchandise subject to Sec. 141.57(d)(2) of 
this chapter, which is invoiced and delivered to the carrier as a single 
shipment, but which, due to the carrier's inability to accommodate the 
merchandise on a single conveyance, is shipped by the carrier in 
separate portions to the same port of entry in the United States as 
listed on the original bill of lading, may be released incrementally 
under a special permit. Incremental release means releasing each portion 
of such shipments separately as they arrive.
    (h) Entities shipped unassembled or disassembled on multiple 
conveyances. Merchandise subject to Sec. 141.58(d)(2) of this chapter, 
which is purchased, invoiced, and classified as a single entity under 
the Harmonized Tariff Schedule of the United States (HTSUS), and which 
is shipped in separate portions because its size or nature prevents 
shipping the entity on a single conveyance, may be released 
incrementally under a special permit.
    (i) When authorized by Headquarters. Headquarters may authorize the 
release of merchandise under the immediate delivery procedure in 
circumstances other than those described in Sec. 142.21(a) through (h) 
provided a bond on CBP Form 301 containing the bond conditions set forth 
in Sec. 113.62 of this chapter is on file.

(R.S. 251, as amended, secs. 623, as amended, 624, 46 Stat. 759, as 
amended (19 U.S.C. 66, 1623, 1624))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 81-260, 46 
FR 49842, Oct. 8, 1981; T.D. 84-213, 49 FR 41185, Oct. 19, 1984; T.D. 
89-104, 54 FR 50499, Dec. 7, 1989; T.D. 03-09, 68 FR 8721, Feb. 25, 
2003; CBP Dec. 06-11, 71 FR 31927, June 2, 2006]



Sec. 142.22  Application for special permit for immediate delivery.

    (a) Form. An application for a special permit for immediate delivery 
will be made on CBP Form 3461, supported by the documentation provided 
for in Sec. 142.3. A commercial invoice will not be required, except 
for merchandise released under the provisions of 19 U.S.C. 1484(j). 
Instead of a commercial invoice, the importer may deliver to CBP a pro 
forma invoice, waybill, or other document setting forth an adequate 
description of the merchandise and the quantities, together with the 
values or approximate values when values are needed for the purpose of 
examination. If the merchandise is to be released under a term special 
permit, the documentation also shall show the term special permit 
number, as provided for in Sec. 142.24.
    (b) CBP custody. Merchandise for which a special permit for 
immediate delivery has been issued under Sec. 142.21 of this part shall 
be considered to remain in CBP custody until the filing of one of the 
following:
    (1) An entry summary for consumption, with estimated duties 
attached; an entry summary for consumption without estimated duties 
attached, if entry/entry summary information and a valid scheduled 
statement date (pursuant to Sec. 24.25 of this chapter) have 
successfully been received by CBP via the Automated Broker Interface; an 
entry summary for warehouse; or an

[[Page 56]]

entry summary for entry temporarily under bond, which may be filed in 
any of the circumstances under Sec. 142.21 of this part except for 
merchandise released from warehouse under Sec. 142.21(f) of this part;
    (2) A withdrawal for consumption, with estimated duties attached, 
which shall be filed only for merchandise released from warehouse under 
Sec. 142.21(f) of this part;
    (3) An entry for transportation and exportation, immediate 
transportation without appraisement, or direct exportation, which shall 
be filed in those circumstances under Sec. 142.21(b) and (e)(2) of this 
part; or entry for transportation and exportation, or direct 
exportation, which shall be filed in the circumstances under Sec. 
142.28 of this part or
    (4) An application to destroy, which shall be filed in those 
circumstances under Sec. Sec. 142.21(b) and (e)(2), and Sec. 142.28 of 
this part.

(R.S. 251, as amended, secs. 623, as amended, 624, 46 Stat. 759, as 
amended (19 U.S.C. 66, 1623, 1624))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 81-260, 46 
FR 49842, Oct. 8, 1981; T.D. 89-104, 54 FR 50499, Dec. 7, 1989; T.D. 03-
09, 68 FR 8721, Feb. 25, 2003; CBP Dec. 06-11, 71 FR 31927, June 2, 
2006]



Sec. 142.23  Time limit for filing documentation after release.

    The applicable documentation described in Sec. 142.22(b) shall be 
filed, and estimated duties, if any, shall be deposited, within 10 
working days after the merchandise or any part of the merchandise is 
authorized for release under a special permit for immediate delivery or, 
for quota class merchandise within the quota period, whichever expires 
first.

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979; T.D. 80-26, 45 FR 3901, Jan. 
21, 1980; T.D. 98-34, 63 FR 19399, Apr. 20, 1998]



Sec. 142.24  Special permit.

    (a) Conditions for issuance. At the discretion of the port director, 
a special permit for immediate delivery may be issued on Customs Form 
3461, appropriately modified, for a class or classes of merchandise 
particularly described in the application for the permit.
    (b) Notation of value for each shipment. When applying for the 
release of a shipment of merchandise under a special permit for 
immediate delivery, the importer shall note a value for the shipment on 
the documentation presented. The value so noted shall not be less than 
the invoice value.

(R.S. 251, as amended, secs. 623, as amended, 624, 46 Stat. 759, as 
amended (19 U.S.C. 66, 1623, 1624))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 84-213, 49 
FR 41185, Oct. 19, 1984]



Sec. 142.25  Discontinuance of immediate delivery privileges.

    (a) Authority of port director. The port director may discontinue 
immediate delivery privileges if the importer:
    (1) Has failed repeatedly to file the applicable Customs 
documentation set forth in Sec. 142.22(b) timely without justification, 
or
    (2) Has not taken prompt action to settle a claim for liquidated 
damages issued under Sec. 142.27 for failure to file the applicable 
Customs documentation set forth in Sec. 142.22(b) timely, or a claim 
for liquidated damages issued under the basic importation and entry bond 
for failure to deposit estimated duties, taxes and charges timely, as 
provided in such bond. ``Prompt action'' means that the importer, within 
the time specified in a claim for liquidated damages shall petition for 
relief or pay the amount claimed and, file the applicable documentation 
and deposit estimated duties, if any.
    (3) Has repeatedly delivered documentation required by Sec. 
142.22(b) which is incomplete or which contains erroneous information.
    (4) Is substantially or habitually delinquent in the payment of 
Customs bills. See Sec. 142.26.
    (b) Brokers; restriction. A broker shall not circumvent an action 
taken under this section by applying for the immediate release of the 
importer's merchandise in the broker's name and under the broker's bond.

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 93-37, 58 FR 
30984, May 28, 1993; T.D. 95-77, 60 FR 50020, Sept. 27, 1995]

[[Page 57]]



Sec. 142.26  Delinquent payment of Customs bills.

    The following procedures shall be followed if an importer is 
substantially or habitually delinquent in the payment of Customs bills:
    (a) Notice. The importer shall be advised in writing by the director 
of the port in which he is substantially or habitually delinquent that 
his immediate delivery privileges have been suspended. The notice shall 
state the reason for the action and advise the importer that if payment 
of all his delinquent Customs bills is not made within 10 working days 
from the date of the notice, the importer's immediate delivery 
privileges also shall be suspended at all Customs ports.
    (b) Reinstatement of privileges by port. If the importer pays all 
his delinquent Customs bills within 10 working days after the date of 
the notice, the suspension shall be removed, and the importer's 
immediate delivery privileges shall be reinstated.
    (c) Reinstatement of privileges by Headquarters. If the importer has 
not paid all his delinquent Customs bills within 10 working days after 
the date of the notice, his immediate delivery privileges shall be 
suspended at all Customs ports. This suspension shall remain in effect 
in each port of entry until notification is received from Headquarters 
that the suspension is removed and that the importer's immediate 
delivery privileges have been reinstated.



Sec. 142.27  Failure to file documentation timely.

    If the applicable Customs documentation set forth in Sec. 142.22(b) 
is not filed within the time provided in Sec. 142.23, the port director 
shall make an immediate demand for liquidated damages in the amount of 
the bond in the case of a single entry bond. When the transaction has 
been charged against a continuous bond, the demand shall be for the 
amount that would have been demanded if the merchandise had been 
released under a single entry bond. Any application for cancellation of 
liquidated damages incurred shall be made in accordance with part 172 of 
this chapter.

(R.S. 251, as amended, secs. 623, as amended, 624, 46 Stat. 759, as 
amended (19 U.S.C. 66, 1623, 1624))

[T.D. 79-221, 44 FR 46821, Aug. 9, 1979, as amended by T.D. 84-213, 49 
FR 41185, Oct. 19, 1984]



Sec. 142.28  Withdrawal or entry summary not required for prohibited merchandise.

    (a) Exportation or destruction of prohibited merchandise. If 
merchandise released under a special permit for immediate delivery later 
is found to be prohibited, the port director shall demand its recall in 
accordance with Sec. 141.113 of this chapter (applicable to the recall 
of merchandise released from Customs custody), and withdrawal or entry 
summary documentation and the deposit of estimated duties, if any, shall 
not be required provided:
    (1) The merchandise is exported or destroyed under Customs 
supervision within the time limit for entry specified in Sec. 142.23, 
or
    (2) An entry for exportation or for transportation and exportation 
on Customs form 7512, or an application to destroy the merchandise, is 
made within the specified time limit, and the exportation or destruction 
is accomplished promptly.
    (b) Procedures for exportation or destruction. The exportation or 
destruction of prohibited merchandise required by paragraph (a) of this 
section shall be under the same procedures as exportation or destruction 
of prohibited merchandise covered by a consumption entry with remission 
or refund of duties. See Sec. Sec. 158.41 and 158.45(c) of this 
chapter.
    (c) Notation on exportation entry. An entry for exportation or for 
transportation and exportation of prohibited merchandise for which no 
entry summary for consumption has been filed shall be stamped or 
imprinted conspicuously with the legend:

              Prohibited Merchandise, No Other Entry Filed



Sec. 142.29  Other procedures applicable.

    Merchandise released under a special permit for immediate delivery 
shall be

[[Page 58]]

subject to the same procedures applicable to all other imported 
merchandise, unless specific procedures are set forth in this subpart.



                         Subpart D_Line Release

    Source: T.D. 92-93, 57 FR 44093, Sept. 24, 1992, unless otherwise 
noted.



Sec. 142.41  Line Release.

    Line Release is an automated system designed to release and tract 
repetitive shipments. It is a method of entry or immediate delivery 
extended to importers of merchandise which Customs deems to be 
repetitive and high volume. Line Release may be used only at locations 
approved by Customs for handling Line Release. At certain high-risk 
locations along the land borders of the United States (the locations to 
be published in the Federal Register), which are approved by Customs for 
handling Line Release, the use of Line Release for particular shipments 
may be denied by Customs unless the imported merchandise is transported 
by carriers that participate in the Land Border Carrier Initiative 
Program (see, subpart H of part 123 of this chapter).

[T.D. 92-93, 57 FR 44093, as amended by T.D. 99-2, 64 FR 33, Jan. 4, 
1999]



Sec. 142.42  Application for Line Release processing.

    In order to obtain approval for processing import transactions 
through Line Release, a broker or importer filing its own entries (entry 
filer) must submit an application to the port director, signed by the 
entry filer, in a format described as a Line Release Data Loading Sheet. 
The application must be accompanied by a representative sample of an 
actual commercial invoice for the products sought to be processed under 
Line Release. The Line Release Data Loading Sheet must contain the 
following information with each information element appearing on a 
separate line.
    (a) Port where application is being made.
    (b) Initiating Company Information: name, address, city, state, 
contact person, phone number of contact person, and signature.
    (c) Listing of all ports in which the initiating company has filed a 
similar application for Line Release.
    (d) Country of origin codes (ISO codes from Annex B of HTSUS) for 
the merchandise.
    (e) Shipper or manufacturer information: Name, address, city, 
province/state, country, postal code, indication by noting ``M'' or 
``S'' whether this information relates to a manufacturer (M) or a 
shipper (S), and manufacturer identification number of the shipper or 
manufacturer.
    (f) Importer information (if importer is different than filer): 
Name, address, city, state and country, zip code, importer number, bond 
number, and surety code.
    (g) Entry filer information: Name, importer number, filer code, bond 
number, and surety code.
    (h) Product information: Product description, manifest unit of 
measure, HTSUS number described to sub-heading level for particular 
product or range of HTSUS numbers at sub-heading levels for multiple 
products for which Line Release is sought.
    (i) Election of whether the Line Release transaction is to be 
considered an entry or an immediate delivery.



Sec. 142.43  Line Release application approval process.

    (a) Port review. The port director shall review each Line Release 
application to determine whether the shipments qualify for Line Release 
processing. The port director may contact the applicant for further 
information, if necessary. An application that fails to elect whether 
the Line Release transaction is to be considered an entry or an 
immediate delivery will be returned to the applicant. If all required 
information is submitted, the application will be forwarded to 
Headquarters for final processing.
    (b) Assignment of C-4 Codes. A C-4 Code (Common Commodity 
Classification Code), which is a unique code identifying the shipper or 
manufacturer, importer, entry filer, and the product for each Line 
Release shipment, shall be assigned by Headquarters to each application 
approved for Line Release. Headquarters shall annotate each approved 
application with a C-4 Code and

[[Page 59]]

return the application to the port director who shall return the 
approved application to the entry filer.
    (c) Denial of Line Release application. If the port director is 
considering the denial of a Line Release application, consideration 
shall be given to whether an application by the same filer for the same 
transaction has been approved at another port. If there is not an 
approved application at another port and the port director determines 
that the application shall be denied, the application shall be noted 
denied and returned to the entry filer without a C-4 Code annotation by 
the port director. If an application has been approved at another port, 
but the port director still questions whether the application should be 
approved at his port, the port director shall forward the application to 
the Assistant Commissioner, Office of Information Management. The Office 
of Information and Technology will review the application and will 
notify the port director of the final determination.



Sec. 142.44  Entry number range.

    After an application for Line Release has received final approval, 
filers must provide the port director, in writing, with a range of entry 
numbers for use in the system so that an entry number can be assigned 
automatically to each Line Release transaction. For the purposes of this 
subpart, ``entry number'', when the release is an immediate delivery, 
merely refers to the Line Release transaction number; this number does 
not become the actual entry number until an entry for the merchandise 
released under the immediate delivery procedure is filed. A separate 
range must be provided for each Line Release site at the port. These 
entry numbers shall be used for assignment within the Line Release 
system. Entry filers shall not assign these numbers to other entry 
transactions.



Sec. 142.45  Use of bar code by entry filer.

    (a) Printing of C-4 Code. Upon receipt of an approved Line Release 
application, the entry filer, in accordance with instructions from the 
port director, shall preprint invoices with the C-4 Code in bar code and 
alpha-numeric format or print labels with the necessary information. Bar 
codes shall be printed in accordance with the specifications stated in 
Customs Publication 561 (Line Release Overview). Labels or preprinted 
invoices also shall state the name of the shipper or manufacturer of the 
product and the name of the importer of record, if other than the entry 
filer, above the bar code and the name of the entry filer and a product 
description below the bar code.
    (b) Multiple commodity processing. Multiple commodity processing 
allows more than one product to be released under one entry number. The 
shipper/manufacturer, importer of record and the entry filer must be the 
same. The product description is the only variable allowed. The 
commodities should be listed on one invoice with C-4 Code labels for 
each commodity attached to the invoice.
    (c) Distribution of labels. If labels are used, the labels shall be 
affixed to the invoices in accordance with instructions from the port 
director. The entry filer may either affix the labels or distribute the 
labels to the shippers/manufacturers and instruct them in the use and 
placement of the labels.



Sec. 142.46  Presentation of invoice and assignment of entry number.

    (a) Presentation of invoice. When merchandise that has been approved 
for Line Release is imported at a Line Release site, the carrier, 
importer or filer shall present Customs with an invoice with the bar 
code or codes printed or affixed and, according to the method of 
transportation, the appropriate manifest document.
    (b) Verification of data. If after scanning the bar code at the Line 
Release site, the Customs officer verifies the data on the bar code with 
the information on the invoice, he will key the quantity on the invoice 
and an entry number will be automatically assigned to the transaction. 
If there are any differences between the system data and the invoice and 
bar code, including any differences in entry filer, the Customs officer 
shall order an examination.
    (c) Other agency documentation. If the Line Release shipment 
requires other agency documentation, the Customs officer at the Line 
Release site will be

[[Page 60]]

alerted to that requirement electronically when he verifies the data on 
the bar code with the information on the invoice. If the required form 
is presented to the officer with the documentation package, the shipment 
may be released.



Sec. 142.47  Examinations of Line Release transactions.

    (a) General. Merchandise imported under Line Release generally may 
be released without further Customs processing. Customs, however, may 
choose to inspect any Line Release shipment. Examinations may be either 
specifically ordered by the Customs officer or random.
    (b) Voiding of Line Release Transaction. Customs may void a Line 
Release transaction for the following reasons: Because of an 
examination, because a carrier transporting the Line Release merchandise 
is not a participant in the Land Border Carrier Initiative Program 
(LBCIP), or because a driver or conveyance is not authorized in 
accordance with the LBCIP. If this occurs, Customs will return the 
invoice to the carrier, and the entry filer, in order to enter 
merchandise, shall prepare and submit either a CF 3461 or 3461 
Alternate.

[T.D. 92-93, 57 FR 44093, Sept. 24, 1992, as amended by T.D. 99-2, 64 FR 
33, Jan. 4, 1999]



Sec. 142.48  Release procedure.

    (a) General. When the Customs officer at the Line Release site 
determines that a shipment is ready for release, release data, 
consisting of the entry number, the date and time of release, the 
inspector's badge number, the quantity and unit of measure, and the C-4 
Code will be printed on the invoice and the manifest document and, when 
other agency documentation is presented, may be printed on that 
documentation. The invoice shall be returned to the entry filer and the 
manifest document shall be retained by Customs.
    (b) Notification to non-ABI participants. The returned invoice with 
the release data shall be the release notification to non-ABI 
participants.
    (c) Notification to ABI participants. If the Line Release entry 
filer is an operational ABI participant, the filer shall receive an 
electronic notification of the release consisting of the importer of 
record number, the port of entry, the filer code, the entry number, the 
date and time of release, the manufacturer code, the quantity and unit 
of measure, the release site, the HTSUS number(s), the C-4 Code and the 
country or countries of origin.



Sec. 142.49  Deletion of C-4 Code.

    (a) By Customs. A port director may temporarily or permanently 
delete an entry filer's C-4 Code without providing the participant with 
any justification and without prior notification in cases of willfulness 
or when public health, interest, or safety so requires, thereby revoking 
the filer's use of Line Release.
    (b) By entry filer. Entry filers may delete C-4 Codes from Line 
Release by notifying the port director in writing on a Deletion Data 
Loading Sheet. Such notification shall state the C-4 Code which is to be 
deleted, the port where the C-4 Code is to be deleted and the reason for 
the requested deletion. A copy of the originally approved Data Loading 
Sheet must be submitted with the Deletion Data Loading Sheet. If only a 
temporary deletion is desired, the filer shall state the requested 
effective date for the deletion and the date the C-4 Code is requested 
to be returned to Line Release processing.



Sec. 142.50  Line Release data base corrections or changes.

    The applicant shall notify the port director of any changes in 
names, importer or filer numbers or bond information on a Line Release 
Data Loading Sheet as soon as possible. Notification shall be 
accomplished by the submission of a copy of the original loading sheet 
with a Correction Data Loading Sheet.



Sec. 142.51  Changing election of entry or immediate delivery.

    An applicant who has already received a C-4 Code and wishes to 
change the election chosen on his Line Release application as to whether 
the release should be considered an entry or an immediate delivery must 
submit a letter requesting such change to the port director where the C-
4 Code is used. This

[[Page 61]]

letter must include the C-4 Code to be changed and the date the change 
is to be effective. If the requested change is for a temporary time 
period, the letter shall include the date the releases are to return to 
the release type originally requested. Applications that fail to state 
the effective dates of the changes requested will be returned to the 
applicant.



Sec. 142.52  Port-wide and multiple port acceptance of Line Release.

    (a) Port-wide processing. If a C-4 Code has been approved by the 
port director, the C-4 Code may be used at any Line Release site at the 
port.
    (b) Multiple port processing. In order for a C-4 Code approved at 
one port to be used at another port, the entry filer must submit an 
application to the port director of the other port. While uniform 
criteria shall be applied to approving similar shipments for Line 
Release at all ports, a port director may exercise his discretion to 
deny Line Release at his port even though a similar shipment may be 
approved at another port.



PART 143_SPECIAL ENTRY PROCEDURES--Table of Contents




Sec.
143.0 Scope.

                  Subpart A_Automated Broker Interface

143.1 Eligibility.
143.2 Application.
143.3 Action on application.
143.4 Confidentiality of data.
143.5 System performance requirements.
143.6 Failure to maintain performance standards.
143.7 Revocation of ABI participation.
143.8 Appeal of suspension or revocation.

                      Subpart B_Appraisement Entry

143.11 Merchandise eligible for appraisement entry.
143.12 Form of entry.
143.13 Documents to be presented with entry.
143.14 Payment of additional expenses.
143.15 Deposit of estimated duties and taxes.
143.16 Substitution of warehouse entry.

                        Subpart C_Informal Entry

143.21 Merchandise eligible for informal entry.
143.22 Formal entry may be required.
143.23 Form of entry.
143.24 Preparation of Customs Form 7501 and Customs Form 368 or 368A 
          (serially numbered).
143.25 Information on entry form.
143.26 Party who may make informal entry of merchandise.
143.27 Invoices.
143.28 Deposit of duties and release of merchandise.

                    Subpart D_Electronic Entry Filing

143.31 Applicability.
143.32 Definitions.
143.33 Eligibility criteria for participation.
143.34 Procedure for electronic immediate delivery or entry.
143.35 Procedure for electronic entry summary.
143.36 Form of immediate delivery, entry and entry summary.
143.37 Retention of records.
143.38 [Reserved]
143.39 Penalties.

    Authority: 19 U.S.C. 66, 1481, 1484, 1498, 1624.

    Source: T.D. 73-175, 38 FR 17463, July 2, 1973, unless otherwise 
noted.



Sec. 143.0  Scope.

    This part sets forth the requirements and procedures for 
participation in the Automated Broker Interface (ABI) and for the 
clearance of imported merchandise under appraisement and informal 
entries as well as under electronic entry filing, which are in addition 
to the general requirements and procedures for all entries set forth in 
part 141 of this chapter. More specific requirements and procedures are 
set forth elsewhere in this chapter; for example, in part 145 for 
importations by mail, and in part 10 for merchandise conditionally free 
of duty or subject to a reduced rate.

[T.D. 73-175, 38 FR 17463, July 2, 1973, as amended by T.D. 90-92, 55 FR 
49884, Dec. 3, 1990]



                  Subpart A_Automated Broker Interface

    Source: T.D. 90-92, 55 FR 49884, Dec. 3, 1990, unless otherwise 
noted.

[[Page 62]]



Sec. 143.1  Eligibility.

    The Automated Broker Interface (ABI) is a module of the Customs 
Automated Commercial System (ACS) which allows participants to transmit 
data electronically to Customs through ABI and to receive transmissions 
through ACS. Its purposes are to improve administrative efficiency, 
enhance enforcement of Customs and related laws, lower costs and 
expedite the release of cargo. Participants in ABI may be:
    (a) Customs brokers as defined in Sec. 111.1 of this chapter;
    (b) Importers as defined in Sec. 101.1 of this chapter; and
    (c) ABI service bureaus, that is, an individual, partnership, 
association or corporation which provides communications facilities and 
data processing services for brokers and importers, but which does not 
engage in the conduct of customs business as defined in Sec. 111.1(c) 
of this chapter.

[T.D. 90-92, 55 FR 49884, Dec. 3, 1990, as amended by T.D. 97-82, 62 FR 
51771, Oct. 3, 1997; T.D. 01-14, 66 FR 8767, Feb. 2, 2001]



Sec. 143.2  Application.

    A prospective participant in ABI shall submit a letter of intent to 
the port director closest to his principal office, with a copy to the 
Assistant Commissioner, Information and Technology, or designee. The 
letter of intent shall set forth a commitment to develop, maintain and 
adhere to the performance requirements and operational standards of the 
ABI system in order to ensure the validity, integrity and 
confidentiality of the data transmitted. The letter of intent must also 
contain the following, as applicable:
    (a) A description of the computer hardware, communications and entry 
processing systems to be used and the estimated completion date of the 
programming;
    (b) If the participant has offices in more than one location, the 
location of each office and the estimated start-up date for each office 
listed;
    (c) The name(s) of the participant's principal management and 
contact person(s) regarding the system;
    (d) If the system is being developed or supported by a data 
processing company, the data processing company's name and the contact 
person;
    (e) The software vendor's name and the contact person; and
    (f) The participant's entry filer code and average monthly volume.



Sec. 143.3  Action on application.

    (a) Approval. Permission to use ABI will be granted by the Assistant 
Commissioner, Information and Technology, or his designee, only to those 
applicants who are not delinquent or otherwise remiss in their 
transactions with Customs and are in compliance with the ABI system 
performance procedures and standards as described in Sec. 143.5 of this 
subpart. If there is any cause to question the qualifications or fitness 
of the applicant to participate in ABI, the application may be referred 
for investigation and report. The investigation may include, but need 
not be limited to:
    (1) The accuracy of the information provided in the letter of 
intent;
    (2) The business integrity of the applicant;
    (3) The character and reputation of an individual applicant or a 
member of a partnership or an officer of an association or corporation; 
and
    (4) The character and reputation of the software vendor.
    (b) Denial. If permission to use ABI is denied to an applicant by 
the Assistant Commissioner, Information and Technology, or his designee, 
written notice, including the grounds for the denial, will be given to 
him and to the port director. The applicant may appeal the denial in the 
manner prescribed in Sec. 143.8 of this subpart and those procedures 
for handling an appeal shall apply.



Sec. 143.4  Confidentiality of data.

    The electronic data received and exchanged by a service bureau shall 
be considered confidential, and the service bureau shall maintain the 
accuracy of data received in the process of formatting and transmitting 
such data on behalf of a filer, and shall not disclose this data or any 
information connected therewith to any persons other than the filer or 
Customs (see Sec. 111.24 of this chapter).

[[Page 63]]



Sec. 143.5  System performance requirements.

    The performance requirements and operational standards for 
electronic data filing are detailed in Customs Publication 552, Customs 
And Trade Automated Interface Requirements (CATAIR), which is updated 
periodically. The User Support Services Division, Customs Headquarters, 
upon request, shall provide each prospective participant with a copy of 
this publication. Each prospective participant must demonstrate that his 
system can interface directly with the Customs computer and ensure 
accurate submission of required data. Such demonstration will include 
intensive testing of the participant's system and monitoring of its 
performance in accordance with Publication 552.



Sec. 143.6  Failure to maintain performance standards.

    ABI participants must adhere to the performance requirements and 
operational standards of the ABI system and maintain a high level of 
quality in the transmission of data, as defined in Customs Publication 
552 (CATAIR) and Customs directives and policy statements, in order to 
participate in ABI.
    (a) Probational status. A participant who does not adhere to the 
requirements and standards of the ABI system or maintain a high level of 
quality as described above may be placed on probational status. The 
participant will be notified, electronically and in writing, by the 
Director, User Support Services Division, of any action to place the 
participant on probation. The notice will specifically set forth the 
grounds for the proposed probation, and advise the participant that he 
will have 15 days from the date of the notice to show cause why the 
probationary period should not take effect. If the participant fails to 
respond within the allotted time, or fails to show to the satisfaction 
of the Director, User Support Services Division, that the probationary 
period should not take effect, the Director will notify the participant 
of the effective date of the probationary period. The length of the 
probationary period may, in the discretion of the Director, User Support 
Services Division, be extended up to a maximum of 90 days, if the 
participant's performance remains below standard, but, except for 
immediate revocation under Sec. 143.7, participation will not be 
suspended or revoked until the probationary period has lasted a minimum 
of 30 days. The participant's performance will be closely monitored 
during this time, which will include working with the participant and 
providing any necessary guidance to assist the participant in bringing 
his performance back to standard.
    (b) Suspension following probationary period. If deficiencies are 
not corrected within the probationary period, the participant will be 
suspended from operational status. The participant will be notified, 
electronically and in writing, by the Director, User Support Services 
Division, of any action to suspend participation. The notice will 
specifically set forth the grounds and effective date for the 
suspension, and the right to appeal the suspension to the Assistant 
Commissioner, Information and Technology, within 10 days following the 
date of the written notice of suspension (see Sec. 143.8).
    (c) Reinstatement following suspension. To obtain reinstatement to 
operational status, a suspended participant must submit a letter to the 
Director, User Support Services Division, stating that the deficiencies 
for which the suspension was invoked have been corrected. If, after the 
participant has demonstrated compliance with the system performance 
requirements and operational standards specified in Sec. 143.5 of this 
part, if required, the Director is satisfied that the deficiencies have 
been corrected, the participant will be reinstated.



Sec. 143.7  Revocation of ABI participation.

    (a) Fraud or misstatement of material fact. If it is determined at 
any time that participation in the system was obtained through fraud or 
the misstatement of a material fact, the Executive Director, Trade 
Policy and Programs, Office of International Trade, will immediately 
revoke ABI participation.
    (b) Risk of significant harm to system. If the participant's 
continued use of

[[Page 64]]

ABI would pose a potential risk of significant harm to the integrity and 
functioning of the system, the Director, User Support Services Division, 
will immediately revoke ABI participation.
    (c) Notification to participant. The participant will be notified, 
electronically and in writing, by the applicable Director, of the 
revocation. The notice will specifically set forth the grounds and 
effective date of revocation, and the right to appeal the revocation to 
the Assistant Commissioner, Information and Technology, within 10 days 
following the date of the written notice of revocation.



Sec. 143.8  Appeal of suspension or revocation.

    If the participant files a written appeal with the Assistant 
Commissioner, Information and Technology, within 10 days following the 
date of the written notice of action to suspend or revoke participation 
as provided in Sec. Sec. 143.6 and 143.7, the suspension or revocation 
of participation shall not take effect until the appeal is decided, 
except in those cases where the Executive Director, Trade Policy and 
Programs, Office of International Trade, or the Director, User Support 
Services Division, respectively, determines that participation was 
obtained through fraud or the misstatement of a material fact, or that 
continued participation would pose a potential risk of significant harm 
to the integrity and functioning of the system. The CBP officer who 
receives the appeal shall stamp the date of receipt of the appeal and 
the stamped date is the date of receipt for purposes of the appeal. The 
Assistant Commissioner shall inform the participant of the date of 
receipt and the date that a response is due under this paragraph. The 
Assistant Commissioner shall render his decision to the participant, in 
writing, stating his reasons therefor, by letter mailed within 30 
working days following receipt of the appeal, unless this period is 
extended with due notification to the participant.



                      Subpart B_Appraisement Entry



Sec. 143.11  Merchandise eligible for appraisement entry.

    (a) Without Commissioner's approval. An application for entry by 
appraisement may be approved by the port director without securing the 
approval of the Commissioner of Customs for any of the following 
merchandise:
    (1) Merchandise damaged on the voyage of importation, by fire or 
through marine casualty or any other cause, without fault on the part of 
the shipper;
    (2) Merchandise recovered from a wrecked or stranded vessel;
    (3) Household effects used abroad and personal effects, not imported 
in pursuance of a purchase or agreement for purchase and not intended 
for sale;
    (4) Articles sent by persons in foreign countries as gifts to 
persons in the United States;
    (5) Tools of trade of a person arriving in the United States;
    (6) Personal effects of citizens of the United States who have died 
in a foreign country; and
    (7) Any of the following articles, which are deemed in accordance 
with section 498(a)(10), Tariff Act of 1930, as amended (19 U.S.C. 
1498(a)(10)), to be articles the value of which cannot be declared:
    (i) Articles which are secondhand;
    (ii) Articles which have become deteriorated or damaged before 
importation otherwise than as specified in paragraph (a)(1) of this 
section;
    (iii) Articles which are not the subject of a commercial 
transaction; and
    (iv) So-called overages or dock accumulations which cannot be 
identified with any particular shipment.
    (b) With Commissioner's approval. Entry by appraisement for 
merchandise not provided for in paragraph (a) of this section shall be 
allowed only with the approval of the Commissioner of Customs. Each 
request for such approval shall be filed in triplicate with the port 
director and shall state in detail the reasons for the request for entry 
by appraisement.
    (c) Merchandise not eligible. An application for an entry by 
appraisement shall not be approved after the merchandise has been 
appraised or released

[[Page 65]]

from Customs custody, nor for damaged merchandise when the damage occurs 
after importation.



Sec. 143.12  Form of entry.

    Application for an entry by appraisement shall be made in triplicate 
on the entry summary, Customs Form 7501.

[T.D. 84-129, 49 FR 23168, June 5, 1984]



Sec. 143.13  Documents to be presented with entry.

    The importer shall in all cases present:
    (a) Any bills or statements of cost relating to the merchandise 
which may be in his possession; and
    (b) A declaration that he has no other information as to the value 
of the articles and is unable to obtain such information or to determine 
the value of the articles for the purpose of making formal entry 
thereof.



Sec. 143.14  Payment of additional expenses.

    Any additional expenses for cartage, storage, or labor occasioned by 
reason of an entry by appraisement shall be borne by the importer.



Sec. 143.15  Deposit of estimated duties and taxes.

    Estimated duties shall be deposited in accordance with subpart G of 
part 141 of this chapter before the merchandise is released from Customs 
custody.



Sec. 143.16  Substitution of warehouse entry.

    The importer may substitute an entry for warehouse at any time 
within 1 year from the date of importation, provided the merchandise has 
remained in continuous Customs custody.



                        Subpart C_Informal Entry



Sec. 143.21  Merchandise eligible for informal entry.

    The following types of merchandise are among those which may be 
entered under informal entry (see Sec. Sec. 141.52 and 143.22 of this 
chapter):
    (a) Shipments of merchandise not exceeding $2,000 in value (except 
for articles valued in excess of $250 classified in Sections VII, VIII, 
XI, and XII; Chapter 94 and Chapter 99, Subchapters III and IV, HTSUS);
    (b) Any installment, not exceeding $2,000 in value, of a shipment 
arriving at different times, as described in Sec. 141.82 of this 
chapter;
    (c) A portion of one consignment, when such portion does not exceed 
$2,000 in value and may be entered separately pursuant to Sec. 141.51 
of this chapter. This paragraph does not apply to shipments of articles 
valued in excess of $250 classified under subheadings from Sections VII, 
VIII, XI, and XII; or in Chapter 94 and Chapter 99, Subchapters III and 
IV, HTSUS;
    (d) Household or personal effects or tools of trade entitled to free 
entry under Chapter 98, Subchapter IV, HTSUS (19 U.S.C. 1202);
    (e) Household effects used abroad and personal effects whether or 
not entitled to free entry, not imported in pursuance of a purchase or 
agreement for purchase and not intended for sale;
    (f) Household and personal effects described in paragraph (e) of 
this section when entered under subheading 9802.00.40, HTSUS (19 U.S.C. 
1202), and the value of the repairs and alterations thereto does not 
exceed $2,000;
    (g) Personal effects not exceeding $2,000 in value of citizens of 
the United States who have died abroad;
    (h) Books and other articles classifiable under subheadings 
4903.00.00, 4904.00.00, 4905.91.00, 4905.99.00, 9701.10.00, 9701.90.00, 
9810.00.05, HTSUS (19 U.S.C. 1202), imported by a library or other 
institution described in subheadings 9810.00.05 and 9810.00.30, HTSUS 
(19 U.S.C. 1202);
    (i) Theatrical scenery, properties, and effects, motion-picture 
films, commercial travelers' samples and professional books, implements, 
instruments, and tools of trade, occupation, or employment, as set forth 
in Sec. 10.68 of this chapter;
    (j) Merchandise which, upon written application to the Commissioner 
of Customs, is determined to be unique in character or design such that 
the value thereof cannot be declared and which is not intended for sale 
or imported in pursuance of a purchase or agreement for purchase; and

[[Page 66]]

    (k) Products of the United States, when the aggregate value of the 
shipment does not exceed $10,000 and the products are imported--
    (1) For the purposes of repair or alteration prior to reexportation, 
or
    (2) After having been either rejected or returned by the foreign 
purchaser to the United States for credit.
    (l) Shipments of merchandise qualifying for the administrative 
exemptions under 19 U.S.C. 1321(a)(2) and provided for in--
    (1) Section 10.151 or 145.31 of this chapter (certain importations 
not exceeding $200 in value);
    (2) Section 10.152 or 145.32 of this chapter (certain bona-fide 
gifts not exceeding $100 in value ($200 in the case of articles sent 
from a person in the Virgin Islands, Guam, or American Samoa)); or
    (3) Section 148.51 or 148.64 of this chapter (certain personal or 
household articles not exceeding $200 in value).

[T.D. 73-175, 38 FR 17463, July 2, 1973]

    Editorial Note: For Federal Register citations affecting Sec. 
143.21, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



Sec. 143.22  Formal entry may be required.

    The port director may require a formal consumption or appraisement 
entry for any merchandise if deemed necessary for: (a) Import 
admissibility enforcement purposes, (b) revenue protection, or (c) the 
efficient conduct of Customs business. Individual shipments for the same 
consignee, when such shipments are valued at $2,000 or less, may be 
consolidated on one such entry.

[T.D. 73-175, 38 FR 17463, July 2, 1973, as amended by T.D. 84-171, 49 
FR 31253, Aug. 3, 1984; T.D. 85-38, 50 FR 8723, Mar. 5, 1985; T.D. 85-
123, 50 FR 29955, July 23, 1985; T.D. 89-82, 54 FR 36026, Aug. 31, 1989; 
T.D. 98-28, 63 FR 16417, Apr. 3, 1998]



Sec. 143.23  Form of entry.

    Except for the types of merchandise listed below which may be 
entered on the forms indicated, merchandise to be entered informally 
shall be entered on a Customs Form 368 or 368A, (serially numbered) or 
Customs Form 7501, or, if authorized by the port director, upon the 
presentation of a commercial invoice which contains the following 
declaration, signed by the importer or his agent:

    I declare that the information on this invoice is accurate to the 
best of my knowledge and belief; that the invoice quantities are true 
and correct manifest quantities; and that I have not received and do not 
know of any invoice other than this one.

    (a) Articles in passengers' baggage which may be cleared on a 
baggage declaration in accordance with subpart B of part 148 of this 
chapter;
    (b) Products of the United States being returned for which clearance 
on Customs Form 3311 is prescribed by Sec. 10.1 of this chapter;
    (c) Personal effects and tools of trade for which clearance on 
Customs Form 3299 is prescribed by Sec. 148.6 of this chapter; and
    (d) Shipments not exceeding $2,000 in value (except for articles 
valued in excess of $250 classified in Sections VII, VIII, XI, and XII; 
Chapter 94; and Chapter 99, Subchapter III and IV, Harmonized Tariff 
Schedule of the United States) which are either (1) unconditionally free 
of duty and not subject to any quota or internal revenue tax, or (2) 
conditionally free (other than shipments of merchandise provided for in 
paragraph (g) of this section) and all conditions for free entry are met 
at the time of entry, which may be released upon the filing by the 
importer on Customs Form 7523, in duplicate, supported by evidence of 
the right to make entry.
    (e) Merchandise for which informal entry can be made on a different 
form as prescribed elsewhere in this chapter.
    (f) Merchandise released under the immediate delivery procedure or 
the entry documentation required by Sec. 142.3(a), and entry is made on 
Customs Form 7501, annotated ``Informal Entry'' in the upper right hand 
corner.
    (g) Merchandise, regardless of value, which is imported for 
noncommercial purposes, which qualifies for entry free of duty under the 
Generalized System of Preferences (see Sec. Sec. 10.171 through 10.178 
of this chapter), and for which informal entry may be made on Customs 
Form 7523, in duplicate.
    (h) Products of the United States being returned for which informal

[[Page 67]]

entry is permitted by Sec. 143.21(j) may be cleared as follows:
    (1) For products of the United States returned for the purposes of 
repair or alteration prior to reexportation. Customs Form 3311 will 
serve as informal entry.
    (2) For products of the United States after having been either 
rejected or returned by the foreign purchaser for credit, Customs Form 
7501, annotated ``informal entry'' in the upper right hand corner, and 
Customs Form 3311 will serve as informal entry.
    (i) A shipment of merchandise not exceeding $2,000 in value which is 
imported by an express consignment operator or carrier and which meets 
the requirements in Sec. 128.24 of this chapter may be entered as 
provided in that section.
    (j) Except for mail importations (see Sec. Sec. 145.31 and 145.32 
of this chapter), or in the case of personal written or oral 
declarations (see Sec. Sec. 148.12, 148.13 and 148.62 of this chapter), 
a shipment of merchandise not exceeding $200 in value which qualifies 
for informal entry under 19 U.S.C. 1498 and meets the requirements in 
Sec. 10.151 or Sec. 10.152 of this chapter may be entered by 
presenting the bill of lading or a manifest listing each bill of lading 
(see Sec. Sec. 10.151, 10.152 and 128.24(e) of this chapter). The 
following information is required to be filed as a part of such entry:
    (1) Country of origin of the merchandise;
    (2) Shipper name, address and country;
    (3) Ultimate consignee name and address;
    (4) Specific description of the merchandise;
    (5) Quantity;
    (6) Shipping weight; and
    (7) Value.

[T.D. 73-175, 38 FR 17463, July 2, 1973]

    Editorial Note: For Federal Register citations affecting Sec. 
143.23, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



Sec. 143.24  Preparation of Customs Form 7501 and Customs Form 368 or 368A (serially numbered).

    Customs Form 7501 may be prepared by importers or their agents or by 
Customs officers when it can be presented to a Customs cashier for 
payment of duties and taxes and for numbering of the entry before the 
merchandise is examined by a Customs officer. Where there is no Customs 
cashier, Customs Form 368 or 368A (serially numbered) or Customs Form 
7501 must be used, and it shall be prepared by a Customs officer unless 
the form can be prepared under his control by the importer or agent for 
immediate use in clearing merchandise under the informal entry 
procedure. The conditions for the preparation of Customs Form 7501 by 
importers or their agents, as described in the first sentence of this 
section, do not apply to the acceptance of these entries for shipments 
not exceeding $250 in value released under a special permit for 
immediate delivery in accordance with part 142 of this chapter.

[T.D. 84-129, 49 FR 23168, June 5, 1984, as amended by T.D. 87-75, 52 FR 
26142, July 13, 1987; T.D. 89-82, 54 FR 36026, Aug. 31, 1989; T.D. 92-
56, 57 FR 24944, June 12, 1992]



Sec. 143.25  Information on entry form.

    Each Customs Form 368 or 368A (serially numbered) or, where used, 
Customs Form 7501 shall contain an adequate description of the 
merchandise and the item number of the Harmonized Tariff Schedule of the 
United States (19 U.S.C. 1202), under which the merchandise is 
classified.

[T.D. 76-213, 41 FR 31812, July 30, 1976, as amended by T.D. 87-75, 52 
FR 26142, July 13, 1987; T.D. 89-1, 53 FR 51263, Dec. 21, 1988; T.D. 92-
56, 57 FR 24944, June 12, 1992]



Sec. 143.26  Party who may make informal entry of merchandise.

    (a) Shipments valued between $200 and $2,000. A shipment of 
merchandise valued between $200 and $2,000 which qualifies for informal 
entry under 19 U.S.C. 1498 may be entered, using reasonable care, by the 
owner or purchaser of the shipment or, when appropriately designated by 
the owner, purchaser, or consignee of the shipment, a Customs broker 
licensed under 19 U.S.C. 1641.
    (b) Shipments valued at $200 or less. A shipment of merchandise 
valued at $200 or less which qualifies for informal entry under 19 
U.S.C. 1498 and meets the requirements in 19 U.S.C. 1321(a)(2)

[[Page 68]]

(see Sec. Sec. 10.151, 10.152, 10.153, 145.31, 145.32, 148.51, 148.64, 
of this chapter) may be entered, using reasonable care, by the owner, 
purchaser, or consignee of the shipment or, when appropriatel y 
designated by one of these persons, a Customs broker licensed under 19 
U.S.C. 1641.

[T.D. 94-51, 59 FR 30296, June 13, 1994, as amended by T.D. 95-31, 60 FR 
18991, Apr. 14, 1995; T.D. 98-28, 63 FR 16417, Apr. 3, 1998]



Sec. 143.27  Invoices.

    In the case of merchandise imported pursuant to a purchase or 
agreement to purchase, or intended for sale and entered informally, the 
importer shall produce the commercial invoice covering the transaction 
or, in the absence thereof, an itemized statement of value.

[T.D. 85-39, 50 FR 9612, Mar. 11, 1985]



Sec. 143.28  Deposit of duties and release of merchandise.

    Unless statement processing and ACH are used pursuant to Sec. 24.25 
of this chapter, the estimated duties and taxes, if any, shall be 
deposited at the time the entry is presented and accepted by a Customs 
Officer, whether at the customhouse or elsewhere. If upon examination of 
the merchandise further duties or taxes are found due, they shall be 
deposited before release of the merchandise by Customs. When the entry 
is presented elsewhere than where the merchandise is to be examined, the 
permit copy shall be delivered through proper channels to the Customs 
officer who will examine the merchandise.

[T.D. 73-175, 38 FR 17463, July 2, 1973, as amended by T.D. 89-104, 54 
FR 50499, Dec. 7, 1989]



                    Subpart D_Electronic Entry Filing

    Source: T.D. 90-92, 55 FR 49886, Dec. 3, 1990, unless otherwise 
noted.



Sec. 143.31  Applicability.

    This subpart sets forth general requirements for the entry of 
imported merchandise processed electronically through the Customs 
Automated Commercial System (ACS). Entries processed electronically are 
subject to the documentation, document retention and document 
retrievability requirements of this chapter as well as the general entry 
requirements of parts 141 and 142. Use of this system is voluntary and 
optional on behalf of the filer. Customs does not contemplate that 
processing of non-electronic filings shall be delayed.



Sec. 143.32  Definitions.

    The following are definitions for purposes of this subpart D:
    (a) ACS. ``ACS'' means the Automated Commercial System and refers to 
Customs integrated comprehensive tracking system for the acquisition, 
processing and distribution of import data.
    (b) ABI. ``ABI'' means the Automated Broker Interface and refers to 
a module of ACS that allows entry filers to transmit immediate delivery, 
entry and entry summary data electronically to Customs through ACS and 
to receive transmissions from ACS.
    (c) AII. ``AII'' means Automated Invoice Interface and is a method 
of transmitting detailed invoice data through ABI.
    (d) Broker. ``Broker'' means a Customs broker licensed under part 
111 of this chapter.
    (e) Certification. ``Certification'' means the electronic equivalent 
of a signature for data transmitted through ABI. This electronic 
(facsimile) signature must be transmitted as part of the immediate 
delivery, entry or entry summary data. Such data is referred to as 
``certified''.
    (f) Data. ``Data'' when used in conjunction with immediate delivery, 
entry and/or entry summary means the information required to be 
submitted with the immediate delivery, entry and/or entry summary, 
respectively, in accordance with the CATAIR and/or Customs Headquarters 
directives. It does not mean the actual paper documents, but includes 
all of the information required to be in such documents.
    (g) Documentation. ``Documentation'' when used in conjunction with 
immediate delivery, entry and/or entry summary means the documents set 
forth in Sec. 142.3 of this chapter, required to be submitted as part 
of an application for immediate delivery, entry and/or entry

[[Page 69]]

summary, but does not include the Customs Forms 7501, 3461 (or 
alternative forms).
    (h) EDIFACT. ``EDIFACT'' means the Electronic Data Interchange for 
Administration, Commerce and Transport which provides an electronic 
capability to transmit detailed CF 3461, CF 7501 and invoice data.
    (i) Electronic immediate delivery. ``Electronic immediate delivery'' 
means the electronic transmission of CF 3461 or CF 3461 alternate (CF 
3461 ALT) data utilizing ACS in order to obtain the release of goods 
under immediate delivery.
    (j) Electronic entry. ``Electronic entry'' means the electronic 
transmission of CF 3461, CF 3461 ALT, or CF 7501 data utilizing ACS in 
order to obtain the release of merchandise from Customs custody.
    (k) Electronic entry summary. ``Electronic entry summary'' means the 
electronic transmission of CF 7501 data utilizing ACS for the purpose of 
duty assessment and the collection of statistical data.
    (l) Filer. ``Filer'' means the party certifying the electronic 
filing of the application for immediate delivery, entry or entry 
summary. Filer may be a broker or an importer of record filing his own 
entries through ABI without the use of a broker.
    (m) Preclassification/binding ruling number. ``Preclassification/
binding ruling number'' means the system by which classifications are 
approved and assigned a unique identifying number. This number may be 
transmitted as part of the ABI data.
    (n) Records. ``Records'' means the records as defined in part 163 of 
this chapter, which are required to be maintained pursuant to this 
chapter.
    (o) Selectivity criteria. ``Selectivity criteria'' means the 
categories of information which guide Customs judgment in evaluating and 
assessing the risk of an immediate delivery, entry or entry summary 
transaction. Based upon these criteria, immediate delivery or entry 
transactions will be subject to either general examination, general 
examination with document review, or intensive examination. Entry 
summary transactions will be subject to either system review or summary 
document review. General examination (entry/immediate delivery) and 
system review (entry summary) procedures will constitute electronic 
processing provided all conditions necessary for electronic processing 
contained in this part are met.
    (p) Statement processing. ``Statement processing'' means the method 
of collection and accounting within, ACS which allows a filer to pay for 
more than one entry summary with one payment. ACS/ABI generates the 
statement, which is transmitted electronically to the filer, consisting 
of a list of entry summaries and the amount of duties, taxes or fees, if 
any, due for payment. Upon payment and collection of the statement, 
those entry summaries designated as electronic will be scheduled for 
liquidation (see Sec. 24.25 of this chapter).

[T.D. 90-92, 55 FR 49886, Dec. 3, 1990, as amended by T.D. 98-56, 63 FR 
32945, June 16, 1998]



Sec. 143.33  Eligibility criteria for participation.

    To be eligible for electronic immediate delivery, electronic entry 
and electronic entry summary, the filer must be qualified to use the ABI 
feature of ACS, as prescribed in Sec. 143.5. To be eligible for 
electronic entry summary processing, filers must be authorized to use 
the ABI statement processing system. Filers not so authorized would have 
to follow the electronic entry summary with the submission of an entry 
summary in paper form along with any duties, taxes or fees accruing.



Sec. 143.34  Procedure for electronic immediate delivery or entry.

    To file immediate delivery or entry electronically, the filer will 
submit certified immediate delivery or entry data electronically through 
ABI. Data will be validated and, if found error-free, will be accepted. 
If it is determined through selectivity criteria and review of data that 
documentation is not required to be physically submitted in paper form, 
merchandise will be released and Customs will electronically notify the 
filer.

[[Page 70]]



Sec. 143.35  Procedure for electronic entry summary.

    In order to obtain entry summary processing electronically, the 
filer will submit certified entry summary data electronically through 
ABI. Data will be validated and, if the transmission is found error-
free, will be accepted. If it is determined through selectivity criteria 
and review of data that documentation is required for further processing 
of the entry summary, Customs will so notify the filer. Documentation 
submitted before being requested by Customs will not be accepted or 
retained by Customs. The entry summary will be scheduled for liquidation 
once payment is made under statement processing (see Sec. 24.25 of this 
chapter).

[T.D. 98-56, 63 FR 32945, June 16, 1998]



Sec. 143.36  Form of immediate delivery, entry and entry summary.

    (a) Electronic form of data. If Customs determines that the 
immediate delivery, entry or entry summary data is satisfactory under 
Sec. Sec. 143.34 and 143.35, the electronic form of the immediate 
delivery, entry or entry summary through ABI shall be deemed to satisfy 
all filing requirements under this part. Further, the filer will not be 
required to produce or physically submit any official Customs forms of 
immediate delivery, entry or entry summary. The filer is responsible for 
the accuracy of the data submitted electronically to the same extent as 
if the documents were produced, signed and physically submitted by the 
filer (see Sec. 111.32 of this chapter).
    (b) Accuracy of data. Participation constitutes declaration by the 
electronic filer that, to the best of his knowledge, all transactions 
filed electronically fully disclose prices, values, quantities, rebates, 
drawbacks, fees, commissions, and royalties, which are true and correct, 
and that all goods or services provided either free or at a reduced cost 
to the seller of the merchandise are fully disclosed (see Sec. 111.32 
of this chapter).
    (c) Submission of invoice. The invoice will be retained by the filer 
unless requested by Customs. If the invoice is submitted by the filer 
before a request is made by Customs, it will not be accepted or retained 
by Customs. When Customs requests presentation of the invoice, invoice 
data must be submitted in one of the following forms:
    (1) Paper form;
    (2) AII or EDIFACT format.
    (3) In appropriate cases where a party has obtained a 
preclassification/binding ruling number covering the merchandise being 
entered, or is a participant in a pre-approval program, and information 
is electronically transmitted which is adequate for the examination of 
the merchandise and the determination of duties, and for verifying the 
information required for statistical purposes by Sec. 141.61(e) of this 
chapter, such information will satisfy the invoice requirement of this 
part and part 141 of this chapter.

[T.D. 90-92, 55 FR 49886, Dec. 3, 1990, as amended by T.D. 98-56, 63 FR 
32945, June 16, 1998]



Sec. 143.37  Retention of records.

    (a) Record maintenance requirements. All records received or 
generated by a broker or importer must be maintained in accordance with 
part 163 of this chapter.
    (b) Termination of broker's responsibility. If the broker is 
discharged by the importer, he shall retain the documentation for those 
deliveries, entries or entry summaries filed by him prior to such 
discharge. Documentation in possession of a broker at the time of 
permanent termination of the brokerage business shall be accounted for 
pursuant to Sec. 111.30(e) of this chapter.

[T.D. 90-92, 55 FR 49886, Dec. 3, 1990, as amended by T.D. 98-56, 63 FR 
32945, June 16, 1998]



Sec. 143.38  [Reserved]



Sec. 143.39  Penalties.

    (a) Brokers. Brokers unable to produce records requested by Customs 
under this chapter will be subject to disciplinary action or penalties 
pursuant to part 111 or part 163 of this chapter.
    (b) Importers. Importers unable to produce records requested by 
Customs under this chapter will be subject to

[[Page 71]]

penalties pursuant to part 163 of this chapter.

[T.D. 98-56, 63 FR 32945, June 16, 1998]



PART 144_WAREHOUSE AND REWAREHOUSE ENTRIES AND WITHDRAWALS--Table of Contents




Sec.
144.0 Scope.

                      Subpart A_General Provisions

144.1 Merchandise eligible for warehousing.
144.2 Liability of importers and sureties.
144.3 Allowance for damage.
144.4 Allowance for abandoned, destroyed, or exported merchandise.
144.5 Period of warehousing.
144.6 [Reserved]
144.7 Disposition of merchandise after expiration of warehousing period.

        Subpart B_Requirements and Procedures for Warehouse Entry

144.11 Form of entry.
144.12 Contents of entry summary; estimated duties.
144.13 Bond requirements.
144.14 Removal to warehouse.
144.15 Entry and withdrawal from Customs bonded warehouses of distilled 
          spirits.

   Subpart C_Transfer of Right To Withdraw Merchandise from Warehouse

144.21 Conditions for transfer.
144.22 Endorsement of transfer on withdrawal form.
144.23 Endorsement in blank.
144.24 Transferee's bond.
144.25 Deposit of forms.
144.26 Further transfer.
144.27 Withdrawal from warehouse by transferee.
144.28 Protest by transferee.

                  Subpart D_Withdrawals from Warehouse

144.31 Right to withdraw.
144.32 Statement of quantity; charges and liens.
144.33 Minimum quantities to be withdrawn.
144.34 Transfer to another warehouse.
144.35 Withdrawal of vessel and aircraft supplies and equipment.
144.36 Withdrawal for transportation.
144.37 Withdrawal for exportation.
144.38 Withdrawal for consumption.
144.39 Permit to transfer and withdraw merchandise.

                      Subpart E_Rewarehouse Entries

144.41 Entry for rewarehouse.
144.42 Combined entry for rewarehouse and withdrawal for consumption.

    Authority: 19 U.S.C. 66, 1484, 1557, 1559, 1624.
    Section 144.3 also issued under 19 U.S.C. 1563;
    Section 144.33 also issued under 19 U.S.C. 1562;
    Section 144.37 also issued under 19 U.S.C. 1555, 1562.

    Source: T.D. 73-175, 38 FR 17464, July 2, 1973, unless otherwise 
noted.



Sec. 144.0  Scope.

    This part contains regulations pertaining to the entry and 
withdrawal of merchandise under the provisions of section 557, Tariff 
Act of 1930, as amended (19 U.S.C. 1557), which among other things 
provides that articles subject to duty may be entered for warehousing 
and deposited in a bonded warehouse at the expense and risk of the 
owner, importer, or consignee, and withdrawn from warehouse for 
consumption upon payment of duties and charges. The requirements and 
procedures set forth in this part are in addition to the general 
requirements and procedures for all entries set forth in part 141 of 
this chapter. Regulations pertaining to manipulation in warehouse, 
manufacturing warehouses, and smelting and refining warehouses are set 
forth in part 19 of this chapter.



                      Subpart A_General Provisions



Sec. 144.1  Merchandise eligible for warehousing.

    (a) Types of merchandise. Any merchandise subject to duty may be 
entered for warehousing except for perishable merchandise and explosive 
substances (other than firecrackers). Dangerous and highly flammable 
merchandise, though not classified as explosive, shall not be entered 
for warehouse without the written consent of the insurance company 
insuring the warehouse in which the merchandise is to be stored.
    (b) [Reserved]
    (c) Merchandise previously entered. If merchandise has been entered 
under other than a warehouse entry and has

[[Page 72]]

remained in continuous Customs custody, a warehouse entry may be 
substituted for the previous entry. If estimated duties were deposited 
with the superseded previous entry, that entry shall be liquidated for 
refund of the estimated duties without awaiting liquidation of the 
warehouse entry. All copies of the warehouse entry shall bear the 
following notation: This entry is in substitution of ------------------
------; entry No. ------------, dated ------------------------.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 82-204, 47 
FR 49376, Nov. 1, 1982; T.D. 84-149, 49 FR 28699, July 16, 1984]



Sec. 144.2  Liability of importers and sureties.

    The importer of merchandise entered for warehouse is liable for the 
payment of all unpaid duties not only as principal on the bond filed on 
Customs Form 301, containing the bond conditions set forth in Sec. 
113.62 of this chapter, but also by reason of his personal liability as 
consignee. Under the conditions of the bond, the sureties on the bond 
shall be held liable for the payment of duties and Customs charges not 
paid by the principal on the bond, whether such duties and charges are 
finally ascertained before the merchandise is withdrawn from Customs 
custody or thereafter. Liability may be transferred in part along with 
the right to withdraw the merchandise, in accordance with Subpart C of 
this part.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 84-213, 49 
FR 41185, Oct. 19, 1984]



Sec. 144.3  Allowance for damage.

    No abatement or allowance of duties shall be made on account of 
damage, loss, or deterioration of the merchandise while in warehouse, 
except as provided for by law (see part 158 of this chapter).



Sec. 144.4  Allowance for abandoned, destroyed, or exported merchandise.

    Allowance in duties shall be made for merchandise in warehouse which 
is abandoned or destroyed in accordance with Sec. 158.43 of this 
chapter or exported in accordance with Sec. 144.37.



Sec. 144.5  Period of warehousing.

    Merchandise shall not remain in a bonded warehouse beyond 5 years 
from the date of importation.

[T.D. 86-118, 51 FR 22516, June 20, 1986]



Sec. 144.6  [Reserved]



Sec. 144.7  Disposition of merchandise after expiration of warehousing period.

    Merchandise remaining in a bonded warehouse after the expiration of 
the warehousing period shall be disposed of in accordance with Sec. 
127.14 of this chapter.

[T.D. 79-221, 44 FR 46828, Aug. 9, 1979]



        Subpart B_Requirements and Procedures for Warehouse Entry



Sec. 144.11  Form of entry.

    (a) Entry. The documentation required by Sec. 142.3 of this chapter 
shall be filed at the time of entry. If the entry summary, Customs Form 
7501, is filed at the time of entry for merchandise to be entered for 
warehouse, it shall serve as both the entry and the entry summary, and 
Customs Form 3461 or 7533 shall not be required. If the entry summary is 
not filed at the time of entry, it shall be filed within the time limit 
prescribed by Sec. 142.12 of this chapter. If merchandise is released 
before the filing of the entry summary, the importer shall have a bond 
on file, as prescribed by Sec. 142.4 of this chapter.
    (b) Customs Form 7501. The entry summary for merchandise entered for 
warehouse shall be executed in triplicate on Customs Form 7501, 
appropriately modified, and shall include all of the statistical 
information required by Sec. 141.61(e) of this chapter. The port 
director may require an extra copy or copies of Customs Form 7501, 
annotated ``PERMIT'' for use in connection with delivery of the 
merchandise to the bonded warehouse.
    (c) Designation of warehouse. The importer shall designate on the 
entry summary, Customs Form 7501, the bonded warehouse in which he 
desires his merchandise deposited.
    (d) Specification list. When packages which are not uniform in 
contents, quantities, values, or rates of duties

[[Page 73]]

are grouped together as one item on an entry summary, a specification 
list (original only) shall be furnished with the entry summary, showing 
separately opposite the marks or numbers of each package, the quantity 
of each class of merchandise, the entered value of each class, and the 
rates of duty claimed for each. However, a specification list is not 
needed if one withdrawal is to be filed for all the merchandise covered 
by the entry summary.

[T.D. 79-221, 44 FR 46828, Aug. 9, 1979, as amended by T.D. 84-129, 49 
FR 23168, June 5, 1984]



Sec. 144.12  Contents of entry summary; estimated duties.

    The entry summary, Customs Form 7501, shall show the value, 
classification, and rate of duty as approved by the port director at the 
time the entry summary is filed. However, no deposit of estimated duties 
shall be required until the merchandise is withdrawn for consumption.

[T.D. 79-221, 44 FR 46828, Aug. 9, 1979, as amended by T.D. 84-129, 49 
FR 23168, June 5, 1984]



Sec. 144.13  Bond requirements.

    A bond on Customs Form 301, containing the bond conditions set forth 
in Sec. 113.62 of this chapter shall be filed in the amount required by 
the port director to support the entry documentation.

[T.D, 84-213, 49 FR 41185, Oct. 19, 1984]



Sec. 144.14  Removal to warehouse.

    When the entry summary, Customs Form 7501, and the bond on Customs 
Form 301, containing the bond conditions set forth in Sec. 113.62 of 
this chapter have been filed, the merchandise shall be sent to the 
bonded warehouse, except for:
    (a) Merchandise for which an immediate withdrawal if filed, or
    (b) Packages designated for examination elsewhere than at the 
warehouse, which shall be sent to the warehouse after examination.

[T.D. 79-221, 44 FR 46828, Aug. 9, 1979, as amended by T.D. 84-129, 49 
FR 23168, June 5, 1984; T.D. 84-213, 49 FR 41185, Oct. 19, 1984]



Sec. 144.15  Entry and withdrawal from Customs bonded warehouses of distilled spirits.

    (a) Distilled spirits entered in warehouse under section 5066(a), 
Internal Revenue Code--(1) General rule. Except as otherwise provided in 
this section, distilled spirits entered into Customs bonded warehouse in 
accordance with section 5066(a), Internal Revenue Code, as amended (26 
U.S.C. 5066(a)), shall be treated in the same manner as any other 
merchandise entered for warehouse.
    (2) Withdrawal from warehouse for domestic consumption. Distilled 
spirits entered in warehouse under this paragraph may be withdrawn from 
warehouse for domestic consumption under section 5066(c), Internal 
Revenue Code, as amended (26 U.S.C. 5066(c)). In this case, the 
distilled spirits shall be subject to duty as American goods exported 
and returned under subheading 9801.00.80, Harmonized Tariff Schedule of 
the United States (19 U.S.C. 1202).
    (b) Distilled spirits transferred from a manufacturing warehouse to 
a storage warehouse under section 311, Tariff Act of 1930--(1) 
Prohibition on withdrawal from warehouse for domestic consumption. 
Domestic distilled spirits which have been transferred from a Customs 
bonded manufacturing warehouse, Class 6, to a Customs bonded storage 
warehouse, Class 2 or 3, in accordance with section 311, Tariff Act of 
1930, as amended (19 U.S.C. 1311), may not be withdrawn under section 
5066(c) of the Internal Revenue Code, as amended (26 U.S.C. 5066(c)), 
for domestic consumption.
    (2) Procedure governing transfer of distilled spirits from 
manufacturing warehouse to storage warehouse. For procedure concerning 
the transfer of such distilled spirits from Customs bonded manufacturing 
warehouse, Class 6, to Customs bonded storage warehouse, see Sec. 
19.15(g)(2) of this chapter.
    (c) Distilled spirits entered under section 5214(a)(9), Internal 
Revenue Code--(1) General rule. Distilled spirits may be entered into a 
Customs bonded storage warehouse under section 5214(a)(9), Internal 
Revenue Code, as amended (26 U.S.C. 5214(a)(9)), in the same manner as 
any other merchandise is entered for warehouse, unless otherwise 
provided in this section.

[[Page 74]]

    (2) Withdrawal only for exportation. Distilled spirits warehoused 
under section 5214(a)(9), Internal Revenue Code, may be withdrawn only 
for the purpose of exportation, either directly or after rewarehousing 
at the same or another port. The distilled spirits may not be withdrawn 
for domestic consumption.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 78-298, 43 
FR 38382, Aug. 28, 1978; T.D. 80-271, 45 FR 75641, Nov. 17, 1980; T.D. 
84-213, 49 FR 41185, Oct. 19, 1984; T.D. 89-1, 53 FR 51263, Dec. 21, 
1988]



   Subpart C_Transfer of Right To Withdraw Merchandise from Warehouse



Sec. 144.21  Conditions for transfer.

    Under the provisions of section 557(b) Tariff Act of 1930, as 
amended (19 U.S.C. 1557(b)), the right to withdraw all or part of 
merchandise entered for warehouse may be transferred by appropriate 
endorsement on the withdrawal form, provided that the transferee files a 
bond on Customs Form 301, containing the bond conditions set forth in 
Sec. 113.62 of this chapter. Upon the deposit of the endorsed form, 
properly executed, and the transferee's bond with the Customs officer 
designated to receive such form and bond, the transferor and his 
sureties shall be relieved from all undischarged liability.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 84-213, 49 
FR 41185, Oct. 19, 1984; 49 FR 44867, Nov. 9, 1984]



Sec. 144.22  Endorsement of transfer on withdrawal form.

    Transfer of the right to withdraw merchandise entered for warehouse 
shall be established by an appropriate endorsement on the withdrawal 
form by the person primarily liable for payment of duties before the 
transfer is completed, i.e., the person who made the warehouse or 
rewarehouse entry or a transferee of the withdrawal right of such 
person. Endorsement shall be made on whichever of the following 
withdrawal forms is applicable:
    (a) Customs Form 7501 for:
    (i) A duty paid warehouse withdrawal for consumption;
    (ii) Withdrawal with no duty payment (diplomatic use);
    (iii) Merchandise to be withdrawn as vessel or aircraft supplies and 
equipment under Sec. 10.60 of this chapter or other conditionally free 
merchandise;
    (b) Customs Form 7512 for merchandise to be withdrawn for 
transportion, exportation, or transportation and exportation; or

[T.D. 82-204, 47 FR 49376, Nov. 1, 1982, as amended by T.D. 95-81, 60 FR 
52295, Oct. 6, 1995]



Sec. 144.23  Endorsement in blank.

    If the transferor wishes to do so, he may endorse the withdrawal 
form to authorize the right to withdraw the merchandise specified 
thereon but leave the space for the name of the transferee blank. A 
holder of a withdrawal form so endorsed and otherwise fully executed may 
insert his own name in the blank space, deposit such form and his 
transferee's bond with the Customs officer designated to receive such 
form and bond, and thereby establish his right to withdraw the 
merchandise.



Sec. 144.24  Transferee's bond.

    The transferee's bond shall be on Customs Form 301 and contain the 
bond conditions set forth in Sec. 113.62 of this chapter.

[T.D. 84-213, 49 FR 41185, Oct. 19, 1984]



Sec. 144.25  Deposit of forms.

    Either the transferor or the transferee may deposit the endorsed 
withdrawal form and transferee's bond with the Customs officer 
designated to receive such form and bond.



Sec. 144.26  Further transfer.

    The right of a transferee to withdraw the merchandise may not be 
revoked by the transferor but may be retransferred by the transferee.



Sec. 144.27  Withdrawal from warehouse by transferee.

    At any time within the warehousing period, a transferee who has 
established his right to withdraw merchandise may withdraw all or part 
of the merchandise covered by the transfer by

[[Page 75]]

filing any authorized kind of withdrawal from warehouse in accordance 
with subpart D of this part.



Sec. 144.28  Protest by transferee.

    (a) Entries on or after January 12, 1971. A transferee of 
merchandise entered for warehouse on or after January 12, 1971, shall 
have the right to file a protest under section 514, Tariff Act of 1930, 
as amended (19 U.S.C. 1514), to the same extent that such right would 
have been available to the transferor.
    (b) Entries prior to January 12, 1971. A transferee of merchandise 
entered for warehouse prior to January 12, 1971, shall have no right to 
file a protest, except under the conditions set forth in section 557(b), 
Tariff Act of 1930, as amended (19 U.S.C. 1557(b)), prior to the 
amendments made thereto by Pub. L. 91-685, effective January 12, 1971 
(T.D. 71-55).



                  Subpart D_Withdrawals from Warehouse



Sec. 144.31  Right to withdraw.

    Withdrawals from bonded warehouse may be made only by the person 
primarily liable for the payment of duties on the merchandise being 
withdrawn, i.e., the importer of record on the warehouse entry, the 
actual owner if an actual owner's declaration and superseding bond have 
been filed in accordance with Sec. 141.20 of this chapter, or the 
transferee if the right to withdraw the merchandise has been transferred 
in accordance with subpart C of this part. No new declaration of the 
consignee or agent is required.



Sec. 144.32  Statement of quantity; charges and liens.

    (a) On each withdrawal. Each withdrawal filed shall have indicated 
thereon, preferably in the lower part of the left-hand margin if there 
is no space designated on the form for such information, a summary 
statement of the account to which it is related. The statement shall 
indicate:
    (1) The quantity (i.e., the number of outer containers, or tons, 
etc.) in the warehouse account before the withdrawal;
    (2) The quantity being withdrawn; and
    (3) The quantity remaining in warehouse after the withdrawal. The 
quantity in each instance may be shown as a cumulative total event 
though it may include a group of varied units such as boxes, cases, or 
cartons, and may consist of more than one commodity, such as distilled 
spirits, chinaware, etc.
    (b) Transferred merchandise. When all or a portion of an original 
lot has been transferred to a new owner in accordance with subpart C of 
this part, each withdrawal by the transferee shall show only the 
quantity on hand in the transferee's name before the withdrawal, the 
quantity being withdrawn by the transferee, and the transferred quantity 
remaining in the warehouse after the withdrawal. The quantity retained 
by the original importer and the quantity transferred shall be treated 
as separate accounts.
    (c) Charges and liens. Upon receipt of an application to withdraw 
merchandise the appropriate Customs officer shall determine whether 
there are any cartage, storage, labor, or any other charges due the 
Government in connection with the goods remaining unpaid or whether 
there is on file any notice of lien filed by a carrier. If there are no 
charges or liens or all charges and liens have been satisfied, and all 
other requirements of law or regulations have been met, the application 
to withdraw shall be approved.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 82-204, 47 
FR 49376, Nov. 1, 1982; T.D. 86-118, 51 FR 22516, June 20, 1986]



Sec. 144.33  Minimum quantities to be withdrawn.

    Unless by special authority of the Commissioner of Customs, 
merchandise shall not be withdrawn from bonded warehouse in quantities 
less than an entire bale, cask, box, or other package, or, if in bulk, 
in quantities less than 1 ton in weight or the entire quantity imported, 
whichever is smaller.



Sec. 144.34  Transfer to another warehouse.

    (a) At the same port. With the concurrence of the proprietors of the 
delivering and receiving warehouses, merchandise may be transferred from 
one bonded warehouse to another at the

[[Page 76]]

same port under Customs supervision and at the expense of the importer 
upon his written request to the port director, who shall issue an order 
for such transfer on Customs Form 6043. However, the port director may 
require the filing of a rewarehouse entry under Sec. 144.41 if he 
determines it necessary for proper control of the merchandise. All 
charges shall be paid before merchandise is transferred from a warehouse 
of class 1 (see Sec. 19.1 of this chapter for classes of warehouses). 
The quantities of goods so transferred shall be subject to the joint 
determination of the warehouse proprietor and the cartman, lighterman, 
or private bonded carrier, as provided in Sec. 19.6 of this chapter.
    (b) At another port. Merchandise may be transferred to a warehouse 
which is under the jurisdiction of another port by withdrawing the 
merchandise for transportation in accordance with Sec. 144.36 and 
entering it for rewarehouse in accordance with Sec. 144.41 upon arrival 
at destination. All charges shall be paid before merchandise is 
transferred from the warehouse of class 1 (see Sec. 19.1 of this 
chapter for classes of warehouses).
    (c) Transfers between integrated bonded warehouses--(1) Eligibility. 
(i) Only an importer who will transfer warehoused merchandise among 
Class 2 and 9 warehouses listed on the application in paragraph (c)(2) 
of this section is eligible to participate.
    (ii) The importer must have a centralized inventory control system 
that shows the location of all of the warehoused merchandise at all 
times, including merchandise in transit.
    (iii) The importer and its surety must sign the application. If the 
application to use this alternative procedure is approved by the 
appropriate port director, the importer's entry bond containing the 
conditions provided under Sec. 113.62 of this chapter will continue to 
attach to any merchandise transferred under these alternative 
procedures.
    (iv) Each proprietor of a warehouse listed on the application and 
each surety who underwrites that proprietor's custodial bond coverage 
under Sec. 113.63 of this chapter shall sign the application.
    (2) Application. Application must be made in writing to the port 
director of the port in which the applicant's centralized inventory 
control system exists, with copies to all affected port directors, for 
exemptions from the requirements for transfer of merchandise from one 
bonded warehouse to another set forth in paragraphs (a) and (b) of this 
section. The application must list all bonded warehouses to and from 
which the merchandise may be transferred; all such warehouses must be 
covered by the same centralized inventory control system. Only blanket 
exemption requests will be considered; exemptions will not be considered 
for individual transfers. The application may be in letter form, signed 
by all participants, and contain a certification to the port director by 
the applicant that he maintains accounting records, documents and 
financial statements and reports that adequately support Customs 
activities.
    (3) Operation. An importer who receives approval to transfer 
merchandise between bonded warehouses in accordance with the provisions 
of this section may, after entry into the first warehouse, transfer that 
merchandise to any other warehouse without filing a withdrawal from 
warehouse or a rewarehouse entry. The warehoused merchandise will be 
treated as though it remains in the first warehouse so long as the 
actual location of the merchandise at all times is recorded as provided 
under the provisions of this section.
    (4) Inventory control requirements. The records required to be 
maintained must include a centralized inventory control system and 
supporting documentation which meets the following requirements:
    (i) Provide Customs upon demand with the proper on-hand balance of 
each inventory item in each warehouse facility and each storage location 
within each warehouse;
    (ii) Provide Customs upon demand with the proper on-hand balance for 
each open warehouse entry and the actual quantity in each warehouse 
facility;
    (iii) If an alternative inventory system has been approved, provide 
Customs upon demand with the proper on-hand balance for each unique 
identifier

[[Page 77]]

and the quantity related to each open warehouse entry and the quantity 
in each warehouse facility;
    (iv) Maintain documentation for all intracompany movements, 
including authorizations for the movement, shipping documents and 
receiving reports. These documents must show the appropriate warehouse 
entry number or unique identifier, the description and quantity of the 
merchandise transferred, and must be properly authorized and signed 
evidencing shipment from and delivery to each location;
    (v) Maintain a consolidated permit file folder at the location where 
the merchandise was originally warehoused. The consolidated permit file 
folder must meet the requirements of Sec. 19.12(d)(4) of this chapter 
regardless of the warehouse facility in which the action occurred. 
Documentation for all intracompany movements, including authorizations 
for movement, shipping documents, receiving reports, as well as 
documentation showing ultimate disposition of the merchandise must be 
filed in the consolidated permit file folder within seven business days;
    (vi) Maintain a subordinate permit file at all intracompany 
locations where merchandise is transferred containing copies of 
documentation required by Sec. 19.12(d)(4) of this chapter and by 
paragraph (c)(3)(v) of this section relating to merchandise quantities 
transferred to the location. A copy of all documents in the subordinate 
permit file folder must be filed in the consolidated permit file folder 
within seven business days; no exceptions will be granted to this 
requirement. When the final withdrawal is made on the respective entry, 
the subordinate permit file shall be considered closed and filed at the 
intracompany location to which the merchandise was transferred; and
    (vii) File the withdrawal from Customs custody at the original 
warehouse location at which the merchandise was entered.
    (5) Waiver of permit file folder requirements. The permit file 
folder requirements of paragraphs (c)(3)(v) and (c)(3)(vi) of this 
section may be waived if the proprietor's recordkeeping and inventory 
control system qualifies under the requirements of Sec. 
19.12(d)(4)(iii) of this chapter at all locations where bonded 
merchandise is stored.
    (6) Procedure not available--(i) Liens. The transfer procedures 
permitted under paragraph (c) of this section shall not be available for 
merchandise with respect to which Customs is notified of the existence 
of a lien, as prescribed in Sec. 141.112 of this chapter (see 19 U.S.C. 
1564), until proof shall be produced at the original warehouse location 
that the lien has been satisfied or discharged.
    (ii) Restricted merchandise. With the exception of alcohol and 
tobacco products, merchandise subject to a restriction on release such 
as covered by a licensing, quota or visa requirement, is not eligible.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 82-204, 47 
FR 49376, Nov. 1, 1982; T.D. 97-19, 62 FR 15840, Apr. 3, 1997]



Sec. 144.35  Withdrawal of vessel and aircraft supplies and equipment.

    Supplies and equipment for vessels and aircraft may be withdrawn 
from warehouse under the procedures set forth in this subpart and in 
Sec. Sec. 10.59 through 10.65 of this chapter.



Sec. 144.36  Withdrawal for transportation.

    (a) Time limit. Merchandise may be withdrawn from warehouse for 
transportation to another port of entry if withdrawal for consumption or 
exportation can be accomplished at the port of destination before the 
expiration of the warehousing period.
    (b) Physical deposit in warehouse not needed. All or any part of the 
merchandise covered by an entry summary, Customs Form 7501 may be 
withdrawn for transportation without deposit in a bonded warehouse and 
may be permitted to remain on the vessel or other vehicle or on the pier 
in a constructive warehouse status pending examination. When any such 
merchandise not deposited in a warehouse is not forwarded under the 
withdrawal for transportation on account of damage or other cause, the 
importer shall be required to withdraw such merchandise immediately for 
consumption or exportation, or designate a warehouse to

[[Page 78]]

which it may be sent and, upon his failure to do so, it shall be treated 
as unclaimed.
    (c) Form. (1) A withdrawal for transportation shall be filed on 
Customs Form 7512 in five copies. An extra copy or copies of the Customs 
Form 7512 may be required for use in connection with the delivery of the 
merchandise to the bonded carrier and, in the case of alcoholic 
beverages, two extra copies shall be required for use in furnishing the 
duty statement to the port director at destination.
    (2) Separate withdrawals for transportation from a single warehouse, 
via a single conveyance, consigned to the same consignee, and deposited 
into a single warehouse, can be filed on one Customs Form 7512, under 
one control number, provided that there is an attachment, to be 
certified by a Customs officer, providing the information for each 
withdrawal, as required in paragraph (d) of this section. With the 
exception of alcohol and tobacco products, this procedure shall not be 
allowed for merchandise which is in any way restricted (for example, 
quota/visa).
    (3) The requirement that a Customs Form 7512 be filed and the 
information required in paragraph (d) of this section be shown shall not 
be required if the merchandise qualifies under the exemption in Sec. 
144.34(c).
    (d) Information required. In addition to the statement of quantity 
required by Sec. 144.32, Customs Form 7512 shall show the following 
information for the merchandise being withdrawn:
    (1) The original entry number, date of entry, date of entry summary, 
and port at which filed;
    (2) The name of the consignee at the port of destination;
    (3) Any ascertained weight, gauge, or measure;
    (4) The entered value of the merchandise;
    (5) Estimated duties, if any;
    (6) A statement that the merchandise is or is not admissible for 
consumption and the reason for non-admissibility, if applicable; and
    (7) The statistical information required by Sec. 141.61(e) of this 
chapter.

When the withdrawal is made after the merchandise has been rewarehoused, 
the rewarehouse entry number, date, and port at which filed also shall 
be shown.
    (e) Duty on samples withdrawn. The duty on any samples withdrawn at 
the original port from a shipment covered by a withdrawal for 
transportation shall be collected at such port and a notation thereof 
made on the withdrawal form. No separate invoice or extract from the 
original invoice shall be required to cover such samples.
    (f) Forwarding procedure. The merchandise shall be forwarded in 
accordance with the general provisions for transportation in bond 
(Sec. Sec. 18.1 through 18.8 of this chapter). However, when the 
alternate procedures under Sec. 144.34(c) are employed, the merchandise 
need not be delivered to a bonded carrier for transportation, and an 
entry for transportation (Customs Form 7512) and a rewarehouse entry 
will not be required.
    (g) Procedure at destination. Upon arrival at destination, the 
merchandise may be:
    (1) Entered for rewarehouse in accordance with Sec. 144.41;
    (2) Entered for combined rewarehouse and withdrawal for consumption 
in accordance with Sec. 144.42;
    (3) Exported in accordance with paragraph (h) of this section;
    (4) Forwarded to another port or returned to the port of origin in 
accordance with Sec. 18.5 (c) or (d) of this chapter;
    (5) Admitted to a foreign trade zone in zone-restricted status as 
provided in part 146 of this chapter; or
    (6) Deposited into the proprietor's bonded warehouse or duty free 
store warehouse without rewarehouse entry as required in Sec. 144.41, 
if the merchandise qualifies for the exemption specified in Sec. 
144.34(c).
    (h) Exportation. A consignee of merchandise withdrawn for 
transportation who desires to export the merchandise upon arrival at 
destination shall so advise the port director at destination in writing. 
The port director shall then permit the exportation of the merchandise 
under Customs supervision in the

[[Page 79]]

same manner as a withdrawal for indirect exportation under Sec. 144.37.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 79-221, 44 
FR 46828, Aug. 9, 1979; T.D. 84-129, 49 FR 23168, June 5, 1984; T.D. 84-
212, 49 FR 39047, Oct. 3, 1984; T.D. 86-16, 51 FR 5064, Feb. 11, 1986; 
T.D. 86-118, 51 FR 22516, June 20, 1986; T.D. 97-19, 62 FR 15841, Apr. 
3, 1997]



Sec. 144.37  Withdrawal for exportation.

    (a) Form. A withdrawal for either direct or indirect exportation 
shall be filed on Customs Form 7512 (Transportation Entry and Manifest 
of Goods Subject to Customs Inspection and Permit) in 5 copies or on 
Customs Form 7501 in 3 copies for merchandise being exported under cover 
of a TIR carnet. Customs Form 7512 or Customs Form 7501 shall contain 
all of the statistical information as provided in Sec. 141.61(e) of 
this chapter. The port director may require an extra copy or copies of 
Customs Form 7512 or 7501 for use in connection with the delivery of 
merchandise to the carrier.
    (b) Procedure for indirect exportation--(1) Forwarding. Merchandise 
withdrawn for indirect exportation (transportation and exportation) 
shall be forwarded to the port of exportation in accordance with the 
general provisions for transportation in bond (Sec. Sec. 18.1-18.8 of 
this chapter).
    (2) Splitting of shipments. If any part of a shipment is not 
exported or if a shipment is divided at the port of exportation, 
extracts in duplicate from the manifest on file in the customhouse shall 
be made on Customs Form 7512 for each portion, one copy to be sent to 
the discharging inspector and the other to the lading inspector to be 
used as report of exportation. The splitting up for exportation of 
shipments arriving under warehouse withdrawals for indirect exportation 
shall be permitted only when various portions of a shipment are destined 
to different destinations, when the export vessel cannot properly 
accommodate the entire quantity, or in other similar circumstances. In 
the case of merchandise moving under cover of a TIR carnet, if the 
merchandise is not to be exported or if the shipment is to be divided, 
appropriate entry shall be required and the carnet discharged. The 
provisions of Sec. Sec. 18.23 and 18.24 of this chapter concerning 
change of destination or retention of merchandise on the dock shall also 
be followed in applicable cases.
    (3) Conversion to withdrawal for consumption. A withdrawal for 
indirect exportation may be converted to a withdrawal for consumption 
upon request to the director of the port where the withdrawal for 
indirect exportation was made.
    (c) Exportation by mail. Merchandise may be withdrawn from warehouse 
for exportation by mail in accordance with the provisions of subpart F 
of part 145 of this chapter.
    (d) Marks on packages. The exportation shall be made under the 
original marks of importation. Port marks may be added by authority of 
the port director under Customs supervision. The original and port marks 
shall appear in all Customs papers pertaining to the exportation.
    (e) Weight, gauge, or measure. Merchandise in bulk and packaged 
articles which are customarily bought and sold by weight, gauge, or 
measure may be withdrawn for exportation or transportation only at the 
actual quantities ascertained at the time of the original entry for 
warehouse, except as otherwise provided for by law. In any case, the 
port director may require a special report of weight, gauge, or measure 
of the merchandise being exported if he deems it necessary.
    (f) Merchandise not laden. Merchandise withdrawn for exportation but 
not laden shall be sent to general order unless other disposition is 
prescribed by the port director.
    (g) Exportation at a foreign trade zone. Merchandise may be 
withdrawn for exportation at a foreign trade zone in the same or at a 
different port. The merchandise will be considered exported upon 
admission to a zone in zone-restricted status, as provided in Sec. 
146.44(c) of this chapter.
    (h) Class 9 warehouse withdrawals for exportation--(1) Applicability 
of sales ticket procedure. Merchandise in a Class 9 warehouse (duty-free 
store) may be withdrawn for any of the purposes set forth in this 
subpart. However, only conditionally duty-free merchandise in

[[Page 80]]

a Class 9 warehouse intended for exportation or for delivery to persons 
and organizations set forth in subpart I, part 148, of this chapter, 
will be eligible for withdrawal under the sales ticket procedure 
specified in this paragraph.
    (2) Sales ticket content and handling. Sales ticket withdrawals 
shall be made only under a blanket permit to withdraw (see Sec. 19.6(d) 
of this chapter) and the sales ticket shall serve as the equivalent of 
the supplementary withdrawal. A sales ticket is an invoice of the 
proprietor's design which will include:
    (i) Serial number and date of preparation of each ticket;
    (ii) Warehouse entry number or specific identifier, if approved by 
the port director;
    (iii) Quantity of goods sold;
    (iv) Brief description of the articles including the size of 
bottles;
    (v) The full name and address of the purchaser. However, the port 
director may waive the address requirement for all merchandise except 
for alcoholic beverages in quantities in excess of 4 liters and 
cigarettes in quantities in excess of 3 cartons. Also, the address 
requirement is not applicable with respect to purchasers at airport 
duty-free enterprises; and
    (vi) A statement on the original copy (purchaser's copy) of the 
effect that goods purchased in a duty-free store will be subject to duty 
and/or tax with personal exemption if returned to the United States. At 
the time of purchase, the sales ticket, in triplicate, shall be made out 
in the name of the purchaser. One copy shall be retained by the 
proprietor. A permit file copy will be attached to the parcel containing 
the articles, and the original given to the purchaser. Additional copies 
may be retained by the proprietor.
    (3) Sales ticket register. In addition to the records required in 
Sec. 19.12(a) of this chapter, Class 9 warehouse proprietors shall 
maintain a sales ticket register or similar accounting record for each 
warehouse entry. The sales ticket register of the proprietor shall 
include the following information:
    (i) Warehouse entry number;
    (ii) Specific identifier, if applicable;
    (iii) Sales ticket date and number;
    (iv) Description;
    (v) Quantity; and
    (vi) Current balance.

As each warehouse entry is closed out, the warehouse proprietor shall 
verify the sales ticket register total with the amount withdrawn so as 
to account for all merchandise so withdrawn and certify on the register 
that all the goods have been exported or sold to qualifying persons and 
organizations under part 148 of this chapter. The sales ticket register 
shall be included in the permit file folder with or in lieu of the 
blanket permit summary, as provided in Sec. 19.6(d)(5) of this chapter. 
A copy of all sales tickets shall be retained by the proprietor for not 
less than 5 years after the date of the last sales ticket in the entry. 
In lieu of placing a copy of sales tickets in each permit file folder, 
the warehouse proprietor may keep all sales tickets in a readily 
retrievable manner in a separate file.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 73-312, 38 
FR 30883, Nov. 8, 1973; T.D. 80-142, 45 FR 36383, May 30, 1980; T.D. 84-
212, 49 FR 39047, Oct. 3, 1984; T.D. 86-16, 51 FR 5064, Feb. 11, 1986; 
T.D. 92-81, 57 FR 37701, Aug. 20, 1992; T.D. 95-81, 60 FR 52295, 52296, 
Oct. 6, 1995; T.D. 97-19, 62 FR 15842, Apr. 3, 1997; T.D. 99-64, 64 FR 
43266, Aug. 10, 1999; T.D. 00-22, 65 FR 16518, Mar. 29, 2000]



Sec. 144.38  Withdrawal for consumption.

    (a) Form. Withdrawals for consumption of merchandise in bonded 
warehouses shall be filed on Customs Form 7501, in triplicate, and shall 
contain all of the statistical information as provided in Sec. 
141.61(e) of this chapter.
    (b) Withdrawal for exportation to Canada or Mexico. A withdrawal for 
exportation to Canada or Mexico or for entry into a duty-deferral 
program in Canada or Mexico is considered a withdrawal for consumption 
pursuant to Sec. 181.53 of this chapter.
    (c) Information to be shown on withdrawal. Each withdrawal shall 
show all information for which spaces are provided on the withdrawal 
form, and shall also show the separate value of each package and the 
total dutiable value of the merchandise being withdrawn. In the case of 
merchandise in packages which are uniform in kind, quantity, value, and 
duty, the number of each package to be withdrawn need not be shown on 
the withdrawal if the

[[Page 81]]

lowest and highest numbers in the number series of such packages are 
shown. In the case of merchandise subject to quota, or textiles and 
textile products subject to levels of restraint, the description shall 
reflect any correction thereof reported after the filing of the 
warehouse entry. Additionally, on each withdrawal of cigars, cigarettes, 
or cigarette papers or tubes subject to internal revenue tax, the 
statement for tax purposes required by Sec. 275.81 of the regulations 
of the Internal Revenue Service (26 CFR Sec. 275.81) shall be made on 
the withdrawal form.
    (d) Deposit of estimated duties. Estimated duties on the merchandise 
being withdrawn shall be deposited in accordance with subpart G of part 
141 of this chapter. The port director may increase or decrease the 
amount of estimated duties to be deposited on the final withdrawal to 
bring the aggregate amount of duties deposited into balance with the 
amount which he estimates will be finally due upon liquidation.
    (e) Permit for release of merchandise. When the duties and other 
charges have been paid, and all other requirements of law and 
regulations have been met, a permit on Customs Form 7501 shall be issued 
and delivered to the person making the warehouse withdrawal.
    (f) Textiles and textile products. Textiles and textile products 
subject to quota, visa or export license requirements in their condition 
at the time of importation may not be withdrawn from warehouse for 
consumption if during the warehouse period there has been a change by 
manipulation or other means:
    (1) In the country of origin of the merchandise as defined by Sec. 
102.21 or Sec. 102.22 of this chapter, as applicable,
    (2) To exempt from quota or visa or export license requirements 
other than a change brought about by statute, treaty, executive order or 
Presidential proclamation, or
    (3) From one textile category to another textile category.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 73-312, 38 
FR 30883, Nov. 8, 1973; T.D. 74-114, 39 FR 12095, Apr. 3, 1974; T.D. 78-
329, 43 FR 43455, Sept. 26, 1978; T.D. 82-204, 47 FR 49376, Nov. 1, 
1982; T.D. 84-171, 49 FR 31253, Aug. 3, 1984; T.D. 85-38, 50 FR 8723, 
Mar. 5, 1985; T.D. 95-81, 60 FR 52296, Oct. 6, 1995; T.D. 96-14, 61 FR 
2911, Jan. 30, 1996; CBP Dec. 05-32, 70 FR 58016, Oct. 5, 2005]



Sec. 144.39  Permit to transfer and withdraw merchandise.

    With the exception of merchandise transferred under the procedures 
of Sec. 144.34(c), if all legal and regulatory requirements are met, 
the appropriate Customs officer shall approve the application to 
transfer or withdraw merchandise from a bonded warehouse by endorsing 
the permit copy and returning it to the applicant. The approved permit 
shall be presented by the withdrawer to the warehouse proprietor as 
evidence of Customs authorization of the transfer or withdrawal. The 
approved permit copy shall thereafter be retained in the warehouse entry 
file of the proprietor. Goods covered by permit may be retained in the 
bonded warehouse at the option of the proprietor.

[T.D. 82-204, 47 FR 49376, Nov. 1, 1982, as amended by T.D. 97-19, 62 FR 
15842, Apr. 3, 1997]



                      Subpart E_Rewarehouse Entries



Sec. 144.41  Entry for rewarehouse.

    (a) Applicability. When merchandise which has been withdrawn from 
warehouse for transportation to another port has arrived at the port of 
destination, it may be entered for rewarehouse by the consignee named in 
the withdrawal.
    (b) Form of entry. An entry for rewarehouse shall be made in 
duplicate on Customs Form 7501 and shall contain all of the statistical 
information as provided in Sec. 141.61(e) of this chapter. The port 
director may require an extra copy or copies of Customs Form 7501, 
annotated ``PERMIT,'' for use in connection with the delivery of the 
merchandise to the warehouse. No declaration is required on the entry.

[[Page 82]]

    (c) Combining separate shipments. (1) Separate shipments consigned 
to the same consignee and received under separate withdrawals for 
transportation may be combined into one rewarehouse entry if the 
warehouse withdrawals are from the same original warehouse entry.
    (2) Shipments covered by multiple warehouse entries, and shipped 
from a single warehouse under separate withdrawals for transportation, 
via a single conveyance, may be combined into one rewarehouse entry if 
consigned to the same consignee and deposited into a single warehouse. 
With the exception of alcohol and tobacco products, this procedure shall 
not be allowed for merchandise which is in any way restricted (for 
example, quota/visa). The combined rewarehouse entry shall have attached 
either copies of each warehouse entry package which is being combined 
into the single rewarehouse entry or a summary with pertinent 
information, that is, the date of importation, commodity description, 
size, HTSUS and entry numbers, for all entries withdrawn for 
consolidation as one rewarehouse entry. Any combining of separate 
withdrawals into one rewarehouse entry shall result in the rewarehouse 
entry being assigned the import date of the oldest entry being combined 
into the rewarehouse entry.
    (3) Combining of separate shipments shall be prohibited in all other 
circumstances.
    (d) Bond. A bond on Customs Form 301, containing the bond conditions 
set forth in Sec. 113.62 of this chapter shall be filed before a permit 
is issued on Customs Form 7501 for sending the merchandise to the bonded 
warehouse. However, no bond shall be required if the merchandise is 
entered by the consignee named in the original bond filed at the 
original port of entry, or if it is entered by a transferee who has 
established his right to withdraw the merchandise and has filed a bond 
in accordance with subpart C of this part.
    (e) Value and classification. The duties determined at the port 
where the original warehouse entry was filed shall be the duties 
chargeable under the rewarehouse entry, except in the cases provided for 
in Sec. Sec. 159.7 (a) and (b) of this chapter, which pertain to 
certain classes of merchandise excluded from the liquidation of the 
original warehouse entry and merchandise on which rates of duty or tax 
are changed by an act of Congress or by a proclamation by the President.
    (f) Examination. Any examination necessary for identification of the 
merchandise, determination of shortages, or other purposes shall be 
made.
    (g) Failure to enter. If the rewarehouse entry is not filed within 
15 calendar days after its arrival, the merchandise shall be disposed of 
in accordance with the applicable procedures in Sec. 4.37 or Sec. 
122.50 or Sec. 123.10 of this chapter. However, merchandise sent to a 
general order warehouse shall not be sold or otherwise disposed of as 
unclaimed until the expiration of the original 5-year period during 
which the merchandise may remain in warehouse under bond.
    (h) Protest. A protest may be filed at the port where the 
rewarehouse entry is made against a liquidation made at that port under 
Sec. 159.7 (a) or (b) of this chapter, or against a refusal of the 
director of that port to liquidate pursuant to said sections. In all 
other cases, any protest shall be filed against the original warehouse 
entry.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 82-204, 47 
FR 49376, Nov. 1, 1982; T.D. 84-129, 49 FR 23168, June 5, 1984; T.D. 84-
213, 49 FR 41185, Oct. 19, 1984; T.D. 97-19, 62 FR 15842, Apr. 3, 1997; 
T.D. 98-74, 64 FR 15303, Mar. 31, 1999]



Sec. 144.42  Combined entry for rewarehouse and withdrawal for consumption.

    (a) Applicability. If the consignee of merchandise withdrawn for 
transportation wishes to pay duty and obtain possession of the 
merchandise immediately upon arrival at destination, he may make a 
combined entry for rewarehouse and withdrawal for consumption.
    (b) Procedure for entry. The procedures set forth in Sec. 144.41 
are applicable to this type of entry, with the following exceptions:
    (1) Form of entry. A combined entry for rewarehouse and withdrawal 
for consumption shall be made on Customs Form 7501 (Consumption Entry), 
in 4

[[Page 83]]

copies, and shall contain all of the statistical information as provided 
in Sec. 141.61(e) of this chapter, one copy to be used as the permit. 
No declaration is required on the entry;
    (2) Extra copy for Internal Revenue. An additional copy of Customs 
Form 7501, marked or stamped ``For Internal Revenue Purposes,'' shall be 
presented for each entry of cigars, cigarettes, or cigarette papers or 
tubes, when the release from Customs custody of those articles is 
subject to part 275 of the regulations of the Internal Revenue Service 
(26 CFR part 275) and tax is payable to Customs; and
    (3) Deposit of duties. Estimated Customs duties, taxes, and other 
charges, as set forth in subpart G of part 141 of this chapter, shall be 
deposited upon presentation of the combined entry. The port director 
shall then issue a permit for release on Customs Form 7501.

[T.D. 73-175, 38 FR 17464, July 2, 1973, as amended by T.D. 73-312, 38 
FR 30884, Nov. 8, 1973; T.D. 87-75, 52 FR 20068, May 29, 1987]



PART 145_MAIL IMPORTATIONS--Table of Contents




Sec.
145.0 Scope.

                      Subpart A_General Provisions

145.1 Definitions.
145.2 Mail subject to Customs examination.
145.3 Opening of letter class mail; reading of correspondence 
          prohibited.
145.4 Dutiable merchandise without declaration or invoice, prohibited 
          merchandise, and merchandise imported contrary to law.
145.5 Undeliverable packages.

                  Subpart B_Requirements and Procedures

145.11 Declarations of value and invoices.
145.12 Entry of merchandise.
145.13 Internal revenue tax on mail entries.
145.14 Marking requirements.

             Subpart C_Administrative Review of Mail Entries

145.21 Administrative review.
145.22 Procedures for obtaining administrative review.
145.23 Time limits.
145.24 Amendment of entry.
145.25 Entry correct.
145.26 Rates of duty not binding.

                Subpart D_Special Classes of Merchandise

145.31 Importations not over $200 in value.
145.32 Bona-fide gifts.
145.34 Personal and household effects and tools of trade.
145.35 United States products returned.
145.36 Articles for institutions.
145.37 Articles for the U.S. Government.
145.38 Diplomatic pouches.
145.39 Articles for diplomatic officers, representatives or 
          international organizations, and foreign military personnel.
145.40 Plant material imported for immediate exportation.
145.41 Other conditionally and unconditionally free merchandise.
145.42 Proof for conditionally free merchandise.
145.43 Unaccompanied tourist shipments.

             Subpart E_Restricted and Prohibited Merchandise

145.51 Articles prohibited by section 305, Tariff Act of 1930.
145.52 Literature concerning devices for unlawful abortion.
145.53 Firearms and munitions of war.
145.54 Alcoholic beverages.
145.55 Trademarks, trade names, and copyrights.
145.56 Foreign Assets Control.
145.57 Regulations of other agencies.
145.58 Other restricted and prohibited merchandise.
145.59 Seizures.

                      Subpart F_Exportation by Mail

145.71 Exportation from continuous Government custody.
145.72 Delivery to Customs custody for exportation.

Policy Statement to Part 145--Examination of Sealed Letter Class Mail
Appendix to Part 145

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff 
Schedule of the United States), 1624;
    Section 145.4 also issued under 18 U.S.C. 545, 19 U.S.C. 1618;
    Section 145.11 also issued under 19 U.S.C. 1481, 1485, 1498;
    Section 145.12 also issued under 19 U.S.C. 1315, 1484, 1498;
    Sections 145.22 through 145.23 also issued under 19 U.S.C. 1501, 
1514;
    Section 145.31 also issued under 19 U.S.C. 1321;
    Section 145.32 also issued under 19 U.S.C. 1321, 1498;
    Sections 145.35 through 145.38, 145.41, also issued under 19 U.S.C. 
1498;
    Section 145.51 also issued under 19 U.S.C. 1305;

[[Page 84]]

    Section 145.54 also issued under 19 U.S.C. 1618.

    Source: T.D. 73-135, 38 FR 13369, May 21, 1973, unless otherwise 
noted.



Sec. 145.0  Scope.

    The provisions of this part apply only to mail subject to Customs 
examination as set forth in Sec. 145.2. This part contains regulations 
pertaining specifically to the importation of merchandise through the 
mails but does not contain all the regulations applicable to mail 
importations. Importations by mail are subject to the same requirements 
and restrictions as importations by any other means, except where more 
specific procedures for mail importations are set forth in this part. 
The fee applicable to each item of dutiable mail for which Customs 
prepares documentation is set forth in Sec. 24.22 of this chapter.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-102, 43 
FR 14454, Apr. 6, 1978; T.D. 93-85, 58 FR 54286, Oct. 21, 1993]



                      Subpart A_General Provisions



Sec. 145.1  Definitions.

    (a) Mail article. ``Mail article'' means any posted parcel, packet, 
package, envelope, letter, aerogramme, box, card, or similar article or 
container, or any contents thereof, which is transmitted in mail subject 
to customs examination.
    (b) Letter class mail. ``Letter class mail'' means any mail article, 
including packages, post cards, and aerogrammes, mailed at the letter 
rate or equivalent class or category of postage.
    (c) Sealed letter class mail. ``Sealed letter class mail'' means 
letter class mail sealed against postal inspection by the sender.

[T.D. 78-102, 43 FR 14454, Apr. 6, 1978]



Sec. 145.2  Mail subject to Customs examination.

    (a) Restrictions. Customs examination of mail as provided in 
paragraph (b) of this section is subject to the restrictions and 
safeguards relating to the opening of letter class mail set forth in 
Sec. 145.3.
    (b) Generally. All mail arriving from outside the Customs territory 
of the United States which is to be delivered within the Customs 
territory of the United States and all mail arriving from outside the 
U.S. Virgin Islands which is to be delivered within the U.S. Virgin 
Islands, is subject to Customs examination, except:
    (1) Mail known or believed to contain only official documents 
addressed to officials of the U.S. Government;
    (2) Mail addressed to Ambassadors and Ministers (Chiefs of 
Diplomatic Missions) of foreign countries; and
    (3) Letter class mail known or believed to contain only 
correspondence or documents addressed to diplomatic missions, consular 
posts, or the officers thereof, or to international organizations 
designated by the President as public international organizations 
pursuant to the International Organizations Act (see Sec. 148.87(b) of 
this chapter). Mail, other than letter class mail, addressed to the 
designated international organizations is subject to Customs examination 
except where the organization certifies under its official seal that the 
mail contains no dutiable or prohibited articles. Any Customs 
examination made shall, upon request of the addressee international 
organization, take place in the presence of an appropriate 
representative of that organization.

[T.D. 78-102, 43 FR 14454, Apr. 6, 1978]



Sec. 145.3  Opening of letter class mail; reading of correspondence prohibited.

    (a) Matter in addition to correspondence. Except as provided in 
paragraph (e), Customs officers and employees may open and examine 
sealed letter class mail subject to Customs examination which appears to 
contain matter in addition to, or other than, correspondence, provided 
they have reasonable cause to suspect the presence of merchandise or 
contraband.
    (b) Only correspondence. No Customs officer or employee shall open 
sealed letter class mail which appears to contain only correspondence 
unless prior to the opening:

[[Page 85]]

    (1) A search warrant authorizing that action has been obtained from 
an appropriate judge of United States magistrate, or
    (2) The sender or the addressee has given written authorization for 
the opening.
    (c) Reading of correspondence. No Customs officer or employee shall 
read, or authorize or allow any other person to read, any correspondence 
contained in any letter class mail, whether or not sealed, unless prior 
to the reading:
    (1) A search warrant authorizing that action has been obtained from 
an appropriate judge or United States magistrate, or
    (2) The sender or the addressee has given written authorization for 
the reading.
    (d) Other types of correspondence. The provisions of paragraph (c) 
shall also apply to correspondence between school children and 
correspondence of the blind which are authorized to be mailed at other 
than the letter rate of postage in international mail.
    (e) Certain Virgin Islands mail. First class mail originating in the 
Customs territory of the United States and arriving in the U.S. Virgin 
Islands, which is to be delivered within the U.S. Virgin Islands, shall 
not be opened unless:
    (1) A search warrant authorizing that action has been obtained from 
an appropriate judge or United States magistrate, or
    (2) The sender or the addressee has been given written authorization 
for the opening.

[T.D. 78-102, 43 FR 14454, Apr. 6, 1978]



Sec. 145.4  Dutiable merchandise without declaration or invoice, prohibited merchandise, and merchandise imported contrary to law.

    (a) Subject to seizure and forfeiture. When, upon Customs 
examination, a mail article is found to contain merchandise subject to 
duty or tax, and the mail article is not accompanied by an appropriate 
Customs declaration and invoice or statement of value required by Sec. 
145.11, or is found to contain material prohibited importation or 
imported contrary to law, the merchandise is subject to seizure and 
forfeiture.
    (b) Mitigation of forfeiture. Any claimant incurring a forfeiture of 
merchandise for violation of this section may file a petition for relief 
pursuant to part 171 of this chapter. Mitigation of that forfeiture may 
occur consistent with mitigation guidelines.
    (c) Collection of mitigated forfeiture. When the shipment does not 
exceed $2,000 in value, Customs Form 3419 or 3419A or Customs Form 368 
or 368A (serially numbered) or Customs Form 7501 shall be used for the 
entry of the merchandise, and the duty, any tax, and the amount of the 
mitigated forfeiture shall be entered as separate items thereon. If a 
mail article for which a mail fine entry has been issued in accordance 
with this paragraph is undeliverable, it will be returned to the 
director of the port where the entry was issued, for disposition in 
accordance with Sec. 145.59 relating to articles subject to seizure.
    (d) Petition for relief. The addressee or sender may file a petition 
with the Fines, Penalties, and Forfeitures Officer having jurisdiction 
over the port where the mail fine entry was issued in accordance with 
part 171 of this chapter for relief from the forfeiture incurred and for 
release of the seized merchandise, or for additional relief from a 
mitigated forfeiture.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-102, 43 
FR 14454, Apr. 6, 1978; T.D. 86-118, 51 FR 22516, June 20, 1986; T.D. 
87-75, 52 FR 26142, July 13, 1987; T.D. 91-73, 56 FR 42527, Aug. 28, 
1991; T.D. 92-56, 57 FR 24944, June 12, 1992; T.D. 98-28, 63 FR 16417, 
Apr. 3, 1998; T.D. 99-27, 64 FR 13675, Mar. 22, 1999; T.D. 00-57, 65 FR 
53575, Sept. 5, 2000]



Sec. 145.5  Undeliverable packages.

    Mail articles which are refused or undeliverable, except mail 
articles for which a mail fine entry has been issued in accordance with 
Sec. 145.4(c), will be marked by the postmaster to show why delivery 
was not made, and will be forwarded to the proper exchange post office 
for return to the country of origin. Mail entries will be removed from 
the mail articles and returned to Customs for cancellation. If, for any 
reason, an undeliverable mail article known or supposed to be dutiable 
is not returned to the country of origin or forwarded to another country 
in accordance with the Postal regulations, it will be delivered to 
Customs for disposition under

[[Page 86]]

the Customs laws and regulations governing seized or unclaimed 
merchandise.



                  Subpart B_Requirements and Procedures



Sec. 145.11  Declarations of value and invoices.

    (a) Customs declaration. A clear and complete Customs declaration on 
the form provided by the foreign post office, giving a full and accurate 
description of the contents and value of the merchandise, shall be 
securely attached to at least one mail article of each shipment, 
including shipments of special classes of merchandise treated in subpart 
D of this part. Although a Customs declaration is required to be 
attached to only one mail article of each shipment, examination and 
release of the merchandise will be expedited if such a declaration is 
attached to each individual mail article.
    (b) Invoice or statement of commercial value. Each shipment of 
merchandise shall have an invoice or bill of sale (or, in the case of 
merchandise not purchased or consigned for sale, a statement of the fair 
retail value in the country of shipment), giving an accurate description 
and the purchase price of the merchandise, securely attached to the 
outside of the mail article or enclosed therein. If the shipment 
consists of more than one mail article, a copy of the invoice should 
accompany each mail article, or else the invoice shall accompany the 
mail article bearing the declaration, and that mail article shall be 
marked ``Invoice enclosed.''
    (c) [Reserved]
    (d) Shipments without declaration and invoice. Shipment of 
merchandise which are not accompanied by a Customs declaration and 
invoice in accordance with paragraphs (a) through (b) of this section 
may be subject to seizure and forfeiture in accordance with Sec. 145.4.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 76-103, 41 
FR 14731, Apr. 7, 1976; T.D. 78-102, 43 FR 14454, Apr. 6, 1978; T.D. 85-
39, 50 FR 9612, Mar. 11, 1985]



Sec. 145.12  Entry of merchandise.

    (a) Formal entries--(1) Discretionary. The port director may require 
formal entry of any mail shipment regardless of value if in his opinion 
it is necessary to protect the revenue.
    (2) Required. Formal entry at the customhouse shall be required for 
every importation in the mails which exceeds $2,000 in value, except for 
special classes of merchandise which can be released without entry (see 
subpart D of this part), and except as provided in subparts B and C of 
part 143 and Sec. 10.1 of this chapter.
    (3) Separate shipments. Separate shipments not exceeding $2,000 in 
value, if mailed abroad at different times (as shown by the declaration 
or other mailing indicia), shall not be combined for the purpose of 
requiring formal entry, even though they reach Customs at the same time 
and are covered by a single order or contract in excess of $2,000, 
unless there was a splitting of shipments in order to avoid the payment 
of Customs duty.
    (4) Notice of formal entry requirement. When a formal entry is 
required, the addressee shall be notified of the arrival of the shipment 
and of the place at which entry is to be made. If the shipment is 
addressed to a point which is not a Customs port or station, the port of 
entry specified in the notice shall be the port nearest the destination 
of the shipment. When a formal entry is filed, it shall contain all the 
statistical information as provided in Sec. 141.61(e) of this chapter.
    (b) Mail and informal entries--(1) Preparation of entry form. Except 
as provided in paragraphs (c) and (e) of this section, Customs officers 
shall prepare and attach a mail entry (Customs Form 3419 or 3419A) for 
each shipment not exceeding $2,000 in value which is to be delivered by 
the Postal Service, and return the shipment to the Postal Service for 
delivery and collection of duty. If the addressee has arranged to pick 
up such a shipment at the Customs office where it is being processed, 
the Customs officer shall prepare an informal entry (Customs Form 368 or 
368A (serially numbered), or an entry summary, Customs Form 7501, and 
collect the duty in accordance with subpart C of part 143 of this 
chapter.
    (2) Rates of duty. Merchandise released under a mail or informal 
entry shall be dutiable at the rates of duty in

[[Page 87]]

effect when the preparation of the entry is completed by a Customs 
employee, ready for transmittal with the merchandise to the addressee.
    (c) Dutiable shipments not over $2,000 for Government agencies. When 
a dutiable shipment not exceeding $2,000 in value is addressed to a U.S. 
Government department or agency, the port director may release the 
merchandise prior to the payment of duties under an entry on Customs 
Form 368 or 368A (serially numbered) or Customs Form 7501, upon the 
receipt of a stipulation in the form set forth in Sec. 141.102(d) of 
this chapter. If the stipulation does not accompany the shipment, the 
port director shall notify the Government department or agency of the 
arrival of the shipment and request the stipulation. Upon receipt of the 
completed stipulation and preparation of the entry form, the port 
director shall stamp all mail articles in the shipment to show that they 
have received Customs treatment and shall return the shipment to the 
Postal Service for delivery, unless the addressee has arranged to pick 
up the shipment at the Customs office where it is being processed. The 
proper Government department or agency shall be billed later for any 
duties and taxes due.
    (d) Release without entry. Certain types of merchandise may be 
passed free of duty without issuing an entry (see subpart D of this 
part).
    (e) Unaccompanied shipments--(1) Mail entry to be attached. If the 
requirements of Sec. 148.115(a) of this chapter are met, Customs 
officers shall prepare and attach a mail entry, Customs Form 3419 or 
3419A, for each shipment for which entry is claimed under subheading 
9816.00.40, Harmonized Tariff Schedule of the United States (19 U.S.C. 
1202), which is to be delivered by the Postal Service, and return the 
shipment to the Postal Service for delivery and collection of duty. If 
the addressee has arranged to pick up the shipment at the Customs office 
where it is being processed, the Customs officer shall prepare an 
informal entry, Customs Form 368 or 368A (serially numbered), or entry 
summary, Customs Form 7501, and collect the duty in accordance with 
subpart C of part 143 of this chapter if the requirements of Sec. 
148.115(a) of this chapter are met.
    (2) Disposition of Customs Form 255. The Declaration of 
Unaccompanied Articles, Customs Form 255, affixed to the shipment shall 
be removed by the Customs officer and retained for Customs purposes. If 
a mail entry, Customs Form 3419 or 3419A, has been prepared, the mail 
entry number shall be noted on the Customs Form 255.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 73-175, 38 
FR 17469, July 2, 1973; T.D. 73-312, 38 FR 30884, Nov. 8, 1973; T.D. 78-
102, 43 FR 14454, Apr. 6, 1978; T.D. 78-394, 43 FR 49788, Oct. 25, 1978; 
T.D. 85-123, 50 FR 29955, July 23, 1985; T.D. 87-75, 52 FR 26142, July 
13, 1987; T.D. 89-1, 53 FR 51263, Dec. 21, 1988; T.D. 89-82, 54 FR 
36026, Aug. 31, 1989; T.D. 91-73, 56 FR 42527, Aug. 28, 1991; T.D. 92-
56, 57 FR 24944, June 12, 1992; T.D. 98-28, 63 FR 16417, Apr. 3, 1998]



Sec. 145.13  Internal revenue tax on mail entries.

    (a) Method of collection. Any internal revenue tax assessed on a 
mail entry shall be shown as a separate item on the entry, and collected 
in the same manner as Customs duties.
    (b) Release without payment of tax. A mail entry may not be used to 
release a shipment of cigars, cigarettes, or cigarette papers or tubes 
for a manufacturer without payment of tax as provided for in 27 CFR part 
275 and Sec. 11.2a of this chapter. If a claim for release without 
payment of tax is made by the addressee at the time of delivery, the 
shipment will be returned by the Postal Service to the port of entry or 
sent to the nearest Customs office at which appropriate release as 
claimed may be arranged by the addressee.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-329, 43 
FR 43455, Sept. 26, 1978]



Sec. 145.14  Marking requirements.

    (a) Country of origin. Merchandise imported by mail shall be marked 
with the country of origin in accordance with part 134 of this chapter. 
If merchandise without the required marking is to be delivered from the 
post office where it has been given Customs examination, the Customs 
officer shall require compliance with the marking law and regulations. 
If it is to be delivered from another post office, the Customs

[[Page 88]]

officer shall place in the envelope containing the mail entry a copy of 
Customs Form 3475, containing instructions to the postmaster concerning 
the marking to be required before delivery.
    (b) Other marking requirements. Certain types of merchandise are 
subject to special marking requirements, such as those contained in the 
Textile Fiber Products Identification Act, the Wool Products Labeling 
Act, and the Trademark Act. Since there is no provision for post office 
supervision of these types of marking, the port director shall require 
compliance with the law and regulations (see parts 11 and 133 of this 
chapter).
    (c) Failure to mark. If the addressee fails to comply with the 
marking requirements, the mail article will be treated as undeliverable 
in accordance with Sec. 145.5.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-102, 43 
FR 14454, Apr. 6, 1978]



             Subpart C_Administrative Review of Mail Entries



Sec. 145.21  Administrative review.

    Requests for adjustment of the amount of duty assessed under mail 
entries shall be handled as requests for administrative review in 
accordance with this subpart.



Sec. 145.22  Procedures for obtaining administrative review.

    If an addressee is dissatisfied with the amount of duty assessed 
under a mail entry, he may obtain administrative review in the following 
ways:
    (a) He may pay the assessed duty, take delivery of the merchandise, 
and send a copy of the mail entry to the issuing Customs office 
indicated on the mail entry, together with a statement of the reason it 
is believed the duty assessed is incorrect. Any invoices, bills of sale, 
or other evidence should be submitted with the statement. The addressee 
may show the mail entry number and date on his statement instead of 
sending a copy of the mail entry, but this may result in delay.
    (b) He may postpone acceptance of the shipment, and within the time 
allowed by the Postal regulations provide the postmaster with a written 
statement of his objections. The postmaster will forward the mail entry 
together with the addressee's statement and any invoices, bills of sale, 
or other evidence submitted by the addressee to the port director who 
issued the entry, and retain custody of the shipment until advice is 
received from the port director as to the disposition to be made. If the 
addressee is located near one of the ports at which Customs officers are 
authorized to review mail entries (see 39 CFR 10.5), the postmaster may 
send the mail entry to that port, together with the addressee's 
statement and evidence, for reconsideration by the port director.
    (c) He may pay the assessed duty and take delivery of the 
merchandise, and file a protest under section 514, Tariff Act of 1930, 
as amended (19 U.S.C. 1514), in the form and manner prescribed in part 
174 of this chapter.

[T.D. 73-175, 38 FR 13369, May 21, 1973, as amended by T.D. 78-99, 43 FR 
13061, Mar. 29, 1978]



Sec. 145.23  Time limits.

    A mail entry may be amended under section 520(c), Tariff Act of 
1930, as amended (19 U.S.C. 1520(c)), only if the addressee requests 
such amendment within the time limits prescribed therein (see Sec. Sec. 
173.4 and 173.5 of this chapter), and the claim is allowable under 
section 520(c). Requests for adjustment in the amount of duty assessed 
under mail entries made under Sec. 145.22(a) shall be made in such time 
that the request can be acted upon by the port director within 90 days 
after receipt of the mail article and payment of the duties by the 
addressee. Protests under Sec. 145.22(c) must be filed not later than 
90 days after payment of the duties by the addressee, but may be acted 
upon after the expiration of that 90-day period.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-102, 43 
FR 14454, Apr. 6, 1978]



Sec. 145.24  Amendment of entry.

    If the port director is satisfied that the objection is valid and 
timely, he shall amend the mail entry. If the duty has already been 
paid, Customs shall issue an appropriate refund of duty.

[[Page 89]]



Sec. 145.25  Entry correct.

    If the port director believes the duty originally assessed was 
correct, he shall send the addressee a notice in writing that the 
request for refund of duty has been denied. If the duty has not been 
paid, the mail entry shall be returned to the postmaster concerned, 
together with a copy of the notice sent to the addressee. The postmaster 
will then collect the duty and deliver the shipment, or, if the 
addressee refuses to pay the duty, will treat the shipment as 
undeliverable.



Sec. 145.26  Rates of duty not binding.

    Rates of duty assessed on a mail entry, whether assessed on the 
original entry or as amendments under Sec. 145.24, are not binding for 
future importations. A binding ruling on tariff classification may be 
obtained in accordance with the procedures set forth in part 177 of this 
chapter.

[T.D. 73-175, 38 FR 13369, May 21, 1973, as amended by T.D. 73-175, 38 
FR 17469, July 2, 1973; T.D. 78-99, 43 FR 13061, Mar. 29, 1978]



                Subpart D_Special Classes of Merchandise



Sec. 145.31  Importations not over $200 in value.

    The port director shall pass free of duty and tax, without preparing 
an entry as provided for in Sec. 145.12, packages containing 
merchandise having an aggregate fair retail value in the country of 
shipment of not over $200, subject to the requirements set forth in 
Sec. Sec. 10.151 and 10.153 of this chapter.

[T.D. 94-51, 59 FR 30296, June 13, 1994]



Sec. 145.32  Bona-fide gifts.

    The port director shall pass free of duty and tax, without preparing 
an entry as provided for in Sec. 145.12, articles sent as bona-fide 
gifts from persons in foreign countries to persons in the United States 
having an aggregate fair retail value in the country of shipment not 
exceeding $100 ($200, in the case of articles sent from persons in the 
Virgin Islands, Guam, and American Samoa), subject to the requirements 
set forth in Sec. Sec. 10.152 and 10.153 of this chapter.

[T.D. 94-51, 59 FR 30296, June 13, 1994]



Sec. 145.34  Personal and household effects and tools of trade.

    (a) U.S. military and civilian personnel returning from extended 
duty abroad. Section 148.74 of this chapter sets forth specific 
requirements for exemptions from duty under subheading 9805.00.50, 
Harmonized Tariff Schedule of the United States (19 U.S.C. 1202), for 
personal and household effects of military and civilian personnel of the 
United States returning upon the completion of extended duty abroad. A 
copy of the official travel orders shall be attached to or enclosed in 
each mail article and the outside of each mail article shall be clearly 
marked to show that exemption from duty is being claimed.
    (b) Other personal and household effects, and tools of trade. 
Certain personal and household effects and tools of trade may be passed 
free of duty without issuing an entry, in accordance with Sec. 148.53 
of this chapter.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-102, 43 
FR 14454, Apr. 6, 1978; T.D. 89-1, 53 FR 51263, Dec. 21, 1988]



Sec. 145.35  United States products returned.

    Products of the United States returned after having been exported, 
which have not been advanced in value or improved in condition while 
abroad, may be passed free of duty without issuing an entry and without 
the declarations provided for in Sec. 10.1(a) of this chapter, provided 
the shipment is valued at not over $2,000 and the port director is 
satisfied that the merchandise is free of duty under subheading 
9801.00.10, Harmonized Tariff Schedule of the United States (19 U.S.C. 
1202).

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 85-123, 50 
FR 29955, July 23, 1985; T.D. 89-1, 53 FR 51263, Dec. 21, 1988; T.D. 89-
82, 54 FR 36026, Aug. 31, 1989; T.D. 94-47, 59 FR 25570, May 17, 1994; 
T.D. 98-28, 63 FR 16417, Apr. 3, 1998]



Sec. 145.36  Articles for institutions.

    Books and other articles classifiable under subheading 4903.00.00, 
4904.00.00, 4905.91.00, 4905.99.00, 9701.10.00, 9701.90.00, 9810.00.05, 
Harmonized Tariff Schedule of the United States (HTSUS) (19 U.S.C. 
1202), imported by and addressed directly to a library or other 
institution described in subheading 9810.00.05

[[Page 90]]

or 9101.30, HTSUS may be passed free of duty without issuing an entry, 
if the port director is satisfied that the merchandise is entitled to 
free entry. A declaration may be required in accordance with Sec. 10.43 
of this chapter under the procedure specified in Sec. 145.42.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 85-123, 50 
FR 29955, July 23, 1985; T.D. 89-1, 53 FR 51263, Dec. 21, 1988]



Sec. 145.37  Articles for the U.S. Government.

    (a) Mail articles for copyright. Mail articles marked for copyright 
which are addressed to the Library of Congress, to the U.S. Copyright 
Office, or to the office of the Register of Copyrights, Washington, DC, 
shall be passed free of duty without issuing an entry.
    (b) Books, engravings, and other articles. Books, classifiable under 
subheading 4903.00.00, Harmonized Tariff Schedule of the United States 
(HTSUS) (19 U.S.C. 1202), and engravings, etchings, and other articles 
enumerated in subheading 9808.00.10, HTSUS, shall be passed free of duty 
without issuing an entry when they are addressed to the Library of 
Congress or any department or agency of the U.S. Government.
    (c) Official Government documents. Other mail articles addressed to 
offices or officials of the U.S. Government, believed to contain only 
official documents, shall be passed free of duty without issuing an 
entry. Such mail articles, when believed to contain merchandise, shall 
be treated in the same manner as other mail articles of merchandise so 
addressed.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-102, 43 
FR 14454, Apr. 6, 1978; T.D. 89-1, 53 FR 51263, Dec. 21, 1988; T.D. 91-
77, 56 FR 46115, Sept. 10, 1991]



Sec. 145.38  Diplomatic pouches.

    Mail articles bearing the official seal of a foreign government with 
which the United States has diplomatic relations, accompanied by 
certificates bearing such seal to the effect that they contain only 
official communications or documents, shall be admitted free of duty 
without Customs examination.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-102, 43 
FR 14454, Apr. 6, 1978]



Sec. 145.39  Articles for diplomatic officers, representatives of international organizations, and foreign military personnel.

    Free entry of articles in mail articles addressed to diplomatic 
officers, representatives of certain international organizations, and 
similar persons is governed by subpart I of part 148 of this chapter.

[T.D. 73-175, 38 FR 13369, May 21, 1973, as amended by T.D. 73-227, 38 
FR 22548, Aug. 22, 1973; T.D. 78-102, 43 FR 14454, Apr. 6, 1978]



Sec. 145.40  Plant material imported for immediate exportation.

    Plant material may be imported by mail free of duty for immediate 
exportation by mail subject to the following regulations, which have 
been approved by the Department of Agriculture and the Postal Service. 
This procedure shall not affect the movement of plant material in the 
internal mails through the United States:
    (a) Permit for entry. Each shipment shall be dispatched in the mails 
from abroad, accompanied by a yellow and green special mail tag bearing 
the serial number of the permit for entry for immediate exportation or 
immediate transportation and exportation, issued by the U.S. Department 
of Agriculture, and also by the postal form of Customs declaration.
    (b) Place of inspection. Upon arrival, the shipment shall be 
detained by or redispatched to the postmaster at Washington, DC, 
Brownsville, Tex., Hoboken, NJ, Honolulu, Hawaii, Laredo, Tex., Miami, 
Fla., San Francisco, Calif., San Juan, P.R., San Pedro, Calif., or 
Seattle, Wash., as may be appropriate, according to the address on the 
green and yellow tag, and there submitted to the Customs officer and the 
Federal quarantine inspector. The merchandise shall be accorded special 
handling only at these cities, and under no circumstances shall it be 
permitted to enter the commerce of the United States.
    (c) Special handling. After inspection by the Customs and quarantine 
officers, and with their approval, the addressee or his authorized agent 
shall repack and readdress the mail package under Customs supervision; 
endorse and sign on the package a waiver of the

[[Page 91]]

addressee's right to withdraw the mail article from the mails; affix to 
the mail article the necessary postage; and comply with any other 
mailing and export requirements, after which the package shall be 
delivered under Customs supervision to the postmaster for exportation by 
mail in accordance with Sec. 145.71.
    (d) Entry not required. It will not be necessary to issue a Customs 
mail entry nor to require a formal entry of the shipment.

[T.D. 73-175, 38 FR 13369, May 21, 1973, as amended by T.D. 78-102, 43 
FR 14455, Apr. 6, 1978]



Sec. 145.41  Other conditionally and unconditionally free merchandise.

    Shipments of conditionally or unconditionally free merchandise not 
specifically treated elsewhere in this part may be passed free of duty 
and tax without issuing an entry, if the value is not over $2,000 and 
the port director is satisfied that the merchandise is entitled to free 
entry.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 85-123, 50 
FR 29955, July 23, 1985; T.D. 89-82, 54 FR 36026, Aug. 31, 1989; T.D. 
98-28, 63 FR 16417, Apr. 3, 1998]



Sec. 145.42  Proof for conditionally free merchandise.

    The port director may, at his discretion, require appropriate proof 
of duty-free status before releasing conditionally free merchandise. 
This proof may be obtained by either of the following methods:
    (a) Retain shipment and request proof. The shipment may be retained 
by the port director while the necessary proof is requested from the 
addressee. If the requested proof is not received within 30 days, a mail 
entry shall be issued at the ordinary rate of duty which would apply if 
the merchandise were not conditionally free, and the mail entry shall be 
forwarded with the shipment for collection of duties.
    (b) Send shipment with form and entry. If the only proof required 
for free entry is a declaration signed by the addressee, the port 
director may issue a mail entry at the ordinary duty which would apply 
if the merchandise were not conditionally free. The shipment shall then 
be forwarded together with the mail entry, a copy of the appropriate 
declaration form, and instructions to the postmaster to deliver the 
shipment free of duty if the importer executes the declaration, and to 
collect the full duty shown on the mail entry if the importer does not 
execute the declaration.



Sec. 145.43  Unaccompanied tourist shipments

    Unaccompanied tourist shipments for which entry is claimed under 
subheading 9804.00.70, Harmonized Tariff Schedule of the United States 
(19 U.S.C. 1202), may be passed free of duty and tax if the requirements 
of Sec. 148.115(a) of this chapter are met. The Declaration of 
Unaccompanied Articles, Customs Form 255, shall be removed by the 
Customs officer from the shipment and retained for Customs purposes.

[T.D. 78-394, 43 FR 49788, Oct. 25, 1978, as amended by T.D. 89-1, 53 FR 
51263, Dec. 21, 1988]



             Subpart E_Restricted and Prohibited Merchandise



Sec. 145.51  Articles prohibited by section 305, Tariff Act of 1930.

    (a) Types of articles. Various articles, as described in section 
305, Tariff Act of 1930, as amended (19 U.S.C. 1305), and in part 12 of 
this chapter, are prohibited from importation. This prohibition includes 
the following types of articles:
    (1) Obscene matter;
    (2) Articles for causing unlawful abortion (see Sec. 145.52 for the 
treatment of literature pertaining to such articles);
    (3) Matter advocating treason or insurrection against the United 
States or forcible resistance to any law of the United States;
    (4) Matter containing any threat to take the life of or inflict 
bodily harm upon any person in the United States; and
    (5) Lottery matter, except any lottery ticket, printed paper that 
may be used as a lottery ticket, or advertisement of any lottery, that 
is printed in Canada for use in connection with a lottery conducted in 
the United States.

[[Page 92]]

    (b) Disposition of articles. Mail found to contain lottery matter 
shall be disposed of by the Postal Service under the postal laws and 
regulations. Mail found to contain any of the other prohibited articles 
described in paragraphs (a)(1) through (a)(4) of this section shall be 
given appropriate treatment by Customs under the Customs laws and 
regulations (see Sec. 12.40 of this chapter).

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 92-80, 57 FR 
37702, Aug. 20, 1992]



Sec. 145.52  Literature concerning devices for unlawful abortion.

    Mail articles containing literature or advertisements concerning 
devices to produce unlawful abortions, are prohibited from the mails by 
18 U.S.C. 1461, and shall be retained by, or delivered to, the Postal 
Service for disposition under the postal laws and regulations. If the 
Postal Service determines in any case that it is proper to release the 
material to the addressee, it shall be submitted for Customs treatment 
before delivery.

[T.D. 78-99, 43 FR 13061, Mar. 29, 1978, as amended by T.D. 78-102, 43 
FR 14455, Apr. 6, 1978]



Sec. 145.53  Firearms and munitions of war.

    Importations of firearms, munitions of war, and related articles are 
subject to the import permit requirements and other restrictions set 
forth in 27 CFR parts 47, 178, 179.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 78-329, 43 
FR 43455, Sept. 26, 1978]



Sec. 145.54  Alcoholic beverages.

    (a) Nonmailable. Alcoholic beverages are nonmailable, with certain 
exceptions (see 18 U.S.C. 1716 and the postal regulations), and when 
imported in the mails are subject to seizure and forfeiture under 18 
U.S.C. 545.
    (b) Seizure. When alcoholic beverages are received in the mails, 
they shall be seized, and the addressee shall be advised that they are 
subject to forfeiture and that he has a right to file a petition for 
their release (see part 171 of this chapter).
    (c) Conditions for release. If the port director is satisfied that 
there was no fraudulent intent involved, he may release the alcoholic 
beverages to the addressee upon the following conditions:
    (1) Applicable duty and internal revenue tax shall be paid.
    (2) The addressee shall comply with the alcoholic beverage laws of 
the State to which the shipment is destined.
    (3) Any other conditions the port director may impose under his 
authority to remit or mitigate fines, penalties, and forfeitures shall 
be complied with.
    (4) The addressee, his representative, or a common carrier shall 
pick up the merchandise at the Customs office where it is being held. 
Since the merchandise is nonmailable, it cannot be delivered by the 
Postal Service.



Sec. 145.55  Trademarks, trade names, and copyrights.

    Merchandise bearing a trademark or trade name entitled to protection 
against imports, merchandise bearing a mark or name that copies or 
simulates such a trademark or trade name, and merchandise which is in 
violation of copyright law is subject to the restrictions and 
prohibitions set forth in part 133 of this chapter.



Sec. 145.56  Foreign Assets Control.

    Merchandise subject to regulations of the Office of Foreign Assets 
Control of the Treasury Department prohibiting or restricting entry of 
unlicensed importations of articles directly or indirectly from certain 
designated countries shall be detained until licensed or the question of 
its release, seizure, or other disposition has been determined under the 
Foreign Assets Control or Cuban Assets Control regulations (31 CFR parts 
500 and 515) (See also 19 CFR 12.150).

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 96-42, 61 FR 
24889, May 17, 1996]



Sec. 145.57  Regulations of other agencies.

    Certain types of plants and plant products, food, drugs, cosmetics, 
hazardous or caustic and corrosive substances, viruses, serums, and 
various harmful articles are subject to examination and clearance by 
appropriate

[[Page 93]]

agencies before release to the addressee (see part 12 of this chapter).



Sec. 145.58  Other restricted and prohibited merchandise.

    Other restrictions and prohibitions pertaining to certain types of 
imported merchandise are set forth in part 12 of this chapter and are 
applicable to importations by mail.



Sec. 145.59  Seizures.

    (a) Articles prohibited and contrary to law. All mail shipments 
containing articles the importation of which is prohibited, or articles 
imported into the United States in any manner contrary to law, shall be 
seized or detained as appropriate and held by Customs officers for 
appropriate treatment, except for certain articles which will be handled 
by the Postal Service as specified in Sec. Sec. 145.51 and 145.52.
    (b) Notification of seizure or detention. In all cases where 
articles are seized or detained by Customs officers, the addressee shall 
be notified of the seizure or detention, of the reason for such action, 
and, if appropriate, of his right to petition for relief (see part 171 
of this chapter).



                      Subpart F_Exportation by Mail



Sec. 145.71  Exportation from continuous Government custody.

    (a) Relief from duties. Merchandise imported into the United States, 
unless nonmailable, may be exported by any class of mail without the 
payment of duties, if:
    (1) The merchandise has remained continuously in the custody of the 
Government (Customs or postal authorities); and
    (2) The mail articles containing such merchandise are inspected and 
mailed under Customs supervision.
    (b) Waiver of right to withdraw. Waiver of the right to withdraw the 
mail article from the mails shall be endorsed on each mail article to be 
so exported and signed by the exporter.
    (c) Export entry or withdrawal required. An export entry in 
accordance with Sec. 18.25 of this chapter or a warehouse withdrawal 
for exportation in accordance with Sec. 144.37 of this chapter, 
whichever is appropriate, shall be filed for merchandise being exported 
under this section, except for merchandise imported by mail which is 
either:
    (1) Unclaimed or refused and being returned by the Postal Service to 
the country of origin as undeliverable mail; or
    (2) For which a formal entry has not been filed and which is being 
remailed from continuous Customs or postal custody to Canada.

[T.D. 73-175, 38 FR 13369, May 21, 1973, as amended by T.D. 73-175, 38 
FR 17470, July 2, 1973; T.D. 78-102, 43 FR 14455, Apr. 6, 1978]



Sec. 145.72  Delivery to Customs custody for exportation.

    In certain cases where merchandise has not been in continuous 
Government custody, delivery to Customs custody is appropriate before 
exportation by mail, as set forth in the following sections of this 
chapter:
    (a) Section 10.8 (articles exported for repairs or alterations).
    (b) Section 10.9 (articles exported for processing).
    (c) Section 148.33 (merchandise which was imported free of duty 
under a personal exemption, found to be unsatisfactory, and is being 
exported for replacement).
    (d) Section 10.38 (exportation of imported merchandise which was 
entered temporarily under bond).
    (e) Section 191.42 (exportation of rejected imported merchandise, 
with drawback of duties).

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 98-16, 63 FR 
11005, Mar. 5, 1998]



 Sec. Policy Statement to Part 145--Examination of Sealed Letter Class 
                                  Mail

    A. Customs officers and employees shall not open first class mail 
arriving in the U.S. Virgin Islands for delivery there, if it originated 
in the Customs territory of the United States, unless a search warrant 
or written authorization of the sender or addressee is obtained. Customs 
officers or employees may open and examine all other sealed letter class 
mail which is subject to the Customs mail regulations (see 19 CFR part 
145) and which appears to contain matter in addition to, or other than, 
correspondence, provided they have ``reasonable cause to suspect'' the 
presence of merchandise or contraband.

[[Page 94]]

    B. Customs officers and employees shall not open any sealed letter 
class mail which appears to contain only correspondence unless a search 
warrant or written authorization of the sender or addressee is obtained 
in advance of the opening.
    C. Customs officers and employees are prohibited from reading, or 
authorizing or allowing others to read, any correspondence contained in 
any letter class mail unless there has been obtained in advance either a 
search warrant or written authorization of the sender or addressee. This 
prohibition, which will continue to be strictly enforced, also applies 
to correspondence between school children and correspondence of the 
blind which are authorized to be mailed at other than the letter rate of 
postage in international mail.
    D. If a violation of law is discovered upon opening any mail article 
referred to in paragraph C, and it is believed that the correspondence 
may provide additional information concerning the violation and is 
therefore needed for further investigation or use in court, a search 
warrant shall be obtained before any correspondence is seized, read, or 
referred to another agency. Search warrants shall be promptly sought. 
Correspondence may be detained while a search warrant is being sought.
    E. If no controlled delivery is arranged and correspondence is not 
to be otherwise seized pursuant to a search warrant (see ``F'' below), 
the item which constitutes the violation shall be removed and any 
correspondence shall be replaced in the wrapper, or in a new wrapper if 
the original wrapper has been seized pursuant to 19 U.S.C. 1595a. The 
wrapper shall then be resealed, marked to indicate it was opened by 
Customs, and returned to postal channels. Appropriate seizure notices 
shall be sent in accordance with 19 CFR 145.59(b).
    F. No mail article may be referred to another agency without a 
search warrant unless--
    (1) Any correspondence has been removed and the mail article is 
being referred for examination and clearance under 19 CFR 145.57,
    (2) Any correspondence has been removed and the mail article has 
been lawfully seized by Customs,
    (3) The mail article is being referred to Postal Service channels to 
effect a controlled delivery in cooperation with other law enforcement 
agencies, or
    (4) The mail article is being returned to Postal Service channels 
for normal processing.
    G. Whenever sealed letter class mail is opened, the factors giving 
the Customs officer or employee ``reasonable cause to suspect'' the 
presence of merchandise or contraband shall be recorded on the 
appropriate form and on the opened envelope or other container by means 
of appropriate coded symbols. Should a seizure result, these factors 
shall also be recorded on the seizure report.
    H. Sealed letter class mail with the green Customs label on a 
Customs declaration may be opened without additional cause. 
Correspondence in such mail is subject to the restrictions regarding the 
detention, reading, and referral of mail to other agencies found in 
paragraphs C through F.
    I. Whenever any sealed letter class mail is opened for any of the 
reasons set forth in the above paragraphs, a Postal Service employee 
shall be present and shall observe the opening.
    J. Any violation of the Customs mail regulations or any of these 
policies will lead to appropriate administrative sanctions, as well as 
possible criminal prosecution pursuant to 18 U.S.C. 1702.

[T.D. 73-135, 38 FR 13369, May 21, 1973, as amended by T.D. 84-213, 49 
FR 41185, Oct. 19, 1984]



                    Sec. Appendix to Part 145

    A. Scope. The Customs Service is authorized to examine, with certain 
exceptions for diplomatic and governmental mail, all mail arriving from 
outside the Customs territory of the United States (CTUS) which is to be 
delivered within the CTUS, and all mail arriving from outside the U.S. 
Virgin Islands which is to be delivered within the U.S. Virgin Islands. 
The term ``Customs territory of the United States'' is limited to the 
States, the District of Columbia, and Puerto Rico. Consequently, mail 
arriving from other U.S. territories and possessions is subject to 
Customs examination even though it is designated ``domestic'' mail for 
Postal Service purposes. Likewise, mail in the APO/FPO military postal 
system is subject to Customs examination, even though it also is 
designated ``domestic'' mail for Postal Service purposes. The Customs 
Service therefor is responsible for examining all international mail to 
be delivered in the CTUS and certain limited categories of so-called 
``domestic mail''.
    B. Definitions. Under various international conventions and 
bilateral agreements, international mail falls within two main classes, 
Parcel Post and Postal Union mail.
    Parcel Post is not permitted to contain correspondence but is to be 
used for the transmission of merchandise and is fully subject to Customs 
examination in the same manner as other merchandise shipments (e.g., 
luggage, cargo, containers, etc.). Postal Union mail is divided into 
``LC'' mail (Lettres et Cartes) and ``AO'' mail (Aures Objets).
    ``LC mail consists of letters, packages paid at the letter rate of 
postage, post cards, and aerogrammes. The term ``letter class mail'' as 
used in the Customs Regulations and in

[[Page 95]]

this policy statement means ``LC'' mail as well as equivalent articles 
in ``domestic'' mail subject to Customs examination. Equivalent articles 
in ``domestic'' mail would include articles mailed at the letter rate, 
or equivalent class or category, in the APO/FPO military system or from 
a U.S. territory or possession outside the CTUS. Since the term ``letter 
class mail'' thus includes packages and bulky envelopes as long as they 
are mailed at the letter rate, or equivalent class or category, the 
restrictions relating to opening and reading of correspondence apply 
equally to such packages or bulky envelopes.
    ``AO'' mail is to be treated in the same manner as Parcel Post mail 
since the Universal Postal Union Convention requires that they ``be made 
up in such a manner that they may be easily examined'' and generally are 
not permitted to ``contain any document having the character of current 
and personal correspondence.'' Exceptions to the latter requirement 
exist for matter for the blind and certain correspondence between school 
children. Because of these exceptions, the prohibition against reading 
correspondence without a search warrant or authorization of the sender 
or addressee applies to correspondence of the blind and correspondence 
between school children contained in ``AO'' mail. ``AO'' mail can 
usually be identified by the following words: ``Imprime'' or ``Printed 
Matter'', ``Cecogramme'' or ``Literature for the Blind'', ``Petit 
Paquet'' or ``Small Packet'' or similar terms or their equivalents.
    C. Reasonable Cause to Suspect. Determining whether there is 
``reasonable cause to suspect'' that merchandise or contraband is 
contained in sealed letter class mail is ultimately a matter of judgment 
for each Customs official, based on all relevant facts and 
circumstances. This judgment should be exercised within the framework of 
the Customs regulation that sealed letter class mail which appears to 
contain only correspondence is not to be opened unless a search warrant 
or written authorization from either the sender or the addressee has 
been obtained in advance of the opening.
    Past practice indicates that the following circumstances (which are 
illustrative and not exhaustive) provide ``reasonable cause to suspect'' 
and permit the opening of sealed letter class mail without a search 
warrant or authorization of the sender or addressee.
    1. A detector dog has alerted to the presence of narcotics or 
explosives in a specific mail article.
    2. X-ray of fluoroscope examination indicates the presence of 
merchandise or contraband.
    3. The weight, shape, feel, or sound of the mail article or its 
contents may indicate that merchandise or contraband (e.g., a hard 
object which may be jewelry, a stack of paper which may be counterfeit 
money, or coins) could be in the mail article. Contents of a mail 
article which feel lumpy, powdery, or spongy may, for example, indicate 
the presence of narcotics.
    4. Information from a source previously shown to be reliable 
indicates that an identifiable mail article contains merchandise or 
contraband.
    5. The mail article is insured.
    6. The mail article is a box, carton, or wrapper other than a thin 
envelope.
    7. The sender or addressee of the mail article is known to be 
fictitious.
    On the other hand, certain facts standing alone generally will not 
provide ``reasonable cause to suspect'' the presence of merchandise or 
contraband and therefore do not permit the opening of sealed letter 
class mail. For example, sealed letter class mail may not be opened 
merely because:
    1. The mail article is registered.
    2. The feel of a letter-size envelope suggests that it contains one 
or a limited number of photographs.
    3. The mail article appears to be part of a mass mailing.
    4. The mail article is from a particular country, whether or not a 
known source country of contraband.
    5. A detector dog has alerted to the presence of narcotics or 
explosives somewhere within a tray of mail ( the individual articles of 
mail must then be examined individually).
    6. The sender of addressee of the mail article is known to have 
mailed or received contraband or merchandise in violation of law in the 
past.
    7. The wrapper contains writing or typing similar to that previously 
found on articles of mail which contained contraband or merchandise in 
violation of law.
    In case where any one of the above facts is present, additional 
evidence must exist which in conjunction with that fact provides 
reasonable cause to suspect the presence of merchandise or contraband.

[T.D. 78-102, 43 FR 14454, Apr. 6, 1978, as amended by T.D. 83-212, 48 
FR 46771, Oct. 14, 1983]



PART 146_FOREIGN TRADE ZONES--Table of Contents




Sec.
146.0 Scope.

                      Subpart A_General Provisions

146.1 Definitions.
146.2 Port director as Board representative.
146.3 Customs supervision.
146.4 Operator responsibility and supervision.
146.5 [Reserved]
146.6 Procedure for activation.
146.7 Zone changes.

[[Page 96]]

146.8 Seals; authority of operator to break and affix.
146.9 Permission of operator.
146.10 Authority to examine merchandise.
146.11 Transportation of merchandise to a zone.
146.12 Use of zone by carrier.
146.13 Customs forms and procedures.
146.14 Retail trade within a zone.

          Subpart B_Inventory Control and Recordkeeping System

146.21 General requirements.
146.22 Admission of merchandise to a zone.
146.23 Accountability for merchandise in a zone.
146.24 Transfer of merchandise from a zone.
146.25 Annual reconciliation.
146.26 System review.

              Subpart C_Admission of Merchandise to a Zone

146.31 Admissibility of merchandise into a zone.
146.32 Application and permit for admission of merchandise.
146.33 Temporary deposit for manipulation.
146.34 Merchandise transiting a zone.
146.35 Temporary deposit in a zone; incomplete documentation.
146.36 Examination of merchandise.
146.37 Operator admission responsibilities.
146.38 Certificate of arrival of merchandise.
146.39 Direct delivery procedures.
146.40 Operator responsibilities for direct delivery.

                Subpart D_Status of Merchandise in a Zone

146.41 Privileged foreign status.
146.42 Nonprivileged foreign status.
146.43 Domestic status.
146.44 Zone-restricted status.

               Subpart E_Handling of Merchandise in a Zone

146.51 Customs control of merchandise.
146.52 Manipulation, manufacture, exhibition or destruction; Customs 
          Form 216.
146.53 Shortages and overages.

              Subpart F_Transfer of Merchandise From a Zone

146.61 Constructive transfer to Customs territory.
146.62 Entry.
146.63 Entry for consumption.
146.64 Entry for warehouse.
146.65 Classification, valuation, and liquidation.
146.66 Transfer of merchandise from one zone to another.
146.67 Transfer of merchandise for exportation.
146.68 Transfer for transportation or exportation; estimated production.
146.69 Supplies, equipment, and repair material for vessels or aircraft.
146.70 Transfer of zone-restricted merchandise into Customs territory.
146.71 Release and removal of merchandise from zone.

               Subpart G_Penalties; Suspension; Revocation

146.81 Penalties.
146.82 Suspension.
146.83 Revocation of zone grant.

        Subpart H_Petroleum Refineries in Foreign-Trade Subzones

146.91 Applicability.
146.92 Definitions.
146.93 Inventory control and recordkeeping system.
146.94 Records concerning establishment of manufacturing period.
146.95 Methods of attribution.
146.96 Approval of other recordkeeping systems.

Appendix to Part 146--Guidelines for Determining Producibility and 
          Relative Values for Oil Refinery Zones

    Authority: 19 U.S.C. 66, 81a-81u, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1623, 1624.

    Source: T.D. 86-16, 51 FR 5049, Feb. 11, 1986, unless otherwise 
noted.



Sec. 146.0  Scope.

    Foreign trade zones are established under the Foreign Trade Zones 
Act and the general regulations and rules of procedure of the Foreign 
Trade Zones Board contained in 15 CFR part 400. This part 146 of the 
Customs Regulations governs the admission of merchandise into a foreign 
trade zone, manipulation, manufacture, or exhibition in a zone; 
exportation of the merchandise from a zone; and transfer of merchandise 
from a zone into Customs territory.



                      Subpart A_General Provisions



Sec. 146.1  Definitions.

    (a) The following words, defined in section 1 of the Foreign-Trade 
Zones Act of 1934, as amended (19 U.S.C. 81a), are given the same 
meaning when used

[[Page 97]]

in this part, unless otherwise stated: ``Board'', ``Grantee'', and 
``Zones''.
    (b) The following are general definitions for the purpose of this 
part:
    Act. ``Act'' means the Foreign-Trade Zones Act of June 18, 1934, as 
amended (48 Stat. 998-1003; 19 U.S.C. 81a-u).
    Activation. ``Activation'' means approval by the grantee and port 
director for operations and for the admission and handling of 
merchandise in zone status.
    Admit. ``Admit'' means to bring merchandise into a zone with zone 
status.
    Alteration. ``Alteration'' means a change in the boundaries of an 
activated zone or subzone; activation of a separate site of an already-
activated zone or subzone with the same operator at the same port; or 
the relocation of an already-activated site with the same operator.
    Conditionally admissible merchandise. ``Conditionally admissible 
merchandise'' is merchandise which may be imported into the U.S. under 
certain conditions. Merchandise which is subject to permits or licenses, 
or which may be reconditioned to bring it into compliance with the laws 
administered by various Federal agencies, is an example of conditionally 
admissible merchandise.
    Constructive transfer. ``Constructive transfer'' is a legal fiction 
which permits acceptance of a Customs entry for merchandise in a zone 
before its physical transfer to the Customs territory.
    Customs territory. ``Customs territory'' is the territory of the 
U.S. in which the general tariff laws of the U.S. apply. ``Customs 
territory of the United States'' includes only the States, the District 
of Columbia, and Puerto Rico. (General Note 2, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202)).
    Deactivation. ``Deactivation'' means voluntary discontinuation of 
the activation of an entire zone or subzone by the grantee or operator. 
Discontinuance of the activated status of only a part of a zone site is 
an alteration.
    Default. ``Default'' means an action or omission that will result in 
a claim for duties, taxes, charges, or liquidated damages under the 
Foreign Trade Zone Operator Bond.
    Domestic merchandise. ``Domestic merchandise'' is merchandise which 
has been (i) produced in the U.S. and not exported therefrom, or (ii) 
previously imported into Customs territory and properly released from 
Customs custody.
    Foreign merchandise. ``Foreign merchandise'' is imported merchandise 
which has not been properly released from Customs custody in Customs 
territory.
    Fungible merchandise. ``Fungible merchandise'' means merchandise 
which for commercial purposes is identical and interchangeable in all 
situations.
    Merchandise. ``Merchandise'' includes goods, wares and chattels of 
every description, except prohibited merchandise. Building materials, 
production equipment, and supplies for use in operation of a zone are 
not ``merchandise'' for the purpose of this part.
    Operator. ``Operator'' is a corporation, partnership, or person that 
operates a zone or subzone under the terms of an agreement with the zone 
grantee. Where used in this part, the term ``operator'' also applies to 
a ``grantee'' that operates its own zone.
    Port Director. For those foreign trade zones located within the 
geographical limits of a port of entry, the term ``port director'' means 
the director of that port of entry. For those foreign trade zones 
located outside the geographical limits of a port of entry, the term 
``port director'' means the director of the port of entry geographically 
nearest to where the foreign trade zone is located.
    Prohibited merchandise. ``Prohibited merchandise'' is merchandise 
the importation of which is prohibited by law on grounds of public 
policy or morals, or any merchandise which is excluded from a zone by 
order of the Board. Books urging treason or insurrection against the 
U.S., obscene pictures, and lottery tickets are examples of prohibited 
merchandise.
    Reactivation. ``Reactivation'' means a resumption of the activated 
status of an entire area that was previously deactivated without any 
change in the operator or the area boundaries. If the boundaries are 
different, the action is an alteration. If the operator is different, it 
is an activation.

[[Page 98]]

    Subzone. ``Subzone'' is a special-purpose zone established as part 
of a zone project for a limited purpose, that cannot be accommodated 
within an existing zone. The term ``zone'' also applies to a subzone, 
unless specified otherwise.
    Transfer. ``Transfer'' means to take merchandise with zone status 
from a zone for consumption, transportation, exportation, warehousing, 
cartage or lighterage, vessel supplies and equipment, admission to 
another zone, and like purposes.
    Unique identifier. ``Unique identifier'' means the numbers, letters, 
or combination of numbers and letters that identify merchandise admitted 
to a zone with zone status.
    User. ``User'' means a person or firm using a zone or subzone for 
storage, handling, or processing of merchandise.
    Zone lot. ``Zone lot'' means a collection of merchandise maintained 
under an inventory control method based on specific identification of 
merchandise admitted to a zone by lot.
    Zone site. ``Zone site'' means the physical location of a zone or 
subzone.
    Zone status. ``Zone status'' means the status of merchandise 
admitted to a zone, i.e., nonprivileged foreign, privileged foreign, 
zone restricted, or domestic.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 89-1, 53 FR 
51263, Dec. 21, 1988; T.D. 99-27, 64 FR 13674, Mar. 22, 1999]



Sec. 146.2  Port director as Board representative.

    The appropriate port director shall be in charge of the zone as the 
representative of the Board.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 99-27, 64 FR 
13676, Mar. 22, 1999]



Sec. 146.3  Customs supervision.

    (a) Assignment of Customs officers. Customs officers will be 
assigned or detailed to a zone as necessary to maintain appropriate 
Customs supervision of merchandise and records pertaining thereto in the 
zone, and to protect the revenue.
    (b) Supervision. Customs supervision over any zone or transaction 
provided for in this part will be in accordance with Sec. 101.2(c) of 
this chapter. The port director may direct a Customs officer to 
supervise any transaction or procedure at a zone. Supervision may be 
performed through a periodic audit of the operator's records, quantity 
count of goods in a zone inventory, spot check of selected transactions 
or procedures, or review of recordkeeping, security, or conditions of 
storage in a zone.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 98-22, 63 FR 
11826, Mar. 11, 1998]



Sec. 146.4  Operator responsibility and supervision.

    (a) Supervision. The operator shall supervise all admissions, 
transfers, removals, recordkeeping, manipulations, manufacturing, 
destruction, exhibition, physical and procedural security, and 
conditions of storage in the zone as required by law and regulations. 
Supervision by the operator shall be that which a prudent manager of a 
storage, manipulation, or manufacturing facility would be expected to 
exercise, and may take into account the degree of supervision exercised 
by the zone user having physical possession of zone merchandise.
    (b) Customs access. The operator shall permit any Customs officer 
access to a zone.
    (c) Safekeeping of merchandise and records. The operator is 
responsible for safekeeping of merchandise and records concerning 
merchandise admitted to a zone. The operator, at its liability, may 
allow the zone importer or owner of the goods to store, safeguard, and 
otherwise maintain or handle the goods and the inventory records 
pertaining to them.
    (d) Records maintenance. The operator shall (1) maintain the 
inventory control and recordkeeping system in accordance with the 
provisions of subpart B, (2) retain all records required in this part 
and defined in Sec. 162.1(a) of this chapter, pertaining to zone 
merchandise for 5 years after the merchandise is removed from the zone, 
and (3) protect proprietary information in its custody from unauthorized 
disclosure. Records shall be readily available for Customs review at the 
zone.
    (e) Merchandise security. The operator shall maintain the zone and 
establish

[[Page 99]]

procedures adequate to ensure the security of merchandise located in the 
zone in accordance with applicable Customs security standards and 
specifications.
    (f) Storage and handling. The operator shall store and handle 
merchandise in a zone in a safe and sanitary manner to minimize damage 
to the merchandise, avoid hazard to persons, and meet local, state, and 
Federal requirements applicable to a specific kind of goods. All trash 
and waste will be promptly removed from a zone. Aisles will be 
established and maintained, and doors and entrances left unblocked for 
access by Customs officers and other persons in the performance of their 
official duties.
    (g) Guard service. The operator is authorized to provide guards or 
contract for guard service to safeguard the merchandise and ensure the 
security of the zone. This authorization does not limit the authority of 
the port director to assign Customs guards to protect the revenue under 
section 4 of the Act (19 U.S.C. 81d).
    (h) Miscellaneous responsibilities. The operator is responsible for 
complying with requirements for admission, manipulation, manufacture, 
exhibition, or destruction, shortage, or overage; inventory control and 
recordkeeping systems, transfer to Customs territory, and other 
requirements as specified in this part. If the operator elects to 
transfer merchandise from within the district boundaries (see definition 
of ``district'' at Sec. 112.1) to his zone, he shall receipt for the 
merchandise at the time he picks it up for transportation to his 
facility. He becomes liable for the merchandise at that time.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 94-81, 59 FR 
51496, Oct. 12, 1994; T.D. 95-77, 60 FR 50020, Sept. 27, 1995; T.D. 99-
27, 64 FR 13676, Mar. 22, 1999]



Sec. 146.5  [Reserved]



Sec. 146.6  Procedure for activation.

    (a) Application. A zone operator, or where there is no operator, a 
grantee, shall make written application to the port director to obtain 
approval of activation of a zone or zone site. The area to be activated 
may be all or any portion of the zone approved by the Board. The 
application must include a description of all the zone sites covered by 
the application, any operation to be conducted therein, and a statement 
of the general character of the merchandise to be admitted. The port 
director may also require the operator or grantee to submit fingerprints 
on form FD 258 or electronically at the time of filing the application. 
If the operator is an individual, that individual's fingerprints may be 
required. If the operator or grantee is a business entity, fingerprints 
of all officers and managing officials may be required.
    (b) Supporting documents. The application must be accompanied by the 
following:
    (1) [Reserved]
    (2) A blueprint of the area approved by the Board to be activated 
showing area measurements, including all openings and buildings; and all 
outlets, inlets, and pipelines to any tank for the storage of liquid or 
similar product, that portion of the blueprint certified to be correct 
by the operator of the tank;
    (3) A gauge table, when appropriate, showing the capacity, in the 
appropriate unit, of any tank, certified to be correct by the operator 
of the tank;
    (4) A procedures manual describing the inventory control and 
recordkeeping system that will be used in the zone, certified by the 
operator or grantee to meet the requirements of subpart B; and
    (5) The written concurrence of the grantee, when the operator 
applies for activation, in the requested zone activation.
    (c) Inquiry by port director. As a condition of approval of the 
application, the port director may order an inquiry by a Customs officer 
into:
    (1) The qualifications, character, and experience of an operator 
and/or grantee and their principal officers; and
    (2) The security, suitability, and fitness of the facility to 
receive merchandise in a zone status.
    (d) Decision of the port director. The port director shall promptly 
notify the applicant in writing of his decision to approve or deny the 
application to activate the zone. If the application is denied, the 
notification will state the grounds for denial which need not be

[[Page 100]]

limited to those listed in Sec. 146.82. The decision of the port 
director will be the final Customs administrative determination in the 
matter. On approval of the application, a Foreign Trade Zone Operator's 
Bond shall be executed on Customs Form 301, containing the bond 
conditions of Sec. 113.73 of this chapter.
    (e) Activation. Upon the port director's approval of the application 
and acceptance of the executed bond, the zone or zone site will be 
considered activated; and merchandise may be admitted to the zone. 
Execution of the bond by an operator does not lessen the liability of 
the grantee to comply with the Act and implementing regulations.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 93-18, 58 FR 
15773, Mar. 24, 1993; T.D. 95-99, 60 FR 62733, Dec. 7, 1995; T.D. 99-27, 
64 FR 13676, Mar. 22, 1999; T.D. 01-14, 66 FR 8767, Feb. 2, 2001]



Sec. 146.7  Zone changes.

    (a) Alteration of an activated area. An operator shall make written 
application to the port director for approval of an alteration of an 
activated area, including an alteration resulting from a zone boundary 
modification. The application must be accompanied by the supporting 
document requirements specified in Sec. 146.6, as applicable. The port 
director may review the security, suitability, and fitness of the area, 
and shall reply to the applicant as provided for in Sec. 146.6.
    (b) Deactivation or reactivation. A grantee, or an operator with the 
concurrence of a grantee, shall make written application to the port 
director for deactivation of a zone site, indicating by layout or 
blueprint the exact site to be deactivated. The port director shall not 
approve the application unless all merchandise in the site in zone 
status (other than domestic status) has been removed at the risk and 
expense of the operator. The port director may require an accounting of 
all merchandise in a zone as a condition of approving the deactivation. 
A zone may be reactivated using the above procedure if a sufficient bond 
is on file under Sec. 146.6(d).
    (c) Suspension of activated site. When approval of an activated 
status has been suspended through the procedure in subpart G, the port 
director may require all goods in that area in zone status (other than 
domestic status) to be transferred to another zone, a bonded warehouse, 
or other location where they may lawfully be stored, if the port 
director considers that transfer advisable to protect the revenue or 
administer any Federal law or regulation.
    (d) New bond. The port director may require an operator to furnish, 
on 10 days notice, a new Foreign Trade Zone Operator's Bond on Customs 
Form 301. If the operator fails to furnish the new bond, no more 
merchandise will be received in the zone in zone status. Merchandise in 
zone status (other than domestic status) will be removed at the risk and 
expense of the operator. A new bond may be required if (1) the activated 
zone area is substantially altered; (2) the character of merchandise 
admitted to the zone or operations performed in the zone are 
substantially changed; (3) the existing bond lacks good and sufficient 
surety; or (4) for any other reason that substantially affects the 
liability of the operator under the bond. Although a new bond may not be 
required, the operator shall obtain the consent of the surety to any 
material alteration in the boundaries of the zone.
    (e) New operator. A grantee of an activated zone site shall make 
written application to the port director for approval of a new operator, 
submitting with the application a certification by the new operator that 
the inventory control and recordkeeping system meets the requirements of 
subpart B, and a copy of the system procedures manual if different from 
the previous operator's manual. The port director may order an inquiry 
into the qualifications, character, and experience of the operator and 
its principal officers.
    (f) The bond in Sec. 146.6 shall be submitted by the operator 
before the operating agreement may become effective in respect to 
merchandise in zone status. The port director shall promptly notify the 
grantee, in writing, of the approval or disapproval of the application.
    (g) List of officers, employees, and other persons. The port 
director may make a written demand upon the operator to submit, within 
30 days after the date of the demand, a written list of the

[[Page 101]]

names, addresses, social security numbers, and dates and places of birth 
of officers and persons having a direct or indirect financial interest 
in the operator, and of persons employed in the carriage, receipt or 
delivery of merchandise in zone status, whether employed by the zone 
operator or a zone user. If a list was previously furnished, the port 
director may make a written demand for the same information in respect 
to new persons employed in the carriage, receipt, or delivery of zone 
status merchandise within 10 days after such employment. The list need 
not include employees of common or contract carriers transporting goods 
to or from the zone.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 95-99, 60 FR 
62733, Dec. 7, 1995]



Sec. 146.8  Seals, authority of operator to break and affix.

    The port director may authorize an operator to break a Customs in-
bond seal affixed under Sec. 18.4 of this chapter, or under any Customs 
order or directive, on any vehicle or intermodal container containing 
merchandise approved for admission to the zone upon its arrival at the 
zone; or to affix a Customs in-bond seal to any vehicle or intermodal 
container of merchandise for which an entry, withdrawal, or other 
approval document has been obtained for movement in-bond from the zone. 
The authorized affixing or breaking of that seal will be considered to 
have been done under Customs supervision. The operator shall report to 
the port director, upon arrival of the vehicle or container at the zone, 
any seal found to be broken, missing, or improperly affixed, and hold 
the vehicle or container and its contents intact pending instructions 
from the port director. If the operator does not obtain the written 
concurrence of the carrier as to the condition of the seal or delivering 
conveyance, the port director shall deem the seal or delivering 
conveyance to be intact.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986; 51 FR 11012, Apr. 1, 1986]



Sec. 146.9  Permission of operator.

    An application for permission to admit merchandise into a zone, or 
to manipulate, manufacture, exhibit, or destroy merchandise in a zone 
must include the written concurrence of the operator, except where the 
regulations of this part provide for the making of application by the 
operator itself or where the operator files a separate specific or 
blanket application. The written concurrence of the operator in the 
removal of merchandise from a zone is not required because the 
merchandise is released by the port director to the operator for 
delivery from the zone, as provided in Sec. 146.71 (a).



Sec. 146.10  Authority to examine merchandise.

    The port director may cause any merchandise to be examined before or 
at the time of admission to a zone, or at any time thereafter, if the 
examination is considered necessary to facilitate the proper 
administration of any law, regulation, or instruction which Customs is 
authorized to enforce.



Sec. 146.11  Transportation of merchandise to a zone.

    (a) From outside Customs territory. Merchandise may be admitted 
directly to a zone from any place outside Customs territory.
    (b) Through Customs territory, foreign merchandise. Foreign 
merchandise destined to a zone and transported in-bond through Customs 
territory will be subject to the laws and regulations applicable to 
other merchandise transported in-bond between two places in Customs 
territory.
    (c) From Customs territory, domestic merchandise. Domestic 
merchandise may be admitted to a zone from Customs territory by any 
means of transportation which will not interfere with the orderly 
conduct of business in the zone.
    (d) From a bonded warehouse. Merchandise may be withdrawn from a 
bonded warehouse under the procedures in Sec. 144.37(g) of this chapter 
and transferred to a zone for admission in zone-restricted status.



Sec. 146.12  Use of zone by carrier.

    (a) Primary use; lading and unlading. The water area docking 
facilities, and any lading and unlading stations of a

[[Page 102]]

zone are intended primarily for the unlading of merchandise into the 
zone or the lading of merchandise for removal from the zone. Their use 
for other purposes may be terminated by Customs if found to endanger the 
revenue, or by the Board if found to impede the primary use of the zone.
    (b) Carrier in zone not exempt from law or regulations. Nothing in 
the Act or the regulations in this part shall be construed as excepting 
any carrier entering, remaining in, or leaving a zone from the 
application of any other law or regulation.



Sec. 146.13  Customs forms and procedures.

    Where a Customs form or other document is required in this part, the 
number of copies of the form or document required to be presented and 
their manner of distribution and processing shall be determined by the 
port director, except as otherwise specified in this part.



Sec. 146.14  Retail trade within a zone.

    Retail trade is prohibited within a zone except as provided in 19 
U.S.C. 81o(d). See also the regulations of the Board as contained in 15 
CFR part 400.



          Subpart B_Inventory Control and Recordkeeping System



Sec. 146.21  General requirements.

    (a) Systems capability. The operator shall maintain either manual or 
automated inventory control and recordkeeping systems or combination 
manual and automated systems capable of:
    (1) Accounting for all merchandise, including domestic status 
merchandise, temporarily deposited, admitted, granted a zone status and/
or status change, stored, exhibited, manipulated, manufactured, 
destroyed, transferred, and/or removed from a zone;
    (2) Producing accurate and timely reports and documents as required 
by this part;
    (3) Identifying shortages and overages of merchandise in a zone in 
sufficient detail to determine the quantity, description, tariff 
classification, zone status, and value of the missing or excess 
merchandise;
    (4) Providing all the information necessary to make entry for 
merchandise being transferred to the Customs territory;
    (5) Providing an audit trail to Customs forms from admission through 
manipulation, manufacture, destruction or transfer of merchandise from a 
zone either by zone lot or Customs authorized inventory method.
    (b) Procedures manual. (1) The operator shall provide the port 
director with an English language copy of its written inventory control 
and recordkeeping systems procedures manual in accordance with the 
requirements of this part.
    (2) The operator shall keep current its procedures manual and shall 
submit to the port director any change at the time of its 
implementation.
    (3) The operator may authorize a zone user to maintain its 
individual inventory control and recordkeeping system and procedures 
manual. The operator shall furnish a copy of the zone user's procedures 
manual, including any subsequent changes, to the port director. However, 
the operator will remain responsible to Customs and liable under its 
bond for supervision, defects in, or failures of a system.
    (4) The operator's procedures manual and subsequent changes will be 
furnished to the port director for information purposes only. Customs 
receipt of a manual does not indicate approval or rejection of a system.
    (c) Liability of operator. Upon zone activation approval the 
operator remains liable for complying with all inventory control and 
recordkeeping system requirements set forth in this part.



Sec. 146.22  Admission of merchandise to a zone.

    (a) Identification. All merchandise will be recorded in a receiving 
report or document using a zone lot number or unique identifier. All 
merchandise, except domestic status merchandise for which no permit for 
admission is required under Sec. 146.43, will be traceable to a Customs 
Form 214 and accompanying documentation.
    (b) Reconciliation. Quantities received will be reconciled to a 
receiving report or document such as an invoice with any discrepancy 
reported to the port director as provided in Sec. 146.37.

[[Page 103]]

    (c) Incomplete documentation. Merchandise received without complete 
Customs documentation or which is unacceptable to the inventory control 
and recordkeeping system will be recorded in a suspense account or 
record until documentation is complete or the system is capable of 
accepting the information, at which time it will be formally admitted to 
the zone under Sec. 146.32 or 146.40. The receiving report or document 
will provide sufficient information to identify the merchandise and 
distinguish it from other merchandise. The suspense account or record 
will be completely documented for Customs review to explain the 
differences noted and corrections made.
    (d) Recordation. Merchandise received will be accurately recorded in 
the inventory system records from the receiving report or document using 
the zone lot number or unique identifier for traceability. The inventory 
record will state the quantity and date admitted, cost or value where 
applicable, zone status, and description of the merchandise, including 
any part or stock number.
    (e) Harbor maintenance fee. When imported cargo is unloaded from a 
commercial vessel at a U.S. port and admitted into a foreign trade zone, 
the applicant for admission of that cargo into the zone may be subject 
to the harbor maintenance fee as set forth in Sec. 24.24 of this 
chapter.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 87-44, 52 FR 
10211, Mar. 30, 1987; 52 FR 10970, Apr. 6, 1987]



Sec. 146.23  Accountability for merchandise in a zone.

    (a) Identification of merchandise--(1) General. A zone lot number or 
unique identifier will be used to identify and trace merchandise.
    (2) Fungible merchandise. Fungible merchandise may be identified by 
an inventory method authorized by Customs, which is consistently 
applied, such as First-In-First-Out (FIFO) and using a unique 
identifier.
    (b) Inventory records. The inventory records will specify by zone 
lot number or unique identifier:
    (1) Location of merchandise;
    (2) Zone status;
    (3) Cost or value, unless operator's or user's financial records 
maintain cost or value and the records are made available for Customs 
review;
    (4) Beginning balance, cumulative receipts and removals, 
adjustments, and current balance on hand by date and quantity;
    (5) Destruction of merchandise; and
    (6) Scrap, waste, and by-products.
    (c) Physical inventory. The operator shall take at least an annual 
physical inventory of all merchandise in the zone (unless continuous 
cycle counts are taken as part of an ongoing inventory control program) 
with prior notification of the date(s) given to Customs for any 
supervision of the inventory deemed necessary. The operator shall notify 
the port director of any discrepancies in accordance with Sec. 146.53.



Sec. 146.24  Transfer of merchandise from a zone.

    (a) Accountability. (1) All zone status merchandise transferred from 
a zone will be accurately recorded within the inventory control and 
recordkeeping system.
    (2) The inventory control and recordkeeping system for merchandise 
transfers must have the capability to trace all transfers back to a zone 
admission under a Customs authorized inventory method.
    (b) Information. The inventory control and recordkeeping system must 
be capable of providing all information necessary to make entry for 
transfer of merchandise from the zone.



Sec. 146.25  Annual reconciliation.

    (a) Report. The operator shall prepare a reconciliation report 
within 90 days after the end of the zone/subzone year unless the port 
director authorizes an extension for reasonable cause. The operator 
shall retain that annual reconciliation report for a spot check or audit 
by Customs, and need not furnish it to Customs unless requested. There 
is no form specified for the preparation of the report.
    (b) Information required. The report must contain a description of 
merchandise for each zone lot or unique identifer, zone status, quantity 
on hand at the beginning of the year, cumulative receipts and transfers 
(by

[[Page 104]]

unit), quantity on hand at the end of the year, and cumulative positive 
and negative adjustments (by unit) made during the year.
    (c) Certification. The operator shall submit to the port director 
within 10 working days after the annual reconciliation report, a letter 
signed by the operator certifying that the annual reconciliation has 
been prepared, is available for Customs review, and is accurate. The 
certification letter must contain the name and street address of the 
operator, where the required records are available for Customs review; 
and the name, title, and telephone number of the person having custody 
of the records. Reporting of shortages and overages based on the annual 
reconciliation will be made in accordance with Sec. 146.53. These 
reports must accompany the certification letter.



Sec. 146.26  System review.

    The operator shall perform an annual internal review of the 
inventory control and recordkeeping system and shall report to the port 
director any deficiency discovered and corrective action taken, to 
ensure that the system meets the requirements of this part.



              Subpart C_Admission of Merchandise to a Zone



Sec. 146.31  Admissibility of merchandise into a zone.

    Merchandise of every description may be admitted into a zone unless 
prohibited by law. A distinction is made between prohibited and 
conditionally admissible merchandise.
    (a) Prohibited merchandise. Port directors shall not admit 
prohibited merchandise. If there is a question as to whether the 
merchandise may be prohibited, port directors may permit the temporary 
deposit of the merchandise in a zone pending a final determination of 
its status. Any prohibited merchandise which is found within a zone will 
be disposed of in the manner provided for in the laws and regulations 
applicable to that merchandise.
    (b) Conditionally admissible merchandise. The admission of this 
merchandise into a zone is subject to the regulations of the Federal 
agency concerned.



Sec. 146.32  Application and permit for admission of merchandise.

    (a) Application on Customs Form 214 and permit. Merchandise may be 
admitted into a zone only upon application on a uniquely and 
sequentially numbered Customs Form 214 (``Application for Foreign Trade 
Zone Admission and/or Status Designation'') and the issuance of a permit 
by the port director. Exceptions to the Customs Form 214 requirement are 
for merchandise temporarily deposited (Sec. 146.33), transiting 
merchandise (Sec. 146.34), or domestic merchandise admitted without 
permit (Sec. 146.43). The applicant for admission shall present the 
application to the port director and shall include a statistical copy on 
Customs Form 214-A for transmittal to the Bureau of Census, unless the 
applicant has made arrangements for the direct transmittal of 
statistical information to that agency.
    (b) Supporting documents--(1) Commercial documentation. The 
applicant shall submit with the application two copies of an examination 
invoice meeting the requirements of subpart F, part 141, of this 
chapter, for any merchandise, other than that excepted in paragraph (a) 
of this section, to be admitted to a zone. The notation of tariff 
classification and value required by Sec. 141.90 of this chapter need 
not be made, unless the merchandise is to be admitted in privileged 
status.
    (2) Evidence of right to make entry. The applicant for admission 
shall submit with the application a document similar to that which would 
be required as evidence of the right to make entry for merchandise in 
Customs territory under Sec. 141.11 or Sec. 141.12 of this chapter.
    (3) Release order. Merchandise will not be authorized for delivery 
by Customs to a zone until a release order has been executed by the 
carrier which brought the merchandise to the port, unless the 
merchandise is released back to that same carrier for delivery to the 
zone (see Sec. 141.11 of this chapter). When a release order is 
required, it will be made on any of the forms specified in Sec. 141.111 
of this chapter, or by the following

[[Page 105]]

statement attached to Customs Form 214:

    Authority is hereby given to release the merchandise described in 
this
application to__________________________________________________________
________________________________________________________________________

Name of Carrier_________________________________________________________
________________________________________________________________________

Signature and title of carrier
representative__________________________________________________________
________________________________________________________________________
    A blanket or qualified release order may be authorized for the 
transfer of merchandise to a zone as provided for in Sec. 141.111 of 
this chapter.

    (4) Application to unlade. For merchandise unladen in the zone 
directly from the importing carrier, the application on Customs Form 214 
will be supported by an application to unlade on Customs Form 3171.
    (5) Other documentation. The port director may require additional 
information or documentation as needed to conduct an examination of 
merchandise under Customs selective entry processing criteria, or to 
determine whether the merchandise is admissible to the zone.
    (c) Conditions for issuance of a permit. The port director will 
issue a permit for admission of merchandise to a zone when:
    (1) The application is properly executed and includes the zone 
status desired for the merchandise, as provided in subpart D of this 
part;
    (2) The operator's approval appears either on the application or in 
a separate specific or blanket approval;
    (3) The merchandise is retained for examination at the place of 
unlading, the zone, or other location designated by the port director, 
except for merchandise for direct delivery to a zone under Sec. Sec. 
146.39 and 146.40. The merchandise may be examined as if it were to be 
entered for consumption or warehouse; and
    (4) All requirements have been fulfilled.
    (d) Blanket application for admission of merchandise. Merchandise 
may be admitted to a zone under blanket application upon presentation of 
a Customs Form 214 covering more than one shipment of merchandise. A 
blanket application for admission is for:
    (1) Shipments which arrive under one transportation entry as 
described in Sec. 141.55 of this chapter, or
    (2) Shipments which are destined to the same zone applicant on a 
single business day, in which case the applicant shall:
    (i) Present the examination invoices required by paragraph (b) of 
this section to the port director before the merchadise is admitted into 
the zone,
    (ii) Have been approved for the direct transmittal of statistical 
trade information to the Bureau of Census under an agreement with that 
agency; and
    (iii) Have examination invoices containing a unique identifier to 
trace the shipment to the manifest of the carrier that brought the 
merchandise to the port having jurisdiction over the zone, as well as to 
the inventory control and recordkeeping system of the operator as 
described in subpart B.



Sec. 146.33  Temporary deposit for manipulation.

    Imported merchandise for which an entry has been made and which has 
remained in continuous Customs custody may be brought temporarily to a 
zone for manipulation and return to Customs territory under Customs 
supervision, pursuant to section 562, Tariff Act of 1930, as amended (19 
U.S.C. 1562), and Sec. 19.11 of this chapter. That merchandise will not 
be considered within the purview of the Act but will be treated as 
though remaining in Customs territory. No zone form or procedure will be 
considered applicable, but the merchandise will remain subject to any 
requirements necessary for the enforcement of section 562 and other 
Customs laws while in the zone.



Sec. 146.34  Merchandise transiting a zone.

    The following procedure is applicable when merchandise is to be 
unladen from any carrier in the zone for immediate transfer to Customs 
territory, or if it is to be transferred from Customs territory through 
the zone for immediate lading on any carrier in the zone:
    (a) Application. Application for permission to lade or unlade will 
be filed with the port director on Customs Form 3171 prior to transfer 
of the merchandise into the zone.

[[Page 106]]

    (b) Permit. The port director shall permit the transfer unless he 
has reason to believe that the merchandise will not be moved promptly 
from the zone or will be made the subject of an application for 
admission in accordance with Sec. 146.32(a).
    (c) Treatment of merchandise. Upon the issuance of a permit to lade, 
or unlade, the merchandise will be treated as though the lading or 
unlading were in the Customs territory.
    (d) Delay in zone transit. Merchandise delayed while transiting a 
zone must be made the subject of an application for admission in 
accordance with Sec. 146.32, or it must be removed from the zone.



Sec. 146.35  Temporary deposit in a zone; incomplete documentation.

    (a) General. Temporary deposit of merchandise in a zone is allowed 
in circumstances where the information or documentation necessary to 
complete the Customs Form 214 is not available at the time of arrival of 
merchandise within the jurisdiction of the port. The merchandise will be 
subject to examination as provided in Sec. 146.36.
    (b) Application. An application for temporary deposit will be made 
to the port director on a properly signed and uniquely numbered Customs 
Form 214, annotated clearly ``Temporary Deposit in a Zone''.
    (c) Conditions. Merchandise temporarily deposited under the 
provisions of this section has no zone status and is considered to be in 
the Customs territory. It will:
    (1) Be physically segregated from all other zone merchandise;
    (2) Be held under the bond and at the risk of the operator; and
    (3) Be manipulated only to the extent necessary to obtain sufficient 
information about the merchandise to file the appropriate admission or 
entry documentation.
    (d) Approval. The port director shall approve the application for 
temporary deposit of merchandise in a zone if the provisions of 
paragraphs (b) and (c) of this section are met.
    (e) Submission of Customs Form 214. A complete and accurate Customs 
Form 214 will be submitted, as provided in Sec. 146.32, within 5 
working days plus any extension granted by the port director, or the 
merchandise shall be placed in general order.



Sec. 146.36  Examination of merchandise.

    Except for direct delivery procedures provided for in Sec. 146.39, 
all merchandise covered by a Customs Form 214 may be retained for 
Customs examination at the place of unlading, the zone, or another 
location, as designated by the port director. The port director may 
authorize release of the merchandise without examination, as provided in 
Sec. 151.2 of this chapter. If a physical examination is conducted, the 
Customs officer shall note the results of the examination on the 
examination invoices.



Sec. 146.37  Operator admission responsibilities.

    (a) Maintenance of admission documentation. The operator shall 
maintain either:
    (1) Lot file. The operator shall open and maintain a lot file 
containing a copy of the Customs Form 214, the examination invoice, and 
all other documentation necessary to account for the merchandise covered 
by each Customs Form 214. The lot file will be maintained in sequential 
order by using the unique number assigned to each Customs Form 214 as 
the file reference number; or
    (2) Authorized inventory method. Where a Customs authorized 
inventory method other than a lot system (specific identification of 
merchandise) is used, e.g., First-In-First-Out (FIFO), no lot file is 
required but the operator shall maintain a file of all Customs Form's 
214 in sequential order.
    (b) Examination invoice. The operator shall give a copy of the 
examination invoice to the person making entry to transfer the 
merchandise from the zone upon request of that person or the port 
director.
    (c) Liability for merchandise. The operator will be held liable 
under its bond for the receipt of merchandise admitted in the quantity 
and condition as described on the Customs Form 214, except as modified 
by a discrepancy report:
    (1) Signed jointly by the operator and carrier on the Customs Form 
214 or

[[Page 107]]

other approved form within 15 days after admission of the merchandise, 
and reported to the port director within 2 working days thereafter; or
    (2) Submitted on Customs Form 5931 under the provisions of subpart 
A, part 158, of this chapter within 20 days after admission of the 
merchandise. The operator may file a Customs Form 5931 on behalf of the 
person who applied for admission of merchandise to the zone.
    (d) Supervision of merchandise. The port director may authorize the 
receipt of zone status merchandise at a zone without physical 
supervision by a Customs officer (see Sec. 146.3). In that case, the 
operator shall supervise the receipt of merchandise into the zone, 
report the receipt and condition of the merchandise, and mark packages 
with the unique Customs Form 214 number so that the merchandise can be 
traced to a particular Customs Form 214. Packages that are accounted for 
under a Customs-authorized inventory method other than specific 
identification, need not be marked with a unique Customs Form 214 number 
but must be adequately identified so Customs can conduct an inventory 
count. The operator shall submit the Custom Form 214 to Customs at the 
location specified by the port director.



Sec. 146.38  Certificate of arrival of merchandise.

    Whenever a certificate prepared by Customs as to the arrival of any 
merchandise in a zone is required by a Federal agency, the port director 
shall issue the document certifying only that authorization to deliver 
the merchandise to a zone has been made. The operator shall issue a 
certificate of arrival of merchandise at a zone.



Sec. 146.39  Direct delivery procedures.

    (a) General. This procedure is for delivery of merchandise to a zone 
without prior application and approval on Customs Form 214.
    (b) Application. An operator, meeting the criteria of paragraph (c) 
of this section, shall file a written application with the port director 
at least 30 days before the special procedure is to become effective. 
The application will describe the merchandise to be handled or 
processed, and the kind of operation which it will undergo in the zone.
    (c) Criteria. The port director shall approve the application if the 
following criteria are met:
    (1) The merchandise is not restricted or of a type which requires 
Customs examination or documentation review before or upon its arrival 
at the zone;
    (2) The merchandise to be admitted to the zone, and the operations 
to be conducted therein, are known well in advance, are predictable and 
stable over the long term, and are relatively fixed in variety by the 
nature of the business conducted at the site; and
    (3) The operator is the owner or purchaser of the goods.
    (d) Application decision. The port director shall promptly notify 
the operator, in writing, of Customs decision on the application. If the 
application is denied, the port director shall specify the reason for 
denial in his reply. The port director's decision will constitute the 
final Customs administrative determination concerning the application.
    (e) Revocation of approval. The port director may revoke the 
approval given under this section if it becomes necessary for Customs 
routinely to examine the merchandise or documentation before or upon 
admission to the zone.



Sec. 146.40  Operator responsibilities for direct delivery.

    (a) Arrival of conveyance. Upon arrival at a subzone or zone site of 
a conveyance containing foreign merchandise, the operator shall:
    (1) Collect in-bond or cartage documentation from the carrier;
    (2) Check the condition of any seal affixed to the conveyance, and 
if broken, missing or improperly affixed, notify the port director and 
receive instructions before unloading the merchandise;
    (3) Check each incoming in-bond and cartage shipment to determine if 
the manifested quantity or the quantity on the cartage document agrees 
with the quantity actually received;
    (4) Sign and date the in-bond or cartage documentation to accept 
responsibility for the merchandise under the Foreign Trade Zone 
Operator's Bond

[[Page 108]]

and to relieve the carrier of responsibility.
    (5) Forward the in-bond or cartage documentation so as to reach the 
port director within 2 working days after the date of arrival of the 
conveyance at the subzone or zone site;
    (6) Maintain a file of open in-bond manifests in chronological order 
of date of conveyance arrival to identify shipments that have arrived 
but the entire contents of which have not been admitted to the subzone 
or zone site; and
    (7) Notify the port director, by annotation on the Customs Form 214, 
when the entire contents of a shipment have been admitted.
    (b) Transportation by operator. If merchandise is transported to a 
subzone or zone site by the foreign trade zone operator from a location 
in the district (see definition of ``district'' at Sec. 112.1) in which 
the subzone or zone site is situated, the merchandise is deemed admitted 
at the time the foreign trade zone operator picks it up. At the time of 
pick-up, the operator is responsible for:
    (1) Receipting for the merchandise and recording on the appropriate 
document any discrepancies regarding quantity, condition or the status 
of the seals;
    (2) Transporting the merchandise to the zone or subzone; and
    (3) Ensuring that the zone records reflect that the merchandise is 
received in the zone.
    (c) Admission of merchandise: alternative procedures--(1) Cumulative 
Customs Form 214. If the operator has an agreement with the Bureau of 
Census for direct transmittal of statistical information, he shall 
submit to the port director each business day a properly signed and 
uniquely numbered Customs Form 214 listing all merchandise except for 
domestic status merchandise admitted under Sec. 146.43 recorded into 
the inventory control and recordkeeping system during the previous 
business day. The Customs Form 214 must contain a list of all in-bond 
(I.T.) numbers or the unique number of any cartage document, as well as 
the number of invoices for each I.T. or cartage document, pertaining to 
merchandise which has been entered into the system.
    (2) Individual Customs Form 214. If a cumulative Customs Form 214 is 
not submitted as provided in paragraph (b)(1) of this section, the 
operator shall file with the port director each business day an 
individual Customs Form 214 and 214-A covering each shipment recorded 
into the inventory control and recordkeeping system during the previous 
business day. The forms shall be submitted within 10 days after the end 
of the month in which the merchandise was received in the zone, and no 
extension beyond that time will be approved by the port director.
    (3) General order. Merchandise not admitted into a subzone or zone 
site as provided in this section within 15 calendar days after its 
arrival there shall be disposed of in accordance with the applicable 
procedures in Sec. 4.37 or Sec. 122.50 or Sec. 123.10 of this 
chapter.
    (4) Inventory control and recordkeeping system. The operator shall 
establish and maintain a continuing input quality control program to 
ensure that information concerning merchandise in admission documents, 
verified or corrected by counts and checks, is accurately recorded in 
the inventory control and recordkeeping system. Quantities recorded in 
the system, after allowance by the port director for any discrepancies, 
will be the quantities of merchandise for which the operator shall be 
held liable under its bond for admission to the subzone or zone site. A 
discrepancy involving a within-case shortage (or overage) need not be 
reported on Customs Form 5931, if the operator is able to report that 
information in another manner so that the port director can determine 
whether there is liability for the discrepancy under the bond of any 
party to the importation.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 94-81, 59 FR 
51497, Oct. 12, 1994; T.D. 95-77, 60 FR 50020, Sept. 27, 1995; T.D. 98-
74, 64 FR 6801, Feb. 11, 1999]



                Subpart D_Status of Merchandise in a Zone



Sec. 146.41  Privileged foreign status.

    (a) General. Foreign merchandise which has not been manipulated or

[[Page 109]]

manufactured so as to effect a change in tariff classification will be 
given status as privileged foreign merchandise on proper application to 
the port director.
    (b) Application. Each application for this status will be made on 
Customs Form 214 at the time of filing the application for admission of 
the merchandise into a zone or at any time thereafter before the 
merchandise has been manipulated or manufactured in the zone in a manner 
which has effected a change in tariff classification.
    (c) Supporting documentation. Each applicant for this status shall 
submit to the port director, with the application, an invoice notated as 
provided for in Sec. 141.90 of this chapter.
    (d) Determination of duties and taxes. Upon receipt of the 
application and accompanying invoice, the port director may examine the 
merchandise to determine whether to approve the application. The 
merchandise will be subject to classification and valuation as provided 
in Sec. 146.65.
    (e) Status as privileged foreign merchandise binding. A status as 
privileged foreign merchandise cannot be abandoned and remains 
applicable to the merchandise even if changed in form by manipulation or 
manufacture, except in the case of recoverable waste (see Sec. 
146.42(b)), as long as the merchandise remains within the purview of the 
Act. However, privileged foreign merchandise may be exported or 
withdrawn for supplies, equipment, or repair material of vessels or 
aircraft without the payment of taxes and duties, in accordance with 
Sec. Sec. 146.67 and 146.69.



Sec. 146.42  Nonprivileged foreign status.

    All of the following will have the status of nonprivileged foreign 
merchandise:
    (a) Foreign merchandise. Foreign merchandise properly in a zone 
which does not have the status of privileged foreign merchandise or of 
zone-restricted merchandise;
    (b) Waste. Waste recovered from any manipulation or manufacture of 
privileged foreign merchandise in a zone; and
    (c) Certain domestic merchandise. Domestic merchandise in a zone, 
which by reason of noncompliance with the regulations in this part has 
lost its identity as domestic merchandise, will be treated as foreign 
merchandise. Any domestic merchandise will be considered to have lost 
its identity if the port director determines that it cannot be 
identified positively by a Customs officer as domestic merchandise on 
the basis of an examination of the articles or consideration of any 
proof that may be submitted promptly by a party-in-interest.



Sec. 146.43  Domestic status.

    (a) General. Domestic status may be granted to merchandise:
    (1) The growth, product, or manufacture of the U.S. on which all 
internal-revenue taxes, if applicable, have been paid;
    (2) Previously imported and on which duty and tax has been paid; or
    (3) Previously entered free of duty and tax.
    (b) Application. No application or permit is required for the 
admission of domestic status merchandise, including domestic packing and 
repair material, to a zone, except upon order of the Commissioner of 
Customs. No application or permit is required for the manipulation, 
manufacture, exhibition, destruction, or transfer to Customs territory 
of domestic status merchandise, including packing and repair materials, 
except: (1) When it is mixed or combined with merchandise in another 
zone status, or (2) upon order of the Commissioner of Customs. When the 
Commissioner orders a permit to be required for domestic status 
merchandise, he may also order the procedures, forms, and terms under 
which the permit will be received and processed.
    (c) Return of merchandise of Customs territory. Upon compliance with 
the provisions of this section, any of the merchandise specified in 
paragraph (a) of this section, may subsequently be returned to Customs 
territory free of quotas, duty, or tax.



Sec. 146.44  Zone-restricted status.

    (a) General. Merchandise taken into a zone for the sole purpose of 
exportation, destruction (except destruction of distilled spirits, 
wines, and fermented malt liquors), or storage will

[[Page 110]]

be given zone-restricted status on proper application. That status may 
be requested at any time the merchandise is located in a zone, but 
cannot be abandoned once granted. Merchandise in zone-restricted status 
may not be removed to Customs territory for domestic consumption except 
where the Board determines the return to be in the public interest.
    (b) Application. Application for zone-restricted status will be made 
on Customs Form 214.
    (c) Merchandise considered exported--(1) For Customs purposes. If 
the applicant desires a zone-restricted status in order that the 
merchandise may be considered exported for the purpose of any Customs 
law, all pertinent Customs requirements relating to an actual 
exportation shall be complied with as though the admission of the 
merchandise into zone constituted a lading on an exporting carrier at a 
port of final exit from the U.S. Any declaration or form required for 
actual exportation will be modified to show the merchandise has been 
deposited in a zone in lieu of actual exportation, and a copy of the 
approved Customs Form 214 may be accepted in lieu of any proof of 
shipment required in cases of actual exportation.
    (2) For other purposes. If the merchandise is to be considered 
exported for the purpose of any Federal law other than the Customs laws, 
the port director shall be satisfied that all pertinent laws, 
regulations, and rules administered by the Federal agency concerned have 
been complied with before the Customs Form 214 is approved.
    (d) Merchandise entered for warehousing transferred to a zone. 
Merchandise entered for warehousing and transferred to a zone, other 
than temporarily for manipulation and return to Customs territory as 
provided for in Sec. 146.33, will have the status of zone-restricted 
merchandise when admitted into the zone. The application on Customs Form 
214 will state that zone-restricted status is desired for the 
merchandise.



               Subpart E_Handling of Merchandise in a Zone



Sec. 146.51  Customs control of merchandise.

    No merchandise, other than domestic status merchandise provided for 
in Sec. 146.43, will be manipulated, manufactured, exhibited, 
destroyed, or transferred from a zone in any manner or for any purpose, 
except under Customs permit as provided for in this part. The port 
director may require segregation of any zone status merchandise whenever 
necessary to protect the revenue or properly administer U.S. laws or 
regulations.



Sec. 146.52  Manipulation, manufacture, exhibition or destruction; Customs Form 216.

    (a) Application. Prior to any action, the operator shall file with 
the port director an application (or blanket application) on Customs 
Form 216 for permission to manipulate, manufacture, exhibit, or destroy 
merchandise in a zone. After Customs approves the application (or 
blanket application), the operator will retain in his recordkeeping 
system the approved application.
    (b) Approval. (1) The port director shall approve the application 
unless (i) the proposed operation would be in violation of law or 
regulation; (ii) the place designated for its performance is not 
suitable for preventing confusion of the identity or status of the 
merchandise, or for safeguarding the revenue; (iii) the port director is 
not satisfied that the destruction will be effective; or (iv) the 
Executive Secretary of the Board has not granted approval of a new 
manufacturing operation.
    (2) The port director is authorized to approve a blanket application 
for a period of up to one year for a continuous or repetitive operation. 
The port director may disapprove or revoke approval of any application, 
or may require the operator to file an individual application.
    (c) Appeal of adverse ruling. If an approved application is 
subsequently rescinded by the port director for any reason, the 
applicant or grantee may appeal the adverse ruling pursuant to the 
hearing provisions of Sec. 146.82(b)(2).

[[Page 111]]

The rescission shall remain in effect pending the decision on the 
appeal.
    (d) Report results--(1) Separate application. The operator shall 
report on Customs Form 216 the results of an approved manipulation, 
manufacture, exhibition, or certification of destruction (other than by 
a blanket application), unless the port director chooses physically to 
supervise the operation.
    (2) Blanket application. The operator shall maintain a record of an 
approved manipulation, manufacture, exhibition, or certification of 
destruction, in its inventory control and recordkeeping system so as to 
provide an accounting and audit trail of the merchandise through the 
approved operation.
    (e) Destruction. The port director may permit destruction to be done 
outside the zone, in whole or in part and at the risk and expense of the 
applicant, and under such conditions as are necessary to protect the 
revenue, if proper destruction cannot be accomplished within the zone. 
Any residue from the destruction within a zone, which is determined to 
be without commercial value, may be removed to Customs territory for 
disposal.



Sec. 146.53  Shortages and overages.

    (a) Report required. The operator shall report, in writing, to the 
port director upon identification, as such, of any:
    (1) Theft or suspected theft of merchandise;
    (2) Merchandise not properly admitted to the zone; or
    (3) Shortage of one percent (1%) or more of the quantity of 
merchandise in a lot or covered by a unique identifier, if the missing 
merchandise would have been subject to duties and taxes of $100 or more 
upon entry into the Customs territory. The operator shall record upon 
identification all shortages and overages, whether or not they are 
required to be reported to the port director at that time, in its 
inventory control and recordkeeping system. The operator shall record 
all shortages and overages as required in the annual reconciliation 
report under Sec. 146.25.
    (b) Certain domestic merchandise. Except in a case of theft or 
suspected theft, the operator need not file a report with the port 
director, or note in the annual reconciliation report, any shortage or 
overage concerning domestic status merchandise for which no permit is 
required.
    (c) Shortage--(1) Operator responsibility. The operator is 
responsible under its Foreign Trade Zone Operator's Bond for any loss of 
merchandise or for any merchandise which cannot be located or otherwise 
accounted for (except domestic status merchandise for which no permit is 
required), unless the port director is satisfied that the merchandise 
was:
    (i) Never received in the zone;
    (ii) Removed from the zone under proper permit;
    (iii) Not removed from the zone; or
    (iv) Lost or destroyed in the zone through fire or other casualty, 
evaporation, spillage, leakage, absorption, or similar cause, and did 
not enter the commerce of the U.S.
    (2) Liability for duty and taxes. Upon demand of the port director, 
the operator shall make entry for and pay duties and taxes applicable to 
merchandise which is missing or otherwise not accounted for.
    (d) Overage. The person with the right to make entry shall file, 
within 5 days after identification of an overage, an application for 
admission of the merchandise to the zone on Customs Form 214 or file a 
Customs entry for the merchandise. If a Customs Form 214 or a Customs 
entry is not timely filed, and the port director has not granted an 
extension of the time provided, the merchandise shall be sent to general 
order.
    (e) Damage. The liability of the operator under its Foreign Trade 
Zone Operator's Bond may be adjusted for the loss of value resulting 
from damage to merchandise occurring in the zone. The operator shall 
segregate, mark, and otherwise secure damaged merchandise to preserve 
its identity as damaged merchandise.



              Subpart F_Transfer of Merchandise From a Zone



Sec. 146.61  Constructive transfer to Customs territory.

    The port director shall accept receipt of any entry in proper form 
provided

[[Page 112]]

under this subpart, and the merchandise described therein will be 
considered to have been constructively transferred to Customs territory 
at that time, even though the merchandise remains physically in the 
zone. If the entry is thereafter rejected or cancelled, the merchandise 
will be considered at that time to be constructively transferred back 
into the zone in its previous zone status.



Sec. 146.62  Entry.

    (a) General. Entry for foreign merchandise which is to be 
transferred from a zone, or removed from a zone for exportation or 
transportation to another port, for consumption or warehouse, will be 
made on Customs Form 7512, Customs Form 3461, Customs Form 7501, or 
other applicable Customs forms. If entry is made on Customs Form 3461, 
the person making entry shall file an entry summary for all the 
merchandise covered by the Customs Form 3461 within 10 working days 
after the time of entry.
    (b) Documentation. (1) Customs Form 7501 or the entry summary will 
be accompanied by the entry documentation, including invoices as 
provided in parts 141 and 142 of this chapter. The person with the right 
to make entry shall submit any other supporting documents required by 
law or regulations that relate to the transferred merchandise and 
provide the information necessary to support the admissibility, the 
declared values, quantity, and classification of the merchandise. If the 
declared values are predicated on estimates or estimated costs, that 
information must be clearly stated in writing at the time an entry or 
entry summary is filed.
    (2) Customs Form 7512 for merchandise to be transferred to another 
port or zone or for exportation shall state that the merchandise covered 
is foreign trade zone merchandise; give the number of the zone from 
which the merchandise was transferred; state the status of the 
merchandise; and, if applicable, bear the notation or endorsement 
provided for in Sec. 146.64(c), Sec. 146.66(b), or Sec. 146.70(c).
    (c) Waiver of supporting documents. The port director may waive 
presentation of an invoice and supporting documentation required in 
paragraph (b) of this section with the entry or entry summary, if 
satisfied that presentation of those documents would be impractical, and 
the person making entry or the operator either files invoices and 
supporting documentation with the port director or maintains and makes 
those records available for examination by Customs.



Sec. 146.63  Entry for consumption.

    (a) Foreign merchandise. Merchandise in foreign status or composed 
in part of merchandise in foreign status may be entered for consumption 
from a zone.
    (b) Zone-restricted merchandise. Merchandise in a zone-restricted 
status may be entered for consumption only when the Board has ruled that 
merchandise can be entered for consumption.
    (c) Estimated production--(1) Weekly entry. When merchandise is 
manufactured or otherwise changed in a zone (exclusive of packing) to 
its physical condition as entered within 24 hours before physical 
transfer from the zone for consumption, the port director may allow the 
person making entry to file an entry on Customs Form 3461 for the 
estimated removals of merchandise during the calendar week. The Customs 
Form 3461 must be accompanied by a pro forma invoice or schedule showing 
the number of units of each type of merchandise to be removed during the 
week and their zone and dutiable values. Merchandise covered by an entry 
made under the provisions of this section will be considered to be 
entered and may be removed only when the port director has accepted the 
entry on Customs Form 3461. If the actual removals will exceed the 
estimate for the week, the person making entry shall file an additional 
Customs Form 3461 to cover the additional units before their removal 
from the zone. Notwithstanding that a weekly entry may be allowed, all 
merchandise will be dutiable as provided in Sec. 146.65. When estimated 
removals exceed actual removals, that excess merchandise will not be 
considered to have been entered or constructively transferred to the 
Customs territory.
    (2) Individual transfers. After acceptance of the weekly entry, 
individual

[[Page 113]]

transfers of merchandise covered by the entry may be made from the zone.
    (d) Textiles and textile products. Subject to the existing statutory 
authority of the Board, textiles and textile products admitted into a 
zone, regardless of whether the merchandise has privileged or 
nonprivileged foreign status, which would have been subject to quota or 
visa or export license requirements in their condition at the time of 
importation (if entered for consumption rather than admitted to a zone), 
may not be subsequently transferred into Customs territory for 
consumption if, during the time the merchandise is in the zone, there 
has been a change by manipulation, manufacture, or other means:
    (1) In the country of origin of the merchandise as defined by Sec. 
102.21 or Sec. 102.22 of this chapter, as applicable;
    (2) To exempt from quota or visa or export license requirements 
other than a change brought about by statute, treaty, executive order or 
Presidential proclamation; or
    (3) From one textile category to another textile category.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by CBP Dec. 05-32, 70 
FR 58016, Oct. 5, 2005]



Sec. 146.64  Entry for warehouse.

    (a) Foreign merchandise. Merchandise in privileged foreign status or 
composed in part of merchandise in privileged foreign status may not be 
entered for warehouse from a zone. Merchandise in nonprivileged foreign 
status containing no components in privileged foreign status may be 
entered for warehouse in the same or at a different port.
    (b) Zone-restricted merchandise. Foreign merchandise in zone-
restricted status may be entered for warehouse in the same or at a 
different port only for storage pending exportation, unless the Board 
has approved another disposition.
    (c) Textiles and textile products. Textiles and textile products 
which have been changed as provided for in Sec. 146.63(d) may be 
entered for warehouse only if the entry is endorsed by the port director 
to show that the merchandise may not be withdrawn for consumption.
    (d) Time limit. Merchandise may neither be placed nor remain in a 
Customs bonded warehouse after 5 years from the date of importation of 
the merchandise.



Sec. 146.65  Classification, valuation, and liquidation.

    (a) Classification--(1) Privileged foreign merchandise. Privileged 
foreign merchandise provided for in this section will be subject to 
tariff classification according to its character, condition and 
quantity, at the rate of duty and tax in force on the date of filing, in 
complete and proper form, the application for privileged status. 
Classification of merchandise subject to a tariff-rate import quota will 
be made only at the higher non-quota duty rate in effect on the date 
privileged foreign status was granted. Notwithstanding the grant of 
privileged status, Customs may correct any misclassification of any such 
entered merchandise when it posts the bulletin notice of liquidation 
under Sec. 159.9 of this chapter.
    (2) Nonprivileged foreign merchandise. Nonprivileged foreign 
merchandise provided for in this section will be subject to tariff 
classification in accordance with its character, condition and quantity 
as constructively transferred to Customs territory at the time the entry 
or entry summary is filed with Customs.
    (b) Valuation--(1) Total zone value. The total zone value of 
merchandise provided for in this section will be determined in 
accordance with the principles of valuation contained in sections 402 
and 500 of the Tariff Act of 1930, as amended by the Trade Agreements 
Act of 1979 (19 U.S.C. 1401a, 1500). The total zone value shall be that 
price actually paid or payable to the zone seller in the transaction 
that caused the merchandise to be transferred from the zone. Where there 
is no price paid or payable, the total zone value shall be the cost of 
all materials and zone processing costs related to the merchandise 
transferred from the zone.
    (2) Dutiable value. The dutiable value of merchandise provided for 
in this section shall be the price actually paid or payable for the 
merchandise in the transaction that caused the merchandise to be 
admitted into the zone, plus

[[Page 114]]

the statutory additions contained in section 402(b)(1) of the Tariff Act 
of 1930, as amended by the Trade Agreements Act of 1979 (19 U.S.C. 
1401a(b)(1)), less, if included, international shipment and insurance 
costs and U.S. inland freight costs. If there is no such price actually 
paid or payable, or no reasonable representation of that cost or of the 
statutory additions, the dutiable value may be determined by excluding 
from the zone value any included zone costs of processing or 
fabrication, general expenses and profit and the international shipment 
and insurance costs and U.S. inland freight costs related to the 
merchandise transferred from the zone. The dutiable value of recoverable 
waste or scrap provided for in Sec. 146.42(b) will be the price 
actually paid or payable to the zone seller in the transaction that 
caused the recoverable waste or scrap to be transferred from the zone.
    (3) Allowance. An allowance in the dutiable value of zone 
merchandise may be made by the port director in accordance with the 
provisions of subparts B and C of part 158 of this chapter, for damage, 
deterioration, or casualty while the merchandise is in the zone.
    (c) Liquidation; extension to update cost data. When the declared 
value or values of the merchandise are based on an estimate or 
estimates, the person making entry may request an extension of 
liquidation pending the presentation of updated or actual cost data. A 
request for an extension may be granted at the discretion of the port 
director.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 91-79, 56 FR 
46372, Sept. 12, 1991; T.D. 95-35, 60 FR 20632, Apr. 27, 1995]



Sec. 146.66  Transfer of merchandise from one zone to another.

    (a) At the same port. A transfer of merchandise to another zone with 
a different operator at the same port (including a consolidated port) 
will be by a licensed cartman or a bonded carrier as provided for in 
Sec. 112.2(b) of this chapter or by the operator of the zone for which 
the merchandise is destined under an entry for immediate transportation 
on Customs Form 7512 or other appropriate form with a Customs Form 214 
filed at the destination zone. A transfer of merchandise between zone 
sites at the same port having the same operator may be made under a 
permit on CF 6043 or under a local control system approved by the port 
director wherein any loss of merchandise between sites will be treated 
as if the loss occurred in the zone.
    (b) At a different port. A transfer of merchandise from a zone at 
one port of entry to a zone at another port will be by bonded carrier 
under an entry for immediate transportation on Customs Form 7512. All 
copies of the entry must bear a notation that the merchandise is being 
transferred to another zone designated by its number.
    (c) Forwarding of merchandise history; documentation. When 
merchandise is transferred under the provisions of this section, the 
operator of the transferring zone shall provide the operator of the 
destination zone with the documented history of the merchandise being 
transferred.
    (1) The following documentation must accompany merchandise 
maintained under a lot inventory control system:
    (i) A copy of the original Customs Form(s) 214 with accompanying 
invoices for admission of the merchandise and all components thereof;
    (ii) A copy of any Customs Form 214 filed subsequent to admission to 
change the status of the merchandise or its components; and
    (iii) A copy of any Customs Form 216 to manipulate or manufacture 
the merchandise.
    (2) The following documentation must accompany merchandise not under 
a lot system, and not manufactured in a zone:
    (i) A copy of the original Customs Form(s) 214 with accompanying 
invoices for admission of the merchandise as attributed under the 
particular zone inventory method;
    (ii) A copy of any Customs Form 214 filed subsequent to admission to 
change the status of the merchandise as attributed under the particular 
zone inventory method; and
    (iii) A copy of any Customs Form 216 to manipulate the merchandise 
as attributed under the particular zone inventory method.

[[Page 115]]

    (3) If the documents specified in paragraph (c)(2) of this section 
are not presented, the operator of the transferring zone shall submit 
the following:
    (i) A statement of the zone value, dutiable value, quantity, 
description, unique identifier, and zone status (showing any changes of 
status after admission and whether the merchandise was manipulated so as 
to change its tariff classification) of all the merchandise in the 
shipment covered by the transportation entry; and
    (ii) A certification that the statement in paragraph (c)(3)(i) of 
this section, is true and that the information contained therein is 
contained in the inventory control and recordkeeping system of the 
transferring zone.
    (4) The following documentation must accompany merchandise not under 
a lot system, but manufactured in a zone:
    (i) A statement by the transferring zone operator of the zone value, 
dutiable value, quantity, description, unique identifier, and zone 
status of all the merchandise (and components thereof, where applicable) 
covered by the transportation entry. The statement will also show any 
change in zone status in the transferring zone and whether the 
merchandise has been manufactured or manipulated in the zone so as to 
change its tariff classification; and
    (ii) A certification by the operator of the transferring zone that 
the statement in paragraph (c)(4)(i) of this section is true and the 
information therein is contained in the inventory control and 
recordkeeping system of the zone.
    (5) The operator of the transferring zone shall transmit the 
historical documentation of the merchandise to the receiving zone within 
10 working days after it has been delivered to the bonded carrier for 
transportation. The documentation will be referenced to the I.T. number 
covering the merchandise.
    (d) Arrival at destination zone. Upon arrival of the merchandise at 
the destination zone, it will be admitted under the procedure provided 
for in Sec. 146.32, except that no invoice or Customs examination will 
be required. When the historical documentation is received, the operator 
of the destination zone shall associate it with the Customs Form 214 for 
admission of the merchandise and incorporate that information into the 
zone inventory control and recordkeeping system.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 94-81, 59 FR 
51497, Oct. 12, 1994]



Sec. 146.67  Transfer of merchandise for exportation.

    (a) Direct exportation. Any merchandise in a zone may be exported 
directly therefrom (without transfer into Customs territory) upon 
compliance with the procedures of paragraph (b) of this section.
    (b) Immediate exportation. Each transfer of merchandise to the 
Customs territory for exportation at the port where the zone is located, 
will be made under an entry for immediate exportation on Customs Form 
7512. The person making entry shall furnish an export bond on Customs 
Form 301 containing the bond conditions provided for in Sec. 113.62 of 
this chapter.
    (c) Transportation and exportation. Each transfer of merchandise to 
the Customs territory for transportation to and exportation from a 
different port, will be made under an entry for transportation and 
exportation on Customs Form 7512. The bonded carrier will be responsible 
for exportation of the merchandise in accordance with Sec. 18.26 of 
this chapter.
    (d) Textiles and textile products. Textiles and textile products 
which have been changed as provided for in Sec. 146.63(d) may be 
exported and returned to Customs territory for warehousing provided the 
entry for warehouse is endorsed by the port director to show that the 
merchandise may not be withdrawn for consumption.
    (e) Merchandise produced or manufactured in a zone and returned to 
Customs territory after exportation. Merchandise produced or 
manufactured in a zone and exported without having been transferred to 
Customs territory other than for exportation or for transportation and 
exportation will be subject, on its return to Customs territory, to the 
duties and taxes applicable to like articles of wholly foreign origin, 
unless it is conclusively established that it

[[Page 116]]

was produced or manufactured exclusively with the use of domestic 
merchandise. The identity of the domestic merchandise must have been 
maintained in accordance with the provisions of this part, in which case 
that merchandise will be subject to the provisions of Chapter 98, 
Subchapter I, Harmonized Tariff Schedule of the United States (19 U.S.C. 
1202).

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 89-1, 53 FR 
51263, Dec. 21, 1988]



Sec. 146.68  Transfer for transportation or exportation; estimated production.

    (a) Weekly permit. The port director may allow the person making 
entry for merchandise provided for in Sec. 146.63(c) to file an 
application for a weekly permit to enter and release merchandise during 
a calendar week for exportation, transportation, or transportation and 
exportation. The application will be on Customs Form 7512 stating at the 
top the words ``Application for Weekly Zone Permit,'' and will be filed 
with the port director. The application must be accompanied by a pro 
forma invoice or schedule like that required in Sec. 146.63(c)(1). If 
actual transfers will exceed the estimate for the week, the person with 
the right to make entry shall file a supplemental Customs Form 7512 to 
cover the additional merchandise to be transferred from the subzone or 
zone site. No merchandise covered by the weekly permit may be 
transferred from the zone before approval of the application by the port 
director.
    (b) Individual entries. After approval of the application for a 
weekly permit by the port director, the person making entry will be 
authorized to execute individual Customs Forms 7512 for exportation, 
transportation, or transportation and exportation of the merchandise 
covered by permit. Upon transfer of the merchandise, the operator shall 
obtain a receipt from the carrier on Customs Form 7512 to ensure its 
assumption of liability under the carrier's or cartman's bond. Customs 
will consider the time of entry to be when the removing carrier signs 
the receipt for the merchandise. The operator shall give the bonded 
carrier a copy of the individual Customs Form 7512, as provided for in 
Sec. 18.2(c) of this chapter. The operator also shall ensure that the 
port director receives a copy of the Customs Form 7512 by the end of the 
next working day after the carrier has receipted for the merchandise.
    (c) Statement of merchandise entered. The person making entry for 
merchandise under an approved weekly permit shall file with the port 
director, by the close of business on the second working day of the week 
following the week designated on the permit, a statement of the 
merchandise entered under that permit. The statement must list each 
Customs Form 7512 by its unique I.T. number, and will provide a 
reconciliation of the quantities on the weekly permit with the 
manifested quantities on the individual Customs Forms 7512 submitted to 
Customs, as well as an explanation of any discrepancy.

[T.D. 867-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 00-22, 65 FR 
16518, Mar. 29, 2000]



Sec. 146.69  Supplies, equipment, and repair material for vessels or aircraft.

    (a) General. Any merchandise which may be withdrawn duty and tax 
free in Customs territory under section 309 or 317, Tariff Act of 1930, 
as amended (19 U.S.C. 1309, 1317), and under Sec. Sec. 10.59 through 
10.65 of this chapter, may similarly be transferred from a zone, 
regardless of its zone status, under those statutes and regulations. 
Each transfer from a zone for delivery to a qualified vessel or 
aircraft, will be made on Customs Form 5512 (see Sec. 10.60 of this 
chapter). The person making entry shall furnish a bond on Customs Form 
301 containing the bond conditions provided for in Sec. 113.62 of this 
chapter.
    (b) Merchandise for delivery within zone. Upon acceptance of the 
entry and bond, the port director shall release the merchandise to the 
operator for delivery to the qualified vessel or aircraft for lading in 
the zone.
    (c) Merchandise for delivery outside zone. Upon acceptance of the 
entry and bond, the port director shall release the merchandise to the 
operator for delivery to the bonded cartmen, lighterman, or carrier, for 
transportation through the Customs territory to the qualified lading 
vessel or aircraft.

[[Page 117]]



Sec. 146.70  Transfer of zone-restricted merchandise into Customs territory.

    (a) General. Zone-restricted merchandise may be transferred to 
Customs territory only for entry for exportation, for entry for 
transportation and exportation, for warehousing pending exportation, for 
destruction (except destruction of distilled spirits, wines and 
fermented malt liquors), for transfer from one zone to another, or for 
delivery to a qualified vessel or aircraft or as ground equipment of a 
qualified aircraft under section 309 or 317, Tariff Act of 1930, as 
amended (19 U.S.C. 1309, 1317), unless the Board has ruled that the 
return of the merchandise to Customs territory for domestic consumption 
is in the public interest. With Board approval (See 15 CFR part 400), 
that merchandise may be entered for consumption, for warehousing, for 
immediate transportation without appraisement, or under any other 
provision of the Customs laws, unless the Board has specified the form 
of entry to be made.
    (b) For consumption. If the return of zone-restricted merchandise to 
Customs territory for consumption has been ruled by the Board to be in 
the public interest, the entry shall be endorsed by the port director to 
show the authority under which it was made, and that the merchandise is 
subject to the provisions of Chapter 98, Subchapter I, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202).
    (c) For warehousing. Zone-restricted merchandise may be transferred 
from a zone to a Customs bonded warehouse for storage pending 
exportation. The Customs Form 7501 shall be endorsed by the port 
director to show that the merchandise may not be withdrawn for 
consumption. In the case of zone-restricted merchandise transported in 
bond to another port for warehousing and exportation, Customs Form 7512 
shall be endorsed by the port director to show that the merchandise is 
foreign trade zone merchandise in zone-restricted status, which shall be 
entered for warehouse with proper endorsement on Customs Form 7501, and 
which may not be withdrawn for consumption. Zone-restricted merchandise 
transferred from a zone to a Customs bonded warehouse may not be 
manipulated, except for packing or unpacking incidental to exportation.
    (d) For other purposes. Upon acceptance of an entry or withdrawal 
for zone-restricted merchandise for any purpose other than that 
described in a Board order, the entry shall be endorsed by the person 
making entry to show that actual exportation of the merchandise is 
required by the fourth proviso to section 3 of the Act, as amended, or 
the entry endorsed to require delivery to a qualified vessel or 
aircraft, under section 309 or 317, Tariff Act of 1930, as amended (19 
U.S.C. 1309, 1317).

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 89-1, 53 FR 
51263, Dec. 21, 1988]



Sec. 146.71  Release and removal of merchandise from zone.

    (a) General. Except as provided for in Sec. 146.43, no merchandise 
will be transferred from a zone without a Customs permit on the 
appropriate entry or withdrawal form or other document as required in 
this part. This port director may authorize transfer from a zone without 
physical supervision or examination by a Customs officer. Upon issuance 
of a permit, the port director will authorize delivery of the 
merchandise only to the operator, who then may release the merchandise 
to the importer or carrier.
    (b) Liability for discrepancy. When a transfer is not physically 
supervised by a Customs officer, the operator will be relieved of 
responsibility only for the merchandise in a zone in the condition and 
quantity as shown on the entry, withdrawal, or other appropriate form. 
The operator will be relieved of responsibility only if it receives the 
signed receipt on the document of the importer or the carrier named in 
that document. The responsibility of the operator may be adjusted by any 
discrepancy report made jointly by the operator and the bonded cartman, 
lighterman, or carrier, or the importer, and signed by the above or an 
authorized representative within 15 days after transfer of the 
merchandise from the zone. Any adjustment must be noted on the permit 
copy of the entry, withdrawal, or other appropriate form or

[[Page 118]]

document. A copy of any joint report of discrepancy must be submitted to 
the port director within 10 working days of signing by the parties.
    (c) Time limit. Except in the case of articles for use in a zone, 
merchandise for which a Customs permit for transfer to Customs territory 
has been issued must be physically removed from the zone within 5 
working days of issuance of that permit. The port director, upon request 
of the operator, may extend that period for good cause. Merchandise 
awaiting removal within the required time limit will not be further 
manipulated or manufactured in the zone, but will be segregated or 
otherwise identified by the operator as merchandise that has been 
constructively transferred to Customs territory.
    (d) Retention or return of merchandise to zone for consumption. (1) 
The port director shall cancel any entry for consumption where: (i) The 
merchandise is not removed from the zone within the period specified in 
paragraph (c) of this section, or (ii) the merchandise was removed from 
the zone but did not enter the commerce of the U.S. in Customs territory 
and was subsequently readmitted to a zone in domestic status. If the 
port director has reason to believe any new entry would be cancelled 
under the provisions of this paragraph, he may reject the entry or 
demand a written stipulation, as a condition of entry acceptance, that 
the merchandise will not be returned to a zone in domestic status. 
Merchandise covered by an entry which has been cancelled under this 
paragraph shall be restored to its last foreign status.
    (2) A component of merchandise which has been entered, but not 
physically removed from a zone, shall be restored to its last zone 
status, provided the port director determines that the component was 
included in the entry through clerical error, mistake of fact, or other 
inadvertence not amounting to an error in the construction of the law. 
Such an error, including that in appraisement of any entry or 
liquidation due to the above circumstances, may be corrected pursuant to 
section 520(c)(1), Tariff Act of 1930, as amended (19 U.S.C. 
1520(c)(1)), in accordance with the procedures described in part 173 of 
this chapter. If the port director decides there has been no error, 
mistake, or inadvertence, or that the information was not timely 
provided, the component will be considered as an overage and subject to 
the provisions of Sec. 146.53(d).
    (3) When merchandise which has been entered for consumption is 
subsequently returned to a zone for a reason other than that specified 
in paragraph (d)(1) of this section, it shall be admitted in domestic 
status.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986; 51 FR 11012, Apr. 1, 1986]



               Subpart G_Penalties; Suspension; Revocation



Sec. 146.81  Penalties.

    (a) Amount. Upon violation of the Act, or any regulation issued 
under the Act, by the grantee, or any officer, agent, operator or 
employee thereof, the person responsible for or permitting the violation 
shall be subject to a fine of not more than $1,000. Each day during 
which a violation continues will constitute a separate offense. 
Liquidated damages, where applicable, will be imposed in addition to the 
fine (19 U.S.C. 81s).
    (b) Review. All fines assessed by the port director under this 
section will be reviewed by the Assistant Commissioner, Office of 
International Trade, or his designee, Headquarters, to determine whether 
further action against the grantee or operator, such as suspension or a 
recommendation for revocation of the grant, is warranted.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 91-77, 56 FR 
46115, Sept. 10, 1991]



Sec. 146.82  Suspension.

    (a) For cause. The port director may suspend for cause the activated 
status of a zone or zone site, or the privilege to admit, manufacture, 
manipulate, exhibit, destroy, transfer or remove merchandise at a zone 
or zone site for a period not to exceed 90 days. Upon order of the Board 
the suspension may be continued. If appropriate, the suspension may be 
limited to an individual user or users and not to the zone or zone site 
as a whole, or may be limited to a particular activity of an operator

[[Page 119]]

or user, such as suspension of the privilege to admit merchandise or the 
privilege to manufacture. An action to suspend will be taken in 
accordance with the procedure in paragraph (b) of this section if:
    (1) The approval of the application to activate the zone was 
obtained through fraud or the misstatement of a material fact;
    (2) The operator neglects or refuses to obey any proper order of a 
Customs officer or any Customs order, rule, or regulation relating to 
the operation or administration of a zone;
    (3) The operator, or any officer of a corporation which has been 
granted the right to operate a zone, is convicted of or has commited 
acts which would constitute a felony, or misdemeanor involving theft, 
smuggling, or a theft-connected crime. Any change in the employment 
status of the corporate officer (e.g., discharge, resignation, demotion, 
or promotion) prior to conviction of a felony or prior to conviction of 
a misdemeanor involving theft, smuggling, or a theft-connected crime, 
resulting from acts committed while a corporate officer, will not 
preclude application of this provision;
    (4) The operator fails to furnish a current list of names, 
addresses, or other information as required by Sec. 146.7;
    (5) The operator does not provide a secure facility or properly 
safeguard merchandise within a zone;
    (6) [Reserved]
    (7) The operator, or any officer, agent, or employee of the 
operator, discloses to an unauthorized person proprietary information 
contained on a Customs form or in the inventory control and 
recordkeeping system; or
    (8) The inventory control and recordkeeping system is impaired to 
the point where the identity of merchandise in zone status has been lost 
and cannot be reestablished without a suspension of zone operations.
    (b) Procedure--(1) Notice. The port director may, at any time, serve 
notice, in writing, upon an operator to show cause why its right to 
continue operation of a zone should not be suspended or why an 
individual user or activities of an individual user should not be 
suspended, as provided for in paragraph (a) of this section. The notice 
will advise the operator of the grounds for the proposed action and will 
afford the operator an opportunity to respond, in writing, within 15 
days after receipt of the notice. Thereafter, the port director shall 
consider the allegations and any response made by the operator and issue 
a decision, unless the operator requests a hearing in the matter.
    (2) Hearing. If the operator requests a hearing, it will be held 
before a hearing officer designated by the Commissioner of Customs or 
his designee within 30 days following the operator's request. The 
operator may be represented by counsel at the hearing, and any evidence 
and testimony of witnesses in the proceeding, including substantiation 
of the allegations and the response thereto, will be presented. The 
right of cross-examination will be available to both parties. A 
stenographic record of the proceeding will be made and a copy will be 
delivered to the operator. At the conclusion of the hearing, the hearing 
officer shall transmit promptly all papers and the stenographic record 
of the hearing to the Assistant Commissioner, Office of Field 
Operations, or designee, together with a recommendation for final 
action.
    (3) Decision of Assistant Commissioner. Within 10 calendar days 
after delivery to the operator of a copy of the stenographic record of 
the hearing, the operator may submit to the Assistant Commissioner, 
Office of Field Operations, or designee, in writing any additional views 
or arguments. The Assistant Commissioner, Office of Field Operations, or 
designee, shall then render a written decision stating his reasons 
therefor. That decision will be served on the operator and will be 
considered the final Customs administrative action in the case.
    (4) Grantee. If the grantee of the zone is not the operator, a copy 
of the notice to show cause will be served upon the grantee. The 
grantee, as a party-in-interest, may join the operator in any 
proceedings under this section.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 88-63, 53 FR 
40220, Oct. 14, 1988; T.D. 95-99, 60 FR 62733, Dec. 7, 1995]

[[Page 120]]



Sec. 146.83  Revocation of zone grant.

    (a) Recommendation of port director. The port director may at any 
time recommend to the Board that the privilege of establishing, 
operating, and maintaining a zone or subzone under CBP jurisdiction be 
revoked for willful and repeated violations of the Act (19 U.S.C. 81r). 
If the port director believes that a substantial question of law exists 
as to whether willful and repeated violations of the Act have occurred, 
that officer may request internal advice under the provisions of part 
177 of this chapter from the Executive Director, Regulations and 
Rulings, Office of International Trade, Headquarters. A recommendation 
to the Board that a zone or subzone grant be revoked does not preclude, 
and may be in addition to, any liquidated damages, penalty, or 
suspension for cause.
    (b) Decision of the Board. The procedure for revocation of a grant, 
the decision of the Board, and appeal is covered by the provisions of 
the Act and title 15, chapter IV, part 400, Code of Federal Regulations.

[T.D. 86-16, 51 FR 5049, Feb. 11, 1986, as amended by T.D. 91-77, 56 FR 
46115, Sept. 10, 1991; T.D. 99-27, 64 FR 13676, Mar. 22, 1999]



        Subpart H_Petroleum Refineries in Foreign-Trade Subzones

    Source: T.D. 95-35, 60 FR 20632, Apr. 27, 1995, unless otherwise 
noted.



Sec. 146.91  Applicability.

    This subpart applies only to a petroleum refinery (as defined 
herein) engaged in refining petroleum in a foreign-trade zone or 
subzone. Further, the provisions relating to zones generally, which are 
set forth elsewhere in this part, including documentation and document 
retention requirements, and entry procedures, such as weekly entry, 
shall apply as well to a refinery subzone, insofar as applicable to and 
not inconsistent with the specific provisions of this subpart. It does 
not cover zone-to-zone transfers in which the fact of removal from one 
zone is ignored.



Sec. 146.92  Definitions.

    (a) Attribution. ``Attribution'' means the association of a final 
product with its source material.
    (b) Feedstocks. ``Feedstocks'' means crude petroleum or intermediate 
product that is used in a petroleum refinery to make a final product.
    (c) Feedstock factor. ``Feedstock factor'' means the relative value 
of final products utilizing T.D. 66-16 (see Sec. 146.92(h)), and which 
takes into account any volumetric loss or gain.
    (d) Final product. ``Final product'' means any petroleum product 
that is produced in a refinery subzone and thereafter removed therefrom 
or consumed within the zone.
    (e) Manufacturing period. ``Manufacturing period'' means a period 
selected by the refiner which must be no more than a calendar month 
basis, for which attribution to a source feedstock must be made for 
every final product made, consumed in, or removed from the refinery 
subzone.
    (f) Petroleum refinery. ``Petroleum refinery'' means a facility that 
refines a feedstock listed on the top line of the tables set forth in 
T.D. 66-16 into a product listed in the left column of the tables set 
forth in T.D. 66-16.
    (g) Price of product. ``Price of product'' means the average per 
unit market value of each final product for a given manufacturing period 
or the published standard product value if updated each month.
    (h) Producibility. ``Producibility'' is a method of attributing 
products to feedstocks for petroleum manufacturing in accordance with 
the Industry Standards of Potential Production set forth in T.D. 66-16.
    (i) Relative value. ``Relative value'' means a value assigned to 
each final product attributed to the separation from a privileged 
foreign feedstock based on the ratio of the final product's value 
compared to the privileged foreign feedstock's duty.
    (j) Time of Separation. ``Time of separation'' means the 
manufacturing period in which a privileged foreign status feedstock is 
deemed to have been separated into two or more final products.
    (k) Weighted Average. ``Weighted average'' means the relative value 
of

[[Page 121]]

merchandise, which is determined by dividing the total value of 
shipments in a given period by the total quantity shipped in the same 
given period. See example in section VI of the appendix to this part.



Sec. 146.93  Inventory control and recordkeeping system.

    (a) Attribution. All final products removed from or consumed within 
a petroleum refinery subzone must be attributed to feedstock admitted 
into said petroleum refinery subzone in the current or prior 
manufacturing period. Attribution must be based on records maintained by 
the operator. Attribution may be made by applying one of the authorized 
methods set forth in this section. Records must be maintained on a 
weight or volume basis.
    (1) Producibility. The producibility method of attribution requires 
that records be kept to attribute final products to feedstocks which are 
eligible for attribution as set forth in this section during the current 
or prior manufacturing period.
    (2) Actual production records. An operator may use its actual 
production records as provided for under Sec. 146.95(b) of this 
subpart.
    (3) Other inventory method. An operator may use the FIFO (first-in, 
first-out) method of accounting (see Sec. 191.22(c) of this chapter). 
The use of this method is illustrated in the appendix to this part.
    (b) Feedstock eligible for attribution. Only a feedstock that has 
been admitted into the refinery subzone is eligible for attribution. For 
a given manufacturing period, the quantity of feedstock eligible for 
attribution may be computed as beginning inventory, plus receipts less 
shipments of feedstock out of the subzone, and less ending inventory.
    (c) Consumption or removal of final product. Each final product that 
is consumed in or removed from a refinery subzone must be attributed to 
a feedstock eligible for attribution during the current or a prior 
manufacturing period. Each final product attributed as being produced 
from the separation of a privileged foreign status feedstock must be 
assigned the proper relative value as set forth in paragraph (d) of this 
section.
    (d) Relative value. A relative value calculation is required when 
two or more final products are produced as the result of the separation 
of privileged foreign status feedstock. Ad valorem and compound rates of 
duty must be converted to specific rates of duty in order to make a 
relative value calculation.
    (e) Privileged status after admission. Nonprivileged status 
feedstock is eligible for privileged status only if the request shows to 
the satisfaction of the Customs Service that there was no manipulation 
or manufacture of the feedstock to change its tariff classification 
before the request is granted. The absence of such manipulation or 
manufacture can be shown by demonstrating that the feedstock was placed 
in an empty tank, in a tank that contained only feedstock with the same 
nominal specifications or providing a sample which shows there was no 
change in tariff status. The existence of negligible amounts of other 
feedstocks may be disregarded only in accordance with Sec. 146.95(b). A 
request for after-admission privileged foreign status shall be denied 
unless the feedstock's tank records from admission to the time that the 
request is made accompany the request. A refiner who makes such a 
request shall not put any other feedstock having different nominal 
specifications into the tank until the request for privileged status is 
granted. The Customs Service will deny or revoke a post-admission 
request if a refiner fails to retain the integrity of the feedstock in 
the tank.
    (f) Consistent use required. The operator must use the selected 
method, measurement (weight or volume), and the price of product 
consistently (see Sec. 146.92(g) of this subpart and paragraph (a) of 
this section).



Sec. 146.94  Records concerning establishment of manufacturing period.

    (a) Feedstock admitted into the refinery subzone. The operator must 
maintain appropriate inventory records during

[[Page 122]]

the manufacturing period to substantiate the feedstock(s) eligible for 
attribution under Sec. 146.93(b) and in accordance with the operator's 
selected attribution method.
    (b) Final product consumed in or removed from subzone. The operator 
must record the date and amount of each final product consumed in, or 
removed from the subzone.
    (c) Consumption or removal. The consumption or removal of a final 
product during a week may be considered to have occurred on the last day 
of that week for purposes of attribution and relative value calculation 
instead of the actual day on which the removal or consumption occurred, 
unless the refiner elects to attribute using the FIFO method (see 
section II of the appendix to this part).
    (d) Gain or loss. A gain or loss that occurs during a manufacturing 
period must be taken into account in determining the attribution of a 
final product to a feedstock and the relative value calculation of 
privileged foreign feedstocks. Any gain in a final product attributed to 
a non-privileged foreign status feedstock is dutiable if entered for 
consumption unless otherwise exempt from duty.
    (e) Determining gain or loss; acceptable methods--(1) Converting 
volume to weight. Volume measurements may be converted to weight 
measurements using American Petroleum Institute conversion factors to 
account for gain or loss.
    (2) Calculating feedstock factor to account for volume gain or loss. 
A feedstock factor may be calculated by dividing the value per barrel of 
production per product category by the quotient of the total value of 
production divided by all feedstock consumed. This factor would be 
applied to a finished product that has been attributed to a feedstock to 
account for volume gain.
    (3) Calculating volume difference. Volume difference may be 
determined by comparing the amount of feedstocks introduced for a given 
period with the amount of final products produced during the period, and 
then assigning the volume change to each final product proportionately.



Sec. 146.95  Methods of attribution.

    (a) Producibility--(1) General. A subzone operator must attribute 
the source of each final product. The operator is limited in this regard 
to feedstocks which were eligible for attribution during the current or 
prior manufacturing period. Attribution of final products is allowable 
to the extent that the quantity of such products could have been 
produced from such feedstocks, using the industry standards of potential 
production on a practical operating basis, as published in T.D. 66-16. 
Once attribution is made for a particular product, that attribution is 
binding. Subsequent attributions of feedstock to product must take prior 
attributions into account. Each refiner shall keep records showing each 
attribution.
    (2) Industry standards of potential production. The industry 
standards of potential production on a practical operating basis 
necessary for the producibility attribution method are contained in 
tables published in T.D. 66-16. With these tables, a subzone operator 
may attribute final products consumed in, or removed from, the subzone 
to feedstocks during the current or a prior manufacturing period.
    (3) Attribution to product or feedstock not listed in T.D. 66-16. 
(i) For purposes of attribution, where a final product or a feedstock is 
not listed in T.D. 66-16, the operator must submit a proposed 
attribution schedule, supported by a technical memorandum, to the 
appropriate port director. The port director shall refer the request to 
the Director, Office of Regulatory Audit (``ORA''), who will verify the 
refiner's records and will coordinate with the Director, Office of 
Laboratories and Scientific Services (``OLSS''). The Director, ORA, 
shall either approve or deny the request. If the request is approved, 
the Director, ORA, shall publish a modification of T.D. 66-16. If an 
operator elects to show attribution on a producibility basis, but fails 
to keep records on that basis, the operator shall use its actual 
operating records to determine attribution and any necessary relative 
value calculation upon the Customs Service demand and subject to 
verification.

[[Page 123]]

    (ii) An operator may attribute a final product to a feedstock in 
excess of the amount allowed under T.D. 66-16, when authorized by 
Customs, without losing the ability to attribute under T.D. 66-16 for 
all other feedstock-final product combinations. The operator must use 
its actual production records for the requested feedstock-final product 
combination. The operator must agree in writing that it will not, and it 
will not enable any other person, to file a drawback claim under 19 
U.S.C. 1313 inconsistent with those actual production records for that 
feedstock-final product combination. The operator shall file its request 
in accordance with paragraph (a)(3) of this section. The Director, ORA, 
and the Director, OLSS, must determine whether T.D. 66-16 needs to be 
modified and shall publish in the Customs Bulletin each approval granted 
under this paragraph and request public comments with each such 
approval.
    (4) Attribution to privileged foreign feedstock; relative value. If 
a final product is attributed to the separation of a privileged foreign 
feedstock a relative value must be assigned (see section IV of the 
appendix to this part).
    (b) Refinery operating records. An operator may use the actual 
refinery operating records to attribute the feedstocks used to the 
removed or consumed products. Customs shall accept the operator's 
operating conventions to the extent that the operator demonstrates that 
it actually uses these conventions in its refinery operations. Whatever 
conventions are elected by the operator, they must be used consistently 
in order to be acceptable to Customs. Additionally, Customs may use 
these records to test the validity of admissions into the subzone, 
consumption within and removals from the subzone.

    Example. If the operator mixes three equal quantities of material in 
a day tank and treats that product as a three-part mixture in its 
production unit, Customs will accept the resulting product as composed 
of the three materials. If, in the alternative, the operator assumes 
that the three products do not mix and treats the first product as being 
composed of the first material put into the day tank, the second product 
as composed of the second material put into the day tank, and the third 
product as being composed of the third material put into the day tank, 
Customs will accept that convention also.



Sec. 146.96  Approval of other recordkeeping systems.

    (a) Approval procedure. An operator must seek prior approval of 
another recordkeeping procedure by submitting the following to the 
Director, Office of Regulatory Audit:
    (1) An explanation of the method describing how attribution will be 
made when a finished product is removed from or consumed in the subzone, 
and how and when the feedstocks will be decremented;
    (2) A mathematical example covering at least two months which shows 
the amounts attributed, all necessary relative value calculations, the 
dates of consumption and removal, and the amounts and dates that the 
transactions are reported to Customs.
    (b) Failure to comply. Requests received that fail to comply with 
paragraph (a) of this section will be returned to the requester with the 
defects noted by the Director, Office of Regulatory Audit.
    (c) Determination by Director. When the Director, Office of 
Regulatory Audit, determines that the recordkeeping procedures provide 
an acceptable basis for verifying the admissions and removals from or 
consumption in a refinery subzone, the Director will issue a written 
approval to the applicant.



Sec. Appendix to Part 146--Guidelines for Determining Producibility and 
                 Relative Values for Oil Refinery Zones

    Where an example is set out in this appendix, the example is for 
purposes of illustrating the application of a provision, and where there 
is any inconsistency between the example and the provision, the 
provision prevails to the extent of the inconsistency. Alternative 
formats are also acceptable so long as they are consistent with the 
provisions of this part.

 I. Attribution Using Producibility Showing Manufacturing Periods From 
             Admission t o Removal Within a Calender Month.

    Volume losses and gains accounted for by weight.

[[Page 124]]

                                  Day 1

    Receipt into the refinery subzone during a 30-day month:

50,000 pounds privileged foreign (PF) class II crude oil.
50,000 pounds PF class III crude oil.
50,000 pounds domestic status class III crude oil.

                                 Day 10

    Removal from the refinery subzone for exportation of 50,000 pounds 
of aviation gasoline.
    The period of manufacture for the aviation gasoline is Day 1 to Day 
10. The refiner must first attribute the designated source of the 
aviation gasoline.
    In order to maximize the duty benefit conferred by the zone 
operation, the refiner chooses to attribute the exported aviation 
gasoline to the privileged foreign status crude oil. Under the tables 
for potential production (T.V. 66-16), class II crude has a 30% 
potential, and class III has a 40% potential. The maximum aviation 
gasoline producible from the class II crude oil is 15,000 pounds (50,000 
x .30). The maximum aviation gasoline producible from the privileged 
foreign status class III crude oil is 20,000 pounds (50,000 x .40). The 
domestic class III crude would also make 20,000 pounds of aviation 
gasoline.
    The refiner could attribute 15,000 pounds of the privileged foreign 
class II crude oil, 20,000 pounds of the privileged foreign class III 
crude oil, and 15,000 pounds of the domestic class III crude oil as the 
source of the 50,000 pounds of the aviation gasoline that was exported; 
35,000 pounds of class II crude oil would be available for further 
production for other than aviation gasoline, 30,000 pounds of privileged 
foreign class III crude oil would be available for further production 
for other than aviation gasoline, and 35,000 pounds of domestic status 
class III crude oil would be available for further production, of which 
up to 5,000 pounds could be attributed to aviation gasoline.

                                 Day 21

    Receipt in the refinery subzone:

50,000 pounds PF status class I crude oil.
50,000 pounds PF status class IV crude oil.

                                 Day 30

    Removal from the refinery subzone:
30,000 pounds of motor gasoline for consumption.
10,000 pounds of jet fuel sold to the US Air Force for use in military 
aircraft.
10,000 pounds of aviation gasoline sold to a U.S. commuter airline for 
domestic flights.
10,000 pounds of kerosene for exportation.

    To the extent that the crude oils that entered production on Day 1 
are attributed as the designated sources for the products removed on Day 
30, the period of manufacture is Day 1 to Day 30. If the refiner chooses 
to attribute the crude oils that were admitted on Day 21 as the 
designated sources of the products removed on Day 30 using the 
production standards published in T.D. 66-16, the manufacturing period 
is Day 21 to Day 30. This choice will be important if a relative value 
calculation on the privileged foreign status crude oil is required, 
because the law requires the value used for computing the relative value 
to be the average per unit value of each product for the manufacturing 
period. Relative value must be calculated if a source feedstock is 
separated into two or more products that are removed from the subzone 
refinery. If the average per unit value for each product differs between 
the manufacturing period from Day 1 to Day 30 and the manufacturing 
period from Day 21 to Day 30, the correct period must be used in the 
calculation.
    In order to minimize duty liability, the refiner would try to 
attribute the production of the exported kerosene and the sale of the 
jet fuel to the US Air Force to the privileged foreign crude oils. For 
the same reason, the refiner would try to attribute the removed motor 
gasoline and the aviation gasoline for the commuter airline to the 
domestic crude oil.
    Accordingly, the refiner chooses to attribute up to 5,000 pounds of 
the domestic status class III crude as the source of the 10,000 pounds 
of aviation gasoline removed from the subzone refinery for the commuter 
airline. Since no other aviation gasoline could have been produced from 
the crude oils that were admitted into the refinery subzone Day 1, the 
refiner must attribute the remainder to the crude oils that entered 
production on Day 21. Again, using the production standards from T.D. 
66-16, the class I crude could produce aviation gasoline in an amount up 
to 10,000 pounds (50,000 x .20). Likewise, the class IV crude oil could 
produce aviation gasoline in an amount up to 8,500 pounds (50,000 x 
.17).
    The refiner selects use of the class I crude as the source of the 
aviation gasoline. The refiner could attribute up to 27,300 pounds 
(35,000-5,000 x .91) of the domestic class III crude oil as the source 
of the motor gasoline. This would leave 2,700 pounds of domestic class 
III crude available for further production for other than aviation 
gasoline or motor gasoline. The remaining motor gasoline removed (also 
2,700 pounds) must be attributed to a privileged foreign crude oil. The 
refiner selects the privileged foreign class II crude oil that entered 
production on Day 1 as the source for the remaining 2,700 pounds of 
motor gasoline.
    This would leave 32,300 pounds of privileged foreign class II crude 
oil available for further production, of which no more than 27,400 
pounds could be designated as the source of

[[Page 125]]

motor gasoline. The refiner attributes the jet fuel that is removed from 
the refinery subzone for the US Air Force for use in military aircraft 
to the privileged foreign class II crude oil. The refiner could 
attribute up to 20,995 pounds of jet fuel from that class II crude oil 
(32,300 x .65). Designating that class II crude oil as the source of the 
10,000 pounds of jet fuel leaves 22,300 pounds of privileged foreign 
class II crude oil available for further production, of which up to 
10,995 pounds could be attributed as the source of the jet fuel. Because 
the motor gasoline and the jet fuel, under the foregoing attribution, 
would be considered to have been separated from the privileged foreign 
class II crude oil, a relative value calculation would be required.
    The jet fuel is eligible for removal from the subzone free of duty 
by virtue of 19 U.S.C. 1309(a)(1)(A). The refiner could attribute the 
privileged foreign class II crude oil as being the source of the 10,000 
pounds of jet fuel (22,300 x .65). The refiner chooses to attribute the 
privileged foreign class III crude oil as the source of the jet fuel. 
The refiner could attribute to that class III crude oil up to 15,000 
pounds of kerosene (30,000 x .50).

                     II. Attribution on a FIFO Basis

(Accounting for volume losses or gains by the weight method)

                                 Day 1-5

    Transfer, into the Refinery Subzone, from one or more storage tanks 
into process 150 barrels of Privileged Foreign (PF) Class II crude oil, 
equivalent to 50,000 pounds.

                                  Day 6

    Removal from the refinery subzone 119 barrels of residual oils to 
customs territory, equivalent to 40,000 pounds.
    Since the operator uses the FIFO method of attribution, as the 
product is removed from the subzone, or consumed or lost within the 
subzone, attribution must be to the oldest feedstock available for 
attribution. Accordingly, the 40,000 pounds of residual oils will be 
attributed to 40,000 pounds of the PF Class II crude oil from Day 1-5.

                                 Day 10

    Transfer, into the refinery subzone, from one or more storage tanks 
4 barrels of domestic motor gasoline blend stock, equivalent to 1,000 
pounds to motor gasoline blending tank.

                                Day 6-15

    Transfer, into the refinery subzone, from one or more storage tanks 
into process 320 barrels of Domestic Class III crude oil, equivalent to 
100,000 pounds.

                                 Day 16

    Removal from the refinery subzone 14 barrels of asphalt to customs 
territory, equivalent to 5,000 pounds.
    The 5,000 pounds of asphalt will be attributed to 5,000 pounds of PF 
Class II crude oil from Day 1-5.

                                 Day 17

    Removal from the refinery subzone, 324 barrels of motor gasoline to 
customs territory, equivalent to 81,000 pounds.
    The 81,000 pounds of motor gasoline will be attributed to 1,000 
pounds of domestic motor gasoline blend stock from Day 10, to the 
remaining 5,000 pounds of PF Class II crude oil from Day 1-5 and 75,000 
pounds of domestic Class III crude oil from Day 6-15.

                                Day 16-20

    Transfer, into the refinery subzone, from one or more storage tanks 
into process 169 barrels of Privileged Foreign (PF) Class III crude oil, 
equivalent to 50,000 pounds.

                                 Day 22

    Removal from the refinery subzone, 214 barrels of jet fuel for 
exportation, equivalent to 60,000 pounds.
    The 60,000 pounds of jet fuel will be attributed to the remaining 
25,000 pounds of domestic Class III crude oil from Day 6-15 and 35,000 
pounds of PF Class III crude oil from Day 16-20.

                                Day 21-25

    Transfer, into the refinery subzone from one or more storage tanks 
into process, 143 barrels of domestic Class I crude oil, equivalent to 
50,000 pounds.

                Day 30 (End of the Manufacturing Period)

    It is determined that during the manufacturing period just ended, 
that 34 barrels of fuel, equivalent to 10,000 pounds was consumed, and 5 
barrels of oil, equivalent to 1,500 pounds was lost in the refining 
production process within the refinery subzone.
    The 10,000 pounds of fuel consumed will be attributed 10,000 pounds 
of PF Class III crude oil from Day 16-20. The 1,500 pounds of oil lost 
in the refining production process will be attributed to 1,500 pounds of 
PF Class III crude oil from Day 16-20. The remaining 3,500 pounds of PF 
Class III crude oil from Day 16-20 will be the first to be attributed 
during the next manufacturing period.

                     III. Relative Value Calculation

    Because privileged foreign feedstocks transferred into process 
during Day 1-5 and Day 16-20 have two or more products attributed to 
them, each feedstock will require a relative value calculation.

[[Page 126]]

    Relative value calculation for UIN Day 1-5, 50,000 pounds, 
equivalent to 150 barrels.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       D Product      E R.V.                  G Dutiable
                                                                  A Lbs       B  BBLS      C $/BBL       value        Factor     F R.V. BBL      BBL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Residual oil.................................................       40,000          119        15.00        1,785        .9047          108          108
Asphalt......................................................        5,000           14        13.00          182        .7840           11           11
Motor gasoline...............................................        5,000           20        26.00          520       1.5682           31           31
                                                              ------------------------------------------------------------------------------------------
      Totals.................................................       50,000          153  ...........        2,487  ...........          150         150
--------------------------------------------------------------------------------------------------------------------------------------------------------
A=Pounds Attributed.
B=Equivalent Barrels.
C=Price of Product.
D=BxC.
E=C/(Total of Column D/Attributed Crude BBLS).
Residual Oil RV Factor=15.00/(2,487/150)=.9047.
F=BxE.
G=Dutiable Barrels.
 
Since all products attributed to the 50,000 pounds (150 BBLS) of PF Class II crude entered customs territory duty equals $7.88 (150x.0525).
Feedstock factor calculation for UIN Day 16-20, 46,500 pounds equivalent to 157 barrels.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Product     Feedstock                  Dutiable
                                                                   Lbs          BBLS        $/BBL        value        factor      R.V. BBL       BBL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Jet Fuel.....................................................       35,000          125        27.00        3,375       1.1030          138            0
Fuel.........................................................       10,000           34        12.00          408       0.4902           17            0
Consumed Process Loss........................................        1,500            5        12.00           60       0.4902            2            0
                                                              ------------------------------------------------------------------------------------------
      Totals.................................................       46,500          164  ...........        3,843  ...........          157           0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Since jet fuel was exported, no duty is applicable. Fuel consumed for refinery process was consumed within the subzone premises and did not enter
  customs territory, thus no duty is applicable (assume refinery not barred by duty-free consumption restriction). Likewise, the process loss occurred
  entirely within the subzone. Therefore, no duty is applicable.

IV. Attribution to Privileged Foreign Feedstock; Relative Value; Monthly 
  Manufacturing Period, Weekly Entries, Attribution to a Prior Period; 
            Volume Loss or Gain Shown by Volume Differences.

    An operator who elects to attribute on a monthly basis files the
   following estimated removal of final products for the first week in
                               September:
Jet Fuel (deemed exported on international flights)...........    20,000
Gasoline--Domestic Consumption................................    15,000
Duty-free certified as emergency war material.................    10,000
Petroleum coke exportations...................................    10,000
Distillate for consumption....................................     5,000
Petrochemicals exported.......................................    10,000
                                                               ---------
      Total removals..........................................    70,000
 
Because it does not elect to make attributions for feedstocks that were
  charged to operating units during the same week, the operator
  attributes the estimated removals to final products made during August
  from the following feedstocks:


Class II PF (privileged foreign) crude........................    20,000
Class III PF crude............................................    35,000
Class III D (domestic) crude..................................    20,000
Class III NPF (nonprivileged foreign crude....................    20,000
                                                               ---------
                                                                 95,000
 
During August the operator produced from those feedstocks:


Jet..........................................................     35,000
Gasoline.....................................................     40,000
Petroleum Coke...............................................     10,000
Distillate...................................................      5,000
Petrochemicals...............................................     15,000
                                                              ----------
                                                                105,000
 
There is a gain of 105,000-95,000=10,000
 
Using the tables in T.D. 66-16, the following choices are available for
  attribution:


----------------------------------------------------------------------------------------------------------------
                                                                             Petrolum                   Petro-
                                      Charged        Jet        Gasoline       coke      Distillate    chemical
----------------------------------------------------------------------------------------------------------------
Class II PF Crude.................       20,000       13,000       17,200        4,400       17,200        5,000
Class III PF Crude................       35,000       24,500       31,850       14,000       31,150       10,150
Class III D Crude.................       20,000       14,000       18,200        8,000       17,800        5,800

[[Page 127]]

 
Class III NPF Crude...............       20,000       14,000       18,200        8,000       17,800        5,800
----------------------------------------------------------------------------------------------------------------
Feedstock factors are calculated:


----------------------------------------------------------------------------------------------------------------
                                                                              Value                   Feedstock
                                                                Barrels      barrels       Value       factors
----------------------------------------------------------------------------------------------------------------
Gasoline....................................................       40,000          $25   $1,000,000        .9117
Jet Fuel....................................................       35,000           23      805,000        .8388
Distillate..................................................        5,000           20      100,000        .7294
Petroleum Coke..............................................       10,000           10      100,000        .3647
Petrochemicals..............................................       15,000           40      600,000       1.4587
                                                             ---------------------------------------------------
                                                                  105,000  ...........    2,605,000
                                                             ---------------------------
Gain........................................................      -10,000   $2,605,000
                                                             ---------------------------
      Total.................................................   \1\ 95,000       =$27.42 average value p/bbl
----------------------------------------------------------------------------------------------------------------
Using the feedstock factor the refiner makes the following attributions:


Jet Fuel.........................       24,192  (20,291 feedstock
                                                 attributed to Class III
                                                 PF Crude).
                                        10,808  Class III NPF Crude
                                                 (attribution of 9066
                                                 solely for purpose of
                                                 accounting for the
                                                 amount of NPF used).
                                  -------------
                                        35,000
  Gasoline.......................        5,000  (4,559 feedstock
                                                 attributed to Class III
                                                 PF Crude).
                                         5,000  Class III NPF Crude
                                                 (attribution of 4599
                                                 solely for purpose of
                                                 accounting for the
                                                 amount of NPF used).
                                        15,000  (13,676 feedstock
                                                 attributed to Class III
                                                 D Crude).
                                  -------------
Petroleum Coke...................        8,418  (3,070 feedstock
                                                 attributed to Class II
                                                 PF Crude).
                                         1,582  Class III NPF Crude
                                                 (attribution of 577
                                                 solely for purposes of
                                                 accounting for the
                                                 amount of NPF used).
                                  -------------
                                        10,000
Distillate.......................        5,000  (3,647 feedstock
                                                 attributed to Class III
                                                 Domestic).
Petrochemicals...................        3,975  (5,800 feedstock
                                                 attributed to Class III
                                                 NPF Crude).
                                         6,025  (8,789 feedstock
                                                 attributed to Class III
                                                 PF Crude).
                                  -------------
                                        10,000
 

   V. Weekly Entry, Weekly Manufacturing Period, and Relative Values 
Calculated on the Actual Weighted Average Values at the End of the Week.

    On the weekly estimated production CF 3461, the refiner is required 
to provide a pro forma invoice or schedule showing the number of units 
of each type of merchandise to be removed during the week and their zone 
and dutiable values. For example, on CF 3461 the refiner estimates the 
following shipments and relative values for the next week and files this 
on the preceding Friday.

----------------------------------------------------------------------------------------------------------------
                                                                   PF shipments    Value/barrel
                         Product week 1                               (MBBLS)        (platts)       Total value
----------------------------------------------------------------------------------------------------------------
Motor Gasoline..................................................          20,000             $35        $700,000
Total Alkylate..................................................          25,000              35         875,000
Heavy Reformate.................................................          60,000              35       2,100,000
Reformer Feed...................................................         110,000              35       3,850,000
Raffinates......................................................         200,000              35       7,000,000
Jet Fuel........................................................         200,000              35       7,000,000
                                                                 ----------------                ---------------
      Total.....................................................         615,000  ..............     $21,525,000
----------------------------------------------------------------------------------------------------------------
Attributed Feedstock--Class III Crude: 615,000@ $105=$64,575 (estimated duties)
During that week the refiner actually removes the following products and reports those on the CF 7501 filed
  within 10 business days after the CF 3461 is filed. Column 3 is the actual ``weighted average'' value for the
  manufacturing period, therefore, no reconciliation is necessary.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3  Value/                      5  Relative    6  Feedstock
                       1  Product                            Shipments      barrel (wt.   4  Total value   value factor      distribu.    7  Liq. duties
                                                              (mbbls)          avg.)          (2)x(3)         (3)/(8)         (5)x(2)      (6)x(10) (9)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 1:
    Motor Gasoline......................................          19,977          $35.70        $713,179        1.104545          22,065          $2,317
    Total Alkylate......................................          22,907           42.50         973,548        1.314935          30,121           3,163

[[Page 128]]

 
    Heavy Reformate.....................................          58,164           31.42       1,827,513         .972123          56,542           5,937
    Reformer Feed.......................................         100,279           31.42       3,150,766         .972123          97,484          10,235
    Raffinates..........................................         170,293           29.55       5,032,158         .914266         155,693          16,348
    Jet Fuel............................................         168,433           30.04       5,059,727         .929426         156,546          16,437
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         540,053  ..............      16,756,891  ..............         518,451          54,437
                                                          ..............  ..............  ..............  ..............             (9)           (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Consumed 518,451x$.105 = $54,437
Volumetric Gain 21,602
Avg. Value/Barrel Crude Consumed=$16,756,891/518,451=$32.321 (8)
This example shows volumetric gain of 21,602 mbbls. However, in that PF was requested, liquidated duties are only on actual feedstock (class III crude)
  used in the refining process. (518,451 @ $.105=$54,437).

  VI. Weekly Entry, Monthly Manufacturing Period, and Relative Values 
   Calculated on the Actual Weighted Average Values at the End of the 
                                 Month.

    For example, on the CF 3461 the refiner estimates the following 
shipments and relative values for the next week and files this on the 
preceding Friday.

----------------------------------------------------------------------------------------------------------------
                                                                                     3 Value/
                            1 Product                             2 PF shipments      barrel       4 Total value
                                                                      (mbbls)        (platts)
----------------------------------------------------------------------------------------------------------------
Week 1:
    Motor Gasoline..............................................          20,000             $35        $700,000
    Total Alkylate..............................................          25,000              35         875,000
    Heavy Reformate.............................................          60,000              35       2,100,000
    Reformer Feed...............................................         110,000              35       3,850,000
    Raffinates..................................................         200,000              35       7,000,000
    Jet Fuel....................................................         200,000              35       7,000,000
                                                                 ----------------                ---------------
      Total.....................................................         615,000  ..............     21,525,000
----------------------------------------------------------------------------------------------------------------
Attributed Feedstock--Class III Crude: 615,000 @ $.105=$64,575 (estimated duties)
 
During the week the refiner actually removes the following products and reports those on the CF 7501 filed
  within 10 business days after the CF 3461 is filed. The reported relative values may be an estimate based on
  Platts, prior period actual prices, or the refiner's transfer prices. For this example, the estimates are
  based on the refiner's actual transfer prices. Listed below are the data to be shown on the weekly CF 7501s
  with actual quantities shipped and estimated values for weeks 1-5.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             3 Value/                       5 Relative      6 Feedstock
                        1 Product                         2 PF shipments      barrel       4 Total value   value factor      distrib.      7 Liq. duties
                                                              (mbbls)       (estimates)       (2)x(3)         (3)/(8)         (5)x(2)      (6)x(10) (9)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 1:
    Motor Gasoline......................................          19,977          $35.70        $713,179        1.104545          22,065          $2,317
    Total Alkylate......................................          22,907           42.50         973,548        1.314935          30,121           3,163
    Heavy Reformate.....................................          58,164           31.42       1,827,513         .972123          56,542           5,937
    Reformer Feed.......................................         100,279           31.42       3,150,766         .972123          97,484          10,235
    Raffinates..........................................         170,293           29.55       5,032,158         .914266         155,693          16,348
    Jet Fuel............................................         168,433           30.04       5,059,727         .929426         156,546          16,437
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         540,053  ..............      16,756,891  ..............         518,451         $54,437
                                                          ..............  ..............  ..............  ..............             (9)           (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Consumed 518,451x$.105=$54,437
Volumetric Gain 21,602
Avg. Value/Barrel Crude Consumed=$16,756,891/518,451=$32.321 (8)


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3 Value/
                        1 Product                            shipments        barrel      4 Total  value    5 Relative      6 Feedstock   7 Liq.  duties
                                                              (mbbls)       (estimated)                    value  factor     distrib.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 2:
    Motor Gasoline......................................          20,651          $36.90        $762,022        1.145429          23,654          $2,484
    Total Alkylate......................................          23,435           44.25       1,036,999        1.373584          32,190           3,380
    Heavy Reformate.....................................          59,819           30.35       1,815,507         .942108          56,358           5,918
    Reformer Feed.......................................         101,167           30.10       3,045,127         .934347          94,526           9,925
    Raffinates..........................................         172,317           29.30       5,048,888         .909514         156,726          16,456
    Jet fuel............................................         165,291           30.70       5,074,434         .952972         157,519          16,539
                                                         -----------------------------------------------------------------------------------------------

[[Page 129]]

 
      Total.............................................         542,680  ..............     $16,782,977  ..............         520,973         $54,702
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Consumed 520,973x$.105 = $54,702
Volumetric Gain 21,707
Avg. Value/Barrel Crude Consumed = $32.215


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3 Value/
                        1 Product                            shipments        barrel      4 Total  value    5 Relative      6 Feedstock   7 Liq.  duties
                                                              (mbbls)       (estimated)                    value  factor     distrib.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 3:
    Motor Gasoline......................................          18,689          $34.90        $652,246        1.091819          20,405          $2,142
    Total Alkylate......................................          21,511           40.25         865,818        1.259190          27,087           2,844
    Heavy Reformate.....................................          57,371           30.90       1,772,764         .966682          55,460           5,823
    Reformer Feed.......................................          99,707           30.90       3,080,946         .966682          96,386          10,121
    Raffinates..........................................         168,112           29.65       4,984,521         .927577         155,938          16,374
    Jet Fuel............................................         172,092           29.85       5,136,946         .933834         160,707          16,874
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         537,482  ..............     $16,493,241  ..............         515,983        $54,178
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Consumed 515,983 x $.105 = $54,178
Volumetric Gain 21,499
Avg. Value/Barrel Crude Consumed = $31.965


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3 Value/
                        1 Product                            shipments        barrel      4 Total  value    5 Relative      6 Feedstock   7 Liq.  duties
                                                              (mbbls)       (estimated)                    value  factor     distrib.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 4:
    Motor Gasoline......................................          21,905          $32.85        $719,579        1.027237          22,502          $2,363
    Total Alkylate......................................          22,552           38.75         873,890        1.211733          27,327           2,869
    Heavy Reformate.....................................          58,116           29.60       1,720,234        0.925607          53,791           5,648
    Reformer Feed.......................................         101,058           29.40       2,971,105        0.919353          92,908           9,755
    Raffinates..........................................         169,823           30.15       5,120,163        0.942806         160,110          16,812
    Jet Fuel............................................         171,493           31.05       5,324,858        0.970949         166,511          17,484
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         544,947  ..............     $16,729,829  ..............         523,149         $54,931
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Consumed 523,149 x $.105 = $54,931
Gain 21,798
Avg. Value/Barrel Crude Consumed = $31.979


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3 Value/
                        1 Product                            shipments        barrel      4 Total  value    5 Relative      6 Feedstock   7 Liq.  duties
                                                              (mbbls)       (estimated)                    value  factor     distrib.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 5:
    Motor Gasoline......................................           8,990          $37.25        $334,878        1.136260          10,215          $1,073
    Total Alkylate......................................           9,984           45.10         450,278        1.375713          13,735           1,442
    Heavy Reformate.....................................          25,351           31.50         798,557        0.960864          24,360           2,558
    Reformer Feed.......................................          43,492           31.35       1,363,474        0.956288          41,592           4,367
    Raffinates..........................................          75,172           29.95       2,251,401        0.913583          68,677           7,211
    Jet fuel............................................          75,795           30.56       2,316,295        0.932190          70,654           7,418
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         238,784  ..............      $7,514,883  ..............         229,233        $24,069
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Consumed 229,233 x $.105 = $24,069
Gain 9,551
Avg. Value/Barrel Crude Consumed = $32.783
As provided in the regulations, the refiner files an amended CF 7501 for each week based on the refiner's actual weighted average values for the month,
  as shown below.


------------------------------------------------------------------------
                                                                Value/
                          Product                               barrel
                                                               (MBBLS)
------------------------------------------------------------------------
Month End:
    Motor Gasoline.........................................       $35.27
    Total Alkylate.........................................        41.84
    Heavy Reformate........................................        30.66
    Reformer Feed..........................................        30.54
    Raffinates.............................................        29.69
    Jet Fuel...............................................        30.42
------------------------------------------------------------------------


[[Page 130]]


                                        Reconciliation of Week 1 Using Month's End Actual Weighted Average Values
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            7  Amended
                                                               2  PF         3  Value/       4  Total       5  Relative    6  Feedstock      wt. avg.
                       1  Product                            shipments     barrel  (wt.   value  (2)x(3)   value  factor      distri.         duties
                                                              (mbbls)      avg.)  actual                      (3)/(8)         (5)x(2)      (6)x(10)  (9)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Motor Gasoline..........................................          19,977          $35.27        $704,589        1.095716          21,889          $2,298
Total Alkylate..........................................          22,907           41.84         958,429        1.299823          29,775           3,126
Heavy Reformate.........................................          58,164           30.66       1,783,308         .952499          55,401           5,817
Reformer Feed...........................................         100,279           30.54       3,062,521         .948771          95,141           9,990
Raffinates..............................................         170,293           29.69       5,055,999         .922365         157,072          16,493
Jet Fuel................................................         168,433           30.42       5,123,732         .945043         159,176          16,713
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................         540,053  ..............     $16,688,578  ..............         518,454          54,437
                                                          ..............  ..............  ..............  ..............             (9)            (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Consumed = 518,454 x $.105 = $54,437
Volumetric Gain 21,599
Avg.Value/Bbl Crude Consumed = $16,688,578 / 518,454 = $32.189 (8)
Note: No change in amended total duties, because duty is computed on total quantity of class III crude used. The difference is amongst the various
  products, i.e., estimated weekly CF 7501 duties paid for Motor Gasoline was $2,317, while the reconciled amount as shown above is $2,298. Additional
  duties owed or refunds due would depend on the reconciliation of the weekly entry as an entirety.

    VII. Weekly entry, monthly manufacturing period, relative values 
   calculated on prior manufacturing period's actual weighted average 
        values. The prior period (PP) values are set forth below:

------------------------------------------------------------------------
                                                           Value/Barrel
                         Product                            (wt. avg.)
------------------------------------------------------------------------
Motor Gasoline..........................................    Sec.  35.28
Total Alkylate..........................................           41.90
Heavy Reformate.........................................           31.78
Reformer Feed...........................................           30.02
Raffinates..............................................           31.10
Jet Fuel................................................           28.80
------------------------------------------------------------------------
Thereafter, the information provided or both the CF 3461 and CF 7501
  filed for each weekly entry with respect to relative values would
  remain the same. The only estimated amount would be the quantity to be
  removed on the CF 3461 as shown below. On the CF 3461 the refiner
  estimates the following shipments and uses a prior manufacturing
  period's actual weighted average values.


----------------------------------------------------------------------------------------------------------------
                                                                       2  PF         3  Value/
                           1  Product                                shipments     barrel  (PP)      4  Total
                                                                      (mbbls)       (wt. avg.)         value
----------------------------------------------------------------------------------------------------------------
Week 1
    Motor Gasoline..............................................          20,000          $35.28        $705,600
    Total Alkylate..............................................          25,000           41.90       1,047,500
    Heavy Reformate.............................................          60,000           31.78       1,906,800
    Reformer Feed...............................................         110,000           30.02       3,302,200
    Raffinates..................................................         200,000           31.10       6,220,000
    Jet Fuel....................................................         200,000           28.80       5,760,000
                                                                 -----------------------------------------------
      Total.....................................................         615,000  ..............      18,942,100
----------------------------------------------------------------------------------------------------------------
Attributed Feedstock--Class III Crude: 615,000 @ $.105 = $64,575 (estimated duties)
 
On the CF 7501, the refiner reports the following shipments and uses a prior manufacturing period's actual
  average values.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3  Value/                      5  Relative    6  Feedstock       7  Liq.
                       1  Product                            shipments     barrel  (PP)      4  Total      value  factor      distri.         duties
                                                              (mbbls)       (wt. avg.)    value  (2)x(3)      (3)/(8)         (5)x(2)      (6)x(10)  (9)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 1:
    Motor Gasoline......................................          19,977          $35.28        $704,789        1.097219          21,919          $2,902
    Total Alkylate......................................          22,907           41.90         959,803        1.303104          29,850           3,134
    Heavy Reformate.....................................          58,164           31.78       1,848,452         .988368          57,486           6,036
    Reformer Feed.......................................         100,279           30.02       3,010,376         .933632          93,623           9,830
    Raffinates..........................................         170,293           31.10       5,296,112         .967220         164,710          17,295
    Jet Fuel............................................         168,433           28.80       4,850,870         .895689         150,863          15,840
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         540,053  ..............     $16,670,402  ..............         518,451         $54,437

[[Page 131]]

 
                                                          ..............  ..............  ..............  ..............             (9)            (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Used 518,451 x $.105 = $54,437
Volumetric Gain 21,602
Avg. Value/Barrel Crude Used = $16,670,402 / 518,451 = $32.154 (8)


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3  Value/
                       1  Product                            shipments     barrel  (PP)      4  Total       5  Relative    6  Feedstock       7  Liq.
                                                              (mbbls)       (wt. avg.)         value       value  factor      distri.         duties
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 2:
    Motor Gasoline......................................          20,651          $35.28        $728,567        1.096128          22,636          $2,377
    Total Alkylate......................................          23,435           41.90         981,926        1.301808          30,508           3,203
    Heavy Reformate.....................................          59,819           31.78       1,901,048         .987386          59,064           6,202
    Reformer Feed.......................................         101,167           30.02       3,037,033         .932704          94,359           9,908
    Raffinates..........................................         172,317           31.10       5,359,059         .966259         166,503          17,483
    Jet Fuel............................................         165,291           28.80       4,760,381         .894799         147,903          15,529
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         542,680  ..............      16,768,014  ..............         520,973          54,702
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Used 520,973x$.105=$54,702
Volumetric Gain 21,707
Avg. Value/Barrel Crude Used=$32.186


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3  Value/
                       1  Product                            shipments     barrel  (PP)      4  Total       5  Relative    6  Feedstock   7  Liq. duties
                                                              (mbbls)       (wt. avg.)         value       value  factor      distri.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 3:
    Motor Gasoline......................................          18,689          $35.28        $659,348        1.099168          20,542          $2,157
    Total Alkylate......................................          21,511           41.90         901,311        1.305418          28,081           2,948
    Heavy Reformate.....................................          57,371           31.78       1,823,250         .990124          56,803           5,964
    Reformer Feed.......................................          99,707           30.02       2,993,204         .935290          93,254           9,792
    Raffinates..........................................         168,112           31.10       5,228,283         .968938         162,889          17,103
    Jet Fuel............................................         172,092           28.80       4,956,250         .897280         154,414          16,214
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         537,482  ..............      16,561,646  ..............         515,983          54,178
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Used 515,983x$.105=$54,178
Volumetric Gain 21,499
Avg. Value/Barrel Crude Used=$32.097


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3  Value/
                       1  Product                            shipments     barrel  (PP)      4  Total       5  Relative    6  Feedstock       7  Liq.
                                                              (mbbls)       (wt. avg.)         value       value  factor      distri.         duties
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 4:
    Motor Gasoline......................................          21,905          $35.28        $772,808        1.097390          24,038          $2,524
    Total Alkylate......................................          22,552           41.90         944,929        1.303306          29,391           3,086
    Heavy Reformate.....................................          58,116           31.78       1,846,926         .988522          57,447           6,032
    Reformer Feed.......................................         101,058           30.02       3,033,761         .933777          94,365           9,908
    Raffinates..........................................         169,823           31.10       5,281,495         .967371         164,281          17,250
    Jet Fuel............................................         171,493           28.80       4,938,998         .895829         153,627          16,131
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         544,947  ..............      16,818,917  ..............         523,149          54,931
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Used 523,149x$.105=$54,931
Volumetric Gain 21,798
Avg. Value/Barrel Crude Used=$32.149


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3  Value/
                       1  Product                            shipments     barrel  (PP)      4  Total       5  Relative    6  Feedstock       7  Liq.
                                                              (mbbls)       (wt. avg.)         value       value  factor      distri.         duties
--------------------------------------------------------------------------------------------------------------------------------------------------------
Week 5:
    Motor Gasoline......................................           8,990          $35.28        $317,167        1.097698           9,868          $1,036
    Total Alkylate......................................           9,984           41.90         418,330        1.303671          13,016           1,367
    Heavy Reformate.....................................          25,351           31.78         805,655         .988799          25,067           2,632

[[Page 132]]

 
    Reformer Feed.......................................          43,492           30.02       1,305,630         .934039          40,623           4,265
    Raffinates..........................................          75,172           31.10       2,337,849         .967642          72,740           7,638
    Jet Fuel............................................          75,795           28.80       2,182,896         .896080          67,919           7,131
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................         238,784  ..............       7,367,527  ..............         229,233          24,069
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Used 229,233x$.105=$24,069
Volumetric Gain 9,551
Avg. Value/Barrel Crude Used=$32.14
At the end of the month, the refiner must calculate its actual weighted average values for use in the subsequent period.


                                               Reconciliation of Relative Value for the Subsequent Period
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2  PF         3  Value/                      5  Relative                       7  Liq.
                       1  Product                            shipments     barrel  (PP)      4  Total      value  factor   6  Feedstock       duties
                                                              (mbbls)       (wt. avg.)     value  (2x3)       (3)/(8)     distri.  (5x2)   (6x(10)  (9)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Month End:
    Motor Gasoline......................................          90,212          $35.27      $3,181,777        1.095682          98,844         $10,379
    Total Alkylate......................................         100,389           41.84       4,200,276        1.299783         130,484          13,701
    Heavy Reformate.....................................         258,821           30.66       7,935,452         .952470         246,519          25,885
    Reformer Feed.......................................         445,703           30.54      13,611,770         .948742         422,857          44,400
    Raffinates..........................................         755,717           29.69      22,437,238         .922336         697,025          73,188
    Jet Fuel............................................         753,104           30.42      22,909,424         .945014         711,694          74,726
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................       2,403,946  ..............      74,275,937  ..............       2,307,423         242,279
                                                          ..............  ..............  ..............  ..............             (9)            (10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class III Crude Used 2,307,423x$.105=$242,279
Volumetric Gain 96,523
Avg. Value/Barrel Crude Used=$74,275,937/2,307,423=$32.19 (8)
Note: Actual monthly reconciliation data could result in attributions on a product basis that are less than or greater than weekly distributions. This
  is due to the ``weighing'' of the data i.e., motor gasoline on a weekly basis was $10,996 as compared to $10,379 as above. No additional duties are
  due to the averaging.



PART 147_TRADE FAIRS--Table of Contents




Sec.
147.0 Scope.

                      Subpart A_General Provisions

147.1 Definitions.
147.2 Articles which may be entered for a fair.
147.3 Bond required.

                   Subpart B_Procedure for Importation

147.11 Entry.
147.12 Invoices.
147.13 Transfer to fair building.
147.14 Articles not to be immediately entered and delivered to a fair.
147.15 Tentative appraisement.

                  Subpart C_Requirements of Other Laws

147.21 Marking under the Tariff Act of 1930.
147.22 Compliance with internal revenue laws and Federal Alcohol 
          Administration Act.
147.23 Compliance with Plant Quarantine Act and Federal Food, Drug, and 
          Cosmetic Act.
147.24 Merchandise subject to licensing.

                      Subpart D_Customs Supervision

147.31 Articles to be kept separate.
147.32 Detail of officers to protect the revenue.
147.33 Reimbursement by fair operator.

           Subpart E_Disposition of Articles Entered for Fairs

147.41 Removal or disposition pursuant to regulation.
147.42 Disposition generally.
147.43 Entry under the Customs laws.
147.44 Entry for another fair.
147.45 Merchandise from a foreign-trade zone.
147.46 Voluntary abandonment or destruction.
147.47 Mandatory abandonment.

    Authority: 19 U.S.C. 66, 1623, 1624, 1751-1756, unless otherwise 
noted.

    Source: T.D. 70-134, 35 FR 9268, June 13, 1970, unless otherwise 
noted.

[[Page 133]]



Sec. 147.0  Scope.

    This part governs the entry of merchandise intended for exhibition 
or for use in constructing, installing, or maintaining foreign exhibits 
at trade fairs which have been so designated by the Secretary of 
Commerce. It also contains provisions concerning Customs supervision of 
the merchandise, and the disposition of the merchandise after the fair 
has closed. The entry of articles which may be admitted free of duty 
under other provisions of this chapter may be governed by those 
provisions rather than the regulations in this part.



                      Subpart A_General Provisions



Sec. 147.1  Definitions.

    The following are general definitions for the purposes of part 147:
    (a) The Act. ``The Act'' means the Trade Fair Act of 1959. (Secs. 2-
7, 73 Stat. 18, 19; 19 U.S.C. 1751-1756.)
    (b) Fair. ``Fair'' means a fair, exhibition, or exposition 
designated by the Secretary of Commerce pursuant to the Trade Fair Act.
    (c) Fair operator. ``Fair operator'' means the party named by the 
Secretary of Commerce as the operator of the fair.
    (d) Port. ``Port'' means the port at which the fair is to be held, 
or if the fair is not to be held within the limits of a port, the port 
nearest to the location of the fair.
    (e) Closing date. ``Closing date'' means the date designated by the 
Secretary of Commerce as the date when the fair will close, including 
any extension granted by the Secretary of Commerce, or, if the fair 
closes earlier, the date on which the fair actually closes.
    (f) Articles for a fair. ``Articles for a fair'' includes, but is 
not limited to:
    (1) Actual exhibit items;
    (2) Pamphlets, brochures, and explanatory material in reasonable 
quantities relating to foreign exhibits at a fair;
    (3) Material for use in constructing, installing, or maintaining 
foreign exhibits at a fair.

[T.D. 70-134, 35 FR 9268, June 13, 1970, as amended by T.D. 82-145, 47 
FR 35478, Aug. 16, 1982]



Sec. 147.2  Articles which may be entered for a fair.

    (a) General. Any article imported or brought into the United States 
may be entered under bond under the regulations of this part for the 
purpose of exhibition at a fair, or for use in constructing, installing, 
or maintaining foreign exhibits at a fair, if no duty or internal 
revenue tax has been paid, and the article is:
    (1) In a foreign-trade zone; or
    (2) Imported for exhibition under Chapter 98, Subchapter XII, 
Harmonized Tariff Schedule of the United States; or
    (3) In continuous Customs custody, including but not limited to 
articles:
    (i) Imported or brought into the United States for the purpose of 
direct entry at a particular fair;
    (ii) In Customs bonded warehouses;
    (iii) Unentered under the Customs laws and held in general order 
pending entry or exportation;
    (iv) On exhibition at another fair designated by the Secretary of 
Commerce.
    (b) Exception. Articles which have been entered under Chapter 98, 
Subchapter XIII, HTSUS, may not be entered under the regulations of this 
part.

[T.D. 70-134, 35 FR 9268, June 13, 1970, as amended by T.D. 84-213, 49 
FR 41186, Oct. 19, 1984; T.D. 89-1, 53 FR 51263, Dec. 21, 1988]



Sec. 147.3  Bond required.

    The fair operator shall file a bond on Customs Form 301, containing 
the bond conditions set forth in Sec. 113.62 of this chapter in such 
amount as the port director requires. Liquidated damages shall be 
assessed by the port director under the bond if payments required by 
Sec. Sec. 147.33, 147.41 or 147.43 are not paid upon demand.

[T.D. 84-213, 49 FR 41186, Oct. 19, 1984]



                   Subpart B_Procedure for Importation



Sec. 147.11  Entry.

    (a) Made in name of fair operator. All entries of articles for a 
fair shall be made at the port in the name of the fair operator which 
shall be deemed for Customs purposes the sole consignee of the 
merchandise entered under the Act

[[Page 134]]

and responsible to the Government for all duties and charges due the 
United States on account of such entries.
    (b) Merchandise arriving at port other than port of the fair. 
Articles to be entered under this subpart which arrive at ports other 
than the port of the fair shall be entered for immediate transportation 
without appraisement to the latter port in the manner prescribed in part 
18 of this chapter.
    (c) Form of entry. Articles shall be entered upon arrival at the 
port of the fair on a special form of entry to read substantially as 
follows:

                          Entry for Exhibition

                         Entry No. ------------

    Entry at the port of ------------------------ of articles consigned 
or transferred to ------------------------ (Fair operator) under ------
------------------ I.T. No. ------------------------ ex S.S. ----------
-------------- from ------------------------ on the ------------ day of 
------------------, 19----, for exhibition purposes under the Trade Fair 
Act of 1959.

------------------------------------------------------------------------
                               Package and                     Invoice
    Mark         Number         contents         Quality        value
------------------------------------------------------------------------
              ............  ................  ............  ............
              ............  ................  ............  ............
              ............  ................  ............  ............
              ............  ................  ............  ............
------------------------------------------------------------------------

________________________________________________________________________
                                                         (Fair operator)
By______________________________________________________________________

    (d) Supersedes previous entry. When entry for a fair is made under 
this part, such entry shall supersede any previous entry.



Sec. 147.12  Invoices.

    Articles intended for a fair under the provisions of the Act are 
subject to the invoice requirements of subpart F, part 141 of this 
chapter.

(R.S. 251, as amended, secs. 481, 484, 624, 46 Stat. 719, 722, as 
amended, 759 (19 U.S.C. 66, 1481, 1484, 1624))

[T.D. 85-39, 50 FR 9612, Mar. 11, 1985]



Sec. 147.13  Transfer to fair building.

    (a) Immediate delivery. The provisions governing immediate delivery 
in part 142 of this chapter are applicable to articles for a fair.
    (b) After entry. Upon the entry being made, a permit may be issued 
by the port director for the transfer of the articles covered thereby to 
the buildings in which they are to be exhibited or used, or, in his 
discretion, to the public stores for examination and subsequent delivery 
to the buildings in which they are to be exhibited or used.

[T.D. 70-134, 35 FR 9268, June 13, 1970, as amended by T.D. 73-175, 38 
FR 17470, July 2, 1973]



Sec. 147.14  Articles not to be immediately entered and delivered to a fair.

    (a) Placed in bonded warehouses. If for any reason articles imported 
for a fair are not to be entered and delivered to a fair upon their 
arrival, the fair operator should request the port director, in writing, 
to cause such articles to be placed in a bonded warehouse under a 
``general order permit'' at the risk and expense of the fair operator. 
If no request is made and the articles remain unentered after 5 days 
from the date of arrival, they will be placed in general order.
    (b) Entry within 1 year. At any time within 1 year from the date 
such articles are imported or brought in, they may be entered under this 
part for a fair or entered under the general tariff law, or for 
exportation.
    (c) Abandonment. If not entered within such period, they will be 
regarded as abandoned to the Government.



Sec. 147.15  Tentative appraisement.

    All articles entered for a fair shall be tentatively appraised prior 
to exhibition or use.



                  Subpart C_Requirements of Other Laws



Sec. 147.21  Marking under the Tariff Act of 1930.

    The marking requirements of the Tariff Act of 1930, as amended, and 
the regulations thereunder will not apply to articles for a fair, 
except, when such articles are entered for consumption. When entered for 
consumption, such articles shall be released from Customs custody only 
upon a full compliance with these marking requirements.

[[Page 135]]



Sec. 147.22  Compliance with the internal revenue laws and Federal Alcohol Administration Act.

    The packaging, marking, and labeling requirements of the internal-
revenue laws, and the Federal Alcohol Administration Act (27 U.S.C. 201 
to 212), will not apply to articles entered under this part, but any 
article failing to comply with such requirements shall be conspicuously 
marked prior to exhibition ``Not labeled or packaged as required by 
law--not for sale.'' When any such article is withdrawn for consumption, 
it shall be released from Customs custody only upon a full compliance 
with such packaging, marking, and labeling requirements.



Sec. 147.23  Compliance with Plant Quarantine Act and Federal Food, Drug, and Cosmetic Act.

    (a) Plant Quarantine Act. The entry of plant material subject to 
restriction under the Plant Quarantine Act of 1912, as amended (7 U.S.C. 
151 through 164a, 167), shall not be permitted except under permits 
issued by the Plant Quarantine Division of the Agricultural Research 
Service, Department of Agriculture, and in accordance with the plant 
quarantine regulations.
    (b) Federal Food, Drug, and Cosmetic Act. The entry of food products 
shall conform to the requirements of the Federal Food, Drug, and 
Cosmetic Act, as amended (21 U.S.C. 301 et seq.), and the regulations 
issued thereunder.



Sec. 147.24  Merchandise subject to licensing.

    Merchandise, the importation of which is subject to the licensing 
regulations of any agency of the U.S. Government, may be entered for a 
fair only upon the presentation of the required license, or a waiver of 
such license.



                      Subpart D_Customs Supervision



Sec. 147.31  Articles to be kept separate.

    Articles for exhibit at a fair shall be segregated from domestic 
articles and from imported articles entered under the provisions of the 
general Customs laws and released from Customs custody.



Sec. 147.32  Detail of officers to protect the revenue.

    The port director shall detail an officer to act as his 
representative at the fair and shall station inside the buildings as 
many additional Custom officers and employees as may be necessary to 
properly protect the revenue.



Sec. 147.33  Reimbursement by fair operator.

    All actual and necessary charges for labor, services, and other 
expenses in connection with the entry, examination, appraisement, 
custody, abandonment, destruction, or release of articles entered under 
the regulations of this part, together with the necessary charges for 
salaries of Customs officers and employees in connection with the 
accounting for, custody of, and supervision over, such articles, shall 
be reimbursed by the fair operator to the Government, payment to be made 
on demand to the port director for deposit to the appropriation from 
which paid.



           Subpart E_Disposition of Articles Entered for Fairs



Sec. 147.41  Removal or disposition pursuant to regulation.

    Articles for a fair entered under this part shall not be removed 
from the fair premises, or otherwise disposed of, except in accordance 
with this subpart. The fair operator shall be liable for the payment of 
any unpaid duty, tax, fees, charges, or exaction due on any article 
removed from the fair premises or disposed of contrary to this subpart, 
including any article lost or stolen regardless of the fair operator's 
fault. The payment shall be made on demand by the port director.

[T.D. 70-134, 35 FR 9268, June 13, 1970, as amended by T.D. 84-213, 49 
FR 41186, Oct. 19, 1984]



Sec. 147.42  Disposition generally.

    (a) Kinds of disposition. Any article entered for a fair under this 
part may be entered for consumption, for warehouse, or under any other 
provision of the Customs laws, or for another fair, or may be 
transferred to other Customs custody status or to a foreign-trade zone, 
or abandoned to the Government,

[[Page 136]]

or destroyed under Customs supervision, or exported, at any time before, 
or within 3 months after, the closing date of the fair.
    (b) Appraisement. Upon entry under any provision of the Customs 
laws, or at the expiration of 3 months after the closing date of the 
fair in the case of articles not previously entered or transferred, 
articles entered for fairs shall be appraised.
    (c) Period for performance of certain acts. In the case of any 
article entered under a provision of the Customs laws, or for another 
fair, or transferred to other Customs custody status, or to a foreign-
trade zone, the period prescribed for the performance of any act 
required by the provision governing the status under which the article 
is entered, or to which it is transferred, shall be computed from the 
date of such entry or transfer.

[T.D. 70-134, 35 FR 9268, June 13, 1970, as amended by T.D. 70-181, 35 
FR 13436, Aug. 22, 1970]



Sec. 147.43  Entry under the Customs laws.

    (a) Payment of duties and taxes. Any applicable duties and internal 
revenue taxes on any article entered under any provision of the Customs 
laws must be paid on such article in its condition and quantity, and at 
the rate in effect, at the time of such entry.
    (b) Person to make entry. Entry of merchandise under the Customs 
laws from a fair may be made in the name of any person duly authorized 
in writing by the fair operator to make such entry.



Sec. 147.44  Entry for another fair.

    Articles entered for a fair which are to be entered for another fair 
under the provisions of this part shall be retained in continuous 
Customs custody.



Sec. 147.45  Merchandise from a foreign-trade zone.

    Articles entered for a fair from a foreign-trade zone status of 
``zone-restricted merchandise'' can afterwards be entered for 
consumption from a fair if the Foreign-Trade Zones Board has approved 
the entry for consumption as being in the public interest. Articles 
entered in the above manner are subject to the provisions of subheading 
9801.00.70, if aircraft, or subheading 9801.00.80, if not aircraft, 
unless excluded by U.S. Note 1(c), Chapter 98, Subchapter I, Harmonized 
Tariff Schedule of the United States.

(R.S. 251, as amended; secs. 1-21, 48 Stat. 998, 999, as amended; 1000, 
1002, as amended, 1003, 77A Stat. 14, sec. 624, 46 Stat. 759 (19 U.S.C 
66, 81a-81u, 1202 (Gen, Hdnt. 11)1624))

[T.D. 83-240, 48 FR 53098, Nov. 24, 1983, as amended by T.D. 89-1, 53 FR 
51263, Dec. 21, 1988]



Sec. 147.46  Voluntary abandonment or destruction.

    At any time before or within 3 months after the closing date of the 
fair any article entered for a fair may be abandoned to the Government 
or destroyed under Customs supervision, upon compliance with Sec. 
158.43 of this chapter.

[T.D. 70-134, 35 FR 9268, June 13, 1970, as amended by T.D. 72-258, 37 
FR 20174, Sept. 27, 1972]



Sec. 147.47  Mandatory abandonment.

    Any article entered for a fair, and not disposed of under the 
provisions of this subpart prior to the expiration of 3 months after the 
close of the fair shall be regarded as abandoned to the Government, and 
subject to sale or destruction. Proceeds of sale shall be disposed of in 
the manner provided in sections 491, 492, and 493, Tariff Act of 1930, 
as amended, and the regulations thereunder. (See subpart D of part 127 
of this chapter.) Any duties or internal revenue taxes on such article 
shall be computed on the basis of its condition and quantity at the time 
it becomes subject to sale.

[T.D. 70-134, 35 FR 9268, June 13, 1970, as amended by T.D. 74-114, 39 
FR 12095, Apr. 3, 1974]



PART 148_PERSONAL DECLARATIONS AND EXEMPTIONS--Table of Contents




Sec.
148.0 Scope.

                      Subpart A_General Provisions

148.1 Registration of effects to be taken abroad.
148.2 Residence status of arriving persons.

[[Page 137]]

148.3 Customs treatment after transiting the Panama Canal.
148.4 Accompanying articles.
148.5 Regular entry of articles in baggage.
148.6 Entry of unaccompanied shipments of effects subject to personal 
          exemptions.
148.7 Unclaimed baggage.
148.8 Temporary importation by residents arriving for short visits.

                         Subpart B_Declarations

148.11 Declaration required.
148.12 Oral declarations.
148.13 Written declarations.
148.14 Family declarations.
148.15 Inclusion of articles not for personal or household use.
148.16 Amendment of declaration.
148.17 Declaration on arrival incidental to further foreign travel.
148.18 Failure to declare.
148.19 False or fraudulent statement.

   Subpart C_Examination of Baggage and Collection of Duties and Taxes

148.21 Opening of baggage, compartments, or vehicles.
148.22 Examination of air travelers' baggage in foreign territory.
148.23 Examination and clearance of baggage.
148.24 Determination of dutiable value.
148.25 Reexamination and protest.
148.26 Collection of internal revenue taxes.
148.27 Receipt for payment.

              Subpart D_Exemptions for Returning Residents

148.31 Effects taken abroad.
148.32 Vehicles, aircraft, boats, teams and saddle horses taken abroad.
148.33 Articles acquired abroad.
148.34 Family grouping of exemptions for articles acquired abroad.
148.35 Length of stay for exemption of articles acquired abroad.
148.36 Frequency of allowance of exemption for articles acquired abroad.
148.37 Replacement of unsatisfactory articles acquired abroad.
148.38 Sale of articles acquired abroad.
148.39 Rented automobiles.

                  Subpart E_Exemptions for Nonresidents

148.41 Articles carried through the United States.
148.42 Personal effects.
148.43 Tobacco products and alcoholic beverages.
148.44 Gifts.
148.45 Vehicles and other conveyances.
148.46 Sale of exempted articles.

                       Subpart F_Other Exemptions

148.51 Special exemption for personal or household articles.
148.52 Exemption for household effects used abroad.
148.53 Exemption for tools of trade.
148.54 Exemption for effects of citizens dying abroad.
148.55 Exemption for articles bearing American trademark.

            Subpart G_Crewmember Declarations and Exemptions

148.61 Status as crewmembers.
148.62 Declaration and entry of articles by crewmembers.
148.63 Articles for use while on temporary leave.
148.64 Administrative exemption.
148.65 Exemption for resident crewmembers.
148.66 Exemptions for nonresident crewmembers.
148.67 Penalties for failure to declare articles.

  Subpart H_Military and Civilian Employees of the United States, and 
                                Evacuees

148.71 Status of persons in service of United States as returning 
          residents.
148.72 [Reserved]
148.73 Baggage on carriers operated by the Department of Defense.
148.74 Exemption on termination of assignment to extended duty or on 
          evacuation.
148.75 Persons ineligible for exemption on termination of assignment.
148.76 Waiver of requirements or limitations.
148.77 Entry of effects on termination of assignment to extended duty, 
          or on evacuation.

      Subpart I_Personnel of Foreign Governments and International 
      Organizations and Special Treatment for Returning Individuals

148.81 General provisions.
148.82 Diplomatic, consular, and other privileged personnel.
148.83 Diplomatic and consular bags.
148.84 Special treatment for returning individuals.
148.85 Subsequent importations for the personal or family use of 
          diplomatic, consular and other privileged personnel.
148.86 Articles for official use of representatives of foreign 
          governments and public international organizations.
148.87 Officers and employees of, and representatives to public 
          international organizations.

[[Page 138]]

148.88 Certain representatives to and officers of the United Nations and 
          the Organization of American States.
148.89 Property of public international organizations and foreign 
          governments.
148.90 Foreign military personnel.

          Subpart J_Noncommercial Importations of Limited Value

148.101 Applicability.
148.102 Flat rate of duty.
148.103 Family grouping of allowances.
148.104 Frequency of use.
148.105 Procedure for excluding articles from flat rate of duty.
148.106 Excluded articles of merchandise.

    Subpart K_Unaccompanied Shipments from American Samoa, Guam, the 
 Commonwealth of the Northern Mariana Islands, or the Virgin Islands of 
                            the United States

148.110 Applicability.
148.111 Written declaration for unaccompanied articles.
148.112 Evidence of purchase.
148.113 Declaration, entry, and collection of duty.
148.114 Shipment of unaccompanied articles.
148.115 Release of shipment.
148.116 Claim for refund.

    Authority: 19 U.S.C. 66, 1496, 1498, 1624. The provisions of this 
part, except for subpart C, are also issued under 19 U.S.C. 1202 
(General Note 3(i), Harmonized Tariff Schedule of the United States);
    Section 148.21 also issued under 19 U.S.C. 1461, 1462.
    Section 148.22 also issued under 19 U.S.C. 1629;
    Sections 148.43, 148.51, 148.63, 148.64, 148.74 also issued under 19 
U.S.C. 1321;
    Section 148.87 also issued under 22 U.S.C. 288.

    Source: T.D. 73-27, 38 FR 2449, Jan. 26, 1973, unless otherwise 
noted.



Sec. 148.0  Scope.

    This part contains the regulations governing the allowance of 
exemptions for residents and nonresidents arriving in the United States, 
for crewmembers of carriers engaged in international traffic, for 
military and civilian employees of the United States, for certain 
evacuees, and for certain personnel of foreign governments and 
international organizations. Procedures and requirements are also set 
forth pertaining to registration of articles to be taken abroad, 
declaration and entry, and examination of baggage, and collection of 
duties and taxes.



                      Subpart A_General Provisions



Sec. 148.1  Registration of effects to be taken abroad.

    (a) Persons who may use procedure. Any person, except a nonresident 
seaman, airman, or person engaged in similar employment, who intends to 
take effects of foreign origin abroad may register such articles before 
departure from the United States in order to facilitate their 
identification on return to the United States. Only articles of foreign 
origin having serial numbers or other distinctive, permanently affixed 
unique markings can be registered.
    (b) Procedures for registration. Applicants for registration of 
articles of foreign origin shall present the articles, together with a 
completed, but unsigned, Customs Form 4457, which may be obtained in 
advance of departure, to a Customs officer. After the Customs officer 
has examined the articles and verified their description, he shall have 
the applicant sign the form. The Customs officer shall then sign the 
form and return it to the applicant for presentation on return of the 
articles. Customs form 4455 may be required in any case in which Customs 
form 4457 will not adequately serve the purpose of registration.
    (c) Presentation on return and reuse. The form shall be presented to 
the Customs officer when the registered articles are returned to the 
United States. The form shall be valid for reuse as long as the document 
is legible to identify the registered articles.

[T.D. 82-102, 47 FR 24119, June 3, 1982, as amended by T.D. 91-35, 56 FR 
19260, Apr. 26, 1991]



Sec. 148.2  Residence status of arriving persons.

    (a) General. Persons arriving from foreign countries shall be 
divided into two classes for Customs purposes:
    (1) Residents of the United States returning from abroad, and
    (2) All other persons, hereinafter referred to as nonresidents.
    (b) Status as returning resident. Citizens of the United States, or 
persons

[[Page 139]]

who have formerly resided in the United States, (including American 
citizens who are residents of American Samoa, Guam, the Commonwealth of 
the Northern Mariana Islands, or the Virgin Islands of the United 
States) shall be deemed residents of the United States returning from 
abroad within the meaning of ``residents'' as used in Chapter 98, 
Subchapter IV, Harmonized Tariff Schedule of the United States (19 
U.S.C. 1202), in the absence of satisfactory evidence that they have 
established a home elsewhere. For this purpose, the residence of a wife 
shall be deemed to be that of her husband unless satisfactory evidence 
is presented that the wife has established a separate residence 
elsewhere. The residence of a minor child shall be presumed to be that 
of his parents.
    (c) Status as nonresident. Any person arriving in the United States 
who is not a resident of the United States or who, though a resident of 
the United States, is not returning from abroad, shall be treated for 
the purpose of these regulations as a nonresident.
    (d) Optional claim of nonresident status. Any person arriving in the 
United States who would otherwise be considered a returning resident, 
may claim at his option the status of a nonresident if he intends to 
remain in the United States for only a short period of time before 
returning abroad. If the status as a nonresident claimed by an arriving 
person is allowed, the procedures in Sec. 148.8 shall be followed.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-394, 43 FR 
49788, Oct. 25, 1978; T.D. 89-1, 53 FR 51263, Dec. 21, 1988; T.D. 97-75, 
62 FR 46441, Sept. 3, 1997]



Sec. 148.3  Customs treatment after transiting the Panama Canal.

    Passengers' baggage and effects and purchases of officers and 
crewmembers landed in the United States from vessels which have 
transited the Panama Canal are subject to Customs examination and 
treatment in the same manner as arrivals from any other foreign country.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 79-276, 44 FR 
61957, Oct. 29, 1979]



Sec. 148.4  Accompanying articles.

    (a) Generally. Articles shall be considered as accompanying a 
passenger or brought in by him if the articles arrive on the same 
vessel, vehicle, or aircraft on the same date as that of his arrival in 
the United States.
    (b) Baggage shipped as freight. Articles in baggage shipped as 
freight on a bill of lading or airway bill shall be considered as 
accompanying a passenger when the baggage arrives on the conveyance on 
which he arrives in the United States.
    (c) Precleared articles. Articles in baggage, or in baggage shipped 
as freight, shall be considered as accompanying a passenger if examined 
at an established preclearance station and the baggage is hand-carried, 
checked or manifested on the conveyance on which he arrives in the 
United States.
    (d) Automobiles. An automobile which arrives on the same mode of 
conveyance on the same date as a passenger arrives in the United States 
shall be considered as accompanying him.
    (e) Misdirected baggage. Baggage which arrives on the same mode of 
conveyance ahead of, or after a passenger, shall be treated as 
accompanying him if it is fully evident to the examining officer from 
the circumstances that:
    (1) The passenger intended the baggage to arrive with him; and
    (2) It was misdirected through no fault of the passenger.



Sec. 148.5  Regular entry of articles in baggage.

    Subject to any applicable exemption from entry requirements, 
articles imported as baggage but not passed under a baggage declaration 
or under the procedure provided in Sec. 148.6 for unaccompanied 
shipments of effects subject to personal exemptions shall be entered in 
the same manner as a cargo importation of like goods. In making regular 
entry for articles imported in baggage, the value of articles entitled 
to free entry under subheadings 9804.00.10, or 9804.00.45, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202), shall be 
disregarded in determining

[[Page 140]]

whether formal or informal entry is required.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51263, Dec. 21, 1988]



Sec. 148.6  Entry of unaccompanied shipments of effects subject to personal exemptions.

    (a) Declaration to support free entry. When effects claimed to be 
free of duty under subheadings 9804.00.10, 9804.00.20, 9804.00.25, 
9804.00.35 or 9804.00.45, Harmonized Tariff Schedule of the United 
States (HTSUS) (19 U.S.C. 1202), do not accompany the importer on his 
arrival in the United States or are forwarded in bond, a declaration of 
the importer on Customs Form 3299 shall be required to support the claim 
for free entry. However, an oral declaration may be accepted in lieu of 
a written declaration on Customs Form 3299, for effects of a resident 
which are free of duty under subheadings 9804.00.10 or 9804.00.45. 
Effects of returning residents entitled to free entry under subheadings 
9804.00.10 or 9804.00.45 (except automobiles and other vehicles of 
residents returning from countries other than Canada or Mexico) need not 
be itemized if a written declaration is required.
    (b) Exemption from entry. If the port director is satisfied that an 
entry would serve no good purpose, none need be required, but evidence 
of ownership for Customs purposes, such as a carrier's certificate or 
properly endorsed bill of lading, shall be required with the 
declaration. Such exemption from entry may also be applied with respect 
to household effects or tools of trade entitled to free entry (see 
Sec. Sec. 148.52 and 148.53 respectively) which are unaccompanied or 
forwarded in bond.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51264, Dec. 21, 1988]



Sec. 148.7  Unclaimed baggage.

    Articles in passengers' baggage on which duties due are not paid and 
baggage not claimed within a reasonable time shall be treated as 
unclaimed and sent to general order.



Sec. 148.8  Temporary importation by residents arriving for short visits.

    A person claiming the status of a nonresident upon arrival for a 
short visit in the United States before returning abroad may import 
articles free of duty under subheadings 9804.00.20, 9804.00.25, 
9804.00.30, 9804.00.35, Harmonized Tariff Schedule of the United States 
(19 U.S.C. 1202), in accordance with the following procedure:
    (a) The person claiming the status shall agree to export all such 
articles upon his departure from the United States, except articles 
imported as gifts under subheading 9804.00.30, and articles consumed 
during his visit;
    (b) When required to do so, the person claiming the status shall 
list all articles of substantial value which he is importing on Customs 
Form 4455, in duplicate, noting thereon the expected duration of his 
visit. He shall present the completed form to the inspecting officer who 
will initial both copies and return the duplicate to him;
    (c) Upon his departure from the United States at the completion of 
his visit, the person claiming the status of a nonresident shall present 
to a Customs officer the duplicate copy of Customs Form 4455, initialed 
by the inspecting officer, and the articles listed thereon shall be 
subject to inspection; and
    (d) If he decides not to return abroad, the person claiming the 
status shall immediately notify the director of the port of entry. The 
port director will advise him of the amount of duties and taxes due by 
reason of his failure to return abroad.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51264, Dec. 21, 1988]



                         Subpart B_Declarations



Sec. 148.11  Declaration required.

    All articles brought into the United States by any individual shall 
be declared to a Customs officer at the port of first arrival in the 
United States, on a conveyance en route to the United States on which a 
Customs officer is assigned for that purpose, or at a preclearance 
office in a foreign country

[[Page 141]]

where a United States Customs officer is stationed for that purpose.



Sec. 148.12  Oral declarations.

    (a) Generally. Returning residents and nonresidents arriving in the 
United States may make an oral declaration under the conditions set 
forth in paragraph (b) of this section. However, written declarations 
may be required generally or in respect to particular types of traffic 
at any port if necessary to effect prompt and orderly clearance of 
passengers and their effects, and may be required in particular cases at 
any port if deemed necessary to protect the revenue. If an oral 
declaration is permitted, completion of the identifying information on 
Customs Form 6059-B may be required.
    (b) When permitted. Oral declarations may be permitted under the 
following conditions:
    (1) Residents. A returning resident may make an oral declaration if:
    (i) The aggregate fair retail value in the country of acquisition of 
all accompanying articles acquired abroad by him and of alterations and 
dutiable repairs made abroad to personal and household effects taken out 
and brought back by him does not exceed:
    (A) $400; or
    (B) $600 in the case of a direct arrival from a beneficiary country 
as defined in Sec. 10.191(b)(1) of this chapter, not more than $400 of 
which shall have been acquired elsewhere than in beneficiary countries; 
or
    (C) $1,200 in the case of a direct or indirect arrival from American 
Samoa, Guam, the Commonwealth of the Northern Mariana Islands, or the 
Virgin Islands of the United States, not more than $400 of which shall 
have been acquired elsewhere than in such locations except that up to 
$600 of which may have been acquired in one or more beneficiary 
countries as defined in Sec. 10.191(b)(1) of this chapter;
    (ii) None of his accompanying articles are forwarded in bond; and
    (iii) None of his accompanying articles are imported for the account 
of any other person or for sale.
    (2) Nonresidents. An arriving nonresident may make an oral 
declaration if all the articles he has to declare are:
    (i) Entitled to free entry under his personal exemptions (see 
Subpart E of this part); or
    (ii) Eligible for the administrative exemption for articles not 
exceeding $200 in aggregate value, provided in section 321(a)(2)(B), 
Tariff Act of 1930, as amended (19 U.S.C. 1321(a)(2)(B)) (see Sec. 
148.51).
    (c) Memorandum baggage declaration for dutiable articles. When an 
arriving person is carrying a few dutiable or taxable articles which can 
be readily identified and segregated from articles entitled to free 
entry under his personal exemptions, the Customs officer may prepare a 
memorandum baggage declaration using a cash receipt, Customs Form 368 or 
368A, for dutiable or taxable articles if he determines that a written 
declaration by the arriving person is not essential.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-394, 43 FR 
49788, Oct. 25, 1978; T.D. 86-118, 51 FR 22516, June 20, 1986; T.D. 92-
56, 57 FR 24944, June 12, 1992; T.D. 94-51, 59 FR 30296, June 13, 1994; 
T.D. 97-75, 62 FR 46441, Sept. 3, 1997]



Sec. 148.13  Written declarations.

    (a) When required. Unless an oral declaration is accepted under 
Sec. 148.12, the declaration required of a person arriving in the 
United States shall be in writing on Customs Form 6059-B.
    (b) Completion and presentation of written declarations. The person 
arriving in the United States shall complete the information required by 
Customs Form 6059-B and shall list all articles acquired abroad which 
are in his possession at the time of arrival. Individual items not 
exceeding $5 per item in fair retail value in the country of acquisition 
may be grouped on the written declaration as ``Miscellaneous'' up to but 
not exceeding a total value of $50. Articles not requiring itemization 
as set forth in paragraph (c) of this section shall be declared orally 
to the Customs officer. The form shall be presented to the Customs 
officer who will inspect the passenger's baggage.
    (c) Itemization of certain articles not required. Except as required 
by Sec. 148.62 or Sec. 148.66 for crewmembers' articles, the following 
need not be itemized in written declarations:

[[Page 142]]

    (1) Effects of a returning resident entitled to free entry under 
subheading 9804.00.10, Harmonized Tariff Schedule of the United States 
(HTSUS) (19 U.S.C. 1202), for tools of trade taken abroad, or under 
subheading, 9804.00.45, HTSUS, for personal or household effects taken 
abroad. However, automobiles and other vehicles of residents returning 
from countries other than Canada or Mexico and the cost of all repairs 
or alterations to articles taken abroad must be itemized.
    (2) Effects of a nonresident entitled to free entry under subheading 
9804.00.20, HTSUS (19 U.S.C. 1202), for wearing apparel and other 
similar personal effects; subheading 9804.00.25, HTSUS, for tobacco 
products and alcoholic beverages; subheading 9804.00.30, HTSUS, for 
articles to be disposed of as bona fide gifts; or subheading 9804.00.40, 
HTSUS, for articles accompanying a person in transit to a place outside 
U.S. customs territory.
    (3) Books, libraries, furniture, and similar household effects 
entitled to free entry under subheading 9804.00.05, HTSUS.
    (d) Value. Opposite the description of each article required to be 
declared specifically in a written declaration, the passenger shall 
state either:
    (1) The price actually paid for the article in the currency of 
purchase, or its equivalent in U.S. currency; or
    (2) The fair retail value in the country of acquisition if the 
article was not acquired by purchase, in the currency of the country in 
which the article was acquired, or its equivalent in U.S. currency.
    (e) Acknowledgment before Customs officer. Each written declaration 
shall be acknowledged by the declarant before the Customs officer who 
examines the baggage covered by the declaration.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 87-89, 52 FR 
24445, July 1, 1987; T.D. 89-1, 53 FR 51264, Dec. 21, 1988]



Sec. 148.14  Family declarations.

    A family group residing in one household, traveling together, and 
having the same residence status may be permitted to declare orally 
articles acquired abroad for the personal or household use of any member 
of the family if the value of such articles does not exceed the total 
amount of the exemption to which the family group is entitled. (See 
Sec. 148.34.) Where a written declaration is required, one member of a 
family group may declare for all. Servants accompanying a family group 
shall not be included in the family declaration.



Sec. 148.15  Inclusion of articles not for personal or household use.

    Articles not personal in character, or which are intended for sale 
or are brought in on commission for another person, may be included in 
the baggage declaration of a resident or nonresident under the 
conditions specified in Sec. 148.23(c). If not so included, regular 
entry shall be required.



Sec. 148.16  Amendment of declaration.

    (a) Before examination. A passenger shall be permitted to add an 
article to his declaration if, before examination of his baggage has 
begun, the fact that the article has not been declared is brought to the 
attention of the examining officer by the passenger.
    (b) After examination is begun. A passenger shall be permitted to 
add an article to his declaration after examination of his baggage has 
begun if, before any undeclared article is found, the passenger advises 
the examining officer that he has such an article and the officer is 
satisfied that there was no fraudulent intent. Under no circumstances 
shall a passenger be permitted to add any undeclared article to his 
declaration after such article has been discovered by the examining 
officer.



Sec. 148.17  Declaration on arrival incidental to further foreign travel.

    (a) Declaration on incidental arrival. A resident who enters the 
United States merely as an incident of foreign travel and who will 
continue his foreign travel before finally returning to the United 
States from a continuous trip shall declare, but need not clear through 
Customs, any articles he has acquired or had repaired or altered while 
abroad. The incidental character of the arrival shall be made known to 
the Customs officer.
    (b) Treatment of articles on incidental arrival. In order that a 
resident may claim the $400, $600, or $1,200 exemption

[[Page 143]]

upon his final arrival in the United States from a continuous trip, 
articles accompanying him at the time of an incidental arrival may be 
exported directly from Customs custody or after transportation in bond, 
or the articles may be left in Customs custody if the resident upon his 
final return is to arrive at the Customs facility where the articles are 
deposited.
    (c) Failure to advise of incidental character of arrival. If the 
traveler fails to advise the Customs officer of the incidental character 
of his arrival, or for other reason declares any articles for allowance 
of the $400, $600, or $1,200 exemption, such declaration shall mark the 
beginning of the respective period or periods during which a further 
exemption cannot be granted.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 86-118, 51 FR 
22516, June 20, 1986; T.D. 97-75, 62 FR 46441, Sept. 3, 1997]



Sec. 148.18  Failure to declare.

    (a) Penalty incurred. Any article in the baggage of a passenger 
arriving from a foreign country which is not declared as required by 
this subpart shall be seized if it is available for seizure at the time 
the violation is detected, and the personal penalty prescribed by 
section 497, Tariff Act of 1930 (19 U.S.C. 1497), shall be demanded from 
the passenger. If the article is not seized, a claim for the personal 
penalty shall be made against the person who imported the article 
without declaration. No duty shall be collected, because undeclared 
articles are treated as smuggled.
    (b) Remission of liability. When an article not declared as required 
by this subpart is found in the baggage of a person arriving in the 
United States, the personal penalty and forfeiture may be mitigated or 
remitted in accordance with the Guidelines for Disposition of Violations 
of 19 U.S.C. 1497 in the appendix to part 171 of this chapter.

[T.D. 83-145, 48 FR 30100, June 30, 1983]



Sec. 148.19  False or fraudulent statement.

    A passenger who makes any false or fraudulent statement or engages 
in other conduct within the purview of section 592, Tariff Act of 1930, 
as amended (19 U.S.C. 1592), whereby a Customs officer is or may be 
induced to pass an article free of duty or at less than the proper 
amount of duty, or to treat an article in some other manner in order to 
obtain a benefit, shall be deemed to have violated 19 U.S.C. 1592. In 
any such case the article involved shall be seized only if one or more 
of the conditions set forth in section 162.75 of this chapter are 
present, if it is available for seizure at the time the violation is 
detected, and if such seizure is otherwise practicable, unless the 
article is in the possession of an innocent holder for value who has 
full right to possession as against any party to the Customs violation. 
If seizure is not made, an amount equivalent to the maximum penalty 
which may be assessed in accordance with the passenger's degree of 
culpability as provided in 19 U.S.C. 1592(c) shall be demanded from the 
passenger. The amount demanded in lieu of seizure shall be determined in 
accordance with the guidelines contained in the appendix to part 171 of 
this chapter. In all cases, the estimated duties shall be demanded of 
the passenger as soon as possible after the discovery of the violation. 
Any applicable internal revenue tax shall also be demanded unless the 
merchandise is to be, or has been, forfeited.

[T.D. 84-18, 49 FR 1678, Jan. 13, 1984; 49 FR 3986, Feb. 1, 1984]



   Subpart C_Examination of Baggage and Collection of Duties and Taxes



Sec. 148.21  Opening of baggage, compartments, or vehicles.

    A Customs officer has the right to open and examine all baggage, 
compartments and vehicles brought into the United States under Sections 
461, 462, 496 and 582, Tariff Act of 1930, as amended (19 U.S.C. 1461, 
1462, 1496, and 1582) and 19 U.S.C. 482. To the extent practical, the 
owner or his agent shall be asked to open the baggage, compartment or 
vehicle first. If the owner or his agent is unavailable or refuses to 
open the baggage, compartment, or vehicle, it shall be opened by the 
Customs officer. If any article subject to

[[Page 144]]

duty, or any prohibited article is found upon opening by the Customs 
officer, the whole contents and the baggage or vehicle shall be subject 
to forfeiture, pursuant to 19 U.S.C. 1462.

[T.D. 95-86, 60 FR 54188, Oct. 20, 1995]



Sec. 148.22  Examination of air travelers' baggage in foreign territory.

    (a) Examination and surrender of declaration. When places have been 
established in a foreign country where U.S. Customs officers have been 
stationed for the purpose of conducting Customs inspections and 
examinations (see Sec. Sec. 101.5 and 162.8 of this chapter), persons 
destined to the United States on flights shall present themselves to 
those officers for inspection and examination of their baggage which may 
be passed in accordance with Sec. 148.23 prior to boarding the flight. 
They shall comply with all U.S. Customs laws and other civil and 
criminal laws of the United States relating to importation of 
merchandise, including baggage, to the filing of false or fraudulent 
statements, and to the unlawful removal of merchandise from Customs 
custody, in the same manner as if the passengers, were arriving at an 
airport within the Customs territory of the United States. When baggage 
is examined in foreign territory, the baggage declaration shall be 
surrendered to the Customs officer at the airport of departure for the 
United States prior to boarding the flight.
    (b) Subsequently acquired articles. When a person whose baggage has 
been examined and passed in foreign territory in accordance with 
paragraph (a) of this section subsequently acquires additional articles 
prior to return to the United States, the Customs officer to whom the 
declaration was surrendered may permit the amendment of that declaration 
to include the additional articles.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 77-241, 42 FR 
54944, Oct. 12, 1977; T.D. 89-22, 54 FR 5076, Feb. 1, 1989]



Sec. 148.23  Examination and clearance of baggage.

    (a) Articles free of duty. The inspector, including inspectors on 
trains or ferries, who examines the baggage of any person arriving in 
the United States may examine and pass, without limitation as to value, 
the following articles in such baggage or otherwise accompanying such 
person:
    (1) All articles which are for the personal or household use of the 
arriving person and are free of duty under Chapter 98, Subchapter IV, 
Harmonized Tariff Schedule of the United States (HTSUS) (19 U.S.C. 
1202), including automobiles and other articles under Sec. 148.32.
    (2) Works of art classifiable under subheadings 9701.10.00 or 
9701.90.00, HTSUS.
    (3) Works of art classifiable under subheadings 9702.00.00 or 
9703.00.00, HTSUS, upon compliance with Sec. 10.48 of this chapter.
    (b) Articles subject to duty. The inspector who examines the baggage 
of any person arriving in the United States may examine, determine the 
dutiable value of, collect duty on, and pass articles accompanying the 
arriving person which are for his personal or household use but are 
subject to duty, including articles imported to be disposed of by him as 
bona fide gifts.
    (c) Articles not for personal use--(1) Valued at not more than 
$2,000 (with exceptions). The inspector may also examine, determine the 
dutiable value of, collect duty on, and pass articles accompanying any 
person arriving in the United States properly listed on the baggage 
declaration which are not for the personal or household use of the 
declarant or which are intended for sale or are brought in on commission 
for another, provided the aggregate value of such articles is not more 
than $2,000 (except for articles valued in excess of $250 classified in 
Sections VII, VIII, XI, and XII; Chapter 94, and Chapter 99, Subchapter 
III and IV, HTSUS).
    (2) Valued over $2,000 (with exceptions). Articles in the baggage of 
or otherwise accompanying any person arriving in the United States which 
have an aggregate value over $2,000 (except for articles valued in 
excess of $250 classified in Sections VII, VIII, XI, and XII; Chapter 94 
and Chapter 99, Subchapters III and IV, HTSUS) and are not intended for 
his personal or household use, or are intended for sale or are brought 
in on commission for another, may be examined and entered and

[[Page 145]]

cleared on a baggage declaration at the place of their arrival with a 
passenger if:
    (i) The articles are accompanied by a proper invoice if one is 
required (see Sec. 141.83 of this chapter); and
    (ii) It is practicable to appraise the articles at the place of 
arrival.
    (d) Examination of tea for personal use imported in baggage. Tea for 
personal use in one or more packages weighing not more than 5 pounds 
each, when imported in a passenger's baggage, may be delivered without 
examination for purity under 21 U.S.C. 41-50 and without payment of the 
examination fee prescribed in 21 U.S.C. 46a.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 84-149, 49 FR 
28699, July 16, 1984; T.D. 86-118, 51 FR 22516, June 20, 1986; T.D. 89-
1, 53 FR 51264, Dec. 21, 1988; T.D. 89-82, 54 FR 36026, Aug. 31, 1989; 
T.D. 98-28, 63 FR 16417, Apr. 3, 1998]



Sec. 148.24  Determination of dutiable value.

    (a) Principles applied. In determining the dutiable value of 
articles examined under Sec. 148.23, the Customs inspector shall apply 
the principles of section 402, Tariff Act of 1930, as amended (19 U.S.C. 
1401a), and shall not regard the declared value or price as conclusive.
    (b) Adjustment of value declared. An adjustment shall be made by the 
Customs inspector whenever the purchase price or value declared differs 
from the fair retail value, whether by reason of depreciation due to 
wear or use, circumstances of purchase, or acquisition, or for any other 
reason. He shall give due consideration to the condition of the articles 
at the time of importation, but he shall not make any allowance for wear 
and use in excess of 25 per centum of the declared price or value of a 
worn or used article. A passenger who desires to claim a larger 
allowance may arrange for formal entry and appraisement of his goods.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 87-89, 52 FR 
24445, July 1, 1987]



Sec. 148.25  Reexamination and protest.

    (a) Reexamination. Whenever the Customs officer deems it advisable 
any or all of a passenger's baggage may be sent to the public stores for 
examination or reexamination. Passengers dissatisfied with the 
assessment of duty on their baggage may demand a reexamination, provided 
the articles have not been removed from Customs custody. In either case, 
a receipt for the baggage to be examined or reexamined shall be given on 
Customs Form 6051.
    (b) Protest. If the passenger remains dissatisfied with the 
assessment of duty after reexamination, he shall pay the duty assessed 
and may protest the decision of the port director in accordance with 
part 174 of this chapter.



Sec. 148.26  Collection of internal revenue taxes.

    (a) Cigars and cigarettes. The internal revenue tax on taxable 
cigars and cigarettes in a passenger's baggage shall be paid to Customs, 
using the Customs entry form as a return. Any such return shall show the 
kind, the quantity, and the tax by class on cigars and cigarettes 
separately from the statement of duty. Unless for the personal 
consumption of the importer or disposition as his bona fide gift, cigars 
and cigarettes are subject to the packaging and marking requirements in 
the regulations of the Bureau of Alcohol, Tobacco, and Firearms.
    (b) Alcoholic beverages. The internal revenue tax shall be collected 
on all wines and liquors in excess of the quantity entitled to exemption 
as specified in this part.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51264, Dec. 21, 1988]



Sec. 148.27  Receipt for payment.

    When duties and internal revenue taxes on articles in a passenger's 
baggage are collected, a receipt on Customs Form 368 or 368A shall be 
issued to the passenger if such duties and taxes are paid in cash. If 
such duties and taxes are paid by personal check, the check shall be the 
passenger's receipt unless a receipt is requested.

[T.D. 73-27 38 FR 2449, Jan. 26, 1973, as amended by T.D. 92-56, 57 FR 
24944, June 12, 1992]

[[Page 146]]



              Subpart D_Exemptions for Returning Residents



Sec. 148.31  Effects taken abroad.

    (a) Exemption. Each returning resident (including American citizens 
who are residents of American Samoa, Guam, the Commonwealth of the 
Northern Mariana Islands, or the Virgin Islands of the United States) is 
entitled to bring in free of duty and internal revenue tax under 
subheading 9804.00.45, and Chapter 98, U.S Note 3, Harmonized Tariff 
Schedule of the United States, (19 U.S.C. 1202), all personal and 
household effects taken abroad. To ensure allowance of the exemption, 
articles of foreign origin should be registered in accordance with Sec. 
148.1. Automobiles and other vehicles, aircraft, boats, teams and saddle 
horses, together with their accessories, may be brought in free of duty 
if taken abroad for noncommercial use (see Sec. 148.32).
    (b) Repair or alteration while abroad. If any such personal or 
household effect taken abroad has been advanced in value or improved in 
condition while abroad by repairs (including cleaning) not merely 
incidental to wear or use while abroad, or by alterations (including 
additions) which did not change the identity of the article, the cost or 
value of such repairs or alterations is subject to duty unless all or 
part of such cost or value is covered by an allowance of the $400, $600, 
or $1,200 exemption for articles acquired abroad (see Sec. 148.33). An 
effect taken abroad and there changed into a different article is 
dutiable at its full value when returned to the United States, unless 
covered in whole or in part by some provision for free entry.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-394, 43 FR 
49788, Oct. 25, 1978; T.D. 86-118, 51 FR 22516, June 20, 1986; T.D. 89-
1, 53 FR 51264, Dec. 21, 1988; T.D. 97-75, 62 FR 46441, Sept. 3, 1997]



Sec. 148.32  Vehicles, aircraft, boats, teams and saddle horses taken abroad.

    (a) Admission free of duty. Automobiles and other vehicles, 
aircraft, boats, teams and saddle horses, together with their 
accessories, taken abroad for noncommercial use and returned by a 
returning resident shall be admitted free of duty upon being 
satisfactorily identified.
    (b) Identification of articles taken abroad. Upon the request of the 
owner or his agent, the port director shall cause any article described 
in paragraph (a) of this section to be examined before it is taken 
abroad, and shall issue a certificate of registration therefor on 
Customs Form 4455. On the return of the article, the certificate may be 
accepted as satisfactory identification of the described article for the 
purpose of admitting the article free of duty. In lieu of Customs Form 
4455, the following may be accepted as satisfactory identification of 
such articles taken abroad:
    (1) For an automobile, the State registration card;
    (2) For an aircraft, the certificate of registration issued by the 
Federal Aviation Administration; and
    (3) For a pleasure boat, the yacht license or motorboat 
identification certificate.
    (c) Repairs, alterations, and accessories. Repairs made abroad to 
articles described in paragraph (a) of this section, if incidental to 
use abroad, are not subject to duty. Repairs not incidental to use 
abroad, and alterations and additions made abroad, shall be assessed 
with duty upon their value at the rate at which the article itself would 
be dutiable if imported. Accessories for articles described in paragraph 
(a) of this section which are acquired abroad are dutiable as if 
separately imported. Any accessories, repairs, alterations, or 
additions, which accompany the returning resident at the time of his 
return to the United States shall be included in his baggage 
declaration.
    (d) Entry. Entry on a baggage declaration or regular entry (see 
Sec. 148.5) shall be required if:
    (1) The owner or his agent is unable to produce a proper 
registration card or certificate to cover the article;
    (2) A claim for free entry of repairs, alterations, additions, or 
accessories is to be made under the $400, $600, or $1,200 returning 
resident's exemption for articles acquired abroad; or
    (3) Duty is to be collected.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 86-118, 51 FR 
22516, June 20, 1986; T.D. 97-75, 62 FR 46441, Sept. 3, 1997]

[[Page 147]]



Sec. 148.33  Articles acquired abroad.

    (a) Exemption. Each returning resident is entitled to bring in free 
of duty and internal revenue tax under subheadings 9804.00.65, 
9804.00.70 and 9804.00.72, and Chapter 98, U.S. Note 3, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202), articles for his 
personal or household use which were purchased or otherwise acquired 
abroad merely as an incident of the foreign journey from which he is 
returning, subject to the limitations and conditions set forth in this 
section and Sec. Sec. 148.34-148.38. The aggregate fair retail value in 
the country of acquisition of such articles for personal and household 
use shall not exceed:
    (1) $400, and provided that the articles accompany the returning 
resident;
    (2) Whether or not the articles accompany the returning resident, 
$600 in the case of a direct arrival from a beneficiary country as 
defined in Sec. 10.191(b)(1) of this chapter, not more than $400 of 
which shall have been acquired elsewhere than in beneficiary countries; 
or
    (3) Whether or not the articles accompany the returning resident, 
$1,200 in the case of a direct or indirect arrival from American Samoa, 
Guam, the Commonwealth of the Northern Mariana Islands, or the Virgin 
Islands of the United States, not more than $400 of which shall have 
been acquired elsewhere than in such locations except that up to $600 of 
which may have been acquired in one or more beneficiary countries as 
defined in Sec. 10.191(b)(1) of this chapter.
    (b) Application to articles of highest rate of duty. The $400, $600, 
or $1,200 exemption shall be applied to the aggregate fair retail value 
in the country of acquisition of the articles acquired abroad which are 
subject to the highest rates of duty. If an internal revenue tax is 
applicable, it shall be combined with the duty in determining which 
rates are highest.
    (c) Gifts. An article acquired abroad by a returning resident and 
imported by him to be disposed of after importation as his bona fide 
gift is considered to be for the personal use of the returning resident 
and may be included in the exemption.
    (d) Tobacco products and alcoholic beverages. Cigars, cigarettes, 
manufactured tobacco, and alcoholic beverages may be included in the 
exemption to which a returning resident is entitled, with the following 
limits:
    (1) No more than 200 cigarettes and 100 cigars may be included, 
except that in the case of American Samoa, Guam, the Commonwealth of the 
Northern Mariana Islands and the Virgin Islands of the United States the 
cigarette limit is 1,000, not more than 200 of which shall have been 
acquired elsewhere than in such locations;
    (2) No alcoholic beverages shall be included in the case of an 
individual who has not attained the age of 21; and
    (3) No more than 1 liter of alcoholic beverages may be included, 
except that:
    (i) An individual returning directly or indirectly from American 
Samoa, Guam, the Commonwealth of the Northern Mariana Islands or the 
Virgin Islands of the United States may include in the exemption not 
more than 5 liters of alcoholic beverages, not more than 1 liter of 
which shall have been acquired elsewhere than in such locations and not 
more than 4 liters of which shall have been produced elsewhere than in 
such locations; and
    (ii) An individual returning directly from a beneficiary country as 
defined in Sec. 10.191(b)(1) of this chapter may include in the 
exemption not more than 2 liters of alcoholic beverages if at least 1 
liter is the product of one or more beneficiary countries.
    (e) Exemption not applicable. The exemption does not apply to 
articles intended for sale or acquired on commission, i.e., for the 
account of another person, with or without compensation for the service 
rendered. Articles acquired on one journey and left in a foreign country 
cannot be allowed the exemption accruing upon the return of the resident 
from a subsequent journey.
    (f) Remainder not applicable to subsequent journey. A returning 
resident who has received a total exemption of less than the $400, $600, 
or $1,200 maximum in connection with his return from one journey is not 
entitled to apply the unused portion of that maximum amount

[[Page 148]]

to articles acquired abroad on a subsequent journey.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-394, 43 FR 
49788, Oct. 25, 1978; T.D. 80-179, 45 FR 45580, July 7, 1980; T.D. 86-
118, 51 FR 22516, June 20, 1986; T.D. 89-1, 53 FR 51264, Dec. 21, 1988; 
T.D. 97-75, 62 FR 46441, Sept. 3, 1997]



Sec. 148.34  Family grouping of exemptions for articles acquired abroad.

    (a) Grouping of exemptions. Each member of a family is entitled to 
the $400, $600, or $1,200 exemption for articles acquired abroad, 
subject to the conditions prescribed in this subpart. When members of a 
family residing in one household travel together on their return to the 
United States, the $400, $600, or $1,200 exemption to which the several 
members of the family may be entitled may be grouped and allowed without 
regard to which member of the family is the owner of the articles. 
However, a group exemption shall not include an exemption for a family 
member not entitled to it in his own right, nor shall a group exemption 
be applied to any property of such a member. The exemption of a family 
member who has not attained the age of 21 shall not be applied under the 
group exemption to alcoholic beverages. No exemptions allowable to a 
resident servant accompanying the family shall be included in the family 
grouping.
    (b) Members of a family residing in one household. The term 
``members of a family in one household'' shall include all persons, 
regardless of age, who:
    (1) Are related by blood, marriage, or adoption;
    (2) Lived together in one household at their last permanent 
residence; and
    (3) Intend to live together in one household after their arrival in 
the United States.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 86-118, 51 FR 
22516, June 20, 1986; T.D. 97-75, 62 FR 46442, Sept. 3, 1997]



Sec. 148.35  Length of stay for exemption of articles acquired abroad.

    (a) Required for allowance of $400, $600, or $1,200 exemption. 
Except as otherwise provided in this paragraph or in paragraph (b) of 
this section, the $400, $600, or $1,200 exemption for articles acquired 
abroad shall not be allowed unless the returning resident has remained 
beyond the territorial limits of the United States for a period of not 
less than 48 hours. The $400 exemption may be allowed on articles 
acquired abroad by a returning resident arriving directly from Mexico 
without regard to the length of time the person has remained outside the 
territorial limits of the United States.
    (b) Not required for allowance of $1,200 exemption on return from 
Virgin Islands. The $1,200 exemption applicable in the case of the 
arrival of a returning resident directly or indirectly from the Virgin 
Islands of the United States may be allowed without regard to the length 
of time such person has remained outside the territorial limits of the 
United States.
    (c) Computation of time. The 48-hour period a returning resident 
must have completed abroad to be entitled to an exemption shall be 
computed exactly. For example, a resident leaving United States 
territory at 1:30 p.m. on June 1 would complete the 48-hour period at 
1:30 p.m. on June 3.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 86-118, 51 FR 
22516, June 20, 1986; T.D. 97-75, 62 FR 46442, Sept. 3, 1997]



Sec. 148.36  Frequency of allowance of exemption for articles acquired abroad.

    (a) 30-day period. The $400, $600, or $1,200 exemption for articles 
acquired abroad shall not be granted to a returning resident who has 
taken advantage of such exemption within the 30-day period immediately 
preceding his return to the United States. The date of the returning 
resident's latest prior arrival on which he declared articles acquired 
abroad for allowance of the $400, $600, or $1,200 exemption shall be 
deemed the date he took advantage of the applicable exemption.
    (b) Computation of time. The 30-day period immediately preceding the 
resident's return shall be computed by excluding the day of arrival and 
counting backward 30 days. For example, in the case of an arrival on May 
28, the resident would not be entitled to the $400, $600, or $1,200 
exemption if he had

[[Page 149]]

taken advantage of such exemption on or after the preceding April 28.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 86-118, 51 FR 
22516, June 20, 1986; T.D. 97-75, 62 FR 46442, Sept. 3, 1997]



Sec. 148.37  Replacement of unsatisfactory articles acquired abroad.

    (a) Free entry of replacement articles. An article furnished by a 
foreign supplier to replace a like article of comparable value 
previously exempted from duty under the $400, $600, or $1,200 exemptions 
for articles acquired abroad shall be allowed free entry if the original 
article is found by the importer to be unsatisfactory and the procedures 
provided by paragraph (b) of this section are followed. In any case in 
which the importer has failed to follow these procedures, the port 
director may allow free entry of the replacement article if he is 
satisfied that the unsatisfactory article was timely exported and that 
the failure to comply with the procedures of paragraph (b) of this 
section was due to inadvertence or lack of experience in Customs matters 
and was without willful intent to avoid Customs supervision.
    (b) Procedure for replacement. Any article previously exempted from 
duty under the $400, $600, or $1,200 exemptions found by the importer to 
be unsatisfactory shall be returned to Customs custody and exported 
under Customs supervision at the expense of the importer within 60 days 
after its importation. A certificate of registration on Customs Form 
4455 shall be issued to the importer with instructions as to its use 
when the unsatisfactory article is exported for replacement under the 
provisions of subheading 9804.00.75, Harmonized Tariff Schedule of the 
United States.
    (c) Articles found damaged upon declaration. The requirement that 
the original article be exported under Customs supervision does not 
apply when a duplicate article is furnished by a foreign supplier as a 
replacement for an article declared for entry under the $400, $600, or 
$1,200 exemption and found by the Customs inspector or other examining 
officer to be so damaged as to constitute a nonimportation (Sec. 158.11 
of this chapter). In such a case, Customs Form 4455 shall be issued to 
the importer at the time the determination of nonimportation is made and 
the duplicate replacement shall be considered to have been acquired 
abroad for the purposes of the $400, $600, or $1,200 exemption 
provision, provided no charge is made to the importer for the duplicate 
replacement.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 86-118, 51 FR 
22516, June 20, 1986; T.D. 89-1, 53 FR 51264, Dec. 21, 1988; T.D. 97-75, 
62 FR 46442, Sept. 3, 1997]



Sec. 148.38  Sale of articles acquired abroad.

    An article brought in under the $400, $600, or $1,200 exemption for 
articles acquired abroad for personal or household use and subsequently 
sold is not dutiable or subject to forfeiture by reason of the sale if 
the returning resident actually acquired and imported the article for 
his bona fide personal or household use and not for sale.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 86-118, 51 FR 
22516, June 20, 1986; T.D. 97-75, 62 FR 46442, Sept. 3, 1997]



Sec. 148.39  Rented automobiles.

    (a) Importation for temporary period. An automobile rented by a 
resident of the United States while abroad may be brought into the 
United States by or on behalf of such resident for a temporary period 
not to exceed 30 days under subheading 9804.00.60, Harmonized Tariff 
Schedule of the United States (HTSUS) (19 U.S.C. 1202), without payment 
of duty. The automobile shall be used for the transportation of the 
resident and that of his family and guests, and for such incidental 
carriage of articles as may be appropriate to his personal use of the 
automobile. No entry or security for exportation shall be required.
    (b) Unauthorized use or failure to export. If any automobile 
exempted from duty under subheading 9804.00.60, HTSUS (19 U.S.C. 1202), 
is used otherwise than for the purpose expressed or is not returned 
abroad within 30 days, without prior payment to a port director of the 
duty which would have been payable at the time of entry if entered 
without benefit of the exemption, the

[[Page 150]]

automobile or its value (to be recovered from the importer) shall be 
subject to forfeiture.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51264, Dec. 21, 1988]



                  Subpart E_Exemptions for Nonresidents



Sec. 148.41  Articles carried through the United States.

    An arriving nonresident who is in transit to a place outside U.S. 
Customs territory may take with him through U.S. Customs territory for 
carriage to such place articles not exceeding $200 in aggregate value 
(including not more than 4 liters of alcoholic beverages) without the 
payment of duty or internal revenue taxes as provided in subheading 
9804.00.40, Chapter 98, U.S. Note 3, Harmonized Tariff Schedule of the 
United States (19 U.S.C. 1202).

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-394, 43 FR 
49788, Oct. 25, 1978; T.D. 89-1, 53 FR 51264, Dec. 21, 1988; T.D. 97-82, 
62 FR 51771, Oct. 3, 1997]



Sec. 148.42  Personal effects.

    (a) Exemption. A nonresident arriving in the United States, 
regardless of age, is entitled under subheading 9804.00.20, and Chapter 
98, U.S. Note 3, Harmonized Tariff Schedule of the United States (19 
U.S.C. 1202), to entry free of duty and internal revenue tax for his 
wearing apparel, articles of personal adornment, toilet articles, and 
similar personal effects. ``Similar personal effects'' include all 
articles intended and appropriate for the personal use of the 
nonresident while traveling, such as hunting and fishing equipment, 
wheelchairs for invalids or crippled persons, pet and hunting dogs, and 
the like.
    (b) Application of exemption. The exemption applies only to articles 
which were actually owned by the nonresident and in his possession 
abroad at the time of, or prior to, his departure for the United States. 
The articles must be appropriate for the personal use of the 
nonresident, and intended only for such use and not as a gift for 
another person nor for sale.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51264, Dec. 21, 1988]



Sec. 148.43  Tobacco products and alcoholic beverages.

    (a) For personal use. Fifty cigars, or 200 cigarettes, or 2 
kilograms of smoking tobacco, and not exceeding 1 liter of alcoholic 
beverages may be passed free of duty and internal revenue tax under 
subheading 9804.00.25 and Chapter 98, U.S. Note 3, Harmonized Tariff 
Schedule of the United States (HTSUS) (19 U.S.C. 1202), when brought in 
by an adult nonresident for his personal use, and not for commercial use 
or to be given to another person. This exemption for tobacco products 
may be applied proportionately. The exemption may be applied to more 
than one kind of alcoholic beverages but not to an aggregate volume of 
more than 1 liter for one adult nonresident.
    (b) For gifts. A nonresident who is allowed the $100 gift exemption 
(see Sec. 148.44) may include not more than 100 cigars under such 
exemption from duty and internal revenue tax, provided the cigars 
accompany him and are to be disposed of only as bona fide gifts.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-394, 43 FR 
49789, Oct. 25, 1978; T.D. 80-19, 45 FR 45580, July 7, 1980; T.D. 89-1, 
53 FR 51264, Dec. 21, 1988]



Sec. 148.44  Gifts.

    (a) Exemption. An arriving nonresident who intends to remain in the 
United States for not less than 72 hours is entitled to claim as free of 
duty and internal revenue tax under subheading 9804.00.30 and Chapter 
98, U.S. Note 3, Harmonized Tariff Schedule of the United States (19 
U.S.C. 1202), articles not over $100 in aggregate value (not including 
alcoholic beverages and cigarettes, but including not more than 100 
cigars) which accompany him and are to be disposed of by him as bona 
fide gifts. See Sec. 148.43(b) for limitations on cigars under this 
exemption.
    (b) Frequency of allowance. The exemption for gifts may be allowed 
only if the nonresident has not claimed the

[[Page 151]]

exemption within the immediately preceding 6 months.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-394, 43 FR 
49789, Oct. 25, 1978; T.D. 89-1, 53 FR 51265, Dec. 21, 1988]



Sec. 148.45  Vehicles and other conveyances.

    Nonresidents are entitled to entry free of duty and internal revenue 
tax under subheading 9804.00.35 and Chapter 98, U.S. Note 3, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202), for automobiles, 
trailers, aircraft, motorcycles, bicycles, baby carriages, boats, horse-
drawn conveyances, horses, and similar means of transportation and the 
usual equipment accompanying them, if such articles are imported in 
connection with the arrival of the nonresident to be used in the United 
States only for the transportation of the nonresident, his family and 
guests, and such incidental carriage of articles as may be appropriate 
to his personal use of the conveyance.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51265, Dec. 21, 1988]



Sec. 148.46  Sale of exempted articles.

    (a) Sale resulting in forfeiture. The following articles or their 
value (to be recovered from the importer) upon their sale, shall be 
subject to forfeiture in accordance with the provisions of Chapter 98, 
Subchapter IV, U.S. Note 1, HTSUS (19 U.S.C. 1202), unless the procedure 
set forth in paragraph (b) of this section is followed:
    (1) Any jewelry or similar articles of personal adornment having an 
aggregate value of $300 or more which have been allowed an exemption 
under Sec. 148.42, if sold within 3 years of the date of importation.
    (2) Any conveyance or its equipment allowed an exemption under Sec. 
148.45, if sold within 1 year after the date of importation.
    (b) Procedure permitting sale. Articles described in paragraph (a) 
of this section may be sold if, prior to the time of sale, payment is 
made to a port director of the duty which would have been payable at the 
time of entry if the article had been entered without the benefit of the 
applicable exemption.
    (c) Permissible sales. A sale pursuant to a judicial order or in 
liquidation of the estate of a decedent is not a basis for any liability 
for duty or forfeiture.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51265, Dec. 21, 1988]



                       Subpart F_Other Exemptions



Sec. 148.51  Special exemption for personal or household articles.

    (a) Application of exemption. The exemption from duty and internal 
revenue tax contemplated by section 321(a)(2)(B), Tariff Act of 1930, as 
amended (19 U.S.C. 1321(a)(2)(B)), may be applied to articles for his 
personal or household use including gifts, but not for any business or 
commercial use, accompanying:
    (1) A nonresident arriving in the United States who is not entitled 
to an exemption for gifts under subheading 9804.00.30 Harmonized Tariff 
Schedule of the United States (HTSUS) (19 U.S.C. 1202) (see Sec. 
148.44); or
    (2) A returning resident who is not entitled to the $400, $600, or 
$1,200 exemption for articles acquired abroad under subheading 
9804.00.65, 9804.00.70 or 9804.00.72, HTSUS (see Subpart D of this 
part).
    (b) Limitations. No article accompanying a person arriving in the 
United States shall be exempted from duty or internal revenue tax under 
section 321(a)(2)(B), Tariff Act of 1930, as amended, if any article 
accompanying such person is subject to duty or tax by reason of the 
following limitations on the application of this exemption:
    (1) Value of articles. The exemption shall be allowed only when the 
aggregate fair retail value of all articles not otherwise entitled to an 
exemption does not exceed $200.
    (2) Articles subject to internal revenue tax. The exemption shall 
not be applied to articles subject to internal revenue tax other than:
    (i) Cigarettes not in excess of 50;
    (ii) Cigars not in excess of 10;
    (iii) Alcoholic beverages not in excess of 150 milliliters; or
    (iv) Alcoholic perfumery not in excess of 150 milliliters; or

[[Page 152]]

    (c) Family grouping. Family grouping of the exemption shall not be 
allowed.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-394, 43 FR 
49789, Oct. 25, 1978; T.D. 80-179, 45 FR 45580, July 7, 1980; T.D. 86-
118, 51 FR 22516, June 20, 1986; T.D. 89-1, 53 FR 51265, Dec. 21, 1988; 
T.D. 94-51, 59 FR 30296, June 13, 1994; T.D. 97-75, 62 FR 46442, Sept. 
3, 1997; T.D. 99-64, 64 FR 43267, Aug. 10, 1999]



Sec. 148.52  Exemption for household effects used abroad.

    (a) Exemption. Furniture, carpets, paintings, tableware, books, 
libraries, and other usual household furnishings and effects actually 
used abroad for not less than 1 year by resident or nonresidents, and 
not intended for any other person or for sale may be allowed entry free 
of duty and tax under subheading 9804.00.05, Harmonized Tariff Schedule 
of the United States (19 U.S.C. 1202). Household effects used abroad not 
less than 1 year by a family of which the importer was a resident member 
for not less than 1 year during the period of use may be allowed free 
entry whether or not the importer owned the effects at the time of such 
use. The year of use need not be continuous, nor need it immediately 
precede the time of importation.
    (b) Proof of use. In order to obtain free entry for household 
effects under this section, the use of the effects abroad for 1 year 
must be proven to the satisfaction of the port director. The port 
director, in his discretion, may require evidence of use other than the 
declaration provided for in paragraph (c) of this section.
    (c) Declaration. When household effects are claimed to be free of 
duty a declaration of the owner on Customs Form 3299 shall be required 
to support the claim for free entry. If it is impracticable to produce 
the declaration at the time of entry, the importer may give a bond on 
Customs Form 301, containing the bond conditions set forth in Sec. 
113.62 of this chapter, for the production of the owner's declaration 
within 6 months.
    (d) Arrival of effects more than 10 years after arrival of importer. 
As a general rule, household effects arriving more than 10 years after 
the last arrival of the importer from the country in which the effects 
were used shall not be admitted free of duty under this exemption unless 
the port director is satisfied from the importer's explanation that the 
effects were unavoidably detained beyond the 10-year period. However, in 
no case shall free entry be allowed under this provision when a period 
of 25 years or more has elapsed since the last arrival of the importer 
in the United States from the country in which the effects were used.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 84-213, 49 FR 
41186, Oct. 19, 1984; T.D. 89-1, 53 FR 51265, Dec. 21, 1988]



Sec. 148.53  Exemption for tools of trade.

    (a) Exemption. Professional books, implements, instruments, or tools 
of trade, occupation or employment, may be allowed entry free of duty 
and tax under the provisions of subheading 9804.00.15, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202), for such articles owned 
and used abroad by any person emigrating to the United States, or 
subheading 9804.00.10 for such articles taken abroad by or for the 
account of any person arriving in the United States. The exemption for 
emigrants under subheading 9804.00.15, HTSUS shall not be applied to:
    (1) Theatrical scenery, properties, or apparel;
    (2) Articles for use in any manufacturing establishment;
    (3) Articles for any other person; or
    (4) Articles for sale.
    (b) Declaration. A declaration of the emigrant or returning 
individual on Customs Form 3299 shall be required to support the claim 
of free entry. However, an oral declaration may be accepted from a 
returning individual in lieu of a written declaration for any such 
articles claimed to be free of duty under subheading 9804.00.10, HTSUS 
(19 U.S.C. 1202).

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51265, Dec. 21, 1988]



Sec. 148.54  Exemption for effects of citizens dying abroad.

    (a) Exemption. Articles claimed to be personal and household 
effects, not stock in trade, the title to which is in the estate of a 
citizen of the United States who died abroad may be allowed

[[Page 153]]

entry free of duty and tax under subheading 9804.00.85, and Chapter 98, 
U.S. Note 3, Harmonized Tariff Schedule of the United States (19 U.S.C. 
1202).
    (b) Entry. Such effects shall be entered in accordance with the 
provisions of Sec. Sec. 143.11 through 143.16 of this chapter, or if 
the value of such effects does not exceed $250, entry may be permitted 
under the provisions of Sec. Sec. 143.21 through 143.28 of this 
chapter.
    (c) Statement of facts required. The port director shall require in 
connection with the entry the written statement of a person having 
knowledge of the facts or shall otherwise satisfy himself as to the 
citizenship of the deceased owner of the effects at the time of death.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-99, 43 FR 
13061, Mar. 28, 1978; T.D. 89-1, 53 FR 51265, Dec. 21, 1988]



Sec. 148.55  Exemption for articles bearing American trademark.

    (a) Application of exemption. An exemption is provided for 
trademarked articles accompanying any person arriving in the United 
States which would be prohibited entry under section 526, Tariff Act of 
1930, as amended (19 U.S.C. 1526), or section 42 of the Act of July 5, 
1946 (60 Stat. 440; 15 U.S.C. 1124), because the trademark has been 
registered with the U.S. Patent and Trademark Office and recorded with 
Customs. The exemption may be applied to those trademarked articles of 
foreign manufacture bearing a trademark owned by a citizen of, or a 
corporation or association created or organized within, the United 
States when imported for the arriving person's personal use in the 
quantities provided in pararaph (c) of this section. Unregistered and 
unrecorded trademarked articles are not subject to quantity limitation.
    (b) Limitations--(1) 30-day period. The exemption in paragraph (a) 
of this section shall not be granted to any person who has taken 
advantage of the exemption for the same type of article within the 30-
day period immediately prior to his arrival in the United States. The 
date of the person's last arrival on which he claimed this exemption 
shall be considered to be the date he last took advantage of the 
exemption.
    (2) Sale of exempted articles. If an article which has been exempted 
is sold within one year of the date of importation, the article or its 
value (to be recovered from the importer), is subject to forfeiture. A 
sale subject to judicial order or in the liquidation of an estate is not 
subject to the provisions of this paragraph.
    (c) Quantities. Generally, each person arriving in the United States 
may apply the exemption to one article of the type bearing a protected 
trademark. The Commissioner shall determine if a quantity of an article 
in excess of one may be entered and, with the approval of the Secretary 
of the Treasury, publish in the Federal Register a list of types of 
articles and the quantities of each entitled to the exemption. If the 
holder of a protected trademark allows importation of a quantity in 
excess of one of its particular trademarked article, the total of those 
trademarked articles authorized by the trademark holder may be entered 
without penalty.

[T.D. 79-159, 44 FR 31969, June 4, 1979; 44 FR 35208, June 19, 1979, as 
amended by T.D. 91-77, 56 FR 46115, Sept. 10, 1991]



            Subpart G_Crewmember Declarations and Exemptions



Sec. 148.61  Status as crewmembers.

    The following persons arriving in the United States shall not be 
treated as crewmembers:
    (a) Members of the uniformed services of the United States and 
persons in the civil service of the United States engaged in the 
operation of a vessel, vehicle, or aircraft owned by, or under the 
complete control and management of, the United States or any of its 
agencies.
    (b) Persons engaged in the operation of a private or public 
aircraft.
    (c) Persons not connected with the operation, navigation, ownership, 
or business of a vessel, vehicle or aircraft engaged in international 
traffic.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 76-338, 41 FR 
54167, Dec. 13, 1976]

[[Page 154]]



Sec. 148.62  Declaration and entry of articles by crewmembers.

    (a) Declaration required. Articles which are to be landed by a 
crewmember, including any person traveling on board a vessel, vehicle, 
or aircraft engaged in international traffic who is returning from a 
trip on which he was employed as a crewmember, shall be declared upon 
arrival of the vessel, vehicle, or aircraft in the United States. When 
practicable, the clearance of articles through Customs shall be made and 
permission to unlade obtained before the articles are taken from the 
carrier. However, if no danger to the revenue will result, articles may 
be submitted for examination and clearance to the Customs office on the 
pier or at the landing place.
    (b) Form of declaration--(1) Oral declaration. A crewmember may be 
permitted to make an oral declaration and entry if all articles he has 
to declare, in addition to articles for use in port on temporary leave 
for which no entry is required in accordance with Sec. 148.63, may be 
admitted free of duty and tax under section 321(a)(2)(B), Tariff Act of 
1930, as amended (19 U.S.C. 1321(a)(2)(B)) (See Sec. 148.64).
    (2) Written declaration. A written declaration on Customs Form 5129, 
Crewmember's Declaration shall be required in any case in which an oral 
declaration is not permitted. A written declaration may be required in 
any case if necessary to effect prompt and orderly clearance of 
crewmembers and their effects or if deemed necessary to protect the 
revenue.
    (c) Transfer without declaration. Articles belonging to a crewmember 
may be transferred from one carrier to another in international traffic 
without declaration, entry, or assessment of duty if the transfer is 
carried out under the supervision of Customs officers, or by a bonded 
cartman if necessary.
    (d) Entry at port where articles to be landed. Articles in the 
possession of or owned by a crewmember of a character for which entry 
must be made when they are brought into the United States shall be 
entered at the port where the articles are to be landed. However, if the 
crewmember remains on a vessel, vehicle, or aircraft which is to proceed 
to another port of the United States in a movement in which entry of the 
vessel, vehicle, or aircraft will not be required, entry of the articles 
shall be made at the port at which such movement begins.
    (e) Collection of duty and taxes. Any duties and taxes found due 
shall be collected as in the case of arriving passengers.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-99, 43 FR 
13061, Mar. 29, 1978]



Sec. 148.63  Articles for use while on temporary leave.

    (a) Exemption. Articles in the possession of and exclusively for use 
by any crewmember during the trip or voyage, such as necessary clothing, 
toiletries, and purely personal effects, may be landed by such 
crewmember for use on temporary leave without a written declaration or 
entry, and without payment of duty or internal revenue tax under 
subheading 9804.00.80, Harmonized Tariff Schedule of the United States 
(HTSUS) (19 U.S.C. 1202), if the port director is satisfied that:
    (1) The articles are reasonable and appropriate for the crewmember's 
accommodation while on temporary leave, and are to be taken out of the 
United States, except for articles consumed in use;
    (2) The articles are intended exclusively for the crewmember's bona 
fide personal use;
    (3) The quantities are reasonable, depending on the circumstances in 
each particular case; and
    (4) In the case of tobacco products and alcoholic beverages, the 
containers have been opened and the total quantity landed shall not 
exceed 50 cigars, 300 cigarettes, or 2 kilograms of smoking tobacco, or 
a proportionate amount of each, and 1 liter of alcoholic beverages.
    (b) Temporary leave. A crewmember is not considered to be on 
temporary leave from a vessel, vehicle, or aircraft engaged in 
international traffic or entitled to the exemption under this section 
upon disembarkation when he is to remain in the confines of a pier, 
terminal, airport, or area immediately adjacent thereto, in order to 
timely embark on the carrier in the course of a

[[Page 155]]

continuous journey or on a concurrently scheduled arrival and departure.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 80-179, 45 FR 
45580, July 7, 1980; T.D. 89-1, 53 FR 51265, Dec. 21, 1988]



Sec. 148.64  Administrative exemption.

    (a) Application of exemption. The exemption from duty and internal 
revenue tax contemplated by section 321(a)(2)(B), Tariff Act of 1930, as 
amended (19 U.S.C. 1321(a)(2)(B)), may be applied to articles for the 
personal and household use, including gifts, of a crewmember arriving in 
the United States who is not entitled to an exemption under subheading 
9804.00.30, 9804.00.65, 9804.00.70, or 9804.00.72, Harmonized Tariff 
Schedule of the United States (HTSUS) (see Sec. Sec. 148.66(c) and 
148.65). The exemption may be applied when the crewmember is entitled to 
an exemption under subheading 9804.00.80, HTSUS (19 U.S.C. 1202), for 
articles for use while on temporary leave (Sec. 148.63).
    (b) Limitations. No article accompanying a crewmember arriving in 
the United States shall be exempted from duty or internal revenue tax 
under section 321(a)(2)(B), Tariff Act of 1930, as amended, if any 
article accompanying such crewmember is subject to duty or internal 
revenue tax by reason of the following limitations.
    (1) Value of articles. The exemption shall be allowed only when the 
aggregate fair retail value of all articles not otherwise entitled to an 
exemption does not exceed $200.
    (2) Articles subject to internal revenue tax. The exemption shall 
not be applied to any article subject to internal revenue tax in 
addition to any articles allowed an exemption under subheading 
9804.00.80, HTSUS (19 U.S.C. 1202), other than:
    (i) Cigarettes not in excess of 50;
    (ii) Cigars not in excess of 10;
    (iii) Alcoholic beverages not in excess of 150 milliliters; or
    (iv) Alcoholic perfumery not in excess of 150 milliliters 
(Subheading 9805.00.50, HTSUS (19 U.S.C. 1202, 1321)). [T.D. 80-179.].

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 80-179, 45 FR 
45580, July 7, 1980; T.D. 84-149, 49 FR 28699, July 16, 1984; T.D. 89-1, 
53 FR 51265, Dec. 21, 1988; T.D. 94-51, 59 FR 30296, June 13, 1994; T.D. 
97-75, 62 FR 46442, Sept. 3, 1997]



Sec. 148.65  Exemption for resident crewmembers.

    (a) Status as returning resident. A crewmember arriving in a vessel, 
vehicle, or aircraft from a foreign port who is a resident of the United 
States shall be considered a returning resident qualifying for the 
exemptions allowed under Chapter 98, Subchapter IV, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202), and subpart D of this 
part if he permanently leaves the carrier without the intention of 
resuming his employment on the same or any other carrier that is engaged 
in international traffic.
    (b) Statement of declaration. A resident crewmember who claims that 
articles declared by him are entitled to be passed free of duty and tax 
under the returning resident's exemption, shall include a legible 
statement on the declaration, Customs Form 5129, of the basis for his 
claim for entitlement to the resident's exemption.

[T.D. 81-218, 46 FR 42657, Aug. 24, 1981, as amended by T.D. 89-1, 53 FR 
51265, Dec. 21, 1988]



Sec. 148.66  Exemptions for nonresident crewmembers.

    (a) Status as arriving nonresident. A nonresident crewmember will be 
treated as an arriving nonresident for purposes of claiming the 
exemptions allowable under Chapter 98, Subchapter IV, Harmonized Tariff 
Schedule of the United States (HTSUS) (19 U.S.C. 1202), and subpart E of 
this part when he permanently leaves his employment with a vessel, 
vehicle, or aircraft at a port in the United States without intention of 
resuming employment on the same or another carrier in international 
traffic. However, a nonresident crewmember shall not be treated as an 
arriving nonresident for this purpose when he departs a carrier for 
temporary leave but retains his employment with the carrier so that he 
will be

[[Page 156]]

going foreign again in the course of his continuing employment (see 
Sec. 148.63).
    (b) Articles carried through the United States. A nonresident 
crewmember, permanently leaving a carrier in a U.S. port to travel as a 
passenger on another carrier which will take him to a place outside the 
United States, who desires to take with him articles not exceeding $200 
in aggregate value (including not more than 4 liters of alcoholic 
beverages) without the payment of duty or internal revenue tax as 
provided in item 812.40 (see Sec. 148.41), may be accorded free entry 
of the articles under the following procedure:
    (1) Declaration and supporting statement. The nonresident crewmember 
shall itemize the articles on his declaration and entry, Customs Form 
5129, required by Sec. 148.62(b)(2), and shall state in writing in 
support of his declaration that:
    (i) He has been finally discharged from the carrier, with the date 
of discharge;
    (ii) He intends to depart from the same or another U.S. port as a 
passenger on another carrier for a place outside U.S. Customs territory; 
and
    (iii) The articles will be taken with him on such carrier and will 
not remain in the United States.
    (2) Allowance by port director. The port director may require 
verification of the crewmember's discharge and a statement as to the 
accuracy of the second and third supporting statements of the crewmember 
from the person in charge of the carrier, the vessel agent, or the port 
captain. If the port director is satisfied that the crewmember's 
statements are correct, the articles may be passed free of duty and 
internal revenue tax under subheading 9808.00.40, HTSUS (19 U.S.C. 
1202).
    (c) Articles to be disposed of as gifts. A nonresident crewmember 
shall itemize on his baggage declaration and entry, Customs Form 5123 or 
5129, required by Sec. 148.62, all articles in his possession for which 
he seeks entry under subheading 9804.00.30, HTSUS (19 U.S.C. 1202), as 
bona fide gifts. The crewmember must be permanently leaving his 
employment on the international carrier for a stay in the United States 
of at least 72 hours before departing for a place outside the United 
States as a passenger.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 78-99, 43 FR 
13061, Mar. 29, 1978; T.D. 78-394, 43 FR 49789, Oct. 25, 1978; T.D. 89-
1, 53 FR 51265, Dec. 21, 1988]



Sec. 148.67  Penalties for failure to declare articles.

    (a) Avoidance of inspection. When articles may be presented to the 
Customs office on the pier or at the landing place for inspection and 
clearance, if the circumstances under which the articles are landed 
indicate an attempt to avoid inspection, the penalties prescribed in 
section 453, Tariff Act of 1930, as amended (19 U.S.C. 1453), shall be 
assessed.
    (b) Articles landed without declaration. Any article landed without 
having been properly declared as provided in Sec. 148.62 shall be 
considered as having been unladen without a permit and the penalties 
provided in 19 U.S.C. 1453 or 19 U.S.C. 1644 and 1644a shall be assessed 
as applicable.
    (c) Articles omitted from declaration. If the declaration does not 
include all the articles landed, the crewmember shall be subject to the 
penalties prescribed in section 497, Tariff Act of 1930 (19 U.S.C. 
1497), with respect to the articles omitted. The penalties prescribed in 
section 453, Tariff Act of 1930, as amended (19 U.S.C. 1453), shall not 
be assessed if any, though not all, of the articles are declared, except 
as provided in paragraph (a) of this section.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 98-74, 63 FR 
51290, Sept. 25, 1998]



  Subpart H_Military and Civilian Employees of the United States, and 
                                Evacuees



Sec. 148.71  Status of persons in service of United States as returning residents.

    A person in the service of the United States and members of his 
family arriving in the United States are ordinarily considered returning 
residents for the purpose of Chapter 98, Subchapter IV, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202), except that the 
following persons are treated as nonresidents:

[[Page 157]]

    (a) A wife or husband of any person in the service of the United 
States emigrating to the United States, and
    (b) A child born abroad of any person in the service of the United 
States who is arriving in the United States for the first time.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51265, Dec. 21, 1988]



Sec. 148.72  [Reserved]



Sec. 148.73  Baggage on carriers operated by the Department of Defense.

    (a) Declaration. All persons, including crewmembers, entering the 
United States on carriers operated by or for the Department of Defense 
shall execute written baggage declarations.
    (b) Exemptions applicable. Passengers on transports shall be granted 
the applicable exemptions from duty provided for in Chapter 98, 
Subchapter IV, Harmonized Tariff Schedule of the United States (19 
U.S.C. 1202). Members of the Armed Forces of the United States and 
personnel in the civil service of the United States engaged in the 
operation of the vessel shall be accorded the same privilege. Civilian 
officers and crewmembers not in the service of the United States shall 
be subject to the provisions of subpart G of this part with respect to 
exemption from duty.
    (c) Examination of baggage. Baggage on transports shall be examined 
at the port where landed in the same manner as baggage on commercial 
vessels.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 82-213, 48 FR 
46979, Oct. 17, 1983; T.D. 89-1, 53 FR 51265, Dec. 21, 1988]



Sec. 148.74  Exemption on termination of assignment to extended duty or on evacuation.

    (a) Exemption. With the limitation on alcoholic beverages and 
tobacco products provided in paragraph (c) of this section, entry free 
of duty and tax under subheading 9805.00.50, Harmonized Tariff Schedule 
of the United States (19 U.S.C. 1202), may be accorded personal and 
household effects of:
    (1) Any person in the service of the United States who returns to 
the United States upon the termination of assignment to extended duty at 
a post or station outside the Customs territory of the United States;
    (2) Members of his family who have resided with him at such post or 
station and are returning upon the termination of his assignment; or
    (3) Any person evacuated to the United States under Government 
orders or instructions.
    (b) The term ``personal effects'' as used in subheading 9805.00.50, 
HTSUS, is not confined to that class of articles described in subheading 
9804.00.20, HTSUS, nor is any period of use, such as prescribed by 
subheading 9804.00.05, HTSUS, applicable to household effects entered 
under subheading 9805.00.50, HTSUS. The privilege of free entry under 
subheading 9805.00.50, HTSUS, does not apply to:
    (1) Articles imported for sale, or for the account of any person not 
specified in subheading 9805.00.50, HTSUS; or
    (2) Articles which have not been in the direct personal possession 
of the claimant, or a member of his household, while abroad.
    (c) Limitation on alcoholic beverages and tobacco products. A total 
of not more than 4 liters of alcoholic beverages and not more than 100 
cigars shall be accorded free entry under subheading 9805.00.50, HTSUS, 
subject to the conditions that:
    (1) These articles accompany the person making the claim for free 
entry upon his arrival in the U.S.;
    (2) Not more than 1 liter of any such alcoholic beverages shall have 
been distilled or otherwise manufactured and bottled in any place other 
than the United States or its possessions;
    (3) Such individual has not concurrently claimed exemption as a 
returning resident under subheading 9804.00.65, 9804.00.70, or 
9804.00.72, HTSUS; and
    (4) Such person, if other than one in the service of the U.S., shall 
have attained the age of 21.
    (d) Termination of assignment to extended duty. The requirement of 
subheading 9805.00.50, HTSUS that the person ``returns to the United 
States upon the termination of assignment to extended duty'' shall be 
considered met upon the necessary proof being submitted that any one of 
the following is applicable:

[[Page 158]]

    (1) The person is returning upon the termination of a tour of duty 
outside the Customs territory of the United States of at least 140 days' 
duration.
    (2) The person is returning after the termination of an assignment 
under permanent change of station orders to duty at a post or station 
outside the Customs territory of the United States, regardless of the 
duration of the duty. A crewmember, including a member of a command, 
serving on a United States naval vessel when it departs from the United 
States on an intended deployment of 120 days or more outside the Customs 
territory of the United States and who continues to serve on the vessel 
until it returns to the United States may be considered as returning 
after the termination of an assignment of duty under permanent change of 
station orders.
    (3) The person is returning to the United States upon the 
termination of a tour of duty at any time after leaving the United 
States for duty of not less than 140 days outside the Customs territory 
of the United States.
    (4) The person, although not returning to the United States, is 
ordered by the Government agency involved from duty at a post or station 
outside the Customs territory of the United States to duty at another 
post or station outside the Customs territory of the United States 
necessitating the return to the United States of his personal and 
household effects.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 80-179, 45 FR 
45580, July 7, 1980; T.D. 89-1, 53 FR 51265, Dec. 21, 1988; T.D. 97-75, 
62 FR 46442, Sept. 3, 1997]



Sec. 148.75  Persons ineligible for exemption on termination of assignment.

    (a) Persons returning from temporary assignment. No person, or 
member of his family, shall be allowed free entry of personal and 
household effects under subheading 9805.00.50, Harmonized Tariff 
Schedule of the United States (HTSUS) (19 U.S.C. 1202), where the person 
returns to the United States pursuant to Government orders or 
instructions which authorized him initially to proceed to a foreign post 
or station and return to the United States upon termination of temporary 
duty, except as it may otherwise be deemed proper in accordance with the 
provisions of Sec. 148.74(d) or Sec. 148.76.
    (b) Persons returning on leave or before termination of extended 
duty assignment. A person returning on leave, other than on reemployment 
leave at the termination of assignment to extended duty as defined in 
Sec. 148.74(d), or otherwise returning before the termination of an 
assignment to extended duty outside the Customs territory of the United 
States, with or without orders covering the return, is not eligible for 
an exemption under subheading 9805.00.50, HTSUS (19 U.S.C. 1202).
    (c) Person returning on temporary duty assignment. A person 
returning to the United States under orders on temporary duty assignment 
at the termination of which he is returned to his duty station abroad to 
resume his regular duties is not regarded as returning to the United 
States at the termination of extended duty outside the Customs territory 
of the United States and is not eligible for an exemption under 
subheading 9805.00.50, HTSUS (19 U.S.C. 1202).

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51266, Dec. 21, 1988]



Sec. 148.76  Waiver of requirements or limitations.

    In any case in which the limitation on the quantity of alcoholic 
beverages and tobacco products which may be exempted from duty and tax 
under Sec. 148.74(c) or the failure of the person to meet the 
requirements that he be returning upon the termination of assignment to 
``extended duty,'' as explained in Sec. 148.74(d), will cause undue 
hardship to the person through no fault of his own, but rather because 
of the nature of his assignment or other hardship circumstances, the 
Commissioner of Customs, upon receipt of a request from the Government 
agency involved, may waive the limitation or the requirement, as the 
case may be, if he deems such waiver warranted by the facts.

[[Page 159]]



Sec. 148.77  Entry of effects on termination of assignment to extended duty, or on evacuation.

    (a) General procedure. All articles for which free entry is claimed 
under subheading 9805.00.50, Harmonized Tariff Schedule of the United 
States (19 U.S.C. 1202), shall be entered or withdrawn in accordance 
with the requirements prescribed by the Tariff Act of 1930, as amended. 
Port directors shall be satisfied in all cases that the articles for 
which free entry is claimed under subheading 9805.00.50, HTSUS, are 
personal and household effects of the importer entitled to the benefits 
of item 817.00, particularly in those cases where the quantity of 
effects imported may appear to be unreasonable for personal or household 
use. No invoice shall be required for articles accorded free entry under 
this provision.
    (b) Declaration and entry--(1) Person entitled to exemption. 
Declaration and entry for articles claimed to be exempt from duty and 
tax under subheading 9805.00.50, HTSUS (19 U.S.C. 1202), may be made on 
Customs Form 3299, or Department of Defense Form (DD) 1252 when entry is 
made in the name of the person who is entitled to the benefits of the 
exemption. The date of the person's last departure from the United 
States shall be indicated on the declaration and entry.
    (2) Designated official. Customs Form 3299 or Department of Defense 
Form 1252 executed on behalf of the owner of unaccompanied personal and 
household effects by either a United States Dispatch Agent or a 
designated responsible military official in his own name, may be 
accepted by the Customs officer as the declaration and entry if there is 
a valid reason evident from the owner's travel orders or information at 
hand why the United States Government agency concerned is unable to 
present Department of Defense Form (DD) 1252 or Customs Form 3299 
executed by the owner. The date of the owner's last departure from the 
United States need not be indicated on the form. The following statement 
shall be added across the face or to the back of Customs Form 3299 or 
Department of Defense Form 1252.

    This form is completed on behalf of (Name of Government employee) 
Travel orders and information on hand in this office show that the named 
person has met all requirements of section 148.74, Customs Regulations, 
and is entitled to the benefits of subheading 9805.00.50, Harmonized 
Tariff Schedule of the United States. The shipment imported consists of 
nothing but personal and household effects of the named person, which 
effects are not imported for sale or as an accommodation for others.

    (c) Verification of claim for exemption--(1) By travel orders. The 
declaration and entry shall be verified by the Customs officer by an 
inspection of the owner's travel orders. If the port director accepts an 
inspection of the owner's travel orders as evidence that the effects 
were brought into the United States within the requirements of 
subheading 9805.00.50, the owner's travel orders shall be identified on 
the entry, which shall be handled like a free baggage declaration.
    (2) By other evidence. The declaration and entry may be verified by 
other evidence which satisfies the port director that the effects were 
brought into the United States in connection with:
    (i) The person's return to the United States upon the termination of 
assignment to extended duty, as explained in Sec. 148.74(d);
    (ii) The return of members of his family who have resided with him 
at his post or station upon the termination of his assignment; or
    (iii) The evacuation of a person to the United States under 
Government orders or instructions.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 82-145, 47 FR 
35478, Aug. 16, 1982; T.D. 85-123, 50 FR 29955, July 23, 1985; T.D. 89-
1, 53 FR 51266, Dec. 21, 1988]



      Subpart I_Personnel of Foreign Governments and International 
      Organizations and Special Treatment for Returning Individuals



Sec. 148.81  General provisions.

    (a) Reciprocal privileges. The privileges provided for in Sec. Sec. 
148.81 through 148.86 and Sec. 148.90 of this chapter shall be accorded 
only if reciprocal privileges are granted by the foreign government 
involved to U.S. personnel of comparable status.

[[Page 160]]

    (b) Baggage and effects. The term ``baggage and effects,'' as used 
in this subpart includes all articles which were in the possession of a 
person abroad, and are being imported in connection with his arrival, 
and which are intended for his bona fide personal or household use. It 
does not include articles imported as an accommodation to others or for 
sale or other commercial use.
    (c) Aliens. The privileges provided in this subpart shall be 
accorded only to alien representatives, officers, employees, and members 
of the armed forces of foreign governments and designated public 
international organizations.
    (d) Internal revenue tax. Any article exempted from the payment of 
duty under this subpart shall be exempt also from the payment of any 
internal revenue tax imposed upon or by reason of importation.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 73-227, 38 FR 
22548, Aug. 22, 1973]



Sec. 148.82  Diplomatic, consular, and other privileged personnel.

    (a) Inviolability of the person of diplomatic personnel. The person 
of the representatives of foreign governments and members of their 
families set forth below shall be free from arrest, search, or 
detention:
    (1) Ambassadors, ministers, charg[eacute]s d'affaires, secretaries, 
counselors, attach[eacute]s of foreign embassies and legations, and 
other heads of diplomatic missions or members of the diplomatic staffs 
of such missions, accredited to the United States or en route between 
other countries to which accredited and their own countries.
    (2) Members of the families forming part of the households of the 
diplomatic personnel listed in the preceding subparagraph, who are 
accompanying them or traveling separately to join them incidental to 
their official travel, excluding those members of families who are U.S. 
nationals.
    (3) Members of the administrative and technical staffs of diplomatic 
missions accredited to the United States and members of their families 
forming part of their household, all of whom are not nationals or 
permanent residents of the United States who are accompanying them or 
traveling separately to join them incidental to their official travel.
    (4) Diplomatic and consular couriers.
    (b) Exemption for baggage and effects and admission without entry. 
The baggage and effects of the following representatives of foreign 
governments shall be admitted free of duty without the filing of an 
entry, upon the request of the Department of State and appropriate 
instructions from the United States Customs Service in each instance:
    (1) Ambassadors, ministers, charg[eacute]s d'affaires, secretaries, 
counselors, attach[eacute]s of embassies and legations, and other 
members of the diplomatic staffs of such missions accredited to the 
United States or en route to or from other countries to which assigned, 
as well as recognized consular officers, and the immediate families, 
suites, and servants of all the above under subheading 9806.00.05, 
Harmonized Tariff Schedule of the United States (HTSUS) (19 U.S.C. 
1202).
    (2) Members of the administrative and technical staffs of diplomatic 
missions and members of their families forming part of their households, 
all of whom are not nationals or permanent residents of the United 
States under subheading 9806.00.05, Harmonized Tariff Schedule of the 
United States (19 U.S.C. 1202). Unless more extensive privileges are 
provided in treaties or special agreements between the United States and 
the foreign country concerned, this privilege is limited to baggage and 
effects imported at the time of first installation.
    (3) Consular employees who are not nationals or permanent residents 
of the United States. Unless more extensive privileges are provided in 
treaties or special agreements between the United States and the foreign 
country concerned, this privilege is limited to articles imported at the 
time of first installation.
    (4) Other high officials of foreign governments and such 
distinguished foreign visitors as may be designated by the Department of 
State, and their immediate families under subheading 9806.00.25, HTSUS.
    (5) Foreign government personnel entitled to privileges under 
statutes or

[[Page 161]]

treaties under subheading 9806.00.30, HTSUS.
    (6) Diplomatic couriers, limited to accompanying baggage and 
effects.
    (c) Absence of special request. In the absence of special request 
from the Department of State prior to the arrival of representatives of 
foreign governments enumerated in paragraph (b)(1) of this section, 
their immediate families as well as accompanying suites and servants, 
and diplomatic couriers, their baggage and effects may be admitted free 
of duty without entry upon presentation of their credentials or other 
proof of their identity.
    (d) Delay in arrival of baggage or effects. If by accident or 
unavoidable delay in shipment the baggage or other effects of a person 
entitled to the privileges of this section shall arrive after him upon 
satisfactory proof of ownership, such baggage or effects may be passed 
free of duty without entry.
    (e) Inspection of baggage--(1) Exemption for representatives of 
foreign governments. The personal baggage of the following 
representatives of foreign governments and their families is ordinarily 
exempt from inspection:
    (i) Ambassadors, ministers, charg[eacute]s d'affaires, secretaries, 
counselors, attach[eacute]s of foreign embassies or legations, and other 
members of the diplomatic staffs of such missions, who are accredited to 
the United States or en route between other countries to which 
accredited and their own countries and members of their families forming 
part of their household who are not nationals of the United States.
    (ii) Consular officers recognized by the United States and members 
of their families forming part of their household who are not nationals 
or permanent residents of the United States, provided the baggage 
accompanies them.
    (iii) Diplomatic couriers, provided the baggage accompanies them.
    (2) Conditions permitting inspection. The personal baggage of 
representatives of foreign governments listed in paragraph (e)(1) of 
this section and members of their families may be inspected if there is 
serious reason to believe that it contains:
    (i) Articles other than those for the personal use of such persons 
or for the use of their establishments or for official mission use.
    (ii) In the case of consular officers and their families, articles 
intended for consumption in excess of the quantities necessary for 
direct use by the person concerned.
    (iii) Articles which are absolutely or conditionally prohibited 
importation or exportation under the laws or regulations of the United 
States, or which are subject to the quarantine laws or regulations of 
the United States.
    (3) Presence of foreign representative. When inspection of personal 
baggage is permitted under paragraph (e)(2) of this section, the 
inspection shall take place only in the presence of the affected 
representative of a foreign government, or his authorized agent.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51266, Dec. 21, 1988]



Sec. 148.83  Diplomatic and consular bags.

    (a) Diplomatic bags. The contents of diplomatic bags are restricted 
to diplomatic documents and articles intended exclusively for official 
use and packages constituting the diplomatic bag must bear visible marks 
of their character. Diplomatic bags shall not be opened or detained nor 
shall they be subject to duty or entry.
    (b) Consular bags. Consular bags must bear visible external marks of 
their character and their contents are restricted to official 
correspondence and documents or articles intended exclusively for 
official use. Consular bags shall not be subject to duty and ordinarily 
shall not be opened or detained. However, if Customs officers have 
serious reason to believe that a consular bag contains other than 
permissible materials, they may request that the bag be opened in their 
presence by an authorized representative of the foreign government 
concerned. If this request is refused, the consular bag shall be 
returned to its place of origin.



Sec. 148.84  Special treatment for returning individuals.

    (a) Except as otherwise provided by law, an individual returning to 
the United States from abroad:

[[Page 162]]

    (1) Shall not have his or her baggage and effects admitted free of 
duty without entry.
    (2) Shall not be entitled to expedited Customs examination and 
clearance of his or her baggage and effects unless the port director 
finds:
    (i) That the individual:
    (A) Is seriously ill or infirm;
    (B) Was summoned by news of affliction or disaster; or
    (C) Is accompanying the body of a deceased relative; or
    (ii) That a special circumstance exists which warrants expedited 
examination and clearance.
    (b) For purposes of this section, the term ``baggage and effects'' 
means any article which was in the possession of the individual while 
abroad, is being imported in connection with his or her arrival, and is 
intended for his or her bona fide personal or household use. This term 
does not include any article imported as an accommodation to others or 
for sale or other commercial use.

[T.D. 78-394, 43 FR 49789, Oct. 25, 1978]



Sec. 148.85  Subsequent importations for the personal or family use of diplomatic, consular and other privileged personnel.

    The privilege of importing free of duty and without the filing of 
any entry articles for personal or family use, but not as an 
accommodation for others or for sale or other commercial use, shall be 
granted upon the request of the Department of State and upon appropriate 
instructions from the United States Customs Service in each instance, to 
the following:
    (a) Ambassadors, ministers, charg[eacute]s d'affaires, secretaries, 
counselors and attach[eacute]s of foreign embassies and legations 
accredited to the United States under subheading 9806.00.40, Harmonized 
Tariff Schedule of the United States (HTSUS) (19 U.S.C. 1202);
    (b) Other representatives, officers and employees of foreign 
governments, under subheading 9806.00.50, HTSUS; and
    (c) Other persons designated pursuant to statute or pursuant to 
treaties between the United States and the countries which they 
represent, under subheading 9806.00.55, HTSUS.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51266, Dec. 21, 1988]



Sec. 148.86  Articles for official use of representatives of foreign governments and public international organizations.

    Office supplies and equipment and other articles for the official 
use of members and attaches of foreign embassies and legations, consular 
officers, and other representatives of foreign governments or of 
personnel of public international organizations, may be admitted free of 
duty under subheading 9809.00.20, Harmonized Tariff Schedule of the 
United States, without the filing of an entry, upon the request of the 
Department of State.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 82-145, 47 FR 
35478, Aug. 16, 1982; T.D. 89-1, 53 FR 51266, Dec. 21, 1988]



Sec. 148.87  Officers and employees of, and representatives to public international organizations.

    (a) Exemption for baggage and effects. The baggage and effects of 
the alien officers and employees of, or representatives of foreign 
governments, to the organizations designated by the President as public 
international organizations pursuant to section 1 of the International 
Organizations Immunities Act (22 U.S.C. 288), and the baggage and 
effects of their families, suites, and servants, shall be admitted free 
of duty and without entry under subheading 9806.00.15, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202), but only upon the 
receipt in each instance of instructions from the United States Customs 
Service issued at the request of the Department of State.
    (b) Designated public international organizations. The President, by 
virtue of the authority vested in him by section 1 of the International 
Organizations Immunities Act of December 29, 1945 (22 U.S.C. 288), has 
designated certain organizations as public international organizations 
entitled to the free entry privileges of that statute. The following is 
a list of the public international organizations currently entitled to 
such free entry privileges and

[[Page 163]]

the Executive orders by which they were designated:

------------------------------------------------------------------------
                                       Executive
             Organization                Order             Date
------------------------------------------------------------------------
African Development Bank.............      12403  Feb. 8, 1983.
African Development Fund.............      11977  Mar. 14, 1977.
Asian Development Bank...............      11334  Mar. 7, 1967.
Border Environment Cooperation             12904  Mar. 16, 1994.
 Commission.
Caribbean Organization...............      10983  Dec. 30, 1961.
Commission for Environmental               12904  Mar. 16, 1994.
 Cooperation.
Commission for Labor Cooperation.....      12904  Mar. 16, 1994.
Commission for the Study of                12567  Oct. 2, 1986.
 Alternatives to the Panama Canal.
Council of Europe in Respect of the        13240  Dec. 18, 2001.
 Group of States Against Corruption
 (GRECO).
Customs Cooperation Council..........      11596  June 5, 1971.
European Bank for Reconstruction and       12766  June 18, 1991.
 Development.
European Space Agency (formerly the        12766  June 18, 1991.
 European Space Research Organization
 (ESRO)).
Food and Agriculture Organization....       9698  Feb. 19, 1946.
Great Lakes Fishery Commission.......      11059  Oct. 23, 1962.
Hong Kong Economic and Trade Offices.      13052  June 30, 1997.
Inter-American Defense Board.........      10228  Mar. 26, 1951.
Inter-American Development Bank......      10873  Apr. 8, 1960.
Inter-American Institute of                 9751  July 11, 1946.
 Agricultural Sciences.
Inter-American Investment Corporation      12567  Oct. 2, 1986.
Inter-American Statistical Institute.       9751   Do.
Inter-American Tropical Tuna               11059  Oct. 23, 1962.
 Commission.
Intergovernmental Maritime                 10795  Dec. 13, 1958.
 Consultative Organization.
International Atomic Energy Agency...      10727  Aug. 31, 1957.
International Bank for Reconstruction       9751  July 11, 1946.
 and Development.
International Boundary and Water           12467  Mar. 2, 1984.
 Commission, United States & Mexico.
International Centre for Settlement        11966  Jan. 19, 1977.
 of Investment Disputes.
International Civil Aviation                9863  May 31, 1947.
 Organization.
International Coffee Organization....      11225  May 22, 1965.
International Committee of the Red         12643  June 23, 1988.
 Cross.
International Cotton Advisory               9911  Dec. 19, 1947.
 Committee.
International Cotton Institute.......      11283  May 27, 1966.
International Criminal Police              12425  June 16, 1983.
 Organization (INTERPOL)--Limited
 privileges..
                                           12971  Sep. 15, 1995.
International Development Association      11966  Jan. 19, 1977.
International Development Law              12842  Mar. 29, 1993.
 Institute.
International Fertilizer Development       11977  Mar. 14, 1977.
 Center.
International Finance Corporation....      10680  Oct. 2, 1956.
International Food Policy Research         12359  Apr. 22, 1982.
 Institute--Limited privileges only.
International Fund for Agricultural        12732  Oct. 31, 1990.
 Development.
International Hydrographic Bureau....      10769  May 29, 1958.
International Joint Commission--            9972  June 25, 1948.
 United States and Canada.
International Labor Organization.....       9698  Feb. 19, 1946.
International Maritime Satellite           12238  Sept. 12, 1980.
 Organization.
International Monetary Fund..........       9751  July 11, 1946.
International Pacific Halibut              11059  Oct. 23, 1962.
 Commission.
International Secretariat for              11363  July 20, 1967.
 Volunteer Service.
International Telecommunications           11966  Jan. 19, 1977.
 Satellite Organization (INTELSAT).
International Telecommunication Union       9863  May 31, 1947.
International Union for Conservation       12986  Jan. 18, 1996.
 of Nature and Natural Resources--
 Limited privileges.
International Wheat Advisory                9823  Jan. 24, 1947.
 Committee (International Wheat
 Council).
Interparliamentary Union.............      13097  Aug. 7, 1998.
Israel-United States Binational            12956  Mar. 13, 1995.
 Industrial Research and Development
 Foundation.
Korean Peninsula Energy Development        12997  Apr. 1, 1996.
 Organization.
Multilateral Investment Guarantee          12647  Aug. 2, 1988.
 Agency.
Multinational Force and Observers....      12359  Apr. 22, 1982.
North American Development Bank......      12904  Mar. 16, 1994.
North Pacific Anadromous Fish              12895  Jan. 26, 1994.
 Commission.
North Pacific Marine Science               12894  Jan. 26, 1994.
 Organization.
Organization for Economic Cooperation      10133  June 27, 1950.
 and Development [formerly
 Organization for European Economic
 Cooperation].
Organization for the Prohibition of        13049  June 11, 1997.
 Chemical Weapons..
Organization of African Unity (OAU)..      11767  Feb. 19, 1974.
Organization of American States......      10533  June 3, 1954.
Organization of Eastern Caribbean          12669  Feb. 20, 1989.
 States.
Pacific Salmon Commission............      12567  Oct. 2, 1986.
Pan American Health Organization           10864  Feb. 18, 1960.
 (includes the Pan American Sanitary
 Bureau).
Preparatory Commission of the              10727  Aug. 31, 1957.
 International Atomic Energy Agency.

[[Page 164]]

 
Provisional Intergovernmental              10335  Mar. 28, 1952.
 Committee for the Movement of
 Migrants from Europe (now known as
 the Intergovernmental Committee for
 European Migration).
South Pacific Commission.............      10086  Nov. 25, 1949.
United International Bureau for the        11484  Sept. 29, 1969.
 Protection of Intellectual Property.
United Nations.......................       9698  Feb. 19, 1946.
United Nations Educational,                 9863  May 31, 1947.
 Scientific, and Cultural
 Organization.
United Nations Industrial Development      12628  Mar. 8, 1988.
 Organization.
Universal Postal Union...............      10727  Aug. 31, 1957.
World Health Organization............      10025  Dec. 30, 1948.
World Intellectual Property                11866  June 18, 1975.
 Organization.
World Meteorological Organization....      10676  Sept. 1, 1956.
World Tourism Organization...........      12508  Mar. 22, 1985.
World Trade Organization.............      13042  Apr. 9, 1997.
------------------------------------------------------------------------


[T.D. 73-27, 38 FR 2449, Jan. 26, 1973]

    Editorial Note: For Federal Register citations affecting Sec. 
148.87, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



Sec. 148.88  Certain representatives to and officers of the United Nations and the Organization of American States.

    (a) Exemption for baggage and effects and admission without entry. 
At the request of the Department of State and upon appropriate 
instructions from the United States Customs Service in each instance, 
the privilege of admission free of duty without the filing of an entry 
may be extended to the baggage and effects of the following alien 
representatives, officers, and members of the staff of the United 
Nations and the Organization of American States, and their personal 
baggage is ordinarily exempt from inspection, subject to Sec. 
148.82(e)(2):
    (1) Every person designated by a United Nations member nation as the 
principal resident representative to the United Nations of such member 
or as a resident representative with the rank of ambassador or minister 
plenipotentiary and members of their families;
    (2) Such resident members of their staffs as may be agreed upon 
between the Secretary-General of the United Nations, the Government of 
the United States, and the Government of the United Nations member 
concerned and members of their families;
    (3) Every person designated by a United Nations member of a 
specialized United Nations agency as its principal resident 
representative, with the rank of ambassador or minister plenipotentiary 
at the headquarters of such agency in the United States and members of 
their families;
    (4) Such other principal resident representatives of United Nations 
members to a specialized United Nations agency and such resident members 
of the staffs of representatives to a specialized United Nations agency 
as may be agreed upon between the principal executive officer of the 
specialized agency, the Government of the United States, and the 
Government of the United Nations member concerned and members of their 
families;
    (5) The Secretary-General, Under Secretaries-General, and Assistant 
Secretaries-General to the United Nations and members of their families;
    (6) Representatives of members to the principal and subsidiary 
organs of the United Nations and to conferences convened by the United 
Nations, while exercising their functions and during their journey to 
and from the place of meeting, with regard to personal baggage only;
    (7) Experts performing missions for the United Nations, the same 
facilities for personal baggage as are accorded diplomatic envoys;
    (8) Any person designated by a member of the Organization of 
American States as its representative or interim representative on the 
council of the Organization of American States and members of their 
families; and
    (9) All other permanent members of the Delegation of a member of the 
Organization of American States and members of their families regarding 
whom there is agreement for that purpose between the government of the 
member state concerned, the Secretary-General of the Organization of 
American States, and the Government of the United States of America.
    (b) Absence of special request. In the absence of a special request 
from the

[[Page 165]]

Department of State prior to the arrival of persons of the classes 
enumerated in paragraph (a) of this section, the privilege of admission 
free of duty without entry may be extended to their baggage and effects 
upon presentation of their credentials or other proof of identity.
    (c) Importations for personal or family use. Upon the request of the 
Department of State and appropriate instructions from the United States 
Customs Service, the privilege of importing without entry and free of 
duty articles for their personal or family use but not as an 
accommodation for others or for sale or other commercial use may be 
granted to persons of the classes enumerated in paragraph (a) of this 
section except those in paragraph (a) (6) and (7) of this section, under 
subheading 9806.00.55, Harmonized Tariff Schedule of the United States 
(19 U.S.C. 1202).
    (d) Personal inviolability. The person of the representatives to and 
officers of the United Nations and the Organization of American States 
set forth in paragraph (a) of this section shall be free from arrest, 
search, and detention except that persons of the rank set forth in 
paragraph (a) (6) and (7) of this section shall be accorded this 
privilege only while exercising their function and traveling to and from 
the place of meeting.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 89-1, 53 FR 
51266, Dec. 21, 1988]



Sec. 148.89  Property of public international organizations and foreign governments.

    (a) Exemption from duty. Property of designated international 
organizations listed in paragraph (b) of Sec. 148.87 or of foreign 
governments shall be admitted free of duty and internal-revenue taxes 
imposed upon or by reason of importation under 22 U.S.C. 288a(d), but 
such exemption shall be granted only upon the receipt in each instance 
of instruction from the United States Customs Service issued at the 
request of the Department of State.
    (b) Bond. Any Customs bond which may be required from a designated 
international organization (see paragraph (b) of Sec. 148.87) in 
connection with the importation or entry of merchandise into, or the 
exportation of merchandise from, the United States may be accepted 
without surety.

[T.D. 73-27, 38 FR 2449, Jan. 26, 1973, as amended by T.D. 82-145, 47 FR 
35479, Aug. 16, 1982]



Sec. 148.90  Foreign military personnel.

    (a) Exemptions allowed. Port directors shall in accordance with the 
provisions of this section admit the following free of duty and internal 
revenue tax imposed upon or by reason of importation:
    (1) The baggage and effects of persons on duty in the United States 
as members of the armed forces of any foreign country, and of their 
immediate families under subheading 9806.00.20, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202);
    (2) Articles entered or withdrawn from warehouse for consumption by 
a member of the armed forces of any foreign country on duty in the 
United States, for his personal use or that of any member of his 
immediate family but not as an accommodation to others or for sale or 
other commercial use, under subheading 9806.00.45, HTSUS; and
    (3) Articles entered or withdrawn from warehouse for consumption for 
the official use of members of the armed forces of any foreign country 
on duty in the United States, under subheading 9809.00.30, HTSUS.
    (b) Reciprocity limitation. When port directors have been advised 
officially of a finding by the Secretary of the Treasury that a foreign 
country does not reciprocate to members of the armed forces of the 
United States on duty in its country and members of their immediate 
families the privileges accorded its members and their families in the 
United States, the port directors shall accord to the personnel of such 
foreign government privileges under the law only to the extent to which 
the foreign government accords similar treatment to members of the armed 
forces of the United States and members of their immediate families.
    (c) Status of importer questioned. If any question arises as to the 
status of the importer under subheadings 9806.00.20, 9806.00.45 and 
9809.00.30, HTSUS, or

[[Page 166]]

whether articles entered thereunder are for official use or for personal 
or family use, but not as an accommodation to others or for sale or 
other commercial use, the port director shall report the available facts 
to the Commissioner of Customs for instructions.
    (d) Alcoholic beverages for personal or family use--(1) General 
rule--(i) Limitation stated. Except in the case of exceptional 
circumstances set forth in paragraph (d)(2) of this section, entry of 
alcoholic beverages (other than malt beverages) for personal or family 
use but not as an accommodation to others or for sale or other 
commercial use under subheading 9806.00.45, HTSUS, is limited to one 
case each month.
    (ii) Advance entry or withdrawal. A maximum of three cases (the 
initial one plus two cases in advance) may be entered or withdrawn at 
any one time in a given 3-month period if the port director is satisfied 
they are for personal or family use but not as an accommodation to 
others or for sale or other commercial use. Such advance entry or 
withdrawal shall not be deemed to broaden the one case per month 
limitation.
    (iii) Certification. At the time of each entry or withdrawal, the 
member of the Armed Forces must certify that since his last entry or 
withdrawal there have expired a number of months equal to the numbers of 
cases last entered or withdrawn.
    (2) Exceptional circumstances. In exceptional circumstances an 
additional quantity of alcoholic beverages for personal or family use 
but not as an accommodation to others or for sale or other commercial 
use, in excess of the one case per month limitation may be allowed under 
the following procedure:
    (i) A statement signed by the member of the Armed Forces and 
attached to his declaration for free entry will be submitted to the port 
director, setting forth the reason for requesting the additional 
quantity;
    (ii) The statement of request must be approved by the officer or 
person in charge of the Armed Forces involved, or a person specifically 
authorized by such officer or person to approve such requests; and
    (iii) The port director must be satisfied that the need for the 
additional quantity is justified. Questionable cases shall be referred 
to the Commissioner of Customs for instructions.
    (3) Retention and verification of the warehouse proprietors' 
records. The warehouse proprietor shall retain all records relating to 
the entry and withdrawal of alcoholic beverages under subheading 
9806.00.45, HTSUS, for 3 years from the date of the entry against which 
the withdrawal of the alcoholic beverages is charged.
    (e) Entry requirements. The entry requirements prescribed in the 
Tariff Act of 1930, as amended (Title 19, United States Code), and the 
regulations thereunder are applicable to articles for which free entry 
is claimed under subheadings 9806.00.20, 9806.00.45, 9809.00.30, HTSUS. 
No invoices shall be required.

[T.D. 73-227, 38 FR 22548, Aug. 22, 1973, as amended by T.D. 79-159, 44 
FR 31969, June 4, 1979; T.D. 89-1, 53 FR 51266, Dec. 21, 1988]



          Subpart J_Noncommercial Importations of Limited Value



Sec. 148.101  Applicability.

    Each person, including a crewmember, arriving in the United States 
who enters articles for his personal or household use, or as bona fide 
gifts not imported for sale nor for the account of another person, 
valued in the aggregate at not over $1,000 fair retail value in the 
country of acquisition, shall be assessed a flat rate of duty on the 
articles, as provided in Sec. 148.102. The entry shall be made under 
subheading 9816.00.20 or 9816.00.40, Harmonized Tariff Schedule of the 
United States (19 U.S.C. 1202), and is subject to the limitations and 
conditions in this subpart. Except as provided in Sec. 148.105, the 
flat rate of duty shall be assessed in place of any rates of duty other 
than free rates of duty. If the dutiable amount of the article(s) is 
over $1,000 fair retail value, the flat rate of duty provisions shall 
apply to the amount not over $1,000 fair retail value, and the excess 
amount shall be valued under section 402, Tariff Act of 1930, as amended 
(19 U.S.C. 1401a). The article(s) shall be classified under the 
appropriate subheading number of the tariff schedule.

[[Page 167]]

For purposes of this subpart, ``fair retail value'' in the country of 
acquisition means the price at which the merchandise is freely offered 
there for sale at retail and ``country of acquisition'' includes America 
Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the 
Virgin Islands of the United States.
    Two examples of the application of this subpart are set forth below:

    Example 1: B returned from Europe where he acquired merchandise 
having a fair retail value of $1,950. Assume for purposes of this 
example that (1) in addition to the personal exemption of $400, $100 of 
the merchandise carries a free rate of duty, (2) allowances and 
exemptions have not been used within the past 30 days, and (3) all 
articles in excess of allowances and exemptions and duty-free articles 
are dutiable at rates other than the flat rate.
    B presents his baggage to the Customs officer for examination and 
his declaration for verification. Duty is figured as follows:

------------------------------------------------------------------------
                                                        Fair
                                                       retail     Duty
                                                        value
------------------------------------------------------------------------
(a) The $400 personal exemption.....................      $400  ........
(b) Articles which carry a free rate of duty........       100  ........
(c) The $1,000 flat rate of duty allowance               1,000  ........
 calculated at:.....................................
    4 percent (effective 01/01/01 through 12/31/01).  ........       $40
    3 percent (effective from 01/01/02).............  ........        30
(d) Balance of articles subject to duty at rates       \1\ 450     (\1\)
 other than flat rate...............................
                                                     -------------------
        Total.......................................       \1\    (\1\)
                                                         1,950
------------------------------------------------------------------------
\1\ The articles not covered by exemptions, allowances, and duty-free
  rates will be valued under section 402, Tariff Act of 1930, as
  amended, and duty calculated at rates other than the flat rate.

    Example 2: Mr. and Mrs. B return from the U.S. Virgin Islands. 
During the trip, they acquired merchandise having a fair retail value of 
$4,900. Assume for purposes of this example that (1) in addition to the 
personal exemption of $1,200 for each returning resident, $100 of the 
merchandise carries a free rate of duty, (2) allowances and exemptions 
have not been used within the past 30 days, (3) all articles in excess 
of allowances and exemptions and duty-free articles are dutiable at 
rates other than the flat rate, and (4) Mrs. B made $400 in purchases on 
the trip, none of which carries a free rate of duty.
    Mr. and Mrs. B present their baggage to the Customs officer for 
examination and their declaration for verification. Duty is figured as 
follows:

------------------------------------------------------------------------
                                                        Fair
                                                       retail     Duty
                                                        value
------------------------------------------------------------------------
(a) The $1,200 personal exemptions for residents        $2,400  ........
 returning from the U.S. Virgin Islands are grouped
 for a total of.....................................
(b) Articles which carry a free rate of duty........       100  ........
(c) The $1,000 flat rate of duty allowance               2,000  ........
 calculated at:.....................................
    2 percent (effective 01/01/01 through 12/31/01).  ........       $40
    1.5 percent (effective from 01/01/02)...........  ........        30
(d) Balance of articles subject to duty at rates       \1\ 400     (\1\)
 other than flat rate...............................
                                                     -------------------
        Total.......................................       \1\    (\1\)
                                                         4,900
------------------------------------------------------------------------
\1\ The articles not covered by exemptions, allowances, and duty-free
  rates will be valued under section 402, Tariff Act of 1930, as
  amended, and duty calculated at rates other than the flat rate.


[T.D. 78-394, 43 FR 49789, Oct. 25, 1978, as amended by T.D. 86-118, 51 
FR 22516, June 20, 1986; 52 FR 12149, Apr. 15, 1987; T.D. 87-89, 52 FR 
24446, July 1, 1987; T.D. 89-1, 53 FR 51266, Dec. 21, 1988; T.D. 97-75, 
62 FR 46442, Sept. 3, 1997; T.D. 01-61, 66 FR 46218, Sept. 4, 2001]



Sec. 148.102  Flat rate of duty.

    (a) Generally. The rate of duty on articles accompanying any person, 
including a crewmember, arriving in the United States (exclusive of 
duty-free articles and articles acquired in American Samoa, Guam, the 
Commonwealth of the Northern Mariana Islands, or the Virgin Islands of 
the United States) shall be 4 percent, effective January 1, 2001, and 3 
percent, effective January 1, 2002, of the fair retail value in the 
country of acquisition.
    (b) American Samoa, Guam, the Northern Mariana Islands, and the 
Virgin Islands. The rate of duty on articles accompanying any person, 
including a crewmember, arriving in the United States directly or 
indirectly from American Samoa, Guam, the Commonwealth of the Northern 
Mariana Islands, or the Virgin Islands of the United States (exclusive 
of duty-free articles), acquired in these locations as an incident of 
the person's physical presence there, shall be 2 percent, effective 
January 1, 2001, and 1.5 percent, effective January 1, 2002, of the fair 
retail value in the location in which acquired.

[T.D. 01-61, 66 FR 46218, Sept. 4, 2001]

[[Page 168]]



Sec. 148.103  Family grouping of allowances.

    (a) Generally. When members of a family residing in one household 
travel together on their return to the United States, the flat rate of 
duty allowance will be grouped and allowed without regard to which 
member of the family is the owner of the articles. A group allowance 
shall not include an allowance for a family member not entitled to it in 
his own right, nor shall a group allowance be applied to any property of 
that member.
    (b) Members of a family residing in one household. ``Members of a 
family residing in one household'' shall include all persons, regardless 
of age, who:
    (1) Are related by blood, marriage, or adoption;
    (2) Lived together in one household at their last permanent 
residence; and
    (3) Intend to live in one household after their arrival in the 
United States.

[T.D. 78-394, 43 FR 49789, Oct. 25, 1978]



Sec. 148.104  Frequency of use.

    (a) 30-day period. The flat rate of duty shall not apply to a person 
who has used the provision within the 30-day period immediately prior to 
his arrival in the United States. The date of the person's last arrival 
on which he declared articles for which the flat rate of duty was 
applicable shall be considered the date that rate was last used.
    (b) Computation of time. The 30-day period immediately prior to the 
person's arrival in the United States shall be computed by excluding the 
day of arrival and counting backward 30 days.
    (c) Remainder not applicable to subsequent journey. A person who has 
received a flat rate of duty allowance of less than $1,000 in connection 
with his return from one journey is not entitled to apply the remainder 
to articles acquired abroad on a subsequent journey.

[T.D. 78-394, 43 FR 49789, Oct. 25, 1978, as amended by T.D. 86-118, 51 
FR 22516, June 20, 1986; T.D. 97-75, 62 FR 46443, Sept. 3, 1997]



Sec. 148.105  Procedure for excluding articles from flat rate of duty.

    (a) Generally. Any person who has information that merchandise is 
being imported into the United States under the provisions of subheading 
9816.00.20 or 9816.00.40, Harmonized Tariff Schedule of the United 
States (19 U.S.C. 1202), and this subpart which adversely affects the 
economic interest of the United States may communicate the information 
in writing to the Commissioner of Customs, Attention: Office of Field 
Operations, Washington, DC 20229.
    (b) Content of communication. The communication to the Commissioner 
need not be in any particular form but shall contain the following:
    (1) The name of the individual and the person, firm, or association 
the individual represents, if any;
    (2) The nature of the individual's interest in the matter, if any;
    (3) A description of the merchandise, which it is alleged affects 
the economic interest of the United States adversely, including 
subheadings of the HTSUS, if known;
    (4) The country of acquisition and the ports and dates of entry of 
the merchandise, if known; and
    (5) A statement and supporting evidence as to the manner in which 
the individual believes the economic interest of the United States is 
being adversely affected.
    (c) Inquiry to be conducted. Upon receipt of a communication 
containing the information required by paragraph (b) of this section, an 
inquiry will be conducted.
    (d) Negative determination. If the inquiry results in a finding that 
no reasonable cause exists to believe that the application of the flat 
rate of duty provisions to a particular article of merchandise is 
adversely affecting the economic interest of the United States, the 
inquirer shall be advised in writing of the finding and the matter shall 
be closed.
    (e) Publication of tentative finding. If the inquiry results in a 
finding by the Secretary of the Treasury that reasonable cause exists to 
believe that the application of the flat rate of duty provisions to a 
particular article of merchandise is affecting the economic interest of 
the United States adversely, a notice of the finding will be published 
in the Federal Register and Customs

[[Page 169]]

Bulletin, along with a statement of intent to exclude the articles from 
application of the flat rate of duty provisions. Interested persons will 
be given an opportunity to submit written comments on the notice.
    (f) Final determination. Based upon the comments received and the 
results of any additional inquiry as may be necessary, if it is 
determined by the Secretary of the Treasury that application of the flat 
rate of duty provisions adversely affects the economic interest of the 
United States, a Treasury Decision will be published in the Federal 
Register and Customs Bulletin announcing that the merchandise will be 
excluded from application of the flat rate of duty provisions. Excluded 
articles of merchandise shall be listed in Sec. 148.106. If it is 
determined by the Secretary of the Treasury that a valid basis for 
excluding the merchandise from the flat rate of duty provisions does not 
exist, the notice proposing to exclude the article will be withdrawn by 
publishing a notice in the Federal Register and the Customs Bulletin.

[T.D. 78-394, 43 FR 49789, Oct. 25, 1978, as amended by T.D. 89-1, 53 FR 
51267, Dec. 21, 1988; T.D. 91-77, 56 FR 46115, Sept. 10, 1991; T.D. 93-
66, 58 FR 44130, Aug. 19, 1993]



Sec. 148.106  Excluded articles of merchandise.

    The following articles of merchandise have been found to affect the 
economic interest of the United States adversely, and they are excluded 
from the application of the flat rate of duty provisions.
    [Reserved for listing.]

[T.D. 78-394, 43 FR 49789, Oct. 25, 1978]



    Subpart K_Unaccompanied Shipments From American Samoa, Guam, the 
 Commonwealth of the Northern Mariana Islands, or the Virgin Islands of 
                            the United States



Sec. 148.110  Applicability.

    The provisions of this subpart are applicable to articles not 
accompanying a person, including a crewmember, which are purchased in 
and shipped from American Samoa, Guam, the Commonwealth of the Northern 
Mariana Islands, or the Virgin Islands of the United States. However, 
this subpart is not applicable to the importation of unaccompanied 
articles in a manner prohibited by law or regulation (e.g., mail 
shipments of alcoholic beverages or alcoholic beverages shipped other 
than by mail in excess of quantities authorized by State laws or 
regulations).
    The following is a summary of the procedure to be followed to obtain 
the benefits of this subpart: A person purchasing articles in American 
Samoa, Guam, the Commonwealth of the Northern Mariana Islands, or the 
Virgin Islands of the United States would receive a sales slip, invoice, 
or other evidence of purchase which he would present to the Customs 
officer along with his baggage declaration, Customs Form 6059-B, and a 
Declaration of Unaccompanied Articles, Customs Form 255. The latter form 
is prepared in triplicate for each shipment to follow. The Customs 
officer would verify the information, indicate on the form whether the 
article or articles were free of duty, dutiable at the flat rate, or a 
combination of the foregoing, and validate the form. Two copies would be 
returned to the traveler, who would send one form to the vendor. Upon 
receipt of the form the vendor would place it in an envelope, affix it 
to the outside of the package, clearly mark the package ``Unaccompanied 
Tourist Shipment,'' and send the package to the traveler, generally via 
mail, although it could be sent by other means. If sent through the 
mail, the package would be examined by Customs and forwarded to the 
Postal Service for delivery. Any duties due would be collected by the 
mailman. If the shipment arrives other than through the mail, the 
traveler would be notified by the carrier when the article arrives. 
Entry would be made by the carrier or the traveler at the customhouse. 
Any duties due would be collected at that time.

[T.D. 78-394, 43 FR 49790, Oct. 25, 1978; 43 FR 55758, Nov. 29, 1978; 
T.D. 97-75, 62 FR 46443, Sept. 3, 1997]



Sec. 148.111  Written declaration for unaccompanied articles.

    The baggage declaration, Customs Form 6059-B, of a person (the 
crewmembers declaration, Customs Form

[[Page 170]]

5129, in the case of a returning crewmember) arriving directly or 
indirectly from American Samoa, Guam, the Commonwealth of the Northern 
Mariana Islands, or the Virgin Islands of the United States shall be in 
writing if it covers articles which do not accompany him and:
    (a) The articles are entitled to free entry under the $1,200 
exemption provided by subheading 9804.00.70, Harmonized Tariff Schedule 
of the United States (HTSUS) (19 U.S.C. 1202), or
    (b) The articles are noncommerical importations of limited value 
subject to a flat rate of duty under subheading 9816.00.40, HTSUS.

[T.D. 78-394, 43 FR 49790, Oct. 25, 1978, as amended by T.D. 86-118, 51 
FR 22516, June 20, 1986; T.D. 89-1, 53 FR 51267, Dec. 21, 1988; T.D. 97-
75, 62 FR 46443, Sept. 3, 1997]



Sec. 148.112  Evidence of purchase.

    A sales slip, invoice, or other evidence of purchase, shall be 
presented with the declaration for all unaccompanied articles.

[T.D. 78-394, 43 FR 49790, Oct. 25, 1978]



Sec. 148.113  Declaration, entry, and collection of duty.

    (a) Declaration and entry for unaccompanied articles--(1) 
Declaration. A baggage declaration covering articles for which a claim 
of free entry, in whole or in part, is made under the $1,200 exemption 
provided by subheading 9804.00.70, Harmonized Tariff Schedule of the 
United States (HTSUS) (19 U.S.C. 1202), or a baggage or crewmembers 
declaration covering articles for which the flat rate of duty provision 
of subheading 9816.00.40, HTSUS appears to be applicable, shall be 
accompanied by a Declaration of Unaccompanied Articles, Customs Form 
255. Customs Form 255 shall be prepared in triplicate by the vendor or 
declarant for each shipment of declared articles not accompanying the 
person. A shipment consists of one or more packages or containers sent 
as a unit.
    (2) Verification. The Customs officer shall verify the information 
from the declaration, sales slip, invoice, or other evidence of purchase 
furnished by the person. The completed Customs Form 255 shall be 
validated by the Customs officer and two copies given to the person.
    (b) Collection of duty. Duties shall be collected before release of 
the articles, after their arrival in the United States, as provided in 
Sec. 145.12 or Sec. 148.115.

[T.D. 78-394, 43 FR 49790, Oct. 25, 1978, as amended by T.D. 86-118, 51 
FR 22516, June 20, 1986; T.D. 89-1, 53 FR 51267, Dec. 21, 1988; T.D. 93-
66, 58 FR 44131, Aug. 19, 1993; T.D. 97-75, 62 FR 46443, Sept. 3, 1997]



Sec. 148.114  Shipment of unaccompanied articles.

    One copy of the validated Customs Form 255 shall be returned to the 
vendor. The vendor shall place the form in an envelope, affix it to the 
outside of the shipment, and clearly mark the outside of the shipment 
``Unaccompanied Tourist Shipment.''

[T.D. 78-394, 43 FR 49790, Oct. 25, 1978]



Sec. 148.115  Release of shipment.

    (a) Release after examination. Unaccompanied tourist shipments:
    (1) To which the personal exemption provided in subheading 
9804.00.70, Harmonized Tariff Schedule of the United States (HTSUS) (19 
U.S.C. 1202), is applicable, or
    (2) For which entry is made under the flat rate of duty provisions 
of subheading 9816.00.40, HTSUS, or under those provisions in 
conjunction with the regular rate of duty provision of another 
subheading of the tariff schedule, shall be released if:
    (i) The shipment is properly marked and accompanied by a validated 
copy of Customs Form 255,
    (ii) The examining Customs officer is satisfied that the contents of 
the shipment are as stated on the Customs Form 255 and, if applicable, 
that they are properly classified,
    (iii) The declared value conforms to the fair retail value in the 
country of acquisition, and
    (iv) In respect to shipments for which entry is made under 
subheading 9816.00.40, HTSUS, any duties found to be due are paid.
    (b) Removal of Customs Form 255. The copy of Customs Form 255 
attached to the shipment shall be removed by the Customs officer and 
retained for Customs purposes.

[[Page 171]]

    (c) Missing Customs Form 255. If a validated copy of Customs Form 
255 does not accompany the shipment, entry shall be made under the 
provisions of part 141 or 145 of this chapter.
    (d) Restricted or prohibited shipments. No shipment containing 
prohibited or restricted merchandise for which exemption is claimed 
under subheading 9804.00.70, HTSUS, or for which entry is claimed under 
subheading 9816.00.40, HTSUS, shall be released except upon compliance 
with the provisions of part 12 and Sec. Sec. 145.51 through 145.59 of 
this chapter, and other applicable laws and regulations.
    (e) Verification of claim. The port director may withhold release of 
any shipment for which exemption is claimed under subheading 9804.00.70, 
HTSUS, or for which entry is claimed under subheading 9816.00.40, HTSUS, 
to verify the validity of the claim. If he is unable to verify the 
claim, the merchandise shall be released under the provisions of part 
141 or 145 of this chapter.

[T.D. 78-394, 43 FR 49790, Oct. 25, 1978; 43 FR 55758, Nov. 29, 1978, as 
amended by T.D. 89-1, 53 FR 51267, Dec. 21, 1988; T.D. 93-66, 58 FR 
44131, Aug. 19, 1993]



Sec. 148.116  Claim for refund.

    Any person who has filed a declaration of unaccompanied articles 
under Sec. Sec. 148.112 and 148.113 and who is dissatisfied with the 
amount of duty assessed on the articles upon their arrival in the United 
States may file a claim for administrative review under subpart C, part 
145, of this chapter if the articles arrived by mail, or under parts 173 
and 174 if the articles arrived other than by mail. Any supporting 
documents, including a copy of Customs Form 255, should be submitted 
with the claim.

[T.D. 78-394, 43 FR 49790, Oct. 25, 1978; 43 FR 55758, Nov. 29, 1978]



PART 151_EXAMINATION, SAMPLING, AND TESTING OF MERCHANDISE--Table of Contents




Sec.
151.0 Scope.

                            Subpart A_General

151.1 Merchandise to be examined.
151.2 Quantities to be examined.
151.3 Disclosure of examination packages.
151.4 Time of examination.
151.5 Conditions for examination prior to entry.
151.6 Place of examination.
151.7 Examination elsewhere than at place of arrival or public stores.
151.8 Examination after assembly.
151.9 Immediate transportation entry delivered outside port limits.
151.10 Sampling.
151.11 Request for samples or additional examination packages after 
          release of merchandise.
151.12 Accreditation of commercial laboratories.
151.13 Approval of commercial gaugers.
151.14 Use of commercial laboratory tests in liquidation.
151.15 Movement of merchandise to a centralized examination station.
151.16 Detention of merchandise.

                 Subpart B_Sugars, Sirups, and Molasses

151.21 Definitions.
151.22 Estimated duties on raw sugar.
151.23 Allowance for moisture in raw sugar.
151.24 Unlading facilities for bulk sugar.
151.25 Mixing classes of sugar.
151.26 Molasses in tank cars.
151.27 Weighing and sampling done at time of unlading.
151.28 Gauging of sirup or molasses discharged into storage tanks.
151.29 Expense of unlading and handling.
151.30 Sugar closets.
151.31 [Reserved]

               Subpart C_Petroleum and Petroleum Products

151.41 Information on entry summary.
151.42 Controls on unlading and gauging.
151.43 [Reserved]
151.44 Storage tanks.
151.45 Storage tanks bonded as warehouses.
151.46 Allowance for detectable moisture and impurities.
151.47 Optional entry of net quantity of petroleum or petroleum 
          products.

     Subpart D_Metal-Bearing Ores and Other Metal-Bearing Materials

151.51 Sampling requirements.
151.52 Sampling procedures.
151.53 Sample lockers.
151.54 Testing by Customs laboratory.
151.55 Deductions for loss during processing.

                         Subpart E_Wool and Hair

151.61 Definitions.
151.62 Information on invoices.
151.63 Information on entry summary.
151.64 Extra copy of entry summary.

[[Page 172]]

151.65 Duties.
151.66 Duty on samples.
151.67 Sampling by importer.
151.68 Merchandise to be sampled and tested by Customs.
151.69 Transfer or exportation of part of sampling unit.
151.70 Method of sampling by Customs.
151.71 Laboratory testing for clean yield.
151.73 Importer's request for commercial laboratory test.
151.74 Retest at port director's request.
151.75 Final determination of clean yield.
151.76 Grading of wool.

                            Subpart F_Cotton

151.81 Definition of staple length.
151.82 Information on invoices.
151.83 Method of sampling.
151.84 Determination of staple length.
151.85 Importer's request for redetermination.

                         Subpart G_Fruit Juices

151.91 Brix values of unconcentrated natural fruit juices.

Subpart H [Reserved]

                Subpart I_Cigars, Cigarillos, and Tobacco

151.111 Cigars, cigarillos, and tobacco of Cuban origin.

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i) and (j), Harmonized 
Tariff Schedule of the United States (HTSUS)), 1624;
    Section 151.11 also issued under 21 U.S.C. 381;
    Section 151.21 also issued under the provisions of Chapters 17 and 
18, HTSUS;
    Section 151.42 also issued under 19 U.S.C. 1460, 1584, 1592;
    Section 151.43 also issued under 19 U.S.C. 1592;
    Section 151.46 also issued under 19 U.S.C. 1507;
    Section 151.62 also issued under 19 U.S.C. 1481;
    Section 151.63 also issued under 19 U.S.C. 1484;
    Section 151.66 also issued under 19 U.S.C. 1562;
    Section 151.68 also issued under 19 U.S.C. 1311, 1562;
    Section 151.69 also issued under 19 U.S.C. 1557, 1562;
    Section 151.82 also issued under 19 U.S.C. 1481;
    Section 151.91 also issued under the Additional U.S. Notes to 
Chapter 20, HTSUS.

    Source: T.D. 73-175, 38 FR 17470, July 2, 1973, unless otherwise 
noted.



Sec. 151.0  Scope.

    This part sets forth general provisions governing the examination 
and sampling of imported merchandise, as well as specific provisions 
governing the examination, sampling, and testing of certain particular 
types of merchandise.



                            Subpart A_General



Sec. 151.1  Merchandise to be examined.

    The port director shall examine such packages or quantities of 
merchandise as he deems necessary for the determination of duties and 
for compliance with the Customs laws and any other laws enforced by the 
Customs Service.

[T.D. 81-240, 46 FR 45130, Sept. 10, 1981]



Sec. 151.2  Quantities to be examined.

    (a)(1) Minimum quantities. Not less than one package of every 10 
packages of merchandise shall be examined, unless a special regulation 
permits a lesser number of packages to be examined. Port directors are 
specially authorized to examine less than one package of every 10 
packages, but not less than one package of every invoice, in the case of 
any merchandise which is:
    (i) Imported in packages the contents and values of which are 
uniform, or
    (ii) Imported in packages the contents of which are identical as to 
character although differing as to quantity and value per package.
    (2) Exceptions to minimum quantities. At ports of entry specifically 
designated by the Commissioner of Customs, the port director is 
authorized to release, without examination, merchandise of a character 
which the port director has determined need not be examined in every 
instance to ensure the protection of the revenue and compliance with the 
Customs laws and any other laws enforced by the Customs Service.

[T.D. 81-240, 46 FR 45130, Sept. 10, 1981]



Sec. 151.3  Disclosure of examination packages.

    Information as to the particular packages which will be examined 
shall not be made available to the importer, his agent, or any person 
other than

[[Page 173]]

Customs officers necessarily concerned, until the merchandise has 
arrived within the limits of the port of entry.



Sec. 151.4  Time of examination.

    Imported merchandise shall not be opened, examined, or inspected 
until it has been entered under some form of entry for consumption or 
warehouse, except in the following cases:
    (a) Official Government examination and sampling. Authorized 
employees of the Customs Service, Food and Drug Administration, Animal 
and Plant Health Inspection Service, Public Health Service, or other 
Government agency may for official purposes examine or take samples of 
merchandise for which entry has not been filed, including merchandise 
being released under a special permit for immediate delivery.
    (b) Perishable merchandise, benzenoid chemicals, and merchandise 
received without an invoice. An application by the importer to examine 
merchandise, whether or not covered by an entry for transportation in 
bond or for exportation, may be granted by the port director, under the 
conditions listed in Sec. 151.5, in the following cases:
    (1) Examination of perishable merchandise is desired solely to 
determine its condition. This is not limited to a single examination, 
and there is no objection to incidental display to prospective buyers 
during the examination.
    (2) [Reserved]
    (3) The importer has been unable to obtain the required documents or 
information to make the necessary entry, and examination of the 
merchandise is required to obtain information for the preparation of a 
pro forma invoice to be used in making entry.
    (c) Examination of merchandise entered for transportation under bond 
or for exportation--(1) Examination, sampling, weighing or emergency 
operation. As a bona fide incident to exportation or further 
transportation, the importer of merchandise entered or withdrawn for 
transportation under bond or for exportation may, upon written 
application to the port director supported by a valid business reason 
for the request, be permitted to examine, sample, weigh, or subject his 
merchandise to an operation required by reason of an emergency, provided 
that any operation performed on the merchandise does not constitute a 
manufacture, and that Sec. 151.5 is complied with. For conditions 
governing transshipment and emergency access to the shipment by the 
carrier, see Sec. 18.3 of this chapter.
    (2) Nonemergency operation. In cases not involving an emergency, an 
operation not constituting a manufacture may be permitted under the 
conditions listed in paragraph (c)(1) of this section if neither the 
protection of the revenue nor the proper conduct of Customs business 
requires that the operation be done in a Customs bonded warehouse, 
provided that the importer's written application for such operation is 
approved by the port director.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 95-99, 60 FR 
62733, Dec. 7, 1995; T.D. 97-82, 62 FR 51771, Oct. 3, 1997]



Sec. 151.5  Conditions for examination prior to entry.

    Examination, sampling, weighing, or operation upon merchandise at 
the importer's request prior to entry for consumption or warehouse, as 
provided for in Sec. 151.4 (b) and (c), shall be subject to the 
following conditions:
    (a) The operation permitted shall be executed under Customs 
supervision;
    (b) If the merchandise is in possession or joint possession of a 
carrier or container station operator, the concurrence of such carrier 
or operator shall be obtained; and
    (c) The Government shall be reimbursed for the compensation, 
computed in accordance with Sec. 24.17(d) of this chapter, and other 
expenses of the Customs officer or employee supervising the action 
permitted.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 95-99, 60 FR 
62733, Dec. 7, 1995]



Sec. 151.6  Place of examination.

    All merchandise will be examined at the place of arrival, unless 
examination at another place is required or authorized by the port 
director in accordance with Sec. 151.7 or Sec. 151.15 of this part. 
Except where the merchandise is required by the port director to be 
examined at the public stores, the importer

[[Page 174]]

shall bear any expense involved in preparing the merchandise for Customs 
examination and in the closing of packages.

[T.D. 84-152, 49 FR 29374, July 20, 1984, as amended by T.D. 93-6, 58 FR 
5606, Jan. 22, 1993]



Sec. 151.7  Examination elsewhere than at place of arrival or public stores.

    The port director may require or authorize examination at a place 
other than the place of arrival or the public stores, such as at the 
importer's premises or at a centralized examination station under Sec. 
151.15 of this part. If examination at a place other than at the place 
of arrival or the public stores is authorized it will be subject to the 
following conditions:
    (a) Sealing of packages. If examination is to be made at the 
importer's premises or other place not under the control of Customs, the 
port director may require the packages to be corded and sealed by a 
Customs officer before the packages are removed from the place of 
arrival. The packages shall be opened only in the presence of the 
Customs officer authorized to examine their contents.
    (b) Preparation for Customs examination and closing of packages. 
Except when merchandise is required by the port director to be examined 
at the public stores, the importer shall arrange and bear any expense 
for preparation of the merchandise for Customs examination and closing 
of packages.
    (c) Reimbursement of expenses outside port limits. If the place of 
examination is not located within the limits of a port of entry or at a 
Customs station at which Customs is permanently located, whether or not 
that location is the place of arrival, the importer shall pay any 
additional expenses, including actual expenses of travel and subsistence 
but not the salary during regular hours of duty of the examining 
officer. However, no collection will be made if the total amount 
chargeable against one importer for one day amounts to less than 50 
cents. If the total amount chargeable amounts to 50 cents or more but 
less than $1, a minimum charge of $1 will be made.
    (d) Bond for removal from Customs custody. Before permitting the 
removal of merchandise for examination elsewhere than at the public 
stores, wharf, or other place under the control of Customs, the port 
director shall require the importer to execute a bond on Customs Form 
301, containing the bond conditions set forth in Sec. 113.62 of this 
chapter.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 84-152, 49 
FR 29374, July 20, 1984; T.D. 84-213, 49 FR 41186, Oct. 19, 1984; T.D. 
93-6, 58 FR 5606, Jan. 22, 1993]



Sec. 151.8  Examination after assembly.

    (a) Application by importer. Upon application by the importer, 
machinery, altars, shrines, and other articles which must be set up or 
assembled prior to examination may be examined at the mill, factory, or 
other suitable place after being assembled.
    (b) Conditions applicable. The importer shall comply with the 
conditions set forth in Sec. 151.7 (b) through (d). The port director 
may also require that a deposit be made of the estimated additional 
expense. The packages need not be corded and sealed in accordance with 
Sec. 151.7(a), but the port director may make such preliminary 
examination as he deems necessary to identify the merchandise with the 
invoice.
    (c) Removal of merchandise and notification of assembly. After the 
bond required by Sec. 151.7(d) has been filed and any necessary 
preliminary examination has been made, the port director may permit the 
merchandise to be removed to the place at which it is to be assembled 
for examination. Within 90 days after such removal, unless an extension 
has been applied for and granted by the port director, the importer 
shall notify the port director that the merchandise has been assembled 
and is ready for examination, whereupon final examination shall be made.



Sec. 151.9  Immediate transportation entry delivered outside port limits.

    When merchandise covered by an immediate transportation entry has 
been authorized by the port director to be delivered to a place outside 
a port of entry as provided for in Sec. 18.11(c) of this chapter, the 
provisions of Sec. 151.7 shall be complied with to the same extent as 
if the merchandise had been delivered

[[Page 175]]

to the port of entry, and then authorized to be examined elsewhere than 
at the public stores, wharf, or other place under the control of 
Customs.



Sec. 151.10  Sampling.

    When necessary, the port director may obtain samples of merchandise 
for appraisement, classification, or other official purposes. Samples 
shall be taken by Customs or a commercial gauger approved in accordance 
with Sec. 151.13. Samples shall be marked to ensure identification and 
retained according to established policies.

[T.D. 87-39, 52 FR 9787, Mar. 26, 1987]



Sec. 151.11  Request for samples or additional examination packages after release of merchandise.

    If the port director requires samples or additional examination 
packages of merchandise which has been released from CBP custody, he 
shall send the importer a written request, on Customs Form 28, Request 
for Information, or other appropriate form, to submit the necessary 
samples or packages. If the request is not promptly complied with, the 
port director may make a demand under the bond for the return of the 
necessary merchandise to CBP custody in accordance with Sec. 141.113 of 
this chapter. For purposes of determining admissibility, representatives 
of the Food and Drug Administration may obtain samples of any food, 
drug, device, or cosmetic, the importation of which is governed by 
section 801 of the Federal Food, Drug, and Cosmetic Act, as amended (21 
U.S.C. 381).

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 75-152, 40 
FR 27444, June 30, 1975; T.D. 84-213, 49 FR 41186, Oct. 19, 1984; CBP 
Dec. 07-02, 72 FR 4430, Jan. 31, 2007]



Sec. 151.12  Accreditation of commercial laboratories.

    This section sets forth the requirements for commercial laboratories 
to obtain accreditation by CBP for the testing of certain commodities, 
and explains the operation of such accredited laboratories. This section 
also provides for the imposition of accreditation and reaccreditation 
fees, sets forth grounds for the suspension and revocation of 
accreditation, and provides for the imposition of a monetary penalty for 
an accredited commercial laboratory that fails to adhere to the 
provisions of this section.
    (a) Definitions. For purposes of this section, the following words 
and phrases have the meanings indicated:
    Analysis record. An ``analysis record'' is a compilation of all 
documents which have been generated during the course of analysis of a 
particular sample which, under normal circumstances, may include, both 
in paper and electronic-form, such documents as work sheets, notes, 
associated spectra (both spectra of the actual product and any standard 
spectra used for comparison), photographs and microphotographs, and the 
laboratory report.
    Assistant Commissioner. In Sec. Sec. 151.12 and 151.13, references 
to the ``Assistant Commissioner'' mean the Assistant Commissioner, 
Office of Information and Technology, or his designee, located in 
Washington, D.C.
    Check samples. ``Check samples'' are samples which have been 
distributed by CBP to accredited laboratories to test their proficiency 
in a certain area of accreditation.
    Commodity Group Brochure. A ``Commodity Group Brochure'' is a 
booklet which contains a listing of laboratory methods which commercial 
laboratories are required to have the capability to perform to qualify 
for CBP-accreditation in a particular commodity group. The brochures and 
the Customs and Border Protection Laboratory (CBPL) Methods will specify 
the particular laboratory testing methods required for particular 
commodity groups, unless written permission from the Executive Director 
is given to use an alternate method. Procedures required by the 
Executive Director may reference applicable general industry testing 
standards, published by such organizations as the American Society for 
Testing and Materials (ASTM) and the American Petroleum Institute (API). 
Commodity Group Brochures and a listing of the methods found in the U.S. 
Customs Laboratory Methods Manual are available from the U.S. Customs 
and Border Protection, Attention: Executive Director, Laboratories and 
Scientific Services, Washington, D.C. 20229 and can also be found on the 
CBP Web site: www.cbp.gov.

[[Page 176]]

    Executive Director. In Sec. Sec. 151.12 and 151.13, references to 
the ``Executive Director'' mean the Executive Director, Laboratories and 
Scientific Services, located in Washington, D.C.
    (b) What is a ``Customs-accredited laboratory''? ``Commercial 
laboratories'' are individuals and commercial organizations that analyze 
merchandise, i.e., determine its composition and/or characteristics, 
through laboratory analysis. A ``Customs-accredited laboratory'' is a 
commercial laboratory, within the United States, that has demonstrated, 
to the satisfaction of the Executive Director, pursuant to this section, 
the capability to perform analysis of certain commodities to determine 
elements relating to the admissibility, quantity, composition, or 
characteristics of imported merchandise. Customs accreditation extends 
only to the performance of such functions as are vested in, or delegated 
to, Customs.
    (c) What are the obligations of a Customs-accredited laboratory? A 
commercial laboratory accredited by Customs agrees to the following 
conditions and requirements:
    (1) To comply with the requirements of part 151, Customs Regulations 
(19 CFR part 151), and to conduct professional services in conformance 
with approved standards and procedures, including procedures which may 
be required by the Commissioner of Customs or the Executive Director;
    (2) To have no interest in or other connection with any business or 
other activity which might affect the unbiased performance of duties as 
a Customs-accredited laboratory. It is understood that this does not 
prohibit acceptance of the usual fees for professional services;
    (3) To maintain the ability, i.e., the instrumentation, equipment, 
qualified staff, facilities, etc., to perform the services for which the 
laboratory is accredited, and allow the Executive Director to evaluate 
that ability on a periodic basis by such means as on-site inspections, 
demonstrations of analysis procedures, reviews of submitted records, and 
proficiency testing through check samples;
    (4) To retain those laboratory records beyond the five-year record-
retention period and samples (see paragraph (j)(1) of this section) 
specified by Customs as necessary to address matters concerned in 
pending litigation, and, if laboratory operations or accreditation 
cease, to contact Customs immediately regarding the disposition of 
records/samples retained;
    (5) To promptly investigate any circumstance which might affect the 
accuracy of work performed as an accredited laboratory, to correct the 
situation immediately, and to notify both the port director and the 
Executive Director of such matters, their consequences, and any 
corrective action taken or that needs to be taken; and
    (6) To immediately notify both the port director and the Executive 
Director of any attempt to impede, influence, or coerce laboratory 
personnel in the performance of their duties, or of any decision to 
terminate laboratory operations or accredited status. Further, within 5 
days of any changes involving legal name, address, ownership, parent-
subsidiary relationships, bond, other offices or sites, or approved 
signatories to notify the Executive Director by certified mail.
    (d) What are the commodity groups for which accreditation may be 
sought? (1) Commercial laboratories may apply for accreditation to 
perform tests for any of the commodity groups listed in paragraph (d)(2) 
of this section. Applicable test procedures are listed in Commodity 
Group Brochures and the U.S. Customs Laboratory Methods Manual. 
Application may be made for accreditation in more than one commodity 
group. At the discretion of the Executive Director accreditation may be 
granted for subgroups of tests within a commodity group or for commodity 
groups not specifically enumerated. Once accredited, a Customs-
accredited laboratory may apply at any time to expand its accreditation, 
to add new testing sites, or increase the number of commodity groups or 
subgroups accredited.
    (2) The commodity groups for which accreditation may be sought 
without special permission from the Executive Director are:
    (i) Dairy and Chocolate Products entered under Chapters 4, 18, and 
21 of the

[[Page 177]]

Harmonized Tariff Schedule of the United States (HTSUS);
    (ii) Food and Food Products entered under Chapters 7-12, 15, 16, and 
19-21, HTSUS;
    (iii) Botanical Identification--materials and products entered under 
Chapters 14 and 44-46, HTSUS;
    (iv) Sugar, Sugar Syrups, and Confectionery products entered under 
Chapter 17, HTSUS;
    (v) Spirituous Beverages entered under Chapter 22, HTSUS;
    (vi) Building Stone, Ceramics, Glassware, and Other Mineral 
Substances entered under Chapters 25 and 68-70, HTSUS;
    (vii) Inorganic Materials, including Inorganic Compounds and Ores, 
entered under Chapters 26, 28, 31, and 36-38, HTSUS;
    (viii) Petroleum and Petroleum Products entered under Chapters 27 
and 29, HTSUS;
    (ix) Organic Materials, including Intermediates and Pharmaceuticals, 
entered under Chapters 29, 30, 34, 35, and 38, HTSUS;
    (x) Rubber, Plastics, Polymers, Pigments and Paints entered under 
Chapters 32, 39, and 40, HTSUS;
    (xi) Essential Oils and Perfumes entered under Chapter 33, HTSUS;
    (xii) Leather and Articles of Leather entered under Chapters 41 and 
42, HTSUS;
    (xiii) Paper and Paper Products entered under Chapters 47-49, HTSUS;
    (xiv) Textiles and Related Products, including footwear and hats, 
entered under Chapters 50-67, HTSUS; and,
    (xv) Metals and Alloys entered under Chapters 72-83, HTSUS.
    (e) What are the approved methods of analysis? Customs-accredited 
laboratories must follow the general or specific testing methods set 
forth in Commodity Group Brochures and the U.S. Customs Laboratory 
Methods Manual in the testing of designated commodities, unless the 
Executive Director gives written permission to use an alternate method. 
Alternative methods will be considered and approved on a case-by-case 
basis.
    (f) How would a commercial laboratory become a Customs-accredited 
laboratory?--(1) What should an application contain? An application for 
Customs accreditation must contain the following information:
    (i) The applicant's legal name and the address of its principal 
place of business and any other facility out of which it will work;
    (ii) Detailed statements of ownership and any partnerships, parent-
subsidiary relationships, or affiliations with any other domestic or 
foreign organizations, including, but not limited to, importers, other 
commercial laboratories, producers, refiners, Customs brokers, or 
carriers;
    (iii) A statement of financial condition;
    (iv) If a corporation, a copy of the articles of incorporation and 
the names of all officers and directors;
    (v) The names, titles, and qualifications of each person who will be 
authorized to sign or approve analysis reports on behalf of the 
commercial laboratory;
    (vi) A complete description of the applicant's facilities, 
instruments, and equipment;
    (vii) An express agreement that if notified by Customs of pending 
accreditation to execute a bond in accordance with part 113, Customs 
Regulations (19 CFR part 113), and submit it to the Customs port nearest 
to the applicant's main office. (The limits of liability on the bond 
will be established by the Customs port in consultation with the 
Executive Director. In order to retain Customs accreditation, the 
laboratory must maintain an adequate bond, as determined by the port 
director);
    (viii) A listing of each commodity group for which accreditation is 
being sought and, if methods are being submitted for approval which are 
not specifically provided for in a Commodity Group Brochure and the U.S. 
Customs Laboratory Methods Manual, a listing of such methods;
    (ix) A listing by commodity group of each method according to its 
Customs Laboratory Method Number for which the laboratory is seeking 
accreditation;
    (x) An express agreement to be bound by the obligations contained in 
paragraph (c) of this section; and,
    (xi) A nonrefundable pre-payment equal to 50 percent of the fixed 
accreditation fee, as published in the Federal

[[Page 178]]

Register and Customs Bulletin, to cover preliminary processing costs. 
Further, the applicant agrees to pay Customs within 30 days of 
notification of preliminary accreditation the associated charges 
assessed for accreditation, i.e., those charges for actual travel and 
background investigation costs, and the balance of the fixed 
accreditation fee.
    (2) Where should an application be sent? A commercial laboratory 
seeking accreditation or an extension of an existing accreditation must 
send a letter of application to the U.S. Customs Service, Attention: 
Executive Director, Laboratories & Scientific Services, 1300 
Pennsylvania Ave., NW, Washington, D.C. 20229.
    (3) How will an application be reviewed?--(i) Physical plant and 
management system. The facility of the applicant will be inspected to 
ensure that it is properly equipped to perform the necessary tests and 
that staff personnel are capable of performing required tests. Customs 
evaluation of an applicant's professional abilities will be in 
accordance with the general criteria contained in either the American 
Society for Testing and Materials (ASTM) E548 (Standard Guide for 
General Criteria Used for Evaluating Laboratory Competence) or the ISO/
IEC Guide 25 (General Requirements for the Competence of Calibration and 
Testing Laboratories). This review will ascertain the laboratory's 
ability to manage and control the acquisition of technical data. The 
review will be performed at the time of initial application and upon 
reaccreditation at three-year intervals.
    (ii) Ability to perform tests on specified commodity groups. For 
each commodity group applied for, the applicant will undergo a separate 
review of testing capabilities. The specific accreditation will be based 
on the laboratory's ability to perform the tests required for that 
commodity group. This will include the qualifications of the technical 
personnel in this field and the instrument availability required by the 
test methods. Maintenance of accreditation will be ongoing and may 
require the submission of test results on periodic check samples. The 
criteria for acceptance will be based on the laboratory's ability to 
produce a work product that assists in the proper classification and 
entry of imported merchandise.
    (iii) Determination of competence. The Executive Director will 
determine the applicant's overall competence, independence, and 
character by conducting on-site inspections, which may include 
demonstrations by the applicant of analysis procedures and a review of 
analysis records submitted, and background investigations. The Executive 
Director may also conduct proficiency testing through check samples.
    (iv) Evaluation of technical and operational requirements. Customs 
will determine whether the following technical and operational 
requirements are met:
    (A) Equipment. The laboratory must be equipped with all of the 
instruments and equipment needed to conduct the tests for which it is 
accredited. The laboratory must ensure that all instruments and 
equipment are properly calibrated, checked, and maintained.
    (B) Facilities. The laboratory must have, at a minimum, adequate 
space, lighting, and environmental controls to ensure compliance with 
the conditions prescribed for appropriate test procedures.
    (C) Personnel. The laboratory must be staffed with persons having 
the necessary education, training, knowledge, and experience for their 
assigned functions (e.g., maintaining equipment, calibrating 
instruments, performing laboratory analyses, evaluating analytical 
results, and signing analysis reports on behalf of the laboratory). In 
general, each technical staff member should hold, at a minimum, a 
bachelor's degree in science or have two years related experience in an 
analytical laboratory.
    (g) How will an applicant be notified concerning accreditation?--(1) 
Notice of accreditation or nonselection. When Customs evaluation of a 
laboratory's credentials is completed, the Executive Director will 
notify the laboratory in writing of its preliminary accreditation or 
nonselection. (Final accreditation determinations will not be made until 
the applicant has satisfied all bond requirements and made payment on 
all assessed charges and the balance

[[Page 179]]

of the applicable accreditation fee). All final notices of 
accreditation, reaccreditation, or extension of existing Customs 
accreditation will be published in the Federal Register and Customs 
Bulletin.
    (2) Grounds for nonselection. The Executive Director may deny a 
laboratory's application for any of the following reasons:
    (i) The application contains false or misleading information 
concerning a material fact;
    (ii) The laboratory, a principal of the laboratory, or a person the 
Executive Director determines is exercising substantial ownership or 
control over the laboratory operation is indicted for, convicted of, or 
has committed acts which would:
    (A) Under United States federal or state law, constitute a felony or 
misdemeanor involving misstatements, fraud, or a theft-related offense; 
or
    (B) Reflect adversely on the business integrity of the applicant;
    (iii) A determination is made that the laboratory-applicant does not 
possess the technical capability, have adequate facilities, or 
management to perform the approved methods of analysis for Customs 
purposes;
    (iv) A determination is made that the laboratory has submitted false 
reports or statements concerning the sampling of merchandise, or that 
the applicant was subject to sanctions by state, local, or professional 
administrative bodies for such conduct;
    (v) Nonpayment of assessed charges and the balance of the fixed 
accreditation fee; or
    (vi) Failure to execute a bond in accordance with part 113 of this 
chapter.
    (3) Adverse accreditation decisions; appeal procedures--(i) 
Preliminary notice. A laboratory which is not selected for accreditation 
will be sent a preliminary notice of nonselection. The preliminary 
notice of nonselection will state the specific grounds for the proposed 
nonselection decision and advise the laboratory that it may file a 
response addressing the grounds for the action proposed with the 
Executive Director within 30 calendar days of the date the preliminary 
notice of nonselection was received by the laboratory.
    (ii) Final notice--(A) Based on nonresponse. If the laboratory does 
not respond to the preliminary notice, the Executive Director will issue 
a final notice of nonselection within 60 calendar days of the date the 
preliminary notice of nonselection was received by the laboratory 
applicant. The final notice of nonselection will state the specific 
grounds for the nonselection and advise the laboratory that it may 
choose to pursue one of the following two options:
    (1) Submit a new application for accreditation, in accordance with 
the provisions of paragraph (f)(1) of this section, 180 days after the 
date of the final notice of nonselection; or
    (2) Administratively appeal the final notice of nonselection to the 
Assistant Commissioner within 30 calendar days of the date of the final 
notice of nonselection.
    (B) Based on response. If the laboratory files a timely response, 
the Executive Director will issue a final determination regarding the 
laboratory's accreditation within 30 calendar days of the date the 
applicant's response is received by the Executive Director. If this 
final determination is adverse to the laboratory, then the final notice 
of nonselection will state the specific grounds for nonselection and 
advise the laboratory that it may choose to pursue one of the two 
options provided at paragraphs (g)(3)(ii)(A)(1) and (2) of this section.
    (iii) Appeal decision. The Assistant Commissioner will issue a 
decision on the appeal within 30 calendar days of the date the appeal is 
received. If the appeal decision is adverse to the laboratory, then the 
decision notice will advise the laboratory that it may choose to pursue 
one of the following two options:
    (A) Submit a new application for accreditation, in accordance with 
the provisions of paragraph (f)(1) of this section, 120 days after the 
date of the appeal decision; or
    (B) File an action with the Court of International Trade, pursuant 
to chapter 169 of title 28, United States Code, within 60 days of the 
date of the appeal decision.
    (h) What are the accreditation/reaccreditation fee requirements?--
(1) In

[[Page 180]]

general. A fixed fee, representing Customs administrative overhead 
expense, will be assessed for each application for accreditation or 
reaccreditation. In addition, associated assessments, representing the 
actual costs associated with travel and per diem of Customs employees 
related to verification of application criteria and background 
investigations will be charged. The combination of the fixed fee and 
associated assessments represent reimbursement to Customs for costs 
related to accreditation and reaccreditation. The fixed fee will be 
published in the Customs Bulletin and the Federal Register. Based on a 
review of the actual costs associated with the program, the fixed fee 
may be adjusted periodically; any changes will be published in the 
Customs Bulletin and the Federal Register.
    (i) Accreditation fees. A nonrefundable pre-payment equal to 50 
percent of the fixed accreditation fee to cover preliminary processing 
costs must accompany each application for accreditation. Before a 
laboratory will be accredited, it must remit to Customs, at the address 
specified in the billing, within the 30 day billing period, the 
associated charges assessed for the accreditation and the balance of the 
fixed accreditation fee.
    (ii) Reaccreditation fees. Before a laboratory will be reaccredited, 
it must submit to Customs, at the billing address specified, within the 
30 day billing period the fixed reaccreditation fee.
    (2) Disputes. In the event a laboratory disputes the charges 
assessed for travel and per diem costs associated with scheduled 
inspection visits, it may file an appeal within 30 calendar days of the 
date of the assessment with the Executive Director. The appeal letter 
must specify which charges are in dispute and provide such supporting 
documentation as may be available for each allegation. The Executive 
Director will make findings of fact concerning the merits of an appeal 
and communicate the agency decision to the laboratory in writing within 
30 calendar days of the date of the appeal.
    (i) Can existing Customs-accredited laboratories continue to 
operate? Commercial laboratories accredited by the Executive Director 
prior to December 8, 1993, will retain that accreditation under these 
regulations provided they conduct their business in a manner consistent 
with the administrative portions of this section. This paragraph does 
not pertain to any laboratory which has had its accreditation suspended 
or revoked. Laboratories which have had their accreditations continued 
under this section will have their status reevaluated on their next 
triennial inspection date which is no earlier than three years after the 
effective date of this regulation. At the time of reaccreditation, these 
laboratories must meet the requirements of this section and remit to 
Customs, at the address specified in the billing, within the 30 day 
billing period, the fixed reaccreditation fee. Failure to meet these 
requirements will result in revocation or suspension of the 
accreditation.
    (j) How will Customs-accredited laboratories operate?--(1) Samples 
for testing. Upon request by the importer of record of merchandise, the 
port director will release a representative sample of the merchandise 
for testing by a Customs-accredited laboratory at the expense of the 
importer. Under Customs supervision, the sample will be split into two 
essentially equal parts and given to the Customs-accredited laboratory. 
One portion of the sample may be used by the Customs-accredited 
laboratory for its testing. The other portion must be retained by the 
laboratory, under appropriate storage conditions, for Customs use, as 
necessary, unless Customs requires other specific procedures. Upon 
request, the sample portion reserved for Customs purposes must be 
surrendered to Customs.
    (i) Retention of non-perishable samples. Non-perishable samples 
reserved for Customs and sample remnants from any testing must be 
retained by the accredited laboratory for a period of four months from 
the date of the laboratory's final analysis report, unless other 
instructions are issued in writing by Customs. At the end of this 
retention time period, the accredited laboratory may dispose of the 
retained samples and sample remnants in a manner consistent with 
federal, state, and local statutes.

[[Page 181]]

    (ii) Retention of perishable samples. Perishable samples reserved 
for Customs and sample remnants from any testing can be disposed of more 
expeditiously than provided for at paragraph (j)(1)(i) of this section, 
if done in accordance with acceptable laboratory procedures, unless 
other instructions are issued in writing by Customs.
    (2) Reports.--(i) Contents of reports. Testing data must be obtained 
using methods approved by the Executive Director. The testing results 
from a Customs-accredited laboratory that are submitted by an importer 
of record with respect to merchandise in an entry, in the absence of 
testing conducted by Customs laboratories, will be accepted by Customs, 
provided that the importer of record certifies that the sample tested 
was taken from the merchandise in the entry and the report establishes 
elements relating to the admissibility, quantity, composition, or 
characteristics of the merchandise entered, as required by law.
    (ii) Status of commercial reports where Customs also tests 
merchandise. Nothing in these regulations will preclude Customs from 
sampling and testing merchandise from a shipment which has been sampled 
and tested by a Customs-accredited laboratory at the request of an 
importer. In cases where a shipment has been analyzed by both Customs 
and a Customs-accredited laboratory, all Customs actions will be based 
upon the analysis provided by the Customs laboratory, unless the 
Executive Director advises otherwise. If Customs tests merchandise, it 
will release the results of its test to the importer of record or its 
agent upon request unless the testing information is proprietary to the 
holder of a copyright or patent, or developed by Customs for enforcement 
purposes.
    (3) Recordkeeping requirements. Customs-accredited laboratories must 
maintain records of the type normally kept in the ordinary course of 
business in accordance with the provisions of this chapter and any other 
applicable provision of law, and make them available during normal 
business hours for Customs inspection. In addition, these laboratories 
must maintain all records necessary to permit the evaluation and 
verification of all Customs-related work, including, as appropriate, 
those described below. All records must be maintained for five years, 
unless the laboratory is notified in writing by Customs that a longer 
retention time is necessary for particular records. Electronic data 
storage and transmission may be approved by Customs.
    (i) Sample records. Records for each sample tested for Customs 
purposes must be readily accessible and contain the following 
information:
    (A) A unique identifying number;
    (B) The date when the sample was received or taken;
    (C) The identity of the commodity (e.g., crude oil);
    (D) The name of the client;
    (E) The source of the sample (e.g., name of vessel, flight number of 
airline, name of individual taking the sample); and
    (F) If available, the Customs entry date, entry number, and port of 
entry and the names of the importer, exporter, manufacturer, and 
country-of-origin.
    (ii) Major equipment records. Records for each major piece of 
equipment or instrument (including analytical balances) used in Customs-
related work must identify the name and type of instrument, the 
manufacturer's name, the instrument's model and any serial numbers, and 
the occurrence of all servicing performed on the equipment or 
instrument, to include recalibration and any repair work, identifying 
who performed the service and when.
    (iii) Records of analytical procedures. The Customs-accredited 
laboratory must maintain complete and up-to-date copies of all approved 
analytical procedures, calibration methods, etc., and must document the 
procedures each staff member is authorized to perform. These procedures 
must be readily available to appropriate staff.
    (iv) Laboratory analysis records. The Customs-accredited laboratory 
must identify each analysis by sample record number (see paragraph 
(j)(3)(i) of this section) and must maintain all information or data 
(such as sample weights, temperatures, references to filed spectra, 
etc.) associated with each Customs-related laboratory analysis. Each 
analysis record must be dated and

[[Page 182]]

initialed or signed by the staff member(s) who did the work.
    (v) Laboratory analysis reports. Each laboratory analysis report 
submitted to Customs must include:
    (A) The name and address of the Customs-accredited laboratory;
    (B) A description and identification of the sample, including its 
unique identifying number;
    (C) The designations of each analysis procedure used;
    (D) The analysis report itself (i.e., the pertinent characteristics 
of the sample);
    (E) The date of the report; and
    (F) The typed name and signature of the person accepting technical 
responsibility for the analysis report (i.e., an approved signatory).
    (4) Representation of Customs-accredited status. Commercial 
laboratories accredited by Customs must limit statements or wording 
regarding their accreditation to an accurate description of the tests 
for the commodity group(s) for which accreditation has been obtained. 
Use of terms other than those appearing in the notice of accreditation 
(see paragraph (g) of this section) is prohibited.
    (5) Subcontracting prohibited. Customs-accredited laboratories must 
not subcontract Customs-related analysis work to non Customs-accredited 
laboratories or non Customs-approved gaugers, but may subcontract to 
other facilities that are Customs-accredited/approved and in good 
standing.
    (k) How can a laboratory have its accreditation suspended or revoked 
or be required to pay a monetary penalty?--(1) Grounds for suspension, 
revocation, or assessment of a monetary penalty--(i) In general. The 
Executive Director may immediately suspend or revoke a laboratory's 
accreditation only in cases where the laboratory's actions are 
intentional violations of any Customs law or when required by public 
health or safety. In other situations where the Executive Director has 
cause, the Executive Director will propose the suspension or revocation 
of a laboratory's accreditation or propose a monetary penalty and 
provide the laboratory with the opportunity to respond to the notice of 
proposed action.
    (ii) Specific grounds. A laboratory's accreditation may be suspended 
or revoked, or a monetary penalty may be assessed because:
    (A) The selection was obtained through fraud or the misstatement of 
a material fact by the laboratory;
    (B) The laboratory, a principal of the laboratory, or a person the 
port director determines is exercising substantial ownership or control 
over the laboratory operation is indicted for, convicted of, or has 
committed acts which would: under United States federal or state law, 
constitute a felony or misdemeanor involving misstatements, fraud, or a 
theft-related offense; or reflect adversely on the business integrity of 
the applicant. In the absence of an indictment, conviction, or other 
legal process, the port director must have probable cause to believe the 
proscribed acts occurred;
    (C) Staff laboratory personnel refuse or otherwise fail to follow 
any proper order of a Customs officer or any Customs order, rule, or 
regulation;
    (D) The laboratory fails to operate in accordance with the 
obligations of paragraph (c) of this section;
    (E) A determination is made that the laboratory is no longer 
technically or operationally proficient at performing the approved 
methods of analysis for Customs purposes;
    (F) The laboratory fails to remit to Customs, at the billing address 
specified, within the 30 day billing period the associated charges 
assessed for the accreditation and the balance of the fixed 
accreditation fee;
    (G) The laboratory fails to maintain its bond;
    (H) The laboratory fails to remit to Customs, at the billing address 
specified, within the 30 day billing period, the fixed reaccreditation 
fee; or
    (I) The laboratory fails to remit any monetary penalty assessed 
under this section.
    (iii) Assessment of monetary penalties. The assessment of a monetary 
penalty under this section, may be in lieu of, or in addition to, a 
suspension or revocation of accreditation under this section. The 
monetary penalty may not exceed $100,000 per violation and will be 
assessed and administered pursuant to published guidelines. Any monetary

[[Page 183]]

penalty under this section can be in addition to the recovery of:
    (A) Any loss of revenue, in cases where the laboratory intentionally 
falsified the analysis report in collusion with the importer, pursuant 
to 19 U.S.C. 1499(b)(1)(B)(i); or
    (B) Liquidated damages assessed under the laboratory's Customs bond.
    (2) Notice of adverse action. When a decision to suspend or revoke 
accreditation, and/or assess a monetary penalty is made, the Executive 
Director will immediately notify the laboratory in writing, indicating 
whether the action is effective immediately or is proposed.
    (i) Immediate suspension or revocation. Where the suspension or 
revocation of accreditation is immediate, the Executive Director will 
issue a final notice of adverse determination. The final notice of 
adverse determination will state the specific grounds for the immediate 
suspension or revocation, direct the laboratory to cease performing any 
Customs-accredited functions, and advise the laboratory that it may 
choose to pursue one of the following two options:
    (A) Submit a new application for accreditation, in accordance with 
the provisions of paragraph (f)(1) of this section, 180 days after the 
date of the final notice of adverse determination; or
    (B) Administratively appeal the final notice of adverse 
determination to the Assistant Commissioner within 30 calendar days of 
the date of the final notice of adverse determination.
    (ii) Proposed suspension, revocation, or assessment of monetary 
penalty--(A) Preliminary notice. Where the suspension or revocation of 
accreditation, and/or the assessment of a monetary penalty is proposed, 
the Executive Director will issue a preliminary notice of proposed 
action. The preliminary notice of proposed action will state the 
specific grounds for the proposed action, inform the laboratory that it 
may continue to perform those functions requiring Customs-accreditation 
until the Executive Director's final notice is issued, and advise the 
laboratory that it may file a response addressing the grounds for the 
action proposed with the Executive Director within 30 calendar days of 
the date the preliminary notice of proposed action was received by the 
laboratory. The laboratory may respond by accepting responsibility, 
explaining extenuating circumstances, and/or providing rebuttal 
evidence. The laboratory also may ask for a meeting with the Executive 
Director or his designee to discuss the proposed action.
    (B) Final notice--(1) Based on nonresponse. If the laboratory does 
not respond to the preliminary notice of proposed action, the Executive 
Director will issue a final notice of adverse determination within 60 
calendar days of the date the preliminary notice of proposed action was 
received by the laboratory. The final notice of adverse determination 
will state the specific grounds for the adverse determination, direct 
the laboratory to cease performing any Customs-accredited functions, and 
advise the laboratory that it may choose to pursue one of the two 
options provided at paragraphs (k)(2)(i)(A) and (B) of this section.
    (2) Based on response. If the laboratory files a timely response, 
the Executive Director will issue a final determination regarding the 
status of the laboratory's accreditation within 30 calendar days of the 
date the laboratory's response is received by the Executive Director. If 
this final determination is adverse to the laboratory, then the final 
notice of adverse determination will state the specific grounds for the 
adverse action, advise the laboratory to cease performing any functions 
requiring Customs accreditation, and advise the laboratory that it may 
choose to pursue one of the two options provided at paragraphs 
(k)(2)(i)(A) and (B) of this section.
    (3) Publication of final notices of adverse determination. Any final 
notices of adverse determination issued by the Executive Director 
resulting in a laboratory being directed to cease performing Customs-
accredited functions will be published in the Federal Register and 
Customs Bulletin and the notice published will include the effective 
date, duration, and scope of the determination.
    (4) Appeal decision. The Assistant Commissioner will issue a 
decision on the appeal within 30 calendar days of the date the appeal is 
received. If the

[[Page 184]]

appeal decision is adverse to the laboratory, then the decision notice 
will advise the laboratory that it may choose to pursue one of the 
following two options:
    (i) Submit a new application for accreditation, in accordance with 
the provisions of paragraph (f)(1) of this section, 120 days after the 
date of the appeal decision; or
    (ii) File an action with the Court of International Trade, pursuant 
to chapter 169 of title 28, United States Code, within 60 days of the 
date of the appeal decision.

[T.D. 99-67, 64 FR 48534, Sept.7, 1999; T.D. 99-67, 65 FR 10009, 10010, 
Feb. 25, 2000]



Sec. 151.13  Approval of commercial gaugers.

    This section sets forth the requirements for commercial gaugers to 
obtain approval by Customs for the measuring of certain merchandise, and 
explains the operation of such approved gaugers. This section also 
provides for the imposition of approval and reapproval fees, sets forth 
grounds for the suspension or revocation of approval, and provides for 
the imposition of a monetary penalty for an approved commercial gauger 
that fails to adhere to the provisions of this section.
    (a) What is a ``Customs-approved gauger''? ``Commercial gaugers'' 
are individuals and commercial organizations that measure, gauge, or 
sample merchandise (usually merchandise in bulk form) and who deal 
mainly with animal and vegetable oils, petroleum, petroleum products, 
and bulk chemicals. A ``Customs-approved gauger'' is a commercial 
concern, within the United States, that has demonstrated, to the 
satisfaction of the Executive Director (defined at Sec. 151.12(a)), 
pursuant to this section, the capability to perform certain gauging and 
measurement procedures for certain commodities. Customs approval extends 
only to the performance of such functions as are vested in, or delegated 
to, Customs.
    (b) What are the obligations of a Customs-approved gauger? A 
commercial gauger approved by Customs agrees to the following conditions 
and requirements:
    (1) To comply with the requirements of part 151, Customs Regulations 
(19 CFR part 151), and to conduct professional services in conformance 
with approved standards and procedures, including procedures which may 
be required by the Commissioner of Customs or the Executive Director;
    (2) To have no interest in or other connection with any business or 
other activity which might affect the unbiased performance of duties as 
a Customs-approved gauger. It is understood that this does not prohibit 
acceptance of the usual fees for professional services;
    (3) To maintain the ability, i.e., the instrumentation, equipment, 
qualified staff, facilities, etc., to perform the services for which the 
gauger is approved, and allow the Executive Director to evaluate that 
ability on a periodic basis by such means as on-site inspections, 
demonstrations of gauging procedures, and reviews of submitted records;
    (4) To retain those gauger records beyond the five-year record-
retention period specified by Customs as necessary to address matters 
concerned in pending litigation, and, if gauger operations or approval 
cease, to contact Customs immediately regarding the disposition of 
records retained;
    (5) To promptly investigate any circumstance which might affect the 
accuracy of work performed as an approved gauger, to correct the 
situation immediately, and to notify both the port director and the 
Executive Director of such matters, their consequences, and any 
corrective action taken or that needs to be taken; and
    (6) To immediately notify both the port director and the Executive 
Director of any attempt to impede, influence, or coerce gauger personnel 
in the performance of their duties, or of any decision to terminate 
gauger operations or approval status. Further, within 5 days of any 
changes involving legal name, address, ownership, parent-subsidiary 
relationships, bond, other offices or sites, or approved signatories to 
notify the Executive Director by certified mail.
    (c) What are the approved measurement procedures? Customs-approved 
gaugers must comply with appropriate procedures published by such 
professional organizations as the American Society

[[Page 185]]

for Testing and Materials (ASTM) and the American Petroleum Institute 
(API), unless the Executive Director gives written permission to use an 
alternate method. Alternative methods will be considered and approved on 
a case-by-case basis.
    (d) How would a commercial gauger become a Customs-approved 
gauger?--(1) What should an application contain? An application for 
Customs approval must contain the following information:
    (i) The applicant's legal name and the address of its principal 
place of business and any other facility out of which it will work;
    (ii) Detailed statements of ownership and any partnerships, parent-
subsidiary relationships, or affiliations with any other domestic or 
foreign organizations, including, but not limited to, importers, 
producers, refiners, Customs brokers, or carriers;
    (iii) A statement of financial condition;
    (iv) If a corporation, a copy of the articles of incorporation and 
the names of all officers and directors;
    (v) The names, titles, and qualifications of each person who will be 
authorized to sign or approve gauging reports on behalf of the 
commercial gauger;
    (vi) A complete description of the applicant's facilities, 
instruments, and equipment;
    (vii) An express agreement that if notified by Customs of pending 
approval to execute a bond in accordance with part 113, Customs 
Regulations (19 CFR part 113), and submit it to the Customs port nearest 
to the applicant's main office. (The limits of liability on the bond 
will be established by the Customs port in consultation with the 
Executive Director. In order to retain Customs approval, the gauger must 
maintain an adequate bond, as determined by the port director);
    (viii) An express agreement to be bound by the obligations contained 
in paragraph (b) of this section; and,
    (ix) A nonrefundable pre-payment equal to 50 percent of the fixed 
approval fee, as published in the Federal Register and Customs Bulletin, 
to cover preliminary processing costs. Further, the applicant agrees to 
pay Customs within 30 days of notification of preliminary approval the 
associated charges assessed for approval, i.e., those charges for actual 
travel and background investigation costs, and the balance of the fixed 
approval fee.
    (2) Where should an application be sent? A commercial gauger seeking 
approval or an extension of an existing approval must send a letter of 
application to the U.S. Customs Service, Attention: Executive Director, 
Laboratories & Scientific Services, 1300 Pennsylvania Ave., NW, 
Washington, D.C. 20229.
    (3) How will an application be reviewed?--(i) Determination of 
competence. The Executive Director will determine the applicant's 
overall competence, independence, and character by conducting on-site 
inspections, which may include demonstrations by the applicant of 
gauging procedures and a review of records submitted, and background 
investigations. The Executive Director may also conduct proficiency 
testing through check samples.
    (ii) Evaluation of technical and operational requirements. Customs 
will determine whether the following technical and operational 
requirements are met:
    (A) Equipment. The facility must be equipped with all of the 
instruments and equipment needed to conduct approved services. The 
gauger must ensure that all instruments and equipment are properly 
calibrated, checked, and maintained.
    (B) Facilities. The facility must have, at a minimum, adequate 
space, lighting, and environmental controls to ensure compliance with 
the conditions prescribed for appropriate measurements.
    (C) Personnel. The facility must be staffed with persons having the 
necessary education, training, knowledge, and experience for their 
assigned functions (e.g., maintaining equipment, calibrating 
instruments, performing gauging services, evaluating gauging results, 
and signing gauging reports on behalf of the commercial gauger). In 
general, each technical staff member should have, at a minimum, six 
months training and experience in gauging.
    (e) How will an applicant be notified concerning approval?--(1) 
Notice of approval or nonselection. When Customs

[[Page 186]]

evaluation of a gauger's credentials is completed, the Executive 
Director will notify the gauger in writing of its preliminary approval 
or nonselection. (Final approval determinations will not be made until 
the applicant has satisfied all bond requirements and made payment on 
all assessed charges and the balance of the applicable approval fee). 
All final notices of approval, reapproval, or extension of existing 
Customs approval will be published in the Federal Register and Customs 
Bulletin.
    (2) Grounds for nonselection. The Executive Director may deny a 
gauger's application for any of the following reasons:
    (i) The application contains false or misleading information 
concerning a material fact;
    (ii) The gauger, a principal of the gauging facility, or a person 
the Executive Director determines is exercising substantial ownership or 
control over the gauger operation is indicted for, convicted of, or has 
committed acts which would:
    (A) Under United States federal or state law, constitute a felony or 
misdemeanor involving misstatements, fraud, or a theft-related offense; 
or
    (B) Reflect adversely on the business integrity of the applicant;
    (iii) A determination is made that the gauger-applicant does not 
possess the technical capability, have adequate facilities, or 
management to perform the approved methods of measurement for Customs 
purposes;
    (iv) A determination is made that the gauger has submitted false 
reports or statements concerning the measurement of merchandise, or that 
the applicant was subject to sanctions by state, local, or professional 
administrative bodies for such conduct;
    (v) Nonpayment of assessed charges and the balance of the fixed 
approval fee; or
    (vi) Failure to execute a bond in accordance with part 113 of this 
chapter.
    (3) Adverse approval decisions; appeal procedures. (i) Preliminary 
notice. A gauger which is not selected for approval will be sent a 
preliminary notice of nonselection. The preliminary notice of 
nonselection will state the specific grounds for the proposed 
nonselection decision and advise the gauger that it may file a response 
addressing the grounds for the action proposed with the Executive 
Director within 30 calendar days of the date the preliminary notice of 
nonselection was received by the gauger.
    (ii) Final notice--(A) Based on nonresponse. If the gauger does not 
respond to the preliminary notice, the Executive Director will issue a 
final notice of nonselection within 60 calendar days of the date the 
preliminary notice of nonselection was received by the gauger applicant. 
The final notice of nonselection will state the specific grounds for the 
nonselection and advise the gauger that it may choose to pursue one of 
the following two options:
    (1) Submit a new application for approval, in accordance with the 
provisions of paragraph (d)(1) of this section, 180 days after the date 
of the final notice of nonselection; or
    (2) Administratively appeal the final notice of nonselection to the 
Assistant Commissioner within 30 calendar days of the date of the final 
notice of nonselection.
    (B) Based on response. If the gauger files a timely response, the 
Executive Director will issue a final determination regarding the 
gauger's approval within 30 calendar days of the date the applicant's 
response is received by the Executive Director. If this final 
determination is adverse to the gauger, then the final notice of 
nonselection will state the specific grounds for nonselection and advise 
the gauger that it may choose to pursue one of the two options provided 
at paragraphs (e)(3)(ii)(A)(1) and (2) of this section.
    (iii) Appeal decision. The Assistant Commissioner will issue a 
decision on the appeal within 30 calendar days of the date the appeal is 
received. If the appeal decision is adverse to the gauger, then the 
decision notice will advise the gauger that it may choose to pursue one 
of the following two options:
    (A) Submit a new application for approval, in accordance with the 
provisions of paragraph (d)(1) of this section, 120 days after the date 
of the appeal decision; or
    (B) File an action with the Court of International Trade, pursuant 
to chapter 169 of title 28, United States Code,

[[Page 187]]

within 60 days of the date of the appeal decision.
    (f) What are the approval/reapproval fee requirements?--(1) In 
general. A fixed fee, representing Customs administrative overhead 
expense, will be assessed for each application for approval or 
reapproval. In addition, associated assessments, representing the actual 
costs associated with travel and per diem of Customs employees related 
to verification of application criteria and background investigations 
will be charged. The combination of the fixed fee and associated 
assessments represent reimbursement to Customs for costs related to 
approval and reapproval. The fixed fee will be published in the Customs 
Bulletin and the Federal Register. Based on a review of the actual costs 
associated with the program, the fixed fee may be adjusted periodically; 
any changes will be published in the Customs Bulletin and the Federal 
Register.
    (i) Approval fees. A nonrefundable pre-payment equal to 50 percent 
of the fixed approval fee to cover preliminary processing costs must 
accompany each application for approval. Before a gauger will be 
approved, it must submit to Customs, at the address specified in the 
billing, within the 30 day billing period the associated charges 
assessed for the approval and the balance of the fixed approval fee.
    (ii) Reapproval fees. Before a gauger will be reapproved, it must 
submit to Customs, at the billing address specified, within the 30 day 
billing period, the fixed reapproval fee.
    (2) Disputes. In the event a gauger disputes the charges assessed 
for travel and per diem costs associated with scheduled inspection 
visits, it may file an appeal within 30 calendar days of the date of the 
assessment with the Executive Director. The appeal letter must specify 
which charges are in dispute and provide such supporting documentation 
as may be available for each allegation. The Executive Director will 
make findings of fact concerning the merits of an appeal and communicate 
the agency decision to the gauger in writing within 30 calendar days of 
the date of the appeal.
    (g) Can existing Customs-approved gaugers continue to operate? 
Commercial gaugers approved by the Executive Director prior to December 
8, 1993, will retain approval under these regulations provided that they 
conduct their business in a manner consistent with the administrative 
portions of this section. This paragraph does not pertain to any gauger 
which has had its approval suspended or revoked. Gaugers which have had 
their approvals continued under this section will have their status 
reevaluated on their next triennial inspection date which is no earlier 
than three years after the effective date of this regulation. At the 
time of reapproval, these gaugers must meet the requirements of this 
section and remit to Customs, at the address specified in the billing, 
within the 30 day billing period the fixed reapproval fee. Failure to 
meet these requirements will result in revocation or suspension of the 
approval.
    (h) How will Customs-approved gaugers operate?--(1) Reports--(i) 
Contents of reports. The measurement results from a Customs-approved 
gauger that are submitted by an importer of record with respect to 
merchandise in an entry, in the absence of measurements conducted by 
Customs, will be accepted by Customs, provided that the importer of 
record certifies that the measurement was of the merchandise in the 
entry. All reports must measure net landed quantity, except in the case 
of crude petroleum of Heading 2709, Harmonized Tariff Schedule of the 
United States (HTSUS), which may be measured by gross quantity. Reports 
must use the appropriate HTSUS units of quantity, e.g., liters, barrels, 
or kilograms.

------------------------------------------------------------------------
            HTSUS                    Product          Unit of quantity
------------------------------------------------------------------------
Headings 1501-1515..........  Animal and vegetable  Kilogram.
                               oils.
Subheadings 2707.10-2707.30   Benzene, toluene and  Liter.
 and 2902.20-2902.44.          xylene.
Heading 2709................  Crude Petroleum.....  Barrel.
Heading 2710 (various         Fuel oils, motor      Barrel.
 subheadings).                 oils, kerosene,
                               naphtha,
                               lubricating oils.

[[Page 188]]

 
Chapter 29 (various           Organic compounds in  Kilogram, liter,
 subheadings).                 bulk and liquid       etc.
                               form.
------------------------------------------------------------------------

    (ii) Status of commercial reports where Customs also gauges 
merchandise. Nothing in these regulations will preclude Customs from 
gauging a shipment which has been gauged by a Customs-approved gauger at 
the request of an importer. In cases where a shipment has been gauged by 
both Customs and a Customs-approved gauger, all Customs actions will be 
based upon the gauging reports issued by Customs, unless the Executive 
Director advises other actions. If Customs gauges merchandise, it will 
release the report of its measurements to the importer of record or its 
agent upon request unless the gauging information is proprietary to the 
holder of a copyright or patent, or developed by Customs for enforcement 
purposes.
    (2) Recordkeeping requirements. Customs-approved gaugers must 
maintain records of the type normally kept in the ordinary course of 
business in accordance with the provisions of this chapter and any other 
applicable provisions of law, and make them available during normal 
business hours for Customs inspection. In addition, these gaugers must 
maintain all records necessary to permit the evaluation and verification 
of all Customs-related work, including, as appropriate, those described 
below. All records must be maintained for five years, unless the gauger 
is notified in writing by Customs that a longer retention time is 
necessary for particular records. Electronic data storage and 
transmission may be approved by Customs.
    (i) Transaction records. Records for each Customs-related 
transaction must be readily accessible and have the following:
    (A) A unique identifying number;
    (B) The date and location where the transaction occurred;
    (C) The identity of the product (e.g., crude oil);
    (D) The name of the client;
    (E) The source of the product (e.g., name of vessel, flight number 
of airline); and
    (F) If available, the Customs entry date, entry number, and port of 
entry and the names of the importer, exporter, manufacturer, and 
country-of-origin.
    (ii) Major equipment records. Records for each major piece of 
equipment used in Customs-related work must identify the name and type 
of instrument, the manufacturer's name, the instrument's model and any 
serial numbers, and the occurrence of all servicing performed on the 
equipment or instrument, to include recalibration and any repair work, 
identifying who performed the service and when.
    (iii) Records of gauging procedures. The Customs-approved gauger 
must maintain complete and up-to-date copies of all approved gauging 
procedures, calibration methods, etc., and must document the procedures 
that each staff member is authorized to perform. These procedures must 
be readily available to appropriate staff.
    (iv) Gauging records. The Customs-approved gauger must identify each 
transaction by transaction record number (see paragraph (h)(2)(i) of 
this section) and must maintain all information or data (such as 
temperatures, etc.) associated with each Customs-related gauging 
transaction. Each gauging record (i.e., the complete file of all data 
for each separate transaction) must be dated and initialed or signed by 
the staff member(s) who did the work.
    (v) Gauging reports. Each gauging report submitted to Customs must 
include:
    (A) The name and address of the Customs-approved gauger;
    (B) A description and identification of the transaction, including 
its unique identifying number;
    (C) The designations of each gauging procedure used;
    (D) The gauging report itself (i.e., the quantity of the 
merchandise);
    (E) The date of the report; and

[[Page 189]]

    (F) The typed name and signature of the person accepting technical 
responsibility for the gauging report (i.e., an approved signatory).
    (3) Representation of Customs-approved status. Commercial gaugers 
approved by Customs must limit statements or wording regarding their 
approval to an accurate description of the commodities for which 
approval has been obtained. Use of terms other than those appearing in 
the notice of approval (see paragraph (e) of this section) is 
prohibited.
    (4) Subcontracting prohibited. Customs-approved gaugers must not 
subcontract Customs-related work to non Customs-approved gaugers or non 
Customs-accredited laboratories, but may subcontract to other facilities 
that are Customs-approved/accredited and in good standing.
    (i) How can a gauger have its approval suspended or revoked or be 
required to pay a monetary penalty?--(1) Grounds for suspension, 
revocation, or assessment of a monetary penalty--(i) In general. The 
Executive Director may immediately suspend or revoke a gauger's approval 
only in cases where the gauger's actions are intentional violations of 
any Customs law or when required by public health or safety. In other 
situations where the Executive Director has cause, the Executive 
Director will propose the suspension or revocation of a gauger's 
approval or propose a monetary penalty and provide the gauger with the 
opportunity to respond to the notice of proposed action.
    (ii) Specific grounds. A gauger's approval may be suspended or 
revoked, or a monetary penalty may be assessed because:
    (A) The selection was obtained through fraud or the misstatement of 
a material fact by the gauger;
    (B) The gauger, a principal of the gauging facility, or a person the 
port director determines is exercising substantial ownership or control 
over the gauger operation is indicted for, convicted of, or has 
committed acts which would: under United States federal or state law, 
constitute a felony or misdemeanor involving misstatements, fraud, or a 
theft-related offense; or reflect adversely on the business integrity of 
the applicant. In the absence of an indictment, conviction, or other 
legal process, the port director must have probable cause to believe the 
proscribed acts occurred;
    (C) Staff gauger personnel refuse or otherwise fail to follow any 
proper order of a Customs officer or any Customs order, rule, or 
regulation;
    (D) The gauger fails to operate in accordance with the obligations 
of paragraph (b) of this section;
    (E) A determination is made that the gauger is no longer technically 
or operationally proficient at performing the approved methods of 
measurement for Customs purposes;
    (F) The gauger fails to remit to Customs, at the billing address 
specified, within the 30 day billing period the associated charges 
assessed for the approval and the balance of the fixed approval fee;
    (G) The gauger fails to maintain its bond;
    (H) The gauger fails to remit to Customs, at the billing address 
specified, within the 30 day billing period the fixed reapproval fee; or
    (I) The gauger fails to remit any monetary penalty assessed under 
this section.
    (iii) Assessment of monetary penalties. The assessment of a monetary 
penalty under this section, may be in lieu of, or in addition to, a 
suspension or revocation of approval under this section. The monetary 
penalty may not exceed $100,000 per violation and will be assessed and 
administered pursuant to published guidelines. Any monetary penalty 
under this section can be in addition to the recovery of:
    (A) Any loss of revenue, in cases where the gauger intentionally 
falsified the gauging report in collusion with the importer, pursuant to 
19 U.S.C. 1499(b)(1)(B)(i); or
    (B) Liquidated damages assessed under the gauger's Customs bond.
    (2) Notice of adverse action. When a decision to suspend or revoke 
approval, and/or assess a monetary penalty is made, the Executive 
Director will immediately notify the gauger in writing, indicating 
whether the action is effective immediately or is proposed.
    (i) Immediate suspension or revocation. Where the suspension or 
revocation of approval is immediate, the Executive

[[Page 190]]

Director will issue a final notice of adverse determination. The final 
notice of adverse determination will state the specific grounds for the 
immediate suspension or revocation, direct the gauger to cease 
performing any Customs-approved functions, and advise the gauger that it 
may choose to pursue one of the following two options:
    (A) Submit a new application for approval, in accordance with the 
provisions of paragraph (d)(1) of this section, 180 days after the date 
of the final notice of nonselection; or
    (B) Administratively appeal the final notice of adverse 
determination to the Assistant Commissioner within 30 calendar days of 
the date of the final notice of adverse determination.
    (ii) Proposed suspension, revocation, or assessment of monetary 
penalty--(A) Preliminary notice. Where the suspension or revocation of 
approval, and/or the assessment of a monetary penalty is proposed, the 
Executive Director will issue a preliminary notice of proposed action. 
The preliminary notice of proposed action will state the specific 
grounds for the proposed action, inform the gauger that it may continue 
to perform those functions requiring Customs-approval until the 
Executive Director's final notice is issued, and advise the gauger that 
it may file a response addressing the grounds for the action proposed 
with the Executive Director within 30 calendar days of the date the 
preliminary notice of proposed action was received by the gauger. The 
gauger may respond by accepting responsibility, explaining extenuating 
circumstances, and/or providing rebuttal evidence. The gauger also may 
ask for a meeting with the Executive Director or his designee to discuss 
the proposed action.
    (B) Final notice--(1) Based on nonresponse. If the gauger does not 
respond to the preliminary notice of proposed action, the Executive 
Director will issue a final notice of adverse determination within 60 
calendar days of the date the preliminary notice of proposed action was 
received by the gauger. The final notice of adverse determination will 
state the specific grounds for the adverse determination, direct the 
gauger to cease performing any Customs-approved functions, and advise 
the gauger that it may choose to pursue one of the two options provided 
at paragraphs (i)(2)(i)(A) and (B) of this section.
    (2) Based on response. If the gauger files a timely response, the 
Executive Director will issue a final determination regarding the status 
of the gauger's approval within 30 calendar days of the date the 
gauger's response is received by the Executive Director. If this final 
determination is adverse to the gauger, then the final notice of adverse 
determination will state the specific grounds for the adverse action, 
advise the gauger to cease performing any functions requiring Customs 
approval, and advise the gauger that it may choose to pursue one of the 
two options provided at paragraphs (i)(2)(i))(A) and (B) of this 
section.
    (3) Publication of final notices of adverse determination. Any final 
notices of adverse determination issued by the Executive Director 
resulting in a gauger being directed to cease performing Customs-
approved functions will be published in the Federal Register and Customs 
Bulletin and the notice published will include the effective date, 
duration, and scope of the determination.
    (4) Appeal decision. The Assistant Commissioner will issue a 
decision on the appeal within 30 calendar days of the date the appeal is 
received. If the appeal decision is adverse to the gauger, then the 
decision notice will advise the gauger that it may choose to pursue one 
of the following two options:
    (i) Submit a new application for approval, in accordance with the 
provisions of paragraph (d)(1) of this section, 120 days after the date 
of the appeal decision; or
    (ii) File an action with the Court of International Trade, pursuant 
to chapter 169 of title 28, United States Code, within 60 calendar days 
of the date of the appeal decision.

[T.D. 99-67, 64 FR 48539, Sept. 7, 1999; T.D. 99-67, 65 FR 10011, Feb. 
25, 2000]



Sec. 151.14  Use of commercial laboratory tests in liquidation.

    The analysis method for crude petroleum contained in ASTM D96 or 
other

[[Page 191]]

approved analysis method and as determined by a Customs-accredited 
commercial laboratory shall be used for Customs purposes if the 
difference between the value found by the commercial laboratory and the 
value found by the Customs laboratory does not exceed 0.11 percent. If 
the difference exceeds this limit and the Customs-accredited commercial 
laboratory cannot establish that Customs is in error, then the Customs 
results shall be used.

[T.D. 90-78, 55 FR 40167, Oct. 2, 1990, as amended by T.D. 99-67, 64 FR 
48543, Sept. 7, 1999]



Sec. 151.15  Movement of merchandise to a centralized examination station.

    (a) Permission to transfer merchandise for examination. When a 
shipment requires examination at a centralized examination station 
(CES), Customs Form 3461, or Customs Form 3461 (ALT) for land border 
cargo, or an attachment to either, may be used to request permission to 
transfer the merchandise to a CES. The entry filer must write, type or 
stamp the following lines on the form or attachment, and must supply the 
information called for on the first three lines:

Containers to be transferred: ------ All or,
    Container 's ------, ------, ------[bdlarr]

To CES----------------------------------[bdlarr]

Approved by: U.S. Customs Inspector------[bdlarr]

Date----------------------------------[bdlarr]


Unless the port director exercises his authority pursuant to paragraph 
(d) of this section, the reviewing inspector will initial and date the 
form or attachment being used, or stamp one copy of the Customs Form 
3461 or 3461 (ALT) if required by the port director. A copy of this 
document will act as notification and authorization to the entry filer 
that the merchandise must be transferred to the importer-designated CES 
unless another CES is designated by the port director under paragraph 
(d) of this section.
    (b) Assumption of liability during transfer. Merchandise designated 
for examination may be transferred from the importing carrier's point of 
unlading or from a bonded facility, to a CES, only if the transfer takes 
place under bond. The entry filer shall select one of the following 
bonded movements for the transfer to the CES unless the type of bonded 
movement to be used is specified by the port director under paragraph 
(d) of this section:
    (1) If the merchandise is tranferred directly to a CES by an 
importing carrier, the importing carrier shall remain liable under the 
terms of its international carrier bond for the proper safekeeping and 
delivery of the merchandise until it is receipted for by the CES 
operator.
    (2) If the merchandise is transferred directly from a bonded 
carrier's facility to a CES or is delivered directly to the CES by a 
bonded carrier, the bonded carrier shall remain liable under the terms 
of its custodial bond for the proper safekeeping and delivery of the 
merchandise until it is receipted for by the CES operator.
    (3) If containerized cargo, including excess loose cargo that is 
part of the containerized cargo, is transferred to a CES operator's own 
facility using his own vehicles, the CES operator shall be liable under 
the terms of his custodial bond for the proper safekeeping and delivery 
of the merchandise to the CES facility.
    (4) If the importer or his agent acting as importer of record 
transfers the merchandise to a CES, that importer or agent shall assume 
liability under his importation and entry bond (see Sec. 151.7(d) of 
this part) for the proper transfer of the merchandise until it is 
receipted for by the CES operator.
    (c) Annual blanket transfer. Port directors may institute an annual 
blanket transfer application procedure to facilitate any of the bonded 
movements described in paragraph (b) of this section.
    (d) Designation of bonded movement and CES to be used. In the event 
the port director deems it necessary, he may direct the type of bonded 
movement to be used to transfer merchandise to a CES and may designate 
the CES at which examination must take place. In either case the port 
director's action will be noted on the Customs Form 3461 or 3461 (ALT) 
or attachment thereto.

[T.D. 93-6, 58 FR 5606, Jan. 22, 1993]

[[Page 192]]



Sec. 151.16  Detention of merchandise.

    (a) Exemptions from applicability. The provisions of this section 
are not applicable to detentions effected by Customs on behalf of other 
agencies of the U.S. Government in whom the determination of 
admissibility is vested and to detentions arising from possibly 
piratical copies (see part 133, subpart E, of this chapter) or import of 
goods bearing marks which are confusingly similar to recorded trademarks 
or restricted gray market merchandise (see part 133, subpart C, of this 
chapter.)
    (b) Decision to detain or release. Within the 5-day period 
(excluding weekends and holidays) following the date on which 
merchandise is presented for Customs examination, Customs shall decide 
whether to release or detain merchandise. Merchandise which is not 
released within such 5-day period shall be considered to be detained 
merchandise. For purposes of this section, merchandise shall be 
considered to be presented for Customs examination when it is in a 
condition to be viewed and examined by a Customs officer. Mere 
presentation to the examining officer of a cargo van, container or 
instrument of international traffic in which the merchandise to be 
examined is contained will not be considered to be presentation of 
merchandise for Customs examination for purposes of this section. Except 
when merchandise is examined at the public stores, the importer shall 
pay all costs relating to the preparation and transportation of 
merchandise for examination.
    (c) Notice of detention. If a decision to detain merchandise is 
made, or the merchandise is not released within the 5-day period, 
Customs shall issue a notice to the importer or other party having an 
interest in such merchandise no later than 5 days (excluding weekends 
and holidays) after such decision or failure to release (see paragraph 
(b) of this section). Issuance of a notice of detention is not to be 
construed as a final determination as to admissibility of the 
merchandise. The notice shall be prepared by the Customs officer 
detaining the merchandise and shall advise the importer or other 
interested party of the:
    (1) Initiation of the detention, including the date the merchandise 
was presented for examination;
    (2) Specific reason for the detention;
    (3) Anticipated length of the detention;
    (4) Nature of the tests or inquiries to be conducted; and
    (5) Nature of any information which, if supplied to the Customs 
Service, may accelerate the disposition of the detention.
    (d) Providing testing results. Upon written request by the importer 
or other party having an interest in detained merchandise, Customs shall 
provide copies of the results of any testing conducted on the 
merchandise together with a description of the testing procedures and 
methodologies used (unless such procedures or methodologies are 
proprietary to the holder of a copyright or patent or were developed by 
Customs for enforcement purposes). The results and test description 
shall be in sufficient detail to permit the duplication and analysis of 
the testing and the results.
    (e) Final determinations. A final determination with respect to 
admissibility of detained merchandise will be made within 30 days from 
the date the merchandise is presented for Customs examination. Such a 
determination may be the subject of a protest.
    (f) Effect of failure to make a determination. The failure by 
Customs to make a final determination with respect to the admissibility 
of detained merchandise within 30 days after the merchandise has been 
presented for Customs examination, or such longer period if specifically 
authorized by law, shall be treated as a decision by Customs to exclude 
the merchandise for purposes of section 514(a)(4) of the Tariff Act of 
1930, as amended (19 U.S.C. 1514(a)(4)). Such a deemed exclusion may be 
the subject of a protest.
    (g) Failure to decide protest. If a protest which is filed as a 
result of a final determination or a deemed exclusion of detained 
merchandise is not allowed or denied in whole or in part before the 30th 
day after the day on which the protest was filed, it shall be treated as 
having been denied on such 30th day for purposes of 28 U.S.C. 1581.

[[Page 193]]

    (h) Decision before commencement of court action. Customs may at any 
time after a deemed denial of a protest as provided in paragraph (g) of 
this section, but before commencement of a court action as provided in 
paragraph (i) of this section, grant a protest and permit release of 
detained merchandise, or deny a protest in accordance with Sec. 174.30 
of this chapter.
    (i) Commencement of court action; burden of proof and decisions of 
the court. Once a court action respecting a detention is commenced, 
unless Customs establishes by a preponderance of the evidence that an 
admissibility decision has not been reached for good cause, the court 
shall grant the appropriate relief which may include, but is not limited 
to, an order to cancel the detention and release the merchandise.
    (j) Seizure and forfeiture; denial of entry or exportation. If 
otherwise provided by law, detained merchandise may be seized and 
forfeited. In lieu of seizure and forfeiture, where authorized by law, 
Customs may deny entry and permit the merchandise to be exported, with 
the importer responsible for paying all expenses of exportation.

[T.D. 99-65, 64 FR 43611, Aug. 11, 1999]



                 Subpart B_Sugars, Sirups, and Molasses



Sec. 151.21  Definitions.

    The following are general definitions for the purposes of this 
subpart in applying the provisions of Chapters 17 and 18, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202):
    (a) Degree. ``Degree'' or ``sugar degree'' means an International 
Sugar Degree as determined by polarimetric test performed in accordance 
with procedures recognized by the International Commission for Uniform 
Methods of Sugar Analysis. This test discloses the percentage of sucrose 
contained in the sugar.
    (b) Total sugars. ``Total sugars'' means the sum of the sucrose, the 
raffinose, and the reducing sugars.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51268, Dec. 21, 1988]



Sec. 151.22  Estimated duties on raw sugar.

    Estimated duties shall be taken on raw sugar, as defined in 
Subheading Note 1 to Chapter 17, Harmonized Tariff Schedule of the 
United States, on the basis of not less than 96[deg] polariscopic test 
unless the invoice shows that the sugar is of a lower grade than that of 
the ordinary commercial shipment.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51268, Dec. 21, 1988]



Sec. 151.23  Allowance for moisture in raw sugar.

    Inasmuch as the absorption of sea water or moisture reduces the 
polariscopic test of sugar, there shall be no allowance on account of 
increased weight of raw sugar importations due to unusual absorption of 
sea water or other moisture while on the voyage of importation. Any 
portion of the cargo claimed by the importer to have absorbed sea water 
or moisture on the voyage of importation shall be weighed, sampled, and 
tested separately. No such claim shall be considered if made after the 
sugar claimed to have been damaged has been weighed.



Sec. 151.24  Unlading facilities for bulk sugar.

    When dutiable sugar is to be imported in bulk, a full description of 
the facilities to be used in unlading the sugar shall be submitted to 
the Commissioner of Customs as far as possible in advance of the date of 
importation, and special instructions will be issued as to the methods 
to be applied in weighing and sampling such sugar.



Sec. 151.25  Mixing classes of sugar.

    No regulations relative to the weighing, taring, sampling, 
classifying, and testing of imported sugar shall be so construed as to 
permit mixing together sugar of different classes, such as centrifugal, 
beet, molasses, or any sugar different in character from those 
mentioned, for the purpose of weighing, taring, sampling, or testing.

[[Page 194]]



Sec. 151.26  Molasses in tank cars.

    When molasses is imported in tank cars, the importer shall file with 
the port director a certificate showing whether there is any substantial 
difference either in the total sugars or the character of the molasses 
in the different cars.



Sec. 151.27  Weighing and sampling done at time of unlading.

    Sugar, sirup, and molasses requiring either weighing or sampling 
shall be weighed or sampled at the time of unlading. When such 
merchandise requires both weighing and sampling, these operations shall 
be performed simultaneously.



Sec. 151.28  Gauging of sirup or molasses discharged into storage tanks.

    (a) Plans of storage tank to be filed. When sirup or molasses is 
imported in bulk in tank vessels and is to be pumped or discharged into 
storage tanks, before the discharging is permitted there shall be filed 
with the port director a certified copy of the plans and gauge table of 
the storage tank showing all inlets and outlets and stating accurately 
the capacity in liters per centimeter of height of the tank from an 
indicated starting point.
    (b) Settling before gauging. After the discharge is completed, all 
inlets to the tank shall be carefully sealed and the sirup or molasses 
left undisturbed for a period not to exceed 20 days to allow for 
settling before being gauged. When a request for immediate gauging is 
made in writing by the importer, it shall be allowed by the port 
director.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 80-142, 45 
FR 36384, May 30, 1980; T.D. 89-1, 53 FR 51268, Dec. 21, 1988]



Sec. 151.29  Expense of unlading and handling.

    No expense incidental to the unlading, transporting, or handling of 
sugar, sirup, or molasses for convenient weighing, gaging, measuring, 
sampling, or marking shall be borne by the Government.



Sec. 151.30  Sugar closets.

    Sugar closets for samples shall be substantially built and secured 
by locks furnished by Customs. They shall be conveniently located as 
near as possible to the points of discharge they are intended to serve. 
They shall be provided by the owner of the premises on which they are 
located and shall be so situated that sugar, sirup, and molasses stored 
therein shall not be subjected to extremes of temperature or humidity.



Sec. 151.31  [Reserved]



               Subpart C_Petroleum and Petroleum Products



Sec. 151.41  Information on entry summary.

    On the entry summary for petroleum or petroleum products in bulk, 
the importer shall show the API gravity at 60[deg] Fahrenheit, in 
accordance with the current edition of the ASTM-IP Petroleum Measurement 
Tables (American Edition), approved by the American Society for Testing 
and Materials. The appropriate unabridged table shall be used in the 
reduction of volume to 60[deg] F. If the exact volumetric quantity 
cannot be determined in advance, the entry summary may be made for ``-- 
barrels, more or less'', but in no case may the estimate vary by more 
than three percent from the gross quantity unladen. The term ``barrels'' 
is defined in Chapter 27, Additional U.S. Note 7, Harmonized Tariff 
Schedule of the United States. The information required by this section 
also shall be shown on the entry summary permit if the entry summary is 
filed at the time of entry, and on each entry summary continuation sheet 
regardless of when the entry summary is filed.

[T.D. 80-142, 45 FR 36384, May 30, 1980, as amended by T.D. 82-224, 47 
FR 53728, Nov. 29, 1982; T.D. 89-1, 53 FR 51268, Dec. 21, 1988]



Sec. 151.42  Controls on unlading and gauging.

    (a) Methods of control. (1) Each port director shall establish 
controls and checks on the unlading and measurement of petroleum and 
petroleum products imported in bulk by vessel, truck, railroad car, 
pipeline, or other carrier. One of the following methods of control 
shall be employed:

[[Page 195]]

    (i) Customs-approved metering and sampling installations provided by 
the importer;
    (ii) Shore tank gauging; or
    (iii) Weighing for trucks and railroad cars.
    (2) Vessel ullages shall be taken in every case unless the port 
director determines that it is impracticable to do so for safety or 
technological reasons. Ullages may be taken for trucks and railroad cars 
if weighing or shore tank gauging is not available as a method of 
control. Vessel ullages will not be used to determine the quantity 
unladen unless none of the other methods provided for in this paragraph 
is available or adequate.
    (3) The metering and sampling installations described in paragraph 
(a)(1)(i) of this section are approved by Customs on a case-by-case 
basis. Importers seeking approval shall send a complete description of 
the installation to the port director who, with the concurrence of the 
Director, Laboratory & Scientific Services, or his designee, shall give 
approval or shall state, in writing, the reasons for disapproval. 
Approved installations are subject to periodic verification by Customs. 
Importers desiring to modify a Customs-approved installation shall 
obtain Customs approval beforehand.
    (b) Duties of Customs officers. Customs officers may perform or 
witness ullaging and gauging as follows:
    (1) Opening ullages.
    (2) Closing ullages of carriers which have not completely discharged 
cargo, or if an importer or carrier requests Customs to witness closing 
ullages because of special problems.
    (3) Shore tank gauges performed by company or related-party 
employees.
    (4) Between 5 and 10 per cent of shore tank gauges conducted by 
commercial gaugers.
    (5) Shore tank gauges, including those conducted by a commercial 
gauger if no carrier ullages are taken.
    (c) Manifest discrepancies. Manifest discrepancies (shortages and 
overages) shall be reported by or on behalf of the carrier in the manner 
specified in Sec. 4.12 of this chapter. If a reported discrepancy is 
not explained to the satisfaction of the port director, the master or 
other person in charge, or the owner of the vessel or vehicle, or any 
person directly or indirectly responsible for the discrepancy, will be 
subject to the imposition of the appropriate penalty under section 460, 
584, or 592, Tariff Act of 1930, as amended (19 U.S.C. 1460, 1584, 
1592).

[T.D. 80-142, 45 FR 36384, May 30, 1980, as amended by T.D. 82-224, 47 
FR 53728, Nov. 29, 1982; T.D. 87-39, 52 FR 9790, Mar. 26, 1987; T.D. 89-
1, 53 FR 51268, Dec. 21, 1988; T.D. 91-77, 56 FR 46115, Sept. 10, 1991]



Sec. 151.43  [Reserved]



Sec. 151.44  Storage tanks.

    (a) Plans and gauge tables. When petroleum or petroleum products 
subject to duty at a specific rate per barrel are imported in bulk in 
tank vessels and are to be transferred into shore storage tanks, both 
the plans of each shore tank showing all outlets and inlets and the 
gauge table for each tank showing its capacity in barrels per centimeter 
or tenth of a centimeter of height shall be certified as correct by the 
proprietor of the tank. One set of these plans and gauge tables so 
certified shall be kept on file at the plant of the oil company and 
shall be available at all times to Customs officers. Another certified 
set of the shore tank plans and gauge tables shall be filed with the 
port director for use in verifying the Customs officers' reports. The 
port director may require such additional sets of shore tank plans, 
including subsidiary pipeline plans, and gauge tables as he may deem 
necessary. The storage tank proprietor shall maintain the plans and 
gauge tables for 3 years after discontinuing use of the storage tanks as 
bonded warehouses for the storage of imported petroleum or petroleum 
products.
    (b) Tags required on valves. The inlet and outlet valves of each 
tank shall have tags of a permanent type affixed by the proprietor or 
lessee indicating the use of the valves.
    (c) Verification of gauge tables. Whenever he has reason to suspect 
their reliability, the port director may require the measurement and 
calibrations shown on the gauge tables to be verified by a Customs 
officer. If no qualified Customs officer is available,

[[Page 196]]

the port director may accept an independent certification verifying the 
measurements and calibrations. The independent verification shall be 
performed at the expense of the storage tank proprietor.

[T.D. 80-142, 45 FR 36384, May 30, 1980, as amended by T.D. 89-1, 53 FR 
51268, Dec. 21, 1988]



Sec. 151.45  Storage tanks bonded as warehouses.

    (a) Application. Tanks for the storage of imported petroleum or 
petroleum products in bulk may be bonded as warehouses of class 2 if to 
be used exclusively for the storage of petroleum or petroleum products 
belonging or consigned to the owner or lessee of the tank. In addition 
to the documents and bonds required to be filed with the application to 
bond (see Sec. 19.2 of this chapter), the certified plans and gauge 
tables required by Sec. 151.44 shall be filed.
    (b) Removal of nonbonded petroleum. If a bonded tank is not empty at 
the time the first importation of bonded petroleum or petroleum products 
is to be stored therein, the amount of nonbonded petroleum or petroleum 
products in the tank shall be withdrawn by the proprietor as soon as 
possible. The request to withdraw shall be in the form of a letter and 
no formal withdrawal need be filed. Domestic or duty-paid petroleum or 
petroleum products shall not thereafter be stored in the tank as long as 
the tank remains bonded.
    (c) Information on warehouse withdrawal. Warehouse withdrawals of 
petroleum or petroleum products from bonded tanks shall show the 
information specified in Sec. 151.41, as well as the designation of the 
tank from which the merchandise is to be withdrawn. Such withdrawals may 
be made for ``---- U.S. gallons, more or less'', but in no case may the 
estimate vary by more than three percent from the gross quantity 
unladen.

[T.D. 80-142, 45 FR 36384, May 30, 1980, as amended by T.D. 87-39, 52 FR 
9790, Mar. 26, 1987]



Sec. 151.46  Allowance for detectable moisture and impurities.

    An allowance for all detectable moisture and impurities present in 
or upon imported petroleum or petroleum products shall be made in 
accordance with Sec. 158.13 of this chapter.

[T.D. 90-78, 55 FR 40167, Oct. 2, 1990]



Sec. 151.47  Optional entry of net quantity of petroleum or petroleum products.

    Instead of stating the gross quantity of petroleum or petroleum 
products on the entry summary, the importer may state the net quantity. 
The analytical report from the Customs-accredited commercial laboratory 
shall be filed with the entry summary.

[T.D. 87-39, 52 FR 9790, Mar. 26, 1987, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



     Subpart D_Metal-Bearing Ores and Other Metal-Bearing Materials



Sec. 151.51  Sampling requirements.

    (a) General. Except as provided in paragraph (b) of this section, 
when metal-bearing ores and other metal-bearing materials which are 
classifiable under Chapter 26, Harmonized Tariff Schedule of the United 
States (HTSUS) (19 U.S.C. 1202), are entered for consumption or 
warehousing at the port of first arrival, they shall be sampled for 
assay and moisture purposes in accordance with Sec. 151.52. If proper 
facilities for weighing or sampling are not available at the port of 
entry, the merchandise shall be transported under bond to the place of 
sampling. The sampling or weighing of metal-bearing ores or materials at 
any place other than the port of entry shall be at the expense of the 
parties in interest.
    (b) Ores of low metal content. When, on the basis of invoice 
information, the nature of any available sample, knowledge of prior 
importations of similar materials, and other data, the port director is 
satisfied that metal-bearing ores entered under heading 2617, HTSUS, as 
containing less than 1 percent of metals dutiable under headings 2603, 
2607, and 2608, HTSUS, are properly entered, he may liquidate the entry 
on the basis of the assay information contained in the entry papers. 
However, the sampling and testing procedures prescribed in Sec. Sec. 
151.52 and 151.54

[[Page 197]]

shall be followed at random intervals for verification purposes.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



Sec. 151.52  Sampling procedures.

    (a) Commercial samples taken under Customs supervision. 
Representative commercial moisture and assay samples shall be taken 
under Customs supervision for testing by the Customs laboratory. The 
samples used for the moisture test shall be representative of the 
shipment at the time the shipment is weighed for Customs purposes. When 
a shipment is made up of a number of lots a composite sample of the 
shipment shall be drawn for assay, providing composite sampling is 
feasible and assays of the individual lots are not required for tariff 
classification or other Customs purposes. The composite sample shall 
consist of proportional parts by weight of the prepared sample drawn 
from the various lots represented and shall be thoroughly mixed.
    (b) Commercial samples furnished by importer. When commercial 
samples cannot be taken under Customs supervision, the importer shall be 
required to furnish a verified commercial moisture sample and prepared 
assay sample certified to be representative of the shipment at the time 
the shipment was weighed for Customs purposes. The samples shall be in 
appropriate containers, properly labeled, and shall be accompanied by a 
statement including:
    (1) Entry number,
    (2) Lots represented,
    (3) Kind of ore or material,
    (4) Date and place where sampling occurred, and
    (5) The name and address of the sampling concern.
    (c) Samples taken by Customs. Where no commercial samples have been 
taken, the port director shall take representative samples from 
different parts of the shipment.



Sec. 151.53  Sample lockers.

    A suitable place or containers shall be provided for the safekeeping 
of all Customs samples under Customs lock or seal.



Sec. 151.54  Testing by Customs laboratory.

    Samples taken in accordance with Sec. 151.52 shall be promptly 
forwarded to the appropriate Customs laboratory for testing in 
accordance with commercial methods. The port director may secure from 
the importer a certified copy of the commercial settlement tests for 
moisture and for assay which shall be transmitted with the commercial 
samples to the Custom laboratory. If the Customs tests are not in 
substantial agreement with the settlement tests, the Customs laboratory 
director shall review his tests. The Customs tests shall be used in 
determining the final duties on the merchandise, except that the 
settlement tests shall be used if, in the opinion of the Customs 
laboratory director:
    (a) The settlement and Customs tests differ by no more than is to be 
expected between qualified laboratories, and
    (b) The use of the settlement test results will not require a 
different tariff classification or rate of duty than is indicated by the 
Customs test.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 87-39, 52 FR 
9791, Mar. 26, 1987]



Sec. 151.55  Deductions for loss during processing.

    Deductions for the loss of copper, lead, or zinc content during 
processing, as authorized by Chapter 26, Additional U.S. Note 1, 
Harmonized Tariff Schedule of the United States (19 U.S.C. 1202), shall 
be made by the port director in the liquidation of any entry only if the 
importer has followed the procedures set forth in that headnote. See 
Sec. Sec. 19.17 through 19.25 of this chapter for procedures applicable 
to bonded smelting and refining warehouses.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



                         Subpart E_Wool and Hair



Sec. 151.61  Definitions.

    The following are general definitions for the purposes of this 
subpart:
    (a) Clean kg. `Clean kg' means kilograms of clean yield as defined 
in paragraph (b) of this section.

[[Page 198]]

    (b) Clean yield. Except for the purposes of carbonized fibers, 
``Clean yield'' means the absolute clean content (that is, all that 
portion of the merchandise which consists exclusively of wool or hair 
free of all vegetable and other foreign material, containing by weight 
12 percent of moisture and 1.5 percent of material removable from the 
wool or hair by extraction with alcohol, and having an ash content of 
not over 0.5 percent by weight), less an allowance, equal by weight to 
0.5 percent of the absolute clean content plus 60 percent of the 
vegetable matter present, but not exceeding 15 percent by weight of the 
absolute clean content, for wool or hair that would ordinarily be lost 
during commercial cleaning operations.
    (c) For the purposes of carbonized fibers, the term clean yield 
means the condition as entered.
    (d) Sampling unit. ``Sampling unit'' means all the similar packages 
covered by one entry or withdrawal containing wool or hair of the same 
kind or same general condition and character, produced in the same 
country, packed in substantially the same manner, and entered as or 
found to be subject to the same rate of entry.
    (e) General sample. ``General sample'' means the composite of the 
individual portions of wool or hair drawn from a sampling unit.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



Sec. 151.62  Information on invoices.

    Invoices of wool or hair subject to duty at a rate per clean 
kilogram under Chapter 51, Harmonized Tariff Schedule of the United 
States (19 U.S.C. 1202), shall show the following detailed information 
in addition to other information required:
    (a) Condition, that is, whether in the grease, washed, pulled, on 
the skin, scoured, carbonized, burr-picked, willowed, handshaken, or 
beaten;
    (b) Whether free of vegetable matter, practically free, slightly 
burry, medium burry, heavy burry;
    (c) Whether in the fleece, skirted, matchings, or sorted;
    (d) Length, that is, whether super combing, ordinary combing, 
clothing, or filling;
    (e) Country of origin, and, if possible, the province, section, or 
locality of production;
    (f) If wool, the type symbol by which it is bought and sold in the 
country of origin and the grade of each lot covered by the invoice, 
specifying the standard or basis used, that is, whether U.S. Official 
Standards or the commercial terms to designate grade in the country of 
shipment; and
    (g) Net weight of each lot of wool or hair covered by the invoice in 
the condition in which it is shipped, and the shipper's estimate of the 
clean yield of each lot by weight or by percentage.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



Sec. 151.63  Information on entry summary.

    Each entry summary covering wool or hair subject to duty at a rate 
per clean kilogram under Chapter 51, Harmonized Tariff Schedule of the 
United States (19 U.S.C. 1202), shall show as to each lot of wool or 
hair covered thereby, in addition to other information required, the 
total estimated or actual net weight of the wool or hair in its 
condition as imported, its total estimated clean yield in kilograms, and 
the estimated percentage clean yield. (19 U.S.C. 1484.)

[T.D. 89-1, 53 FR 51269, Dec. 21, 1988]



Sec. 151.64  Extra copy of entry summary.

    One extra copy of the entry summary covering wool or hair subject to 
duty at a rate per clean kilogram shall be filed in addition to the 
copies otherwise required.

[T.D. 93-52, 58 FR 37854, July 14, 1993]



Sec. 151.65  Duties.

    Duties on wool or hair subject to duty at a rate per clean kilogram 
may be estimated at the time of filing the entry summary on the basis of 
the clean yield shown on the entry summary if the port director is 
satisfied that the revenue will be properly protected. Liquidated duties 
shall be based

[[Page 199]]

upon the port director's final determination of clean yield. Estimated 
and liquidated duties on wool or hair tested for clean yield pursuant to 
the provisions of Sec. 151.71, and withdrawn for consumption without a 
change in condition which affects the duties and in a quantity less than 
an entire sampling unit shall be determined on the basis of an 
appropriate adjustment of the estimated percentage clean yield shown on 
the entry summary for the wool or hair included in each of the lots 
covered by the withdrawal. This adjustment shall be made by increasing 
or decreasing such estimated percentage clean yield of each lot by the 
difference between the percentage clean yield of the related sampling 
unit, as determined by the port director, and the weighted average 
percentage clean yield for the sampling unit, as computed from the 
estimated percentages clean yield and net weights shown on the entry 
summary for the lots included in the sampling unit.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 79-221, 44 
FR 46829, Aug. 9, 1979; T.D. 89-1, 53 FR 51269, Dec. 21, 1988]



Sec. 151.66  Duty on samples.

    Duty shall be assessed and collected on samples taken pursuant to 
any provision in this subpart, whether taken by the importer or by 
Customs, unless an exemption or remission is obtained by compliance with 
an applicable provision of the law or regulations. The duty shall be 
assessed upon the samples in accordance with their condition at the time 
of importation, except in the case of merchandise manipulated in 
warehouse pursuant to section 562, Tariff Act of 1930, as amended (19 
U.S.C. 1562). The collection of duty on the samples may be postponed 
when the importation concerned is not entered for consumption until the 
withdrawal of the merchandise from which the samples are taken, or until 
an application for the destruction or abandonment of such merchandise 
has been accepted pursuant to an appropriate provision of the law or 
regulations.



Sec. 151.67  Sampling by importer.

    The importer may be permitted after entry to draw samples under 
Customs supervision in reasonable quantities from the packages of wool 
or hair designated for examination, provided the bales or bags are 
properly repacked and repaired by him. Any samples so withdrawn shall be 
weighed and a record showing the quantities thereof shall be made and 
filed with the related entry.



Sec. 151.68  Merchandise to be sampled and tested by Customs.

    The following shall be weighed, sampled, and tested for clean yield, 
unless such sampling or testing is not feasible:
    (a) All importation of wool or hair subject to duty at a rate per 
clean kilogram, except importations entered directly for manipulation 
under the provisions of section 562, Tariff Act of 1930, as amended (19 
U.S.C. 1562), or for manufacture under the provisions of section 311, 
Tariff Act of 1930, as amended (19 U.S.C. 1311);
    (b) All imported wool or hair manipulated under the provisions of 
section 562, Tariff Act of 1930, as amended (19 U.S.C. 1562) and 
dutiable after manipulation as wool or hair at a rate per clean 
kilogram; and
    (c) Such other imported wool or hair as the port director may 
designate.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



Sec. 151.69  Transfer or exportation of part of sampling unit.

    (a) Transfer of right to withdraw. When an original sampling unit 
has been weighed, sampled, and tested in accordance with this subpart 
and a part of such unit is covered by a transfer of the right to 
withdraw made pursuant to section 557, Tariff Act of 1930, as amended 
(19 U.S.C. 1557), the percentages clean yield of the part covered by the 
transfer and of the part not so covered shall be computed on the basis 
of the original Customs weights and test and the invoice data related to 
the respective parts.
    (b) Exportation. When part of such an original sampling unit is 
exported from continuous Customs custody without having been manipulated 
as provided for in section 562, Tariff Act of 1930, as amended (19 
U.S.C. 1562), the percentage clean yield of the part not exported shall 
be determined, at the discretion

[[Page 200]]

of the port director, either on the basis of a new determination by 
reweighing, resampling, and retesting, or by a computation as described 
in paragraph (a) of this section, for either the exported or the 
remaining part.



Sec. 151.70  Method of sampling by Customs.

    A general sample shall be taken from each sampling unit, unless it 
is not feasible to obtain a representative general sample of the wool or 
hair in a sampling unit or to test such a sample in accordance with the 
provisions of Sec. 151.71. At the request of the importer, two general 
samples may be taken from a sampling unit if the taking and testing of a 
second general sample is feasible. If two general samples are taken, one 
general sample shall be held for use in making a second test for clean 
yield if such a test is requested in accordance with the provisions of 
Sec. 151.71(c), or if a second test is found desirable by the port 
director or the chief chemist.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 93-52, 58 FR 
37854, July 14, 1993]



Sec. 151.71  Laboratory testing for clean yield.

    (a) Test and report by Customs laboratory. The clean yield of all 
general samples taken in accordance with Sec. 151.70 shall be 
determined by test in a Customs laboratory, unless it is found that it 
is not feasible to test such a sample and obtain a proper finding of 
percentage clean yield. A report of the percentage clean yield of each 
general sample as established by the test, or a statement of the reason 
for not testing a general sample, shall be forwarded to the port 
director.
    (b) Notification to importer. Where samples of wool or hair have 
been tested in a Customs laboratory and the port director has received a 
copy of the Laboratory Report, Customs Form 6415, the port director 
shall promptly provide notice of the test results by mailing a copy of 
that report to the importer.
    (c) Importer's request for retest. If the importer is dissatisfied 
with the port director's finding of clean yield, he may file with the 
port director a written request in duplicate for another laboratory test 
for percentage clean yield. Such request shall be filed within 14 
calendar days after the date of mailing of the notice of the port 
director's finding of clean yield. The request shall be granted if it 
appears to the port director to be made in good faith and if a second 
general sample as provided for in Sec. 151.70 is available for testing, 
or if all packages or, in the opinion of the Commissioner of Customs, an 
adequate number of the packages represented by the general sample are 
available and in their original imported condition.
    (d) Retest procedures. The second test shall be made upon the second 
general sample, if such a sample is available. If the second general 
sample is not available, the packages shall be reweighed, resampled, and 
tested in accordance with the provisions of this section. All costs and 
expenses of such operations, exclusive of the compensation of Customs 
officers, shall be borne by the importer, who may be present during such 
resampling and testing.
    (e) Request for commercial test. If the importer is dissatisfied 
with the results of the second laboratory test, or if a second 
laboratory test is not feasible, the wool or hair may be retested by a 
commercial laboratory in accordance with Sec. 151.73.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 75-121, 40 
FR 23458, May 30, 1975; T.D. 93-52, 58 FR 37854, July 14, 1993]



Sec. 151.73  Importer's request for commercial laboratory test.

    (a) Conditions for commercial test. If the importer is dissatisfied 
with the results of a retest made in accordance with Sec. 151.71(c), he 
may request that a commercial test be made to determine the percentage 
clean yield of the wool or hair.
    (b) Time for filing request. The importer's request shall be filed 
in writing with the port director within 14 calendar days after the date 
of mailing of the notice of the port director's findings based on the 
retest.
    (c) Procedures for commercial test. The port director shall cause a 
representative quantity of the wool or hair in dispute to be selected 
and tested by a commercial method approved by the

[[Page 201]]

Commissioner of Customs. The yield, as determined by such commercial 
test, shall be suitably adjusted to coincide with the definition of 
clean yield in Sec. 151.61(b). Such test shall be made under the 
supervision and direction of the port director at an establishment 
approved by him, and the expense thereof, including the actual expense 
of travel and subsistence of Customs officers but not their 
compensation, shall be paid by the importer.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 93-52, 58 FR 
37854, July 14, 1993]



Sec. 151.74  Retest at port director's request.

    If the port director is not satisfied with the results of any test 
provided for in Sec. 151.71 or Sec. 151.73, he may, within 14 calendar 
days after receiving the report of the results of such test, proceed to 
have another test made upon a suitable sample of the wool or hair at the 
expense of the Government. When the port director is proceeding to have 
another test made, he shall, within the 14-day period specified in this 
paragraph, notify the importer by mail of that fact.



Sec. 151.75  Final determination of clean yield.

    The port director shall base his final determination of clean yield 
upon a consideration of all the tests made in connection with the wool 
or hair concerned.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 93-52, 58 FR 
37854, July 14, 1993]



Sec. 151.76  Grading of wool.

    (a) Examination for grade. The port director shall cause wool 
dutiable at a rate per clean kilogram to be examined for grade. The 
standards for determining grades of wool shall be those which are 
established from time to time by the Secretary of Agriculture pursuant 
to law and which are in effect on the date of importation of the wool, 
as provided by Chapter 51, Additional U.S. Note 2, Harmonized Tariff 
Schedule of the United States (19 U.S.C. 1202).
    (b) Notification to importer. If classification of the wool at the 
grade or grades determined on the basis of the examination will result 
in the assessment of duty at a rate higher than the rate provided for 
wool of the grade stated in the entry, the port director shall promptly 
notify the importer by mail.
    (c) Importer's request for reexamination. If the importer is 
dissatisfied with the port director's findings as to the grade or grades 
of the wool, he may, within 14 calendar days after the date of mailing 
of the notice of the port director's findings, file in duplicate a 
written request for another determination of grade or grades, stating 
the reason for the request. Notice of the port director's findings on 
the basis of the reexamination of the wool shall be mailed to the 
importer.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



                            Subpart F_Cotton



Sec. 151.81  Definition of staple length.

    For the purposes of this subpart, ``staple length'' means the length 
of the fibers in a particular quantity of cotton designated in terms 
expressing the measurement by the millimeter or fraction thereof of a 
representative portion of the quantity in accordance with the Official 
Cotton Standards of the United States for length of staple, as 
established by the Secretary of Agriculture.

[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



Sec. 151.82  Information on invoices.

    Invoices of cotton provided for in subheading 5201.00.10, 
5201.00.20, 5201.00.50, Harmonized Tariff Schedule of the United States 
(19 U.S.C. 1202), shall show the following detailed information in 
addition to other required information:
    (a) One of the following statements regarding each lot of cotton 
covered by the invoice:
    (1) This is harsh or rough cotton under 19.05 millimeters in staple 
length;

[[Page 202]]

    (2) The staple length of this cotton is under 28.58 millimeters. 
(This statement is not to be used if paragraph (a)(1) of this section is 
applicable);
    (3) The staple length of this cotton is 28.58 millimeters or more 
and under 34.93 millimeters;
    (4) This cotton is harsh or rough cotton (other than cotton of 
perished staple, and cotton pickings), white in color, and has a staple 
length of 29.37 millimeters or more and under 44.45 millimeters;
    (5) The staple length of this cotton is 34.93 millimeters or more 
and under 42.86 millimeters; or
    (6) The staple length of this cotton is 42.86 millimeters or more.
    (b) The name of the country of origin and, if practicable, the name 
of the province or other subdivision of the country of origin in which 
the cotton was grown.
    (c) The variety of the cotton, such as Karnak, Gisha, Pima, Tanguis, 
etc.

[T.D. 89-1, 53 FR 51269, Dec. 21, 1988]



Sec. 151.83  Method of sampling.

    For determining the staple length of any lot of cotton for any 
Customs purposes, samples of the lot shall be taken in accordance with 
commercial practice.



Sec. 151.84  Determination of staple length.

    The port director shall have one or more samples of each sampled 
bale of cotton stapled by a qualified Customs officer, or a qualified 
employee of the Department of Agriculture designated by the Commissioner 
of Customs for the purpose, and shall promptly mail the importer a 
notice of the results determined.



Sec. 151.85  Importer's request for redetermination.

    If the importer is dissatisfied with the port director's 
determination, he may file with the port director, within 14 calendar 
days after the mailing of the notice, a written request in duplicate for 
a redetermination of the staple length. Each such request shall include 
a statement of the claimed staple length for the cotton in question and 
a clear statement of the basis for the claim. The request shall be 
granted if it appears to the port director to be made in good faith. In 
making the redetermination of staple length, the port director may 
obtain an opinion of a board of cotton examiners from the U.S. 
Department of Agriculture, if he deems such action advisable. All 
expenses occasioned by any redetermination of staple length, exclusive 
of the compensation of Customs officers, shall be reimbursed to the 
Government by the importer.



                         Subpart G_Fruit Juices



Sec. 151.91  Brix values of unconcentrated natural fruit juices.

    The following values have been determined to be the average Brix 
values of unconcentrated natural fruit juices in the trade and commerce 
of the United States, for the purposes of the provisions of the 
Additional U.S. Notes to Chapter 20, Harmonized Tariff Schedule of the 
United States (HTSUS) (19 U.S.C. 1202), and will be used in determining 
the dutiable quantity of imports of concentrated fruit juices, using the 
procedure set forth in Additional U.S. Note 2, Chapter 20, HTSUS:

------------------------------------------------------------------------
                                                                Average
                     Kind of fruit juice                      Brix value
                                                               (degrees)
------------------------------------------------------------------------
Apple.......................................................        13.3
Apricot.....................................................        14.3
Bilberry (Whortleberry, Vaccinium Myrtillium)...............        13.4
Black currant...............................................        15.0
Blackberry..................................................        10.0
Black raspberry.............................................        11.1
Blueberry...................................................        14.1
Boysenberry.................................................        10.0
Carob.......................................................        40.0
Cherry......................................................        14.3
Crabapple...................................................        15.4
Cranberry...................................................        10.5
Date........................................................        18.5
Dewberry....................................................        10.0
Elderberry..................................................        11.0
Fig.........................................................        18.2
Gooseberry..................................................         8.3
Grape (Vitis Vinifera)......................................        21.5
Grape (Slipskin varieties)..................................        16.0
Grapefruit..................................................        10.2
Guava.......................................................         7.7
Lemon.......................................................         8.9
Lime........................................................        10.0
Loganberry..................................................        10.5
Mango.......................................................        17.0
Naranjilla..................................................        10.5
Orange......................................................        11.8
Papaya......................................................        10.2
Passion Fruit...............................................        15.3
Peach.......................................................        11.8
Pear........................................................        15.4
Pineapple...................................................        14.3
Plum........................................................        14.3

[[Page 203]]

 
Pomegranate.................................................        18.2
Prune.......................................................        18.5
Quince......................................................        13.3
Raisin......................................................        18.5
Raspberry (Red raspberry)...................................        10.5
Red currant.................................................        10.5
Soursop (Guanabana, Annono Muricata)........................        16.0
Strawberry..................................................         8.0
Tamarind....................................................        55.0
Tangerine...................................................        11.5
Youngberry..................................................        10.0
------------------------------------------------------------------------


[T.D. 73-175, 38 FR 17470, July 2, 1973, as amended by T.D. 74-41, 39 FR 
2470, Jan. 23, 1974; T.D. 84-173, 49 FR 31852, Aug. 9, 1984; T.D. 89-1, 
53 FR 51269, Dec. 21, 1988]

Subpart H [Reserved]



                Subpart I_Cigars, Cigarillos, and Tobacco



Sec. 151.111  Cigars, cigarillos, and tobacco of Cuban origin.

    The tobacco National Import Specialist at the port of New York shall 
have general supervision of the examination of (a) all cigars or 
cigarillos which may be made or derived in whole or in part of Cuban 
articles, and (b) all tobacco which may be of Cuban origin.

[T.D. 81-189, 46 FR 37888, July 23, 1981]



PART 152_CLASSIFICATION AND APPRAISEMENT OF MERCHANDISE--Table of Contents




Sec.
152.0 Scope.

                      Subpart A_General Provisions

152.1 Definitions.
152.2 Notification to importer of increased duties.
152.3 Merchandise found not to correspond with invoice description.

                        Subpart B_Classification

152.11 Harmonized Tariff Schedule of the United States.
152.12 Applicable rates of duty.
152.13 Commingling of merchandise.
152.16 Judicial changes in classification.
152.17 Changes in classification by Congress or by Presidential 
          proclamation.

                         Subpart C_Appraisement

152.20-152.22 [Reserved]
152.23 Merchandise imported from intermediate countries.
152.24 [Reserved]
152.25 Conversion of foreign currency.
152.26 Furnishing value information to importer.

Subpart D [Reserved]

                   Subpart E_Valuation of Merchandise

152.100 Interpretative notes.
152.101 Basis of appraisement.
152.102 Definitions.
152.103 Transaction value.
152.104 Transaction value of identical merchandise and similar 
          merchandise.
152.105 Deductive value.
152.106 Computed value.
152.107 Value if other values cannot be determined or used.
152.108 Unacceptable bases of appraisement.

    Authority: 19 U.S.C. 66, 1401a, 1500, 1502, 1624;
    Subpart B also issued under 19 U.S.C. 1315;
    Subpart C also issued under 19 U.S.C. 1503;
    Section 152.3 also issued under 19 U.S.C. 1499;
    Section 152.13 also issued under 19 U.S.C. 1202 (General Note 3(f), 
Harmonized Tariff Schedule of the United States (HTSUS)).

    Source: T.D. 73-175, 38 FR 17477, July 2, 1973, unless otherwise 
noted.



Sec. 152.0  Scope.

    This part contains regulations pertaining to the tariff 
classification and appraisement of imported merchandise. Other 
applicable provisions are contained elsewhere in this chapter, such as 
in part 10 for articles conditionally free or subject to a reduced rate 
of duty, and in part 159 for relief from duties on articles lost, 
damaged, etc.



                      Subpart A_General Provisions



Sec. 152.1  Definitions.

    The following are general definitions for the purposes of part 152:
    (a)-(b) [Reserved]
    (c) Date of exportation. ``Date of exportation,'' or the ``time of 
exportation'' referred to in section 402, Tariff Act of 1930, as amended 
(19 U.S.C. 1401a), means the actual date the merchandise finally leaves 
the country of exportation for the United States. If no positive 
evidence is at hand as to the actual date of exportation, the port 
director shall ascertain or estimate the date of exportation by all 
reasonable

[[Page 204]]

ways and means in his power, and in so doing may consider dates on bills 
of lading, invoices, and other information available to him.
    (d) Fair retail value. ``Fair retail value'' or ``fair market 
value'' as used in Section XXII, Harmonized Tariff Schedule of the 
United States, and part 148 of this chapter means the price actually 
paid or payable for all imported merchandise, or if not purchased, the 
value as otherwise ascertained under 19 CFR 152.100 et seq.

[T.D. 73-175, 38 FR 17477, July 2, 1973, as amended by T.D. 87-89, 52 FR 
24446, July 1, 1987; T.D. 89-1, 53 FR 51269, Dec. 21, 1988]



Sec. 152.2  Notification to importer of increased duties.

    If the port director believes that the entered rate or value of any 
merchandise is too low, or if he finds that the quantity imported 
exceeds the entered quantity, and the estimated aggregate of the 
increase in duties on that entry exceeds $15, he shall promptly notify 
the importer on Customs Form 29, specifying the nature of the difference 
on the notice. Liquidation shall be made promptly and shall not be 
withheld for a period of more than 20 days from the date of mailing of 
such notice unless in the judgment of the port director there are 
compelling reasons that would warrant such action.

[T.D. 73-175, 38 FR 17477, July 2, 1973, as amended by T.D. 82-224, 47 
FR 53728, Nov. 29, 1982; T.D. 93-66, 58 FR 44131, Aug. 19, 1993]



Sec. 152.3  Merchandise found not to correspond with invoice description.

    When any merchandise not corresponding with the description given in 
the invoice is found by the examining officer, duties shall be assessed 
on the merchandise actually found. If the discrepancy appears 
conclusively to be the result of a mistake and not of any intent to 
defraud, no proceedings for forfeiture shall be taken. When the entire 
shipment does not agree with the invoice and there is no evidence of any 
intent to defraud, a new entry shall be required and the estimated duty 
paid on the original entry shall be refunded on liquidation as in the 
case of a nonimportation. (Sec. 499, 46 Stat. 728, as amended; 19 U.S.C. 
1499)



                        Subpart B_Classification



Sec. 152.11  Harmonized Tariff Schedule of the United States.

    Merchandise shall be classified in accordance with the Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202) as interpreted by 
administrative and judicial rulings.

[T.D. 73-175, 38 FR 17477, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51269, Dec. 21, 1988]



Sec. 152.12  Applicable rates of duty.

    Rates of duty shall be based on the detailed instructions in Sec. 
141.69 of this chapter, which provides in general that the rates of duty 
applicable to merchandise shall be those in effect on the date of entry 
or withdrawal for consumption, except for certain merchandise covered by 
an entry for immediate transportation or overcarried and returned to the 
port of entry.



Sec. 152.13  Commingling of merchandise.

    (a) Notice to importer. The port director shall give written notice 
to the importer as promptly as possible after any commingling is 
discovered.
    (b) Highest rate applicable. Commingled merchandise shall be 
assessed with duty at the highest rate or rates applicable to any one 
kind of merchandise included in the commingling, unless:
    (1) The quantity and value of each of the kinds so included can be 
readily ascertained by the usual method of CBP examination or by one or 
more of the methods specified in General Note 3(f), Harmonized Tariff 
Schedule of the United States (HTSUS) (19 U.S.C. 1202), or
    (2) The conditions specified in General Note 3(f), HTSUS, are 
satisfied.
    (c) Time limit. To obtain the benefit of General Note 3(f), HTSUS, 
the importer shall, within 30 days after the date of mailing or personal 
delivery of the notice provided for in paragraph (a) of this section, 
take appropriate action as follows:
    (1) File with the port director evidence showing performance of the 
commercial settlement tests specified in General Note 3(f), HTSUS; or
    (2) Perform the segregation under CBP supervision as specified in 
General Note 3(f), HTSUS; or

[[Page 205]]

    (3) File with the port director documentary proof which will satisfy 
him that the merchandise is entitled to the lower rate of duty under 
General Note 3(f), HTSUS.
    (d) Extension of time limit. The 30-day limit for filing the 
evidence specified in General Note 3(f) or for performing the 
segregation specified in General Note 3(f), Harmonized Tariff Schedule 
of the United States, may be extended by the port director for 
additional periods of 30 days each, but not beyond 6 months from the 
date of mailing or personal delivery of the notice provided for in 
paragraph (a) of this section, if the importer makes written application 
for each extension and gives satisfactory reasons for its allowance.

[T.D. 73-175, 38 FR 17477, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51270, Dec. 21, 1988; T.D. 95-29, 60 FR 18349, Apr. 11, 1995; T.D. 00-
81, 65 FR 68887, Nov. 15, 2000; T.D. 02-14, 67 FR 15099, Mar. 29, 2002; 
CBP Dec. 05-31, 70 FR 53062, Sept. 7, 2005]



Sec. 152.16  Judicial changes in classification.

    The following procedures apply to changes in classification made by 
decision of either the United States Court of International Trade or the 
United States Court of Appeals for the Federal Circuit, except to the 
extent otherwise provided in a ruling published in the Customs Bulletin 
pursuant to Sec. 177.10(a) of this chapter:
    (a) Identical merchandise under decision favorable to Government. 
The principles of any court decision favorable to the Government shall 
be applied to all merchandise identical with that passed on by the court 
which is covered by unliquidated entries, whether for consumption or 
warehouse.
    (b) Similar merchandise under decision favorable to Government. The 
principles of any court decision favorable to the Government shall be 
applied to merchandise, though not identical with the merchandise the 
subject of the court's decision, if its classification is affected by 
such principles, provided that it has been entered or withdrawn for 
consumption after 30 days from the date of publication of the court's 
decision in the Customs Bulletin.
    (c) Higher rate. If a court decision overruling a protest contains a 
definite statement that a higher rate than that assessed by the port 
director was properly chargeable, such higher rate shall be applied to 
all merchandise, whether identical or similar to that passed on by the 
court, which is affected by the principles of the court's decision and 
which is entered or withdrawn for consumption after 30 days from the 
date of the publication of the court's decision in the Customs Bulletin.
    (d) American manufacturer's petition upheld. If the court upholds a 
petition made by an American manufacturer, producer, or wholesaler under 
the provisions of section 516, Tariff Act of 1930, as amended (19 U.S.C. 
1516), the principles of the court's decision shall be applicable to all 
merchandise of that character which is entered or withdrawn for 
consumption after the date of publication of the court's decision in the 
Customs Bulletin. The liquidation of entries covering merchandise of 
that character made after publication of the court's decision shall be 
suspended in accordance with Sec. 159.57 of this chapter pending any 
rehearing or review, then liquidated, or, if necessary, reliquidated in 
accordance with the final judicial decision.
    (e) Other decisions adverse to Government. Unless the Commissioner 
of Customs otherwise directs, the principles of any court decision 
adverse to the Government (except for a decision upholding an American 
manufacturer's petition as covered in paragraph (d) of this section) 
shall be applied to unliquidated entries and protested entries which 
have not been denied in whole or in part and in which the same issue is 
involved as soon as the time within which an application for a rehearing 
or review may be filed has expired without such application having been 
made. See Sec. 176.31 of this chapter for the treatment of entries 
which are the subject of a court decision.

[T.D. 73-175, 38 FR 17477, July 2, 1973, as amended by T.D. 75-186, 40 
FR 31928, July 30, 1975; T.D. 85-90, 50 FR 21430, May 24, 1985]



Sec. 152.17  Changes in classification by Congress or by Presidential Proclamation.

    When a rate of Customs duty or internal revenue tax imposed upon or 
by reason of importation is changed by an

[[Page 206]]

act of Congress or by a proclamation of the President, the new rate 
shall be applied in accordance with the detailed instructions in Sec. 
141.69 of this chapter, which provides in general that the rates of duty 
applicable to merchandise shall be those in effect on the date of entry 
or withdrawal for consumption, except for certain merchandise covered by 
an entry for immediate transportation or overcarried and returned to the 
port of entry.



                         Subpart C_Appraisement



Sec. Sec. 152.20-152.22  [Reserved]



Sec. 152.23  Merchandise imported from intermediate countries.

    Merchandise imported from one country, being the growth, production, 
or manufacture of another country, shall for value purposes (see 
sections 402, Tariff Act of 1930, as amended; 19 U.S.C. 1401a) be 
treated as an exportation of the country from which it is immediately 
imported. However, if it appears by the invoice, bill of lading, or 
other evidence that the merchandise was destined for the United States 
at the time of original shipment, it shall be treated as an exportation 
of the country from which it was originally exported. The term 
``country'' is to be regarded for the purposes of this section as 
embracing all the possessions of a nation, however widely separated, 
which are subject to the same supreme executive and legislative 
authority and control.

[T.D. 73-175, 38 FR 17477, July 2, 1973, as amended by T.D. 87-89, 52 FR 
24446, July 1, 1987]



Sec. 152.24  [Reserved]



Sec. 152.25  Conversion of foreign currency.

    When foreign currency must be converted for purposes of 
appraisement, the instructions in subpart C of part 159 of this chapter 
shall be followed.



Sec. 152.26  Furnishing value information to importer.

    The port director shall furnish to importers the latest information 
as to values in his possession, subject to the following conditions:
    (a) Before appraisement. Value information shall be given before 
appraisement only in response to a specific oral or written request by 
the importer, supported by an adequate reason for the request, or where 
required by Customs purposes, such as in determining proper estimated 
duties to be deposited or notification of increased duties in accordance 
with Sec. 152.2.
    (b) Only for merchandise under port director's jurisdiction. The 
information shall be given only in regard to merchandise to be appraised 
by, or under the jurisdiction of, the port director who receives the 
request, and only with respect to merchandise for which there is 
presented evidence of a firm commitment or intent to import such 
merchandise into the United States.
    (c) Information by importer. Each request shall be accompanied by 
the latest information as to the values in question which the importer 
has or can reasonably obtain.
    (d) Information not binding. Value information shall be given by the 
port director only with an understanding and agreement in each case that 
the information is in no sense an appraisement and is not binding upon 
the port director's action when he appraises the merchandise.
    (e) No reply required after entry. The port director shall not be 
required to reply to a written request for value information after a 
value for the merchandise has been declared on entry unless he has 
information indicating a probable appraised value different from such 
entered value.

Subpart D [Reserved]



                   Subpart E_Valuation of Merchandise

    Source: T.D. 81-7, 46 FR 2600, Jan. 12, 1981, unless otherwise 
noted.



Sec. 152.100  Interpretative notes.

    The interpretative notes set forth in this subpart have been derived 
from information contained in the Statement of Administrative Action 
relating to customs valuation, submitted to and approved by Congress 
along with the Trade Agreements Act of 1979 (Pub. L.

[[Page 207]]

96-39), and will have the force and effect of regulations issued under 
this subpart.



Sec. 152.101  Basis of appraisement.

    (a) Effective date. The value for appraisement of merchandise 
exported to the United States on or after July 1, 1980, or, for articles 
classified under subheading 6401.10.00 Harmonized Tariff Schedule of the 
United States (19 U.S.C. 1202), on or after July 1, 1981, will be 
determined in accordance with section 402, Tariff Act of 1930 (19 U.S.C. 
1401a), as amended by section 201, Trade Agreements Act of 1979.
    (b) Methods. Imported merchandise will be appraised on the basis, 
and in the order, of the following:
    (1) The transaction value provided for in Sec. 152.103;
    (2) The transaction value of identical merchandise provided for in 
Sec. 152.104, if the transaction value cannot be determined, or can be 
determined but cannot be used because of the limitations provided for in 
Sec. 152.103(j);
    (3) The transaction value of similar merchandise provided for in 
Sec. 152.104, if the transaction value of identical merchandise cannot 
be determined;
    (4) The deductive value provided for in Sec. 152.105, if the 
transaction value of similar merchandise cannot be determined;
    (5) The computed value provided for in Sec. 152.106, if the 
deductive value cannot be determined; or
    (6) The value provided for in Sec. 152.107, if the computed value 
cannot be determined.
    (c) Importer's option. The importer may request the application of 
the computed value method before the deductive value method. The request 
must be made at the time the entry summary for the merchandise is filed 
with the port director (see Sec. 141.0a(b) of this chapter). If the 
importer makes the request, but the value of the imported merchandise 
cannot be determined using the computed value method, the merchandise 
will be appraised using the deductive value method if it is possible to 
do so. If the deductive value cannot be determined, the appraised value 
will be determined as provided for in Sec. 152.107.
    (d) Explanation to importer. Upon receipt of a written request from 
the importer within 90 days after liquidation, the port director shall 
provide a reasonable and concise written explanation of how the value of 
the imported merchandise was determined. The explanation will apply only 
to the imported merchandise being appraised and will not serve as 
authority with respect to the valuation of importations of any other 
merchandise at the same or a different port of entry. This procedure is 
for informational purposes only, and will not affect or replace the 
protest or administrative ruling procedures contained in parts 174 and 
177, respectively, of this chapter, or any other Customs procedures. 
Under this procedure, Customs will not be required to release any 
information not otherwise subject to disclosure under the Freedom of 
Information Act, as amended (5 U.S.C. 552), the Privacy Act of 1974 (5 
U.S.C. 552a), or any other statute (see part 103 of this chapter).

[T.D. 81-7, 46 FR 2600, Jan. 12, 1981, as amended by T.D. 89-1, 53 FR 
51270, Dec. 21, 1988]



Sec. 152.102  Definitions.

    As used in this subpart, the following terms will have the meanings 
indicated:
    (a) Assist. (1) ``Assist'' means any of the following if supplied 
directly or indirectly, and free of charge or at reduced cost, by the 
buyer of imported merchandise for use in connection with the production 
or the sale for export to the United States of the merchandise:
    (i) Materials, components, parts, and similar items incorporated in 
the imported merchandise.
    (ii) Tools, dies, molds, and similar items used in the production of 
the imported merchandise.
    (iii) Merchandise consumed in the production of the imported 
merchandise.
    (iv) Engineering, development, artwork, design work, and plans and 
sketches that are undertaken elsewhere than in the United States and are 
necessary for the production of the imported merchandise.
    (2) No service or work to which paragraph (a)(1)(iv) of this section 
applies will be treated as an assist if the service or work:

[[Page 208]]

    (i) Is performed by an individual domiciled within the United 
States;
    (ii) Is performed by that individual while acting as an employee or 
agent of the buyer of the imported merchandise; and
    (iii) Is incidental to other engineering, development, artwork, 
design work, or plans or sketches that are undertaken within the United 
States.
    (3) The following apply in determining the value of assists 
described in paragraph (a)(1)(iv) of this section:
    (i) The value of an assist that is available in the public domain is 
the cost of obtaining copies of the assist.
    (ii) If the production of an assist occurred in the United States 
and one or more foreign countries, the value of the assist is the value 
added outside the United States.
    (iii) If the assist was purchased or leased by the buyer from an 
unrelated person, the value of the assist is the cost of the purchase or 
of the lease.
    (b) Commission. ``Selling commission'' means any commission paid to 
the seller's agent, who is related to or controlled by, or works for or 
on behalf of, the manufacturer or the seller.
    (c) Generally accepted accounting principles. (1) ``Generally 
accepted accounting principles'' refers to any generally recognized 
consensus or substantial authoritative support regarding:
    (i) Which economic resources and obligations should be recorded as 
assets and liabilities;
    (ii) Which changes in assets and liabilities should be recorded;
    (iii) How the assets and liabilities and changes in them should be 
measured;
    (iv) What information should be disclosed and how it should be 
disclosed; and
    (v) Which financial statements should be prepared.
    (2) The applicability of a particular set of generally accepted 
accounting principles will depend upon the basis on which the value of 
the imported merchandise is sought to be established, and the relevant 
country for the point in contention.
    (3) Information submitted by an importer, buyer, or producer in 
regard to the appraisement of merchandise may not be rejected by Customs 
because of the accounting method by which that information was prepared, 
if the preparation was in accordance with generally accepted accounting 
principles.
    (d) Identical merchandise. ``Identical merchandise'' means 
merchandise identical in all respects to, and produced in the same 
country and by the same person as, the merchandise being appraised. If 
identical merchandise cannot be found (or for purposes of related buyer 
and seller transactions (see Sec. 152.103 (j)(2)(i)(A)) regardless of 
whether identical merchandise can be found), merchandise identical in 
all respects to, and produced in the same country as, but not produced 
by the same person as, the merchandise being appraised, may be treated 
as ``identical merchandise''. ``Identical merchandise'' does not include 
merchandise that incorporates or reflects any engineering, development, 
artwork, design work, or plan or sketch supplied free or at reduced cost 
by the buyer of the merchandise for use in connection with the 
production or sale for export to the United States of the merchandise, 
and is not an assist because undertaken within the United States.
    (e) Packing costs. ``Packing costs'' means the cost of all 
containers (exclusive of instruments of international traffic) and 
coverings of whatever nature and of packing, whether for labor or 
materials, used in placing merchandise in condition, packed ready for 
shipment to the United States.
    (f) Price actually paid or payable. ``Price actually paid or 
payable'' means the total payment (whether direct or indirect, and 
exclusive of any charges, costs, or expenses incurred for 
transportation, insurance, and related services incident to the 
international shipment of the merchandise from the country of 
exportation to the place of importation in the United States) made, or 
to be made, for imported merchandise by the buyer to, or for the benefit 
of, the seller.
    (g) Related persons. ``Related persons'' means: (1) Members of the 
same family, including brothers and sisters (whether by whole or half 
blood), spouse, ancestors, and lineal descendants.
    (2) Any officer or director of an organization, and that 
organization.

[[Page 209]]

    (3) An officer or director of an organization and an officer or 
director of another organization, if each individual also is an officer 
or director in the other organization.
    (4) Partners.
    (5) Employer and employee.
    (6) Any person directly or indirectly owning, controlling, or 
holding with power to vote, five percent or more of the outstanding 
voting stock or shares of any organization, and that organization.
    (7) Two or more persons directly or indirectly controlling, 
controlled by, or under common control with, any person.
    (h) Same class or kind. ``Merchandise of the same class or kind'' 
means merchandise (including, but not limited to, identical merchandise 
and similar merchandise) within a group or range of merchandise produced 
by a particular industry or industry sector.
    (i) Similar merchandise. ``Similar merchandise'' means merchandise 
produced in the same country and by the same person as the merchandise 
being appraised, like the merchandise being appraised in characteristics 
and component material, and commercially interchangeable with the 
merchandise being appraised. If similar merchandise cannot be found (or 
for purposes of related buyer and seller transactions (see Sec. 152.103 
(j)(2)(i)(A)) regardless of whether similar merchandise can be found), 
merchandise produced in the same country as, but not produced by the 
same person as, the merchandise being appraised, like the merchandise 
being appraised in characteristics and component material, and 
commercially interchangeable with the merchandise being appraised, may 
be treated as ``similar merchandise''. ``Similar merchandise'' does not 
include merchandise that incorporates or reflects any engineering, 
development, artwork, design work, or plan or sketch supplied free or at 
reduced cost by the buyer of the merchandise for use in connection with 
the production or the sale for export to the United States of the 
merchandise, and is not an assist because undertaken within the United 
States.
    (j) Sufficient information. ``Sufficient information'' means 
information that establishes the accuracy of:
    (1) Any amount:
    (i) Added under Sec. 152.103(b) to the price actually paid or 
payable;
    (ii) Deducted under Sec. 152.105(d) as profit or general expenses 
or value from further processing, or
    (iii) Added under Sec. 152.106(b) as profit or general expenses; or
    (2) Any difference taken into account under Sec. 152.103(j)(2)(ii); 
or
    (3) Any adjustment made under Sec. 152.104(d).
    (k) Unit price in greatest aggregate quantity. ``Unit price at which 
merchandise is sold in the greatest aggregate quantity'' means the unit 
price at which the ``merchandise concerned'' is sold to unrelated 
persons at the first commercial level after importation (in cases to 
which Sec. 152.105(c)(1) and (2) apply), or after further processing 
(in cases to which Sec. 152.105(c)(3) applies), at which the sales take 
place in a total volume greater than the total volume sold at any other 
unit price and sufficient to establish the unit price.

[T.D. 81-7, 46 FR 2600, Jan. 12, 1981, as amended by T.D. 97-82, 62 FR 
51771, Oct. 3, 1997]



Sec. 152.103  Transaction value.

    (a) Price actually paid or payable--(1) General. In determining 
transaction value, the price actually paid or payable will be considered 
without regard to its method of derivation. It may be the result of 
discounts, increases, or negotiations, or may be arrived at by the 
application of a formula, such as the price in effect on the date of 
export in the London Commodity Market. The word ``payable'' refers to a 
situation in which the price has been agreed upon, but actual payment 
has not been made at the time of importation. Payment may be made by 
letters of credit or negotiable instruments and may be made directly or 
indirectly.

    Example 1. In a transaction with foreign Company X, a U.S. firm pays 
Company X $10,000 for a shipment of meat products, packed ready for 
shipment to the United States. No selling commission, assist, royalty, 
or license fee is involved. Company X is not related to the U.S. 
purchaser and imposes no condition or limitation on the buyer.
    The customs value of the imported meat products is $10,000--the 
transaction value of the imported merchandise.

[[Page 210]]

    Example 2. A foreign shipper sold merchandise at $100 per unit to a 
U.S. importer. Subsequently, the foreign shipper increased its price to 
$110 per unit. The merchandise was exported after the effective date of 
the price increase. The invoice price of $100 was the price originally 
agreed upon and the price the U.S. importer actually paid for the 
merchandise.
    How should the merchandise be appraised?
    Actual transaction value of $100 per unit based on the price 
actually paid or payable.
    Example 3. A foreign shipper sells to U.S. wholesalers at one price 
and to U.S. retailers at a higher price. The shipment undergoing 
appraisement is a shipment to a U.S. retailer. There are continuing 
shipments of identical and similar merchandise to U.S. wholesalers.
    How should the merchandise be appraised?
    Actual transaction value based on the price actually paid or payable 
by the retailer.
    Example 4. Company X in the United States pay $2,000 to Y Toy 
Factory abroad for a shipment of toys. The $2,000 consists of $1,850 for 
the toys and $150 for ocean freight and insurance. Y Toy Factory would 
have charged Company X $2,200 for the toys; however, because Y owed 
Company X $350, Y charged only $1,850 for the toys. What is the 
transaction value?
    The transaction value of the imported merchandise is $2,200, that 
is, the sum of the $1,850 plus the $350 indirect payment. Because the 
transaction value excludes C.I.F. charges, the $150 ocean freight and 
insurance charge is excluded.
    Example 5. A seller offers merchandise at $100, less a 2% discount 
for cash. A buyer remits $98 cash, taking advantage of the cash 
discount.
    The transaction value is $98, the price actually paid or payable.

    (2) Indirect payment. An indirect payment would include the 
settlement by the buyer, in whole or in part, of a debt owed by the 
seller, or where the buyer receives a price reduction on a current 
importation as a means of settling a debt owed him by the seller. 
Activities such as advertising, undertaken by the buyer on his own 
account, other than those for which an adjustment is provided in Sec. 
152.103(b), will not be considered an indirect payment to the seller 
though they may benefit the seller. The costs of those activities will 
not be added to the price actually paid or payable in determining the 
customs value of the imported merchandise.
    (3) Assembled merchandise. The price actually paid or payable may 
represent an amount for the assembly of imported merchandise in which 
the seller has no interest other than as the assembler. The price 
actually paid or payable in that case will be calculated by the addition 
of the value of the components and required adjustments to form the 
basis for the transaction value.

    Example 1. The importer previously has supplied an unrelated foreign 
assembler with fabricated components ready for assembly having a value 
or cost at the assembler's plant of $1.00 per unit. The importer pays 
the assembler 50[cent] per unit for the assembly. The transaction value 
for the assembled unit is $1.50.
    Example 2. Same facts as Example 1 above except the U.S. importer 
furnishes to the foreign assembler a tooling assist consisting of a tool 
acquired by the importer at $1,000. The transportation expenses to the 
foreign assembler's plant for the tooling assist equal $100. The 
transaction value for the assembled unit would be $1.50 per unit plus a 
pro rata share of the tooling assist valued at $1,100.

    (4) Rebate. Any rebate of, or other decrease in, the price actually 
paid or payable made or otherwise effected between the buyer and seller 
after the date of importation of the merchandise will be disregarded in 
determining the transaction value under Sec. 152.103(b).
    (5) Foreign inland freight and other inland charges incident to the 
international shipment of merchandise--(i) Ex-factory sales. If the 
price actually paid or payable by the buyer to the seller for the 
imported merchandise does not include a charge for foreign inland 
freight and other charges for services incident to the international 
shipment of merchandise (an ex-factory price), those charges will not be 
added to the price.
    (ii) Sales other than ex-factory. As a general rule, in those 
situations where the price actually paid or payable for imported 
merchandise includes a charge for foreign inland freight, whether or not 
itemized separately on the invoices or other commercial documents, that 
charge will be part of the transaction value to the extent included in 
the price. However, charges for foreign inland freight and other 
services incident to the shipment of the merchandise to the United 
States may be considered incident to the international shipment of that 
merchandise within the meaning of

[[Page 211]]

Sec. 152.102(f) if they are identified separately and they occur after 
the merchandise has been sold for export to the United States and placed 
with a carrier for through shipment to the United States.
    (iii) Evidence of sale for export and placement for through 
shipment. A sale for export and placement for through shipment to the 
United States under paragraph (a)(5)(ii) of this section shall be 
established by means of a through bill of lading to be presented to the 
port director. Only in those situations where it clearly would be 
impossible to ship merchandise on a through bill of lading (e.g., 
shipments via the seller's own conveyance) will other documentation 
satisfactory to the port director showing a sale for export to the 
United States and placement for through shipment to the United States be 
accepted in lieu of a through bill of lading.
    (iv) Erroneous and false information. This regulation shall not be 
construed as prohibiting Customs from making appropriate additions to 
the dutiable value of merchandise in instances where verification 
reveals that foreign inland freight charges or other charges for 
services incident to the international shipment of merchandise have been 
overstated.
    (b) Additions to price actually paid or payable. (1) The transaction 
value of imported merchandise is the price actually paid or payable for 
the merchandise when sold for exportation to the United States, plus 
amounts equal to:
    (i) The packing costs incurred by the buyer with respect to the 
imported merchandise;
    (ii) Any selling commission incurred by the buyer with respect to 
the imported merchandise;
    (iii) The value, apportioned as appropriate, of any assist;
    (iv) Any royalty or license fee related to the imported merchandise 
that the buyer is required to pay, directly or indirectly, as a 
condition of the sale of the imported merchandise for exportation to the 
United States; and
    (v) The proceeds of any subsequent resale, disposal, or use of the 
imported merchandise that accrue, directly or indirectly, to the seller.
    (2) The price actually paid or payable for imported merchandise will 
be increased by the amounts attributable to the items (and no others) 
described in paragraphs (b)(1) (i) through (v) of this section to the 
extent that each amount is not otherwise included within the price 
actually paid or payable, and is based on sufficient information. If 
sufficient information is not available, for any reason, with respect to 
any amount referred to in this section, the transaction value will be 
treated as one that cannot be determined.
    (3) Interpretative note. A royalty is paid on the basis of the price 
in a sale in the United States of a gallon of a particular product 
imported by the pound and transformed into a solution after importation. 
If the royalty is based partially on the imported merchandise and 
partially on other factors which have nothing to do with the imported 
merchandise (such as if the imported merchandise is mixed with domestic 
ingredients and is no longer separately identifiable, or if the royalty 
cannot be distinguished from special financial arrangements between the 
buyer and the seller), it would be inappropriate to attempt to make an 
addition for the royalty. However, if the amount of this royalty is 
based only on the imported merchandise and can be readily quantified, an 
addition to the price actually paid or payable will be made.
    (c) Sufficiency of information. Additions to the price actually paid 
or payable will be made only if there is sufficient information to 
establish the accuracy of the additions and the extent to which they are 
not included in the price.
    (d) Assist. If the value of an assist is to be added to the price 
actually paid or payable, or to be used as a component of computed 
value, the port director shall determine the value of the assist and 
apportion that value to the price of the imported merchandise in the 
following manner:
    (1) If the assist consist of materials, components, parts, or 
similar items incorporated in the imported merchandise, or items 
consumed in the production of the imported merchandise, acquired by the 
buyer from an unrelated seller, the value of the assist is the

[[Page 212]]

cost of its acquisition. If the assist were produced by the buyer or a 
person related to the buyer, its value would be the cost of its 
production. In either case, the value of the assist would include 
transportation costs to the place of production.
    (2) If the assist consists of tools, dies, molds, or similar items 
used in the production of the imported merchandise, acquired by the 
buyer from an unrelated seller,the value of the assist is the cost of 
its acquisition. If the assist were produced by the buyer or a person 
related to the buyer, its value would be cost of its production. If the 
assist has been used previously by the buyer, regardless of whether it 
had been acquired or produced by him, the original cost of acquisition 
or production would be adjusted downward to reflect its use before its 
value could be determined. If the assist were leased by the buyer from 
an unrelated seller, the value of the assist would be the cost of the 
lease. In either case, the value of the assist would include 
transportation costs to the place of production. Repairs or 
modifications to an assist may increase its value.

    Example 1. A U.S. importer supplied detailed designs to the foreign 
producer. These designs were necessary to manufacture the merchandise. 
The U.S. importer bought the designs from an engineering company in the 
U.S. for submission to his foreign supplier.
    Should the appraised value of the merchandise include the value of 
the assist?
    No, design work undertaken in the U.S. may not be added to the price 
actually paid or payable.
    Example 2. A U.S. importer supplied molds free of charge to the 
foreign shipper. The molds were necessary to manufacture merchandise for 
the U.S. importer. The U.S. importer had some of the molds manufactured 
by a U.S. company and others manufactured in a third country.
    Should the appraised value of the merchandise include the value of 
the molds?
    Yes. It is an addition required to be made to transaction value.

    (e) Apportionment. (1) The apportionment of the value of assists to 
imported merchandise will be made in a reasonable manner appropriate to 
the circumstances and in accordance with generally accepted accounting 
principles. The method of apportionment actually accepted by Customs 
will depend upon the documentation submitted by the importer. If the 
entire anticipated production using the assist is for exportation to the 
United States, the total value may be apportioned over (i) the first 
shipment, if the importer wishes to pay duty on the entire value at 
once, (ii) the number of units produced up to the time of the first 
shipment, or (iii) the entire anticipated production. In addition to 
these three methods, the importer may request some other method of 
apportionment in accordance with generally accepted accounting 
principles. If the anticipated production is only partially for 
exportation to the United States, or if the assist is used in several 
countries, the method of apportionment will depend upon the 
documentation submitted by the importer.
    (2) Interpretative note. An importer provides the producer with a 
mold to be used in the production of the imported merchandise and 
contracts to buy 10,000 units. By the time of arrival of the first 
shipment of 1,000 units, the producer has already produced 4,000 units. 
The importer may request Customs to apportion the value of the mold over 
1,000, 4,000, 10,000 units, or any other figure which is in accordance 
with generally accepted accounting principles.
    (f) Royalties or license fees. Royalties or license fees for patents 
covering processes to manufacture the imported merchandise generally 
will be dutiable. Royalties or license fees paid to third parties for 
use, in the United States, of copyrights and trademarks related to the 
imported merchandise generally will be considered selling expenses of 
the buyer and not dutiable. The dutiable status of royalties or license 
fees paid by the buyer will be determined in each case and will depend 
on (1) whether the buyer was required to pay them as a condition of sale 
of the merchandise for exportation to the United States, and (2) to whom 
and under what circumstances they were paid. Payments made by the buyer 
to a third party for the right to distribute or resell the imported 
merchandise will not be added to the price actually paid or payable for 
the imported merchandise if the payments are not a condition of the sale 
of the merchandise for exportation to the United States.


[[Page 213]]


    Example. A foreign producer sold merchandise to an unrelated U.S. 
importer. The U.S. importer pays a royalty to an unrelated third party 
for the right to manufacture and sell a product made in part from the 
imported merchandise. The royalty is based on the selling price of the 
further-manufactured product in the U.S.
    Is the license fee part of the appraised value? No. The license fee 
is not a condition of the sale of the imported merchandise for export to 
the U.S.

    (g) Proceeds of subsequent resale. Additions to the price actually 
paid or payable will be made for the value of any part of the proceeds 
of any subsequent resale, disposal, or use of the imported merchandise 
that accrues directly or indirectly to the seller. Dividends or other 
payments from the buyer to the seller which do not relate directly to 
the imported merchandise will not be added to the price actually paid or 
payable. Whether any addition would be made will depend on the facts of 
the particular case.

    Example. A buyer contracts to import a new product. Not knowing 
whether the product ultimately will sell in the United States, the buyer 
agrees to pay the seller initially $1 per unit with an additional $1 per 
unit to be paid upon the sale of each unit in the United States. 
Assuming the resale price in the United States can be determined in a 
reasonable period of time, the transaction value of each unit would be 
$2. Otherwise, the transaction value could not be determined for want of 
sufficient information.

    (h) Right to reproduce. Charges for the right to reproduce the 
imported merchandise in the United States will not be added to the price 
actually paid or payable. The right to reproduce denotes that an idea or 
an original work is incorporated in, or reflected by, the imported 
merchandise, and the right is reserved to reproduce that idea or work in 
other merchandise by using the imported merchandise. The concept of the 
right to reproduce relates only to the following classes of merchandise: 
originals or copies of artistic or scientific works; originals or copies 
of models and industrial drawings; model machines and prototypes; and 
plant and animal species.

    Example. The importer purchases a painting. By purchasing the 
painting, the owner possesses the right to resell, lease, or otherwise 
place it on display. Absent an agreement to the contrary, he does not 
possess the right to reproduce copies of the painting. Fees paid for the 
right to reproduce the painting would not be dutiable.

    (i) Exclusions from transaction value. The transaction value of 
imported merchandise does not include any of the following, if 
identified separately from the price actually paid or payable and from 
any cost or other item referred to in paragraph (b) of this section:
    (1) Any reasonable cost or charge that is incurred for--
    (i) The construction, erection, assembly, or maintenance of, or the 
technical assistance provided with respect to, the merchandise after its 
importation into the United States; or
    (ii) The transportation of the merchandise after its importation.
    (2) The customs duties and other Federal taxes currently payable on 
the imported merchandise by reason of its importation, and any Federal 
excise tax on, or measured by the value of, the merchandise for which 
vendors in the United States ordinarily are liable.

    Example. A foreign shipper sells a piece of equipment to a U.S. 
buyer. The total contract price for the equipment includes technical 
assistance in the U.S. The equipment cannot be purchased without the 
technical assistance, but the contract provides a breakdown of costs.
    Should the appraised value include the technical assistance? No, 
transaction value does not include any reasonable costs for 
construction, erection, assembly, maintenance of, or technical 
assistance, for the imported merchandise after its importation into the 
U.S., the cost of which can be accurately identified as being separate 
from the price actually paid or payable for the merchandise to which 
they relate.

    (j) Limitations on use of transaction value--(1) In general. The 
transaction value of imported merchandise will be the appraised value 
only if:
    (i) There are no restrictions on the disposition or use of the 
imported merchandise by the buyer, other than restrictions which are 
imposed or required by law, limit the geographical area in which the 
merchandise may be resold, or do not affect substantially the value of 
the merchandise;

[[Page 214]]

    (ii) The sale of, or the price actually paid or payable for, the 
imported merchandise is not subject to any condition or consideration 
for which a value cannot be determined;
    (iii) No part of the proceeds of any subsequent resale, disposal, or 
use of the imported merchandise by the buyer will accrue directly or 
indirectly to the seller, unless an appropriate adjustment can be made 
under paragraph (b)(1)(v) of this section; and
    (iv) The buyer and seller are not related, or the buyer and seller 
are related but the transaction value is acceptable.
    (2) Related person transactions. (i) The transaction value between a 
related buyer and seller is acceptable if an examination of the 
circumstances of sale indicates that their relationship did not 
influence the price actually paid or payable, or if the transaction 
value of the imported merchandise closely approximates:
    (A) The transaction value of identical merchandise; or of similar 
merchandise, in sales to unrelated buyers in the United States; or
    (B) The deductive value or computed value of identical merchandise, 
or of similar merchandise; and
    (C) Each value referred to in paragraph (j)(2)(i) (A) and (B) of 
this section that is used for comparison relates to merchandise that was 
exported to the United States at or about the same time as the imported 
merchandise.
    (ii) In applying the values used for comparison, differences with 
respect to the sales involved will be taken into account if based on 
sufficient information supplied by the buyer or otherwise available to 
Customs and if the differences relate to:
    (A) Commercial levels;
    (B) Quantity levels;
    (C) The costs, commissions, values, fees, and proceeds described in 
paragraph (b) of this section; and
    (D) The costs incurred by the seller in sales in which the seller 
and the buyer are not related that are not incurred by the seller in 
sales in which the seller and the buyer are related.
    (k) Restrictions and conditions on sale. (1) A restriction placed on 
the buyer of imported merchandise that does not affect substantially its 
value will not prevent transaction value from being accepted as the 
appraised value.
    (i) Interpretative note. A seller requires a buyer of automobiles 
not to sell or exhibit them before a fixed date that represents the 
beginning of a model year.
    (2) The transaction value will not be accepted as the appraised 
value if the sale of, or the price actually paid or payable for, the 
merchandise is subject to a condition or consideration for which a value 
cannot be determined.
    (i) Interpretative note 1. The seller establishes the price of the 
imported merchandise on condition that the buyer also will buy other 
merchandise in specified quantities.
    (ii) Interpretative note 2. The price of the imported merchandise is 
dependent upon the price or prices at which the buyer of the merchandise 
sells other merchandise to the seller of the merchandise.
    (iii) Interpretative note 3. The price of the imported merchandise 
is established on the basis of a form of payment extraneous to the 
merchandise, such as where the merchandise is to be further processed by 
the buyer, and has been provided by the seller on condition that he will 
receive a specified quantity of the finished merchandise.
    (l) Related buyer and seller--(1) Validation of transaction. The 
port director shall not disregard a transaction value solely because the 
buyer and seller are related. There will be related person transactions 
in which validation of the transaction value, using the procedures 
contained in Sec. 152.103(j)(2), may not be necessary.
    (i) Interpretative note 1. Customs may have previously examined the 
relationship or may already have sufficient detailed information 
concerning the buyer and seller to be satisfied that the relationship 
did not influence the price actually paid or payable. In such case, if 
Customs has no doubts about the acceptability of the price, the price 
will be accepted without requesting further information from the 
importer. If Customs does have doubts about the acceptability of the 
price and is unable to accept the transaction value without further 
inquiry, the importer will be given an opportunity to supply such 
further detailed information as may be

[[Page 215]]

necessary to enable Customs to examine the circumstances of the sale. In 
this context, Customs will examine relevant aspects of the transaction, 
including the way in which the buyer and seller organize their 
commercial relations and the way in which the price in question was 
arrived at in order to determine whether the relationship influenced the 
price.
    (ii) Interpretative note 2. If it is shown that the buyer and 
seller, although related, buy from and sell to each other as if they 
were not related, this will demonstrate that the price has not been 
influenced by the relationship, and the transaction value will be 
accepted. If the price has been settled in a manner consistent with the 
normal pricing practices of the industry in question, or with the way 
the seller settles prices for sales to buyers who are not related to 
him, this will demonstrate that the price has not been influenced by the 
relationship.
    (iii) Interpretative note 3. If it is shown that the price is 
adequate to ensure recovery of all costs plus a profit which is 
equivalent to the firm's overall profit realized over a representative 
period of time (e.g., on an annual basis), in sales of merchandise of 
the same class or kind, this would demonstrate that the price has not 
been influenced.

    Example. A foreign seller sells merchandise to a related U.S. 
importer. The foreign seller does not sell identical merchandise or 
similar merchandise to any unrelated parties. The transaction between 
the foreign seller and the U.S. importer is determined by Customs to be 
unaffected by the relationship.
    How should the merchandise be appraised?
    Transaction value based on the price actually paid or payable. A 
transaction value between a related buyer and seller is acceptable if 
the relationship did not affect the price actually paid or payable. This 
is so even if similar merchandise is being sold at a higher price, which 
includes a higher percentage for profit and general expenses.

    (2) Test values. (i) The importer or the buyer may demonstrate that 
the transaction value in a related person transaction is acceptable by 
showing that the value ``closely approximates'' any one of the test 
values provided in Sec. 152.103(j)(2)(i). The factors that will be 
examined to determine if the transaction value closely approximates a 
test value include:
    (A) The nature of the imported merchandise and the industry,
    (B) The season in which the merchandise is imported,
    (C) Whether the difference in value is commercially significant, and
    (D) Whether the difference in value is attributable to internal 
transport costs in the country of exportation.
    (ii) Because these factors may vary, Customs will not be able to 
apply a uniform standard, such as a fixed percentage, in each case. A 
small difference in value in a case involving one type of imported 
merchandise may be unacceptable, although a large difference in a case 
involving another type may be acceptable, in determining if the 
transaction value closely approximates any of the test values. Customs 
will be consistent in determining if one value ``closely approximates'' 
another value. The same approach will be taken if Customs considers a 
transaction value that is higher than any of the enumerated test values 
as will be taken if the transaction value is lower than any of the test 
values.

    Example. In applying any of the test values, if the transaction 
value in the sale under consideration is rejected because 95 does not 
closely approximate 100, then a transaction value for the sale of the 
same merchandise at 105 occurring at or about the same time likewise 
would have to be rejected. Similarly, if 103 were considered to closely 
approximate 100, a transaction value of 97 likewise would closely 
approximate 100.

    (iii) If one of the test values provided in Sec. 152.103(j)(2)(i) 
has been found to be appropriate, the port director shall not seek to 
determine if the relationship between the buyer and seller influenced 
the price. If the port director already has sufficient information to be 
satisfied, without further detailed inquiries, that one of the test 
values is appropriate, he shall not require the importer to demonstrate 
that the test value is appropriate.
    (m) Rejection of transaction value. When Customs has grounds for 
rejecting the transaction value declared by an importer and that 
rejection increases the duty liability, the port director shall inform 
the importer of the grounds for the rejection. The importer will be 
afforded 20 days to respond in

[[Page 216]]

writing to the port director if in disagreement. This procedure will not 
affect or replace the administrative ruling procedures contained in part 
177 of this chapter, or any other Customs procedures.

[T.D. 81-7, 46 FR 2600, Jan. 12, 1981, as amended by T.D. 84-235, 49 FR 
46888, Nov. 29, 1984]



Sec. 152.104  Transaction value of identical merchandise and similar merchandise.

    (a) General. The transaction value of identical merchandise, or of 
similar merchandise, is the transaction value (acceptable as the 
appraised value under Sec. 152.103 but adjusted under paragraph (e) of 
this section) of imported merchandise that is--
    (1) With respect to the merchandise being appraised, either 
identical merchandise, or similar merchandise; and
    (2) Exported to the United States at or about the time that the 
merchandise being appraised is exported to the United States.
    (b) Identical merchandise. Minor differences in appearance will not 
preclude otherwise conforming merchandise from being considered 
``identical''. See Sec. 152.102(d).
    (c) Similar merchandise. The quality of the merchandise, its 
reputation, and the existence of a trademark will be factors considered 
to determine whether merchandise is ``similar''. See Sec. 152.102(i).
    (d) Commercial level and quantity. Transaction values determined 
under this section will be based on sales of identical merchandise, or 
similar merchandise, at the same commercial level and in substantially 
the same quantity as the sales of the merchandise being appraised. If no 
such sale is found, sales of identical merchandise, or similar 
merchandise, at either a different commercial level or in different 
quantities, or both, will be used, but adjusted to take account of that 
difference. Any adjustment made under this section will be based on 
``sufficient information''. See Sec. 152.102(j). If in applying this 
section to any merchandise, two or more transaction values for identical 
merchandise, or for similar merchandise, are determined, the merchandise 
will be appraised on the basis of the lower or lowest of those values.
    (e) Adjustments. (1) Adjustments for identical merchandise, or 
similar merchandise, because of different commercial levels or 
quantities, or both, whether leading to an increase or decrease in the 
value, will be made only on the basis of sufficient information; e.g., 
valid price lists containing prices referring to different levels or 
quantities.
    (2) Interpretative note. If the imported merchandise being valued 
consists of a shipment of 10 units and the only identical imported 
merchandise for which a transaction value exists involved a sale of 500 
units, and it is recognized that the seller grants quantity discounts, 
the required adjustment may be accomplished by resorting to the seller's 
price list and using that price applicable to a sale of 10 units. This 
does not require that a sale had to have been made in quantities of 10 
as long as the price list has been established as being bona fide 
through sales at other quantities. In the absence of such an objective 
measure, however, the determination of a customs value under the 
provisions for transaction value of identical or similar merchandise is 
not appropriate.



Sec. 152.105  Deductive value.

    (a) Merchandise concerned. For the purposes of deductive value, 
``merchandise concerned'' means the merchandise being appraised, 
identical merchandise, or similar merchandise.
    (b) Merchandise of the same class or kind. For the purposes of 
deductive value, ``merchandise of the same class or kind'' includes 
merchandise imported from the same country as well as other countries as 
the merchandise being appraised.
    (c) Prices. The deductive value of the merchandise being appraised 
is whichever of the following prices (as adjusted under paragraph (d) of 
this section) is appropriate depending upon when and in what condition 
the merchandise concerned is sold in the United States:
    (1) If the merchandise concerned is sold in the condition as 
imported at or about the date of importation of the merchandise being 
appraised, the price is the unit price at which the merchandise 
concerned is sold in the greatest

[[Page 217]]

aggregate quantity at or about such date.
    (2) If the merchandise concerned is sold in the condition as 
imported but not sold at or about the date of importation of the 
merchandise being appraised, the price is the unit price at which the 
merchandise concerned is sold in the greatest aggregate quantity after 
the date of importation of the merchandise being appraised but before 
the close of the 90th day after the date of such importation.
    (3) If the merchandise concerned was not sold in the condition as 
imported and not sold before the close of the 90th day after the date of 
importation of the merchandise being appraised, the price is the unit 
price at which the merchandise being appraised, after further 
processing, is sold in the greatest aggregate quantity before the 180th 
day after the date of such importation. This provision will apply to 
appraisement of merchandise only if the importer so elects at the time 
of filing the entry summary.
    (d) Deductions from price. The price determined under paragraph (c) 
of this section will be reduced by an amount equal to:
    (1) Any commission usually paid or agreed to be paid, or the 
addition usually made for profit and general expenses, in connection 
with sales in the United States of imported merchandise that is of the 
same class or kind, regardless of the country of exportation, as the 
merchandise concerned;
    (2) The actual costs and associated costs of transportation and 
insurance incurred with respect to international shipments of the 
merchandise concerned from the country of exportation to the United 
States;
    (3) The usual costs and associated costs of transportation and 
insurance incurred with respect to shipments of the merchandise 
concerned from the place of importation to the place of delivery in the 
United States, if those costs are not included as a general expense 
under paragraph (d)(1) of this section;
    (4) The customs duties and other Federal taxes currently payable on 
the merchandise concerned by reason of its importation, and any Federal 
excise tax on, or measured by the value of, the merchandise for which 
vendors in the United States ordinarily are liable; and
    (5) But only in the case of price determined under paragraph (c)(3) 
of this section, the value added by the processing of the merchandise 
after importation to the extent that the value is based on sufficient 
information relating to the cost of that processing.
    (e) Profit and general expenses; special rules. (1) The deduction 
made for profit and general expenses (taken as a whole) will be based 
upon the importer's profit and general expenses, unless the profit and 
general expenses are inconsistent with those reflected in sales in the 
United States of imported merchandise of the same class or kind from all 
countries, in which case the deduction will be based on the usual profit 
and general expenses reflected in those sales, as determined from 
sufficient information. Any State or local tax imposed on the importer 
with respect to the sale of imported merchandise will be treated as a 
general expense.
    (2) In determining deductions for commissions and usual profit and 
general expenses, sales in the United States of the narrowest group or 
range of imported merchandise of the same class or kind, including the 
merchandise being appraised, for which sufficient information can be 
provided, will be examined.
    (f) Packing costs. The price determined under paragraph (c) of this 
section will be increased, but only to the extent that the costs are not 
otherwise included, by an amount equal to the packing costs incurred by 
the importer or the buyer with respect to the merchandise concerned.
    (g) Assists. For purposes of determining deductive value, any sale 
to a person who supplies any assist for use in connection with the 
production or sale for export of the merchandise concerned will be 
disregarded.
    (h) Unit price in greatest aggregate quantity. The unit price will 
be established after a sufficient number of units have been sold to an 
unrelated person. The unit price to be used when the units have been 
sold in different quantities will be that at which the total volume sold 
is greater than the

[[Page 218]]

total volume sold at any other unit price.
    (1) Interpretative note 1. Merchandise is sold to an unrelated 
person from a price list which grants favorable unit prices for 
purchases made in larger quantities:

------------------------------------------------------------------------
                                                                  Total
                                                                quantity
          Sale quantity             Unit     Number of sales     sold at
                                   price                          each
                                                                  price
------------------------------------------------------------------------
1-10 units......................     $100  10 sales of 5 units        65
                                  .......  5 sales of 3 units.
11-25 units.....................       95  5 sales of 11 units        55
Over 25 units...................       90  1 sale of 30 units.        80
                                  .......  1 sale of 50 units.  ........
------------------------------------------------------------------------


The greatest number of units sold at a price is 80; therefore, the unit 
price in the greatest aggregate quantity is $90.
    (2) Interpretative note 2. Two sales to unrelated persons occur: in 
the first sale, 500 units are sold at a price of $95 each; in the second 
sale, 400 units are sold at a price of $90 each. In this example, the 
greatest number of units sold at a particular price is 500; therefore, 
the unit price in the greatest aggregate quantity is $95.
    (3) Interpretative note 3. Various quantities are sold to unrelated 
persons at various prices:

                                (i) Sales
------------------------------------------------------------------------
                                                                  Unit
                        Sale quantity                            price
------------------------------------------------------------------------
40 units.....................................................       $100
30 units.....................................................         90
15 units.....................................................        100
50 units.....................................................         95
25 units.....................................................        105
35 units.....................................................         90
5 units......................................................        100
------------------------------------------------------------------------


                               (ii) Totals
------------------------------------------------------------------------
                                                                  Unit
                     Total quantity sold                         price
------------------------------------------------------------------------
65...........................................................        $90
50...........................................................         95
60...........................................................        100
25...........................................................        105
------------------------------------------------------------------------


In this example, the greatest number of units sold at a particular price 
is 65; therefore, the unit price in the greatest aggregate quantity is 
$90.
    (i) Further processing--(1) Quantified data. If merchandise has 
undergone further processing after its importation into the United 
States and the importer elects the method specified in paragraph (c)(3) 
of this section, deductions made for the value added by that processing 
will be based on objective and quantifiable data relating to the cost of 
the work performed. Accepted industry formulas, recipes, methods of 
construction, and other industry practices would form the basis for the 
deduction. That deduction also will reflect amounts for spoilage, waste, 
or scrap derived from the further processing.
    (2) Loss of identity. If the imported merchandise loses its identity 
as a result of further processing, the method specified in paragraph 
(c)(3) of this section will not be applicable unless the value added by 
the processing can be determined accurately without unreasonable 
difficulty for either importers or Customs. If the imported merchandise 
maintains its identity but forms a minor element of the merchandise sold 
in the United States, the use of paragraph (c)(3) of this section will 
be unjustified. The port director shall review each case involving these 
issues on its merits.

    Example. A foreign shipper sells merchandise to a related U.S. 
importer. The foreign shipper does not sell to any unrelated person. The 
transaction between the foreign shipper and the U.S. importer is 
determined to have been affected by the relationship. There is no 
identical or similar merchandise from the same country of production. 
The U.S. importer further processes the product and sells the finished 
product to an unrelated buyer in the U.S. within 180 days of the date of 
importation. No assists from the unrelated U.S. buyer are involved, and 
the type of processing involved can be accurately costed.
    How should the merchandise be appraised?
    The merchandise should be appraised under deductive value with 
allowances for profit and general expenses, freight and insurance, 
duties and taxes, and the cost of processing.

[T.D. 81-7, 46 FR 2600, Jan. 12, 1981, as amended by T.D. 85-123, 50 FR 
29956, July 23, 1985]



Sec. 152.106  Computed value.

    (a) Elements. The computed value of imported merchandise is the sum 
of:
    (1) The cost or value of the materials and the fabrication and other 
processing of any kind employed in the production of the imported 
merchandise;

[[Page 219]]

    (2) An amount for profit and general expenses equal to that usually 
reflected in sales of merchandise of the same class or kind as the 
imported merchandise that are made by the producers in the country of 
exportation for export to the United States;
    (3) Any assist, if its value is not included under paragraph (a) (1) 
or (2) of this section; and
    (4) The packing costs.
    (b) Special rules. (1) The cost or value of materials under 
paragraph (a)(1) of this section will not include the amount of any 
internal tax imposed by the country of exportation that is directly 
applicable to the materials or their disposition if the tax is remitted 
or refunded upon the exportation of the merchandise in the production of 
which the materials were used.
    (2) The amount for profit and general expenses under paragraph 
(a)(2) of this section will be based upon the producer's profit and 
general expenses, unless the producer's profit and general expenses are 
inconsistent with those usually reflected in sales of merchandise of the 
same class or kind as the imported merchandise that are made by 
producers in the country of exportation for export to the United States. 
In that case, the amount under paragraph (a)(2) of this section will be 
based on the usual profit and general expenses of such producers in 
those sales, as determined from ``sufficient information''. See Sec. 
152.102(j).
    (c) Profit and general expenses. The amount for profit and general 
expenses will be taken as a whole. If the producer's profit figure is 
low and general expenses high, those figures taken together nevertheless 
may be consistent with those usually reflected in sales of imported 
merchandise of the same class or kind.
    (1) Interpretative note 1. A product is introduced into the United 
States, and the producer accepts either no profit or a low profit to 
offset the high general expenses required to introduce the product into 
this market. If the producer can demonstrate that there is a low profit 
on sales of the imported merchandise because of peculiar commercial 
circumstances, the actual profit figures will be accepted provided the 
producer has valid commercial reasons to justify them and his pricing 
policy reflects the usual pricing policies in the industry.
    (2) Interpretative note 2. Producers have been forced to lower 
prices temporarily because of an unforseeable drop in demand, or they 
sell merchandise to complement a range of merchandise being produced in 
the United States and accept a low profit to maintain competitiveness. 
If the producer's own figures for profit and general expenses are not 
consistent with those usually reflected in sales of merchandise of the 
same class or kind as the merchandise being valued which are made in the 
country of exportation for export to the United States, the amount for 
profit and general expenses will be based upon reliable and quantifiable 
information other than that supplied by or on behalf of the producer of 
the merchandise.
    (d) Assists and packing costs. Computed value also will include an 
amount equal to the apportioned value of any assists used in the 
production of the imported merchandise and the packing costs for the 
imported merchandise. The value of any engineering, development, 
artwork, design work, and plans and sketches undertaken in the United 
States will be included in computed value only to the extent that their 
value has been charged to the producer. Depending on the producer's 
method of accounting, the value of assists may be included (duplicated) 
in the producer's cost of materials, fabrication, and other processing, 
or in the general expenses. If duplication occurs, a separate amount for 
the value of the assists will not be added to the other elements as it 
is not intended that any component of computed value be included twice.
    (e) Merchandise of same class or kind. Sales for export to the 
United States of the narrowest group or range of imported merchandise, 
including the merchandise being appraised, will be examined to determine 
usual profit and general expenses. For the purpose of computed value, 
merchandise of the same class or kind must be from the same country as 
the merchandise being appraised.

    Example. A foreign shipper sells merchandise to a related U.S. 
importer. The foreign

[[Page 220]]

shipper does not sell to any unrelated persons. The transaction between 
the foreign shipper and the U.S. importer is determined to have been 
affected by the relationship. There is no identical or similar 
merchandise from the same country of production. The U.S. importer 
further processes the product and sells the finished product to an 
unrelated buyer in the U.S. within 180 days of the date of importation. 
No assists from the unrelated U.S. buyer are involved, and the type of 
processing involved can be accurately costed. The U.S. importer has 
requested that the shipment be appraised under computed value. The 
profit and general expenses figure for the same class or kind of 
merchandise in the country of exportation for export to the U.S. is 
known.
    How should the merchandise be appraised?
    The merchandise should be appraised under computed value, using the 
company's profit and general expenses if not inconsistent with those 
usually reflected in sales of merchandise of the same class or kind.

    (f) Availability of information. (1) It will be presumed that the 
computed value of the imported merchandise cannot be determined if:
    (i) The importer is unable to provide required computed value 
information within a reasonable time, and/or
    (ii) The foreign producer refuses to provide, or is legally 
prevented from providing, that information.
    (2) If information other than that supplied by or on behalf of the 
producer is used to determine computed value, the port director shall 
inform the importer, upon written request, of:
    (i) The source of the information,
    (ii) The data used, and
    (iii) The calculation based upon the specified data,

if not contrary to domestic law regarding disclosure of information. See 
also Sec. 152.101(d).



Sec. 152.107  Value if other values cannot be determined or used.

    (a) Reasonable adjustments. If the value of imported merchandise 
cannot be determined or otherwise used for the purposes of this subpart, 
the imported merchandise will be appraised on the basis of a value 
derived from the methods set forth in Sec. Sec. 152.103 through 
152.106, reasonably adjusted to the extent necessary to arrive at a 
value. Only information available in the United States will be used.
    (b) Identical merchandise or similar merchandise. The requirement 
that identical merchandise, or similar merchandise, should be exported 
at or about the same time of exportation as the merchandise being 
appraised may be interpreted flexibly. Identical merchandise, or similar 
merchandise, produced in any country other than the country of 
exportation or production of the merchandise being appraised may be the 
basis for customs valuation. Customs values of identical merchandise, or 
similar merchandise, already determined on the basis of deductive value 
or computed value may be used.
    (c) Deductive value. The ``90 days'' requirement for the sale of 
merchandise referred to in Sec. 152.105(c) may be administered 
flexibly.



Sec. 152.108  Unacceptable bases of appraisement.

    For the purposes of this subpart, imported merchandise may not be 
appraised on the basis of:
    (a) The selling price in the United States of merchandise produced 
in the United States;
    (b) A system that provides for the appraisement of imported 
merchandise at the higher of two alternative values;
    (c) The price of merchandise in the domestic market of the country 
of exportation;
    (d) A cost of production, other than a value determined under Sec. 
152.106 for merchandise that is identical merchandise, or similar 
merchandise, to the merchandise being appraised;
    (e) The price of merchandise for export to a country other than the 
United States;
    (f) Minimum values for appraisement;
    (g) Arbitrary or fictitious values.

[T.D. 81-7, 46 FR 2600, Jan. 12, 1981, as amended by T.D. 85-123, 50 FR 
29956, July 23, 1985]



PART 158_RELIEF FROM DUTIES ON MERCHANDISE LOST, DAMAGED, ABANDONED, OR EXPORTED--Table of Contents




Sec.
158.0 Scope.

[[Page 221]]

   Subpart A_Lost or Missing Packages and Deficiencies in Contents of 
                                Packages

158.1 Definition of ``permitted'' merchandise.
158.2 Shortages in packages released under immediate delivery or entry.
158.3 Allowance for lost or missing packages included in an entry 
          summary.
158.4 Liability of carrier for lost or missing packages.
158.5 Deficiencies in contents of packages--general.
158.6 Deficiencies in contents of examination packages.
158.7 Allowance for reduction or loss of merchandise by a natural force 
          or by leakage.

               Subpart B_Damaged or Defective Merchandise

158.11 Merchandise completely worthless at time of importation.
158.12 Merchandise partially damaged at time of importation.
158.13 Allowance for moisture and impurities.
158.14 Perishable merchandise condemned.

       Subpart C_Casualty, Loss, or Theft While in Customs Custody

158.21 Allowance in duties for casualty, loss, or theft while in Customs 
          custody.
158.21a Time period.
158.22 Not applicable when allowances made under other provisions.
158.23 Filing of application and evidence by importer.
158.24 Place of filing.
158.25 Partial destruction or injury.
158.26 Loss or theft in public stores.
158.27 Accidental fire or other casualty.
158.28 Waiver of evidence.
158.29 Decision by port director.
158.30 Review of port director's decision.

         Subpart D_Destroyed, Abandoned, or Exported Merchandise

158.41 Destruction of prohibited merchandise.
158.42 Abandonment by importer within 30 days after entry.
158.43 Abandonment or destruction of merchandise in bond.
158.44 Disposition of abandoned merchandise.
158.45 Exportation of merchandise.

    Authority: 19 U.S.C. 66, 1624, unless otherwise noted. Subpart C 
also issued under 19 U.S.C. 1563.

    Source: T.D. 72-258, 37 FR 20171, Sept. 27, 1972, unless otherwise 
noted.



Sec. 158.0  Scope.

    This part sets forth general rules for granting relief from duties 
on merchandise which is lost, damaged, abandoned, or exported.



   Subpart A_Lost or Missing Packages and Deficiencies in Contents of 
                                Packages



Sec. 158.1  Definition of ``permitted'' merchandise.

    For the purpose of this subpart, merchandise is ``permitted'' when 
Customs authorizes the carrier bringing the shipment to the port to make 
delivery to the consignee or the next carrier and:
    (a) These parties in interest, or their agents, make a joint 
determination of the quantities being delivered, or,
    (b) The carrier bringing the shipment to the port, at its option, 
independently declares the quantities available for delivery by filing 
with the port director, no later than the close of business on the next 
working day after a determination of quantities is made, a signed 
statement that:
    (1) An independent determination of quantities of merchandise 
available for delivery has been made, with the date of the determination 
shown;
    (2) At least 4 days have elapsed since the consignee or his agent 
was notified that Customs has authorized delivery; and,
    (3) The merchandise was and is available for delivery.



Sec. 158.2  Shortages in packages released under immediate delivery or entry.

    An importer may file an entry summary for consumption or an entry 
summary for warehouse for less than the invoiced and manifested number 
of packages in a shipment ``permitted'' and delivered to him or 
deposited in a bonded warehouse under the immediate delivery procedure 
in Sec. 142.21 of this chapter, or under the entry documentation in 
Sec. 142.3(a), if he files with the entry summary a Customs Form 5931 
in triplicate. The Customs Form 5931 shall be completed by the importer 
with attached copies of the dock receipt or other documents evidencing

[[Page 222]]

nonreceipt of the lost or missing packages.

[T.D. 85-159, 50 FR 38520, Sept. 23, 1985]



Sec. 158.3  Allowance for lost or missing packages included in an entry summary.

    Allowance shall be made in the assessment of duties for lost or 
missing packages of merchandise included in an entry summary whenever it 
is established to the satisfaction of the port director before the 
liquidation of the entry summary becomes final that the merchandise 
claimed to be lost or missing was not ``permitted.'' A claim for such 
allowance shall be made on Customs Form 5931, in triplicate, executed by 
the importer and the importing carrier or bonded carrier, as 
appropriate. When the importing or bonded carrier refuses to execute the 
Customs Form 5931, a claim may be allowed if the importer properly 
executes the Customs Form 5931 and attaches copies of the dock receipt 
or other document evidencing nonreceipt of the lost or missing packages.

[T.D. 72-258, 37 FR 20171, Sept. 27, 1972, as amended by T.D. 79-221, 44 
FR 46829, Aug. 9, 1979]



Sec. 158.4  Liability of carrier for lost or missing packages.

    Upon a joint determination or independent determination of quantity 
as set forth in Sec. 158.1 (a) or (b) resulting in the merchandise 
being ``permitted,'' the carrier shall be responsible only for any 
discrepancy between the manifested quantity and the ``permitted'' 
quantity. In the case of an importing carrier, when there is a 
difference between the quantity shown on the inward foreign manifest and 
the quantity ``permitted,'' liquidated damages or duties shall be 
assessed under the provisions of the carrier's bond or under the 
provisions of section 448, Tariff Act of 1930, as amended (19 U.S.C. 
1448), unless the carrier corrects his manifest (see Sec. 4.12 of this 
chapter). In the case of a bonded carrier, liquidated damages for lost 
or missing merchandise shall be assessed in accordance with Sec. 18.8 
of this chapter.



Sec. 158.5  Deficiencies in contents of packages--general.

    An allowance shall be made in the assessment of duties for 
deficiencies in the contents of packages when, before the liquidation of 
the entry becomes final, the importer files:
    (a) In the case of a concealed shortage, a Customs Form 5931, in 
triplicate, executed by the importer alone, and the port director 
satisfies himself as to the validity of the claim; or,
    (b) In the case of an unconcealed shortage, a Customs Form 5931, in 
triplicate, executed by both the importer and the importing or bonded 
carrier, as appropriate.



Sec. 158.6  Deficiencies in contents of examination packages.

    Allowance for deficiency in the contents of any examination package 
reported to the port director by a Customs officer shall be made in the 
liquidation of the entry. No Customs officer except one making an 
examination contemplated by section 499, Tariff Act of 1930, as amended 
(19 U.S.C. 1499), shall report a supposed deficiency to the port 
director unless it is established to the satisfaction of the reporting 
officer that the merchandise was not imported.

(Sec. 499, 46 Stat. 728, as amended; 19 U.S.C. 1499)



Sec. 158.7  Allowance for reduction or loss of merchandise by a natural force or by leakage.

    Merchandise subject to ad valorem, specific, or compound rates of 
duty found at the time of importation to be reduced or diminished by a 
natural force, such as evaporation, or by leakage, shall be appraised in 
its condition as imported, with an allowance made in the value, weight, 
quantity, or measure to the extent of the reduction or loss, except when 
forbidden by law or regulation.

(R.S. 251, as amended, sec. 499, sec. 624, 46 Stat. 728, as amended, 759 
(19 U.S.C. 66, 1499, 1624))

[T.D. 78-448, 43 FR 53713, Nov. 17, 1978]

[[Page 223]]



               Subpart B_Damaged or Defective Merchandise



Sec. 158.11  Merchandise completely worthless at time of importation.

    (a) Nonperishable merchandise. When a shipment of nonperishable 
merchandise, or any portion thereof which shall have been segregated 
from the remainder of the shipment under Customs supervision at the 
expense of the importer, is found by the port director to be entirely 
without commercial value at the time of importation by reason of damage 
or deterioration, an allowance in duties on such merchandise on the 
ground of nonimportation shall be made in the liquidation of the entry.
    (b) Perishable merchandise. In the case of perishable merchandise, 
an allowance in duties may be made under the following conditions:
    (1) An application for such allowance shall be filed with the port 
director on Customs Form 4315 in duplicate, within 96 hours after the 
unlading of the merchandise and before any of the shipment involved has 
been removed from the pier (or other area permitted under Sec. 
142.2(b)(2) of this chapter) pursuant to the entry permit.
    (2) Should an application filed in accordance with paragraph (b)(1) 
of this section be withdrawn, the merchandise involved shall thereafter 
be released upon presentation of an appropriate permit.
    (3) Allowance in duty shall be made in the liquidation of the entry 
on such of the merchandise covered by the application as is found by the 
port director to be entirely without commercial value by reason of 
damage or deterioration.

(Sec. 506, 46 Stat. 732, as amended; 19 U.S.C. 1506)

[T.D. 72-258, 37 FR 20171, Sept. 27, 1972, as amended by T.D. 76-220, 41 
FR 33248, Aug. 9, 1976]



Sec. 158.12  Merchandise partially damaged at time of importation.

    (a) Allowance in value. Merchandise which is subject to ad valorem 
or compound duties and found by the port director to be partially 
damaged at the time of importation shall be appraised in its condition 
as imported, with an allowance made in the value to the extent of the 
damage. However, no allowance shall be made when forbidden by law or 
regulation; for example, Chapter 72, Additional U.S. Note 3, Harmonized 
Tariff Schedule of the United States (19 U.S.C. 1202), provides that no 
allowance or reduction of duties for partial damage or loss in 
consequence of discoloration or rust occurring before importation shall 
be made upon iron or steel or upon any article of iron or steel.
    (b) No allowance in specific duties. In the case of merchandise 
subject to specific or compound duties and found to be partially damaged 
at the time of importation, no allowance may be made in the specific 
duties or in the weight, quantity, or measure (except that an allowance 
for any excessive moisture or other impurities may be made in accordance 
with Sec. 158.13). However, any part of the shipment which is totally 
worthless and can be segregated from the rest of the shipment may be 
treated as a nonimportation in accordance with Sec. 158.11.

(Sec. 506, 46 Stat. 732, as amended; 19 U.S.C. 1506)

[T.D. 72-258, 37 FR 20171, Sept 27, 1972, as amended by T.D. 89-1, 53 FR 
51270, Dec. 21, 1988]



Sec. 158.13  Allowance for moisture and impurities.

    (a) Application by importer--(1) Petroleum and petroleum products. 
An application for an allowance in duties under section 507, Tariff Act 
of 1930, as amended (19 U.S.C. 1507), for all detectable moisture and 
impurities present in or upon imported petroleum or petroleum products 
shall be made by the importer on Customs Form 4315. The application 
shall be filed with the port director within 10 days of the port 
director's receipt of the gauging report or within 10 days of Customs 
acceptance of the entry's invoice gauge.
    (2) Other products. An application for an allowance in duties under 
19 U.S.C. 1507 for products other than petroleum or petroleum products 
for excessive moisture or other impurities not usually found in or upon 
such or similar merchandise shall be made by the importer on Customs 
Form 4315. The application shall be filed with the port director within 
10 days after the report

[[Page 224]]

of weight or gauge has been received by the port director or within 10 
days after the date upon which the entry or a related document was 
endorsed to show that invoice weight or gauge has been accepted by the 
Customs inspector or other Customs officer.
    (b) Allowance by port director. If the port director is satisfied 
after any necessary investigation that the merchandise contains moisture 
or impurities as described in paragraph (a) of this section, he shall 
make allowance for the amount thereof in the liquidation of the entry.

[T.D. 90-78, 55 FR 40167, Oct. 2, 1990]



Sec. 158.14  Perishable merchandise condemned.

    (a) Application by importer. When fruit or other perishable 
merchandise has been condemned by health officers or other legally 
constituted authorities within 10 days after landing, an importer who 
desires allowance in duties under section 506(2), Tariff Act of 1930, as 
amended (19 U.S.C. 1506(2)), shall within 5 days after such condemnation 
file with the port director written notice of the condemnation. The date 
of landing in the case of merchandise forwarded under an entry for 
immediate transportation is the date of arrival at the port of 
destination.
    (b) Allowance in duties. If the port director is satisfied after any 
necessary investigation that the claim is valid, allowance in duties 
shall be made in the liquidation of the entry. Such allowance shall be 
limited to perishable goods condemned by the health officers or 
authorities in the original package, unless segregation of the 
merchandise was under constant Customs supervision at the importer's 
expense.

(Sec. 506(2), 46 Stat. 732, as amended; 19 U.S.C. 1506(2))



       Subpart C_Casualty, Loss, or Theft While in Customs Custody



Sec. 158.21  Allowance in duties for casualty, loss, or theft while in Customs custody.

    Section 563(a), Tariff Act of 1930, as amended (19 U.S.C. 1563(a)), 
provides for allowance in duties upon satisfactory proof of the loss or 
theft of any merchandise while in the public stores, or of the actual 
injury or destruction, in whole or in part, of any merchandise by 
accidental fire or other casualty, while in bonded warehouse, or in the 
public stores, or while in transportation under bond, or while in 
Customs custody although not in bond, or while within the limits of any 
port of entry and before having been landed under Customs supervision. 
Such allowance is subject to the conditions set forth in this subpart.



Sec. 158.21a  Time period.

    An abatement or refund of duties shall be made in the case of injury 
to, or destruction of, merchandise in a bonded warehouse as a result of 
accidental fire or other casualty only if the fire or casualty occurs 
within 3 years from the date of importation.

[T.D. 79-221, 44 FR 46829, Aug. 9, 1979]



Sec. 158.22  Not applicable when allowances made under other provisions.

    The procedures in this subpart do not apply in cases where 
allowances in duties are made under subpart A or subpart B of this part, 
or Sec. 18.6 of this chapter.



Sec. 158.23  Filing of application and evidence by importer.

    Within 30 days from the date of his discovery of the loss, theft, 
injury, or destruction, the importer shall file an application in 
duplicate on Customs Form 4315, and within 90 days from the date of 
discovery shall file any evidence required by Sec. 158.26 or Sec. 
158.27.



Sec. 158.24  Place of filing.

    The application and evidence shall be filed with the director of the 
port where the loss, theft, injury, or destruction occurred. In the case 
of total loss of merchandise by fire or other casualty while in 
transportation under bond, the application and evidence shall be filed 
with the director of the port at which the transportation entry was 
made. In the case of partial destruction of or injury to such 
merchandise, the application and evidence shall be filed with the 
director of the port of destination, except that if the merchandise is 
returned to the port at which the transportation entry was

[[Page 225]]

made, the application shall be filed at that port.



Sec. 158.25  Partial destruction or injury.

    In the case of partial destruction or injury, no application shall 
be entertained unless the port director shall have had an opportunity to 
examine the merchandise or the remainder thereof for the purpose of 
fixing the percentage of injury or destruction. Whether the duty 
involved is ad valorem, specific, or compound, the percentage of injury 
for the purpose of the allowance shall be determined by comparing the 
market value of comparable sound merchandise with the net salvage value 
of the injured merchandise computed on the basis of the market value of 
comparable injured merchandise, such comparison to be made as of the 
time and place of examination.



Sec. 158.26  Loss or theft in public stores.

    In the case of alleged loss or theft while the merchandise is in the 
public stores, there shall be filed a declaration of the importer, 
owner, or ultimate consignee that he did not receive the merchandise and 
that to the best of his knowledge and belief it was lost or stolen as 
alleged in the application. If the alleged loss or theft consisted of 
only a part of an examination package and was discovered after the 
release of the package from Customs custody, the following evidence 
shall be submitted:
    (a) A declaration of each cartman, lighterman, or other carrier 
handling the package between the public stores and the place of 
delivery, setting forth the condition of the package at the time of 
receipt and delivery by him and whether or not there was an abstraction 
of the merchandise while the package was in his possession.
    (b) A declaration of the person who first received the package for 
the importer, owner, or ultimate consignee as to whether or not he 
examined the package at the time of receipt, and, if so, as to its 
condition at that time.
    (c) A declaration of the person who opened the package after release 
from Customs custody that the alleged missing merchandise was not found 
by him in the package or elsewhere.



Sec. 158.27  Accidental fire or other casualty.

    In the case of injury or destruction by accidental fire or other 
casualty, the following evidence shall be submitted:
    (a) A declaration of the master of the vessel, the conductor or 
driver of the vehicle, the proprietor of the warehouse, or other person 
(except a Customs officer) having charge of the merchandise at the time 
of casualty, stating:
    (1) The time, place, and nature of such casualty;
    (2) That the merchandise was on board the vessel or vehicle, in the 
warehouse, or otherwise in his charge, as the case may be, at the time 
of the casualty; and
    (3) That it was totally destroyed and there is no probability of 
recovering or saving any part thereof, or that it was injured as the 
result of the casualty.
    (b) The bill of lading, the entry summary (where appropriate) and 
the invoice covering the merchandise, or certified copies of the 
foregoing, unless such documents are already in the possession of the 
director of the port where the claim is filed.
    (c) A copy of the insurance appraiser's report, if any.

[T.D. 72-258, 37 FR 20171, Sept. 27, 1972, as amended by T.D. 79-221, 44 
FR 46829, Aug. 9, 1979]



Sec. 158.28  Waiver of evidence.

    The port director may waive the production of any of the evidence 
required by this subpart if the validity of the claim is otherwise 
established to his satisfaction.



Sec. 158.29  Decision by port director.

    When the application and evidence have been received and examined by 
the port director, he shall determine whether the desired abatement or 
refund of duty shall be made and notify the importer of his decision.



Sec. 158.30  Review of port director's decision.

    (a) Filing of petition. The importer may file with the port director 
a petition addressed to the Commissioner of

[[Page 226]]

Customs for a review of the port director's decision. Such petition 
shall be filed in duplicate within 30 days from the date of the notice 
of the port director's decision, shall completely identify the case, and 
shall set forth in detail the objections to the port director's 
decision.
    (b) Decision by Commissioner. When the petition has been filed, the 
port director shall promptly transmit both copies thereof and the entire 
file to the Commissioner, together with a full statement of his views. 
When the Commissioner's decision is received, the port director shall 
proceed in conformity therewith.



         Subpart D_Destroyed, Abandoned, or Exported Merchandise



Sec. 158.41  Destruction of prohibited merchandise.

    Merchandise regularly entered or withdrawn for consumption in good 
faith and denied admission into the United States by any Government 
agency after its release from Customs custody, pursuant to a law or 
regulation in force on the date of entry or withdrawal for consumption, 
may be destroyed under Government supervision. In such case, the 
destroyed merchandise is exempt from duty and any duties collected 
thereon shall be refunded. In lieu of destruction, the merchandise may 
be exported under Customs supervision in accordance with Sec. 
158.45(c).

(Sec. 558(a), 46 Stat. 744, as amended; 19 U.S.C. 1558(a))



Sec. 158.42  Abandonment by importer within 30 days after entry.

    Allowance in duties for merchandise abandoned to the Government in 
accordance with section 506(1), Tariff Act of 1930, as amended (19 
U.S.C. 1506(1)), shall be subject to the following conditions:
    (a) Minimum quantity to be abandoned. The merchandise being 
abandoned shall represent 5 percent or more of the total value of all 
the merchandise of the same class or kind entered in the invoice in 
which the merchandise being abandoned appears.
    (b) Application within 30 days. The importer shall file written 
notice of abandonment with the director of the port where the entry was 
filed within 30 days after the date of entry, or, in the case of 
examination packages, within 30 days after release, whether or not 
delivery is taken by the importer immediately after entry or release as 
the case may be.
    (c) Delivery of merchandise. Within the 30-day period set forth in 
paragraph (b) of this section, the importer shall deliver the abandoned 
merchandise to such place as the port director specifies, unless the 
port director is satisfied that the merchandise is so far destroyed as 
to be nondeliverable.
    (d) Identification of merchandise. The importer shall identify the 
abandoned merchandise with that described in the invoice used in making 
entry to the satisfaction of the port director, who shall make such 
examination as may be necessary to verify such identification.
    (e) Segregation and repacking. When repacking is necessary to 
segregate the abandoned merchandise from the remainder of the shipment, 
such repacking shall be done at the expense of the importer and under 
Customs supervision.

(Sec. 506, 46 Stat. 732, as amended; 19 U.S.C. 1506)



Sec. 158.43  Abandonment or destruction of merchandise in bond.

    Allowance in duties for merchandise entered under bond destroyed 
under section 557(c), Tariff Act of 1930, as amended (19 U.S.C. 
1557(c)), or for merchandise in bonded warehouse abandoned to the 
Government under section 563(b), Tariff Act of 1930, as amended (19 
U.S.C. 1563(b)), shall be subject to the following conditions:
    (a) Application by importer. The importer shall file an application 
for abandonment or destruction of merchandise in bond with the port 
director on Customs From 3499, with the title modified to read 
``Application and Permit to Abandon (or Destroy) Goods in Bond.'' When 
an application is for permission to destroy, the proposed method of 
destruction shall be stated in the application and be subject to the 
approval of the port director.

[[Page 227]]

    (b) Concurrence of warehouse proprietor. An application to abandon 
or destroy warehoused merchandise shall not be approved unless concurred 
in by the warehouse proprietor.
    (c) Abandonment--(1) Costs. When in the opinion of the port director 
the abandonment of merchandise under section 563(b), Tariff Act of 1930, 
as amended (19 U.S.C. 1563(b)), will involve any expense or cost to the 
Government, or if the merchandise is worthless or unsalable, or cannot 
be sold for a sum sufficient to pay the expenses of sale, such 
abandonment shall not be permitted unless the importer deposits a sum 
which in the opinion of the port director will be sufficient to save the 
Government harmless from any expense or cost resulting from such 
abandonment. The sum so advanced shall be placed in a special deposit 
account and expended to cover the cost of destruction or to meet any 
deficit should the merchandise be sold and the proceeds of sale be less 
than the expenses of such sale. After meeting such expenses or deficit, 
any balance remaining shall be refunded to the importer. However, the 
applicant may elect to destroy such merchandise under Customs 
supervision pursuant to the provisions of section 557(c), Tariff Act of 
1930, as amended (19 U.S.C. 1557(c)).
    (2) Time period. The importer may abandon his warehoused merchandise 
voluntarily to the Government within 3 years from the date of 
importation.
    (d) Destruction--(1) Costs. Destruction of merchandise under section 
557(c), Tariff Act of 1930, as amended (19 U.S.C. 1557(c)), shall be at 
the expense of the importer.
    (2) Time period. The importer may request destruction of his 
warehoused merchandise within 5 years from the date of importation.
    (e) Action by port director. When the conditions set forth in 
paragraphs (a) through (d) of this section are met, the port director 
may grant applications and make an allowance in duties for the 
merchandise abandoned or destroyed. In any case where doubt exists, the 
matter shall be referred to the Commissioner of Customs.

(Secs. 557, 563, 46 Stat. 744, as amended, 746, as amended; 19 U.S.C. 
1557, 1563)

[T.D. 72-258, 37 FR 20171, Sept. 27, 1972, as amended by T.D. 79-221, 44 
FR 46829, Aug. 9, 1979]



Sec. 158.44  Disposition of abandoned merchandise.

    (a) General conditions. The disposition of merchandise abandoned to 
the Government pursuant to Sec. 158.42 or Sec. 158.43, and not 
retained for official use, shall be governed by the regulations of the 
General Services Administration applicable to the United States Customs 
Service.
    (b) Sale of merchandise. If the merchandise is cleared for sale, it 
shall be sold in accordance with the applicable provisions of part 127 
of this chapter, unless it is worthless or it appears probable that the 
expenses of sale will exceed the proceeds. If the merchandise is sold, 
no part of the proceeds shall be returned to the importer.
    (c) Disposition of worthless merchandise. If the merchandise or any 
part thereof is worthless or it appears probable that the expenses of 
its sale will exceed the proceeds, it shall be destroyed or otherwise 
disposed of as the port director shall specify. The port director shall 
insure that such merchandise is destroyed or removed from the control of 
the importer to avoid the possibility of any part of the same 
merchandise being made the subject of another application.

(Secs. 506(1), 563(b), 46 Stat. 732, as amended, 746, as amended; 19 
U.S.C. 1506(1), 1563(b) R.S. 251, as amended, sec. 624, 46 Stat. 759 (19 
U.S.C. 66, 1624))

[T.D. 72-258, 37 FR 20171, Sept. 27, 1972, as amended by T.D. 77-12, 41 
FR 56629, Dec. 29, 1976]



Sec. 158.45  Exportation of merchandise.

    (a) From continuous Customs custody. Merchandise in Customs custody 
for which entry has not been completed and merchandise which has 
remained in continuous Customs custody that is covered by a liquidated 
or unliquidated consumption entry may be exported under Customs 
supervision in accordance with Sec. Sec. 18.25 through 18.27 of this

[[Page 228]]

chapter, with refund of any duties that have been paid.
    (b) After release from Customs custody. Except as provided for in 
paragraphs (c) and (d) of this section, no refund or other allowance in 
duties shall be made because of the exportation of merchandise after its 
release from Customs custody unless a drawback of duties is expressly 
provided for by law (see part 191 of this chapter).
    (c) Prohibited merchandise. If merchandise has been regularly 
entered or withdrawn for consumption in good faith and is thereafter 
found to be prohibited entry under any law of the United States, it may 
be exported under Customs supervision in accordance with Sec. Sec. 
18.25 through 18.27 of this chapter, with refund of any duties that have 
been paid. In lieu of exportation, the merchandise may be destroyed in 
accordance with Sec. 158.41.
    (d) Not legally marked merchandise. When merchandise found to be not 
legally marked is exported or destroyed under Customs supervision after 
once having been released from Customs custody, as provided for in 
section 304(f), Tariff Act of 1930, as amended (19 U.S.C. 1304(f)), such 
exportation or destruction shall not exempt such merchandise from the 
payment of duties other than the marking duties.

(Sec. 558, 46 Stat. 744, as amended; 19 U.S.C. 1558; R.S. 251, as 
amended, sec. 624, 46 Stat. 759 (19 U.S.C. 66, 1624))

[T.D. 72-258, 37 FR 20171, Sept. 27, 1972, as amended by T.D. 83-212, 48 
FR 46771, Oct. 14, 1983; T.D. 90-51, 55 FR 28191, July 10, 1990]



PART 159_LIQUIDATION OF DUTIES--Table of Contents




Sec.
159.0 Scope.

                      Subpart A_General Provisions

159.1 Definition of liquidation.
159.2 Liquidation required.
159.3 Rounding of fractions.
159.4 Alcoholic beverages.
159.5 Cigars, cigarettes, and cigarette papers and tubes.
159.6 Difference between liquidated duties and estimated duties.
159.7 Rewarehouse entries.
159.8 Allowance for loss, injury, etc.
159.9 Notice of liquidation and date of liquidation for formal entries.
159.10 Notice of liquidation and date of liquidation for informal, mail 
          and baggage entries.
159.11 Entries liquidated by operation of law.
159.12 Extension of time for liquidation.

                   Subpart B_Weight, Gage, and Measure

159.21 Quantity upon which duties based.
159.22 Net weights and tares.

                Subpart C_Conversion of Foreign Currency

159.31 Rates to be used.
159.32 Date of exportation.
159.33 Proclaimed rate.
159.34 Certified quarterly rate.
159.35 Certified daily rate.
159.36 Multiple certified rates.
159.37 Suspension of certification of rates.
159.38 Rates for estimated duties.

                        Subpart D_Special Duties

159.41 Antidumping duties.
159.42 Discriminating duties.
159.43 Duties contingent upon foreign export duties, charges, or 
          restrictions.
159.44 Special duties on merchandise imported under agreements in 
          restraint of trade.
159.45 Additional duty for unauthentic claims of antiquity.
159.46 Marking duties.
159.47 Countervailing duties.

                   Subpart E_Suspension of Liquidation

159.51 General.
159.52 Warehouse entry not liquidated until final withdrawal.
159.53 Proof of duty-free or reduced-duty status.
159.54 Open bonds for production of documents.
159.55 Possible prohibited food, drugs, or other articles.
159.57 Merchandise affected by an American manufacturer's cause of 
          action sustained by the court.
159.58 Dumping and countervaling; action by port director.

             Subpart F_Continued Dumping and Subsidy Offset

159.61 General.
159.62 Notice of distribution.
159.63 Certifications.
159.64 Distribution of offset.

    Authority: 19 U.S.C. 66, 1500, 1504, 1624.
    Subpart C also issued under 31 U.S.C. 5151.
    Subpart F also issued under 19 U.S.C. 1675c.
    Sections 159.4, 159.5, and 159.21 also issued under 19 U.S.C. 1315;

[[Page 229]]

    Section 159.6 also issued under 19 U.S.C. 1321, 1505;
    Section 159.7 also issued under 19 U.S.C. 1557;
    Section 159.22 also issued under 19 U.S.C. 1507;
    Section 159.44 also issued under 15 U.S.C. 73, 74;
    Section 159.46 also issued under 19 U.S.C. 1304;
    Section 159.55 also issued under 19 U.S.C. 1558;
    Section 159.57 also issued under 19 U.S.C. 1516.

    Source: T.D. 73-175, 38 FR 17482, July 2, 1973, unless otherwise 
noted.



Sec. 159.0  Scope.

    This part sets forth general rules for the liquidation of entries. 
Certain specific procedures affecting liquidation appear in other parts 
of this chapter; e.g., part 158 of this chapter covers allowance for 
lost or damaged merchandise.



                      Subpart A_General Provisions



Sec. 159.1  Definition of liquidation.

    Liquidation means the final computation or ascertainment of the 
duties (not including vessel repair duties) or drawback accruing on an 
entry.

[T.D. 01-24, 66 FR 16400, Mar. 26, 2001]



Sec. 159.2  Liquidation required.

    All entries covering imported merchandise, except temporary 
importation bond entries and those for transportation in bond or for 
immediate exportation, shall be liquidated. Vessel repair entries are 
not subject to liquidation under this part (see Sec. 4.14(i)(3) of this 
chapter).

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 01-24, 66 FR 
16400, Mar. 26, 2001]



Sec. 159.3  Rounding of fractions.

    (a) Value. In the computation of duty on entries, ad valorem rates 
shall be applied to the values in even dollars, fractional parts of a 
dollar less than 50 cents being disregarded and 50 cents or more being 
considered as $1, with all merchandise in the same invoice subject to 
the same rate of duty to be treated as a unit. However, the total 
dutiable value of the invoice shall not be increased or decreased by 
more than the rounding of the total dutiable value to an even dollar. 
When necessary, fractional parts of a dollar, whether more or less than 
50 cents, shall be dropped or taken up as whole dollars in order to 
avoid such an increase or decrease. If in such cases it is necessary to 
drop fractional parts of a dollar amounting to 50 cents or more, the 
lower fractions shall be dropped, and if it is necessary to take up as 
whole dollars fractional parts less than 50 cents, the larger fractions 
shall be taken. In the case of two equal fractions, the one subject to 
the lower rate of duty shall be dropped or taken up, as the case may be. 
In determining a rate of duty dependent upon value, fractional parts of 
a dollar shall be considered.
    (b) Quantities subject to specific duty. Except in the case of 
alcoholic beverages treated under Sec. 159.4, if a rate of duty is 
specific and $1 or less per unit, fractional quantities, if less than 
one-half, shall be disregarded, and if one-half or more shall be treated 
as a whole unit. Subject to the same exception, if a specific rate is 
more than $1 per unit, duty shall be assessed upon the exact quantity 
with any fractional part expressed in the form of a decimal extended to 
two places.



Sec. 159.4  Alcoholic beverages.

    (a) Quantities subject to duties. Customs duties and internal 
revenue taxes on alcoholic beverages provided for in headings 2207 and 
2208, Harmonized Tariff Schedule of the United States (HTSUS), (19 
U.S.C. 1202), and subject to internal revenue taxes shall be collected 
only on the number of proof gallons and fractional parts thereof, 
entered or withdrawn for consumption. No internal revenue tax shall be 
collected on distilled spirits in bulk which have been transferred to 
Internal Revenue bonded premises in accordance with Sec. 141.102(b) of 
this chapter. Customs duties and internal revenue taxes on alcoholic 
beverages other than subheadings 2206.00.30 and 2206.00.90, HTSUS, and 
distilled spirits provided for in headings 2207 and 2208, shall be 
collected only on the number of wine gallons and fractional parts 
thereof, entered or withdrawn for consumption.

[[Page 230]]

    (b) Computation of duties. In the computation of Customs duties on 
alcoholic beverages provided for in headings 2207 and 2208 (19 U.S.C. 
1202), which are also subject to internal revenue taxes, the methods 
prescribed for the computation of internal revenue taxes on such 
beverages shall be followed. The following methods apply to the specific 
beverages shown:
    (1) Distilled spirits. The quantity of distilled spirits imported in 
barrels, kegs, or similar containers shall be ascertained in accordance 
with the regulations of the Bureau of Alcohol, Tobacco and Firearms. 
Where distilled spirits are imported in bottles, jugs, or similar 
containers, Customs duties and taxes shall be collected on the exact 
quantity contained in each case or other outer container, fractional 
parts of a gallon being carried out to three decimal places utilizing 
the proof gallon method of computation.
    (2) Wine. Customs duties and taxes on wines shall be on the basis of 
a wine gallon of liquid measure equivalent to 231 cubic inches and shall 
be paid proportionally on all fractional parts of a wine gallon. 
Fractions of less than one-tenth gallon shall be converted to the 
nearest one-tenth gallon, and five-hundredths gallon shall be converted 
to the next full one-tenth gallon.
    (3) Beer and similar fermented beverages. Customs duties and taxes 
on beer, ale, porter, stout, and other similar fermented beverages, 
including sake, of any name or description containing one-half of 1 
percent or more of alcohol by volume, brewed or produced from malt, 
wholly or in part, or from any substitute therefor, shall be collected 
in accordance with section 5051(a), Internal Revenue Code of 1954 (26 
U.S.C. 5051(a)).

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 78-329, 43 
FR 43455, Sept. 26, 1978; T.D. 80-271, 45 FR 75641, Nov. 17, 1980; T.D. 
89-1, 53 FR 51270, Dec. 21, 1988]



Sec. 159.5  Cigars, cigarettes, and cigarette papers and tubes.

    The internal revenue taxes imposed on cigars, cigarettes, and 
cigarette papers and tubes under section 5701 or 7652, Internal Revenue 
Code of 1954 (26 U.S.C. 5701 or 7652), are determined in accordance with 
section 5703 of that Code (26 U.S.C. 5703) at the time of removal; that 
is, on the quantity removed from Customs custody under the entry or 
withdrawal for consumption. The Customs duties, unlike those on 
alcoholic beverages, do not necessarily apply only to such quantities.



Sec. 159.6  Difference between liquidated duties and estimated duties.

    (a) Difference under $20 in original liquidation. When there is a 
net difference of less than $20 between the total amount of duties, 
fees, taxes, and interest assessed in the liquidation of any entry 
(other than an informal, mail, or baggage entry) and the total amount of 
estimated duties, fees, and taxes deposited, including any supplemental 
deposit, the difference shall be disregarded and the entry endorsed ``as 
entered.'' In the case of an informal, mail, or baggage entry, the 
amount of duties, fees, and taxes computed by a Customs officer when the 
entry is prepared by, or filed with, him shall be considered the 
liquidated assessment.
    (b) Difference under $20 in reliquidation. When there is a net 
difference of less than $20 between the total amount of duties, fees, 
taxes, and interest found due in the reliquidation of any entry and the 
total amount of duties, fees, taxes, and interest assessed in the prior 
liquidation of the entry, the difference shall be disregarded except in 
the following cases:
    (1) Reliquidation at importer's request. When reliquidation of any 
entry is made at the importer's request, such as reliquidation following 
the allowance of a protest under section 514, Tariff Act of 1930, as 
amended (19 U.S.C. 1514), or a request for correction under section 
520(c), Tariff Act of 1930, as amended (19 U.S.C. 1520(c)), any refund 
determined to be due shall be refunded even if less than $20.
    (2) Court decision. Any refund or increase determined to be due as 
the result of the reliquidation of an entry in accordance with a court 
decision and judgment order shall be refunded or collected as the case 
may be.
    (c) Difference of $20 or more collected or refunded. If there is a 
difference of $20 or more between the duties, fees, taxes, and interest 
assessed in the liquidation

[[Page 231]]

of an entry and the total estimated duties, fees, and taxes deposited, 
or between the total duties, fees, taxes, and interest assessed in the 
reliquidation of an entry and those assessed in the prior liquidation, 
the entry shall be endorsed to show the difference and bills or refund 
checks shall be issued.
    (d) Customs duties and fees and internal revenue taxes and interest 
netted for $20 limit. The assessments of Customs duties and fees and 
internal revenue taxes and interest shall be separately stated on the 
entry at the time of liquidation, but the amounts of any differences 
shall be netted when applying the $20 minimum for issuance of a bill or 
refund check.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 78-394, 43 
FR 49791, Oct. 25, 1978; T.D. 94-51, 59 FR 30296, June 13, 1994; 64 FR 
56440, Oct. 20, 1999]



Sec. 159.7  Rewarehouse entries.

    The liquidation of the original warehouse entry shall be followed in 
determining the liability for duties on a rewarehouse entry, except in 
the following cases:
    (a) Merchandise excluded from liquidation of original warehouse 
entry. When any of the following types of merchandise are withdrawn from 
warehouse for transportation to another port, they shall be excluded 
from the liquidation of the original warehouse entry, and the liability 
for duties shall be determined by a liquidation of the rewarehouse entry 
made at the port where the merchandise is withdrawn for consumption or 
for exportation:
    (1) Alcoholic beverages provided for in headings 2203 through 2208, 
Harmonized Tariff Schedule of the United States (HTSUS) (19 U.S.C. 
1202), and subject to internal revenue taxes;
    (2) Cigars, cigarettes, and cigarette papers and tubes subject to 
internal revenue taxes;
    (3) Tariff-rate quota merchandise; and
    (4) Wool or hair subject to duty at a rate per clean kilogram under 
Chapter 51, HTSUS.
    (b) Reliquidation required by change in rate. When a rate of Customs 
duty or tax is changed by an act of Congress or a proclamation of the 
President, any necessary reliquidation of Customs duty or tax on 
merchandise covered by a rewarehouse entry which may be required by 
reason of the change in rate shall be made at the port where the 
merchandise is held in Customs custody on the effective date of the 
change.
    (c) Shortage, irregular delivery, nondelivery, and other cases. In 
cases involving shortage, irregular delivery, or nondelivery under the 
original warehouse withdrawal for transportation, or in other cases when 
the port director of the port where the merchandise is entered for 
rewarehouse is of the opinion that circumstances make it inadvisable to 
follow the liquidation of the original warehouse entry, he shall make an 
appropriate adjustment in the amount of duties to be assessed under the 
rewarehouse entry.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51270, Dec. 21, 1988; T.D. 90-78, 55 FR 40168, Oct. 2, 1990]



Sec. 159.8  Allowance for loss, injury, etc.

    Allowance in duties for any merchandise which is lost, stolen, 
destroyed, injured, abandoned, or short-shipped shall be made in 
accordance with the provisions of part 158 of this chapter.



Sec. 159.9  Notice of liquidation and date of liquidation for formal entries.

    (a) Bulletin notice of liquidation. Notice of liquidation of formal 
entries shall be made on a bulletin notice of liquidation, Customs Form 
4333.
    (b) Posting of bulletin notice. The bulletin notice of liquidation 
shall be posted for the information of importers in a conspicuous place 
in the customhouse at the port of entry (or Customs station, when the 
entries listed were filed at a Customs station outside the limits of a 
port of entry), or shall be lodged at some other suitable place in the 
customhouse in such a manner that it can readily be located and 
consulted by all interested persons, who shall be directed to that place 
by a notice maintained in a conspicuous place in the customhouse stating 
where notices of liquidation of entries are to be found.
    (c) Date of liquidation--(1) Generally. The bulletin notice of 
liquidation shall be dated with the date it is posted or

[[Page 232]]

lodged in the customhouse for the information of importers. This posting 
or lodging shall be deemed the legal evidence of liquidation. For 
electronic entry summaries, the date of liquidation will be the date of 
posting of the bulletin notice of liquidation. Customs will endeavor to 
provide the filer with electronic notification of this date as an 
informal, courtesy notice of liquidation.
    (2) Exception: Entries liquidated by operation of law. (i) Entries 
liquidated by operation of law at the expiration of the time limitations 
prescribed in section 504. Tariff Act of 1930, as amended (19 U.S.C. 
1504), and set out in Sec. Sec. 159.11 and 159.12, shall be deemed 
liquidated as of the date of expiration of the appropriate statutory 
period.
    (ii) The bulletin notice of liquidation shall be posted or lodged in 
the customhouse within a reasonable period after each liquidation by 
operation of law and shall be dated as of the date of expiration of the 
statutory period.
    (iii) A protest under section 514, Tariff Act of 1930, as amended 
(19 U.S.C. 1514), and part 174 of this chapter shall be filed within 90 
days from the date the bulletin notice of liquidation of an entry by 
operation of law is posted or lodged in the customhouse.
    (d) Courtesy notice of liquidation. Customs will endeavor to provide 
importers or their agents with Customs Form 4333-A, ``Courtesy Notice,'' 
for all entries scheduled to be liquidated or deemed liquidated by 
operation of law. This notice shall serve as an informal, courtesy 
notice and not as a direct, formal and decisive notice of liquidation.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 79-221, 44 
FR 46829, Aug. 9, 1979; T.D. 90-1, 54 FR 52933, Dec. 26, 1989; T.D. 90-
92, 55 FR 49888, Dec. 3, 1990]



Sec. 159.10  Notice of liquidation and date of liquidation for informal, mail, and baggage entries.

    (a) Usual date of liquidation. Except in the cases provided for in 
paragraph (b) of this section, the effective date of liquidation for 
informal, mail, and baggage entries shall be:
    (1) The date of payment by the importer of duties due on the entry;
    (2) The date of release by Customs or the postmaster when the 
merchandise is released under such an entry free of duty; and
    (3) The date a free entry is accepted for articles released under a 
special permit for immediate delivery under part 142 of this chapter.
    (b) Date of liquidation when duty cannot be determined at time of 
entry. When the proper rate or amount of duty cannot be determined at 
the time of entry because the merchandise is subject to a tariff-rate 
quota, because of a missing document which, if for free entry, is not 
produced prior to the release of the merchandise to the importer, or 
because of any other reason, the printed notice of liquidation appearing 
on the receipt issued for any money collected on the entry shall be 
voided. When the tariff status of the merchandise either as dutiable or 
free is finally ascertained it shall be noted on the entry. The 
effective date of liquidation shall be the date of posting or lodging of 
the notice of liquidation required by paragraph (c)(3) of this section.
    (c) Notice of liquidation--(1) Dutiable entries. Where duties are 
paid on an entry in accordance with paragraph (a)(1) of this section, 
notice of liquidation is furnished by a suitable printed statement 
appearing on the receipt issued for duties collected. No other notice of 
liquidation shall be given, but notice of reliquidation of any such 
entry shall be given on Customs Form 4333 posted or lodged in the place 
and manner specified in Sec. 159.9(b).
    (2) Free entries. Notice of liquidation is furnished by release of 
the merchandise under a free entry in accordance with paragraph (a)(2) 
of this section, or by acceptance of the free entry in accordance with 
paragraph (a)(3) of this section after release under a special permit 
for immediate delivery. No further notice of the liquidation of such 
entries shall be given.
    (3) Entries where duty cannot be determined at time of entry. When 
the proper rate or amount of duty cannot be determined at the time of 
entry as set forth in paragraph (b) of this section, notice of 
liquidation shall be given on

[[Page 233]]

a bulletin notice of liquidation, Customs Form 4333, in the manner 
specified in Sec. 159.9 for formal entries.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 90-1, 54 FR 
52933, Dec. 26, 1989]



Sec. 159.11  Entries liquidated by operation of law.

    (a) Time limit generally. Except as provided in Sec. 159.12, an 
entry not liquidated within 1 year from the date of entry of the 
merchandise, or the date of final withdrawal of all merchandise covered 
by a warehouse entry, shall be deemed liquidated by operation of law at 
the rate of duty, value, quantity, and amount of duties asserted by the 
importer at the time of filing an entry summary for consumption in 
proper form, with estimated duties attached, or a withdrawal for 
consumption in proper form, with estimated duties attached. Notice of 
liquidation shall be given on the bulletin notice of liquidation, 
Customs Form 4333, as provided in Sec. Sec. 159.9 and 159.10(c)(3). 
Customs will endeavor to provide a courtesy notice of liquidation on 
Customs Form 4333-A in accordance with Sec. 159.9(d).
    (b) Applicability. The provisions of this section and Sec. 159.12 
shall apply to entries of merchandise for consumption or withdrawals of 
merchandise for consumption made on or after April 1, 1979, but shall 
not apply to drawback entries.

[T.D. 79-221, 44 FR 46829, Aug. 9, 1979, as amended by T.D. 90-1, 54 FR 
52933, Dec. 26, 1989; T.D. 01-24, 66 FR 16400, Mar. 26, 2001]



Sec. 159.12  Extension of time for liquidation.

    (a) Reasons--(1) Extension. The port director may extend the 1-year 
statutory period for liquidation for an additional period not to exceed 
1 year if:
    (i) Information needed by Customs. Information needed by Customs for 
the proper appraisement or classification of the merchandise is not 
available, or
    (ii) Importer's request. The importer requests an extension in 
writing before the statutory period expires and shows good cause why the 
extension should be granted. ``Good cause'' is demonstrated when the 
importer satisfies the port director that more time is needed to present 
to Customs information which will affect the pending action, or there is 
a similar question under review by Customs.
    (2) Suspension. The 1-year liquidation period may be suspended as 
required by statute or court order.
    (b) Notice of extension. If the port director extends the time for 
liquidation, as provided in paragraph (a)(1) of this section, he 
promptly shall notify the importer or the consignee and his agent and 
surety on Customs Form 4333-A, appropriately modified, that the time has 
been extended and the reasons for doing so.
    (c) Notice of suspension. If the liquidation of an entry is 
suspended as required by statute or court order, as provided in 
paragraph (a)(2) of this section, the port director promptly shall 
notify the importer or the consignee and his agent and surety on Customs 
Form 4333-A, appropriately modified, of the suspension.
    (d) Additional extensions--(1) Information needed by Customs. If an 
extension has been granted because Customs needs more information and 
the port director thereafter determines that more time is needed, he may 
extend the time for liquidation for an additional period not to exceed 1 
year provided he issues the notice required by paragraph (b) of this 
section before termination of the prior extension period.
    (2) At importer's request. If the statutory period has been extended 
for 1 year at the importer's request, and the importer thereafter 
determines that additional time is necessary, he may request another 
extension in writing before the original extension expires, giving 
reasons for his request. If the port director finds that good cause (as 
defined in paragraph (a)(1)(ii) of this section) exists, he shall issue 
a notice extending the time for liquidation for an additional period not 
to exceed 1 year.
    (e) Limitation on extensions. The total time for which extensions 
may be granted by the port director may not exceed 3 years.
    (f) Time limitation--(1) Generally. An entry not liquidated within 4 
years from either the date of entry, or the date of final withdrawal of 
all the merchandise covered by a warehouse entry,

[[Page 234]]

shall be deemed liquidated by operation of law at the rate of duty, 
value, quantity, and amount of duty asserted by the importer at the time 
of filing the entry summary for consumption in proper form, with 
estimated duties attached, or the withdrawal for consumption in proper 
form, with estimated duties attached, unless liquidation continues to be 
suspended by statute or court order. Customs will endeavor to provide a 
courtesy notice of liquidation on Customs Form 4333-A, in accordance 
with Sec. 159.9(d), in addition to the bulletin notice specified in 
Sec. 159.9(c)(2)(ii).
    (2) Suspension of liquidation by statute or court order. When 
liquidation of an entry continues to be suspended beyond the 4-year 
period specified in paragraph (f)(1) of this section due to a statute or 
court order, the entry shall be liquidated within 90 days after removal 
of the suspension.
    (g) Notice of liquidation. If an entry is liquidated after an 
extension expires or a suspension is removed, notice of liquidation 
shall be given on the bulletin notice of liquidation, Customs Form 4333, 
as provided in Sec. Sec. 159.9 and 159.10(c)(3). Customs will endeavor 
to provide a courtesy notice of liquidation on Customs Form 4333-A in 
accordance with Sec. 159.9(d).

[T.D. 79-221, 44 FR 46829, Aug. 9, 1979, as amended by T.D. 90-1, 54 FR 
52933, Dec. 26, 1989]



                   Subpart B_Weight, Gage, and Measure



Sec. 159.21  Quantity upon which duties based.

    Insofar as duties are based upon the quantity of any merchandise, 
such duties shall be based upon the quantity of such merchandise at the 
time of its importation, except in the following cases:
    (a) Manipulation in warehouse. If any merchandise covered by a 
warehouse entry has been cleaned, sorted, repacked, or otherwise changed 
in condition under section 562, Tariff Act of 1930, as amended (19 
U.S.C. 1562), withdrawals shall be passed and the entry liquidated on 
the basis of the weight, gauge, or measure of such merchandise in its 
manipulated condition with an appropriate notation in the duty statement 
that the duties are assessed on the basis of the manipulated condition 
of the merchandise.
    (b) Alcoholic beverages. Duties on certain alcoholic beverages are 
assessed only on the quantities entered or withdrawn for consumption 
(see Sec. 159.4).
    (c) Cigars, cigarettes, and cigarette papers and tubes. Although 
Customs duties on cigars, cigarettes, and cigarette papers and tubes are 
assessed on the quantities imported, the internal revenue taxes on such 
merchandise are assessed only on the quantities entered or withdrawn for 
consumption (see Sec. 159.5).

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 80-142, 45 
FR 36386, May 30, 1980]



Sec. 159.22  Net weights and tares.

    (a) Determination of net weight. The net weight of merchandise 
dutiable by net weight, or upon a value dependent upon net weight, shall 
be determined insofar as possible by obtaining the actual weight, or by 
deducting the actual or schedule tare from the gross weight. Actual tare 
may be determined on the basis of tests when the tares of the packages 
in a shipment are reasonably uniform.
    (b) Invoice net weight or tare. When the actual net weight or tare 
cannot reasonably be determined and no schedule tare is applicable, 
liquidation may be made on the basis of the invoice net weight or tare.
    (c) Schedule tare. The following tares, which, from experience, have 
proved to be the average for certain classes of merchandise shall be 
known as schedule tares and shall be applied, except as provided in 
paragraph (d) of this section:

    Apple boxes. 2.984 kilograms per box. This schedule tare includes 
the paper wrappers, if any, on the apples.
    China clay in so-called half-ton casks: 26.856 kilograms per cask.
    Figs in skeleton cases: Actual tare for outer containers plus 13 
percent of the gross weight of the inside wooden boxes and figs.
    Fresh tomatoes: 113 grams per 100 paper wrappings.
    Lemons and oranges: 283 grams per box and 142 grams per half box for 
paper wrappings, and actual tare for outer containers.
    Ocher, dry, in casks: Eight percent of the gross weight.

[[Page 235]]

    Ocher, in oil, in casks: Twelve percent of the gross weight.
    Pimientos in tins imported from Spain: The following schedule 
drained weight shall be used as the Customs dutiable weight in the 
liquidation of entries, the difference between the weight of the new 
contents of pimientos in tins and such drained weight being the 
allowance made in liquidation for tare for water:

------------------------------------------------------------------------
                Size can                          Drained weight
------------------------------------------------------------------------
3 kilo.................................  13.6 kilograms-case of 6 tins.
794 grams..............................  16.7 kilograms-case of 24 tins.
425 grams..............................  8.0 kilograms-case of 24 tins.
198 grams..............................  3.9 kilograms-case of 24 tins.
113 grams..............................  2.4 kilograms-case of 24 tins.
------------------------------------------------------------------------

    Tobacco, leaf not stemmed: 5.9 kilograms per bale: Sumatra: actual 
tare for outside coverings, plus 1.9 kilograms for the inside matting 
and, if a certificate is attached to the invoice certifying that the 
bales contain paper wrapping and specifying whether light or heavy paper 
has been used, either 113 grams or 227 grams for the paper wrapping 
according to the thickness of paper used.

    (d) Actual tare. In the following circumstances, the actual tare 
shall be ascertained and in so doing the weigher shall empty and weigh 
as many casks, boxes, and other coverings as he may deem necessary:
    (1) If the importer is not satisfied with the invoice tare or with 
the schedule tare;
    (2) If the port director is of the opinion that the invoice or 
schedule tare does not correctly represent the tare of the merchandise; 
or
    (3) If the weigher has reason to believe that the invoice or 
schedule tare is greater than the real tare.
    (e) Estimated tare. When it is impracticable to ascertain the actual 
tare, the weigher shall state in his report what, in his judgment, 
constitutes a fair tare allowance.
    (f) Weight for value purposes. In determining the total dutiable 
value of merchandise which is subject to ad valorem duty and appraised 
on the basis of weight, liquidation shall be made on the same basis as 
appraisement. For example, if appraisement is made on the basis of gross 
weight, the unit value shall be multiplied by the total gross weight in 
computing the total value even though net weight may be used for other 
purposes in liquidation, such as in determining total specific duties.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51270, Dec. 21, 1988]



                Subpart C_Conversion of Foreign Currency



Sec. 159.31  Rates to be used.

    Except as otherwise specified in this subpart, no rate or rates of 
exchange shall be used to convert foreign currency for Customs purposes 
other than a proclaimed rate or certified rate or rates.



Sec. 159.32  Date of exportation.

    The date of exportation for currency conversion shall be fixed in 
accordance with Sec. 152.1(c) of this chapter.



Sec. 159.33  Proclaimed rate.

    If a rate of exchange has been proclaimed by the Secretary of the 
Treasury in accordance with 31 U.S.C. 5151(b) for the currency involved, 
such proclaimed rate shall be used unless it varies by 5 percent or more 
from the certified daily rate for the date of exportation as set forth 
in Sec. 159.35. In determining the percentage of variation between the 
proclaimed rate and the certified rate, the difference between the two 
rates shall be divided by the certified rate.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 97-82, 62 FR 
51771, Oct. 3, 1997]



Sec. 159.34  Certified quarterly rate.

    (a) Countries for which quarterly rate is certified. For the 
currency of each of the following foreign countries, there will be 
published in the Customs Bulletin, for the quarter beginning January 1, 
and for each quarter thereafter, the rate or rates first certified by 
the Federal Reserve Bank of New York for such foreign currency for a day 
in that quarter:

Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, 
Germany, Hong Kong, India, Iran, Ireland, Italy, Japan, Malaysia, 
Mexico, Netherlands, New Zealand, Norway, People's Republic of China, 
Philippines, Portugal, Republic of South

[[Page 236]]

Africa, Singapore, Spain, Sri Lanka (Ceylon), Sweden, Switzerland, 
Thailand, United Kingdom, Venezuela.

    (b) When certified quarterly rate is used. The certified quarterly 
rate established under paragraph (a) of this section shall be used for 
Customs purposes for any date of exportation within the quarter, except 
in the following cases:
    (1) Proclaimed rate. If a rate has been proclaimed by the Secretary 
of the Treasury under Sec. 159.33 which does not vary by 5 percent or 
more from the appropriate certified daily rate, notice of such variance 
shall be published in the Customs Bulletin and the proclaimed rate shall 
be used for Customs purposes in connection with merchandise exported on 
such date.
    (2) Certified daily rate. If the certified daily rate for the date 
of exportation varies by 5 percent or more from the certified quarterly 
rate, notice of such variation and the rate or rates certified for such 
day shall be published in the Customs Bulletin, and such certified daily 
rate shall be used for Customs purposes in connection with merchandise 
exported on such day.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 81-117, 46 
FR 24944, May 4, 1981]



Sec. 159.35  Certified daily rate.

    The daily buying rate of foreign currency which is determined by the 
Federal Reserve Bank of New York and certified to the Secretary of the 
Treasury in accordance with 31 U.S.C. 5151(e) shall be used for the 
conversion of foreign currency whenever a proclaimed rate or certified 
quarterly rate is not applicable under the provisions of Sec. Sec. 
159.33 and 159.34. If the date of exportation is one on which banks are 
generally closed in New York City, then the certified daily rate for the 
last preceding business day shall be considered the certified daily rate 
for the day of exportation.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 97-82, 62 FR 
51771, Oct. 3, 1997]



Sec. 159.36  Multiple certified rates.

    The following procedures shall apply when the Federal Reserve Bank 
of New York certifies two or more rates of exchange (e.g., official and 
free) for a foreign currency:
    (a) Rates to be published. When the Federal Reserve Bank of New York 
certifies two or more rates of exchange for the currency of any country, 
those rates will be published in the Customs Bulletin.
    (b) Laws of country of exportation followed. When multiple rates 
have been certified for a foreign currency, the rate to be used for 
Customs purposes shall be the type of certified rate which the port 
director is satisfied, from information in his own files, information 
obtained and presented to him by the importer, or information obtained 
from other sources, is uniformly applicable under the laws and 
regulations of the country of exportation to the particular class of 
merchandise on the date of exportation. In cases where two or more types 
of certified rates are uniformly applicable on a percentage bases, each 
type of certified rate shall be used for the percentage of value to 
which it is applicable. The percentages used shall be those which 
reflect realistically the percentage for which each type of rate is 
uniformly applicable under the laws and regulations of the country of 
exportation on the date of exportation.
    (c) Procedure when multiple certified rates not uniformly 
applicable. If the port director has credible information that a type of 
rate or combination of types of rates which would otherwise be 
applicable under paragraph (b) of this section were not required or 
permitted, as the case may be, under the laws and regulations of the 
country of exportation to be used uniformly during any period in 
connection with the payment for all merchandise of the class involved, 
he shall immediately submit a detailed report to the Commissioner of 
Customs, and shall suspend appraisement and liquidation as to all 
merchandise of the class involved exported to the United States during 
the period involved, until instructions are received from the 
Commissioner of Customs.
    (d) Rate for merchandise different from rate for costs. If the port 
director has credible information that a type of rate or combination of 
types of rates not

[[Page 237]]

applicable to payment for the merchandise was required or permitted in 
payment of costs, charges, or expenses, the currency conversions for the 
exchange covering payment for the merchandise and for the exchange 
covering such costs, charges, or expenses shall be calculated 
separately. In deducting nondutiable costs, charges, or expenses, the 
foreign exchange shall be at the rate or rates actually used in payment 
of such costs, charges, or expenses, whether or not certified in 
accordance with Sec. 159.34 or Sec. 159.35. If the costs, charges or 
expenses are dutiable, they shall be calculated according to the rules 
set forth in this subpart. In the event that any type of rate uniformly 
applicable to payment of such dutiable costs, charges, or expenses for 
merchandise of the class involved was a type of rate not certified in 
accordance with Sec. 159.34 or Sec. 159.35, the port director shall 
immediately submit a detailed report to the Commissioner of Customs, and 
shall suspend appraisement and liquidation as to all merchandise of the 
class involved exported to the United States during the period involved, 
until instructions are received from the Commissioner.



Sec. 159.37  Suspension of certification of rates.

    Whenever the Federal Reserve Bank of New York advises that its 
certification of rates for a currency is being suspended pending 
determination of the question whether it will certify multiple rates for 
that currency, the following procedures shall apply:
    (a) Notification of suspension. Customs field officers will be 
informed when certification of a currency is being suspended. Currency 
information received from the Federal Reserve Bank, or otherwise 
available, which might be helpful in calculating estimated duties during 
the period of suspension will be furnished to the Customs field 
officers.
    (b) Suspension of liquidation. In any case where for the purposes of 
the assessment and collection of duties it is necessary to determine the 
proper rate or rates for a currency during the period when it has been 
suspended from certification, appraisement and liquidation shall be 
suspended until resumption of certification.
    (c) Resumption of certification. When certification is resumed by 
the Federal Reserve Bank, the procedures in Sec. 159.36 shall apply.



Sec. 159.38  Rates for estimated duties.

    For purposes of calculating estimated duties, the port director 
shall use the rate or rates appearing to be applicable under the 
instructions in this subpart to the merchandise involved. When it is not 
yet known what certified rate or rates are applicable or no rate has 
been certified, the port director shall take into account all the 
information in his possession and shall use the highest rate or 
combination of rates (i.e., the rate or combination of rates showing the 
highest amount of United States money), certified or uncertified as the 
case may be, which could be applicable.



                        Subpart D_Special Duties



Sec. 159.41  Antidumping duties.

    Antidumping duties shall be assessed in accordance with part 353, 
chapter III of this title.

[T.D. 80-271, 45 FR 75641, Nov. 17, 1980]



Sec. 159.42  Discriminating duties.

    The discriminating duties provided for in subsection 1 of paragraph 
J, section IV, Tariff Act of 1913, as amended by the Act of March 4, 
1915 (19 U.S.C. 128, 131), and the discriminating duties and penalties 
provided for in section 338, Tariff Act of 1930 (19 U.S.C. 1338), shall 
be imposed only in pursuance of specific instructions from the 
Commissioner of Customs.



Sec. 159.43  Duties contingent upon foreign export duties, charges, or restrictions.

    U.S. Note 1 to Section X, Harmonized Tariff Schedule of the United 
States (19 U.S.C. 1202), provides for the imposition under certain 
conditions of additional duties on merchandise covered thereby. The 
assessment of these additional duties is dependent upon action

[[Page 238]]

by the President, and notice of such action, if taken, will be published 
in the Customs Bulletin.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 89-1, 53 FR 
51270, Dec. 21, 1988; T.D. 97-82, 62 FR 51771, Oct. 3, 1997]



Sec. 159.44  Special duties on merchandise imported under agreements in restraint of trade.

    Whenever it appears that imported articles may be subject to the 
special duties provided for in section 802, Act of September 8, 1916 (15 
U.S.C. 73), the port director shall report the matter to the 
Commissioner of Customs and await instructions with respect to the 
imposition of such duties.



Sec. 159.45  Additional duty for unauthentic claims of antiquity.

    When additional duty is imposed in accordance with Sec. 10.53 of 
this chapter for an unauthentic claim of antiquity, such duty shall be 
assessed in addition to any other duty imposed on the merchandise by 
law.



Sec. 159.46  Marking duties.

    (a) Based on dutiable value. The marking duty prescribed by section 
304(f), Tariff Act of 1930, as amended (19 U.S.C. 1304(f)), shall be 
assessed upon the dutiable value as defined in section 503, Tariff Act 
of 1930, as amended (19 U.S.C. 1503).
    (b) Suspension of liquidation. The liquidation of entries shall not 
be suspended merely because the merchandise covered thereby is not 
legally marked, but, upon special application by the importer, the 
liquidation may be deferred for a reasonable time to permit the marking, 
destruction, or exportation of the merchandise.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 90-51, 55 FR 
28191, July 10, 1990]



Sec. 159.47  Countervailing duties.

    Countervailing duties shall be assessed in accordance with part 353, 
chapter III, of this title.

[T.D. 80-271, 45 FR 75641, Nov. 17, 1980]



                   Subpart E_Suspension of Liquidation



Sec. 159.51  General.

    Liquidation of entries shall be suspended only when provided by law 
or regulation, or when directed by the Commissioner of Customs. 
Liquidation of entries shall not be suspended simply because issues 
involved therein may be before the Customs Court in pending litigation, 
since the importer may seek relief by protesting the entries after 
liquidation.



Sec. 159.52  Warehouse entry not liquidated until final withdrawal.

    Liquidation of a warehouse or rewarehouse entry shall be suspended 
until all merchandise covered by the entry has been accounted for within 
the bonded period by withdrawal, abandonment, or destruction, or until 
the bonded period has expired if the merchandise has not been so 
accounted for before that time.



Sec. 159.53  Proof of duty-free or reduced-duty status.

    Various provisions in part 10 of this chapter provide for suspending 
liquidation of entries covering certain merchandise entered at a 
conditionally free or conditionally reduced rate of duty, pending 
production of required proof. Upon production of the required proof, or 
upon failure to produce the proof within the required time, the entries 
shall be liquidated accordingly.



Sec. 159.54  Open bonds for production of documents.

    The liquidation of entries on which bonds are open for the 
production of documents affecting the rate of duty shall be suspended 
pending the performance or nonperformance under the bond, unless 
production of the document is waived in accordance with Sec. 141.92 of 
this chapter.



Sec. 159.55  Possible prohibited food, drugs, or other articles.

    (a) Suspension of liquidation. The liquidation of each entry 
covering merchandise the subject of Sec. 12.1 of this chapter (which 
pertains to certain foods, drugs, cosmetics, economic poisons, hazardous 
substances, dangerous

[[Page 239]]

caustic or corrosive substances, and related items) shall be suspended 
until it is determined whether admission of the merchandise into the 
United States is permitted under the law.
    (b) Allowance for exportation or destruction. In any case where the 
admission of such merchandise into the United States is refused and the 
merchandise is exported under Customs supervision in accordance with 
Sec. 158.45(b) of this chapter, or destroyed under Customs supervision 
in accordance with Sec. 158.41 of this chapter, the merchandise is 
exempt from duty and any duties collected thereon shall be refunded.



Sec. 159.57  Merchandise affected by an American manufacturer's cause of action sustained by the court.

    Liquidation of entries for merchandise of the character covered by a 
decision of the Secretary of the Treasury published in accordance with 
Sec. 175.24 of this chapter, entered or withdrawn for consumption after 
the date of publication of a decision of the U.S. Court of International 
Trade sustaining in whole or in part the cause of action of an American 
manufacturer, producer, or wholesaler, shall be suspended until final 
disposition is made of the cause of action. Upon final disposition, such 
entries shall be liquidated, or, if necessary, reliquidated in 
accordance with the final judicial decision.

[T.D. 73-175, 38 FR 17482, July 2, 1973, as amended by T.D. 85-90, 50 FR 
21430, May 24, 1985]



Sec. 159.58  Dumping and countervailing duties; action by port director.

    (a) Antidumping matters. Upon receipt of notification from the 
Commissioner, each port director shall suspend liquidation on 
merchandise entered, or withdrawn from warehouse, for consumption, on or 
after the date of publication of the ``Notice of Preliminary Affirmative 
Antidumping Determination,'' ``Notice of Final Affirmative Antidumping 
Determination'' or ``Notice of Violation of Agreement'' as provided by 
part 353, chapter III, of this title. Each port director shall 
immediately notify the importer, consignee, or agent of each entry of 
merchandise in question with respect to which liquidation is suspended. 
The notice shall indicate the relevant ascertained and determined or 
estimated antidumping duty.
    (b) Countervailing matters. Upon receipt of notification from the 
Commissioner, each port director shall suspend liquidation on 
merchandise entered, or withdrawn from warehouse, for consumption, on or 
after the date of publication of the ``Notice of Preliminary Affirmative 
Countervailing Duty Determination,'' ``Notice of Final Affirmative 
Countervailing Duty Determination'' or ``Notice of Violation of 
Agreement,'' as provided by part 355, Chapter III, of this title. Each 
port director shall immediately notify the importer, consignee, or agent 
of each entry of merchandise in question with respect to which 
liquidation is suspended. The notice shall indicate the relevant 
ascertained and determined or estimated countervailing duty.

[T.D. 80-271, 45 FR 75642, Nov. 17, 1980]



             Subpart F_Continued Dumping and Subsidy Offset

    Source: T.D. 01-68, 66 FR 48552, Sept. 21, 2001, unless otherwise 
noted.



Sec. 159.61  General.

    (a) Continued dumping and subsidy offset. Under section 754 of the 
Tariff Act of 1930, as amended by Public Law 106-387, 114 Stat. 1549 (19 
U.S.C. 1675c), known as the Continued Dumping and Subsidy Offset Act of 
2000, assessed duties received on or after October 1, 2000 under a 
countervailing duty order, an antidumping duty order, or a finding under 
the Antidumping Act of 1921, will be distributed, as provided under this 
subpart, to affected domestic producers for certain qualifying 
expenditures that these affected domestic producers incur after the 
issuance of such an antidumping duty order or finding, or countervailing 
duty order. This distribution is called the continued dumping and 
subsidy offset.
    (b) Affected domestic producer--(1) General rule. Except as provided 
in paragraph (b)(2) of this section, an ``affected domestic producer'' 
under paragraph (a) of this section means any manufacturer, producer, 
farmer, rancher or worker representative (including

[[Page 240]]

any association of such persons) that remains in operation continuing to 
produce the product covered by the antidumping duty order or finding or 
countervailing duty order, and that was a petitioner or an interested 
party that supported a petition concerning an antidumping duty order, a 
finding under the Antidumping Act of 1921, or a countervailing duty 
order that was entered. It is the responsibility of the U.S. 
International Trade Commission (USITC) to ascertain and timely forward 
to Customs a list of the domestic producers potentially considered 
``affected domestic producers'' eligible to receive a distribution in 
connection with each order or finding. In addition to the potential 
``affected domestic producers'' set forth on the USITC list, the 
following parties also are potential ``affected domestic producers'':
    (i) Successor company. In the case of a company that has succeeded 
to the operations of a predecessor company that appeared on the USITC 
list, the successor company may file a certification to claim an offset 
as an affected domestic producer on behalf of the predecessor company. 
In its certification, the company must name the predecessor company to 
which it has succeeded and it must describe in detail the duly 
authorized succession by which it is entitled to file the certification.
    (ii) A member company of an association. A member company of an 
association appearing on the USITC list for an order or finding may file 
a certification to claim an offset as an affected domestic producer, 
even though the member company does not itself appear on the USITC list, 
provided that the company also meets the other requirements of the 
statute. In its certification, the company must name the association of 
which it is a member and the company must specifically establish that it 
was a member of the association at the time the association filed the 
petition with the USITC.
    (2) Exceptions. A party who is named on the USITC list is not an 
``affected domestic producer'' under the following circumstances:
    (i) Product no longer produced. A company, business or person that 
has ceased production of the product covered by the antidumping duty 
order or finding, or countervailing duty order, i.e., did not 
manufacture that product at all during the fiscal year that is the 
subject of the disbursement, is not an affected domestic producer under 
this section.
    (ii) Acquisition by related company--(A) Related company defined. A 
company, business or person is not an affected domestic producer if that 
company, business, or person has been acquired by another company or 
business that is related to a company that opposed the antidumping or 
countervailing duty investigation that led to the order or finding. For 
purposes of this paragraph, a company, business or person is related to 
another company, business or person if:
    (1) The company, business or person directly or indirectly controls 
or is controlled by the other company, business or person;
    (2) A third party directly or indirectly controls both companies, 
businesses or persons; or
    (3) Both companies, businesses or persons directly or indirectly 
control a third party and there is reason to believe that the 
relationship causes the first company, business or person to act 
differently than a nonrelated party.
    (B) Control of one party by another. For purposes of paragraphs 
(b)(2)(ii)(A)(1) through (b)(2)(ii)(A)(3) of this section, one party 
would be considered to directly or indirectly control another party if 
the party was legally or operationally in a position to exercise 
restraint or direction over the other party.
    (c) Qualifying expenditures. Qualifying expenditures which may be 
offset by a distribution of assessed antidumping and countervailing 
duties must fall within the categories described in paragraphs (c)(1) 
through (c)(10) of this section. These expenditures must be incurred 
after the issuance, and prior to the termination, of the antidumping 
duty order or finding or countervailing duty order under which the 
distribution is sought. Further, these expenditures must be related to 
the production of the same product that is the subject of the related 
order or finding, with the

[[Page 241]]

exception of expenses incurred by associations which must relate to a 
specific case.
    (1) Manufacturing facilities;
    (2) Equipment;
    (3) Research and development;
    (4) Personnel training;
    (5) Acquisition of technology;
    (6) Health care benefits for employees paid for by the employer;
    (7) Pension benefits for employees paid for by the employer;
    (8) Environmental equipment, training, or technology;
    (9) Acquisition of raw materials and other inputs; and
    (10) Working capital or other funds needed to maintain production.



Sec. 159.62  Notice of distribution.

    (a) Publication of notice. At least 90 days before the end of a 
fiscal year, Customs will publish in the Federal Register a notice of 
intention to distribute assessed duties received as the continued 
dumping and subsidy offset for that fiscal year. The notice will include 
the list of domestic producers, based upon the list supplied by the 
USITC (see Sec. 159.61(b)(1)), that would be potentially eligible to 
receive the distribution.
    (b) Content of notice. The notice of intention to distribute the 
offset will also contain the following:
    (1) The case name and number of the particular order or finding 
concerned, together with the dollar amount contained in the special 
account for that order or finding as of June 1 of the subject fiscal 
year (see Sec. 159.64(a)(1)); and
    (2) The instructions for filing the certification under Sec. 159.63 
in order to claim a distribution.



Sec. 159.63  Certifications.

    (a) Requirement and purpose for certification. In order to obtain a 
distribution of the offset, each affected domestic producer must submit 
a certification, in triplicate, or electronically as authorized by CBP, 
to the Assistant Commissioner, Office of Finance, Headquarters, or 
designee, that must be received within 60 days after the date of 
publication of the notice in the Federal Register, indicating that the 
affected domestic producer desires to receive a distribution. The 
certification must enumerate the qualifying expenditures incurred by the 
domestic producer since the issuance of an order or finding for which a 
distribution has not previously been made, and it must demonstrate that 
the domestic producer is eligible to receive a distribution as an 
affected domestic producer.
    (b) Content of certification. While there is no established format 
for a certification, the certification must identify the date of the 
Federal Register notice under which it is submitted, and the case name 
and the number of the particular order or finding cited in the Federal 
Register notice. The certification must be executed and dated by a party 
legally authorized to bind the domestic producer. The certification must 
also state that the information contained in the certification is true 
and accurate to the best of the certifier's knowledge and belief under 
penalty of law, and that the domestic producer has records to support 
the qualifying expenditures being claimed.
    (1) Identifying information for domestic producer. The certification 
must include the following identifying information related to the 
domestic producer:
    (i) The name of the domestic producer and any name qualifier, if 
applicable (for example, any other name under which the domestic 
producer does business or is also known);
    (ii) The address of the domestic producer (if a post office box, the 
secondary street address must also be included);
    (iii) The Internal Revenue Service (IRS) number (with suffix) of the 
domestic producer, employer identification number, or social security 
number, as applicable;
    (iv) The specific business organization of the domestic producer 
(corporation, partnership, sole proprietorship); and
    (v) The name(s) of any individual(s) designated by the domestic 
producer as the contact person(s) concerning the certification, together 
with the phone number(s) and/or facsimile transmission number(s) and 
electronic mail (email) address(es) for the person(s).
    (2) Amount of claim. In calculating the amount of the distribution 
being

[[Page 242]]

claimed as an offset, the certification must enumerate the following:
    (i) The total amount of qualifying expenditures currently and 
previously certified by the domestic producer, and the amount certified 
by category (see Sec. 159.61(c)(1) through (c)(10));
    (ii) The total amount of those expenditures which have been the 
subject of any prior distribution under section 754, Tariff Act of 1930, 
as amended (19 U.S.C. 1675c); and
    (iii) The net amount for new and remaining qualifying expenditures 
being claimed in the current certification (the total amount currently 
and previously certified as noted in paragraph (b)(2)(i) of this section 
minus the total amount the subject of any prior distribution as noted in 
paragraph (b)(2)(ii) of this section).
    (3) Statement of eligibility to receive distribution. The 
certification must contain a statement that the domestic producer 
desires to receive a distribution and is eligible to receive the 
distribution as an affected domestic producer (see Sec. 159.61(b)(1) 
and (b)(2)).
    (i) Amount certified for payment. The affected domestic producer 
must affirm that the net amount certified for distribution does not 
encompass any qualifying expenditures for which distribution has 
previously been made (see paragraphs (b)(2)(ii) and (b)(2)(iii) of this 
section).
    (ii) Same qualifying expenditures included on more than one 
certification. Where the domestic producer is listed as an affected 
domestic producer on more than one order or finding covering the same 
product and files a separate certification for each order or finding 
using the same qualifying expenditures as the basis for distribution in 
each case, each certification must list all the other orders or findings 
where the producer is claiming the same qualifying expenditures.
    (iii) Continued production of product covered by order or finding; 
acquisition by related company. The statement must include information 
as to whether the domestic producer remains in operation and continues 
to produce the product covered by the particular order or finding under 
which the distribution is sought (see Sec. 159.61(b)(2)(i)). In 
addition, the domestic producer must state whether it has been acquired 
by a company or business that is related to a company, within the 
meaning of Sec. 159.61(b)(2)(ii)(A)(1) through (3), that opposed the 
antidumping or countervailing duty investigation that resulted in the 
order or finding under which the distribution is sought.
    (c) Review and correction of certification. A certification that is 
submitted in response to a notice of distribution and received within 60 
days after the date of publication of the notice in the Federal Register 
may be reviewed before acceptance to ensure that all informational 
requirements are complied with and that any amounts set forth in the 
certification for current and prior qualifying expenditures, including 
the amount claimed for distribution, appear to be correct (see paragraph 
(b)(2) of this section). A certification that is found to be materially 
incorrect or incomplete will be returned to the domestic producer within 
15 days after the close of the 60-day filing period. Within 10 days of 
the date that Customs returns a certification as being materially 
incorrect or incomplete, Customs must receive a corrected certification 
from the affected domestic producer. Customs will make every effort to 
assist companies to perfect their certifications and will not return 
claims for minor errors or omissions. However, it remains the sole 
responsibility of the domestic producer to ensure that the certification 
is correct, complete and satisfactory so as to demonstrate the 
entitlement of the domestic producer to the distribution requested. 
Failure to ensure that the certification is correct, complete and 
satisfactory as provided in this paragraph will result in the domestic 
producer not receiving a distribution.
    (d) Verification of certification; supporting records. 
Certifications are subject to verification. Parties, therefore, are 
required to maintain the accounting records used in developing their 
claims, for a period of five years after the filing of the 
certification. The records supporting certifications must be those that 
are normally kept in the ordinary course of business (see Sec. 
163.1(a)(1) and (a)(2)(vi) of this chapter). Parties must be able to 
demonstrate that their records specifically

[[Page 243]]

support each qualifying expenditure enumerated in a certification. In 
addition, the claimant must be able to support how qualifying 
expenditures are determined to be related to the production of the 
product covered by the order or finding.
    (e) Disclosure of information in certifications; acceptance by 
producer. The name of the affected domestic producer, the total dollar 
amount claimed by that party on the certification, as well as the total 
dollar amount that Customs actually disburses to that company as an 
offset, will be available for disclosure to the public (see Sec. 
159.64(g)(1)). The submission of the certification will be construed as 
an understanding and acceptance on the part of the domestic producer 
that this information will be disclosed to the public. Alternatively, a 
statement in a certification that this information is proprietary and 
exempt from disclosure will result in Customs rejection of the 
certification.



Sec. 159.64  Distribution of offset.

    (a) The creation of Special Accounts and Clearing Accounts--(1) 
Special Accounts. As directed in the legislation (19 U.S.C. 1675c(e)), 
Customs will establish Special Accounts for each antidumping duty order 
or finding or countervailing duty order, into which funds will be 
transferred as set out in paragraph (b) of this section. All 
distributions to affected domestic producers will be made from the 
Special Accounts.
    (2) Clearing Accounts. In order to properly manage and account for 
dumping and subsidy offsets, as well as any requisite refunds to 
importers, Customs will also establish Clearing Accounts. All estimated 
antidumping and countervailing duties received pursuant to an 
antidumping or countervailing order or finding in effect on January 1, 
1999, or thereafter, will be deposited into a Clearing Account.
    (b) Distribution of assessed duties received from the Special 
Accounts; refunds resulting from reliquidation or court action; and 
overpayments to affected domestic producers--(1) Distribution of 
assessed duties received from the Special Accounts. (i) No later than 60 
days after the end of a fiscal year, Customs will distribute the 
assessed duties transferred from the Clearing Accounts and received into 
the Special Accounts. The amount distributed shall be referred to as the 
dumping and subsidy offset;
    (ii) Transfers from the Clearing Accounts to the Special Accounts 
will be made by Customs throughout the fiscal year. Transfers will occur 
between a Clearing Account and a Special Fund Account when an entry upon 
which antidumping or countervailing duties are owed is properly 
liquidated pursuant to an order, finding or receipt of liquidation 
instructions;
    (iii) The amount transferred at liquidation to the Special Account 
will be dependent upon the amount actually collected on the entry and in 
the Clearing Account. Following liquidation, additional transfers will 
be made on the liquidated entry to the corresponding Special Account, as 
additional antidumping or countervailing duties are collected.
    (2) Refunds resulting from reliquidation or court action. If any of 
the underlying entries composing a prior distribution should reliquidate 
for a refund, such refund will be recovered from the corresponding 
Special Account. Similarly, refunds to importers resulting from any 
court action involving those entries will also be recovered from the 
corresponding Special Account. Refunds to importers will not be delayed 
pending the recovery of overpayments from domestic producers as set out 
in paragraph (b)(3) of this section.
    (3) Overpayments to affected domestic producers. Overpayments to 
affected domestic producers resulting from subsequent reliquidations 
and/or court actions and determined by Customs to be not otherwise 
recoverable from the corresponding Special Account as set out in 
paragraph (b)(2) of this section will be collected from the affected 
domestic producers. The amount of each affected domestic producer's bill 
will be directly proportional to the total dumping and subsidy offset 
amounts that the affected domestic producer previously received under 
the related Special Account. All available collection methods will be 
used by Customs to collect outstanding bills, including but not limited 
to, administrative offset. Interest at the same rate set out at

[[Page 244]]

Sec. 24.3a(c) of this chapter will begin to accrue on unpaid bills 30 
days from the bill date.
    (c) Payment of certified claims. (1) If the total amount of the 
certified net claims filed by affected domestic producers does not 
exceed the amount of the offset available for distribution in the 
corresponding Special Account, the certified net claim for each affected 
domestic producer will be paid in full.
    (2) If the certified net claims exceed the dumping and subsidy 
offset amount available in the corresponding Special Account, such 
offset will be made on a pro rata basis based on each affected domestic 
producer's total certified claim.
    (3) In any case where the distribution is not for the entire 
certified qualifying expenditure submitted by an affected domestic 
producer, and if the affected domestic producer believes that the 
reduction was the result of clerical error or mistake by Customs, it 
must file a request for reconsideration within 30 calendar days to the 
address given in the notification. After considering the matter, the 
Customs Service will notify the party requesting reconsideration of its 
decision. However, any adjustments will be made only from funds 
remaining in the account for that case in the current or future fiscal 
years, and will be paid prior to any future distributions.
    (d) Final distribution and termination of the Special Account. (1) A 
Special Account will be terminated and a final distribution will occur 
when:
    (i) The order or finding with respect to which the account was 
established has terminated; and
    (ii) All entries relating to the order or finding are liquidated, 
all outstanding amounts collected or properly accounted for by Customs, 
all related protests, petitions, and court actions fully concluded, and 
all refunds due to importers on the underlying entries are paid in full.
    (2) Once the requirements set out in paragraph (d)(1) of this 
section have been met, notice of a final distribution will be issued 
pursuant to Sec. 159.62.
    (3) Amounts not timely claimed under the notice of final 
distribution will be permanently deposited into the General Fund of the 
Treasury.
    (e) Interest on Special Accounts and Clearing Accounts. In 
accordance with Federal appropriations law, and Treasury guidelines on 
Special Accounts, funds in such accounts are not interest-bearing unless 
specified by Congress. Likewise, funds being held in Clearing Accounts 
are not interest-bearing unless specified by Congress. Therefore, no 
interest will accrue in these accounts. However, statutory interest 
charged on antidumping and countervailing duties at liquidation will be 
transferred to the Special Account, when collected from the importer.
    (f) Distribution final and conclusive. Except as provided in 
paragraphs (b)(3) and (c)(3) of this section, any distribution made to 
an affected domestic producer under this section shall be final and 
conclusive on the affected domestic producer.
    (g) Annual report; disclosure of information. Although it is not 
mandated in the law (19 U.S.C. 1675c), Customs will issue an annual 
report on the disbursements. This report will be available to the public 
via the Customs website. The annual report will address any initiatives 
that have been implemented to improve the liquidation and disbursement 
process. In addition, the annual report will include the information 
described in paragraphs (g)(1) and (g)(2) of this section.
    (1) Company-specific information. The annual report will include the 
following information concerning those parties that have submitted 
certifications for a distribution of the offset with respect to each 
order or finding as identified by its case number:
    (i) The name of the claimant;
    (ii) The total dollar amount claimed by that party on its 
certification; and
    (iii) The total dollar amount disbursed to that company by Customs.
    (2) General information. The annual report will include the 
following general information for each order or finding as identified by 
its case number:
    (i) The number of entries and dollar amounts in the clearing account 
at the beginning of each fiscal year;
    (ii) The number and amount of Customs re-liquidations during the 
fiscal year; and

[[Page 245]]

    (iii) The dollar amounts remaining uncollected from Customs bills 
issued during the fiscal year.



PART 161_GENERAL ENFORCEMENT PROVISIONS--Table of Contents




Sec.
161.0 Scope.

                      Subpart A_General Provisions

161.2 Enforcement for other agencies.
161.5 Compromise of Government claims.

                   Subpart B_Compensation of Informant

161.12 Eligibility for compensation.
161.14 Advising informant of entitlement.
161.15 Confidentiality for informant.
161.16 Filing of claim for informant compensation.

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1600, 1619, 1624.
    Section 161.2 also issued under 12 U.S.C. 95a; 18 U.S.C. 545; 19 
U.S.C. 1595(a); 22 U.S.C. 401, 1934, 2349aa8-9; 42 U.S.C. 1804, 1807; 50 
U.S.C. 1641 et seq., 1701 et seq.; 50 U.S.C. App. 1-44, 2411.

    Source: T.D. 72-211, 37 FR 16487, Aug. 15, 1972, unless otherwise 
noted.



Sec. 161.0  Scope.

    This part provides general information concerning Customs 
enforcement of certain import and export laws administered by other 
federal agencies, the filing of offers in compromise of government 
claims, the eligibility of individuals for informant compensation, and 
the filing of claims for informant compensation.

[T.D. 98-22, 63 FR 11826, Mar. 11, 1998]



                      Subpart A_General Provisions



Sec. 161.2  Enforcement for other agencies.

    (a) Laws enforced by Customs Service for administering agencies. 
Some of the laws enforced in whole or in part by the Customs Service for 
administering agencies are:
    (1) Importations and exportations of arms, ammunition, implements of 
war, helium gas, and other munitions of war are governed by laws 
administered by the Bureau of Alcohol, Tobacco and Firearms and 
Department of State;
    (2) Importations and exportations of controlled substances are 
governed by laws administered by the Drug Enforcement Administration of 
the Department of Justice;
    (3) Importations, exportations, and transactions involving 
identified goods, services, and technology with any of those countries 
designated as subject to economic sanctions under the laws and 
regulations administered by the Office of Foreign Assets Control of the 
Department of the Treasury.
    (4) Importations and exportations of atomic energy source material, 
fissionable material, and equipment and devices for utilizing or 
producing fissionable material are subject to laws administered by the 
Nuclear Regulatory Commission; and
    (5) The exportation of articles, other than those previously 
mentioned herein, are subject to requirements of laws administered by 
the Department of Commerce.
    (b) Seizure for violation of law. When articles are imported or are 
intended to be, are being, or have been exported from the United States 
in violation of law, such articles and any vessel, vehicle, or aircraft 
knowingly used in their transportation shall be seized and proceeded 
against.

[T.D. 72-211, 37 FR 16487, Aug. 15, 1972, as amended by T.D. 76-21, 41 
FR 2383, Jan. 16, 1976; T.D. 78-329, 43 FR 43456, Sept. 26, 1978; T.D. 
91-77, 56 FR 46115, Sept. 10, 1991; T.D. 96-42, 61 FR 24889, May 17, 
1996]



Sec. 161.5  Compromise of Government claims.

    (a) Offer. An offer made pursuant to section 617, Tariff Act of 
1930, as amended (19 U.S.C. 1617), in compromise of a Government claim 
arising under the Customs laws and the terms upon which it is made shall 
be stated in writing addressed to the Commissioner of Customs. The offer 
shall be limited to the civil liability of the proponent in the matter 
which is the subject of the Government's claim.
    (b) Deposit of specific sum tendered. No offer in which a specific 
sum of money is tendered in compromise of a Government claim under the 
Customs laws will be considered by the Commissioner of Customs until due 
notice is received

[[Page 246]]

that such sum has been properly deposited in the name of the person 
submitting the offer with the Treasurer of the United States or a 
Federal Reserve bank. A proponent at a distance from a Federal Reserve 
bank may perfect his offer by tendering a bank draft for the amount of 
the offer payable to the Secretary of the Treasury for collection and 
deposit. If the offer is rejected, the money will be returned to the 
proponent.

(Sec. 617, 46 Stat. 757, as amended; 19 U.S.C. 1617)



                   Subpart B_Compensation of Informant

    Source: T.D. 91-14, 56 FR 5349, Feb. 11, 1991, unless otherwise 
noted.



Sec. 161.12  Eligibility for compensation.

    In accordance with section 619, Tariff Act of 1930, as amended (19 
U.S.C. 1619), any person not an employee or officer of the United States 
who either furnishes original information concerning any fraud upon the 
customs revenue or any violation, perpetrated or contemplated, of the 
customs or navigation laws or any other laws administered or enforced by 
Customs, or detects and seizes any item subject to seizure and 
forfeiture under the customs or navigationlaws or other laws enforced by 
Customs and reports the same to a Customs officer, may file a claim for 
compensation, provided there is a net amount recovered from such 
detection and seizure or such information, unless other laws specify 
different procedures. Any employee or officer of the United States who 
receives, accepts, or contracts for any portion of such compensation, 
either directly or indirectly, is subject to criminal prosecution and 
civil liability as provided by 19 U.S.C. 1620.

[T.D. 98-22, 63 FR 11826, Mar. 11, 1998]



Sec. 161.14  Advising informant of entitlement.

    Any Customs officer who receives information shall advise the 
informant that, in the event of a recovery, he may be entitled to 
compensation. He shall also advise the informant that, if the informant 
has executed a stipulation to that effect, any amount received by the 
informant in the form of purchase of evidence or purchase of information 
will be deducted from any compensation which may be awarded.



Sec. 161.15  Confidentiality for informant.

    The name and address of the informant shall be kept confidential. No 
files or information shall be revealed which might aid in the 
unauthorized identification of an informant. Release of information is 
governed by Sec. Sec. 103.12(g)(4) and 103.12(i) of this chapter.



Sec. 161.16  Filing a claim for informant compensation.

    (a) Limitations on claims. Pursuant to 19 U.S.C. 1619, an informant 
may be paid up to 25 percent of the net recovery to the government from 
duties withheld; from any fine (civil or criminal), forfeited bail bond, 
penalty, or forfeiture incurred; or, if the forfeiture is remitted, from 
the monetary penalty recovered for remission of the forfeiture. The 
amount of the award paid to informants shall not exceed $250,000 for any 
one case, regardless of the number of recoveries that result from the 
information furnished; however, no claim of less than $100 will be paid.
    (b) Filing of claim. A claim shall be filed, in duplicate, on 
Customs Form 4623 with the Special Agent in Charge, who shall make a 
recommendation on the form as to approval and the amount of the award. 
The Special Agent in Charge shall forward the form to the port director, 
who shall make a recommendation on the form as to approval and the 
amount of the award. The port director shall forward the form to Customs 
Headquarters for action. If for any reason a claim has not been 
transmitted by the port director, the claimant may apply directly to 
Customs Headquarters.

[T.D. 98-22, 63 FR 11826, Mar. 11, 1998]



PART 162_INSPECTION, SEARCH, AND SEIZURE--Table of Contents




Sec.
162.0 Scope.

[[Page 247]]

              Subpart A_Inspection, Examination, and Search

162.1-162.2 [Reserved]
162.3 Boarding and search of vessels.
162.4 Search for letters.
162.5 Search of arriving vehicles and aircraft.
162.6 Search of persons, baggage, and merchandise.
162.7 Search of vehicles, persons or beasts.
162.8 Preclearance inspections and examinations.

                        Subpart B_Search Warrants

162.11 Authority to procure warrants.
162.12 Service of search warrant.
162.13 Search of rooms not described in warrant.
162.15 Receipt for seized property.

                           Subpart C_Seizures

162.21 Responsibility and authority for seizures.
162.22 Seizure of conveyances.
162.23 Seizure under section 596(c), Tariff Act of 1930, as amended (19 
          U.S.C. 1595a(c)).

      Subpart D_Procedure When Fine, Penalty or Forfeiture Incurred

162.31 Notice of fine, penalty or forfeiture incurred.
162.32 Where petition for relief not filed.

                Subpart E_Treatment of Seized Merchandise

162.41 [Reserved]
162.42 Proceedings by libel.
162.43 Appraisement.
162.44 Release on payment of appraised value.
162.45 Summary forfeiture: Property other than Schedule I and Schedule 
          II controlled substances. Notice of seizure and sale.
162.45a Summary forfeiture of Schedule I and Schedule II controlled 
          substances.
162.46 Summary forfeiture: Disposition of goods.
162.47 Claim for property subject to summary forfeiture.
162.48 Disposition of perishable and other seized property.
162.49 Forfeiture by court decree.
162.50 Forfeiture by court decree: Disposition.
162.51 Disposition of proceeds of sale of property seized and forfeited 
          other than under 19 U.S.C. 1592.
162.52 Disposition of proceeds of sale of property seized and forfeited 
          under 19 U.S.C. 1592.

        Subpart F_Controlled Substances, Narcotics, and Marihuana

162.61 Importing and exporting controlled substances.
162.62 Permissible controlled substances on vessels, aircraft and 
          individuals.
162.63 Arrests and seizures.
162.64 Custody of controlled substances,
162.65 Penalties for failure to manifest narcotic drugs or marihuana.
162.66 Penalties for unlading narcotic drugs or marihuana without a 
          permit.

           Subpart G_Special Procedures for Certain Violations

162.70 Applicability.
162.71 Definitions.
162.72 Penalties and forfeitures under sections 466 and 584(a)(1), 
          Tariff Act of 1930, as amended.
162.73 Penalties under section 592, Tariff Act of 1930, as amended.
162.73a Penalties under section 593A, Tariff Act of 1930, as amended.
162.74 Prior disclosure.
162.75 Seizures limited under section 592, Tariff Act of 1930, as 
          amended.
162.76 Prepenalty notice for violations of sections 466 or 584(a)(1), 
          Tariff Act of 1930, as amended.
162.77 Prepenalty notice for violations of section 592, Tariff Act of 
          1930, as amended.
162.77a Prepenalty notice for violation of section 539A, Tariff Act of 
          1930, as amended.
162.78 Presentations responding to prepenalty notice.
162.79 Determination as to violation.
162.79a Other notice.
162.79b Recovery of actual loss of duties, taxes and fees or actual loss 
          of revenue.
162.80 Liability for duties; liquidation of entries.

               Subpart H_Civil Asset Forfeiture Reform Act

162.91 Exemptions.
162.92 Notice of seizure.
162.93 Failure to issue notice of seizure.
162.94 Filing of a claim for seized property.
162.95 Release of seized property.
162.96 Remission of forfeitures and payment of fees, costs or interest.

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1592, 1593a, 1624, 6 U.S.C. 
101, 8 U.S.C. 1324(b).
    Section 162.3 also issued under 19 U.S.C. 1581;
    Section 162.4 also issued under 39 U.S.C. 604, 605;
    Section 162.5 also issued under 19 U.S.C. 1581, 49 U.S.C. 1509;
    Section 162.6 also issued under 19 U.S.C. 1461, 1467, 1496;

[[Page 248]]

    Section 162.7 also issued under 19 U.S.C. 482;
    Section 162.8 also issued under 9 U.S.C. 1629;
    Section 162.21 also issued under 19 U.S.C. 482, 1581, 1582, 1602;
    Section 162.22 also issued under 18 U.S.C. 546; 19 U.S.C. 1459, 
1594, 1595a, 1701, 1703-1708;
    Section 162.23 also issued under 19 U.S.C. 1595a(c).
    Section 162.32 also issued under 19 U.S.C. 1603, 1610;
    Section 162.32 also issued under 19 U.S.C. 1603, 1610;
    Section 162.43 also issued under 19 U.S.C. 1606, 1608;
    Section 162.44 also issued under 19 U.S.C. 1614;
    Section 162.45 also issued under 19 U.S.C. 1607, 1608;
    Section 162.45a also issued under 21 U.S.C. 881;
    Section 162.46 also issued under 19 U.S.C. 1609, 1611;
    Section 162.47 also issued under 19 U.S.C. 1608;
    Section 162.48 also issued under 19 U.S.C. 1606, 1607, 1608, 1612, 
1613b, 1618;
    Section 162.49 also issued under 26 U.S.C. 5688;
    Section 162.50 also issued under 19 U.S.C. 1611, 1705;
    Section 162.61 also issued under 21 U.S.C. 952, 953, 957;
    Section 162.62 also issued under 21 U.S.C. 952, 956;
    Sections 162.63, 162.64 also issued under 21 U.S.C. 881, 966;
    Section 162.65 also issued under 19 U.S.C. 1584, 21 U.S.C. 960, 961.
    Sections 162.65 and 162.72 also issued under 19 U.S.C. 1431(b) and 
19 U.S.C. 1644.
    Sections 162.91 through 162.96 also issued under 18 U.S.C. 983.

    Source: T.D. 72-211, 37 FR 16488, Aug. 15, 1972, unless otherwise 
noted.



Sec. 162.0  Scope.

    This part contains provisions for the inspection, examination, and 
search of persons, vessels, aircraft, vehicles, and merchandise involved 
in importation, for the seizure of property, and for the forfeiture and 
sale of seized property. It also contains provisions for Customs 
enforcement of the controlled substances laws. Additional provisions 
concerning records maintenance and examination applicable to U.S. 
importers, exporters and producers under the U.S.-Chile Free Trade 
Agreement, the U.S.-Singapore Free Trade Agreement, the U.S.-Morocco 
Free Trade Agreement, and the U.S.-Bahrain Free Trade Agreement are 
contained in Part 10, Subparts H, I, M, and N of this chapter, 
respectively.

[T.D. 98-56, 63 FR 32945, June 16, 1998, as amended by CBP Dec. 05-07, 
70 FR 10884, Mar. 7, 2005; CBP Dec. 07-81, 72 FR 58522, Oct. 16, 2007]



              Subpart A_Inspection, Examination, and Search

    Source: T.D. 79-159, 44 FR 31970, June 4, 1979, unless otherwise 
noted.



Sec. Sec. 162.1-162.2  [Reserved]



Sec. 162.3  Boarding and search of vessels.

    (a) General authority. A Customs officer, for the purpose of 
examining the manifest and other documents and papers and examining, 
inspecting and searching the vessel, may at any time go on board:
    (1) Any vessel at any place in the United States or within the 
Customs waters of the United States;
    (2) Any American vessel on the high seas;
    (3) Any vessel within a Customs-enforcement area designated such 
under the provisions of the Anti-Smuggling Act (Act of August 5, 1935, 
as amended, 49 Stat. 517; 19 U.S.C. 1701, 1703 through 1711), but 
Customs officers shall not board a foreign vessel upon the high seas in 
contravention of any treaty with a foreign government, or in the absence 
of a special arrangement with the foreign government concerned.
    (b) Search of army or navy vessel. If the port director or special 
agent in charge believes that sufficient grounds exist to justify a 
search of any army or navy vessel, the facts shall be reported to the 
commanding officer or master of the vessel with a request that he cause 
a full search to be made, and advise the port director or special agent 
in charge of the result of such search. If, after the cargo has been 
discharged, passengers and their baggage landed, and the baggage of 
officers and crewmembers examined and passed, the port director or 
special agent in charge believes that sufficient grounds exist to 
justify the continuance of Customs supervision of the vessel, the 
commanding officer or master of the vessel shall be advised accordingly.

[[Page 249]]

    (c) Assistance of other agencies. Customs officers are authorized to 
assist any other agency in the enforcement of United States laws on any 
vessel.

[T.D. 84-18, 48 FR 52899, Nov. 23, 1983]



Sec. 162.4  Search for letters.

    A Customs officer may search vessels for letters which may be on 
board or may have been conveyed contrary to law on board any vessel or 
on any post route, and shall seize such letters and deliver them to the 
nearest post office or detain them subject to the orders of the postal 
authorities.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972]



Sec. 162.5  Search of arriving vehicles and aircraft.

    A customs officer may stop any vehicle and board any aircraft 
arriving in the United States from a foreign country for the purpose of 
examining the manifest and other documents and papers and examining, 
inspecting, and searching the vehicle or aircraft.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 90-34, 55 
FR 17597, Apr. 26, 1990]



Sec. 162.6  Search of persons, baggage, and merchandise.

    All persons, baggage, and merchandise arriving in the Customs 
territory of the United States from places outside thereof are liable to 
inspection and search by a Customs officer. Port directors and special 
agents in charge are authorized to cause inspection, examination, and 
search to be made under section 467, Tariff Act of 1930, as amended (19 
U.S.C. 1467), of persons, baggage, or merchandise, even though such 
persons, baggage, or merchandise were inspected, examined, searched, or 
taken on board the vessel at another port or place in the United States 
or the Virgin Islands, if such action is deemed necessary or 
appropriate.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972]



Sec. 162.7  Search of vehicles, persons, or beasts.

    A Customs officer may stop, search, and examine any vehicle, person, 
or beast, or search any trunk or envelope wherever found, in accordance 
with section 3061 of the Revised Statutes (19 U.S.C. 482).

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 90-34, 55 
FR 17597, Apr. 26, 1990]



Sec. 162.8  Preclearance inspections and examinations.

    In connection with inspections and examinations conducted in 
accordance with Sec. 148.22(a) of this chapter, United States Customs 
officers stationed in a foreign country may exercise such functions and 
perform such duties (including inspections, examinations, searches, 
seizures, and arrests), as may be permitted by treaty, agreement, or law 
of the country in which they are stationed.

[T.D. 89-22, 54 FR 5077, Feb. 1, 1989]



                        Subpart B_Search Warrants



Sec. 162.11  Authority to procure warrants.

    Customs officers are authorized to procure search warrants under the 
provisions of section 595, Tariff Act of 1930, as amended (19 U.S.C. 
1595). However, a Customs officer who is lawfully on any premises and is 
able to identify merchandise which has been imported contrary to law may 
seize such merchandise without a warrant. If merchandise is in a 
building on the boundary, see Sec. 123.71 of this chapter.



Sec. 162.12  Service of search warrant.

    A search warrant shall be served in person by the officer to whom it 
is issued and addressed. In serving a search warrant, the officer shall 
leave a copy of the warrant with the person in charge or possession of 
the premises, or in the absence of any person, the copy shall be left in 
some conspicuous place on the premises searched.



Sec. 162.13  Search of rooms not described in warrant.

    When a Customs officer is acting under a warrant to search the rooms 
in a building occupied by persons named or described in the warrant, no 
search shall be made of any rooms in such building which are not 
described in the warrant as occupied by such persons.

[[Page 250]]



Sec. 162.15  Receipt for seized property.

    A receipt for property seized under a search warrant shall be left 
with the person in charge or possession of the premises, or in the 
absence of any person, the receipt shall be left in some conspicuous 
place on the premises searched.



                           Subpart C_Seizures



Sec. 162.21  Responsibility and authority for seizures.

    (a) Seizures by Customs officers. Property may be seized, if 
available, by any Customs officer who has reasonable cause to believe 
that any law or regulation enforced by Customs and Border Protection or 
Immigration and Customs Enforcement has been violated, by reason of 
which the property has become subject to seizure or forfeiture. This 
paragraph does not authorize seizure when seizure or forfeiture is 
restricted by law or regulation (see, for example, Sec. 162.75), nor 
does it authorize a remedy other than seizure when seizure or forfeiture 
is required by law or regulation. A receipt for seized property shall be 
given at the time of seizure to the person from whom the property is 
seized.
    (b) Seizure by persons other than Customs officers. The port 
director may adopt a seizure made by a person other than a Customs 
officer if such port director has reasonable cause to believe that the 
property is subject to forfeiture under the Customs laws.
    (c) Seizure by State official. If a duly constituted State official 
has seized any merchandise, vessel, aircraft, vehicle, or other 
conveyance under provisions of the statutes of such State, such property 
shall not be seized by a Customs officer unless the property is 
voluntarily turned over to him to be proceeded against under the Federal 
statutes.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 79-160, 44 
FR 31956, June 4, 1979; USCBP-2006-0122, 73 FR 9011, Feb. 19, 2008]



Sec. 162.22  Seizure of conveyances.

    (a) General applicability. If it shall appear to any officer 
authorized to board conveyances and make seizures that there has been a 
violation of any law of the United States whereby a vessel, vehicle, 
aircraft, or other conveyance, or any merchandise on board of or 
imported by such vessel, vehicle, aircraft, or other conveyance is 
liable to forfeiture, the officer shall seize such conveyance and arrest 
any person engaged in such violation. Common carriers are exempted from 
seizure except under certain specified conditions as provided for in 
section 594, Tariff Act of 1930 (19 U.S.C. 1594) and section 274(b)(1) 
of the Immigration and Nationality Act (8 U.S.C. 1324(b)(1)).
    (b) Facilitating importation contrary to law. Except as provided in 
Sec. 171.52(b), every vessel, vehicle, animal, aircraft, or other 
thing, which is being or has been used in, or to aid or facilitate, the 
importation, bringing in, unlading, landing, removal, concealing, 
harboring or subsequent transportation of any article which is being, or 
has been introduced or attempted to be introduced into the United States 
contrary to law, shall be seized and held subject to forfeiture. Any 
person who directs, assists financially or otherwise, or is in any way 
concerned in any such unlawful activity shall be liable to a penalty 
equal to the value of the article or articles involved.
    (c) Common carrier clearance. Unless specifically authorized by law, 
clearance of vessels within the common carrier exception of section 594, 
Tariff Act of 1930 (19 U.S.C. 1594), shall not be refused for the 
purpose of collecting a fine imposed upon the master or owner, unless 
either of them was a party to the illegal act. The Government's remedy 
in such cases is limited to an action against the master or owner.
    (d) Maritime Administration vessels; exemption from penalty. (1) 
When a vessel owned or chartered under bareboat charter by the Maritime 
Administration and operated for its account becomes liable for the 
payment of a penalty incurred for violation of the Customs revenue or 
navigation laws, clearance of the vessel shall not be withheld nor shall 
any proceedings be taken against the vessel itself looking to the 
enforcement of such liability.
    (2) This exemption shall not in any way be considered to relieve the 
master

[[Page 251]]

of any such vessel or other person incurring such penalties from 
personal liability for payment.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 89-86, 54 
FR 37602, Sept. 11, 1989; USCBP-2006-0122, 73 FR 9012, Feb. 19, 2008]



Sec. 162.23  Seizure under section 596(c), Tariff Act of 1930, as amended (19 U.S.C. 1595a(c)).

    (a) Mandatory seizures. The following, if introduced or attempted to 
be introduced into the United States contrary to law, shall be seized 
pursuant to section 596(c), Tariff Act of 1930, as amended (19 U.S.C. 
1595a(c)):
    (1) Merchandise that is stolen, smuggled, or clandestinely imported 
or introduced;
    (2) A controlled substance, as defined in the Controlled Substance 
Act (21 U.S.C. 801 et seq.), not imported in accordance with law;
    (3) A contraband article, as defined in section 1 of the Act of 
August 9, 1939 (49 U.S.C. 80302); or
    (4) A plastic explosive, as defined in section 841(q) of title 18, 
United States Code, which does not contain a detection agent, as defined 
in section 841(p) of that title.
    (b) Permissive seizures. The following, if introduced or attempted 
to be introduced into the United States contrary to law, may be seized 
pursuant to section 596(c), Tariff Act of 1930, as amended (19 U.S.C. 
1595a(c)):
    (1) Merchandise the importation or entry of which is subject to any 
restriction or prohibition imposed by law relating to health, safety, or 
conservation, and which is not in compliance with the applicable rule, 
regulation or statute;
    (2) Merchandise the importation or entry of which requires a 
license, permit or other authorization of a United States Government 
agency, and which is not accompanied by such license, permit or 
authorization;
    (3) Merchandise or packaging in which copyright, trademark or trade 
name protection violations are involved (including, but not limited to, 
a violation of sections 42, 43 or 45 of the Act of July 5, 1946 (15 
U.S.C. 1124, 1125 or 1127), sections 506 or 509 of title 17, United 
States Code, or sections 2318 or 2320 of title 18, United States Code);
    (4) Trade dress merchandise involved in the violation of a court 
order citing section 43 of the Act of July 5, 1946 (15 U.S.C. 1125);
    (5) Merchandise marked intentionally in violation of 19 U.S.C. 1304;
    (6) Merchandise for which the importer has received written notices 
that previous importations of identical merchandise from the same 
supplier were found to have been in violation of 19 U.S.C. 1304; or
    (7) Merchandise subject to quantitative restrictions, found to bear 
a counterfeit visa, permit, license, or similar document, or stamp from 
the United States or from a foreign government or issuing authority 
pursuant to a multilateral or bilateral agreement (but see paragraph 
(e), of this section).
    (c) Resolution of seizure under Sec. 1595a(c). When merchandise is 
either required or authorized to be seized under this section, the 
forfeiture incurred may be remitted in accord with 19 U.S.C. 1618, to 
include as a possible option the exportation of the merchandise under 
such conditions as Customs shall impose, unless its release would 
adversely affect health, safety, or conservation, or be in contravention 
of a bilateral or multilateral agreement or treaty.
    (d) Seizure under 19 U.S.C. 1592. If merchandise is imported, 
introduced or attempted to be introduced contrary to a provision of law 
governing its classification or value, and there is no issue of 
admissibility, such merchandise shall not be seized pursuant to 19 
U.S.C. 1595a(c). Any seizure of such merchandise shall be in accordance 
with section 1592 (see Sec. 162.75 of this chapter).
    (e) Detention only. Merchandise subject to quantitative restrictions 
requiring a visa, permit, license, or other similar document, or stamp 
from the United States Government or from a foreign government or 
issuing authority pursuant to a bilateral or multilateral agreement, 
shall be subject to detention in accordance with 19 U.S.C. 1499, unless 
the appropriate visa, permit, license, or similar document, or stamp is 
presented to Customs (but see

[[Page 252]]

paragraph (b)(7), of this section for instances when seizure may occur).

[T.D. 96-2, 60 FR 67058, Dec. 28, 1995, as amended by T.D. 99-4, 64 FR 
1123, Jan. 8, 1999]



     Subpart D_Procedure When Fine, Penalty, or Forfeiture Incurred



Sec. 162.31  Notice of fine, penalty, or forfeiture incurred.

    (a) Notice. Written notice of any fine or penalty incurred as well 
as any liability to forfeiture shall be given to each party that the 
facts of record indicate has an interest in the claim or seized 
property. The notice shall also inform each interested party of his 
right to apply for relief under section 618, Tariff Act of 1930, as 
amended (19 U.S.C. 1618), or any other applicable statute authorizing 
mitigation of penalties or remission of forfeitures, in accordance with 
part 171 of this chapter. The notice shall inform any interested party 
in a case involving forfeiture of seized property that unless the 
petitioner provides an express agreement to defer judicial or 
administrative forfeiture proceedings until completion of the 
administrative process, the case will be referred promptly to the U.S. 
attorney or the Department of Justice if the penalty was assessed under 
section 592, Tariff Act of 1930, as amended (19 U.S.C. 1592), for 
institution of judicial proceedings, or summary forfeiture proceedings 
will be begun. For violations involving the possession of personal use 
quantities of a controlled substance, also see Sec. 171.55.
    (b) Contents of notice. The notice shall contain the following:
    (1) The provisions of law alleged to have been violated;
    (2) A description of the specific acts or omissions forming the 
basis of the alleged violations;
    (3) If the alleged violations involve the entry or attempted entry 
of merchandise,
    (i) A description of the merchandise and the circumstances of its 
entry or attempted entry, and
    (ii) The identity of each entry, if specific entries are involved; 
and
    (4) If the alleged violations involve a loss of revenue,
    (i) The total loss of revenue and how it was computed, and
    (ii) The loss of revenue attributable to each entry, if readily 
susceptible to calculation.
    (c) Demand for deposit in case of smuggled articles of small value. 
In the case of smuggled articles of small value, demand shall be made 
for immediate deposit of an amount equivalent to the domestic value of 
the articles on account of the liability to a penalty incurred as 
distinct from liability of the goods to forfeiture. Such sum shall be 
deposited whether or not a petition for relief is filed in accordance 
with part 171 of this chapter. A demand for deposit need not be made in 
connection with any liability incurred by the master of a vessel under 
the provisions of section 453, Tariff Act of 1930, as amended (19 U.S.C. 
1453).

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 78-38, 43 
FR 4255, Feb. 1, 1978; T.D. 79-160, 44 FR 31956, June 4, 1979; T.D. 85-
90, 50 FR 21431, May 24, 1985; T.D. 89-86, 54 FR 37602, Sept. 11, 1989]



Sec. 162.32  Where petition for relief not filed.

    (a) Fines, penalties and forfeitures. If any person who is liable 
for a fine, penalty, or claim for a monetary amount, or who has an 
interest in property subject to forfeiture, fails to petition for relief 
as set forth in part 171 of this chapter, or fails to pay the fine or 
penalty within 30 days from the mailing date of the violation/penalty 
notice provided in Sec. 162.31 (unless additional time is authorized 
for filing a petition, as set forth in part 171 of this chapter) the 
Fines, Penalties, and Forfeitures Officer, shall, after any required 
collection action is complete, refer any fine or penalty case promptly 
to the U.S. attorney, or the Department of Justice if the penalty was 
assessed under section 592, Tariff Act of 1930, as amended (19 U.S.C. 
1592). In the case of property subject to forfeiture, the Fines, 
Penalties, and Forfeitures Officer, where appropriate, shall complete 
administrative forfeiture proceedings or shall refer the matter promptly 
to the U.S. attorney, or the Department of Justice if the case arose 
under section 592, in accordance with the provisions of subparagraph (c) 
below, unless the Commissioner of Customs expressly authorizes other 
action.

[[Page 253]]

    (b) Institution of forefeiture proceedings before completion of 
administrative procedures. Nothing in these regulations is intended to 
prevent the institution of forfeiture proceedings before completion of 
the administrative remission or mitigation procedures pursuant to 
section 618, Tariff Act of 1930, as amended (19 U.S.C. 1618).
    (c) Seized property not eligible for administrative forfeiture. If 
the seized property is not eligible for administrative forfeiture, and 
neither a petition for relief in accordance with part 171 of this 
chapter, nor an offer to pay the domestic value as provided for in Sec. 
162.44, is made within 30 days (unless additional time has been 
authorized under part 171 of this chapter), the Fines, Penalties, and 
Forfeitures Officer shall refer the case promptly to the U.S. attorney 
for the judicial district in which the seizure was made, or the 
Department of Justice if the penalty was assessed under section 592.

[T.D. 85-195, 50 FR 50289, Dec. 10, 1985, as amended by T.D. 99-27, 64 
FR 13676, Mar. 22, 1999]



                Subpart E_Treatment of Seized Merchandise



Sec. 162.41  [Reserved]



Sec. 162.42  Proceedings by libel.

    If seizure is made under a statute which provides that the property 
may be seized and proceeded against by libel, the summary forfeiture 
procedures set forth in Sec. Sec. 162.45, 162.46, and 162.47 do not 
apply. Such cases shall be referred to the U.S. attorney. The Fines, 
Penalties, and Forfeitures Officer may request the U.S. attorney to seek 
a decree of forfeiture providing for delivery of the property to the 
Fines, Penalties, and Forfeitures Officer for sale or other appropriate 
disposition, if such property is not to be retained for official use.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1999, as amended by T.D. 99-27, 64 
FR 13676, Mar. 22, 1999]



Sec. 162.43  Appraisement.

    (a) Property under seizure and subject to forfeiture. Seized 
property shall be appraised as required by section 606, Tariff Act of 
1930, as amended (19 U.S.C. 1606). The term ``domestic value'' as used 
therein shall mean the price at which such or similar property is freely 
offered for sale at the time and place of appraisement, in the same 
quantity or quantities as seized, and in the ordinary course of trade. 
If there is no market for the seized property at the place of 
appraisement, such value in the principal market nearest to the place of 
appraisement shall be reported.
    (b) Property not under seizure. The basis for a claim for forfeiture 
value or for an assessment of a penalty relating to the forfeiture value 
of property not under seizure is the domestic value as defined in 
paragraph (a) of this section, except that the value shall be fixed as 
of the date of the violation. In the case of entered merchandise, the 
date of the violation shall be the date of the entry, or the date of the 
filing of the document, or the commission of the act forming the basis 
of the claim, whichever is later.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 79-160, 44 
FR 31957, June 4, 1979; T.D. 85-123, 50 FR 29956, July 23, 1985]



Sec. 162.44  Release on payment of appraised value.

    (a) Value exceeding $100,000. Any offer to pay the appraised 
domestic value of seized property in order to obtain the immediate 
release of the property which was seized under the Customs laws or laws 
administered by Customs and exceeding $100,000 in appraised domestic 
value, or which was seized under the navigation laws, shall be in 
writing, addressed to the Commissioner of Customs, and signed by the 
claimant or his attorney. It shall be submitted in duplicate to the 
Fines, Penalties, and Forfeitures Officer having jurisdiction at the 
port where the property was seized. Proof of ownership shall be 
submitted with the application if the facts in the case make such action 
necessary.
    (b) Value not over $100,000--(1) Authority to accept offer. The 
Fines, Penalties, and Forfeitures Officer is authorized to accept a 
written offer pursuant to section 614, Tariff Act of 1930, as amended 
(19 U.S.C. 1614), to pay the appraised domestic value of property seized 
under

[[Page 254]]

the Customs laws and to release such property if:
    (i) The appraised domestic value of the seized property does not 
exceed $100,000.
    (ii) The Fines, Penalties, and Forfeitures Officer is satisfied that 
the claimant has, in fact, a substantial interest in the property; and
    (iii) Entry of the seized property into the commerce of the United 
States is not prohibited by law.
    (2) Referral of offer. The Fines, Penalties, and Forfeitures Officer 
shall refer to the Commissioner of Customs any offer where it appears 
that the claimant does not have a substantial interest in the seized 
property or where it appears it would not be in the best interest of the 
United States to accept.
    (c) Retention of property. The Fines, Penalties, and Forfeitures 
Officer shall retain custody of the property pending payment of the 
amount of the offer when the application is approved.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 74-276, 39 
FR 37633, Oct. 23, 1974; T.D. 85-195, 50 FR 50289, Dec. 10, 1985; T.D. 
99-27, 64 FR 13676, Mar. 22, 1999]



Sec. 162.45  Summary forfeiture: Property other than Schedule I and Schedule II controlled substances. Notice of seizure and sale.

    (a) Contents. The notice required by section 607, Tariff Act of 
1930, as amended (19 U.S.C. 1607), of seizure and intent to forfeit and 
sell or otherwise dispose of according to law property not exceeding 
$500,000 in value, or any seized merchandise the importation of which is 
prohibited, or any seized vessel, vehicle or aircraft that was used to 
import, export, transport, or store any controlled substance, or such 
seized merchandise is any monetary instrument within the meaning of 31 
U.S.C. 5312(a)(3), shall:
    (1) Describe the property seized and in the case of motor vehicles, 
specify the motor and serial numbers;
    (2) State the time, cause, andplace of seizure;
    (3) State that any person desiring to claim property must appear at 
a designated place and file with the Fines, Penalties, and Forfeitures 
Officer within 20 days from the date of first publication of the notice 
a claim to such property and a bond in the sum of $5,000 or 10% of the 
value of the claimed property, whichever is lower, but not less than 
$250, in default of which the property will be disposed of in accordance 
with the law; and
    (4) State the name and place of residence of the person to whom any 
vessel or merchandise seized for forfeiture under the navigation laws 
belongs or is consigned, if that information is known to the Fines, 
Penalties, and Forfeitures Officer.
    (b) Publication. (1) If the appraised value of any property in one 
seizure from one person, other than Schedule I and Schedule II 
controlled substances (as defined in 21 U.S.C. 802(6) and 812), exceeds 
$5,000, the notice will be published for at least three successive weeks 
in a newspaper circulated at the Customs port and in the judicial 
district where the property was seized. All known parties-in-interest 
shall be notified of the newspaper and expected dates of publication of 
such notice.
    (2) In all other cases, except for Schedule I and Schedule II 
controlled substances (see Sec. 162.45a), the notice will be published 
by posting it in the customhouse nearest the place of seizure. It will 
be posted in a conspicuous place that is accessible to the public, with 
the date of posting noted thereon, and will be kept posted for at least 
three successive weeks. Articles of small value of the same class or 
kind included in two or more seizures will be advertised as one unit.
    (c) Delay of publication. Publication of the notice of seizure and 
intent to summarily forfeit and dispose of property eligible for such 
treatment may be delayed for a period not to exceed 30 days

[[Page 255]]

in those cases where the Fines, Penalties, and Forfeitures Officer has 
reason to believe that a petition for administrative relief in accord 
with part 171 of this chapter will be filed.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 83-72, 48 
FR 11423, Mar. 18, 1983; T.D. 85-123, 50 FR 29956, July 23, 1985; T.D. 
85-195, 50 FR 50290, Dec. 10, 1985; T.D. 91-52, 56 FR 25364, June 4, 
1991; T.D. 99-27, 64 FR 13676, Mar. 22, 1999; T.D. 00-37, 65 FR 33254, 
May 23, 2000; CBP Dec. 05-02, 70 FR 8510, Feb. 22, 2005]



Sec. 162.45a  Summary forfeiture of Schedule I and Schedule II controlled substances.

    The Controlled Substances Act (84 Stat. 1242, 21 U.S.C. 801 et seq.) 
provides that all controlled substances in Schedule I and Schedule II 
(as defined in 21 U.S.C. 802(6) and 812) that are possessed, 
transferred, sold or offered for sale in violation of the Act will be 
deemed contraband, seized and summarily forfeited to the United States 
(21 U.S.C. 881(f)). The Controlled Substances Import and Export Act (21 
U.S.C. 951 et seq.) incorporates by reference this contraband forfeiture 
provision of 21 U.S.C. 881. See 21 U.S.C. 965. Accordingly, in the case 
of a seizure of Schedule I or Schedule II controlled substances, the 
Fines, Penalties, and Forfeitures Officer or his designee will contact 
the appropriate Drug Enforcement Administration official responsible for 
issuing permits authorizing the importation of such substances (see 21 
CFR part 1312). If upon inquiry the Fines, Penalties, and Forfeitures 
Officer or his designee is notified that no permit for lawful 
importation has been issued, he will declare the seized substances 
contraband and forfeited pursuant to 21 U.S.C. 881(f). Inasmuch as such 
substances are Schedule I and Schedule II controlled substances, the 
notice procedures set forth in Sec. 162.45 are inapplicable. When 
seized controlled substances are required as evidence in a court 
proceeding, they will be preserved to the extent and in the quantities 
necessary for that purpose.

[T.D. 00-37, 65 FR 33254, May 23, 2000]



Sec. 162.46  Summary forfeiture: Disposition of goods.

    (a) General. If no petition for relief from the forfeiture is filed 
in accordance with the provision of part 171 of this chapter, or if a 
petition was filed and has been denied, and the property is not retained 
for official use, it shall be disposed of in accordance with section 
609, Tariff Act of 1930, as amended (19 U.S.C. 1609) or section 491(b), 
Tariff Act of 1930, as amended (19 U.S.C. 1491(b)).
    (b) Articles required to be inspected by other Government agencies. 
Before seized drugs, insecticides, seeds, plants, nursery stock, and 
other articles required to be inspected by other Government agencies are 
sold, they shall be inspected by a representative of such agency to 
ascertain whether or not they meet the requirements of the laws and 
regulations of that agency, and if found not to meet such requirements, 
they shall be destroyed forthwith.
    (c) Sale--(1) General. If the forfeited property is cleared for 
sale, it shall be sold in accordance with the applicable provisions of 
part 127 of this chapter. The Fines, Penalties, and Forfeitures Officer 
may postpone the sale of small seizures until he believes the proceeds 
of a consolidated sale will pay all expenses.
    (2) Transfer to another port for sale. Property shall be moved to 
and sold at such other Customs port as the Commissioner of Customs may 
direct pursuant to the provisions of section 611, Tariff Act of 1930 (19 
U.S.C. 1611), if:
    (i) The laws of a State in which property is seized and forfeited 
prohibit the sale of such property; or
    (ii) The Commissioner is of the opinion that the sale of forfeited 
property may be made more advantageously at another Customs port.
    (d) Destruction. If, after summary forfeiture of property is 
completed, it appears that the net proceeds of sale will not be 
sufficient to pay the costs of sale, the Fines, Penalties, and 
Forfeitures Officer may order destruction of the property. Any vessel or 
vehicle summarily forfeited for violation of any law respecting the 
Customs revenue may be destroyed in lieu of the sale thereof when such 
destruction is

[[Page 256]]

authorized by the Commissioner of Customs to protect the revenue.
    (e) Disposition of distilled spirits, wines, and malt liquor. In 
addition to disposition by sale or destruction as provided for by this 
section, distilled spirits, wines, and malt liquor may be delivered:
    (1) To any Government agency the Commissioner of Customs or his 
designee determines has a need for these articles for medical, 
scientific, or mechanical purposes, or for any other official purpose 
for which appropriated funds may be expended by a Government agency, or
    (2) By gift to any charitable institution the Commissioner of 
Customs or his designee determines has a need for the articles for 
medical purposes.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 77-12, 41 
FR 56629, Dec. 29, 1976; T.D. 79-159, 44 FR 31971, June 4, 1979; T.D. 
85-195, 50 FR 50290, Dec. 10, 1985; T.D. 92-69, 57 FR 30640, July 10, 
1992; T.D. 99-27, 64 FR 13676, Mar. 22, 1999]



Sec. 162.47  Claim for property subject to summary forfeiture.

    (a) Filing of claim. Any person desiring to claim under the 
provisions of section 608, Tariff Act of 1930, as amended (19 U.S.C. 
1608), seized property not exceeding $500,000 in value (however there is 
no limit in value of merchandise, the importation of which is 
prohibited, or in the value of vessels, vehicles or aircraft used to 
import, export, transport, or store any controlled substance, or in the 
amount of any monetary instruments within the meaning of 31 U.S.C. 
5312(a)(3), that may be seized and forfeited) and subject to summary 
forfeiture, shall file a claim to such property with the Fines, 
Penalties, and Forfeitures Officer within 20 days from the date of the 
first publication of the notice prescribed in Sec. 162.45.
    (b) Bond for costs. Except as provided in paragraph (e) of this 
section, the bond in the penal sum of $5,000 or 10% of the value of the 
claimed property, whichever is lower, but not less than $250, required 
by section 608, Tariff Act of 1930, as amended, to be filed with a claim 
for seized property shall be on Customs Form 301, containing the bond 
conditions set forth in Sec. 113.72 of this chapter.
    (c) Claimant not entitled to possession. The filing of a claim and 
the giving of a bond, if required, pursuant to section 608, Tariff Act 
of 1930, shall not be construed to entitle the claimant to possession of 
the property. Such action only stops the summary forfeiture proceeding.
    (d) Report to the U.S. attorney. When the claim and bond, if 
required, are filed within the 20-day period, the Fines, Penalties, and 
Forfeitures Officer shall report the case to the U.S. attorney for the 
institution of condemnation proceedings.
    (e) Waiver of bond. Upon satisfactory proof of financial inability 
to post the bond, the Fines, Penalties, and Forfeitures Officer shall 
waive the bond requirement for any person who claims an interest in the 
seized property.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 81-1, 45 FR 
84994, Dec. 24, 1980; T.D. 84-213, 49 FR 41186, Oct. 19, 1984; T.D. 85-
123, 50 FR 29956, July 23, 1985; T.D. 91-52, 56 FR 25364, June 4, 1991; 
T.D. 99-27, 64 FR 13676, Mar. 22, 1999]



Sec. 162.48  Disposition of perishable and other seized property.

    (a) Disposition of perishable property. Seized property which is 
perishable or otherwise enumerated in section 612, Tariff Act of 1930, 
as amended (19 U.S.C. 1612), and is covered by the provisions of section 
607, Tariff Act of 1930, as amended (19 U.S.C. 1607), shall be 
advertised for sale and sold at public auction at the earliest possible 
date. The Fines, Penalties, and Forfeitures Officer shall proceed to 
give notice by advertisement of the summary sale for such time as he 
considers reasonable. This notice shall be of sale only and not notice 
of seizure and intent to forfeit. The proceeds of the sale shall be held 
subject to the claims of parties in interest in the same manner as the 
seized property would have been subject to such claims.
    (b) Disposition of other seized property. (1) If the expense of 
keeping any vessel, vehicle, aircraft, merchandise or baggage is 
disproportionate to the value thereof, destruction or other disposition 
of such property may be ordered by the appropriate Customs officer.

[[Page 257]]

Storage expenses are presumed to be disproportionate to the value of the 
property where the expense has reached or is anticipated to reach 50 
percent of the value of the property. The right of a claimant to seized 
property which has been destroyed or otherwise disposed of shall not be 
extinguished.
    (2) Publication of a notice of the seizure, regardless of the 
disposition of the property, will be required pursuant to 19 U.S.C. 
1607. Claimants to seized property will be permitted to file a petition 
for remission of the forfeiture pursuant to 19 U.S.C. 1618, and part 171 
of this chapter. A claimant receiving full or partial relief from the 
forfeiture shall be reimbursed the difference between the value of the 
merchandise at the time of the seizure, pursuant to 19 U.S.C. 1606 and 
Sec. 162.43 of this part, and any remitted forfeiture amount that the 
claimant is required to pay.
    (3) A claimant to destroyed or otherwise disposed of seized property 
requesting relief in the form of payment may file a claim and cost bond 
and seek judicial hearing on the forfeiture pursuant to 19 U.S.C. 1608.
    (4) Successful claimants shall be compensated from Customs 
Forfeiture Fund pursuant to 19 U.S.C. 1613b.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 85-195, 50 
FR 50290, Dec. 10, 1985; T.D. 92-69, 57 FR 30640, July 10, 1992; T.D. 
99-27, 64 FR 13676, Mar. 22, 1999; T.D. 00-57, 65 FR 53575, Sept. 5, 
2000]



Sec. 162.49  Forfeiture by court decree.

    (a) Report to the U.S. attorney or the Department of Justice if the 
penalty was assessed under section 592, Tariff Act of 1930, as amended 
(19 U.S.C. 1592). When it is necessary to institute legal proceedings in 
order to forfeit seized property, or to forfeit the value of property 
subject to forfeiture, the Fines, Penalties, and Forfeitures Officer or 
the special agent in charge of the area involved shall furnish a report 
to the U.S. attorney or the Department of Justice if the penalty was 
assessed under section 592, Tariff Act of 1930, as amended (19 U.S.C. 
1592), in accordance with the provisions of section 603, Tariff Act of 
1930, as amended (19 U.S.C. 1603).
    (b) Bonding of seized property. When a claimant desires to file a 
bond for the release of seized property which is the subject of a court 
proceeding, he shall be referred to the U.S. attorney. The Government is 
entitled to recover the penal sum of the bond if forfeiture is then 
decreed.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 85-90, 50 
FR 21431, May 24, 1985; T.D. 99-27, 64 FR 13676, Mar. 22, 1999]



Sec. 162.50  Forfeiture by court decree: Disposition.

    (a) Sale. Forfeited property decreed by the court for sale or 
disposition by the Fines, Penalties, and Forfeitures Officer shall be 
disposed of in the same manner as property summarily forfeited. (See 
Sec. 162.46.)
    (b) Transfer to other ports for sale. If the laws of the State in 
which property is seized and forfeited prohibit the sale of such 
property, or if the Commissioner of Customs is of the opinion that the 
sale of forfeited property may be made more advantageously at another 
port, application may be made to the court to permit disposition in 
accordance with the provisions of section 611, Tariff Act of 1930 (19 
U.S.C. 1611). If the court permits such disposition, the property shall 
be moved to and sold at such other port as the Commissioner may direct 
provided it has been cleared for sale.
    (c) Destruction--(1) Proceeds of sale not sufficient. Property 
forfeited under a decree of any court may be destroyed if it is provided 
in the decree of forfeiture that the property shall be delivered to the 
Secretary of the Treasury or the Commissioner of Customs for disposition 
in accordance with section 611, Tariff Act of 1930 (19 U.S.C. 1611).
    (2) For protection of the revenue. Any vessel or vehicle forfeited 
under a decree of any court for violation of any law respecting the 
Customs revenue may be destroyed in lieu of sale when such destruction 
is authorized by the Commissioner of Customs to protect the revenue if 
it is provided in the decree of forfeiture that the property shall be 
delivered to the Secretary of

[[Page 258]]

the Treasury or Commissioner of Customs for disposition under the 
provisions of 19 U.S.C. 1705.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 99-27, 64 
FR 13676, Mar. 22, 1999]



Sec. 162.51  Disposition of proceeds of sale of property seized and forfeited other than under 19 U.S.C. 1592.

    (a) Order of payment of expenses incurred--(1) When application for 
remission and restoration is filed and approved. Section 613 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1613), and Sec. 171.41 of 
this chapter authorize the filing of an application for remission of the 
forfeiture and restoration of the proceeds from the sale of seized and 
forfeited property. If the application is filed within 3 months after 
the date of sale and is approved, the proceeds of the sale, or any part 
thereof, shall be restored to the applicant after deducting the 
following charges in the order named:
    (i) Internal revenue taxes.
    (ii) Marshal's fees and court costs.
    (iii) Expenses of advertising and sale.
    (iv) Expenses of cartage, storage, and labor. When the proceeds are 
insufficient to pay these expenses fully, they shall be paid pro rata.
    (v) Duties.
    (vi) Any sum due to satisfy a lien for freight, charges, or 
contributions in general average, provided notice of the lien has been 
given in the manner prescribed by law.
    (2) When no application for remission and restoration is filed or 
the application is denied. If no application for remission and 
restoration is filed within 3 months after the date of sale of seized 
and forfeited property, or if the application is denied, the proceeds of 
the sale shall be disbursed in the following order:
    (i) Internal revenue taxes.
    (ii) Marshal's fees and court costs.
    (iii) Expenses of advertising and sale.
    (iv) Expenses of cartage, storage, and labor. When the proceeds are 
insufficient to pay these expenses fully, they shall be paid pro rata.
    (v) Any sum due to satisfy a lien for freight, charges, or 
contributions in general average, provided notice of the lien has been 
given in the manner prescribed by law.
    (vi) The residue, if any, shall be deposited with the Treasurer of 
the United States as a customs or navigation fine.
    (b) Transfer of seized and forfeited property to another Federal 
agency. In the event that the seized and forfeited property has been 
authorized for transfer to another Federal agency for official use, the 
receiving agency shall reimburse Customs for the costs incurred in 
moving and storing the property from the date of seizure to the date of 
delivery.

[T.D. 79-160, 44 FR 31957, June 4, 1979; 44 FR 36376, June 22, 1979, as 
amended by T.D. 84-78, 49 FR 13492, Apr. 5, 1984]



Sec. 162.52  Disposition of proceeds of sale of property seized and forfeited under 19 U.S.C. 1592.

    (a) Order of disposition of proceeds. Section 613 of the Tariff Act 
of 1930, as amended (19 U.S.C. 1613), provides for the disposition of 
the proceeds from the sale of property seized and forfeited under 
section 592, Tariff Act of 1930, as amended (19 U.S.C. 1592), as 
provided for in Sec. 162.75 of this part. Distribution shall be made in 
the following order:
    (1) Internal revenue taxes.
    (2) Marshal's fees and court costs.
    (3) Expenses of advertising and sale.
    (4) Expenses of cartage, storage, and labor. When proceeds are 
insufficient to pay these expenses fully, they shall be paid pro rata.
    (5) Duties.
    (6) Any sum due to satisfy a lien for freight, charges, or 
contributions in general average, provided notice of the lien has been 
given in the manner prescribed by law.
    (7) The monetary penalty assessed under 19 U.S.C. 1592.
    (8) The remaining proceeds, if any, shall be paid to the appropriate 
party-in-interest as provided in paragraph (b).
    (b) Determination of appropriate party-in-interest. (1) If the 
property is subject to a judicial forfeiture proceeding and if it 
appears at the time of this proceeding that 2 or more parties claim an 
interest in the remaining proceeds referred to in paragraph (a)(8), each 
of

[[Page 259]]

the parties shall be joined in the proceeding so that the issue of 
proper distribution may be determined by the court.
    (2) If the property is sold under the summary forfeiture procedure, 
or if the court has not specified the manner of distribution, the Fines, 
Penalties, and Forfeitures Officer shall hold the excess proceeds for 3 
months from the date of the sale to allow any party-in-interest to claim 
the proceeds.
    (3) If there is one alleged violator and no petition has been filed 
for the excess proceeds by another person, the excess proceeds shall be 
disbursed to the person against whom the penalty was assessed.
    (4) If there are 2 or more persons with claims or possible claims to 
the excess proceeds, the Fines, Penalties, and Forfeitures Officer shall 
attempt to obtain a written agreement from the parties as to the 
distribution. If an agreement cannot be reached, the matter shall be 
referred to Customs Headquarters for determination.
    (c) Official use of seized and forfeited property. If the seized and 
forfeited property has been authorized for official use, its retention 
or delivery shall be regarded as a ``sale'' for the purposes of section 
613, Tariff Act of 1930, as amended (19 U.S.C. 1613). The appropriation 
available to the receiving agency for the purchase, hire, operation, 
maintenance, and repair of the type of property involved shall be 
distributed as provided in paragraphs (a) and (b).

[T.D. 79-160, 44 FR 31958, June 4, 1979, as amended by T.D. 99-27, 64 FR 
13676, Mar. 22, 1999]



        Subpart F_Controlled Substances, Narcotics, and Marihuana



Sec. 162.61  Importing and exporting controlled substances.

    It shall be unlawful to import to or export from the United States 
any controlled substance or narcotic drug listed in schedules I through 
V of the Controlled Substances Act (Sec. 202, 84 Stat. 1247; 21 U.S.C. 
812), unless there has been compliance with the provisions of said Act, 
the Controlled Substances Import and Export Act and the regulations of 
the Drug Enforcement Administration.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 78-99, 43 
FR 13062, Mar. 29, 1978]



Sec. 162.62  Permissible controlled substances on vessels, aircraft, and individuals.

    Upon compliance with the provisions of the Controlled Substances Act 
(84 Stat. 1242; 21 U.S.C. 801), the Controlled Substances Import and 
Export Act (84 Stat. 1285; 21 U.S.C. 951), and the regulations of the 
Drug Enforcement Administration (21 CFR 1301.28, 1311.27), controlled 
substances listed in schedules I through V of the Controlled Substances 
Act may be held:
    (a) On vessels engaged in international trade in medicine chests and 
dispensaries.
    (b) In aircraft operated by an air carrier under a certificate or 
permit issued by the Federal Aviation Administration for stocking in 
medicine chests and first aid packets.
    (c) By an individual where lawfully obtained for personal medical 
use or for administration to an animal accompanying him to enter or 
depart the United States.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 78-99, 43 
FR 13062, Mar. 29, 1978]



Sec. 162.63  Arrests and seizures.

    Arrests and seizures under the Controlled Substances Act (84 Stat. 
1242, 21 U.S.C. 801 et seq.), and the Controlled Substances Import and 
Export Act (84 Stat. 1285, 21 U.S.C. 951 et seq.), will be handled in 
the same manner as other Customs arrests and seizures. However, Schedule 
I and Schedule II controlled substances (as defined in 21 U.S.C. 802(6) 
and 812) imported contrary to law will be seized and forfeited in the 
manner provided in the Controlled Substances Act (21 U.S.C. 881(f)). See 
Sec. 162.45a.

[T.D. 00-37, 65 FR 33255, May 23, 2000]



Sec. 162.64  Custody of controlled substances.

    All controlled substances seized by a Customs officer shall be 
delivered immediately into the custody of the

[[Page 260]]

Fines, Penalties, and Forfeitures Officer having jurisdiction where the 
seizure is made, together with a full report of the circumstances of the 
seizure.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 99-27, 64 
FR 13676, Mar. 22, 1999]



Sec. 162.65  Penalties for failure to manifest narcotic drugs or marihuana.

    (a) Cargo or baggage containing unmanifested narcotic drugs or 
marihuana. When a package of regular cargo or a passenger's baggage 
otherwise properly manifested is found to contain any narcotic drug or 
marihuana imported for sale or other commercial purpose and not shown as 
such on the manifest, the penalties prescribed in section 584, Tariff 
Act of 1930, as amended (19 U.S.C. 1584), shall be assessed with respect 
to such narcotic drug or marihuana.
    (b) Unmanifested narcotic drugs or marihuana. When an unmanifested 
narcotic drug or marihuana is found on board of, or after having been 
unladen from, a vessel, vehicle, or aircraft, the penalties prescribed 
in section 584, Tariff Act of 1930, as amended (19 U.S.C. 1584), shall 
be assessed. The penalty shall be applied without exception and without 
regard to any question of negligence or responsibility.
    (c) Notice and demand for payment of penalty. A written notice and 
demand for payment of the penalty for failure to manifest incurred under 
section 584, Tariff Act of 1930, as amended (19 U.S.C. 1584), shall be 
sent to the master of the vessel, or commander of the aircraft, or the 
person in charge of the vehicle, and to the owner of the vessel, 
aircraft, or vehicle or any person directly or indirectly responsible. 
In the case of a vessel, if bond has been given, the notice also shall 
be sent to each surety. When a petition for relief from such penalty has 
been filed in accordance with part 171 of this chapter, and a decision 
has been made thereon, the Fines, Penalties, and Forfeitures Officer 
shall send notice of such decision to the interested persons together 
with a demand for any payment required under the terms of such decision.
    (d) Referral to the U.S. attorney. If the penalty incurred under 
section 584, Tariff Act of 1930, as amended (19 U.S.C. 1584), is not 
paid, or a petition is not filed as provided in part 171 of this 
chapter, or if payment is not made in accordance with the decision on a 
petition or a supplemental petition, the Fines, Penalties, and 
Forfeitures Officer, after required collection action, shall refer the 
case to the U.S. attorney.
    (e) Withholding clearance of vessel. Where a penalty has been 
incurred under section 584, Tariff Act of 1930, as amended (19 U.S.C. 
1584), for failure to manifest narcotic drugs or marihuana, clearance of 
the vessel involved shall be withheld until the penalty is paid or a 
bond satisfactory to the Fines, Penalties, and Forfeitures Officer is 
given for the payment thereof unless
    (1) The narcotics or marihuana were discovered in a passenger's 
baggage and the Fines, Penalties, and Forfeitures Officer is satisfied 
that neither the master nor any of the officers nor the owner of the 
vessel knew or had any reason to know or suspect that the narcotics or 
marihuana had been on board the vessel, or
    (2) Prior authority for the clearance without payment of the penalty 
or the furnishing of the bond is obtained from Customs.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 79-160, 44 
FR 31958, June 4, 1979; T.D. 86-59, 51 FR 8489, Mar. 12, 1986; T.D. 99-
27, 64 FR 13676, Mar. 22, 1999; T.D. 99-64, 64 FR 43267, Aug. 10, 1999]



Sec. 162.66  Penalties for unlading narcotic drugs or marihuana without a permit.

    In every case where a narcotic drug or marihuana is unladen without 
a permit, the penalties prescribed in section 453, Tariff Act of 1930, 
as amended (19 U.S.C. 1453), shall be assessed. Penalties shall be 
assessed under this section when a package of regular cargo or a 
passenger's baggage otherwise covered by a permit to unlade is found to 
contain any narcotic drug or marihuana imported for sale or other 
commercial purpose and not specifically covered by a permit to unlade.

[[Page 261]]



           Subpart G_Special Procedures for Certain Violations

    Source: T.D. 79-160, 44 FR 31958, June 4, 1979, unless otherwise 
noted.



Sec. 162.70  Applicability.

    (a) The provisions of this subpart apply only to fines, penalties, 
or forfeitures incurred for the following violations of the customs 
laws:
    (1) Violations of sections 466 and 584(a)(1), Tariff Act of 1930, as 
amended (19 U.S.C. 1466, 1584(a)(1)), that occur after October 3, 1978, 
and
    (2) Except as provided in paragraph (b) of this section, violations 
of section 592, Tariff Act of 1930, as amended (19 U.S.C. 1592), with 
respect to which preceedings have commenced after December 31, 1978. For 
purposes of this subparagraph, a proceeding commences with the issuance 
of a prepenalty notice or, if no prepenalty notice is issued, with the 
issuance of a notice of a claim for a monetary penalty.
    (b) The provisions of this subpart do not apply to alleged 
intentional violations of 19 U.S.C. 1592 if the alleged violation:
    (1) Involves television receivers that are the products of Japan and 
were or are the subject to antidumping proceedings,
    (2) Occurred before October 3, 1978, and
    (3) Was the subject of a Customs investigation begun before October 
3, 1978.
    (c) The provisions of subparts A through F of this part shall apply 
to the violations referred to in paragraph (a) of this section unless 
this subpart specifically provides otherwise.

[T.D. 79-160, 44 FR 31958, June 4, 1979; 44 FR 35208, June 19, 1979, as 
amended by T.D. 90-34, 55 FR 17597, Apr. 26, 1990]



Sec. 162.71  Definitions.

    When used in this subpart, the following terms shall have the 
meanings indicated:
    (a) Loss of duties under section 592. ``Loss of duties'' means the 
duties of which the Government is or may be deprived by reason of the 
violation and includes both actual and potential loss of duties.
    (1) Actual loss of duties. ``Actual loss of duties'' means the 
duties of which the Government has been deprived by reason of the 
violation in respect of entries on which liquidation had become final.
    (2) Potential loss of duties. ``Potential loss of duties'' means the 
duties of which the Government tentatively was deprived by reason of the 
violation in respect of entries on which liquidation had not become 
final.
    (b) Loss of revenue under section 593A. When used in Sec. 162.73a, 
the term ``loss of revenue'' means the amount of drawback (see Sec. 
191.2(i) of this chapter) that is claimed and to which the claimant is 
not entitled and includes both actual and potential loss of revenue.
    (1) Actual loss of revenue. When used in Sec. Sec. 162.73a, 162.74, 
162.77a and 162.79b, the term ``actual loss of revenue'' means the 
amount of drawback (see Sec. 191.2(i) of this chapter) that is claimed 
and has been paid to the claimant and to which the claimant is not 
entitled.
    (2) Potential loss of revenue. When used in Sec. 162.77a, the term 
``potential loss of revenue'' means the amount of drawback (see Sec. 
191.2(i) of this chapter) that is claimed and has not been paid to the 
claimant and to which the claimant is not entitled.
    (c) Repetitive violation. When used in Sec. 162.73a to describe a 
violation, ``repetitive'' has reference to a violation by a person that 
involves the same issue as a prior violation by that person.
    (d) Noncommercial importation. ``Noncommercial importation'' means 
merchandise imported by a traveler for an individual's personal or 
household use, or as a gift, but not imported for sale or other 
commercial purposes.
    (e) Clerical error. ``Clerical error'' means an error in the 
preparation, assembly, or submission of a document which results when a 
person intends to do one thing but does something else. It includes, for 
example, errors in transcribing numbers, errors in arithmetic, and the 
failure to assemble all the documents in a record.
    (f) Mistake of fact. ``Mistake of fact'' means an action based upon 
a belief by a person that the material facts are other than they really 
are; it can be that a fact exists but is unknown to

[[Page 262]]

the person, or that he believes something is a fact when in reality it 
is not. An action is not a mistake of fact if the erroneous belief is 
caused by the neglect of a legal duty.

[T.D. 79-160, 44 FR 31958, June 4, 1979, as amended by T.D. 84-18, 49 FR 
1678, Jan. 13, 1984; 49 FR 3986, Feb. 1, 1984; T.D. 98-49, 63 FR 29131, 
May 28, 1998; T.D. 00-5, 65 FR 3808, Jan. 25, 2000]



Sec. 162.72  Penalties and forfeitures under sections 466 and 584(a)(1), Tariff Act of 1930, as amended.

    (a) Foreign repairs and equipment purchases; election to proceed. If 
the Fines, Penalties, and Forfeitures Officer has reasonable cause to 
believe that a violation of section 466, Tariff Act of 1930, as amended 
(19 U.S.C. 1466), has occurred, he may elect to proceed against the 
vessel or aircraft, or against the violator for forfeiture of a monetary 
amount up to the domestic value of the vessel or aircraft.
    (b) Lack of manifest or discrepancy in manifest. The penalties for 
violation of section 584(a)(1), Tariff Act of 1930, as amended (19 
U.S.C. 1584(a)(1)), are as follows:
    (1) A penalty of $1,000 against the master of a vessel, the 
commander of an aircraft, or the person in charge of a vehicle bound to 
the United States who does not produce the manifest on demand.
    (2) A penalty of $1,000 against the master of a vessel, the 
commander of an aircraft, the person in charge of a vehicle, or the 
owner of the vessel, aircraft, or vehicle, or any person directly or 
indirectly responsible for the discrepancy, if any merchandise described 
in the manifest is not found on board (a ``shortage'').
    (3)(i) A penalty equal to the lesser of $10,000 or the domestic 
value of merchandise found on board of or after having been unladen from 
a vessel or vehicle, or
    (ii) A penalty of $1,000 (see Sec. 122.161 of this chapter) if 
merchandise (other than narcotics or marihuana--see Sec. 162.65 of this 
chapter) is found on board of or after having been unladen from an 
aircraft--if the merchandise is not included or described in the 
manifest or does not agree with the manifest (an ``overage'').
    (iii) Unmanifested merchandise belonging to or consigned to the 
master or crew of the vessel, the commander or crew of the aircraft, or 
to the owner or person in charge of the vehicle, also shall be subject 
to forfeiture.

The appropriate of these penalties may be assessed against the master or 
crew of the vessel, the commander or crew of the aircraft, the person in 
charge of the vehicle, the owner of the vessel, aircraft, or vehicle, or 
any person directly or indirectly responsible for the discrepancy.
    (c) Exception. There is no violation, and consequently no penalty 
incurred under paragraph (b), in the circumstances described in 
Sec. Sec. 4.12(a)(5) and 122.162 of this chapter.

[T.D. 79-160, 44 FR 31958, June 4, 1979, as amended by T.D. 86-59, 51 FR 
8490, Mar. 12, 1986; T.D. 88-12, 53 FR 9315, Mar. 22, 1988; T.D. 99-27, 
64 FR 13676, Mar. 22, 1999; T.D. 99-64, 64 FR 43267, Aug. 10, 1999]



Sec. 162.73  Penalties under section 592, Tariff Act of 1930, as amended.

    (a) Maximum penalty without prior disclosure. If the person 
concerned has not made a prior disclosure as provided in Sec. 162.74, 
the monetary penalty under section 592, Tariff Act of 1930, as amended 
(19 U.S.C. 1592), shall not exceed:
    (1) For fraudulent violations, the domestic value of the 
merchandise;
    (2) For grossly negligent violations,
    (i) The lesser of the domestic value of the merchandise or four 
times the loss of duties, taxes and fees or
    (ii) If there is no loss of duties, taxes and fees 40 percent of the 
dutiable value of the merchandise; and
    (3) For negligent violations,
    (i) The lesser of the domestic value of the merchandise or two times 
the loss of duties, taxes and fees or
    (ii) If there is no loss of duties, taxes and fees 20 percent of the 
dutiable value of the merchandise.
    (b) Maximum penalty with prior disclosure. If the person concerned 
has made a prior disclosure, the monetary penalty shall not exceed:
    (1) For fraudulent violations,
    (i) One times the loss of duties, taxes and fees or

[[Page 263]]

    (ii) If there is no loss of duties, taxes and fees 10 percent of the 
dutiable value of the merchandise; and
    (2) For grossly negligent and negligent violations, the interest on 
any loss of duties, taxes and fees. The interest shall be computed from 
the date of liquidation at the prevailing rate of interest applied under 
section 6621, Internal Revenue Code of 1954, as amended (26 U.S.C. 
6621).
    (c) Exception; clerical error or mistake of fact. There is no 
violation and, consequently, no penalty incurred, if the falsity or 
omission is due solely to clerical error or mistake of fact, unless the 
error or mistake is part of the pattern of negligent conduct.

[T.D. 79-160, 44 FR 31958, June 4, 1979, as mended by T.D. 99-64, 64 FR 
43267, Aug. 10, 1999]



Sec. 162.73a  Penalties under section 593A, Tariff Act of 1930, as amended.

    (a) Maximum penalty without prior disclosure for a drawback 
compliance program nonparticipant. If the person concerned has not made 
a prior disclosure as provided in Sec. 162.74 and has not been 
certified as a participant in the drawback compliance program under part 
191 of this chapter, the monetary penalty under section 593A, Tariff Act 
of 1930, as amended (19 U.S.C. 1593a), cannot exceed:
    (1) For fraudulent violations, three times the loss of revenue; and
    (2) For negligent violations,
    (i) 20 percent of the loss of revenue for the first violation,
    (ii) 50 percent of the loss of revenue for the first repetitive 
violation, or
    (iii) One times the loss of revenue for the second and each 
subsequent repetitive violation.
    (b) Maximum penalty without prior disclosure for a drawback 
compliance program participant----(1) General. If the person concerned 
has not made a prior disclosure as provided in Sec. 162.74 and has been 
certified as a participant in, and is generally in compliance with the 
procedures and requirements of, the drawback compliance program provided 
for in part 191 of this chapter, the monetary penalty or other sanction 
under section 593A, Tariff Act of 1930, as amended (19 U.S.C. 1593a), 
cannot exceed:
    (i) For fraudulent violations, three times the loss of revenue; and
    (ii) For negligent violations,
    (A) Issuance of a written notice of a violation (warning letter) for 
the first violation and for any other violation that is not repetitive 
or that is repetitive but does not occur within three years from the 
date of the violation of which it is repetitive,
    (B) 20 percent of the loss of revenue for the first repetitive 
violation that occurs within three years from the date of the violation 
of which it is repetitive,
    (C) 50 percent of the loss of revenue for the second repetitive 
violation that occurs within three years from the date of the first of 
two violations of which it is repetitive, or
    (D) One times the loss of revenue for the third and each subsequent 
repetitive violation that occurs within three years from the date of the 
first of three or more violations of which it is repetitive.
    (2) Notice of violation and required response to notice(i) The 
notice issued by Customs under paragraph (b)(1)(ii)(A) of this section 
will:
    (A) State that the person concerned has violated section 593A;
    (B) Explain the nature of the violation; and
    (C) Warn the person concerned that future violations of section 593A 
may result in the imposition of monetary penalties. The notice will also 
warn the person concerned that repetitive violations may result in 
removal of certification under the drawback compliance program provided 
for in part 191 of this chapter until the person takes corrective action 
that is satisfactory to Customs.
    (ii) Within 30 days from the date of mailing of the notice issued 
under paragraph (b)(1)(ii)(A) of this section:
    (A) The person concerned must notify Customs in writing of the steps 
that have been taken to prevent a recurrence of the violation; or
    (B) If the person concerned believes that no violation took place, 
he may advise Customs in writing of the basis for that position. If 
Customs agrees on further review that no violation in fact took place, 
Customs will in writing advise the person concerned and rescind

[[Page 264]]

the notice of violation. If on further review Customs remains of the 
opinion that the violation took place as alleged in the notice of 
violation, Customs will issue a written affirmation of the notice of 
violation advising the person concerned that the notice requirement of 
paragraph (b)(2)(ii)(A) of this section remains applicable and must be 
complied with either within the remainder of the prescribed 30-day 
period or within 15 days after issuance of the written affirmation, 
whichever period is longer.
    (c) Maximum penalty with prior disclosure. If the person concerned 
has made a prior disclosure as provided in Sec. 162.74, whether or not 
such person has been certified as a participant in the drawback 
compliance program under part 191 of this chapter, the monetary penalty 
under section 593A, Tariff Act of 1930, as amended (19 U.S.C. 1593a), 
cannot exceed:
    (1) For fraudulent violations, one times the loss of revenue; and
    (2) For negligent violations, an amount equal to the interest 
accruing on the actual loss of revenue during the period from the date 
of overpayment of the claim to the date on which the person concerned 
tenders the amount of the overpayment based on the prevailing rate of 
interest under 26 U.S.C. 6621.

[T.D. 00-5, 65 FR 3808, Jan. 25, 2000]



Sec. 162.74  Prior disclosure.

    (a) In general--(1) A prior disclosure is made if the person 
concerned discloses the circumstances of a violation (as defined in 
paragraph (b) of this section) of 19 U.S.C. 1592 or 19 U.S.C. 1593a, 
either orally or in writing to a Customs officer before, or without 
knowledge of, the commencement of a formal investigation of that 
violation, and makes a tender of any actual loss of duties, taxes and 
fees or actual loss of revenue in accordance with paragraph (c) of this 
section. A Customs officer who receives such a tender in connection with 
a prior disclosure shall ensure that the tender is deposited with the 
concerned local Customs entry officer.
    (2) A person shall be accorded the full benefits of prior disclosure 
treatment if that person provides information orally or in writing to 
Customs with respect to a violation of 19 U.S.C. 1592 or 19 U.S.C. 1593a 
if the concerned Fines, Penalties, and Forfeitures Officer is satisfied 
the information was provided before, or without knowledge of, the 
commencement of a formal investigation, and the information provided 
includes substantially the information specified in paragraph (b) of 
this section. In the case of an oral disclosure, the disclosing party 
shall confirm the oral disclosure by providing a written record of the 
information conveyed to Customs in the oral disclosure to the concerned 
Fines, Penalties, and Forfeitures Officer within 10 days of the date of 
the oral disclosure. The concerned Fines, Penalties and Forfeiture 
Officer may, upon request of the disclosing party which establishes a 
showing of good cause, waive the oral disclosure written confirmation 
requirement. Failure to provide the written confirmation of the oral 
disclosure or obtain a waiver of the requirement may result in denial of 
the oral prior disclosure.
    (b) Disclosure of the circumstances of a violation. The term 
``discloses the circumstances of a violation'' means the act of 
providing to Customs a statement orally or in writing that:
    (1) Identifies the class or kind of merchandise involved in the 
violation;
    (2) Identifies the importation or drawback claim included in the 
disclosure by entry number, drawback claim number, or by indicating each 
concerned Customs port of entry and the approximate dates of entry or 
dates of drawback claims;
    (3) Specifies the material false statements, omissions or acts 
including an explanation as to how and when they occurred; and
    (4) Sets forth, to the best of the disclosing party's knowledge, the 
true and accurate information or data that should have been provided in 
the entry or drawback claim documents, and states that the disclosing 
party will provide any information or data unknown at the time of 
disclosure within 30 days of the initial disclosure date. Extensions of 
the 30-day period may be requested by the disclosing party from the 
concerned Fines, Penalties, and

[[Page 265]]

Forfeitures Officer to enable the party to obtain the information or 
data.
    (c) Tender of actual loss of duties, taxes and fees or actual loss 
of revenue. A person who discloses the circumstances of the violation 
shall tender any actual loss of duties, taxes and fees or actual loss of 
revenue. The disclosing party may choose to make the tender either at 
the time of the claimed prior disclosure, or within 30 days after CBP 
notifies the person in writing of CBP calculation of the actual loss of 
duties, taxes and fees or actual loss of revenue. The Fines, Penalties, 
and Forfeitures Officer may extend the 30-day period if there is good 
cause to do so. The disclosing party may request that the basis for 
determining CBP asserted actual loss of duties, taxes or fees be 
reviewed by Headquarters, provided that the actual loss of duties, taxes 
or fees determined by CBP exceeds $100,000 and is deposited with CBP, 
more than 1 year remains under the statute of limitations involving the 
shipments covered by the claimed disclosure, and the disclosing party 
has complied with all other prior disclosure regulatory provisions. A 
grant of review is within the discretion of CBP Headquarters in 
consultation with the appropriate field office, and such Headquarters 
review shall be limited to determining issues of correct tariff 
classification, correct rate of duty, elements of dutiable value, and 
correct application of any special rules (GSP, CBI, HTS 9802, etc.). The 
concerned Fines, Penalties, and Forfeitures Officer shall forward 
appropriate review requests to the Chief, Penalties Branch, Office of 
International Trade. After Headquarters renders its decision, the 
concerned Fines, Penalties, and Forfeitures Officer will be notified and 
the concerned CBP port will recalculate the loss, if necessary, and 
notify the disclosing party of any actual loss of duties, taxes or fees 
increases. Any increases must be deposited within 30 days, unless the 
local CBP office authorizes a longer period. Any reductions of the CBP 
calculated actual loss of duties, or and fees shall be refunded to the 
disclosing party. Such Headquarters review decisions are final and not 
subject to appeal. Further, disclosing parties requesting and obtaining 
such a review waive their right to contest either administratively or 
judicially the actual loss of duties, taxes and fees or actual loss of 
revenue finally calculated by CBP under this procedure. Failure to 
tender the actual loss of duties, taxes and fees or actual loss of 
revenue finally calculated by CBP shall result in denial of the prior 
disclosure.
    (d) Effective time and date of prior disclosure--(1) If the 
documents that provide the disclosing information are sent by registered 
or certified mail, return-receipt requested, and are received by 
Customs, the disclosure shall be deemed to have been made at the time of 
mailing.
    (2) If the documents are sent by other methods, including in-person 
delivery, the disclosure shall be deemed to have been made at the time 
of receipt by Customs. If the documents are delivered in person, the 
person delivering the documents will, upon request, be furnished a 
receipt from Customs stating the time and date of receipt.
    (3) The provision of information that is not in writing but that 
qualifies for prior disclosure treatment pursuant to paragraph (a)(2) of 
this section shall be deemed to have occurred at the time that Customs 
was provided with information that substantially complies with the 
requirements set forth in paragraph (b) of this section.
    (e) Addressing and filing prior disclosure--(1) A written prior 
disclosure should be addressed to the Commissioner of Customs, have 
conspicuously printed on the face of the envelope the words ``prior 
disclosure,'' and be presented to a Customs officer at the Customs port 
of entry of the disclosed violation.
    (2) In the case of a prior disclosure involving violations at 
multiple ports of entry, the disclosing party may orally disclose or 
provide copies of the disclosure to all concerned Fines, Penalties, and 
Forfeitures Officers. In accordance with internal Customs procedures, 
the officers will then seek consolidation of the disposition and 
handling of the disclosure. In the event that the claimed ``multi-port'' 
disclosure is made to a Customs officer other than the concerned Fines, 
Penalties, and Forfeitures Officer, the disclosing party must identify 
all ports involved

[[Page 266]]

to enable the concerned Customs officer to refer the disclosure to the 
concerned Fines, Penalties, and Forfeitures Officer for consolidation of 
the proceedings.
    (f) Verification of disclosure. Upon receipt of a prior disclosure, 
the Customs officer shall notify Customs Office of Investigations of the 
disclosure. In the event the claimed prior disclosure is made to a 
Customs officer other than the concerned Fines, Penalties, and 
Forfeitures Officer, it is incumbent upon the Customs officer to provide 
a copy of the disclosure to the concerned Fines, Penalties, and 
Forfeitures Officer. The disclosing party may request, in the oral or 
written prior disclosure, that the concerned Fines, Penalties, and 
Forfeitures Officer request that the Office of Investigations withhold 
the initiation of disclosure verification proceedings until after the 
party has provided the information or data within the time limits 
specified in paragraph (b)(4) of this section. It is within the 
discretion of the concerned Fines, Penalties and Forfeitures Officer to 
grant or deny such requests.
    (g) Commencement of a formal investigation. A formal investigation 
of a violation is considered to be commenced with regard to the 
disclosing party on the date recorded in writing by the Customs Service 
as the date on which facts and circumstances were discovered or 
information was received that caused the Customs Service to believe that 
a possibility of a violation existed. In the event that a party 
affirmatively asserts a prior disclosure (i.e., identified or labeled as 
a prior disclosure) and is denied prior disclosure treatment on the 
basis that Customs had commenced a formal investigation of the disclosed 
violation, and Customs initiates a penalty action against the disclosing 
party involving the disclosed violation, a copy of a ``writing'' 
evidencing the commencement of a formal investigation of the disclosed 
violation shall be attached to any required prepenalty notice issued to 
the disclosing party pursuant to 19 U.S.C. 1592 or 19 U.S.C. 1593a.
    (h) Scope of the disclosure and expansion of a formal investigation. 
A formal investigation is deemed to have commenced as to additional 
violations not included or specified by the disclosing party in the 
party's original prior disclosure on the date recorded in writing by the 
Customs Service as the date on which facts and circumstances were 
discovered or information was received that caused the Customs Service 
to believe that a possibility of such additional violations existed. 
Additional violations not disclosed or covered within the scope of the 
party's prior disclosure that are discovered by Customs as a result of 
an investigation and/or verification of the prior disclosure shall not 
be entitled to treatment under the prior disclosure provisions.
    (i) Knowledge of the commencement of a formal investigation--(1) A 
disclosing party who claims lack of knowledge of the commencement of a 
formal investigation has the burden to prove that lack of knowledge. A 
person shall be presumed to have had knowledge of the commencement of a 
formal investigation of a violation if before the claimed prior 
disclosure of the violation a formal investigation has been commenced 
and:
    (i) Customs, having reasonable cause to believe that there has been 
a violation of 19 U.S.C. 1592 or 19 U.S.C. 1593a, so informed the person 
of the type of or circumstances of the disclosed violation; or
    (ii) A Customs Special Agent, having properly identified himself or 
herself and the nature of his or her inquiry, had, either orally or in 
writing, made an inquiry of the person concerning the type of or 
circumstances of the disclosed violation; or
    (iii) A Customs Special Agent, having properly identified himself or 
herself and the nature of his or her inquiry, requested specific books 
and/or records of the person relating to the disclosed violation; or
    (iv) Customs issues a prepenalty or penalty notice to the disclosing 
party pursuant to 19 U.S.C. 1592 or 19 U.S.C. 1593a relating to the type 
of or circumstances of the disclosed violation; or
    (v) The merchandise that is the subject of the disclosure was 
seized; or
    (vi) In the case of violations involving merchandise accompanying 
persons

[[Page 267]]

entering the United States or commercial merchandise inspected in 
connection with entry, the person has received oral or written 
notification of Customs finding of a violation.
    (2) The presumption of knowledge may be rebutted by evidence that, 
notwithstanding the foregoing notice, inquiry or request, the person did 
not have knowledge that an investigation had commenced with respect to 
the disclosed information.

[T.D. 98-49, 63 FR 29131, May 28, 1998; 63 FR 35798, July 1, 1998; T.D. 
99-27, 64 FR 13676, Mar. 22, 1999; T.D. 99-64, 64 FR 43267, Aug. 10, 
1999; T.D. 00-5, 65 FR 3809, Jan. 25, 2000; T.D. 00-57, 65 FR 53575, 
Sept. 5, 2000]



Sec. 162.75  Seizures limited under section 592, Tariff Act of 1930, as amended.

    (a) When authorized. Merchandise may be seized for violation of 
section 592, Tariff Act of 1930, as amended (19 U.S.C. 1592) only if the 
port director has reasonable cause to believe that a person has violated 
the statute and that
    (1) The person is insolvent,
    (2) The person is beyond the jurisdiction of the United States,
    (3) Seizure otherwise is essential to protect the revenue, or
    (4) Seizure is essential to prevent the introduction of prohibited 
or restricted merchandise into the Customs territory of the United 
States.
    (b) No seizure if prior disclosure. Under no circumstances shall 
merchandise be seized under the authority of 19 U.S.C. 1592 if there has 
been a prior disclosure of the violation. This paragraph does not limit 
seizures under the authority of any other applicable law or regulation.
    (c) Seizure notice. If merchandise is seized, the Fines, Penalties, 
and Forfeitures Officer shall promptly issue a written notice of seizure 
to the person concerned and to any other person the facts of record 
indicate has an interest in the merchandise. The seizure notice shall 
contain the information required by Sec. 162.31 and shall state why the 
seizure was necessary.
    (d) Release of seized merchandise--(1) To person from whom seized. 
The Fines, Penalties, and Forfeitures Officer shall return seized 
mechandise to the person from whom seized upon the deposit of security, 
in a form acceptable to the Fines, Penalties, and Forfeitures Officer, 
equal to the maximum penalty which may be assessed, if the entry of the 
merchandise into the commerce of the United States is not prohibited or 
restricted.
    (2) To others. The Fines, Penalties, and Forfeitures Officer may 
release seized merchandise to any other person upon the deposit of 
adequate security, in a form acceptable to the Fines, Penalties, and 
Forfeitures Officer, if the entry of the merchandise into the commerce 
of the United States is not prohibited or restricted, and if:
    (i) The Fines, Penalties, and Forfeitures Officer is satisfied that 
the person has a substantial interest in the merchandise, and
    (ii) The person submits either an agreement to hold the United 
States and its officers and employees harmless, or a release from the 
owner and/or the person from whom the merchandise was seized.
    (3) Forfeiture. If neither a petition for relief is filed in 
accordance with part 171 of this chapter, nor compliance made with the 
decision within the time provided by law, the Fines, Penalties, and 
Forfeitures Officer immediately shall report the facts and refer the 
case to the Department of Justice for the institution of court 
proceedings.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 84-18, 49 
FR 1679, Jan. 13, 1984; T.D. 85-90, 50 FR 21431, May 24, 1985; T.D. 86-
118, 51 FR 22516, June 20, 1986; T.D. 88-43, 53 FR 28195, July 27, 1988; 
T.D. 99-27, 64 FR 13676, Mar. 22, 1999]



Sec. 162.76  Prepenalty notice for violations of sections 466 or 584(a)(1), Tariff Act of 1930, as amended.

    (a) When required. If the Fines, Penalties, and Forfeitures Officer 
has reasonable cause to believe that a violation of section 466 or 
584(a)(1), Tariff Act of 1930, as amended (19 U.S.C. 1466, 1584(a)(1)), 
has occurred and determines that further proceedings are warranted, he 
shall issue to the person concerned a written notice of his intent to 
issue a penalty claim or a claim of forfeiture, as appropriate.
    (b) Contents--(1) Facts of violation. The prepenalty notice shall:
    (i) Describe the merchandise, if applicable,

[[Page 268]]

    (ii) Set forth the details of the error in the manifest, if 
applicable,
    (iii) Specify all laws and regulations allegedly violated,
    (iv) Describe all material facts and circumstances which establish 
the alleged violation, and
    (v) State the estimated loss of duties, if any, and, taking into 
account all circumstances, the amount of the proposed penalty claim or 
claim of forfeiture, as appropriate.
    (2) Right to make presentation. The prepenalty notice also shall 
inform the person of his right to make a written and an oral 
presentation within 30 days of the mailing of the notice (or such 
shorter period as may be prescribed under Sec. 162.78) as to why a 
penalty claim or claim of forfeiture should not be issued or, if issued 
and it involves a monetary amount, why it should be in a lesser amount 
than proposed.
    (c) Exception. No prepenalty notice shall be issued if the proposed 
penalty for an alleged violation of 19 U.S.C. 1584(a)(1) is $1,000 or 
less.

[T.D. 79-160, 44 FR 31958, June 4, 1979, as amended by T.D. 99-27, 64 FR 
13676, Mar. 22, 1999; CBP Dec. 04-28, 69 FR 52600, Aug. 27, 2004]



Sec. 162.77  Prepenalty notice for violations of section 592, Tariff Act of 1930, as amended.

    (a) When required. If the Fines, Penalties, and Forfeitures Officer 
has reasonable cause to believe that a violation of section 592, Tariff 
Act of 1930, as amended (19 U.S.C. 1592), has occurred, and determines 
that further proceedings are warranted, he shall issue to the person 
concerned a notice of his intent to issue a claim for a monetary 
penalty. The prepenalty notice shall be issued whether or not a seizure 
has been made.
    (b) Contents--(1) Facts of violation. The prepenalty notice shall:
    (i) Describe the merchandise,
    (ii) Set forth the details of the entry or introduction, the 
attempted entry or introduction, or the aiding or abetting of the entry, 
introduction, or attempt,
    (iii) Specify all laws and regulatons allegedly violated,
    (iv) Disclose all material facts which establish the alleged 
violation,
    (v) State whether the alleged violation occured as the result of 
fraud, gross negligence, or negligence, and
    (vi) State the estimated loss of duties, if any, and, taking into 
account all circumstances, the amount of the proposed monetary penalty.
    (2) Right to make presentations. The prepenalty notice also shall 
inform the person of his right to make an oral and a written 
presentation within 30 days of the mailing of the notice (or such 
shorter period as may be prescribed under Sec. 162.78) as to why a 
claim for a monetary penalty should not be issued or, if issued, why it 
should be in a lesser amount than proposed.
    (c) Exceptions. A prepenalty notice shall not be issued if:
    (1) The claim is for $1,000 or less, or
    (2) The violation occurred with respect to a noncommercial 
importation.

[T.D. 79-160, 44 FR 31958, June 4, 1979, as amended by T.D. 99-27, 64 FR 
13676, Mar. 22, 1999]



Sec. 162.77a  Prepenalty notice for violation of section 593A, Tariff Act of 1930, as amended.

    (a) When required. If the appropriate Customs field officer has 
reasonable cause to believe that a violation of section 593A, Tariff Act 
of 1930, as amended (19 U.S.C. 1593a) has occurred, and determines that 
further proceedings are warranted, the officer will issue to the person 
concerned a notice of intent to issue a claim for a monetary penalty.
    (b) Contents--(1) Facts of violation. The prepenalty notice will:
    (i) Identify the drawback claim;
    (ii) Set forth the details relating to the seeking, inducing, or 
affecting, or the attempted seeking, inducing, or affecting, or the 
aiding or procuring of, the drawback claim;
    (iii) Specify all laws and regulations allegedly violated;
    (iv) Disclose all the material facts which establish the alleged 
violation;
    (v) State whether the alleged violation occurred as a result of 
fraud or negligence; and
    (vi) State the estimated actual or potential loss of revenue due to 
the drawback claim and, taking into account all circumstances, the 
amount of the proposed monetary penalty.

[[Page 269]]

    (2) Right to make presentations. The prepenalty notice also will 
inform the person of his right to make an oral and a written 
presentation within 30 days of mailing of the notice (or such shorter 
period as may be prescribed under Sec. 162.78) as to why a claim for a 
monetary penalty should not be issued or, if issued, why it should be in 
a lesser amount than proposed.
    (c) Exceptions. A prepenalty notice will not be issued for a 
violation of 19 U.S.C. 1593a if the amount of the proposed monetary 
penalty is $1,000 or less.
    (d) Prior approval. If an alleged violation of 19 U.S.C. 1593a 
occurred as a result of fraud, a prepenalty notice will not be issued 
without prior approval by Customs Headquarters.

[T.D. 00-5; 65 FR 3809, Jan. 25, 2000]



Sec. 162.78  Presentations responding to prepenalty notice.

    (a) Time within which to respond. Unless a shorter period is 
specified in the prepenalty notice or an extension is given in 
accordance with paragraph (b) of this section, the named person shall 
have 30 days from the date of mailing of the prepenalty notice to make a 
written and an oral presentation. The Fines, Penalties, and Forfeitures 
Officer may specify a shorter reasonable period of time, but not less 
than 7 days, if less than 1 year remains before the statute of 
limitations may be asserted as a defense. If a period of fewer than 30 
days is specified, the Fines, Penalties, and Forfeitures Officer, if 
possible, shall inform the named person of the prepenalty notice and its 
contents by telephone at or about the time of issuance.
    (b) Extensions. If at least 1 year remains before the statute of 
limitations may be asserted as a defense, the Fines, Penalties, and 
Forfeitures Officer, upon written request, may extend the time for 
filing a written presentation, or making an oral presentation, or both, 
for any of the reasons given in part 171 of this chapter (except for the 
reason described in Sec. 171.15(a)(4)), relating to extensions of time 
for filing petitions for relief. In addition, an extension may be 
granted if, upon the request of the alleged violator, the Commissioner 
of Customs determines that the case involves an issue which is a proper 
matter for submission to Customs Headquarters under the internal advice 
procedures of Sec. 177.11(b)(2) of this chapter. Other extensions may 
be authorized only by Headquarters.
    (c) Form and contents of written presentation. The written 
presentation need not be in any particular form, but shall contain 
information sufficient to indicate that it is the written presentation 
in response to the prepenalty notice. It should contain answers to the 
allegations in the prepenalty notice and set forth the reasons why the 
person believes the claim should not be issued or, if issued, why it 
should be in a lesser amount than proposed.
    (d) Additional presentations. In addition to one written and one 
oral presentation, the Fines, Penalties, and Forfeitures Officer, in his 
discretion, may allow further presentations.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 85-195, 50 
FR 50290, Dec. 10, 1985; T.D. 99-27, 64 FR 13676, Mar. 22, 1999]



Sec. 162.79  Determination as to violation.

    (a) No violation. If, after considering any presentations made in 
response to the prepenalty notice, the Fines, Penalties, and Forfeitures 
Officer determines that there was no violation by the person named in 
the prepenalty notice, he promptly shall notify the person in writing of 
that determination and that no claim for a monetary penalty will be 
issued.
    (b) Violation--(1) Written notice of claim. If, after considering 
any presentations made in response to the prepenalty notice, the Fines, 
Penalties, and Forfeitures Officer determines that there was a violation 
by the person named in the prepenalty notice, he promptly shall issue a 
written notice of a claim for a monetary penalty to that person.
    (2) Contents. The notice of a claim for a monetary penalty shall 
contain any changes in the information provided in the prepenalty 
notice, and shall inform the person of his right to apply for relief 
under section 618, Tariff Act of 1930, as amended (19 U.S.C. 1618), in 
accordance with part 171 of this chapter. If the person to whom the 
notice is issued is liable for any actual loss of duties recoverable 
under section 592(d),

[[Page 270]]

Tariff Act of 1930, as amended (19 U.S.C. 1592(d)), the notice shall 
identify the entries involved, state the amount of duties payable and 
how it was calculated, and require the person to deposit or arrange for 
payment of the duties within 30 days of the date of the notice.

[T.D. 72-211, 37 FR 16488, Aug. 15, 1972, as amended by T.D. 84-18, 49 
FR 1680, Jan. 13, 1984; T.D. 99-27, 64 FR 13676, Mar. 22, 1999]



Sec. 162.79a  Other notice.

    If no prepenalty notice is issued, a written notice of any monetary 
penalty incurred shall contain the information required under Sec. 
162.76(b)(1), Sec. 162.77(b)(1) or Sec. 162.77a(b)(1) and (b)(2), 
except that the notice shall state the amount of the claim for a 
monetary penalty. The notice also shall inform the person of his right 
to apply for relief under section 618, Tariff Act of 1930, as amended 
(19 U.S.C. 1618), in accordance with part 171 of this chapter.

[T.D. 79-160, 44 FR 31958, June 4, 1979, as amended by T.D. 00-5, 65 FR 
3809, Jan. 25, 2000]



Sec. 162.79b  Recovery of actual loss of duties, taxes and fees or actual loss of revenue.

    Whether or not a monetary penalty is assessed under this subpart, 
the appropriate Customs field officer will require the deposit of any 
actual loss of duties, taxes and fees resulting from a violation of 
section 592, Tariff Act of 1930, as amended (19 U.S.C. 1592) or any 
actual loss of revenue resulting from a violation of section 593A, 
Tariff Act of 1930, as amended (19 U.S.C. 1593a), notwithstanding that 
the liquidation of the entry to which the loss is attributable has 
become final. If a person is liable for the payment of actual loss of 
duties, taxes and fees or actual loss of revenue in any case in which a 
monetary penalty is not assessed or a written notification of claim of 
monetary penalty is not issued, the port director will issue a written 
notice to the person of the liability for the actual loss of duties, 
taxes and fees or actual loss of revenue. The notice will identify the 
merchandise and entries involved, state the loss of duties, taxes and 
fees or loss of revenue and how it was calculated, and require the 
person to deposit or arrange for payment of the duties, taxes and fees 
or revenue within 30 days from the date of the notice. Any determination 
of actual loss of duties, taxes and fees or actual loss of revenue under 
this section is subject to review upon written application to the 
Commissioner of Customs.

[T.D. 00-5, 65 FR 3809, Jan. 25, 2000]



Sec. 162.80  Liability for duties; liquidation of entries.

    (a)(1) When an entry is the subject of an investigation for possible 
violation of section 592, Tariff Act of 1930, as amended (19 U.S.C. 
1592), or of a penalty action established under that section, the port 
director, subject to the provisions of paragraph (a)(2) of this section, 
may liquidate the entry and collect duties before the conclusion of the 
investigation or final disposition of the penalty action if he 
determines that liquidation would be in the interest of the Government.
    (2)(i) An entry not liquidated within 1 year from the date of entry 
or final withdrawal of all merchandise covered by a warehouse entry 
shall be deemed liquidated at the rate of duty, value, quantity, and 
amount of duties asserted at the time of entry by the importer, his 
consignee, or agent unless the time for liquidation is extended by the 
port director because--
    (A) Information needed by Customs for the proper appraisement or 
classification of the merchandise is not available.
    (B) The importer, his consignee, or agent requests an extension and 
demonstrates good cause why the extention should be granted, or
    (C) The 1-year liquidation period is suspended as required by 
statute or court order.
    (ii) An entry not liquidated within 4 years from the date of entry 
or final withdrawal of all merchandise covered by a warehouse entry 
shall be deemed liquidated at the rate of duty, value, quantity, and 
amount of duties asserted at the time of entry by the importer, his 
consignee, or agent unless liquidation continues to be suspended by 
statute or court order. In that event, the entry shall be liquidated 
within 90 days after removal of the suspension.

[[Page 271]]

    (iii) The port director promptly shall notify the importer or 
consignee concerned and any authorized agent and surety of the importer 
or consignee in writing of any extension or suspension of the 
liquidation period.
    (b) When merchandise not covered by an entry is subject to section 
592, Tariff Act of 1930, as amended (19 U.S.C. 1592), a demand shall be 
made on the importer for payment of the duty estimated to be due on such 
merchandise.
    (c) Any applicable internal revenue tax shall also be demanded 
unless the merchandise is to be, or has been, forfeited.

[T.D. 84-18, 49 FR 1680, Jan. 13, 1984]



               Subpart H_Civil Asset Forfeiture Reform Act

    Source: T.D. 00-88, 65 FR 78091, Dec. 14, 2000, unless otherwise 
noted.



Sec. 162.91  Exemptions.

    The provisions of this subpart will apply to all seizures of 
property for civil forfeiture made by Customs and Border Protection or 
Immigration and Customs Enforcement officers except for those seizures 
of property to be forfeited under the following statutes: The Tariff Act 
of 1930 or any other provision of law codified in title19, United States 
Code; the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.); the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.); the 
Trading with the Enemy Act (50 U.S.C. App. 1 et seq.); the International 
Emergency Economic Powers Act (IEEPA) (50 U.S.C. 1701 et seq.); and 
section 1 of title VI of the Act of June 15, 1917 (40 Stat. 233; 22 
U.S.C. 401).

[T.D. 02-08, 67 FR 9191, Feb. 28, 2002, as amended by USCBP-2006-0122, 
73 FR 9012, Feb. 19, 2007]



Sec. 162.92  Notice of seizure.

    (a) Generally. Customs will send written notice of seizure as 
provided in this section to all known interested parties as soon as 
practicable. Except as provided in paragraphs (b), (c) and (d) of this 
section, in no case may notice be sent more than 60 calendar days after 
the date of seizure. Any notice issued under this section will include 
all information that is required by Sec. 162.31(a) and (b) of this 
part.
    (b) Seizure by state or local authorities. In a case in which 
property is seized by a state or local law enforcement agency and turned 
over to Customs for the purpose of forfeiture under Federal law, notice 
will be sent not more than 90 calendar days after the date of seizure by 
the State or local law enforcement agency.
    (c) Identity or interest of party not determined. If the identity or 
interest of a party is not determined until after the seizure or 
turnover, but it is determined before a declaration of forfeiture, 
notice will be sent to such interested party not later than 60 calendar 
days after the determination by Customs of the identity of the party or 
the party's interest.
    (d) Extensions. (1) The Assistant Secretary, Immigration and Customs 
Enforcement or the Commissioner of Customs and Border Protection for 
cases within their respective agencies, or their successors or 
designees, may extend the period for sending notice under this section 
for a period not to exceed 30 calendar days, if it is determined that 
issuance of the notice within 60 calendar days of seizure may have an 
adverse result, including:
    (i) Endangering the life or physical safety of an individual;
    (ii) Flight from prosecution;
    (iii) Destruction of or tampering with evidence;
    (iv) Intimidation of potential witnesses; or
    (v) Otherwise seriously jeopardizing an investigation or unduly 
delaying a trial.
    (2) The period for sending notice of seizure as provided in 
paragraph (d)(1) of this section may not be further extended except by 
order of a court of competent jurisdiction as prescribed in paragraph 
(e) of this section.
    (e) Extensions by a court. Upon motion by the Government, a court of 
competent jurisdiction may extend the period for sending notice for a 
period not to exceed 60 calendar days. This period may be further 
extended by the court for additional 60 calendar-day periods, as 
necessary, if the court determines, based on a written certification of 
the

[[Page 272]]

Assistant Commissioner, Investigations, or designee, that the conditions 
set forth in paragraph (d) of this section are present.

[T.D. 00-88, 65 FR 78091, Dec. 14, 2000, as amended by USCBP-2006-0122, 
73 FR 9012, Feb. 19, 2007]



Sec. 162.93  Failure to issue notice of seizure.

    If Customs does not send notice of a seizure of property in 
accordance with Sec. 162.92 to the person from whom the property was 
seized, and no extension of time is granted, Customs will return the 
property to that person without prejudice to the right of the Government 
to commence a forfeiture proceeding at a later time. Customs is not, 
however, required to return contraband or other property that the person 
may not legally possess.



Sec. 162.94  Filing of a claim for seized property.

    (a) Generally. In lieu of filing a petition for relief in accordance 
with part 171 of this chapter, any person claiming property seized by 
Customs in a non-judicial civil forfeiture proceeding may file a claim 
with the appropriate Fines, Penalties, and Forfeitures Officer.
    (b) When filed. Unless the Fines, Penalties, and Forfeitures Officer 
provides additional time to the person filing a claim for seized 
property pursuant to paragraph (a) of this section, the claim must be 
filed within 35 calendar days after the date the notice of seizure is 
mailed. If the notice of seizure is not received, a claim may be filed 
not later than 30 calendar days after the date of final publication of 
notice of seizure and intent to forfeit the property.
    (c) Form of claim. The claim must be in writing but need not be made 
in any particular form. Claim forms will be made generally available 
upon request.
    (d) Content of claim. The claim must:
    (1) Identify the specific property being claimed;
    (2) State the claimant's interest in the property; and
    (3) Be made under oath, subject to penalty of perjury.
    (e) No bond required. Any person may make a claim under this section 
without posting a bond.
    (f) Effect of claim. Not later than 90 calendar days after a claim 
has been filed, the Government will file an appropriate complaint for 
forfeiture, except that a court in the district in which the complaint 
will be filed may extend the period for filing a complaint for good 
cause shown or upon agreement of the parties.

[T.D. 00-88, 65 FR 78091, Dec. 14, 2000, as amended by T.D. 02-08, 67 FR 
9191, Feb. 28, 2002]



Sec. 162.95  Release of seized property.

    (a) Generally. Except as provided in paragraph (b) of this section, 
a claimant to seized property under 18 U.S.C. 983(a) is entitled to 
immediate release of the property if:
    (1) The claimant has a possessory interest in the property;
    (2) The claimant has sufficient ties to the community to provide 
assurance that the property will be available at the time of trial;
    (3) The continued possession of the property by Customs pending the 
final disposition of forfeiture proceedings will cause substantial 
hardship to the claimant, such as preventing an individual from working, 
or leaving an individual homeless; and
    (4) The claimant's likely hardship from the continued possession by 
Customs of the seized property outweighs the risk that the property will 
be destroyed, damaged, lost, concealed, or transferred if it is returned 
to the claimant during the pendency of the proceedings.
    (b) Exceptions. Immediate release of seized property under paragraph 
(a) of this section will not apply if the seized property:
    (1) Is contraband, currency or other monetary instrument, or 
electronic funds, unless, in the case of currency, other monetary 
instrument or electronic funds, such property comprises the assets of a 
legitimate business which has been seized;
    (2) Is to be used as evidence of a violation of the law;
    (3) By reason of design or other characteristic, is particularly 
suited for use in illegal activities; or
    (4) Is likely to be used to commit additional criminal acts if 
returned to the claimant.

[[Page 273]]

    (c) Request for release. A claimant seeking release of property 
under this section must request possession of the property from the 
Fines, Penalties, and Forfeitures Officer who issued the notice of 
seizure. The request need not be made in any particular form, but must 
be in writing and set forth the basis on which the requirements of 
paragraph (a) of this section have been met. The request may be filed at 
any time during which the property remains under seizure.
    (d) Granting request for release. The Fines, Penalties, and 
Forfeitures Officer may release the property if it is determined to be 
appropriate under paragraphs (a) through (c) of this section.
    (e) Denial of or failure to act on request for release. If the 
Fines, Penalties, and Forfeitures Officer denies the request for release 
or fails to make a decision on the request by the 15th calendar day 
after the date the request is received by Customs, the claimant may file 
a petition in the district court in which the complaint has been filed, 
or, if no complaint has been filed, in the U.S. district court in which 
the seizure warrant was issued or in the U.S. district court for the 
district in which the property was seized.

[T.D. 00-88, 65 FR 78091, Dec. 14, 2000, as amended by T.D. 02-08, 67 FR 
9191, Feb. 28, 2002]



Sec. 162.96  Remission of forfeitures and payment of fees, costs or interest.

    When a person elects to petition for relief before, or in lieu of, 
filing a claim under Sec. 162.94, any seizure subject to forfeiture 
under this subpart may be remitted or mitigated pursuant to the 
provisions of 19 U.S.C. 1618 or 31 U.S.C. 5321(c), as applicable. Any 
person who accepts a remission or mitigation decision will not be 
considered to have substantially prevailed in a civil forfeiture 
proceeding for purposes of collection of any fees, costs or interest 
from the Government.



PART 163_RECORDKEEPING--Table of Contents




Sec.
163.0 Scope.
163.1 Definitions.
163.2 Persons required to maintain records.
163.3 Entry records.
163.4 Record retention period.
163.5 Methods for storage of records.
163.6 Production and examination of entry and other records and 
          witnesses; penalties.
163.7 Summons.
163.8 Third-party recordkeeper summons.
163.9 Enforcement of summons.
163.10 Failure to comply with court order; penalties.
163.11 Compliance assessment and other audit procedures.
163.12 Recordkeeping Compliance Program.
163.13 Denial and removal of program certification; appeal procedures.

Appendix to Part 163--Interim (a)(1)(A) List

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1484, 1508, 1509, 1510, 1624.

    Source: T.D. 98-56, 63 FR 32946, June 16, 1998, unless otherwise 
noted.



Sec. 163.0  Scope.

    This part sets forth the recordkeeping requirements and procedures 
governing the maintenance, production, inspection, and examination of 
records. It also sets forth the procedures governing the examination of 
persons in connection with any investigation or compliance assessment, 
audit or other inquiry conducted for the purposes of ascertaining the 
correctness of any entry, for determining the liability of any person 
for duties, fees and taxes due or that may be due, for determining 
liability for fines, penalties and forfeitures, or for ensuring 
compliance with the laws and regulations administered or enforced by 
Customs. Additional provisions concerning records maintenance and 
examination applicable to U.S. importers, exporters, and producers under 
the United States-Canada Free Trade Agreement and the North American 
Free Trade Agreement are contained in parts 10 and 181 of this chapter, 
respectively.



Sec. 163.1  Definitions.

    When used in this part, the following terms shall have the meaning 
indicated:
    (a) Records--(1) In general. The term ``records'' means any 
information made or normally kept in the ordinary course of business 
that pertains to any activity listed in paragraph (a)(2) of this 
section. The term includes any information required for the entry of

[[Page 274]]

merchandise (the (a)(1)(A) list) and other information pertaining to, or 
from which is derived, any information element set forth in a collection 
of information required by the Tariff Act of 1930, as amended, in 
connection with any activity listed in paragraph (a)(2) of this section. 
The term includes, but is not limited to, the following: Statements; 
declarations; documents; electronically generated or machine readable 
data; electronically stored or transmitted information or data; books; 
papers; correspondence; accounts; financial accounting data; technical 
data; computer programs necessary to retrieve information in a usable 
form; and entry records (contained in the (a)(1)(A) list).
    (2) Activities. The following are activities for purposes of 
paragraph (a)(1) of this section:
    (i) Any importation, declaration or entry;
    (ii) The transportation or storage of merchandise carried or held 
under bond into or from the customs territory of the United States;
    (iii) The filing of a drawback claim;
    (iv) The completion and signature of a NAFTA Certificate of Origin 
pursuant to Sec. 181.11(b) of this chapter;
    (v) The collection, or payment to Customs, of duties, fees and 
taxes; or
    (vi) The completion and signature of a Chile FTA certification of 
origin and any other supporting documentation pursuant to the United 
States-Chile Free Trade Agreement.
    (vii) The maintenance of any documentation that the importer may 
have in support of a claim for preferential tariff treatment under the 
United States-Singapore Free Trade Agreement (SFTA), including a SFTA 
importer's supporting statement if previously required by the port 
director.
    (viii) The maintenance of any documentation that the importer may 
have in support of a claim for preferential tariff treatment under the 
United States-Jordan Free Trade Agreement (US-JFTA), including a US-JFTA 
declaration.
    (ix) The maintenance of any documentation that the importer may have 
in support of a claim for preferential tariff treatment under the United 
States-Morocco Free Trade Agreement (MFTA), including a MFTA importer's 
declaration.
    (x) The maintenance of any documentation that the importer may have 
in support of a claim for preferential tariff treatment under the United 
States-Bahrain Free Trade Agreement (BFTA), including a BFTA importer's 
declaration.
    (xi) Any other activity required to be undertaken pursuant to the 
laws or regulations administered by Customs.
    (b) (a)(1)(A) list. See the definition of ``entry records''.
    (c) Audit. ``Audit'' means a Customs regulatory audit verification 
of information contained in records required to be maintained and 
produced by persons listed in Sec. 163.2 or pursuant to other 
applicable laws and regulations administered by Customs but does not 
include a quantity verification for a customs bonded warehouse or 
general purpose foreign trade zone. The purpose of an audit is to 
determine that information submitted or required is accurate, complete 
and in accordance with laws and regulations administered by Customs.
    (d) Certified recordkeeper. A ``certified recordkeeper'' is a person 
who is required to keep records under this chapter and who is a 
participant in the Recordkeeping Compliance Program provided for in 
Sec. 163.12.
    (e) Compliance assessment. A ``compliance assessment'' is a type of 
importer audit performed by a Customs Compliance Assessment Team which 
uses various audit techniques, including statistical testing of import 
and financial transactions, to assess the importer's compliance level in 
trade areas, to determine the adequacy of the importer's internal 
controls over its customs operations, and to determine the importer's 
rates of compliance.
    (f) Entry records/(a)(1)(A) list. The terms ``entry records'' and 
``(a)(1)(A) list'' refer to records required by law or regulation for 
the entry of merchandise (whether or not Customs required their 
presentation at the time of entry). The (a)(1)(A) list is contained in 
the Appendix to this part.
    (g) Inquiry. An ``inquiry'' is any formal or informal procedure, 
other than

[[Page 275]]

an investigation, through which a request for information is made by a 
Customs officer.
    (h) Original. The term ``original'', when used in the context of 
maintenance of records, has reference to records that are in the 
condition in which they were made or received by the person responsible 
for maintaining the records pursuant to 19 U.S.C. 1508 and the 
provisions of this chapter, including records consisting of the 
following:
    (1) Electronic information which was used to develop other 
electronic records or paper documents;
    (2) Electronic information which is in a readable format such as a 
facsimile paper format or an electronic or hardcopy spreadsheet;
    (3) In the case of a paper record that is part of a multi-part form 
where all parts of the form are made by the same impression, one of the 
carbon-copy parts or a facsimile copy or photocopy of one of the parts; 
and
    (4) A copy of a record that was provided to another government 
agency which retained it, provided that, if required by Customs, a 
signed statement accompanies the copy certifying it to be a true copy of 
the record provided to the other government agency.
    (i) Party/person. The terms ``party'' and ``person'' refer to a 
natural person, corporation, partnership, association, or other entity 
or group.
    (j) Summons. ``Summons'' means any summons issued under this part 
that requires the production of records or the giving of testimony, or 
both.
    (k) Technical data. ``Technical data'' are records which include 
diagrams and other data with regard to a business or an engineering or 
exploration operation, whether conducted inside or outside the United 
States, and whether on paper, cards, photographs, blueprints, tapes, 
microfiche, film, or other media or in electronic or magnetic storage.
    (l) Third-party recordkeeper. ``Third-party recordkeeper'' means any 
attorney, any accountant or any customs broker other than a customs 
broker who is the importer of record on an entry.

[T.D. 98-56, 63 FR 32946, June 16, 1998, as amended by CBP Dec. 05-07, 
70 FR 10884, Mar. 7, 2005; CBP Dec. 07-28, 72 FR 32003, June 11, 2007; 
CBP Dec. 07-50, 72 FR 35160, June 27, 2007; CBP Dec. 07-51, 72 FR 35658, 
June 29, 2007; CBP Dec. 07-81, 72 FR 58522, Oct. 16, 2007]



Sec. 163.2  Persons required to maintain records.

    (a) General. Except as otherwise provided in paragraph (b) or (e) of 
this section, the following persons shall maintain records and shall 
render such records for examination and inspection by Customs:
    (1) An owner, importer, consignee, importer of record, entry filer, 
or other person who:
    (i) Imports merchandise into the customs territory of the United 
States, files a drawback claim, or transports or stores merchandise 
carried or held under bond, or
    (ii) Knowingly causes the importation or transportation or storage 
of merchandise carried or held under bond into or from the customs 
territory of the United States;
    (2) An agent of any person described in paragraph (a)(1) of this 
section; or
    (3) A person whose activities require the filing of a declaration or 
entry, or both.
    (b) Domestic transactions. For purposes of paragraph (a)(1)(ii) of 
this section, a person who orders merchandise from an importer in a 
domestic transaction knowingly causes merchandise to be imported only 
if:
    (1) The terms and conditions of the importation are controlled by 
the person placing the order with the importer (for example, the 
importer is not an independent contractor but rather is the agent of the 
person placing the order: Whereas a consumer who purchases an imported 
automobile from a domestic dealer would not be required to maintain 
records, a transit authority that prepared detailed specifications from 
which imported subway cars or busses were manufactured would be required 
to maintain records); or
    (2) Technical data, molds, equipment, other production assistance, 
material, components, or parts are furnished by

[[Page 276]]

the person placing the order with the importer with knowledge that they 
will be used in the manufacture or production of the imported 
merchandise.
    (c) Recordkeeping required for certain exporters. Any person who 
exports goods to Canada or Mexico for which a Certificate of Origin was 
completed and signed pursuant to the North American Free Trade Agreement 
must also maintain records in accordance with part 181 of this chapter.
    (d) Recordkeeping required for customs brokers. Each customs broker 
must also make and maintain records and make such records available in 
accordance with part 111 of this chapter.
    (e) Recordkeeping not required for certain travelers. After having 
physically cleared the Customs facility, a traveler who made a baggage 
or oral declaration upon arrival in the United States will not be 
required to maintain supporting records regarding non-commercial 
merchandise acquired abroad which falls within the traveler's personal 
exemptions or which is covered by a flat rate of duty.



Sec. 163.3  Entry records.

    Any person described in Sec. 163.2(a) with reference to an import 
transaction shall be prepared to produce or transmit to Customs, in 
accordance with Sec. 163.6(a), any entry records which may be demanded 
by Customs. If entry records submitted to Customs not pursuant to a 
demand are returned by Customs, or if production of entry records at the 
time of entry is waived by Customs, such person shall continue to 
maintain those entry records in accordance with this part. Entry records 
which are normally kept in the ordinary course of business must be 
maintained by such person in accordance with this part whether or not 
copies thereof are retained by Customs.



Sec. 163.4  Record retention period.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, any record required to be made, kept, and rendered for 
examination and inspection by Customs under Sec. 163.2 or any other 
provision of this chapter shall be kept for 5 years from the date of 
entry, if the record relates to an entry, or 5 years from the date of 
the activity which required creation of the record.
    (b) Exceptions. (1) Any record relating to a drawback claim shall be 
kept until the third anniversary of the date of payment of the claim.
    (2) Packing lists shall be retained for a period of 60 calendar days 
from the end of the release or conditional release period, whichever is 
later, or, if a demand for return to Customs custody has been issued, 
for a period of 60 calendar days either from the date the goods are 
redelivered or from the date specified in the demand as the latest 
redelivery date if redelivery has not taken place.
    (3) A consignee who is not the owner or purchaser and who appoints a 
customs broker shall keep a record pertaining to merchandise covered by 
an informal entry for 2 years from the date of the informal entry.
    (4) Records pertaining to articles that are admitted free of duty 
and tax pursuant to 19 U.S.C. 1321(a)(2) and Sec. Sec. 10.151 through 
10.153 of this chapter, and carriers' records pertaining to manifested 
cargo that is exempt from entry under the provisions of this chapter, 
shall be kept for 2 years from the date of the entry or other activity 
which required creation of the record.
    (5) If another provision of this chapter sets forth a retention 
period for a specific type of record that differs from the period that 
would apply under this section, that other provision controls.



Sec. 163.5  Methods for storage of records.

    (a) Original records. All persons listed in Sec. 163.2 shall 
maintain all records required by law and regulation for the required 
retention periods and as original records, whether paper or electronic, 
unless alternative storage methods have been adopted in accordance with 
paragraph (b) of this section. The records, whether in their original 
format or under an alternative storage method, must be capable of being 
retrieved upon lawful request or demand by Customs.
    (b) Alternative method of storage--(1) General. Any of the persons 
listed in Sec. 163.2 may maintain any records, other than records 
required to be maintained as original records under laws and regulations 
administered by other Federal

[[Page 277]]

government agencies, in an alternative format, provided that the person 
gives advance written notification of such alternative storage method to 
the Regulatory Audit, U.S. Customs and Border Protection, 2001 Cross 
Beam Dr., Charlotte, North Carolina 28217, and provided further that the 
Director of Regulatory Audit, Charlotte office does not instruct the 
person in writing as provided herein that certain described records may 
not be maintained in an alternative format. The written notice to the 
Director of Regulatory Audit, Charlotte office must be provided at least 
30 calendar days before implementation of the alternative storage 
method, must identify the type of alternative storage method to be used, 
and must state that the alternative storage method complies with the 
standards set forth in paragraph (b)(2) of this section. If an 
alternative storage method covers records that pertain to goods under 
CBP seizure or detention or that relate to a matter that is currently 
the subject of an inquiry or investigation or administrative or court 
proceeding, the appropriate CBP office may instruct the person in 
writing that those records must be maintained as original records and 
therefore may not be converted to an alternative format until specific 
written authorization is received from that CBP office. A written 
instruction to a person under this paragraph may be issued during the 
30-day advance notice period prescribed in this section or at any time 
thereafter, must describe the records in question with reasonable 
specificity but need not identify the underlying basis for the 
instruction, and shall not preclude application of the planned 
alternative storage method to other records not described therein.
    (2) Standards for alternative storage methods. Methods commonly used 
in standard business practice for storage of records include, but are 
not limited to, machine readable data, CD ROM, and microfiche. Methods 
that are in compliance with generally accepted business standards will 
generally satisfy Customs requirements, provided that the method used 
allows for retrieval of records requested within a reasonable time after 
the request and provided that adequate provisions exist to prevent 
alteration, destruction, or deterioration of the records. The following 
standards must be applied by recordkeepers when using alternative 
storage methods:
    (i) Operational and written procedures are in place to ensure that 
the imaging and/or other media storage process preserves the integrity, 
readability, and security of the information contained in the original 
records. The procedures must include a standardized retrieval process 
for such records. Vendor specifications/documentation and benchmark data 
must be available for Customs review;
    (ii) There is an effective labeling, naming, filing, and indexing 
system;
    (iii) Except in the case of packing lists (see Sec. 163.4(b)(2)), 
entry records must be maintained in their original formats for a period 
of 120 calendar days from the end of the release or conditional release 
period, whichever is later, or, if a demand for return to Customs 
custody has been issued, for a period of 120 calendar days either from 
the date the goods are redelivered or from the date specified in the 
demand as the latest redelivery date if redelivery has not taken place;
    (iv) An internal testing of the system must be performed on a yearly 
basis;
    (v) The recordkeeper must have the capability to make, and must bear 
the cost of, hard-copy reproductions of alternatively stored records 
that are required by Customs for audit, inquiry, investigation, or 
inspection of such records; and
    (vi) The recordkeeper shall retain and keep available one working 
copy and one back-up copy of the records stored in a secure location for 
the required periods as provided in Sec. 163.4.
    (3) Changes to alternative storage procedures. No changes to 
alternative recordkeeping procedures may be made without first notifying 
the Director of the Miami regulatory audit field office. The 
notification must be in writing and must be provided to the director at 
least 30 calendar days before implementation of the change.
    (4) Penalties. All persons listed in Sec. 163.2 who use alternative 
storage methods for records and who fail to maintain or produce the 
records in accordance with this part shall be subject

[[Page 278]]

to penalties pursuant to Sec. 163.6 for entry records or sanctions 
pursuant to Sec. Sec. 163.9 and 163.10 for other records.
    (5) Failure to comply with alternative storage requirements. If a 
person listed in Sec. 163.2 uses an alternative storage method for 
records that is not in compliance with the conditions and requirements 
of this section, the appropriate Customs office may instruct the person 
in writing to discontinue use of the alternative storage method. The 
instruction shall take effect upon receipt thereof and shall remain in 
effect until the noncompliance has been rectified and alternative 
storage has recommenced in accordance with the procedures set forth in 
paragraph (b)(1) of this section.



Sec. 163.6  Production and examination of entry and other records and witnesses; penalties.

    (a) Production of entry records. Pursuant to written, oral, or 
electronic notice, any Customs officer may require the production of 
entry records by any person listed in Sec. 163.2(a) who is required 
under this part to maintain such records, even if the entry records were 
required at the time of entry. Any oral demand for entry records shall 
be followed by a written or electronic demand. The entry records shall 
be produced within 30 calendar days of receipt of the demand or within 
any shorter period as Customs may prescribe when the entry records are 
required in connection with a determination regarding the admissibility 
or release of merchandise. Should any person from whom Customs has 
demanded entry records encounter a problem in timely complying with the 
demand, such person may submit a written or electronic request to 
Customs for approval of a specific additional period of time in which to 
produce the records; the request must be received by Customs before the 
applicable due date for production of the records and must include an 
explanation of the circumstances giving rise to the request. Customs 
will promptly advise the requesting person electronically or in writing 
either that the request is denied or that the requested additional time 
period, or such shorter period as Customs may deem appropriate, is 
approved. The mere fact that a request for additional time to produce 
demanded entry records was submitted under this section shall not by 
itself preclude the imposition of a monetary penalty or other sanction 
under this part for failure to timely produce the records, but no such 
penalty or other sanction will be imposed if the request is approved and 
the records are produced before expiration of that additional period of 
time.
    (b) Failure to produce entry records--(1) Monetary penalties 
applicable. The following penalties may be imposed if a person fails to 
comply with a lawful demand for the production of an entry record and is 
not excused from a penalty pursuant to paragraph (b)(3) of this section:
    (i) If the failure to comply is a result of the willful failure of 
the person to maintain, store, or retrieve the demanded record, such 
person shall be subject to a penalty, for each release of merchandise, 
not to exceed $100,000, or an amount equal to 75 percent of the 
appraised value of the merchandise, whichever amount is less; or
    (ii) If the failure to comply is a result of negligence of the 
person in maintaining, storing, or retrieving the demanded record, such 
person shall be subject to a penalty, for each release of merchandise, 
not to exceed $10,000, or an amount equal to 40 percent of the appraised 
value of the merchandise, whichever amount is less.
    (2) Additional actions--(i) General. In addition to any penalty 
imposed under paragraph (b)(1) of this section, and except as otherwise 
provided in paragraph (b)(2)(ii) of this section, if the demanded entry 
record relates to the eligibility of merchandise for a column 1 special 
rate of duty in the Harmonized Tariff Schedule of the United States 
(HTSUS), the entry of such merchandise:
    (A) If unliquidated, shall be liquidated at the applicable HTSUS 
column 1 general rate of duty; or
    (B) If liquidated within the 2-year period preceding the date of the 
demand, shall be reliquidated, notwithstanding the time limitation in 19 
U.S.C. 1514 or 1520, at the applicable HTSUS column 1 general rate of 
duty.

[[Page 279]]

    (ii) Exception. Any liquidation or reliquidation under paragraph 
(b)(2)(i)(A) or (b)(2)(i)(B) of this section shall be at the applicable 
HTSUS column 2 rate of duty if Customs demonstrates that the merchandise 
should be dutiable at such rate.
    (3) Avoidance of penalties. No penalty may be assessed under 
paragraph (b)(1) of this section if the person who fails to comply with 
a lawful demand for entry records can show:
    (i) That the loss of the demanded record was the result of an act of 
God or other natural casualty or disaster beyond the fault of such 
person or an agent of the person;
    (ii) On the basis of other evidence satisfactory to Customs, that 
the demand was substantially complied with;
    (iii) That the record demanded was presented to and retained by 
Customs at the time of entry or submitted in response to an earlier 
demand; or
    (iv) That he has been certified as a participant in the 
Recordkeeping Compliance Program (see Sec. 163.12), that he is 
generally in compliance with the appropriate procedures and requirements 
of that program, and that the violation in question is his first 
violation and was a non-willful violation.
    (4) Penalties not exclusive. Any penalty imposed under paragraph 
(b)(1) of this section shall be in addition to any other penalty 
provided by law except for:
    (i) A penalty imposed under 19 U.S.C. 1592 for a material omission 
of any information contained in the demanded record; or
    (ii) Disciplinary action taken under 19 U.S.C. 1641.
    (5) Remission or mitigation of penalties. A penalty imposed under 
this section may be remitted or mitigated under 19 U.S.C. 1618.
    (6) Customs summons. The assessment of a penalty under this section 
shall not limit or preclude the issuance or enforcement of a summons 
under this part.
    (c) Examination of entry and other records--(1) Reasons for 
examination. Customs may initiate an investigation or compliance 
assessment, audit or other inquiry for the purpose of:
    (i) Ascertaining the correctness of any entry, determining the 
liability of any person for duties, taxes and fees due or duties, taxes 
and fees which may be due, or determining the liability of any person 
for fines, penalties and forfeitures; or
    (ii) Ensuring compliance with the laws and regulations administered 
or enforced by Customs.
    (2) Availability of records. During the course of any investigation 
or compliance assessment, audit or other inquiry, any Customs officer, 
during normal business hours, and to the extent possible at a time 
mutually convenient to the parties, may examine, or cause to be 
examined, any relevant entry or other records by providing the person 
responsible for such records with reasonable written, oral or electronic 
notice that describes the records with reasonable specificity. The 
examination of entry records shall be subject to the notice and 
production procedures set forth in paragraph (a) of this section, and a 
failure to produce entry records may result in the imposition of 
penalties or the taking of other action as provided in paragraph (b) of 
this section.
    (3) Examination notice not exclusive. In addition to, or in lieu of, 
issuance of an examination notice under paragraph (c)(2) of this 
section, Customs may issue a summons pursuant to Sec. 163.7, and seek 
its enforcement pursuant to Sec. Sec. 163.9 and 163.10, to compel the 
production of any records required to be maintained and produced under 
this chapter.

[T.D. 98-56, 63 FR 32946, June 16, 1998; 63 FR 34808, June 26, 1998]



Sec. 163.7  Summons.

    (a) Who may be served. During the course of any investigation or 
compliance assessment, audit or other inquiry initiated for the reasons 
set forth in Sec. 163.6(c), the Commissioner of Customs or his 
designee, but no designee of the Commissioner below the rank of port 
director, field director of regulatory audit or special agent in charge, 
may issue a summons requiring a person within a reasonable period of 
time to appear before the appropriate Customs officer and to produce 
records or give relevant testimony under oath or both. Such a summons 
may be issued to any person who:

[[Page 280]]

    (1) Imported, or knowingly caused to be imported, merchandise into 
the customs territory of the United States;
    (2) Exported merchandise, or knowingly caused merchandise to be 
exported, to a NAFTA country as defined in 19 U.S.C. 3301(4) (see also 
part 181 of this chapter) or to Canada during such time as the United 
States-Canada Free Trade Agreement is in force with respect to, and the 
United States applies that Agreement to, Canada;
    (3) Transported or stored merchandise that was or is carried or held 
under customs bond, or knowingly caused such transportation or storage;
    (4) Filed a declaration, entry, or drawback claim with Customs;
    (5) Is an officer, employee, or agent of any person described in 
paragraph (a)(1) through (a)(4) of this section;
    (6) Has possession, custody or care of records relating to an 
importation or other activity described in paragraph (a)(1) through 
(a)(4) of this section; or
    (7) Customs may deem proper.
    (b) Contents of summons--(1) Appearance of person. Any summons 
issued under this section to compel the appearance of a person shall 
state:
    (i) The name, title, and telephone number of the Customs officer 
before whom the appearance shall take place;
    (ii) The address within the customs territory of the United States 
where the person shall appear, not to exceed 100 miles from the place 
where the summons was served;
    (iii) The time of appearance; and
    (iv) The name, address, and telephone number of the Customs officer 
issuing the summons.
    (2) Production of records. If a summons issued under this section 
requires the production of records, the summons shall set forth the 
information specified in paragraph (b)(1) of this section and shall also 
describe the records in question with reasonable specificity.
    (c) Service of summons--(1) Who may serve. Any Customs officer is 
authorized to serve a summons issued under this section if designated in 
the summons to serve it.
    (2) Method of service--(i) Natural person. Service upon a natural 
person shall be made by personal delivery.
    (ii) Corporation, partnership, association. Service shall be made 
upon a domestic or foreign corporation, or upon a partnership or other 
unincorporated association which is subject to suit under a common name, 
by delivery to an officer, managing or general agent, or any other agent 
authorized by appointment or law to receive service of process.
    (3) Certificate of service. On the hearing of an application for the 
enforcement of a summons, the certificate of service signed by the 
person serving the summons is prima facie evidence of the facts it 
states.
    (d) Transcript of testimony under oath. Testimony of any person 
taken pursuant to a summons may be taken under oath and when so taken 
shall be transcribed or otherwise recorded. When testimony is 
transcribed or otherwise recorded, a copy shall be made available on 
request to the witness unless for good cause shown the issuing officer 
determines under 5 U.S.C. 555 that a copy should not be provided. In 
that event, the witness shall be limited to inspection of the official 
transcript of the testimony. The testimony or transcript may be in the 
form of a written statement under oath provided by the person examined 
at the request of the Customs officer.



Sec. 163.8  Third-party recordkeeper summons.

    (a) Notice required. Except as otherwise provided in paragraph (f) 
of this section, if a summons issued under Sec. 163.7 to a third-party 
recordkeeper requires the production of, or the giving of testimony 
relating to, records pertaining to transactions of any person, other 
than the person summoned, who is identified in the description of the 
records contained in the summons, then notice of the summons shall be 
provided to the person so identified in the summons.
    (b) Time of notice. The notice of service of summons required by 
paragraph (a) of this section should be provided by the issuing officer 
immediately after service of summons is obtained under Sec. 163.7(c), 
but in no event shall notice be given less than 10 business days before 
the date set in the summons for the production of records or the giving 
of testimony.

[[Page 281]]

    (c) Contents of notice. The issuing officer shall ensure that any 
notice issued under this section includes a copy of the summons and 
provides the following information:
    (1) That compliance with the summons may be stayed if written 
direction not to comply with the summons is given by the person 
receiving notice to the person summoned;
    (2) That a copy of any such direction to not comply and a copy of 
the summons shall be sent by registered or certified mail to the person 
summoned and to the Customs officer who issued the summons; and
    (3) That the actions under paragraphs (c)(1) and (c)(2) of this 
section shall be accomplished not later than the day before the day 
fixed in the summons as the day upon which the records are to be 
examined or the testimony is to be given.
    (d) Service of notice. The Customs officer who issues the summons 
shall serve the notice required by paragraph (a) of this section in the 
same manner as is prescribed in Sec. 163.7(c)(2) for the service of a 
summons, or by certified or registered mail to the last known address of 
the person entitled to notice.
    (e) Examination of records precluded. If notice is required by this 
section, no record may be examined before the date fixed in the summons 
as the date to produce the records. If the person entitled to notice 
under paragraph (a) of this section issues a stay of compliance with the 
summons in accordance with paragraph (c) of this section, no examination 
of records shall take place except with the consent of the person 
staying compliance or pursuant to an order issued by a U.S. district 
court.
    (f) Exceptions to notice and stay of summons provisions--(1) 
Personal liability for duties, fees, or taxes. The notice provisions of 
paragraph (a) of this section shall not apply to any summons served on 
the person, or on any officer or employee of the person, with respect to 
whose liability for duties, fees, or taxes the summons is issued.
    (2) Verification of existence of records. The notice provisions of 
paragraph (a) of this section shall not apply to any summons issued to 
determine whether or not records of transactions of an identified person 
have been made or kept.
    (3) Judicial determination. The notice provisions of paragraph (a) 
of this section and the stay of compliance provisions of paragraph (c) 
of this section shall not apply with respect to a summons described in 
paragraph (a) of this section if a U.S. district court determines, upon 
petition by the issuing Customs officer, that reasonable cause exists to 
believe that the giving of notice may lead to an attempt:
    (i) To conceal, destroy, or alter relevant records;
    (ii) To prevent the communication of information from other persons 
through intimidation, bribery, or collusion; or
    (iii) To flee to avoid prosecution, testifying, or production of 
records.



Sec. 163.9  Enforcement of summons.

    Whenever a person does not comply with a Customs summons, the 
issuing officer may request the appropriate U.S. attorney to seek an 
order requiring compliance from the U.S. district court for the district 
in which the person is found or resides or is doing business. A person 
who is entitled to notice under Sec. 163.8(a) shall have a right to 
intervene in any such enforcement proceeding.



Sec. 163.10  Failure to comply with court order; penalties.

    (a) Monetary penalties. The U.S. district court for any judicial 
district in which a person served with a Customs summons is found or 
resides or is doing business may order such person to comply with the 
summons. Upon the failure of a person to obey a court order to comply 
with a Customs summons, the court may find such person in contempt and 
may assess a monetary penalty.
    (b) Importations prohibited. If a person fails to comply with a 
court order to comply with a Customs summons and is adjudged guilty of 
contempt, the Commissioner of Customs, with the approval of the 
Secretary of the Treasury, for so long as that person remains in 
contempt:

[[Page 282]]

    (1) May prohibit importation of merchandise by that person, directly 
or indirectly, or for that person's account; and
    (2) May withhold delivery of merchandise imported by that person, 
directly or indirectly, or for that person's account.
    (c) Sale of merchandise. If any person remains in contempt for more 
than 1 year after the Commissioner issues instructions to withhold 
delivery under paragraph (b)(2) of this section, the merchandise shall 
be considered abandoned and shall be sold at public auction or otherwise 
disposed of in accordance with subpart E of part 162 of this chapter.



Sec. 163.11  Compliance assessment and other audit procedures.

    (a) Conduct of a Customs compliance assessment or other audit. In 
conducting a compliance assessment or other audit, the Customs auditors, 
except as otherwise provided in paragraph (c) of this section, shall:
    (1) Provide notice, telephonically and in writing, to the person who 
is to be the subject of the compliance assessment or other audit, in 
advance of the compliance assessment or other audit and with a 
reasonable estimate of the time to be required for the compliance 
assessment or other audit;
    (2) Inform the person who is to be the subject of the compliance 
assessment or other audit, in writing and before commencing the 
compliance assessment or other audit, of his right to an entry 
conference at which time the objectives and records requirements of the 
compliance assessment or other audit will be explained and the estimated 
termination date will be set;
    (3) Provide a further estimate of any additional time for the 
compliance assessment or other audit if, in the course of the compliance 
assessment or other audit, it becomes apparent that additional time will 
be required;
    (4) Schedule a closing conference upon completion of the compliance 
assessment or other audit on-site work to explain the preliminary 
results of the compliance assessment or other audit;
    (5) Complete a formal written compliance assessment or other audit 
report within 90 calendar days following the closing conference referred 
to in paragraph (a)(4) of this section, unless the Executive Director, 
Regulatory Audit, Office of International Trade, at CBP Headquarters 
provides written notice to the person who was the subject of the 
compliance assessment or other audit of the reason for any delay and the 
anticipated completion date; and
    (6) After application of any exemption contained in 5 U.S.C. 552, 
send a copy of the formal written compliance assessment or other audit 
report to the person who was the subject of the compliance assessment or 
other audit within 30 calendar days following completion of the report.
    (b) Petition procedures for failure to conduct closing conference. 
Except as otherwise provided in paragraph (c) of this section, if the 
estimated or actual termination date for a compliance assessment or 
other audit passes without a CBP auditor providing a closing conference 
to explain the results of the compliance assessment or other audit, the 
person who was the subject of the compliance assessment or other audit 
may petition in writing for such a conference to the Executive Director, 
Regulatory Audit, Office of International Trade, U.S. Customs and Border 
Protection, Washington, DC 20229. Upon receipt of such a request, the 
Director shall provide for such a conference to be held within 15 
calendar days after the date of receipt.
    (c) Exception to procedures. Paragraphs (a)(5), (a)(6) and (b) of 
this section shall not apply after Customs commences a formal 
investigation with respect to the issue involved.



Sec. 163.12  Recordkeeping Compliance Program.

    (a) General. The Recordkeeping Compliance Program is a voluntary 
Customs program under which certified recordkeepers may be eligible for 
alternatives to penalties (see paragraph (d) of this section) that might 
be assessed under Sec. 163.6 for failure to produce a demanded entry 
record. However, even where a certified recordkeeper is eligible for an 
alternative to a penalty, participation in the Recordkeeping Compliance 
Program has no limiting effect on the authority of Customs to use a 
summons, court order or other legal

[[Page 283]]

process to compel the production of records by that certified 
recordkeeper.
    (b) Certification procedures--(1) Who may apply. Any person 
described in Sec. 163.2(a) who is required to maintain and produce 
entry records under this part may apply to participate in the 
Recordkeeping Compliance Program.
    (2) Where to apply. An application for certification to participate 
in the Recordkeeping Compliance Program shall be submitted to the 
Regulatory Audit, U.S. Customs and Border Protection, 2001 Cross Beam 
Dr., Charlotte, North Carolina 28217. The application shall be submitted 
in accordance with the guidelines contained in the Customs Recordkeeping 
Compliance Handbook which may be obtained by downloading it from the 
Customs Electronic Bulletin Board (703-921-6155) or by writing to the 
Recordkeeping Compliance Program, Executive Director, Regulatory Audit, 
Office of International Trade, U.S. Customs and Border Protection, 1300 
Pennsylvania Ave., NW., Washington, DC 20229.
    (3) Certification requirements. A recordkeeper may be certified as a 
participant in the Recordkeeping Compliance Program after meeting the 
general recordkeeping requirements established under this section or 
after negotiating an alternative program suited to the needs of the 
recordkeeper and Customs. To be certified, a recordkeeper must be in 
compliance with Customs laws and regulations. Customs will take into 
account the size and nature of the importing business and the volume of 
imports and Customs workload constraints prior to granting 
certification. In order to be certified, a recordkeeper must meet the 
applicable requirements set forth in the Customs Recordkeeping 
Compliance Handbook and must be able to demonstrate that it:
    (i) Understands the legal requirements for recordkeeping, including 
the nature of the records required to be maintained and produced and the 
time periods relating thereto;
    (ii) Has in place procedures to explain the recordkeeping 
requirements to those employees who are involved in the preparation, 
maintenance and production of required records;
    (iii) Has in place procedures regarding the preparation and 
maintenance of required records, and the production of such records to 
Customs;
    (iv) Has designated a dependable individual or individuals to be 
responsible for recordkeeping compliance under the program and whose 
duties include maintaining familiarity with the recordkeeping 
requirements of Customs;
    (v) Has a record maintenance procedure acceptable to Customs for 
original records or has an alternative records maintenance procedure 
adopted in accordance with Sec. 163.5(b); and
    (vi) Has procedures for notifying Customs of any occurrence of a 
variance from, or violation of, the requirements of the Recordkeeping 
Compliance Program or negotiated alternative program, as well as 
procedures for taking corrective action when notified by Customs of 
violations or problems regarding such program. For purposes of this 
paragraph, the term ``variance'' means a deviation from the 
Recordkeeping Compliance Program that does not involve a failure to 
maintain or produce records or a failure to meet the requirements set 
forth in this section. For purposes of this paragraph, the term 
``violation'' means a deviation from the Recordkeeping Compliance 
Program that involves a failure to maintain or produce records or a 
failure to meet the requirements set forth in this section.
    (c) Application review and approval and certification process--(1) 
Review of applications. The Charlotte regulatory audit field office will 
process the application and will coordinate and consult, as may be 
necessary, with the appropriate CBP Headquarters and field officials. 
The Charlotte regulatory audit field office will review and verify the 
information contained in the application and may initiate an on-site 
verification prior to approval and certification. If an on-site visit is 
warranted, the Charlotte regulatory audit field office shall inform the 
applicant. If additional information is necessary to process the 
application, the applicant shall be notified. CBP requests for 
information not submitted with the application or for additional 
explanation of details will cause a delay in the application approval 
and certification of applicants and may result in the suspension of the 
application approval and

[[Page 284]]

certification process until the requested information is received by 
CBP.
    (2) Approval and certification. If, upon review, Customs determines 
that the application should be approved and that certification should be 
granted, the Director of the Miami regulatory audit field office shall 
issue the certification with all the applicable conditions stated 
therein.
    (d) Alternatives to penalties--(1) General. If a certified 
participant in the Recordkeeping Compliance Program does not produce a 
demanded entry record for a specific release or provide the information 
contained in the demanded entry record by acceptable alternate means, 
Customs shall, in lieu of a monetary penalty provided for in Sec. 
163.6(b), issue a written notice of violation to the person as described 
in paragraph (d)(2) of this section, provided that the certified 
participant is generally in compliance with the procedures and 
requirements of the program and provided that the violation was not a 
willful violation and was not a repeat violation. A willful failure to 
produce demanded entry records or repeated failures to produce demanded 
entry records may result in the issuance of penalties under Sec. 
163.6(b) and removal of certification under the program (see Sec. 
163.13) until corrective action satisfactory to Customs is taken.
    (2) Contents of notice. A notice of violation issued to a 
participant in the Recordkeeping Compliance Program for failure to 
produce a demanded entry record or information contained therein shall:
    (i) State that the recordkeeper has violated the recordkeeping 
requirements;
    (ii) Identify the record or information which was demanded and not 
produced;
    (iii) Warn the recordkeeper that future failures to produce demanded 
entry records or information contained therein may result in the 
imposition of monetary penalties and could result in the removal of the 
recordkeeper from the Recordkeeping Compliance Program.
    (3) Response to notice. Within a reasonable time after receiving 
written notice under paragraph (d)(1) of this section, the recordkeeper 
shall notify Customs of the steps it has taken to prevent a recurrence 
of the violation.



Sec. 163.13  Denial and removal of program certification; appeal procedures.

    (a) General. Customs may take, and applicants and participants may 
appeal and obtain administrative review of, the following decisions 
regarding the Recordkeeping Compliance Program provided for in Sec. 
163.12:
    (1) Denial of certification for program participation in accordance 
with paragraph (b) of this section; and
    (2) Removal of certification for program participation in accordance 
with paragraph (c) of this section.
    (b) Denial of certification for program participation--(1) Grounds 
for denial. Customs may deny an application for certification for 
participation in the Recordkeeping Compliance Program for any of the 
following reasons:
    (i) The applicant fails to meet the requirements set forth in Sec. 
163.12(b)(3);
    (ii) A circumstance involving the applicant arises that would 
justify initiation of a certification removal action under paragraph (c) 
of this section; or
    (iii) In the judgment of Customs, the applicant appears not to be in 
compliance with Customs laws and regulations.
    (2) Denial procedure. If the Director of the Miami regulatory audit 
field office determines that an application submitted under Sec. 163.12 
should not be approved and that certification for participation in the 
Recordkeeping Compliance Program should not be granted, the Director 
shall issue a written notice of denial to the applicant. The notice of 
denial shall set forth the reasons for the denial and shall advise the 
applicant of its right to file an appeal of the denial in accordance 
with paragraph (d) of this section.
    (c) Certification removal--(1) Grounds for removal. The 
certification for participation in the Recordkeeping Compliance Program 
by a certified recordkeeper may be removed when any of the following 
conditions are discovered:

[[Page 285]]

    (i) The certification privilege was obtained through fraud or 
mistake of fact;
    (ii) The program participant no longer has a valid bond;
    (iii) The program participant fails on a recurring basis to provide 
entry records when demanded by Customs;
    (iv) The program participant willfully refuses to produce a demanded 
or requested record;
    (v) The program participant is no longer in compliance with the 
Customs laws and regulations, including the requirements set forth in 
Sec. 163.12(b)(3); or
    (vi) The program participant is convicted of any felony or has 
committed acts which would constitute a misdemeanor or felony involving 
theft, smuggling, or any theft-connected crime.
    (2) Removal procedure. If Customs determines that the certification 
of a program participant should be removed, the Director of the Miami 
regulatory audit field office shall serve the program participant with 
written notice of the removal. Such notice shall inform the program 
participant of the grounds for the removal and shall advise the program 
participant of its right to file an appeal of the removal in accordance 
with paragraph (d) of this section.
    (3) Effect of removal. The removal of certification shall be 
effective immediately in cases of willfulness on the part of the program 
participant or when required by public health, interest, or safety. In 
all other cases, the removal of certification shall be effective when 
the program participant has received notice under paragraph (c)(2) of 
this section and either no appeal has been filed within the time limit 
prescribed in paragraph (d)(2) of this section or all appeal procedures 
thereunder have been concluded by a decision that upholds the removal 
action. Removal of certification may subject the affected person to 
penalties.
    (d) Appeal of certification denial or removal--(1) Appeal of 
certification denial. A person may challenge a denial of an application 
for certification for participation in the Recordkeeping Compliance 
Program by filing a written appeal with the Executive Director, 
Regulatory Audit, Office of International Trade, U.S. Customs and Border 
Protection, Washington, DC 20229. The appeal must be received by the 
Executive Director, Regulatory Audit, within 30 calendar days after 
issuance of the notice of denial. The Executive Director, Regulatory 
Audit, will review the appeal and will respond with a written decision 
within 30 calendar days after receipt of the appeal unless circumstances 
require a delay in issuance of the decision. If the decision cannot be 
issued within the 30-day period, the Executive Director, Regulatory 
Audit, will advise the appellant of the reasons for the delay and of any 
further actions which will be carried out to complete the appeal review 
and of the anticipated date for issuance of the appeal decision.
    (2) Appeal of certification removal. A certified recordkeeper who 
has received a CBP notice of removal of certification for participation 
in the Recordkeeping Compliance Program may challenge the removal by 
filing a written appeal with the Executive Director, Regulatory Audit, 
U.S. Customs and Border Protection, Office of International Trade, 
Washington, DC 20229. The appeal must be received by the Executive 
Director, Regulatory Audit, within 30 calendar days after issuance of 
the notice of removal. The Executive Director, Regulatory Audit, shall 
consider the allegations upon which the removal was based and the 
responses made thereto by the appellant and shall render a written 
decision on the appeal within 30 calendar days after receipt of the 
appeal.



            Sec. Appendix to Part 163--Interim (a)(1)(A) List

          List of Records Required for the Entry of Merchandise

                           General Information

    (1) Section 508 of the Tariff Act of 1930, as amended (19 U.S.C. 
1508), sets forth the general recordkeeping requirements for Customs-
related activities. Section 509 of the Tariff Act of 1930, as amended 
(19 U.S.C. 1509) sets forth the procedures for the production and 
examination of those records (which includes, but is not limited to, any 
statement, declaration, document, or electronically generated or machine 
readable data).
    (2) Section 509(a)(1)(A) of the Tariff Act of 1930, as amended by 
title VI of Public Law

[[Page 286]]

103-182, commonly referred to as the Customs Modernization Act (19 
U.S.C. 1509(a)(1)(A)), requires the production, within a reasonable time 
after demand by the Customs Service is made (taking into consideration 
the number, type and age of the item demanded) if ``such record is 
required by law or regulation for the entry of the merchandise (whether 
or not the Customs Service required its presentation at the time of 
entry).'' Section 509(e) of the Tariff Act of 1930, as amended by Public 
Law 103-182 (19 U.S.C. 1509(e)) requires the Customs Service to identify 
and publish a list of the records and entry information that is required 
to be maintained and produced under subsection (a)(1)(A) of section 509 
(19 U.S.C. 1509(a)(1)(A)). This list is commonly referred to as ``the 
(a)(1)(A) list.''
    (3) The Customs Service has tried to identify all the presently 
required entry information or records on the following list. However, as 
automated programs and new procedures are introduced, these may change. 
In addition, errors and omissions to the list may be discovered upon 
further review by Customs officials or the trade. Pursuant to section 
509(g), the failure to produce listed records or information upon 
reasonable demand may result in penalty action or liquidation or 
reliquidation at a higher rate than entered. A recordkeeping penalty may 
not be assessed if the listed information or records are transmitted to 
and retained by Customs.
    (4) Other recordkeeping requirements: The importing community and 
Customs officials are reminded that the (a)(1)(A) list only pertains to 
records or information required for the entry of merchandise. An owner, 
importer, consignee, importer of record, entry filer, or other party who 
imports merchandise, files a drawback claim or transports or stores 
bonded merchandise, any agent of the foregoing, or any person whose 
activities require them to file a declaration or entry, is also required 
to make, keep and render for examination and inspection records 
(including, but not limited to, statements, declarations, documents and 
electronically generated or machine readable data) which pertain to any 
such activity or the information contained in the records required by 
the Tariff Act in connection with any such activity, and are normally 
kept in the ordinary course of business. While these records are not 
subject to administrative penalties, they are subject to examination 
and/or summons by Customs officers. Failure to comply could result in 
the imposition of significant judicially imposed penalties and denial of 
import privileges.
    (5) The following list does not replace entry requirements, but is 
merely provided for information and reference. In the case of the list 
conflicting with regulatory or statutory requirements, the latter will 
govern.

  List of Records and Information Required for the Entry of Merchandise

    The following records (which include, but are not limited to, any 
statement, declaration, document, or electronically generated or machine 
readable data) are required by law or regulation for the entry of 
merchandise and are required to be maintained and produced to Customs 
upon reasonable demand (whether or not Customs required their 
presentation at the time of entry). Information may be submitted to 
Customs at the time of entry in a Customs authorized electronic or paper 
format. Not every entry of merchandise requires all of the following 
information. Only those records or information applicable to the entry 
requirements for the merchandise in question will be required/mandatory. 
The list may be amended as Customs reviews its requirements and 
continues to implement the Customs Modernization Act. When a record or 
information is filed with and retained by Customs, the record is not 
subject to recordkeeping penalties, although the underlying backup or 
supporting information from which it is obtained may also be subject to 
the general record retention regulations and examination or summons 
pursuant to 19 U.S.C. 1508 and 1509. (All references, unless otherwise 
indicated, are to the current edition of title 19, Code of Federal 
Regulations, as amended by subsequent Federal Register documents.)

I. General list of records required for most entries. Information shown 
 with an asterisk (*) is usually on the appropriate form and filed with 
                        and retained by Customs:

Sec. Sec. 141.11 through 141.15 Evidence of right to make entry (airway 
bill/bill of lading or *carrier certificate, etc.) when goods are 
imported on a common carrier
Sec. 141.19 * Declaration of entry (usually contained on the entry 
summary or warehouse entry)
Sec. 141.32 Power of attorney (when required by regulations)
Sec. 141.54 Consolidated shipments authority to make entry (if this 
procedure is utilized)
Sec. 142.3 Packing list (where appropriate)
Sec. 142.4 Bond information (except if 10.101 or 142.4(c) applies)
Parts 4, 18, 122, 123 * Vessel, Vehicle or Air Manifest (filed by the 
carrier)

II. The following records or information are required by Sec. 141.61 on 
Customs Form (CF) 3461 or CF 7533 or the regulations cited. Information 
 shown with an asterisk (*) is contained on the appropriate form and/or 
              otherwise filed with and retained by Customs:

Sec. Sec. 142.3, 142.3a * Entry Number
    * Entry Type Code
    * Elected Entry Date

[[Page 287]]

    * Port Code

Sec. 142.4 * Bond information
Sec. Sec. 141.61, 142.3a * Broker/Importer Filer Number
Sec. Sec. 141.61, 142.3 * Ultimate Consignee Name and Number/street 
address of premises to be delivered
Sec. 141.61 * Importer of Record Number
    * Country of Origin

Sec. 141.11 * IT/BL/AWB Number and Code
    * Arrival Date

Sec. 141.61 * Carrier Code
    * Voyage/Flight/Trip
    * Vessel Code/Name
    * Manufacturer ID Number (for AD/CVD must be actual mfr.)
    * Location of Goods-Code(s)/Name(s)
    * U.S. Port of Unlading
    * General Order Number (only when required by the regulations)

Sec. 142.6 * Description of Merchandise
Sec. 142.6 * HTSUSA Number
Sec. 142.6 * Manifest Quantity
    * Total Value
    * Signature of Applicant

III. In addition to the information listed above, the following records 
or items of information are required by law and regulation for the entry 
of merchandise and are presently required to be produced by the importer 
          of record at the time the Customs Form 7501 is filed:

Sec. 141.61 * Entry Summary Date
Sec. 141.61 * Entry Date
Sec. 142.3 * Bond Number, Bond Type Code and Surety code
Sec. 142.3 * Ultimate Consignee Address
Sec. 141.61 * Importer of Record Name and Address
Sec. 141.61 * Exporting Country and Date Exported
    * I.T. (In-bond) Entry Date (for IT Entries only)
    * Mode of Transportation (MOT Code)
Sec. 141.61 * Importing Carrier Name
Sec. 141.82 Conveyance Name/Number
    * Foreign Port of Lading
    * Import Date and Line Numbers
    * Reference Number
    * HTSUS Number

Sec. 141.61 * Identification number for merchandise subject to Anti-
dumping or Countervailing duty order (ADA/CVD Case Number)
Sec. 141.61 * Gross Weight
    * Manifest Quantity

Sec. 141.61 * Net Quantity in HTSUSA Units
Sec. 141.61 * Entered Value, Charges, and Relationship
Sec. 141.61 * Applicable HTSUSA Rate, ADA/CVD Rate, I.R.C. Rate, and/or 
Visa Number, Duty, I.R. Tax, and Fees (e.g. HMF, MPF, Cotton)
Sec. 141.61 Non-Dutiable Charges
Sec. 141.61 * Signature of Declarant, Title, and Date
    * Textile Category Number

Sec. 141.83, 141.86 Invoice information which includes, e.g., date, 
number, merchandise (commercial product) description, quantities, 
values, unit price, trade terms, part, model, style, marks and numbers, 
name and address of foreign party responsible for invoicing, kind of 
currency
    Terms of Sale
    Shipping Quantities
    Shipping Units of Measurements
    Manifest Description of Goods
    Foreign Trade Zone Designation and Status
    Designation (if applicable)
    Indication of Eligibility for Special Access Program (9802/GSP/CBI)

Sec. 141.89 CF 5523
Part 141 Corrected Commercial Invoice
141.86 (e) Packing List
177.8 * Binding Ruling Identification Number (or a copy of the ruling)
Sec. 10.102 Duty Free Entry Certificate (9808.00.30009 HTS)
Sec. 10.108 Lease Statement

   IV. Documents/records or information required for entry of special 
 categories of merchandise (the listed documents or information is only 
    required for merchandise entered [or required to be entered] in 
 accordance with the provisions of the sections of 19 CFR [the Customs 
Regulations] listed). These are in addition to any documents/records or 
  information required by other agencies in their regulations for the 
                          entry of merchandise:

Sec. 4.14 CF 226 Information for vessel repairs, parts and equipment
Sec. 7.3(f) CF 3229 Origin certificate for insular possessions 
Shipper's and importer's declaration for insular possessions
Part 10 Documents required for entry of articles exported and returned:
Sec. Sec. 10.1 through 10.6 Foreign shipper's declaration or master's 
certificate, declaration for free entry by owner, importer or consignee
Sec. 10.7 Certificate from foreign shipper for reusable containers
Sec. 10.8 Declaration of person performing alterations or repairs
    Declaration for non-conforming merchandise

Sec. 10.9 Declaration of processing
Sec. 10.24 Declaration by assembler Endorsement by importer
Sec. Sec. 10.31, 10.35 Documents required for Temporary Importations 
Under Bond:
    Information required, Bond or Carnet

Sec. 10.36 Lists for samples, professional equipment, theatrical 
effects
    Documents required for Instruments of International Traffic:


[[Page 288]]


Sec. 10.41 Application, Bond or TIR carnet
    Note: additional 19 U.S.C. 1508 records: see Sec. 10.41b(e)

Sec. 10.43 Documents required for exempt organizations
Sec. 10.46 Request from head of agency for 9808.00.10 or 9808.00.20 
HTSUS treatment
    Documents required for works of art

Sec. 10.48 Declaration of artist, seller or shipper, curator, etc.
Sec. Sec. 10.49, 10.52 Declaration by institution
Sec. 10.53 Declaration by importer
    USFWS Form 3-177, if appropriate

Sec. Sec. 10.59, 10.63 Documents/CF 5125 for withdrawal of ship 
supplies
Sec. Sec. 10.66, 10.67 Declarations for articles exported and returned
Sec. Sec. 10.68, 10.69 Documents for commercial samples, tools, 
theatrical effects
Sec. Sec. 10.70, 10.71 Purebred breeding certificate
Sec. 10.84 Automotive Products certificate
Sec. 10.90 Master records and metal matrices: detailed statement of 
cost of production
Sec. 10.98 Declarations for copper fluxing material
Sec. 10.99 Declaration of non-beverage ethyl alcohol, ATF permit
Sec. Sec. 10.101 through 10.102 Stipulation for government shipments 
and/or certification for government duty-free entries, etc.
Sec. 10.107 Report for rescue and relief equipment
15 CFR part 301 Requirements for entry of scientific and educational 
apparatus
Sec. 10.121 Certificate from USIA for visual/auditory materials
Sec. 10.134 Declaration of actual use (When classification involves 
actual use)
Sec. 10.138 End Use Certificate
Sec. Sec. 10.171 through 10.178 Documents, etc. required for entries of 
GSP merchandise, GSP Declaration (plus supporting documentation)
Sec. 10.174 Evidence of direct shipment
Sec. 10.179 Certificate of importer of crude petroleum
Sec. 10.180 Certificate of fresh, chilled or frozen beef
Sec. 10.183 Civil aircraft parts/simulator documentation and 
certifications
Sec. Sec. 10.191 through 10.198 Documents, etc. required for entries of 
CBI merchandise, CBI declaration of origin (plus supporting information)
Sec. 10.194 Evidence of direct shipment
Sec. 10.199 Documents, etc. required for duty-free entry of spirituous 
beverages produced in Canada from CBI rum, declaration of Canadian 
processor (plus supporting information)
Sec. 10.216 AGOA Textile Certificate of Origin and supporting records
Sec. 10.226 CBTPA Textile Certificate of Origin and supporting records
Sec. 10.228 CBTPA Declaration of Compliance for brassieres
Sec. 10.236 CBTPA Non-textile Certificate of Origin and supporting 
records
Sec. 10.246 ATPDEA Textile Certificate of Origin
Sec. 10.248 ATPDEA Declaration of Compliance for Brassieres
Sec. 10.256 ATPDEA Non-textile Certificate of Origin
[dagger][Sec. 10.306 Evidence of direct shipment for CFTA]
[dagger][Sec. 10.307 Documents, etc. required for entries under CFTA 
Certificate of origin of CF 353]
    [[dagger]CFTA provisions are suspended while NAFTA remains in 
effect. See part 181]

Sec. 10.410 US-CFTA Certification of origin and supporting records.
Sec. 10.512 SFTA records that the importer may have in support of a 
SFTA claim for preferential tariff treatment, including an importer's 
supporting statement if previously required by the port director.
Sec. 10.522 SFTA TPL Certificate of eligibility.
Sec. 10.704 US-JFTA records that the importer may have in support of a 
US-JFTA claim for preferential tariff treatment, including an importer's 
declaration.
Sec. 10.765 MFTA records that the importer may have in support of a 
MFTA claim for preferential tariff treatment, including an importer's 
declaration.
Sec. 10.805 BFTA records that the importer may have in support of a 
BFTA claim for preferential tariff treatment, including an importer's 
declaration.
Sec. 10.820 BFTA TPL certificate of eligibility.
Sec. 10.821 BFTA TPL declaration.
Sec. 10.848 HOPE Act Declaration of Compliance.
Sec. 12.6 European Community cheese affidavit
Sec. 12.7 HHS permit for milk or cream importation
Sec. 12.11 Notice of arrival for plant and plant products
Sec. 12.17 APHIS Permit animal viruses, serums and toxins
Sec. 12.21 HHS license for viruses, toxins, antitoxins, etc. for 
treatment of man
Sec. 12.23 Notice of claimed investigational exemption for a new drug
Sec. Sec. 12.26 through 12.31 Necessary permits from APHIS, FWS & 
foreign government certificates when required by the applicable 
regulation
Sec. 12.33 Chop list, proforma invoice and release permit from HHS
Sec. 12.34 Certificate of match inspection and importer's declaration
Sec. 12.43 Certificate of origin/declarations for goods made by forced 
labor, etc.
Sec. 12.61 Shipper's declaration, official certificate for seal and 
otter skins
Sec. Sec. 12.73, 12.80 Motor vehicle declarations
Sec. 12.85 Boat declarations (CG-5096) and USCG exemption
Sec. 12.91 FDA form 2877 and required declarations for electronics 
products

[[Page 289]]

Sec. 12.99 Declarations for switchblade knives
Sec. Sec. 12.104 through 12.104i Cultural property declarations, 
statements and certificates of origin
Sec. Sec. 12.105 through 12.109 Pre-Columbian monumental and 
architectural sculpture and murals
    Certificate of legal exportation
    Evidence of exemption

Sec. 12.110 Pesticides, etc. notice of arrival
Sec. Sec. 12.118 through 12.127 Toxic substances: TSCA statements
Sec. 12.140(c) Certificate of Origin issued by Canada's Maritime Lumber 
Bureau
Sec. 12.155 Export license and import license for Mexican Cement.
Sec. 54.5 Declaration by importer of use of certain metal articles
Sec. 54.6(a) Re-Melting Certificate
Sec. 102.25 NAFTA textile requirements
Part 113, Appendix B--Bond to Indemnify Complainant Under Section 337, 
Tariff Act of 1930, as Amended
Part 114 Carnets (serves as entry and bond document where applicable)
Part 115 Container certificate of approval
Part 128 Express consignments
Sec. 128.21 * Manifests with required information (filed by carrier)
Sec. Sec. 132.15, 132.17 Export certificates, respectively, for beef or 
sugar-containing products subject to tariff-rate quota.
Sec. 132.18 License, or written authorization, as applicable, for 
worsted wool fabric subject to tariff-rate quota
Sec. 132.23 Acknowledgment of delivery for mailed items subject to 
quota
Sec. Sec. 133.21(e), 133.22(c)(3) and 133.23(e) Consent from trademark 
or trade name holder to import otherwise restricted goods
Sec. Sec. 134.25, 134.36 Certificate of marking; notice to repacker
Sec. 141.88 Computed value information
Sec. 141.89 Additional invoice information required for certain classes 
of merchandise including, but not limited to:
    Textile Entries: Quota charge Statement, if applicable including 
Style Number, Article Number and Product
    Steel Entries: Ordering specifications, including but not limited 
to, all applicable industry standards and mill certificates, including 
but not limited to, chemical composition.

Sec. 143.13 Documents required for appraisement entries Bills, 
statements of costs of production Value declaration
Sec. 143.23 Informal entry: commercial invoice plus declaration
Sec. 144.12 Warehouse entry information
Sec. 145.11 Customs Declaration for Mail, Invoice
Sec. 145.12 Mail entry information (CF 3419 is completed by Customs but 
formal entry may be required.)
Part 148 Supporting documents for personal importations
Part 151, subpart B Scale Weight
Part 151, subpart B Sugar imports sampling/lab information (Chemical 
Analysis)
Part 151, subpart C Petroleum imports sampling/lab information Out turn 
Report 24. to 25--Reserved
Part 151, subpart E Wool and Hair invoice information, additional 
documents
Part 151, subpart F Cotton invoice information, additional documents
Sec. 181.22 NAFTA Certificate of origin and supporting records
19 U.S.C. 1356k Coffee Form O (currently suspended)

                Other Federal and State Agency Documents

                   State and Local Government Records

 Other Federal Agency Records (See 19 CFR part 12, 19 U.S.C. 1484, 1499)

                    Licenses, Authorizations, Permits

                           Foreign Trade Zones

Sec. 146.32 Supporting documents to CF 214

[T.D. 98-56, 63 FR 32946, June 16, 1998]

    Editorial Note: For Federal Register citations affecting the 
appendix to part 163, see the List of CFR Sections Affected, which 
appears in the Finding Aids section of the printed volume and on GPO 
Access.



PART 171_FINES, PENALTIES, AND FORFEITURES--Table of Contents




Sec.
171.0 Scope.

                    Subpart A_Application for Relief

171.1 Petition for relief.
171.2 Filing a petition.
171.3 Oral presentations seeking relief.

                      Subpart B_Action on Petitions

171.11 Petitions acted on by Fines, Penalties, and Forfeitures Officer.
171.12 Petitions acted on at CBP Headquarters.
171.13 Limitations on consideration of petitions.
171.14 Headquarters advice.

                   Subpart C_Disposition of Petitions

171.21 Written decisions.
171.22 Decisions effective for limited time.
171.23 Decisions not protestable.
171.24 Remission of forfeitures and payment of fees, costs or interest.

                     Subpart D_Offers in Compromise

171.31 Form of offers.
171.32 Acceptance of offers in compromise.

[[Page 290]]

                Subpart E_Restoration of Proceeds of Sale

171.41 Application of provisions for petitions for relief.
171.42 Time limit for filing petition for restoration.
171.43 Evidence required.
171.44 Forfeited property authorized for official use.

               Subpart F_Expedited Petitioning Procedures

171.51 Application and definitions.
171.52 Petition for expedited procedures in an administrative forfeiture 
          proceeding.
171.53 Ruling on petition of expedited procedures.
171.54 Substitute res in an administrative forfeiture action.
171.55 Notice provisions.

               Subpart G_Supplemental Petitions for Relief

171.61 Time and place of filing.
171.62 Supplemental petition decision authority.
171.63 [Reserved]
171.64 Waiver of statute of limitations.

Appendix A to Part 171--Guidelines for Disposition of Violations of 19 
          U.S.C. 1497
Appendix B to Part 171--Customs Regulations, Guidelines for the 
          Imposition and Mitigation of Penalties for Violations of 19 
          U.S.C. 1592
Appendix C to Part 171--Customs Regulations Guidelines for the 
          Imposition and Mitigation of Penalties for Violations of 19 
          U.S.C. 1641
Appendix D to Part 171--Guidelines for the Imposition and Mitigation of 
          Penalties for Violations of 19 U.S.C. 1593A

    Authority: 18 U.S.C. 983; 19 U.S.C. 66, 1592, 1593a, 1618, 1624; 22 
U.S.C. 401; 31 U.S.C. 5321; 46 U.S.C. App. 320.
    Subpart F also issued under 19 U.S.C. 1595a, 1605, 1614.

    Source: T.D. 70-249, 35 FR 18265, Dec. 1, 1970, unless otherwise 
noted.



Sec. 171.0  Scope.

    This part contains provisions relating to petitions for relief from 
fines, forfeitures, and certain penalties incurred, and petitions for 
the restoration of proceeds from sale of seized and forfeited property. 
This part does not relate to petitions on claims for liquidated damages 
or penalties which are guaranteed by the conditions of the International 
Carrier Bond (see Sec. 113.64 of this Chapter).

[T.D. 00-57, 65 FR 53576, Sept. 5, 2000]



                    Subpart A_Application for Relief

    Source: T.D. 00-57, 65 FR 53576, Sept. 5, 2000, unless otherwise 
noted.



Sec. 171.1  Petition for relief.

    (a) To whom addressed. Petitions for the remission or mitigation of 
a fine, penalty, or forfeiture incurred under any law administered by 
Customs must be addressed to the Fines, Penalties, and Forfeitures 
Officer designated in the notice of claim.
    (b) Signature. For commercial violations, the petition for remission 
or mitigation must be signed by the petitioner, his attorney-at-law or a 
Customs broker. If the petitioner is a corporation, the petition may be 
signed by an officer or responsible supervisory official of the 
corporation, or a responsible employee representative of the 
corporation. Electronic signatures are acceptable. In non-commercial 
violations, a non-English speaking petitioner or petitioner who has a 
disability which may impede his ability to file a petition may enlist a 
family member or other representative to file a petition on his behalf. 
The deciding Customs officer may, in his or her discretion, require 
proof of representation before consideration of any petition.
    (c) Form. The petition for remission or mitigation need not be in 
any particular form. Customs can require that the petition and any 
documents submitted in support of the petition be in English or be 
accompanied by an English translation. The petition must set forth the 
following:
    (1) A description of the property involved (if a seizure);
    (2) The date and place of the violation or seizure;
    (3) The facts and circumstances relied upon by the petitioner to 
justify remission or mitigation; and
    (4) If a seizure case, proof of a petitionable interest in the 
seized property.
    (d) False statement in petition. A false statement contained in a 
petition may

[[Page 291]]

subject the petitioner to prosecution under the provisions of 18 U.S.C. 
1001.



Sec. 171.2  Filing a petition.

    (a) Where filed. A petition for relief must be filed with the Fines, 
Penalties, and Forfeitures office whose address is given in the notice.
    (b) When filed--(1) Seizures. Petitions for relief from seizures 
must be filed within 30 days from the date of mailing of the notice of 
seizure.
    (2) Penalties. Petitions for relief from penalties must be filed 
within 60 days of the mailing of the notice of penalty incurred.
    (c) Extensions. The Fines, Penalties, and Forfeitures Officer is 
empowered to grant extensions of time to file petitions when the 
circumstances so warrant.
    (d) Number of copies. The petition must be filed in duplicate unless 
filed electronically.
    (e) Exception for certain cases. If a penalty is assessed or a 
seizure is made and less than 180 days remain before the statute of 
limitations may be asserted as a defense, the Fines, Penalties, and 
Forfeitures Officer may specify in the seizure or penalty notice a 
reasonable period of time, but not less than 7 working days, for the 
filing of a petition for relief. If a petition is not filed within the 
time specified, the matter will be transmitted promptly to the 
appropriate Office of the Chief Counsel for referral to the Department 
of Justice.



Sec. 171.3  Oral presentations seeking relief.

    (a) For violation of section 592 or section 593A. If the penalty 
incurred is for a violation of section 592, Tariff Act of 1930, as 
amended (19 U.S.C. 1592), or section 593A, Tariff Act of 1930, as added 
(19 U.S.C. 1593a), the person named in the notice, in addition to filing 
a petition, may make an oral presentation seeking relief in accordance 
with this paragraph.
    (b) Other oral presentations. Oral presentations other than those 
provided in paragraph (a) of this section may be allowed in the 
discretion of any official of the Customs Service or Department of the 
Treasury authorized to act on a petition or supplemental petition.



                      Subpart B_Action on Petitions

    Source: T.D. 00-57, 65 FR 53576, Sept. 5, 2000, unless otherwise 
noted.



Sec. 171.11  Petitions acted on by Fines, Penalties, and Forfeitures Officer.

    (a) Remission or mitigation authority. Upon receipt of a petition 
for relief submitted pursuant to the provisions of section 618 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1618), or section 5321(c) of 
title 31, United States Code (31 U.S.C. 5321(c)), or section 320 of 
title 46, United States Code App. (46 U.S.C. App. 320), the Fines, 
Penalties, and Forfeitures Officer is empowered to remit or mitigate on 
such terms and conditions as, under law and in view of the 
circumstances, he or she deems appropriate in accordance with 
appropriate delegations of authority.
    (b) When violation did not occur. Notwithstanding any other 
delegation of authority, the Fines, Penalties, and Forfeitures Officer 
is always empowered to cancel any claim when he or she definitely 
determines that the act or omission forming the basis of any claim of 
penalty or forfeiture did not occur.
    (c) When violation is result of vessel in distress. The Fines, 
Penalties, and Forfeitures Officer may remit without payment any penalty 
which arises for violation of the coastwise laws if he or she is 
satisfied that the violation occurred as a direct result of an arrival 
of the transporting vessel in distress.



Sec. 171.12  Petitions acted on at CBP Headquarters.

    Upon receipt of a petition for relief filed pursuant to the 
provisions of section 618 of the Tariff Act of 1930, as amended (19 
U.S.C. 1618), section 5321(c) of title 31, United States Code (31 U.S.C. 
5321(c)), or section 320 of title 46, United States Code App. (46 U.S.C. 
App. 320), involving fines, penalties, and forfeitures which are outside 
of his or her delegated authority, the Fines, Penalties, and Forfeitures 
Officer will refer that petition to the Chief, Penalties Branch, 
Regulations and Rulings, Office of International Trade, CBP 
Headquarters, who is empowered to remit or mitigate on such terms and 
conditions

[[Page 292]]

as, under law and in view of the circumstances, he or she deems 
appropriate, unless there has been no delegation to act by the Secretary 
of the Treasury or his designee. In those cases where there has been no 
delegation to act by the Secretary, the Chief, Penalties Branch, will 
forward the matter to the Department with a recommendation.



Sec. 171.13  Limitations on consideration of petitions.

    (a) Cases referred for institution of legal proceedings. No action 
will be taken on any petition after the case has been referred to the 
Department of Justice for institution of legal proceedings. The petition 
will be forwarded to the Department of Justice.
    (b) Conveyance awarded for official use. No petition for remission 
of forfeiture of a seized conveyance which has been forfeited and 
retained for official use will be considered unless it is filed before 
final disposition of the property is made. This does not affect 
petitions for restoration of proceeds of sale filed pursuant to the 
provisions of section 613 of the Tariff Act of 1930, as amended (19 
U.S.C. 1613).



Sec. 171.14  Headquarters advice.

    The advice of the Director, Border Security and Trade Compliance 
Division, Regulations and Rulings, Office of International Trade, CBP 
Headquarters, or his designee, may be sought in any case (except as 
provided in this section), without regard to delegated authority to act 
on a petition or offer, when a novel or complex issue concerning a 
ruling, policy, or procedure is presented concerning a CBP action(s) or 
potential CBP action(s) relating to seizures and forfeitures, penalties, 
or mitigating or remitting any claim. This section does not apply to 
actual duty loss tenders determined by CBP pursuant to Sec. 162.74(c) 
of this Chapter relating to prior disclosure and to actual duty loss 
demands made under Sec. 162.79b of this Chapter. The request for advice 
may be initiated by the alleged violator or any CBP officer, but must be 
submitted to the Fines, Penalties, and Forfeitures Officer. The Fines, 
Penalties, and Forfeitures Officer retains the authority to refuse to 
forward any request that fails to raise a qualifying issue and to seek 
legal advice from the appropriate Associate or Assistant Chief Counsel 
in any case.



                   Subpart C_Disposition of Petitions

    Source: T.D. 00-57, 65 FR 53577, Sept. 5, 2000, unless otherwise 
noted.



Sec. 171.21  Written decisions.

    If a petition for relief relates to a violation of sections 592, 
593A or 641, Tariff Act of 1930, as amended (19 U.S.C. 1592, 19 U.S.C. 
1593a, or 19 U.S.C. 1641), the petitioner will be provided with a 
written statement setting forth the decision on the matter and the 
findings of fact and conclusions of law upon which the decision is 
based.



Sec. 171.22  Decisions effective for limited time.

    A decision to mitigate a penalty or to remit a forfeiture upon 
condition that a stated amount is paid will be effective for not more 
than 60 days from the date of notice to the petitioner of such decision 
unless the decision itself prescribes a different effective period. If 
payment of the stated amount or arrangements for such payment are not 
made, or a supplemental petition is not filed in accordance with 
regulation, the full penalty or claim for forfeiture will be deemed 
applicable and will be enforced by promptly referring the matter, after 
required collection action, if appropriate, to the appropriate Office of 
the Chief Counsel for preparation for referral to the Department of 
Justice unless other action has been directed by the Commissioner of 
Customs.



Sec. 171.23  Decisions not protestable.

    (a) Mitigation decision not subject to protest. Any decision to 
remit a forfeiture or mitigate a penalty is not a protestable decision 
as defined under the provisions of 19 U.S.C. 1514. Any payment made in 
compliance with any decision to remit a forfeiture or mitigate a penalty 
is not a charge or exaction and therefore is not a protestable action as 
defined under the provisions of 19 U.S.C. 1514.
    (b) Payment of mitigated amount as accord and satisfaction. Payment 
of a mitigated amount in compliance with

[[Page 293]]

an administrative decision on a petition or supplemental petition for 
relief will be considered an election of administrative proceedings and 
full disposition of the case. Payment of a mitigated amount will act as 
an accord and satisfaction of the Government claim. Payment of a 
mitigated amount will never serve as a bar to filing a supplemental 
petition for relief.



Sec. 171.24  Remission of forfeitures and payment of fees, costs or interest.

    Any seizure subject to forfeiture may be remitted or mitigated 
pursuant to the provisions of 19 U.S.C. 1618 or 31 U.S.C. 5321, as 
applicable. Any person who accepts a remission or mitigation decision 
will not be considered to have substantially prevailed in a civil 
forfeiture proceeding for purposes of collection of any fees, costs or 
interest from the Government.

[T.D. 00-88, 65 FR 78093, Dec. 14, 2000]



                     Subpart D_Offers in Compromise

    Source: T.D. 00-57, 65 FR 53577, Sept. 5, 2000, unless otherwise 
noted.



Sec. 171.31  Form of offers.

    Offers in compromise submitted pursuant to the provisions of section 
617 of the Tariff Act of 1930, as amended (19 U.S.C. 1617) must 
expressly state that they are being submitted in accordance with the 
provisions of that section. The amount of the offer must be deposited 
with Customs in accordance with the provisions of Sec. 161.5 of this 
chapter.



Sec. 171.32  Acceptance of offers in compromise.

    An offer in compromise will be considered accepted only when the 
offeror is so notified in writing. As a condition to accepting an offer 
in compromise, the offeror may be required to enter into any collateral 
agreement or to post any security which is deemed necessary for the 
protection of the interest of the United States.



                Subpart E_Restoration of Proceeds of Sale

    Source: T.D. 00-57, 65 FR 53577, Sept. 5, 2000, unless otherwise 
noted.



Sec. 171.41  Application of provisions for petitions for relief.

    The general provisions of subpart A of this part on filing and 
content of petitions for relief apply to petitions for restoration of 
proceeds of sale except insofar as modified by this subpart.



Sec. 171.42  Time limit for filing petition for restoration.

    A petition for the restoration of proceeds of sale under section 
613, Tariff Act of 1930, as amended (19 U.S.C. 1613) must be filed 
within 3 months after the date of the sale.



Sec. 171.43  Evidence required.

    In addition to such other evidence as may be required under the 
provisions of subpart A of this part, the petition for restoration of 
proceeds of sale under section 613, Tariff Act of 1930, as amended (19 
U.S.C. 1613), must show the interest of the petitioner in the property. 
The petition must be supported by satisfactory proof that the petitioner 
did not know of the seizure prior to the declaration or decree of 
forfeiture and was in such circumstances as prevented him from knowing 
of it.



Sec. 171.44  Forfeited property authorized for official use.

    If forfeited property which is the subject of a claim under section 
613, Tariff Act of 1930, as amended (19 U.S.C. 1613) has been authorized 
for official use, retention or delivery will be regarded as the sale 
thereof for the purposes of section 613. The appropriation available to 
the receiving agency for the purchase, hire, operation, maintenance and 
repair of property of the kind so received is available for the granting 
of relief to the claimant and for the satisfaction of liens for freight, 
charges and contributions in general average that may have been filed.



               Subpart F_Expedited Petitioning Procedures



Sec. 171.51  Application and definitions.

    (a) Application. The following definitions, regulations, and 
criteria are designed to establish and implement procedures required by 
section 6079 of the

[[Page 294]]

Anti-Drug Abuse Act of 1988, Pub. L. 100-690, title VI (102 Stat. 4181). 
They are intended to supplement existing law and procedures relative to 
the forfeiture of property under the identified statutory authority. The 
provisions of these regulations do not affect the existing legal and 
equitable rights and remedies of those with an interest in property 
seized for forfeiture, nor do these provisions relieve interested 
parties from their existing obligations and responsibilities in pursuing 
their interests through such courses of action. These regulations are 
intended to reflect the intent of Congress to minimize the adverse 
impact occasioned by the prolonged detention of property subject to 
forfeiture due to violations of law involving possession of personal use 
quantities of controlled substances. The definition of personal use 
quantities of controlled substance as contained herein is intended to 
distinguish between those quantities small in amount which are generally 
considered to be possessed for personal consumption and not for 
distribution, and those larger quantities generally considered to be 
subject to distribution.
    (b) Definitions. As used in this subpart, the following terms shall 
have the meanings specified:
    (1) Appraised value. ``Appraised value'' has the meaning given in 
Sec. 162.43(a) of this chapter.
    (2) Commercial fishing industry vessel. ``Commercial fishing 
industry vessel'' means a vessel that:
    (i) Commercially engages in the catching, taking, or harvesting of 
fish or an activity that can reasonably be expected to result in the 
catching, taking, or harvesting of fish;
    (ii) Commercially prepares fish or fish products other than by 
gutting, decapitating, gilling, skinning, shucking, icing, freezing, or 
brine chilling; or
    (iii) Commercially supplies, stores, refrigerates, or transports 
fish, fish products, or materials directly related to fishing or the 
preparation of fish to or from a fishing, fish processing, or fish 
tender vessel or fish processing facility.
    (3) Controlled substance. ``Controlled substance'' has the meaning 
given in 21 U.S.C. 802.
    (4) Normal and customary manner. ``Normal and customary manner'' 
means that inquiry suggested by particular facts and circumstances which 
would customarily be undertaken by a reasonably prudent individual in a 
like or similar situation. Actual knowledge of such facts and 
circumstances is unnecessary, and implied, imputed, or constructive 
knowledge is sufficient. An established norm, standard, or custom is 
persuasive but not conclusive or controlling in determining whether a 
petitioner acted in a normal and customary manner to ascertain how 
property would be used by another legally in possession of the property.
    (5) Owner or interested party. ``Owner or interested party'' means 
one having a legal and possessory interest in the property seized for 
foreiture or one who was in legal possession of the property at the time 
of seizure and is entitled to legal possession at the time of granting 
the petition for expedited procedure. This includes a lienholder, to the 
extent of his interest in the property, whose claim is in writing 
(except for a maritime lien which need not be in writing), unless the 
collateral is in the possession of the secured party. The agreement 
securing such a lien must create or provide for a security interest in 
the collateral, describe the collateral and be signed by the debtor.
    (6) Personal use quantities. ``Personal use quantities'' means 
possession of controlled substances in circumstances where there is no 
evidence of intent to distribute, or to facilitate the manufacturing, 
compounding, processing, delivering, importing or exporting of any 
controlled substance. A quantity of a controlled substance is presumed 
to be for personal use if the amounts possessed do not exceed the 
quantities set forth in paragraph (b)(6)(i) of this section if there is 
no evidence of illicit drug trafficking or distribution such as, but not 
limited to the factors set forth in paragraph (b)(6)(ii) of this 
section. The possession of a narcotic, a depressant, a stimulant, a 
hallucinogin or a cannabis-controlled substance will be considered in 
excess of personal use quantities if the dosage unit amount possessed 
provides the same or greater equivalent efficacy as described in 
paragraph (b)(6)(i) of this section.

[[Page 295]]

    (i) Quantities presumed to be for personal use unless evidence of 
illicit drug trafficking or distribution exists. (A) One gram of a 
mixture of substance containing a detectable amount of heroin;
    (B) One gram of a mixture of substance containing a detectable 
amount of--
    (1) Coca leaves, except coca leaves and extracts of coca leaves from 
which cocaine, ecgonine, and derivations of ecgonine or their salts have 
been removed;
    (2) Cocaine, its salts, optional and geometric isomers, and salts of 
isomers;
    (3) Ecgonine, its derivatives, their salts, isomers, and salts of 
isomers; or
    (4) Any compound, mixture, or preparation which contains any 
quantity of any of the substances referred to in paragraphs (b)(6)(i)(B) 
(1) through (3) of this section;
    (C) \1/10\th gram of a mixture of substances described in paragraph 
(b)(6)(i)(B) of this section which contains cocaine base;
    (D) \1/10\th gram of mixture of substance containing a detectable 
amount of phencyclidine (PCP);
    (E) 500 micrograms of a mixture of substance containing a detectable 
amount of lysergic acid diethylamide (LSD);
    (F) One ounce of a mixture of substance containing a detectable 
amount of marihuana; or
    (G) One gram of methamphetamine, its salts, isomers, and salts of 
its isomers, or one gram of a mixture of substances containing a 
detectable amount of methamphetamine, its salts, isomers, or salts of 
its isomers.
    (ii) Evidence of possession for other than personal use. Quantities 
shall not be considered to be for personal use if sweepings are present 
or there is other evidence of possession for other than personal use 
such as:
    (A) Evidence such as drug scales, drug distribution paraphernalia, 
drug records, drug packaging material, method of drug packaging, drug 
``cutting'' agents and other equipment, that indicates an intent to 
process, package or distribute a controlled substance;
    (B) Information from reliable sources indicating possession of a 
controlled substance with intent to distribute;
    (C) The arrest and/or conviction record of the person or persons in 
actual or constructive possession of the controlled substance for 
offenses under Federal, State or local law that indicates an intent to 
distribute a controlled substance;
    (D) The controlled substance is related to large amounts of cash or 
any amount of prerecorded government funds;
    (E) The controlled substance is possessed under circumstances that 
indicate such a controlled substance is a sample intended for 
distribution in anticipation of a transaction involving large 
quantities, or is part of a larger delivery; or
    (F) Statements by the possessor, or otherwise attributable to the 
possessor, including statements of conspirators, that indicate 
possession with intent to distribute.
    (7) Property. ``Property'' means property subject to forfeiture 
under 19 U.S.C. 1595a.
    (8) Seizing agency. ``Seizing agency'' means the Federal agency 
which has seized the property or adopted the seizure of another agency, 
and has the responsibility for administratively forfeiting the property.
    (9) Sworn to. ``Sworn to'' refers to the oath as provided by 28 
U.S.C. 1746 or as notarized in accordance with state law.

[T.D. 89-86, 54 FR 37602, Sept. 11, 1989; 54 FR 41364, Oct. 6, 1989, as 
amended by T.D. 00-88, 65 FR 78093, Dec. 14, 2000; CBP Dec. 04-28, 69 FR 
52600, Aug. 27, 2004]



Sec. 171.52  Petition for expedited procedures in an administrative forfeiture proceeding.

    (a) Procedures for violations involving possession of controlled 
substance in personal use quantities. The usual procedures for petitions 
for relief when property is seized are set forth in subpart B of this 
part. However, where property is seized for administrative forfeiture 
pursuant to 19 U.S.C. 1595a due to violations involving controlled 
substances in personal use quantities, a petition may be filed pursuant 
to paragraphs (c) and (d) of this section to seek expedited procedures 
for release of the property. A petition filed pursuant to this subpart 
shall also serve as a petition for relief filed under subpart B of this 
part.

[[Page 296]]

The petition may be filed by an owner or interested party.
    (b) Commercial fishing industry vessels. Where a commercial fishing 
industry vessel proceeding to or from a fishing area or intermediate 
port of call or actually engaged in fishing operations is subject to 
seizure for administrative forfeiture for a violation of law involving 
controlled substances in personal use quantities, a summons to appear 
shall be issued in lieu of a physical seizure. The vessel shall report 
to the port designated in the summons no later than the date specified 
in the summons. When a commercial fishing industry vessel reports, the 
appropriate Customs officer shall, depending on the facts and 
circumstances, either issue another summons to appear at a time deemed 
appropriate, execute a constructive seizure agreement pursuant to 19 
U.S.C. 1605, or take physical custody of the vessel. When a summons to 
appear has been issued, the seizing agency may be authorized to 
institute administrative forfeiture as if the vessel had been physically 
seized. When a summons to appear has been issued, the owner or 
interested party may file a petition for expedited procedures pursuant 
to subsection (a); the provisions of subsection (a) and other provisions 
in this subpart relating to a petition for expedited release shall apply 
as if the vessel had been physically seized.
    (c) Elements to be established in petition. (1) The petition for 
expedited procedures shall establish that:
    (i) The petitioner has a valid, good faith interest in the seized 
property as owner or otherwise;
    (ii) The petitioner reasonably attempted to ascertain the use of the 
property in a normal and customary manner; and
    (iii) The petitioner did not know or consent to the illegal use of 
the property or, in the event that the petitioner knew or should have 
known of the illegal use, the petitioner did what reasonably could be 
expected to prevent the violation.
    (2) In addition, the petitioner may submit evidence to establish 
that he has statutory rights or defenses such that he would prevail in a 
judicial proceeding on the issue of forfeiture.
    (d) Manner of filing. A petition for expedited procedures must be 
filed in a timely manner to be considered by Customs. To be filed in a 
timely manner, the petition must be received by Customs within 20 days 
from the date the notice of seizure was mailed, or in the case of a 
commercial fishing industry vessel for which a summons to appear is 
issued, 20 days from the original date when the vessel is required to 
report. The petition must be sworn to by the petitioner and signed by 
the petitioner or his attorney at law. If the petitioner is a 
corporation, the petition may be sworn to by an officer or responsible 
supervisory employee thereof and signed by that individual or an 
attorney at law representing the corporation. Both the envelope and the 
request must be clearly marked ``PETITION FOR EXPEDITED PROCEDURES.'' 
The petition shall be addressed to the U.S. Customs Service and filed in 
triplicate with the Fines, Penalties, and Forfeitures Officer for the 
port where the property was seized, or for commercial fishing industry 
vessels, with the Fines, Penalties, and Forfeitures Officer for the port 
to which the vessel was required to report.
    (e) Contents of petition. The petition shall include the following:
    (1) A complete description of the property, including identification 
numbers, if any, and the date and place of the violation and seizure;
    (2) A description of the petitioner's interest in the property, 
supported by the documentation, bills of sale, contracts, mortgages, or 
other satisfactory documentary evidence; and
    (3) A statement of the facts and circumstances relied upon by the 
petitioner to justify expedited return of the seized property, supported 
by satisfactory evidence.

[T.D. 89-86, 54 FR 37602, Sept. 11, 1989; 54 FR 41364, Oct. 6, 1989, as 
amended by T.D. 99-27, 64 FR 13676, Mar. 22, 1999; T.D. 00-88, 65 FR 
78093, Dec. 14, 2000; CBP Dec. 04-28, 69 FR 52600, Aug. 27, 2004]



Sec. 171.53  Ruling on petition for expedited procedures.

    (a) Final administrative determination. Upon receipt of a petition 
filed pursuant to Sec. 171.52, Customs shall determine

[[Page 297]]

first whether a final administrative determination of the case can be 
made within 21 days of the seizure. If such a final administrative 
determination is made within 21 days, no further action need be taken 
under this subpart.
    (b) Determination within 20 days. If no such final administrative 
determination is made within 21 days of the seizure, Customs shall 
within 20 days after the receipt of the petition make a determination as 
follows:
    (1) If Customs determines that the factors listed in Sec. 171.52(c) 
have been established, it shall terminate the administrative proceedings 
and release the property from seizure, or in the case of a commercial 
fishing industry vessel for which a summons has been issued, but not yet 
answered, dismiss the summons. The property shall not be returned if it 
is evidence of a violation of law.
    (2) If Customs determines that the factors listed in Sec. 171.52(c) 
have not been established, it shall proceed with the administrative 
forfeiture.

[T.D. 89-86, 54 FR 37602, Sept. 11, 1989]



Sec. 171.54  Substitute res in an administrative forfeiture action.

    (a) Substitute res. Where property is seized for administrative 
forfeiture for a violation involving controlled substances in personal 
use quantities, the owner or interested party may offer to post an 
amount equal to the appraised value of the property (the res) to obtain 
release of the property. The offer, which may be tendered at any time 
subsequent to seizure and up until the completion of administrative 
forfeiture proceedings, must be in the form of cash, irrevocable letter 
of credit, certified funds such as a certified check, traveler's 
check(s), or money order made payable to U.S. Customs. Unless the 
property is evidence of a violation of law or has other characteristics 
that particularly suit it for use in illegal activities, it will be 
released to the owner or interested party subsequent to tender of the 
substitute res.
    (b) Forfeiture of res. If a substitute res is posted and it is 
determined that the property should be administratively forfeited, the 
res will be forfeited in lieu of the property.

[T.D. 89-86, 54 FR 37602, Sept. 11, 1989]



Sec. 171.55  Notice provisions.

    (a) Special notice provision. At the time of seizure of property 
defined in Sec. 171.51, written notice must be provided to the 
possessor of the property regarding applicable statutes and Federal 
regulations including the procedures established for the filing of a 
petition for expedited procedures as set forth in section 6079 of the 
Anti-Drug Abuse Act of 1988 and implementing regulations.
    (b) Notice provision. The notice as required by section 1607 of 
Title 19, United States Code and applicable regulations shall be made at 
the earliest practicable opportunity after determining ownership of, or 
interest in, the seized property and shall include a statement of the 
applicable law under which the property is seized and a statement of the 
circumstances of the seizure sufficiently precise to enable an owner or 
interested party to identify the date, place and use or acquisition 
which makes the property subject to forfeiture.

[T.D. 89-86, 54 FR 37602, Sept. 11, 1989; 54 FR 43424, Oct. 25, 1989]



               Subpart G_Supplemental Petitions for Relief

    Source: T.D. 00-57, 65 FR 53578, Sept. 5, 2000, unless otherwise 
noted.



Sec. 171.61  Time and place of filing.

    If the petitioner is not satisfied with a decision of the deciding 
official on an original petition for relief, a supplemental petition may 
be filed with the Fines, Penalties, and Forfeitures Officer having 
jurisdiction in the port where the violation occurred. Such supplemental 
petition must be filed within 60 days from the date of notice to the 
petitioner of the decision from which further relief is requested or 
within 60 days following an administrative or judicial decision with 
respect to the entries involved in a penalty case which reduces the loss 
of duties upon which the mitigated penalty amount was based (whichever 
is later) unless

[[Page 298]]

another time to file such a supplemental petition is prescribed in the 
decision. The filing of a supplemental petition may be subject to the 
conditions prescribed in Sec. 171.64 of this part. A supplemental 
petition may be filed whether or not the mitigated penalty or forfeiture 
remission amount designated in the decision on the original petition is 
paid.



Sec. 171.62  Supplemental petition decision authority.

    (a) Decisions of Fines, Penalties, and Forfeitures Officers. 
Supplemental petitions filed on cases where the original decision was 
made by the Fines, Penalties, and Forfeitures Officer, will be initially 
reviewed by that official. The Fines, Penalties, and Forfeitures Officer 
may choose to grant more relief and issue a decision indicating that 
additional relief to the petitioner. If the petitioner is dissatisfied 
with the further relief granted or if the Fines, Penalties, and 
Forfeitures Officer decides to grant no further relief, the supplemental 
petition will be forwarded to a designated Headquarters official 
assigned to a field location for review and decision, except that 
supplemental petitions filed in cases involving violations of 19 U.S.C. 
1641 where the amount of the penalty assessed exceeds $10,000 will be 
forwarded to the Chief, Penalties Branch, Border Security and Trade 
Compliance Division, Regulations and Rulings, Office of International 
Trade.
    (b) Decisions of CBP Headquarters. Supplemental petitions filed on 
cases where the original decision was made by the Chief, Penalties 
Branch, Regulations and Rulings, Office of International Trade, CBP 
Headquarters, will be forwarded to the Director, Border Security and 
Trade Compliance Division, CBP Headquarters, for review and decision.

[T.D. 00-57, 65 FR 53578, Sept. 5, 2000, as amended by CBP Dec. 07-82, 
72 FR 59175, Oct. 19, 2007]



Sec. 171.63  [Reserved]



Sec. 171.64  Waiver of statute of limitations.

    The deciding Customs official always reserves the right to require a 
waiver of the statute of limitations executed by the claimants to the 
property or charged party or parties as a condition precedent before 
accepting a supplemental petition in any case in which less than one 
year remains before the statute will be available as a defense to all or 
part of that case.



Sec. Appendix A to Part 171--Guidelines for Disposition of Violations of 
                             19 U.S.C. 1497

    Liabilities incurred under section 497, Tariff Act of 1930 (19 
U.S.C. 1497), shall be mitigated or remitted in accordance with the 
following guidelines (see also part 148, Customs Regulations):
    I. Violations Involving Dutiable Articles. For violations involving 
articles subject to duty and for which there is no applicable exemption 
from duty, the following rules apply:
    1. Mitigated Penalty for First Offense. For violations which are the 
first offense, where there is knowledge of the declaration requirements, 
and where the undeclared articles are discovered by the Customs 
officers, the liabilities shall be remitted upon payment of Three Times 
the Duty (but not less than $50), or the domestic value, whichever is 
lower.
    2. Mitigating Factors. When one or more of the following mitigating 
factors are present, the deciding officer may, within his discretion, 
remit the liabilities upon payment of Between One and One-Half and Three 
Times the Duty or the domestic value, whichever is lower:
    a. Communications with the violator are impaired because of language 
barrier, mental condition, or physical ailment;
    b. Violator cooperates with Customs officers after discovery of the 
violation by providing additional information which facilitates 
conclusion of the case;
    c. Violator is an inexperienced traveler;
    d. There is contributory Customs error (for example, violator 
demonstrates he was given incorrect advice by a Customs officer).
    3. Aggravating Factors. When one or more of the following 
aggravating factors are present, the deciding officer may, within his 
discretion, remit the liabilities upon payment of Between Three and Six 
Times the Duty (but not less than $100), or the domestic value, 
whichever is lower:
    a. Documentary or other evidence discovered establishes violator's 
intent;
    b. Informant provides information which tends to establish 
violator's intent and leads to discovery of the violation after the 
violator has been given an opportunity to properly declare;
    c. Violator is an experienced traveler;
    d. Undeclared articles are concealed to evade U.S. law;

[[Page 299]]

    e. There is behavior, including extreme lack of cooperation, verbal 
or physical abuse, or attempted escape, which tends to demonstrate a 
lack of respect for law and authority.
    4. Commercial Articles. When the undeclared articles are brought in 
for commercial purposes, the liabilities shall be remitted upon the 
payment of Six Times the Duty (but not less than $100), or the domestic 
value, whichever is lower. Mitigating factors may be used to lower this 
amount to as little as Three Times the Duty; aggravating factors may be 
used to increase this amount up to Eight Times the Duty.
    5. Extraordinary Mitigating Factor.
    a. When an individual who has been cleared through Customs without 
discovery of any undeclared article returns to the examination area and 
declares that article, the deciding officer may, within his discretion, 
remit the liabilities upon payment of One Times the Duty.
    b. An individual who declares articles some time later (hours, days, 
weeks, etc.) may be treated similarly.
    6. Extraordinary Aggravating Factors.
    a. When the offense is a second or subsequent violation, the 
deciding officer may, within his discretion, remit the liabilities upon 
payment of Between Six and Eight Times the Duty (but not less than 
$250), or the domestic value, whichever is lower.
    b. When the offense is a second or subsequent violation, and there 
are aggravating factors present, generally there shall either be a 
denial of relief or mitigation to No Less Than Eight Times the Duty or 
the domestic value, whichever is lower.
    c. When there is evidence of an ongoing scheme to defraud the 
revenue involving multiple entries without declaration of articles 
subject to declaration, the deciding officer shall act in accordance 
with the preceding paragraph.
    II. Violations Involving Absolutely or Conditionally Free Articles. 
For violations involving articles either entitled to entry free of duty 
absolutely (classifiable under a duty-free provision in Chapters 1-97, 
Harmonized Tariff Schedule of the United States (HTSUS); (19 U.S.C. 
1202)), or entry free of duty conditionally (entitled to treatment under 
the Generalized System of Preferences (see Sec. Sec. 10.171-10.178, 
Customs Regulations) or Chapter 98, HTSUS), the following rules apply:
    1. Mitigated Penalty for First Offense.
    a. For violations which are first offense, and involve articles 
entitled to the benefit of GSP or Chapter 98, HTSUS, the liabilities 
shall be remitted upon payment of One Times the Duty which would have 
been due if the articles had not been entitled to the benefit.
    b. For violations which are first offense, and involve absolutely 
duty-free articles, the liabilities shall be remitted upon payment of 
Between One and Five Percent of the Domestic Value, but not less than 
$50 (or the domestic value, whichever is less) nor more than $1,000.
    2. Mitigating Factors. When mitigating factors such as those 
outlined above are present, the deciding officer may, in his discretion, 
reduce the mitigated amount to a lower figure.
    3. Aggravating Factors.
    a. When aggravating factors such as those outlined above are 
present, the deciding officer may, in his discretion, remit the 
liabilities for conditionally free articles upon the payment of Between 
One and Two Times the Duty (but not less than $100), or the domestic 
value, whichever is lower.
    b. For absolutely free articles, the deciding officer may remit the 
liabilities upon payment of Between Five and Ten Percent of the Domestic 
Value, but not less than $100.
    4. Commercial Merchandise.
    The fact that undeclared duty-free articles are imported for 
commercial purposes may be considered an aggravating factor under 
section II.3. of these guidelines.
    III. Other Applicable Rules.
    1. These guidelines provide a framework and procedure by which 
violations of 19 U.S.C. 1497 are to be analyzed. They are not mandatory 
in the sense that they must be absolutely applied. Customs officers 
varying from these guidelines must provide reasons for doing so in the 
case record.
    2. Customs officers shall document mitigating and aggravating 
factors found in each case in the case file. There must be a basis shown 
for mitigated amounts.
    3. It is intended that mitigating and aggravating factors shall be 
considered together and used to offset each other where appropriate.
    4. The rate of duty to be used in calculating the mitigated penalty 
shall be the appropriate rate from Chapters 1-97, HTSUS, and not the 
flat rate from Chapter 98, HTSUS.
    5. ``Duty'' means Customs duties and any internal revenue taxes 
which would have attached upon importation (see section 101.1(i), 
Customs Regulations). Therefore, multiples will also be applied to 
internal revenue taxes which would have been due.
    6. Customs officers may, within their discretion, consider other 
factors not here delineated as aggravating or mitigating and apply the 
guidelines accordingly. These additional factors must also be documented 
in the case file.
    7. These guidelines are not authority for admitting into the 
commerce of the United States articles which are conditionally or 
absolutely prohibited from entry.
    8. The presence of one or more extraordinary aggravating factors, 
including but not limited to those set forth in section I.6.

[[Page 300]]

of these guidelines, may within the discretion of the deciding officer 
be a basis for denial of relief.
    9. If the violator is being prosecuted criminally, the civil (19 
U.S.C. 1497) liability generally is administratively settled only after 
completion of the prosecution or with the express approval of the 
appropriate U.S. attorney. Criminal prosecution of the violator, 
however, is insufficient grounds to delay indefinitely determination of 
the civil liability. The Fines, Penalties, and Forfeitures Officer 
should contact the Chief Counsel representative in the field to 
determine the best course of action to follow with respect to the civil 
liability. Chief Counsel representative will consult with the U.S. 
attorney and the Penalties Branch at Customs Headquarters. Because of 
time delay problems, all seizures involving criminal prosecutions must 
be promptly coordinated in this manner, and consideration should be 
given to immediate referral of the forfeiture action to the U.S. 
attorney for the institution of a judicial proceeding.

[T.D. 83-145, 48 FR 30100, June 30, 1983, as amended by T.D. 89-1, 53 FR 
51271, Dec. 21, 1988; T.D. 99-27, 64 FR 13676, Mar. 22, 1999]



  Sec. Appendix B to Part 171--Customs Regulations, Guidelines for the 
 Imposition and Mitigation of Penalties for Violations of 19 U.S.C. 1592

    A monetary penalty incurred under section 592 of the Tariff Act of 
1930, as amended (19 U.S.C. 1592; hereinafter referred to as section 
592) may be remitted or mitigated under section 618 of the Tariff Act of 
1930, as amended (19 U.S.C. 1618), if it is determined that there are 
mitigating circumstances to justify remission or mitigation. The 
guidelines below will be used by the Customs Service in arriving at a 
just and reasonable assessment and disposition of liabilities arising 
under section 592 within the stated limitations. It is intended that 
these guidelines shall be applied by Customs officers in pre-penalty 
proceedings and in determining the monetary penalty assessed in any 
penalty notice. The assessed penalty or penalty amount set forth in 
Customs administrative disposition determined in accordance with these 
guidelines does not limit the penalty amount which the Government may 
seek in bringing a civil enforcement action pursuant to section 592(e). 
It should be understood that any mitigated penalty is conditioned upon 
payment of any actual loss of duty as well as a release by the party 
that indicates that the mitigation decision constitutes full accord and 
satisfaction. Further, mitigation decisions are not rulings within the 
meaning of part 177 of the Customs Regulations (19 CFR part 177). 
Lastly, these guidelines may supplement, and are not intended to 
preclude application of, any other special guidelines promulgated by 
Customs.

                      (A) Violations of Section 592

    Without regard to whether the United States is or may be deprived of 
all or a portion of any lawful duty, tax or fee thereby, a violation of 
section 592 occurs when a person, through fraud, gross negligence, or 
negligence, enters, introduces, or attempts to enter or introduce any 
merchandise into the commerce of the United States by means of any 
document, electronic transmission of data or information, written or 
oral statement, or act that is material and false, or any omission that 
is material; or when a person aids or abets any other person in the 
entry, introduction, or attempted entry or introduction of merchandise 
by such means. It should be noted that the language ``entry, 
introduction, or attempted entry or introduction'' encompasses placing 
merchandise in-bond (e.g., filing an immediate transportation 
application). There is no violation if the falsity or omission is due 
solely to clerical error or mistake of fact, unless the error or mistake 
is part of a pattern of negligent conduct. Also, the unintentional 
repetition by an electronic system of an initial clerical error 
generally will not constitute a pattern of negligent conduct. 
Nevertheless, if Customs has drawn the party's attention to the 
unintentional repetition by an electronic system of an initial clerical 
error, subsequent failure to correct the error could constitute a 
violation of section 592. Also, the unintentional repetition of a 
clerical mistake over a significant period of time or involving many 
entries could indicate a pattern of negligent conduct and a failure to 
exercise reasonable care.

             (B) Definition of Materiality Under Section 592

    A document, statement, act, or omission is material if it has the 
natural tendency to influence or is capable of influencing agency action 
including, but not limited to a Customs action regarding: (1) 
Determination of the classification, appraisement, or admissibility of 
merchandise (e.g., whether merchandise is prohibited or restricted); (2) 
determination of an importer's liability for duty (including marking, 
antidumping, and/or countervailing duty); (3) collection and reporting 
of accurate trade statistics; (4) determination as to the source, 
origin, or quality of merchandise; (5) determination of whether an 
unfair trade practice has been committed under the anti-dumping or 
countervailing duty laws or a similar statute; (6) determination of 
whether an unfair act has been committed involving patent, trademark, or 
copyright infringement; or (7) the determination of whether any other 
unfair trade practice has been committed in violation of federal

[[Page 301]]

law. The ``but for'' test of materiality is inapplicable under section 
592.

              (C) Degrees of Culpability Under Section 592

    The three degrees of culpability under section 592 for the purposes 
of administrative proceedings are:
    (1) Negligence. A violation is determined to be negligent if it 
results from an act or acts (of commission or omission) done through 
either the failure to exercise the degree of reasonable care and 
competence expected from a person in the same circumstances either: (a) 
in ascertaining the facts or in drawing inferences therefrom, in 
ascertaining the offender's obligations under the statute; or (b) in 
communicating information in a manner so that it may be understood by 
the recipient. As a general rule, a violation is negligent if it results 
from failure to exercise reasonable care and competence: (a) to ensure 
that statements made and information provided in connection with the 
importation of merchandise are complete and accurate; or (b) to perform 
any material act required by statute or regulation.
    (2) Gross Negligence. A violation is deemed to be grossly negligent 
if it results from an act or acts (of commission or omission) done with 
actual knowledge of or wanton disregard for the relevant facts and with 
indifference to or disregard for the offender's obligations under the 
statute.
    (3) Fraud. A violation is determined to be fraudulent if a material 
false statement, omission, or act in connection with the transaction was 
committed (or omitted) knowingly, i.e., was done voluntarily and 
intentionally, as established by clear and convincing evidence.

                   (D) Discussion of Additional Terms

    (1) Duty Loss Violations. A section 592 duty loss violation involves 
those cases where there has been a loss of duty including any marking, 
anti-dumping, or countervailing duties, or any tax and fee (e.g., 
merchandise processing and/or harbor maintenance fees) attributable to 
an alleged violation.
    (2) Non-duty Loss Violations. A section 592 non-duty loss violation 
involves cases where the record indicates that an alleged violation is 
principally attributable to, for example, evasion of a prohibition, 
restriction, or other non-duty related consideration involving the 
importation of the merchandise.
    (3) Actual Loss of Duties. An actual loss of duty occurs where there 
is a loss of duty including any marking, anti-dumping, or countervailing 
duties, or any tax and fee (e.g., merchandise processing and/or harbor 
maintenance fees) attributable to a liquidated Customs entry, and the 
merchandise covered by the entry has been entered or introduced (or 
attempted to be entered or introduced) in violation of section 592.
    (4) Potential Loss of Duties. A potential loss of duty occurs where 
an entry remains unliquidated and there is a loss of duty, including any 
marking, anti-dumping or countervailing duties or any tax and fee (e.g., 
merchandise processing and/or harbor maintenance fees) attributable to a 
violation of section 592, but the violation was discovered prior to 
liquidation. In addition, a potential loss of duty exists where Customs 
discovers the violation and corrects the entry to reflect liquidation at 
the proper classification and value. In other words, the potential loss 
in such cases equals the amount of duty, tax and fee that would have 
occurred had Customs not discovered the violation prior to liquidation 
and taken steps to correct the entry.
    (5) Total Loss of Duty. The total loss of duty is the sum of any 
actual and potential loss of duty attributable to alleged violations of 
section 592 in a particular case. Payment of any actual and/or potential 
loss of duty shall not affect or reduce the total loss of duty used for 
assessing penalties as set forth in these guidelines. The ``multiples'' 
set forth below in paragraph (F)(2) involving assessment and disposition 
of cases shall utilize the ``total loss of duty'' amount in arriving at 
the appropriate assessment or disposition.
    (6) Reasonable Care. General Standard: All parties, including 
importers of record or their agents, are required to exercise reasonable 
care in fulfilling their responsibilities involving entry of 
merchandise. These responsibilities include, but are not limited to: 
providing a classification and value for the merchandise; furnishing 
information sufficient to permit Customs to determine the final 
classification and valuation of merchandise; taking measures that will 
lead to and assure the preparation of accurate documentation, and 
determining whether any applicable requirements of law with respect to 
these issues are met. In addition, all parties, including the importer, 
must use reasonable care to provide accurate information or 
documentation to enable Customs to determine if the merchandise may be 
released. Customs may consider an importer's failure to follow a binding 
Customs ruling a lack of reasonable care. In addition, unreasonable 
classification will be considered a lack of reasonable care (e.g., 
imported snow skis are classified as water skis). Failure to exercise 
reasonable care in connection with the importation of merchandise may 
result in imposition of a section 592 penalty for fraud, gross 
negligence or negligence.
    (7) Clerical Error. A clerical error is an error in the preparation, 
assembly or submission of import documentation or information provided 
to Customs that results from a mistake in arithmetic or transcription 
that is not part of a pattern of negligence. The mere non-intentional 
repetition by an electronic system of an initial clerical

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error does not constitute a pattern of negligence. Nevertheless, as 
stated earlier, if Customs has drawn a party's attention to the non-
intentional repetition by an electronic system of an initial clerical 
error, subsequent failure to correct the error could constitute a 
violation of section 592. Also, the unintentional repetition of a 
clerical mistake over a significant period of time or involving many 
entries could indicate a pattern of negligent conduct and a failure to 
exercise reasonable care.
    (8) Mistake of Fact. A mistake of fact is a false statement or 
omission that is based on a bona fide erroneous belief as to the facts, 
so long as the belief itself did not result from negligence in 
ascertaining the accuracy of the facts.

                         (E) Penalty Assessment

    (1) Case Initiation--Pre-penalty Notice.
    (a) Generally. As provided in Sec. 162.77, Customs Regulations (19 
CFR 162.77), if the appropriate Customs field officer has reasonable 
cause to believe that a violation of section 592 has occurred and 
determines that further proceedings are warranted, the Customs field 
officer will issue to each person concerned a notice of intent to issue 
a claim for a monetary penalty (i.e., the ``pre-penalty notice''). In 
issuing such a pre-penalty notice, the Customs field officer will make a 
tentative determination of the degree of culpability and the amount of 
the proposed claim. Payment of any actual and/or potential loss of duty 
will not affect or reduce the total loss of duty used for assessing 
penalties as set forth in these guidelines. The ``multiples'' set forth 
in paragraphs (F)(2)(a)(i), (b)(i) and (c)(i) involving assessment and 
disposition of duty loss violation cases will use the amount of total 
loss of duty in arriving at the appropriate assessment or disposition. 
Further, where separate duty loss and non-duty loss violations occur on 
the same entry, it is within the Customs field officer's discretion to 
assess both duty loss and non-duty loss penalties, or only one of them. 
Where only one of the penalties is assessed, the Customs field officer 
has the discretion to select which penalty (duty loss or non-duty loss) 
shall be assessed. Also, where there is a violation accompanied by an 
incidental or nominal loss of duties, the Customs field officer may 
assess a non-duty loss penalty where the incidental or nominal duty loss 
resulted from a separate non-duty loss violation. The Customs field 
officer will propose a level of culpability in the pre-penalty notice 
that conforms to the level of culpability suggested by the evidence at 
the time of issuance. Moreover, the pre-penalty notice will include a 
statement that it is Customs practice to base its actions on the 
earliest point in time that the statute of limitations may be asserted 
(i.e., the date of occurrence of the alleged violation) inasmuch as the 
final resolution of a case in court may be less than a finding of fraud. 
A pre-penalty notice that is issued to a party in a case where Customs 
determines a claimed prior disclosure is not valid--owing to the 
disclosing party's knowledge of the commencement of a formal 
investigation of a disclosed violation--will include a copy of a written 
document that evidences the commencement of a formal investigation. In 
addition, a pre-penalty notice is not required if a violation involves a 
non-commercial importation or if the proposed claim does not exceed 
$1,000. Special guidelines relating to penalty assessment and 
dispositions involving ``Arriving Travelers,'' are set forth in section 
(L) below.
    (b) Pre-penalty Notice--Proposed Claim Amount
    (i) Fraud. In general, if a violation is determined to be the result 
of fraud, the proposed claim ordinarily will be assessed in an amount 
equal to the domestic value of the merchandise. Exceptions to assessing 
the penalty at the domestic value may be warranted in unusual 
circumstances such as a case where the domestic value of the merchandise 
is disproportionately high in comparison to the loss of duty 
attributable to an alleged violation (e.g., a total loss of duty of 
$10,000 involving 10 entries with a total domestic value of $2,000,000). 
Also, it is incumbent upon the appropriate Customs field officer to 
consider whether mitigating factors are present warranting a reduction 
in the customary domestic value assessment. In all section 592 cases of 
this nature regardless of the dollar amount of the proposed claim, the 
Customs field officer will obtain the approval of the Penalties Branch 
at Headquarters prior to issuance of a pre-penalty notice at an amount 
less than domestic value.
    (ii) Gross Negligence and Negligence. In determining the amount of 
the proposed claim in cases involving gross negligence and negligence, 
the appropriate Customs field officer will take into account the gravity 
of the offense, the amount of loss of duty, the extent of wrongdoing, 
mitigating or aggravating factors, and other factors bearing upon the 
seriousness of a violation, but in no case will the assessed penalty 
exceed the statutory ceilings prescribed in section 592. In cases 
involving gross negligence and negligence, penalties equivalent to the 
ceilings stated in paragraphs (F)(2)(b) and (c) regarding disposition of 
cases may be appropriate in cases involving serious violations, e.g., 
violations involving a high loss of duty or significant evasion of 
import prohibitions or restrictions. A ``serious'' violation need not 
result in a loss of duty. The violation may be serious because it 
affects the admissibility of merchandise or the enforcement of other 
laws, as in the case of quota evasions, false

[[Page 303]]

statements made to conceal the dumping of merchandise, or violations of 
exclusionary orders of the International Trade Commission.
    (c) Technical Violations. Violations where the loss of duty is 
nonexistent or minimal and/or that have an insignificant impact on 
enforcement of the laws of the United States may justify a proposed 
penalty in a fixed amount not related to the value of merchandise, but 
an amount believed sufficient to have a deterrent effect: e.g., 
violations involving the subsequent sale of merchandise or vehicles 
entered for personal use; violations involving failure to comply with 
declaration or entry requirements that do not change the admissibility 
or entry status of merchandise or its appraised value or classification; 
violations involving the illegal diversion to domestic use of 
instruments of international traffic; and local point-to-point traffic 
violations. Generally, a penalty in a fixed amount ranging from $1,000 
to $2,000 is appropriate in cases where there are no prior violations of 
the same kind. However, fixed sums ranging from $2,000 to $10,000 may be 
appropriate in the case of multiple or repeated violations. Fixed sum 
penalty amounts are not subject to further mitigation and may not exceed 
the maximum amounts stated in section 592 and in these guidelines.
    (d) Statute of Limitations Considerations--Waivers. Prior to 
issuance of any section 592 pre-penalty notice, the appropriate Customs 
field officer will calculate the statute of limitations attributable to 
an alleged violation. Inasmuch as section 592 cases are reviewed de novo 
by the Court of International Trade, the statute of limitations 
calculation in cases alleging fraud should assume a level of culpability 
of gross negligence or negligence, i.e., ordinarily applying a shorter 
period of time for statute of limitations purposes. In accordance with 
section 162.78 of the Customs Regulations (19 CFR 162.78), if less than 
1 year remains before the statute of limitations may be raised as a 
defense, a shortened response time may be specified in the notice--but 
in no case, less than 7 business days from the date of mailing. In cases 
of shortened response times, the Customs field officer should notify 
alleged violators by telephone and use all reasonable means (e.g., 
facsimile transmission of a copy of the notice) to expedite receipt of 
the notice by the alleged violators. Also in such cases, the appropriate 
Customs field officer should advise the alleged violator that additional 
time to respond to the pre-penalty notice will be granted only if an 
acceptable waiver of the statute of limitations is submitted to Customs. 
With regard to waivers of the statute of limitations, it is Customs 
practice to request waivers concurrently both from all potential alleged 
violators and their sureties.
    (2) Closure of Case or Issuance of Penalty Notice.
    (a) Case Closure. The appropriate Customs field officer may find, 
after consideration of the record in the case, including any pre-penalty 
response/oral presentation, that issuance of a penalty notice is not 
warranted. In such cases, the Customs field officer will provide written 
notification to the alleged violator who received the subject pre-
penalty notice that the case is closed.
    (b) Issuance of Penalty Notice. In the event that circumstances 
warrant issuance of a notice of penalty pursuant to Sec. 162.79 of the 
Customs Regulations (19 CFR 162.79), the appropriate Customs field 
officer will give consideration to all available evidence with respect 
to the existence of material false statements or omissions (including 
evidence presented by an alleged violator), the degree of culpability, 
the existence of a prior disclosure, the seriousness of the violation, 
and the existence of mitigating or aggravating factors. In cases 
involving fraud, the penalty notice will be in the amount of the 
domestic value of the merchandise unless a lesser amount is warranted as 
described in paragraph (E)(1)(b)(i). In general, the degree of 
culpability or proposed penalty amount stated in a pre-penalty notice 
will not be increased in the penalty notice. If, subsequent to the 
issuance of a pre-penalty notice and upon further review of the record, 
the appropriate Customs field officer determines that a higher degree of 
culpability exists, the original pre-penalty notice should be rescinded 
and a new pre-penalty notice issued that indicates the higher degree of 
culpability and increased proposed penalty amount. However, if less than 
9 months remain before expiration of the statute of limitations or any 
waiver thereof by the party named in the pre-penalty notice, the higher 
degree of culpability and higher penalty amount may be indicated in the 
notice of penalty without rescinding the earlier pre-penalty notice. In 
such cases, the Customs field officer will consider whether a lower 
degree of culpability is appropriate or whether to change the 
information contained in the pre-penalty notice.
    (c) Statute of Limitations Considerations. Prior to issuance of any 
section 592 penalty notice, the appropriate Customs field officer again 
shall calculate the statute of limitations attributable to the alleged 
violation and request a waiver(s) of the statute, if necessary. In 
accordance with part 171 of the Customs Regulations (19 CFR part 171), 
if less than 180 days remain before the statute of limitations may be 
raised as a defense, a shortened response time may be specified in the 
notice--but in no case less than 7 business days from the date of 
mailing. In such cases, the Customs field officer should notify an 
alleged violator by telephone and use all

[[Page 304]]

reasonable means (e.g., facsimile transmission of a copy) to expedite 
receipt of the penalty notice by the alleged violator. Also, in such 
cases, the Customs field officer should advise an alleged violator that, 
if an acceptable waiver of the statute of limitations is provided, 
additional time to respond to the penalty notice may be granted.

                 (F) Administrative Penalty Disposition

    (1) Generally. It is the policy of the Department of the Treasury 
and the Customs Service to grant mitigation in appropriate 
circumstances. In certain cases, based upon criteria to be developed by 
Customs, mitigation may take an alternative form, whereby a violator may 
eliminate or reduce his or her section 592 penalty liability by taking 
action(s) to correct problems that caused the violation. In any case, in 
determining the administrative section 592 penalty disposition, the 
appropriate Customs field officer will consider the entire case record--
taking into account the presence of any mitigating or aggravating 
factors. All such factors should be set forth in the written 
administrative section 592 penalty decision. Once again, Customs 
emphasizes that any penalty liability which is mitigated is conditioned 
upon payment of any actual loss of duty in addition to that penalty as 
well as a release by the party that indicates that the mitigation 
decision constitutes full accord and satisfaction. Finally, section 592 
penalty dispositions in duty-loss and non-duty-loss cases will proceed 
in the manner set forth below.
    (2) Dispositions.
    (a) Fraudulent Violation. Penalty dispositions for a fraudulent 
violation will be calculated as follows:
    (i) Duty Loss Violation. An amount ranging from a minimum of 5 times 
the total loss of duty to a maximum of 8 times the total loss of duty--
but in any such case the amount may not exceed the domestic value of the 
merchandise. A penalty disposition greater than 8 times the total loss 
of duty may be imposed in a case involving an egregious violation, or a 
public health and safety violation, or due to the presence of 
aggravating factors, but again, the amount may not exceed the domestic 
value of the merchandise.
    (ii) Non-Duty Loss Violation. An amount ranging from a minimum of 50 
percent of the dutiable value to a maximum of 80 percent of the dutiable 
value of the merchandise. A penalty disposition greater than 80 percent 
of the dutiable value may be imposed in a case involving an egregious 
violation, or a public health and safety violation, or due to the 
presence of aggravating factors, but the amount may not exceed the 
domestic value of the merchandise.
    (b) Grossly Negligent Violation. Penalty dispositions for a grossly 
negligent violation shall be calculated as follows:
    (i) Duty Loss Violation. An amount ranging from a minimum of 2.5 
times the total loss of duty to a maximum of 4 times the total loss of 
duty--but in any such case, the amount may not exceed the domestic value 
of the merchandise.
    (ii) Non-Duty Loss Violation. An amount ranging from a minimum of 25 
percent of the dutiable value to a maximum of 40 percent of the dutiable 
value of the merchandise--but in any such case, the amount may not 
exceed the domestic value of the merchandise.
    (c) Negligent Violation. Penalty dispositions for a negligent 
violation shall be calculated as follows:
    (i) Duty Loss Violation. An amount ranging from a minimum of 0.5 
times the total loss of duty to a maximum of 2 times the total loss of 
duty but, in any such case, the amount may not exceed the domestic value 
of the merchandise.
    (ii) Non-Duty Loss Violation. An amount ranging from a minimum of 5 
percent of the dutiable value to a maximum of 20 percent of the dutiable 
value of the merchandise, but, in any such case, the amount may not 
exceed the domestic value of the merchandise.
    (d) Authority to Cancel Claim. Upon issuance of a penalty notice, 
Customs has set forth its formal monetary penalty claim. Except as 
provided in 19 CFR part 171, in those section 592 cases within the 
administrative jurisdiction of the concerned Customs field office, the 
appropriate Customs field officer will cancel any such formal claim 
whenever it is determined that an essential element of the alleged 
violation is not established by the agency record, including pre-penalty 
and penalty responses provided by the alleged violator. Except as 
provided in 19 CFR part 171, in those section 592 cases within Customs 
Headquarters jurisdiction, the appropriate Customs field officer will 
cancel any such formal claim whenever it is determined that an essential 
element of the alleged violation is not established by the agency 
record, and such cancellation action precedes the date of the Customs 
field officer's receipt of the alleged violator's petition responding to 
the penalty notice. On and after the date of Customs receipt of the 
petition responding to the penalty notice, jurisdiction over the action 
rests with Customs Headquarters including the authority to cancel the 
claim.
    (e) Remission of Claim. If the Customs field officer believes that a 
claim for monetary penalty should be remitted for a reason not set forth 
in these guidelines, the Customs field officer should first seek 
approval from the Chief, Penalties Branch, Customs Service Headquarters.
    (f) Prior Disclosure Dispositions. It is the policy of the 
Department of the Treasury and the Customs Service to encourage the 
submission of valid prior disclosures that comport with the laws, 
regulations, and policies

[[Page 305]]

governing this provision of section 592. Customs will determine the 
validity of the prior disclosure including whether or not the prior 
disclosure sets forth all the required elements of a violation of 
section 592. A valid prior disclosure warrants the imposition of the 
reduced Customs civil penalties set forth below:
    (1) Fraudulent Violation.
    (a) Duty Loss Violation. The claim for monetary penalty shall be 
equal to 100 percent of the total loss of duty (i.e., actual + 
potential) resulting from the violation. No mitigation will be afforded.
    (b) Non-Duty Loss Violation. The claim for monetary penalty shall be 
equal to 10 percent of the dutiable value of the merchandise in 
question. No mitigation will be afforded.
    (2) Gross Negligence and Negligence Violation.
    (a) Duty Loss Violation. The claim for monetary penalty shall be 
equal to the interest on the actual loss of duty computed from the date 
of liquidation to the date of the party's tender of the actual loss of 
duty resulting from the violation. Customs notes that there is no 
monetary penalty in these cases if the duty loss is potential in nature. 
Absent extraordinary circumstances, no mitigation will be afforded.
    (b) Non-Duty Loss Violation. There is no monetary penalty in such 
cases and any claim for monetary penalty which had been issued prior to 
the decision granting prior disclosure will be remitted in full.

                         (G) Mitigating Factors

    The following factors will be considered in mitigation of the 
proposed or assessed penalty claim or the amount of the administrative 
penalty decision, provided that the case record sufficiently establishes 
their existence. The list is not all-inclusive.
    (1) Contributory Customs Error. This factor includes misleading or 
erroneous advice given by a Customs official in writing to the alleged 
violator, or established by a contemporaneously created written Customs 
record, only if it appears that the alleged violator reasonably relied 
upon the information and the alleged violator fully and accurately 
informed Customs of all relevant facts. The concept of comparative 
negligence may be utilized in determining the weight to be assigned to 
this factor. If it is determined that the Customs error was the sole 
cause of the violation, the proposed or assessed penalty claim shall be 
canceled. If the Customs error contributed to the violation, but the 
violator also is culpable, the Customs error will be considered as a 
mitigating factor.
    (2) Cooperation with the Investigation. To obtain the benefits of 
this factor, the violator must exhibit extraordinary cooperation beyond 
that expected from a person under investigation for a Customs violation. 
Some examples of the cooperation contemplated include assisting Customs 
officers to an unusual degree in auditing the books and records of the 
violator (e.g., incurring extraordinary expenses in providing computer 
runs solely for submission to Customs to assist the agency in cases 
involving an unusually large number of entries and/or complex issues). 
Another example consists of assisting Customs in obtaining additional 
information relating to the subject violation or other violations. 
Merely providing the books and records of the violator should not be 
considered cooperation justifying mitigation inasmuch as Customs has the 
right to examine an importer's books and records pursuant to 19 U.S.C. 
1508-1509.
    (3) Immediate Remedial Action. This factor includes the payment of 
the actual loss of duty prior to the issuance of a penalty notice and 
within 30 days after Customs notifies the alleged violator of the actual 
loss of duties attributable to the alleged violation. In appropriate 
cases, where the violator provides evidence that immediately after 
learning of the violation, substantial remedial action was taken to 
correct organizational or procedural defects, immediate remedial action 
may be granted as a mitigating factor. Customs encourages immediate 
remedial action to ensure against future incidents of non-compliance.
    (4) Inexperience in Importing. Inexperience is a factor only if it 
contributes to the violation and the violation is not due to fraud or 
gross negligence.
    (5) Prior Good Record. Prior good record is a factor only if the 
alleged violator is able to demonstrate a consistent pattern of 
importations without violation of section 592, or any other statute 
prohibiting false or fraudulent importation practices. This factor will 
not be considered in alleged fraudulent violations of section 592.
    (6) Inability to Pay the Customs Penalty. The party claiming the 
existence of this factor must present documentary evidence in support 
thereof, including copies of income tax returns for the previous 3 
years, and an audited financial statement for the most recent fiscal 
quarter. In certain cases, Customs may waive the production of an 
audited financial statement or may request alternative or additional 
financial data in order to facilitate an analysis of a claim of 
inability to pay (e.g., examination of the financial records of a 
foreign entity related to the U.S. company claiming inability to pay).
    (7) Customs Knowledge. Additional relief in non-fraud cases (which 
also are not the subject of a criminal investigation) will be granted if 
it is determined that Customs had actual knowledge of a violation and, 
without justification, failed to inform the violator so that it could 
have taken earlier corrective action. In such cases, if a penalty is to 
be assessed involving repeated violations of the same kind, the maximum 
penalty amount for violations occurring after the date on

[[Page 306]]

which actual knowledge was obtained by Customs will be limited to two 
times the loss of duty in duty-loss cases or twenty percent of the 
dutiable value in non-duty-loss cases if the continuing violations were 
the result of gross negligence, or the lesser of one time the loss of 
duty in duty-loss cases or ten percent of dutiable value in non-duty-
loss cases if the violations were the result of negligence. This factor 
will not be applicable when a substantial delay in the investigation is 
attributable to the alleged violator.

                         (H) Aggravating Factors

    Certain factors may be determined to be aggravating factors in 
calculating the amount of the proposed or assessed penalty claim or the 
amount of the administrative penalty decision. The presence of one or 
more aggravating factors may not be used to raise the level of 
culpability attributable to the alleged violations, but may be utilized 
to offset the presence of mitigating factors. The following factors will 
be considered ``aggravating factors,'' provided that the case record 
sufficiently establishes their existence. The list is not exclusive.
    (1) Obstructing an investigation or audit,
    (2) Withholding evidence,
    (3) Providing misleading information concerning the violation,
    (4) Prior substantive violations of section 592 for which a final 
administrative finding of culpability has been made,
    (5) Textile imports that have been the subject of illegal 
transshipment (i.e., false country of origin declaration), whether or 
not the merchandise bears false country of origin markings,
    (6) Evidence of a motive to evade a prohibition or restriction on 
the admissibility of the merchandise (e.g., evading a quota 
restriction),
    (7) Failure to comply with a lawful demand for records or a Customs 
summons.

            (I) Offers in Compromise (``Settlement Offers'')

    Parties who wish to submit a civil offer in compromise pursuant to 
19 U.S.C. 1617 (also known as a ``settlement offer'' ) in connection 
with any section 592 claim or potential section 592 claim should follow 
the procedures outlined in Sec. 161.5 of the Customs Regulations (19 
CFR 161.5). Settlement offers do not involve ``mitigation'' of a claim 
or potential claim, but rather ``compromise'' an action or potential 
action where Customs evaluation of potential litigation risks, or the 
alleged violator's financial position, justifies such a disposition. In 
any case where a portion of the offered amount represents a tender of 
unpaid duties, taxes and fees, Customs letter of acceptance may identify 
the portion representing any such duty, tax and fee. The offered amount 
should be deposited at the Customs field office responsible for handling 
the section 592 claim or potential section 592 claim. The offered amount 
will be held in a suspense account pending acceptance or rejection of 
the offer in compromise. In the event the offer is rejected, the 
concerned Customs field office will promptly initiate a refund of the 
money deposited in the suspense account to the offeror.

                       (J) Section 592(d) Demands

    Section 592(d) demands for actual losses of duty ordinarily are 
issued in connection with a penalty action, or as a separate demand 
without an associated penalty action. In either case, information must 
be present establishing a violation of section 592(a). In those cases 
where the appropriate Customs field officer determines that issuance of 
a penalty under section 592 is not warranted (notwithstanding the 
presence of information establishing a violation of section 592(a)), but 
that circumstances do warrant issuance of a demand for payment of an 
actual loss of duty pursuant to section 592(d), the Customs field 
officer shall follow the procedures set forth in section 162.79b of the 
Customs Regulations (19 CFR 162.79b). Except in cases where less than 
one year remains before the statute of limitations may be raised as a 
defense, information copies of all section 592(d) demands should be sent 
to all concerned sureties and the importer of record if such party is 
not an alleged violator. Also, except in cases where less than one year 
remains before the statute of limitations may be raised as a defense, 
Customs will endeavor to issue all section 592(d) demands to concerned 
sureties and non-violator importers of record only after default by 
principals.

                           (K) Customs Brokers

    If a customs broker commits a section 592 violation and the 
violation involves fraud, or the broker commits a grossly negligent or 
negligent violation and shares in the benefits of the violation to an 
extent over and above customary brokerage fees, the customs broker will 
be subject to these guidelines. However, if the customs broker commits 
either a grossly negligent or negligent violation of section 592 
(without sharing in the benefits of the violation as described above), 
the concerned Customs field officer may proceed against the customs 
broker pursuant to the remedies provided under 19 U.S.C. 1641.

                         (L) Arriving Travelers

    (1) Liability. Except as set forth below, proposed and assessed 
penalties for violations by an arriving traveler must be determined in 
accordance with these guidelines.
    (2) Limitations on Liability on Non-commercial Violations. In the 
absence of a referral for criminal prosecution, monetary penalties 
assessed in the case of an alleged first-offense,

[[Page 307]]

non-commercial, fraudulent violation by an arriving traveler will 
generally be limited as follows:
    (a) Fraud--Duty Loss Violation. An amount ranging from a minimum of 
three times the loss of duty to a maximum of five times the loss of 
duty, provided the loss of duty is also paid;
    (b) Fraud--Non-duty Loss Violation. An amount ranging from a minimum 
of 30 percent of the dutiable value of the merchandise to a maximum of 
50 percent of its dutiable value;
    (c) Gross Negligence--Duty Loss Violation. An amount ranging from a 
minimum of 1.5 times the loss of duty to a maximum of 2.5 times the loss 
of duty provided the loss of duty is also paid;
    (d) Gross Negligence--Non-duty Loss Violation. An amount ranging 
from a minimum of 15 percent of the dutiable value of the merchandise to 
a maximum of 25 percent of its dutiable value;
    (e) Negligence--Duty Loss Violation. An amount ranging from a 
minimum of .25 times the loss of duty to a maximum of 1.25 times the 
loss of duty provided that the loss of duty is also paid;
    (f) Negligence--Non-duty Loss Violation. An amount ranging from a 
minimum of 2.5 percent of the dutiable value of the merchandise to a 
maximum of 12.5 percent of its dutiable value;
    (g) Special Assessments/Dispositions. No penalty action under 
section 592 will be initiated against an arriving traveler if the 
violation is not fraudulent or commercial, the loss of duty is $100.00 
or less, and there are no other concurrent or prior violations of 
section 592 or other statutes prohibiting false or fraudulent 
importation practices. However, all lawful duties, taxes and fees will 
be collected. Also, no penalty under section 592 will be initiated 
against an arriving traveler if the violation is not fraudulent or 
commercial, there are no other concurrent or prior violations of section 
592, and a penalty is not believed necessary to deter future violations 
or to serve a law enforcement purpose.

     (M) Violations of Laws Administered by Other Federal Agencies.

    Violations of laws administered by other federal agencies (such as 
the Food and Drug Administration, Consumer Product Safety Commission, 
Office of Foreign Assets Control, Department of Agriculture, Fish and 
Wildlife Service) should be referred to the appropriate agency for its 
recommendation. Such recommendation, if promptly tendered, will be given 
due consideration, and may be followed provided the recommendation would 
not result in a disposition inconsistent with these guidelines.

              (N) Section 592 Violations by Small Entities

    In compliance with the mandate of the Small Business Regulatory 
Enforcement Fairness Act of 1996, under appropriate circumstances, the 
issuance of a penalty under section 592 may be waived for businesses 
qualifying as small business entities.
    Procedures established for small business entities regarding 
violations of 19 U.S.C. 1592 were published as Treasury Decision 97-46 
in the Federal Register (62 FR 30378) on June 3, 1997.

[T.D. 00-41, 65 FR 39093, June 23, 2000]



  Sec. Appendix C to Part 171--Customs Regulations Guidelines for the 
 Imposition and Mitigation of Penalties for Violations of 19 U.S.C. 1641

    The Trade and Tariff Act of 1984 promulgated numerous changes to the 
current statute relating to Customs brokers. The following document 
attempts to define that conduct which is to be proscribed and to suggest 
penalty amounts to be assessed for such violations. It also chronicles 
procedures to be followed in assessment and mitigation of penalties.
    Note: Assessment of a monetary penalty is an alternative sanction to 
revocation or suspension of the broker's license or permit.

      I. Penalty Assessment Procedures--19 CFR Part 111, Subpart E

    A. When a penalty against a broker is contemplated, the 
``appropriate Customs officer'', (i.e., the Fines, Penalties, and 
Forfeitures Officer) shall issue a written notice which advises the 
violator of the allegations which would warrant imposition of a penalty. 
The written notice shall be in a format similar to a prepenalty notice 
that would be issued in contemplation of assessment of a penalty under 
section 1592 or 1584.
    B. The written notice shall inform the violator that he has 30 days 
to respond as to why a penalty should not be issued. See 19 CFR 111.92.
    C. If no response is received from the violator, or, if after 
receipt of the response, it is determined that the penalty should be 
issued as stated in the prepenalty notice, a notice of penalty CF-5955A 
shall be issued formally assessing a monetary penalty against the 
broker.
    D. The Fines, Penalties, and Forfeitures Officer may reduce the 
amount of the contemplated penalty or cancel its issuance altogether if, 
after review of the violator's submission in response to the prepenalty 
notice, he is satisfied that the acts which are the basis for the 
penalty did not occur as charged or occurred in a manner that would

[[Page 308]]

permit a reduction in the contemplated penalty.
    E. After issuance of a penalty notice, the petitioning provisions of 
part 171 of the Customs Regulations are in effect.
    F. If the broker does not comply with a final mitigation decision 
within 60 days, the matter shall be referred to the Department of 
Justice for commencement of judicial action.

 II. Penalty Assessment--Conducting Customs Business Without a License 
                         (19 U.S.C. 1641(b)(6))

    A. No person may conduct Customs business, other than solely on 
behalf of that person, without a broker's license.
    B. Penalty amount:
    1. The maximum penalty for any one incident of conducting Customs 
business without a license is $10,000.
    2. Total aggregate penalties for violation of this or any other 
section of the broker penalty statute is $30,000. As a general rule, 
$10,000 will be the maximum assessment for a violation solely involving 
conducting Customs business without a license, without regard to the 
frequency of violations. In particularly aggravated circumstances, this 
rule shall be suspended.
    C. Customs business includes:
    1. Classification and valuation.
    2. Payment of duties, taxes or other charges.
    3. Drawback or refund of duties.
    4. Filing of entries or other documents relating to issues covered 
by 1-3.
    D. Customs business does not include:
    1. Marine transactions.
    2. In-bond movement or transportation of merchandise.
    3. Foreign Trade Zone admissions. See C.S.D. 84-23.
    E. Penalty amounts to be imposed for transacting Customs business 
without a license are as follows:
    1. No penalty action when importation is conducted on behalf of a 
family member. For purposes of this subsection, ``family member'' is 
defined as a parent, child, spouse, sibling, grandparent or grandchild.
    2. No penalty action against an individual who has a power of 
attorney to act as an unpaid agent on a non-commercial shipment. See 19 
CFR 141.33.
    3. A $250 penalty for:
    a. First violation when transaction is non-commercial but is 
conducted on behalf of any business entity, or
    b. First violation where the importation is commercial in nature 
(i.e., imported merchandise is for resale) or where the violator is 
compensated for his action, e.g., an importation of raw material or 
parts of merchandise that is to be manufactured, refined or assembled 
here before resale would be a commercial entry because the merchandise 
eventually would be resold, albeit in another form than that which it 
was entered.
    4. A $1,000 penalty for repeat violation involving:
    a. Commercial importation.
    b. Non-commercial importation made on behalf of a business entity.
    c. Non-commercial importation for which compensation is received by 
the violator.
    5. A $10,000 penalty when:
    a. Violator falsely holds himself out as being a licensed Customs 
broker.
    b. A continuing course of conduct can be shown (determined by 
frequency of violations or number of entries involved) which would 
indicate that the violator is entering merchandise for others on a 
regular commercial basis, e.g., if the violator has incurred numerous 
penalties under subsections (3) and (4) above, but the smaller penalties 
have had no deterrent effect, the $10,000 penalty under this subsection 
should be assessed in an action separate from those smaller penalties.
    F. Mitigation--No mitigation will be afforded for any violation 
involving conducting Customs business without a license unless the 
violator can show an inability to pay such penalty.
    G. IMPORTANT: As a general rule, a separate penalty should not be 
imposed for each unlawful Customs business transaction if numerous 
transactions occur contemporaneously. For example:
    1. If an unlicensed individual files six commercial entries at one 
time, that should be treated as one violation. It should not be treated 
as six violations because the entries were presented contemporaneously.
    2. If Customs discovers that an individual has conducted Customs 
business without a license on numerous occasions, but such individual 
acted without knowledge of the prohibition on such conduct, those 
numerous transactions should be treated as one violation for purposes of 
imposition of any penalty.
    H. Note: Conducting Customs business without a license is not the 
same violation as conducting Customs business without a permit. The 
latter violation is discussed later in this appendix in the section 
involving Violation of Other Laws or Regulations Enforced by Customs.
    I. Intent to violate the law is not an element of this violation. 
Reference to ``intentionally transacts Customs business'' in subsection 
1641(b)(6) relates to the intentional transaction of the business 
itself, not to any intentional attempt to violate the terms of the 
statute.

[[Page 309]]

III. Section 1641(d)(1)(A)--Making a False or Misleading Statement or an 
  Omission as to Material Fact Which Was Required To Be Stated in Any 
                   Application for a License or Permit

    A. If the license would not have been issued but for the false 
statement, the proper sanction would be suspension or revocation of the 
license. If the false or misleading statement would not have absolutely 
resulted in the denial, revocation or suspension of a license, then 
penalty sanctions are proper.
    B. Material facts include but are not limited to:
    1. Facts as to identity.
    2. Facts as to citizenship status of an individual.
    3. Facts as to moral character of an individual which relate to his 
fitness to conduct Customs business.
    4. The organization of any corporation, association or partnership.
    5. The status of the license of a license holder who is a corporate 
officer or partner.
    C. Penalty Amount--$5,000 for each false statement, to a maximum of 
$30,000.
    D. Examples of situations where revocation of the license is 
appropriate.
    1. An applicant states that he is 21 years old (as required by 19 
CFR 111.11) and he is not. But for the false statement, the applicant 
could not meet the age requirement for a license.
    2. An applicant provides an alias in the application which is a 
material false statement as to identity.
    E. Mitigation guidelines.
    1. Violation due to clerical error (clerical error as defined by 19 
U.S.C. 1520(c)(1)), mitigated without payment.
    2. Violation due to negligence.
    a. This is defined as more than clerical error, but not an 
intentional violation. Examples include:
    i. Failing to list a new corporate office because corporate records 
have not been kept current.
    ii. Listing an incorrect address for a reference because applicant 
has failed to update his records.
    b. Mitigate to $500 for each $5,000 penalty assessed.
    c. This category excludes cases of harmless error, i.e., a mistake 
which could not possibly harm the government's interests. Cases falling 
in this category should be mitigated in full.
    3. Intentional violations--Revocation of a license which has been 
granted is the preferred sanction. If no license has been granted, no 
mitigation.

   IV. Section 1641(d)(1)(B)--Broker Convicted of Certain Felonies or 
          Misdemeanors Subsequent To Filing License Application

    A. As a general rule, license revocation is the standard sanction 
for these violations. If the conviction occurs subsequent to the filing 
of an application, monetary penalties may be assessed according to the 
following criteria.
    B. Unlawful conduct must relate to:
    1. Importation or exportation of merchandise.
    2. Conduct of Customs business (this shall include violations 
relating to taxes and duties and documents required to be filed with 
regard to such taxes and duties).
    3. Relevant convictions would include:
    a. 18 U.S.C. 1001--making a false statement to Customs or any other 
agency with regard to any relevant transaction.
    b. 18 U.S.C. 545--unlawful importation of merchandise.
    c. 18 U.S.C. 542--unlawful importation by means of a fraudulent act 
or omission.
    d. 22 U.S.C. 2778--illegal exportation of munitions.
    C. Monetary penalties may not be imposed in connection with 
convictions relating to conduct described in subsection 
1641(d)(1)(B)(iii) including larceny, theft, robbery, extortion, 
counterfeiting, fraudulent concealment or conversion, embezzlement or 
misappropriation of funds. Either suspension or revocation is the 
appropriate penalty for these infractions.
    D. Penalty amounts.
    1. $15,000 for a misdemeanor conviction.
    2. $30,000 for a felony conviction.
    E. Mitigation.
    1. For a misdemeanor conviction, mitigation to a lesser amount is 
permitted if the conviction related to Customs business and the domestic 
value of the merchandise involved is less than $15,000. In such case, 
mitigation to an amount equal to the domestic value of the merchandise 
is appropriate.
    2. For other misdemeanor convictions, no relief.
    3. Felony convictions, no relief.

 V. Section 1641(d)(1)(C)--Violation of Any Law Enforced by the Customs 
   Service or the Rules or Regulations Issued Under Any Such Provision

    A. Penalties under this section may be imposed in addition to any 
penalty provided for under the law enforced by Customs. Exception: 
Penalties imposed against a broker under 19 U.S.C. 1592 at a culpability 
level of less than fraud or under 19 U.S.C. 1595a(b) shall not be 
imposed in addition to a broker's penalty.
    B. Additional penalties under this section shall also be imposed 
against any broker where the other statute violated only moves

[[Page 310]]

against property, or the violator has demonstrated a continuing course 
of illegal conduct or evidence exists which indicates repeated 
violations of other statutes or regulations.
    C. Conducting Customs business without a permit penalties should be 
assessed under this section.
    1. The penalty notice should also cite 19 CFR 111.19 as the 
regulation violated. A party operating without a permit is required to 
apply for one under the above-noted regulation.
    2. Assessment amount--$1,000 per transaction conducted without a 
permit.
    3. Mitigation.
    a. Negligence, mitigate to $250-$500 per transaction depending on 
the presence of mitigating factors (lack of knowledge of permit 
requirement).
    b. Intentional, grant no relief.
    c. No mitigation if permit revoked by operation of law.
    4. Generally, a separate penalty should not be assessed for each 
non-permitted transaction if numerous transactions occurred 
contemporaneously. For example, if a broker files 30 entries the day 
after a permit expires, the 30 filings should be treated as one 
violation, not 30 separate violations.
    D. Penalties for failure to exercise due diligence in payment, 
refund or deposit of monies received from clients in connection with 
clients' Customs business also should be assessed under this section. 
This includes failure to pay over to a client, or file a written 
statement to a client accounting for, funds received.
    1. The penalty notice should also cite 19 CFR 111.29 as the 
regulation violated.
    2. Assessment amount--an amount equal to the value of any monies up 
to a maximum of $30,000, to be deposited with Customs or refunded or 
accounted for to a client.
    3. No mitigation shall be afforded until the monies are properly 
paid to Customs or refunded or accounted for to the clients.
    4. If any claims for liquidated damages result against the client's 
bond from the failure to pay monies to Customs, no mitigation from the 
penalty shall be granted until the claim for liquidated damages is 
settled by the violating broker either through payment of the full claim 
or a mitigated amount.
    5. After monies are paid or accounted for and/or liquidated damages 
claims are settled as stated in 3. and 4. above, mitigation may be 
afforded. If the violator is found to be negligent, the penalty may be 
mitigated to an amount between 25 and 50 percent of the assessed amount, 
but no lower than $250. No mitigation from an intentional violation.
    E. Penalties for failure to retain powers of attorney from clients 
to act in their names.
    1. The penalty notice should also cite 19 CFR 141.46 as the 
regulation violated.
    2. Assessment amount--$1,000 for each power of attorney not on file.
    3. Mitigation--for a first offense, mitigate to an amount between 
$250 and $500 unless extraordinary mitigating factors are present, in 
which case full mitigation should be afforded. An extraordinary 
mitigating factor would be a fire, theft or other destruction of records 
beyond broker control. Subsequent offenses--no mitigation unless 
extraordinary mitigating factors are present.
    4. Penalty should be mitigated in full if it can be established that 
a valid power of attorney had been issued to the broker, but it was 
misplaced or destroyed through clerical error or mistake.
    F. If the other statute violated moves only against property, the 
violator shall incur a monetary penalty equal to the domestic value of 
such property or $30,000, whichever is less.

e.g., Violation of 22 U.S.C. 401 for unlawful exportation of merchandise 
results in seizure and forfeiture of the violative merchandise. There 
are no penalty provisions which Customs enforces against parties 
responsible for the seizable offense. If brokers are recalcitrant and 
are constantly responsible for offenses which result in seizure of 
merchandise, a penalty equal to the domestic value of such merchandise 
(in no case to exceed $30,000) should be imposed.
    G. Use of a broker's importation bond to aid an importer who has had 
his immediate delivery privileges revoked.
    1. The broker has aided his client in avoiding the immediate 
delivery sanctions. The penalty notice should cite 19 CFR 142.25(c) as 
the regulation violated. Before assessment of this penalty, the broker 
should be shown to have known or been negligent in not knowing of the 
client's sanction.
    2. A penalty equal to the value of the merchandise, not to exceed 
$30,000, should be assessed.
    3. Mitigation--The penalty shall be mitigated to an amount between 
25 and 50 percent of that assessed for a first violation where 
negligence is shown. Any knowing violation or a subsequent negligent 
violation (not necessarily involving the same client) will result in no 
mitigation.
    H. If the other statute violated provides for a personal penalty, 
the violator shall incur an additional monetary penalty under this 
section equal to such personal penalty or $30,000, whichever is less.
    I. Penalties assessed under this provision are not limited to 
violations just involving Customs business as defined in the statute.
    J. Mitigation guidelines.
    1. If the other law violated moves only against property, mitigate 
the penalty using guidelines in effect for the other statute violated. 
For example, if the broker is responsible for a 401 seizure of 
merchandise valued at $45,000, he incurs a penalty of $30,000. The

[[Page 311]]

guidelines for remission of the 401 forfeiture are applicable to 
mitigation of the broker penalty. Thus, if the forfeiture is remitted 
upon payment of 5 percent of the merchandise's value, the penalty will 
be mitigated upon payment of a like amount.
    2. If the other law violated provides for a personal penalty, 
mitigate the broker penalty using guidelines in effect for the other 
statute violated.

For example, a broker incurs a $40,000 penalty under 1592. The penalty 
amount represents eight times the loss of revenue because a preliminary 
finding of fraud is made (see section V.A. of this appendix). A penalty 
of $30,000, in addition to the $40,000 penalty issued under 1592, may be 
assessed. The 1592 penalty is later mitigated to $25,000, an amount 
equal to five times the loss of revenue, as the finding of fraud is 
upheld and it is also determined that the broker shared in the financial 
benefits of the violation. The broker penalty also should be mitigated 
to that $25,000 figure, for a total collection of $50,000.

 VI. Section 1641(d)(1)(D)--Counseling, Commanding, Inducing, Procuring 
 or Knowingly Aiding and Abetting Violations by Any Other Person of Any 
                   Law Enforced by the Customs Service

    A. If the law violated by another moves only against property, a 
monetary penalty equal to the domestic value of such property or $30,000 
whichever is less, may be imposed against the broker who counsels, 
commands or knowingly aids and abets such violation.
    B. If the law violated provides for only a personal penalty against 
the actual violator, a penalty may be imposed against the broker in an 
amount equal to that assessed against the violator, but in no case can 
the penalty exceed $30,000.
    C. If the broker is assessed a penalty under the statute violated by 
the other person, he may be assessed a penalty under this section in 
addition to any other penalties.
    D. Examples of violations of this subsection:
    1. A broker counsels a client that certain gemstones are absolutely 
free of duty and need not be declared upon entry into the United States. 
The client arrives in the United States and fails to declare a quantity 
of gemstones worth $45,000. A penalty of $30,000 may be imposed against 
the broker for such counseling. The client would incur a personal 
penalty of $45,000 under the provisions of title 19, United States Code, 
section 1497, but the penalty against the broker cannot exceed $30,000.
    2. A client imports $15,000 worth of merchandise by vessel. The 
merchandise is unladen at the wharf but Customs has not appraised or 
released it. Customs informs the broker that the shipment must be held 
for an intensive examination. The broker informs the client that the 
merchandise can be moved and delivered to the consignee. The broker 
assures his client that he will handle all the necessary paperwork. The 
merchandise is moved from the wharf. The broker is subject to a $15,000 
penalty for counseling and inducing his client to violate the provisions 
of title 19, United States Code, section 1448 and title 19, United 
States Code, section 1595a(b).
    E. Mitigation--Follow guidelines applicable to the other penalty or 
forfeiture statute involved.

VII. Section 1641(d)(1)(E)--Knowingly Employing or Continuing To Employ 
Any Person Who Has Been Convicted of a Felony, Without Written Approval 
          of Such Employment From the Secretary of the Treasury

    A. A broker has 30 days to seek approval of the Secretary for such 
employment. If he seeks the approval within such time, no penalty will 
be assessed.
    B. A $5,000 penalty for knowingly employing any convicted felon and 
failing to make application with the Secretary approving such employment 
within 30 days of the date of discovery of the felony conviction.
    C. A $25,000 penalty for knowingly employing any convicted felon 
without seeking approval for employment.
    D. A $30,000 penalty for knowingly employing any convicted felon and 
continuing to employ same after approval has been denied (generally 
revocation or suspension of the license would be appropriate under this 
circumstance).
    E. Example: If a broker unknowingly employs a convicted felon and 1 
year after employment discovers the existence of such a conviction, the 
following actions would dictate imposition of a penalty:
    1. If he seeks approval of the Secretary within 30 days after 
discovery of the existence of the conviction, no penalty will be 
assessed.
    2. If he seeks approval at some time after 30 days from the date of 
discovery, a $5,000 penalty would lie.
    3. If he does not seek approval until after Customs becomes aware of 
the violation, a $25,000 penalty would lie.
    4. If he seeks approval, but is denied, and continues to employ the 
convicted felon, a $30,000 penalty would lie.
    F. Customs discovery of a felony conviction. If Customs discovers 
the felony conviction and there is no indication that the employer is 
aware of same, Customs may inform the employer of such conviction. 
Discretion should be used in divulging this information.
    G. Mitigation will only be permitted from the $5,000 penalty as 
follows:

[[Page 312]]

    1. If the application for approval is submitted within 60 days, but 
after 30 days, mitigate to $2,000.
    2. If there is no application beyond the 60-day period, no 
mitigation shall be granted. Continued employment will result in further 
penalties as described above in sections E.3 and E.4.

  VIII. Section 1641(d)(1)(F)--In the Course of Customs Business, With 
 Intent To Defraud, Knowingly Deceiving, Misleading or Threatening Any 
                      Client or Prospective Client

    A. An unsubstantiated accusation by a client is inadequate basis to 
assess any penalty under this section of law.
    B. A $30,000 penalty should be imposed for any violation of this 
section.
    C. Mitigation--Inasmuch as evidence of intent must be shown before a 
penalty can be imposed, no mitigation should be permitted if a violation 
is found to lie. A petition for mitigation could be entertained only on 
the issue of whether such violation did, in fact, occur.

IX. Section 1641(b)(5)--The Failure of a Customs Broker That is Licensed 
as a Corporation, Association or Partnership To Have, For Any Continuous 
     Period of 120 Days, at Least One Officer of the Corporation or 
      Association or One Member of the Partnership Validly Licensed

    A. Important: Violation of this section results in the revocation of 
the broker's license by operation of law.
    B. A $10,000 penalty may be imposed pursuant to section 1641(b)(6) 
because the revocation by operation of law results in the broker 
conducting Customs business without a license. No penalty liability 
would be incurred specifically under section 1641(b)(5).
    C. Mitigation--Grant no mitigation from any penalty incurred by a 
broker for conducting Customs business without a license as a result of 
revocation of that license by operation of law.

 X. Section 1641(c)(3)--Failure of a Customs Broker Granted a Permit To 
   Conduct Business in a Certain District to Employ, for a Continuous 
 Period of 180 Days, at Least One Individual Who is Licensed Within the 
                           District or Region

    A. Important: Violation of this section results in the revocation of 
a permit by operation of law.
    B. Penalties may be imposed for violation of the provisions of 
1641(d)(1)(C), violation of other laws enforced by Customs. Guidelines 
for imposition of penalties for conducting Customs business without a 
permit should be followed.
    C. Mitigation--No mitigation should be permitted from any penalty 
imposed for failure to have a permit when the permit lapses by operation 
of law.

    XI. Section 1641(b)(4)--Failure of a Licensed Broker To Exercise 
 Responsible Supervision and Control Over the Customs Business That it 
                                Conducts

    A. Standards of responsible supervision and control shall be issued 
by the Commissioner of Customs. Statutory authority to set such 
standards is provided by section 1641(f).

    Note: All penalties assessed for violation of 1641(b)(4) shall also 
cite section 1641(d)(1)(C) as the statute violated in all notices issued 
to the alleged violator.

    B. The following penalty amounts shall be assessed against brokers 
who fail to exercise responsible supervision and control over business 
conducted at district level.
    1. A penalty of $1,000 against any broker who:
    a. Continuously makes the same errors on a particular type of entry;
    b. Fails to properly instruct employees about Customs business, 
thereby resulting in the filing of incorrect entries or the mishandling 
of transactions relating to Customs business;
    c. Knowingly allows his entry bond to be used to effect release of 
merchandise in districts where he does not have a license or permit 
(this is imposed in addition to any penalty for conducting Customs 
business without a license);
    d. Fails to comply with regulations or procedures but does not 
commit violations that would warrant any higher penalty amount as 
described below.
    2. A penalty of $5,000 against any broker who, when requested, is 
unable to produce documents relating to specific Customs business which 
are material to that business (e.g., if the business regards an entry he 
should have the invoice, packing list, etc.). This requirement excludes 
documents not required to be kept by a broker.
    3. A penalty of $5,000 against any broker who is unable to satisfy 
the deciding Customs official that he has a working knowledge of any 
operation material to his ability to render valuable service to others 
in the conduct of Customs business.
    Examples include:
    a. A working knowledge of all automated systems in use in the 
district;
    b. A knowledge of the cash flow procedures in each district of 
operation;
    c. Retention of copies of all surety bonds in proper form and in 
sufficient dollar amount;
    d. Knowledge of filing systems and document record storage in each 
district;

[[Page 313]]

    e. Continuous monitoring to ensure timely payment of all obligations 
including duties, taxes and refunds.
    4. A penalty of $5,000 against any broker who fails to exercise 
responsible supervision and control over the Customs business that it 
conducts as defined in section XI.C. of this appendix.
    5. A penalty of $10,000 against any broker who is found to have 
failed to maintain satisfactory accounting records or records of 
documents filed with Customs on any matter.
    C. The following factors shall be indicative of a lack of 
supervision or lack of working knowledge of Customs procedures (the list 
is not conclusive):
    1. A high rate of entry rejections when compared with other brokers 
in the permitted district.
    2. A high rate of late filing liquidated damages cases when compared 
with other brokers in the permitted district.
    3. In the case of entry summaries filed in the broker's name, a high 
number of missing document cases when compared with other brokers in the 
permitted district.
    4. An inordinate number of entries for which free entry is claimed, 
but no documentation supporting such claim is submitted, resulting in 
liquidation of the entries as dutiable.
    5. Inability to assist or failure to cooperate with an audit, 
including failure to provide all records and any other necessary 
information pertaining to a broker's Customs business to assist 
auditors.
    6. Failure to settle (including petitioning) liquidated damages 
claims in a timely manner.
    7. Evidence to indicate that timely duty refunds to clients are not 
made or accounted for and adequate records of same are not kept (usually 
will result in penalty assessed in accordance with section B.5. above).
    8. Employing a licensed individual for a minimal number of days each 
120- or 180-day period (see sections 1641(b)(5) and 1641(c)(3) so as to 
avoid violation of the statute.
    a. For purposes of imposition of penalties under this subsection, a 
minimal number of days shall be 10 working days for each 120-day period 
or 15 working days for each 180-day period.
    b. It shall be presumed that temporary employment of such a licensed 
individual is undertaken solely to avoid revocation of a license or 
permit. Such minimal employment shall be prima facie evidence of lack of 
supervision.
    D. Mitigation.
    1. $1,000 penalties shall not be mitigated unless the broker can 
show that extraordinary mitigating factors are present.
    2. $5,000 penalties for failure to produce documents may be 
mitigated to an amount between $2,000 and $3,500 if the documents are 
produced but not in a timely fashion. No mitigation shall be afforded if 
the documents are not produced, unless the broker can satisfactorily 
demonstrate that such failure to produce was caused by circumstances 
beyond the control of the broker or his client (e.g., a rupture of 
relations with the party responsible for generating the documents). Full 
mitigation shall be afforded in the case of destruction of records by 
events beyond a broker's control, such as theft, flood, fire or other 
acts of God.
    3. $5,000 penalty for failure to have a working knowledge of any 
operation for which a broker is licensed to do business may be mitigated 
to a lesser amount upon a showing by the broker that steps have been 
taken to improve instruction and supervision of employees and an 
improvement in the knowledge of his operation occurs.
    4. $5,000 penalty for failure to exercise responsible supervision 
and control may be mitigated to a lesser amount if the broker 
immediately corrects the problem which was the basis for the assessment 
and sufficiently monitors the situation to avoid recurrence.
    5. $10,000 penalty for failure to maintain satisfactory accounting 
records will only be subject to mitigation in full if the broker can 
prove that satisfactory accounting records and documents records are 
being kept. Mitigation in a lesser degree may be afforded upon a showing 
by the broker that a bona fide attempt was made to establish a 
satisfactory accounting and/or recordkeeping system, or upgrade a 
deficient system, but such efforts proved unsuccessful or only partially 
effective.
    6. Penalty equal to the value of monies not properly paid or 
accounted for.
    a. If the broker shows that the monies were paid or accounted for 
and requisite notifications were made, albeit in an untimely fashion not 
to exceed 30 days after any due date, the penalty may be mitigated upon 
payment of 25 percent of the assessed amount, but no less than $250.
    b. If the monies were paid and notifications made more than 30 days 
after any due date, the penalty may be mitigated upon payment of 50 
percent of the assessed amount, but not less than $1,000.
    c. If there is no proof of proper payment of duties, refunds, etc., 
no mitigation shall be granted.

                   XII. Limits of Penalty Assessments

    A. A broker shall be penalized a maximum of $30,000 for any 
violation or violations of the statute in any one penalty notice.
    B. If a broker is penalized to the maximum the statue will allow and 
continues to commit the same violation or violations, revocation or 
suspension of his license would be the appropriate sanction. Barring 
such revocation or suspension action, he may again be

[[Page 314]]

penalized to the maximum the statute will allow.
    C. From any one audit, the maximum aggregate penalty for all 
violations discovered is $30,000.

                      XIII. Consolidation of Cases

    Whenever multiple penalties arising from a particular fact situation 
or pattern are contemplated against brokers or individuals operating in 
different districts, the cases may be consolidated in one district. 
Approval for consolidation must be sought from the Trade Policy and 
Programs, Office of International Trade.

[T.D. 90-20, 55 FR 10056, Mar. 19, 1990, as amended by T.D. 97-82, 62 FR 
51771, Oct. 3, 1997; T.D. 99-27, 64 FR 13676, Mar. 22, 1999; T.D. 00-57, 
65 FR 53578, Sept. 5, 2000; 65 FR 65770, Nov. 2, 2000]



     Sec. Appendix D to Part 171--Guidelines for the Imposition and 
        Mitigation of Penalties for Violations of 19 U.S.C. 1593a

    A monetary penalty incurred under section 593A, Tariff Act of 1930, 
as amended (19 U.S.C. 1593a; hereinafter referred to as section 593A), 
may be remitted or mitigated under section 618, Tariff Act of 1930, as 
amended (19 U.S.C. 1618; hereinafter referred to as section 618), if it 
is determined that there exist such mitigating circumstances as to 
justify remission or mitigation. The guidelines below will be used by 
Customs in arriving at a just and reasonable assessment and disposition 
of liabilities arising under section 593A within the stated limitations. 
It is intended that these guidelines will be applied by Customs officers 
in prepenalty proceedings, in determining the monetary penalty assessed 
in the penalty notice, and in arriving at a final penalty disposition. 
The assessed or mitigated penalty amount set forth in Customs 
administrative disposition determined in accordance with these 
guidelines does not limit the penalty amount which the Government may 
seek in bringing a civil enforcement action pursuant to 19 U.S.C. 
1593a(i).

                     (A) Violations of Section 593A

    A violation of section 593A occurs when a person, through fraud or 
negligence, seeks, induces, or affects, or attempts to seek, induce, or 
affect, the payment or credit to that person or others of any drawback 
claim by means of any document, written or oral statement, or 
electronically transmitted data or information, or act which is material 
and false, or any omission which is material, or aids or abets any other 
person in the foregoing violation. There is no violation if the falsity 
is due solely to clerical error or mistake of fact unless the error or 
mistake is part of a pattern of negligent conduct. Also, the mere 
nonintentional repetition by an electronic system of an initial clerical 
error will not constitute a pattern of negligent conduct. Nevertheless, 
if Customs has drawn the person's attention to the nonintentional 
repetition by an electronic system of an initial clerical error, 
subsequent failure to correct the error could constitute a violation of 
section 593A.

                       (B) Degrees of Culpability

    There are two degrees of culpability under section 593A: negligence 
and fraud.
    (1) Negligence. A violation is determined to be negligent if it 
results from an act or acts (of commission or omission) done with actual 
knowledge of, or wanton disregard for, the relevant facts and with 
indifference to, or disregard for, the offender's obligations under the 
statute or done through the failure to exercise the degree of reasonable 
care and competence expected from a person in the same circumstances in 
ascertaining the facts or in drawing inferences from those facts, in 
ascertaining the offender's obligations under the statute, or in 
communicating information so that it may be understood by the recipient. 
As a general rule, a violation is determined to be negligent if it 
results from the offender's failure to exercise reasonable care and 
competence to ensure that a statement made is correct.
    (2) Fraud. A violation is determined to be fraudulent if the 
material false statement, omission or act in connection with the 
transaction was committed (or omitted) knowingly, i.e., was done 
voluntarily and intentionally, as established by clear and convincing 
evidence.

                       (C) Assessment of Penalties

    (1) Issuance of Prepenalty Notice. As provided in Sec. 162.77a of 
the Customs Regulations (19 CFR 162.77a), if Customs has reasonable 
cause to believe that a violation of section 593A has occurred and 
determines that further proceedings are warranted, a notice of intent to 
issue a claim for a monetary penalty will be issued to the person 
concerned. In issuing such prepenalty notice, the appropriate Customs 
field officer will make a tentative determination of the degree of 
culpability and the amount of the proposed claim. A prepenalty notice 
will not be issued if the claim does not exceed $1,000.
    (2) Issuance of Penalty Notice. After considering representations, 
if any, made by the person concerned pursuant to the notice issued under 
paragraph (C)(1), the appropriate Customs field officer will determine 
whether any violation described in section (A) has occurred. If a notice 
was issued under paragraph (C)(1) and the appropriate Customs field 
officer determines that there was no violation, Customs will promptly 
issue a

[[Page 315]]

written statement of the determination to the person to whom the notice 
was sent. If the appropriate Customs field officer determines that there 
was a violation, Customs will issue a written penalty claim to the 
person concerned. The written penalty claim will specify all changes in 
the information provided in the prepenalty notice issued under paragraph 
(C)(1). The person to whom the penalty notice is issued will have a 
reasonable opportunity under section 618 to make representations, both 
oral and written, seeking remission or mitigation of the monetary 
penalty. At the conclusion of any proceeding under section 618, Customs 
will provide to the person concerned a written statement which sets 
forth the final determination and the findings of fact and conclusions 
of law on which such determination is based.

                          (D) Maximum Penalties

    (1) Fraud. In the case of a fraudulent violation of section 593A, 
the monetary penalty will be in an amount not to exceed 3 times the 
actual or potential loss of revenue.
    (2) Negligence.
    (a) In General. In the case of a negligent violation of section 
593A, the monetary penalty will be in an amount not to exceed 20 percent 
of the actual or potential loss of revenue for the first violation.
    (b) Repetitive Violations. For the first negligent violation that is 
repetitive (i.e., involves the same issue and the same violator), the 
penalty will be in an amount not to exceed 50 percent of the actual or 
potential loss of revenue. The penalty for a second and each subsequent 
repetitive negligent violation will be in an amount not to exceed the 
actual or potential loss of revenue.
    (3) Prior Disclosure.
    (a) In General. Subject to paragraph (D)(3)(b), if the person 
concerned discloses the circumstances of a violation of section 593A 
before, or without knowledge of the commencement of, a formal 
investigation of such violation, the monetary penalty assessed under 
this Appendix will not exceed:
    (i) In the case of fraud, an amount equal to the actual or potential 
revenue of which the United States is or may be deprived as a result of 
overpayment of the claim; or
    (ii) If the violation resulted from negligence, an amount equal to 
the interest computed on the basis of the prevailing rate of interest 
applied under 26 U.S.C. 6621 on the amount of actual revenue of which 
the United States is or may be deprived during the period that begins on 
the date of overpayment of the claim and ends on the date on which the 
person concerned tenders the amount of the overpayment.
    (b) Condition Affecting Penalty Limitations. The limitations in 
paragraph (D)(3)(a) on the amount of the monetary penalty to be assessed 
apply only if the person concerned tenders the amount of the overpayment 
made on the claim either at the time of the disclosure or within 30 days 
(or such longer period as Customs may provide) from the date of notice 
by Customs of its calculation of the amount of overpayment.
    (c) Burden of Proof. The person asserting lack of knowledge of the 
commencement of a formal investigation has the burden of proof in 
establishing such lack of knowledge.
    (d) Commencement of Investigation. For purposes of this Appendix, a 
formal investigation of a violation is considered to be commenced with 
regard to the disclosing party, and with regard to the disclosed 
information, on the date recorded in writing by Customs as the date on 
which facts and circumstances were discovered which caused Customs to 
believe that a possibility of a violation of section 593A existed.
    (e) Exclusivity. Penalty claims under section D will be the 
exclusive civil remedy for any drawback-related violation of section 
593A.

                    (E) Deprivation of Lawful Revenue

    Notwithstanding section 514, Tariff Act of 1930, as amended (19 
U.S.C. 1514), if the United States has been deprived of lawful duties 
and taxes resulting from a violation of section 593A, Customs will 
require that such duties and taxes be restored whether or not a monetary 
penalty is assessed.

(F) Final Disposition of Penalty Cases When the Drawback Claimant Is Not 
       a Certified Participant in the Drawback Compliance Program

    (1) In General. Customs will consider all information in the 
petition and all available evidence, taking into account any mitigating, 
aggravating, and extraordinary factors, in determining the final 
assessed penalty. All factors considered should be stated in the 
decision.
    (2) Penalty Disposition When There Has Been No Prior Disclosure.
    (a) Nonrepetitive Negligent Violation. The final penalty disposition 
will be in an amount ranging from a minimum of 10 percent of the actual 
or potential loss of revenue to a maximum of 20 percent of the actual or 
potential loss of revenue.
    (b) Repetitive Negligent Violation.
    (i) First Repetitive Negligent Violation. The final penalty 
disposition will be in an amount ranging from a minimum of 25 percent of 
the actual or potential loss of revenue to a maximum of 50 percent of 
the actual or potential loss of revenue.
    (ii) Second and Each Subsequent Repetitive Negligent Violation. The 
final penalty disposition will be in an amount ranging from a minimum of 
50 percent of the actual or potential loss of revenue to a maximum of 
100 percent of the actual or potential loss of revenue.

[[Page 316]]

    (c) Fraudulent Violation. The final penalty disposition will be in 
an amount ranging from a minimum of 1.5 times the actual or potential 
loss of revenue to a maximum of 3 times the actual or potential loss of 
revenue.
    (3) Penalty Disposition When There Has Been a Prior Disclosure.
    (a) Negligent Violation. The final penalty disposition will be in an 
amount equal to the interest determined in accordance with paragraph 
(D)(3)(a)(ii).
    (b) Fraudulent Violation. The final penalty disposition will be in 
an amount equal to 100 percent of the actual or potential loss of 
revenue.
    (4) Mitigating Factors. The following factors will be considered in 
mitigation of the proposed or assessed penalty claim or final penalty 
amount, provided that the case record sufficiently establishes their 
existence. The list is not exclusive.
    (a) Contributory Customs Error. This factor includes misleading or 
erroneous advice given by a Customs official in writing to the alleged 
violator, but this factor may be applied in such a case only if it 
appears that the alleged violator reasonably relied upon the written 
information and the alleged violator fully and accurately informed 
Customs of all relevant facts. The concept of comparative negligence may 
be utilized in determining the weight to be assigned to this factor. If 
the Customs error contributed to the violation, but the alleged violator 
is also culpable, the Customs error is to be considered as a mitigating 
factor. If it is determined that the Customs error was the sole cause of 
the violation, the proposed or assessed penalty is to be cancelled.
    (b) Cooperation With the Investigation. To obtain the benefits of 
this factor, the alleged violator must exhibit cooperation beyond that 
expected from a person under investigation for a Customs violation. An 
example of the cooperation contemplated includes assisting Customs 
officers to an unusual degree in auditing the books and records of the 
alleged violator (e.g., incurring extraordinary expenses in providing 
computer runs solely for submission to Customs to assist the agency in 
cases involving an unusually large number of entries and/or complex 
issues). Another example consists of assisting Customs in obtaining 
additional information relating to the subject violation or other 
violations. Merely providing the books and records of the alleged 
violator may not be considered cooperation justifying mitigation 
inasmuch as Customs has the right to examine an importer's books and 
records pursuant to 19 U.S.C. 1508-1509.
    (c) Immediate Remedial Action. This factor includes the payment of 
the actual loss of revenue prior to the issuance of a penalty notice and 
within 30 days after Customs notifies the alleged violator of the actual 
loss of revenue attributable to the violation. In appropriate cases, 
where the alleged violator provides evidence that, immediately after 
learning of the violation, substantial remedial action was taken to 
correct organizational or procedural defects, immediate remedial action 
may be granted as a mitigating factor. Customs encourages immediate 
remedial action to ensure against future incidents of non-compliance.
    (d) Prior Good Record. Prior good record is a factor only if the 
alleged violator is able to demonstrate a consistent pattern of filing 
drawback claims without violation of section 593A, or any other statute 
prohibiting the making or filing of a false statement or document in 
connection with a drawback claim. This factor will not be considered in 
alleged fraudulent violations of section 593A.
    (e) Inability to Pay the Customs Penalty. The party claiming the 
existence of this factor must present documentary evidence in support 
thereof, including copies of income tax returns for the previous 3 years 
and an audited financial statement for the most recent fiscal quarter. 
In certain cases, Customs may waive the production of an audited 
financial statement or may request alternative or additional financial 
data in order to facilitate an analysis of a claim of inability to pay 
(e.g., examination of the financial records of a foreign entity related 
to the U.S. company claiming inability to pay). In addition, the alleged 
violator must present information reflecting ownership and related 
domestic and foreign parties and must provide information reflecting its 
current financial condition, including books and records of account, 
bank statements, other tax records (for example, sales tax returns) and 
a list of assets with current values; if the alleged violator is a 
closely held corporation, similar current financial information must be 
provided on the shareholders, wherever they are located.
    (f) Customs Knowledge. This factor may be used in non-fraud cases 
(which also are not the subject of a criminal investigation) if it is 
determined that Customs had actual knowledge of a violation and failed, 
without justification, to inform the violator so that it could have 
taken earlier remedial action. This factor is not applicable when a 
substantial delay in the investigation is attributable to the alleged 
violator.
    (5) Aggravating Factors. Certain factors may be determined to be 
aggravating factors in calculating the amount of the proposed or 
assessed penalty claim or the amount of the final administrative 
penalty. The presence of one or more aggravating factors may not be used 
to raise the level of culpability attributable to the alleged 
violations, but may be used to offset the presence of mitigating 
factors. The following factors will be considered ``aggravating 
factors'', provided that the case record sufficiently establishes their 
existence. The list is not exclusive.
    (a) Obstructing an investigation or audit.

[[Page 317]]

    (b) Withholding evidence.
    (c) Providing misleading information concerning the violation.
    (d) Prior substantive violations of section 593A for which a final 
administrative finding of culpability has been made.
    (e) Failure to comply with a Customs summons or lawful demand for 
records.

              (G) Drawback Compliance Program Participants

    (1) In General. Special alternative procedures and penalty 
assessment standards apply in the case of negligent violations of 
section 593A committed by persons who are certified as participants in 
the Customs drawback compliance program and who are generally in 
compliance with the procedures and requirements of that program. 
Provisions regarding the operation of the drawback compliance program 
are set forth in part 191 of the Customs Regulations (19 CFR part 191).
    (2) Alternatives to Penalties. When a participant described in 
paragraph (G)(1) commits a violation of section 593A, in the absence of 
fraud or repeated violations and in lieu of a monetary penalty, Customs 
will issue a written notice of the violation (warning letter).
    (a) Contents of Notice. The notice will:
    (i) State that the person has violated section 593A;
    (ii) Explain the nature of the violation; and
    (iii) Warn the person that future violations of section 593A may 
result in the imposition of monetary penalties and that repetitive 
violations may result in removal of certification under the drawback 
compliance program until the person takes corrective action that is 
satisfactory to Customs.
    (b) Response to Notice. Within 30 days from the date of mailing of 
the written notice, the person must notify Customs in writing of the 
steps that have been taken to prevent a recurrence of the violation 
unless the person establishes to the satisfaction of Customs that no 
violation took place (see Sec. 162.73a(b)(2)(ii) of the Customs 
Regulations, 19 CFR 162.73a(b)(2)(ii)). If the person fails to provide 
the required notification in a timely manner, any penalty assessed for a 
repetitive violation under paragraph (G)(3) will not be subject to 
mitigation under this Appendix.
    (3) Repetitive Violations.
    (a) In General. A person who has been issued a written notice under 
paragraph (G)(2) and who subsequently commits a negligent violation that 
is repetitive (i.e., involves the same issue), and any other person who 
is a participant described in paragraph (G)(1) and who commits a 
repetitive negligent violation, is subject to one of the following 
monetary penalties:
    (i) An amount not to exceed 20 percent of the loss of revenue for 
the first repetitive violation that occurs within three years from the 
date of the violation of which it is repetitive;
    (ii) An amount not to exceed 50 percent of the loss of revenue for 
the second repetitive violation that occurs within three years from the 
date of the first of two violations of which it is repetitive ; and
    (iii) An amount not to exceed 100 percent of the loss of revenue for 
the third and each subsequent repetitive violation that occurs within 
three years from the date of the first of three or more violations of 
which it is repetitive.
    (b) Repetitive Violations Outside 3-Year Period. If a participant 
described in paragraph (G)(1) commits a negligent violation that is 
repetitive but that did not occur within 3 years of the violation of 
which it is repetitive, the new violation will be treated as a first 
violation for which a written notice will be issued in accordance with 
paragraph (G)(2), and each repetitive violation subsequent to that 
violation that occurs within any 3-year period described in paragraph 
(G)(3)(a) will result in the assessment of the applicable monetary 
penalty prescribed in that paragraph.
    (4) Final Penalty Disposition When There Has Been No Prior 
Disclosure.
    (a) In General. Customs will consider all information in the 
petition and all available evidence, taking into account any mitigating 
factors (see paragraph (F)(4)), aggravating factors (see paragraph 
(F)(5)), and extraordinary factors in determining the final assessed 
penalty. All factors considered should be stated in the decision.
    (b) First Repetitive Negligent Violation Within 3 Years of Violation 
Handled Under Paragraph (G)(2). The final penalty disposition will be in 
an amount ranging from a minimum of 10 percent of the loss of revenue to 
a maximum of 20 percent of the loss of revenue.
    (c) Second Repetitive Negligent Violation Within 3 Years of 
Violation Handled Under Paragraph (G)(2) or (G)(3). The final penalty 
disposition will be in an amount ranging from a minimum of 25 percent of 
the loss of revenue to a maximum of 50 percent of the loss of revenue.
    (d) Third and Each Subsequent Repetitive Negligent Violation Within 
3 Years of Violation Handled Under Paragraph (G)(2) or (G)(3). The final 
penalty disposition will be in an amount ranging from a minimum of 50 
percent of the loss of revenue to a maximum of 100 percent of the loss 
of revenue.
    (e) Fraudulent Violations. The final penalty disposition will be 
determined in the same manner as in the case of fraudulent violations 
committed by persons who are not participants in the drawback compliance 
program (see paragraph (F)(2)(c)).
    (5) Final Penalty Disposition When There Has Been A Prior 
Disclosure. The final penalty disposition will be determined in the same 
manner as in the case of persons who are not participants in the 
drawback compliance program (see paragraph (F)(3)).

[[Page 318]]

                    (H) Violations by Small Entities

    In compliance with the mandate of the Small Business Regulatory 
Enforcement Fairness Act of 1996, under appropriate circumstances, the 
issuance of a penalty under section 593A may be waived for businesses 
qualifying as small business entities. Procedures that were established 
for small business entities regarding violations of 19 U.S.C. 1592 in 
Treasury Decision 97-46 published in the Federal Register (62 FR 30378) 
are also applicable for small entities regarding violations of section 
593A.

[T.D. 00-5, 65 FR 3809, Jan. 25, 2000]



PART 172_CLAIMS FOR LIQUIDATED DAMAGES; PENALTIES SECURED BY BONDS--Table of Contents




Sec.
172.0 Scope.

          Subpart A_Notice of Claim and Application for Relief

172.1 Notice of liquidated damages or penalty incurred and right to 
          petition for relief.
172.2 Petition for relief.
172.3 Filing a petition.
172.4 Demand on surety.

                      Subpart B_Action on Petitions

172.11 Petitions acted on by Fines, Penalties, and Forfeitures Officer.
172.12 Petitions acted at Customs Headquarters.
172.13 Limitations on consideration of petitions.
172.14 Headquarters advice.

                   Subpart C_Disposition of Petitions

172.21 Decisions effective for limited time.
172.22 Decisions not protestable.

                     Subpart D_Offers in Compromise

172.31 Form of offers.
172.32 Authority to accept offers.
172.33 Acceptance of offers in compromise.

               Subpart E_Supplemental Petitions for Relief

172.41 Time and place of filing.
172.42 Supplemental petition decision authority.
172.43 Waiver of statute of limitations.

    Authority: 19 U.S.C. 66, 1618, 1623, 1624; 46 U.S.C. App. 320.

    Source: T.D. 00-57, 65 FR 53578, Sept. 5, 2000, unless otherwise 
noted.



Sec. 172.0  Scope.

    This part contains provisions relating to petitions for relief from 
claims for liquidated damages arising under any Customs bond and 
penalties incurred which are secured by the conditions of the 
International Carrier Bond (see Sec. 113.64 of this Chapter). This part 
does not relate to petitions on unsecured fines or penalties or seizures 
and forfeitures, nor does it relate to petitions for the restoration of 
proceeds of sale pursuant to 19 U.S.C. 1613.



          Subpart A_Notice of Claim and Application for Relief



Sec. 172.1  Notice of liquidated damages or penalty incurred and right to petition for relief.

    (a) Notice of liquidated damages or penalty incurred. When there is 
a failure to meet the conditions of any bond posted with Customs or when 
a violation occurs which results in assessment of a penalty which is 
secured by a Customs bond, the principal will be notified in writing of 
any liability for liquidated damages or penalty incurred and a demand 
will be made for payment. The sureties on such bond will also be 
notified in writing of any such liability at the same time.
    (b) Notice of right to petition for relief. The notice will inform 
the principal that application may be made for relief from payment of 
liquidated damages or penalty.



Sec. 172.2  Petition for relief.

    (a) To whom addressed. Petitions for the cancellation of any claim 
for liquidated damages or remission or mitigation of a fine or penalty 
secured by a Customs bond incurred under any law or regulation 
administered by Customs must be addressed to the Fines, Penalties, and 
Forfeitures Officer designated in the notice of claim.
    (b) Signature. The petition for remission or mitigation must be 
signed by the petitioner, his attorney-at-law or a Customs broker. If 
the petitioner is a corporation, the petition may be signed by an 
officer or responsible supervisory official of the corporation, or 
responsible employee representative of the corporation. Electronic 
signatures are

[[Page 319]]

acceptable. The deciding Customs officer may, in his or her discretion 
and with articulable cause, require proof of representation before 
consideration of any petition.
    (c) Form. The petition for cancellation, remission or mitigation 
need not be in any particular form. Customs can require that the 
petition and any documents submitted in support of the petition be in 
English or be accompanied by an English translation. The petition must 
set forth the following:
    (1) The date and place of the violation; and
    (2) The facts and circumstances relied upon by the petitioner to 
justify cancellation, remission or mitigation.
    (d) False statement in petition. A false statement contained in a 
petition may subject the petitioner to prosecution under the provisions 
of 18 U.S.C. 1001.



Sec. 172.3  Filing a petition.

    (a) Where filed. A petition for relief must be filed by the bond 
principal with the Fines, Penalties, and Forfeitures office whose 
address is given in the notice.
    (b) When filed. Petitions for relief must be filed within 60 days 
from the date of mailing to the bond principal the notice of claim for 
liquidated damages or penalty secured by a bond.
    (c) Extensions. The Fines, Penalties, and Forfeitures Officer is 
empowered to grant extensions of time to file petitions when the 
circumstances so warrant.
    (d) Number of copies. The petition must be filed in duplicate unless 
filed electronically.
    (e) Exception for certain cases. If a penalty or claim for 
liquidated damages is assessed and fewer than 180 days remain from the 
date of penalty or liquidated damages notice before the statute of 
limitations may be asserted as a defense, the Fines, Penalties, and 
Forfeitures Officer may specify in the notice a reasonable period of 
time, but not less than 7 working days, for the filing of a petition for 
relief. If a petition is not filed within the time specified, the matter 
will be transmitted promptly to the appropriate Office of the Chief 
Counsel for referral to the Department of Justice.



Sec. 172.4  Demand on surety.

    If the principal fails to file a petition for relief or fails to 
comply in the prescribed time with a decision to mitigate a penalty or 
cancel a claim for liquidated damages issued with regard to a petition 
for relief, Customs will make a demand for payment on surety. The surety 
will then have 60 days from the date of the demand to file a petition 
for relief.



                      Subpart B_Action on Petitions



Sec. 172.11  Petitions acted on by Fines, Penalties, and Forfeitures Officer.

    (a) Mitigation or cancellation authority. Upon receipt of a petition 
for relief submitted pursuant to the provisions of section 618 or 623 of 
the Tariff Act of 1930, as amended (19 U.S.C. 1618 or 19 U.S.C. 1623), 
or section 320 of title 46, United States Code App. (46 U.S.C. App. 
320), the Fines, Penalties, and Forfeitures Officer, notwithstanding any 
other law or regulation, is empowered to mitigate any penalty or cancel 
any claim for liquidated damages on such terms and conditions as, under 
law and in view of the circumstances, he or she shall deem appropriate 
in accordance with appropriate delegations of authority.
    (b) When violation did not occur. Notwithstanding any other 
delegation of authority, the Fines, Penalties, and Forfeitures Officer 
is always empowered to cancel any case without payment of a mitigated or 
cancellation amount when he or she definitely determines that the act or 
omission forming the basis of any claim of penalty or claim for 
liquidated damages did not occur.



Sec. 172.12  Petitions acted on at Customs Headquarters.

    Upon receipt of a petition for relief filed pursuant to the 
provisions of section 618 or 623 of the Tariff Act of 1930, as amended 
(19 U.S.C. 1618 or 19 U.S.C. 1623), or section 320 of title 46, United 
States Code App. (46 U.S.C. App. 320), involving fines, penalties, and 
claims for liquidated damages which are outside of his or her delegated 
authority the Fines, Penalties, and Forfeitures Officer will refer that 
petition to the

[[Page 320]]

Chief, Penalties Branch, Office of Regulations and Rulings, Customs 
Headquarters, who is empowered, notwithstanding any other law or 
regulation, to mitigate penalties or cancel bond claims on such terms 
and conditions as, under law and in view of the circumstances, he or she 
deems appropriate.



Sec. 172.13  Limitations on consideration of petitions.

    (a) Cases referred for institution of legal proceedings. No action 
will be taken on any petition if the civil liability has been referred 
to the Department of Justice for institution of legal proceedings. The 
petition will be forwarded to the Department of Justice.
    (b) Delinquent sureties. No action will be taken on any petition 
from a principal or surety if received after the issuance to surety of a 
notice to show cause pursuant to the provisions of Sec. 113.38(c)(3) of 
this chapter.



Sec. 172.14  Headquarters advice.

    The advice of the Director, Border Security and Trade Compliance 
Division, Regulations and Rulings, Office of International Trade, CBP 
Headquarters, may be sought in any case (except as provided in this 
section), without regard to delegated authority to act on a petition or 
offer, when a novel or complex issue concerning a ruling, policy, or 
procedure is presented concerning a CBP action(s) or potential CBP 
action(s) relating to penalties secured by bonds (including penalty-
based determinations of duty except as provided in this section), claims 
for liquidated damages or mitigating any claim. This section does not 
apply to actual duty loss tenders determined by CBP pursuant to Sec. 
162.74(c) of this chapter relating to prior disclosure. The request for 
advice may be initiated by the bond principal, surety or any CBP 
officer, but must be submitted to the Fines, Penalties, and Forfeitures 
Officer. The Fines, Penalties, and Forfeitures Officer retains the 
authority to refuse to forward any request that fails to raise a 
qualifying issue and to seek legal advice from the appropriate Associate 
or Assistant Chief Counsel in any case.



                   Subpart C_Disposition of Petitions



Sec. 172.21  Decisions effective for limited time.

    A decision to mitigate a penalty or to cancel a claim for liquidated 
damages upon condition that a stated amount is paid will be effective 
for not more than 60 days from the date of notice to the petitioner of 
such decision unless the decision itself prescribes a different 
effective period. If payment of the stated amount is not made or a 
petition or a supplemental petition is not filed in accordance with 
regulation, the full penalty or claim for liquidated damages will be 
deemed applicable and will be enforced by promptly transmitting the 
matter, after required collection action, if appropriate, to the 
appropriate office of the Chief Counsel for preparation for referral to 
the Department of Justice unless other action has been directed by the 
Commissioner of Customs. Any such case may also be the basis for a 
sanction action commenced in accordance with regulations in this 
chapter.



Sec. 172.22  Decisions not protestable.

    (a) Mitigation decision not subject to protest. Any decision to 
remit or mitigate a penalty or cancel a claim for liquidated damages 
upon payment of a lesser amount is not a protestable decision as defined 
under the provisions of 19 U.S.C. 1514. Any payment made in compliance 
with any decision to remit or mitigate a penalty or cancel a claim for 
liquidated damages upon payment of a lesser amount is not a charge or 
exaction and therefore is not a protestable action as defined under the 
provisions of 19 U.S.C. 1514.
    (b) Payment of mitigated or cancellation amount as accord and 
satisfaction. Payment of a mitigated or cancellation amount in 
compliance with an administrative decision on a petition or supplemental 
petition for relief will be considered an election of administrative 
proceedings and full disposition of the case. Payment of a mitigated or 
cancellation amount will act as an accord and satisfaction of the 
Government claim. Payment of a mitigated or cancellation amount will 
never serve as a bar to filing a supplemental petition for relief.

[[Page 321]]



                     Subpart D_Offers in Compromise



Sec. 172.31  Form of offers.

    Offers in compromise submitted pursuant to the provisions of section 
617 of the Tariff Act of 1930, as amended (19 U.S.C. 1617), must 
expressly state that they are being submitted in accordance with the 
provisions of that section. The amount of the offer must be deposited 
with Customs in accordance with the provisions of Sec. 161.5 of this 
chapter.



Sec. 172.32  Authority to accept offers.

    The authority to accept offers in compromise, subject to the 
recommendation of the General Counsel of the Treasury or his delegee, 
resides with the official having authority to decide a petition for 
relief, except that authority to accept offers in compromise submitted 
with regard to penalties secured by a bond or claims for liquidated 
damages which are the subject of a letter to show cause issued to a 
surety in anticipation of possible action involving nonacceptance of 
bonds authorized under the provisions of part 113 of this chapter will 
reside with the designated Headquarters official who issued the show 
cause letter.



Sec. 172.33  Acceptance of offers in compromise.

    An offer in compromise will be considered accepted only when the 
offeror is so notified in writing. As a condition to accepting an offer 
in compromise, the offeror may be required to enter into any collateral 
agreement or to post any security which is deemed necessary for the 
protection of the interest of the United States.



               Subpart E_Supplemental Petitions for Relief



Sec. 172.41  Time and place of filing.

    If the petitioner is not satisfied with a decision of the deciding 
official on an original petition for relief, a supplemental petition may 
be filed with the Fines, Penalties, and Forfeitures Officer having 
jurisdiction in the port where the violation occurred. The petitioner 
must file such a supplemental petition within 60 days from the date of 
notice to the petitioner of the decision from which further relief is 
requested or within 60 days following an administrative or judicial 
decision with respect to issues serving as the basis for the claim for 
liquidated damages (whichever is later) unless another time to file such 
a supplemental petition is prescribed in the decision. A supplemental 
petition may be filed whether or not the mitigated amount designated in 
the decision on the original petition is paid.



Sec. 172.42  Supplemental petition decision authority.

    (a) Decisions of Fines, Penalties, and Forfeitures Officers. 
Supplemental petitions filed on cases where the original decision was 
made by the Fines, Penalties, and Forfeitures Officer, will be initially 
reviewed by that official. The Fines, Penalties, and Forfeitures Officer 
may choose to grant more relief and issue a decision indicating 
additional relief to the petitioner. If the petitioner is dissatisfied 
with the further relief granted or if the Fines, Penalties, and 
Forfeitures Officer decides to grant no further relief, the supplemental 
petition will be forwarded to a designated Headquarters official 
assigned to a field location for review and decision.
    (b) Decisions of CBP Headquarters. Supplemental petitions filed on 
cases where the original decision was made by the Chief, Penalties 
Branch, Regulations and Rulings, Office of International Trade, CBP 
Headquarters, will be forwarded to the Director, Border Security and 
Trade Compliance Division, Regulations and Rulings, for review and 
decision.
    (c) Authority of Executive Director. Any authority given to any 
Headquarters official by this part may also be exercised by the 
Executive Director, Regulations and Rulings, Office of International 
Trade, or his designee.



Sec. 172.43  Waiver of statute of limitations.

    The deciding Customs official always reserves the right to require a 
waiver of the statute of limitations executed by the charged party or 
parties as a condition precedent before accepting a supplemental 
petition in any case in

[[Page 322]]

which less than one year remains before the statute will be available as 
a defense to all or part of that case.



PART 173_ADMINISTRATIVE REVIEW IN GENERAL--Table of Contents




Sec.
173.0 Scope.
173.1 Authority to review for error.
173.2 Transactions which may be reviewed and corrected.
173.3 Voluntary reliquidation.
173.4 Correction of clerical error, mistake of fact, or inadvertence.
173.4a Correction of clerical error prior to liquidation.
173.5 Review of entry covering household for personal effects.

    Authority: 19 U.S.C. 66, 1501, 1520, 1624.

    Source: T.D. 70-181, 35 FR 13429, Aug. 22, 1970, unless otherwise 
noted.



Sec. 173.0  Scope.

    This part deals with the general authority of review, the authority 
to reliquidate voluntarily, the authority to correct for clerical error, 
mistake of fact, or other inadvertence under section 520(c)(1), Tariff 
Act of 1930, as amended, the authority to review an entry of household 
or personal effects, and the power to reliquidate an entry on account of 
fraud.



Sec. 173.1  Authority to review for error.

    Port directors have broad responsibility and authority to review 
transactions to ensure that the rate and amount of duty assessed on 
imported merchandise is correct and that the transaction is otherwise in 
accordance with the law. This authority extends to errors in the 
construction of a law and to errors adverse to the Government as well as 
the importer.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 79-221, 44 
FR 46830, Aug. 9, 1979]



Sec. 173.2  Transactions which may be reviewed and corrected.

    The port director may review transactions for correctness, and take 
appropriate action under his general authority to correct errors, 
including those in appraisement where appropriate, at the time of:
    (a) Liquidation of an entry;
    (b) Voluntary reliquidation completed within 90 days after 
liquidation;
    (c) Voluntary correction of an exaction within 90 days after the 
exaction was made;
    (d) Reliquidation made pursuant to a valid protest covering the 
particular merchandise as to which a change is in order; or
    (e) Modification, pursuant to a valid protest, of a transaction or 
decision which is neither a liquidation or reliquidation.



Sec. 173.3  Voluntary reliquidation.

    (a) Authority to reliquidate. Within 90 days from the date notice of 
deemed liquidation or notice of the original liquidation is given to the 
importer, consignee, or agent, the port director may reliquidate on his 
own initiative a liquidation or a reliquidation to correct errors in 
appraisement, classification, or any other element entering into the 
liquidation or reliquidation, including errors based on misconstruction 
of applicable law. A voluntary reliquidation may be made even though a 
protest has been filed, and whether the error is discovered by the port 
director or is brought to his attention by an interested party.
    (b) Notice of reliquidation. Notice of a voluntary reliquidation 
shall be given in accordance with the requirements for giving notice of 
the original liquidation.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by CBP Dec. 07-62, 
72 FR 40737, July 25, 2007]



Sec. 173.4  Correction of clerical error, mistake of fact, or inadvertence.

    (a) Authority to review and correct. Even though a valid protest was 
not filed, the port director, upon timely application, may correct 
pursuant to section 520(c)(1), Tariff Act of 1930, as amended (19 U.S.C. 
1520(c)(1), a clerical error, mistake of fact, or other inadvertence 
meeting the requirements of paragraph (b) of this section, by 
reliquidation or other appropriate action.
    (b) Transactions which may be corrected. Correction pursuant to 
section 520(c)(1), Tariff Act of 1930, as amended, (19 U.S.C. 
1520(c)(1), may be made in

[[Page 323]]

any entry, liquidation, or other Customs transaction if the clerical 
error, mistake of fact, or other inadvertence:
    (1) Does not amount to an error in the construction of a law;
    (2) Is adverse to the importer; and
    (3) Is manifest from the record or established by documentary 
evidence.
    (c) Limitation on time for application. A clerical error, mistake of 
fact, or other inadvertence meeting the requirements of paragraph (b) of 
this section shall be brought to the attention of the director of the 
port of entry within 1 year after the date of liquidation or exaction. 
The party requesting reliquidation under section 520(c)(1), Tariff Act 
of 1930, as amended (19 U.S.C. 1520(c)(1)) shall state, to the best of 
his knowledge, whether the entry for which correction is requested is 
the subject of a drawback claim, or whether the entry has been 
referenced on a certificate of delivery or certificate of manufacture 
and delivery so as to enable a party to make such entry the subject of 
drawback (see Sec. Sec. 181.50(b) and 191.81(b) of this chapter).
    (d) ``Liquidation'' includes reliquidation. ``Liquidation'' when 
used in section 520(c)(1), Tariff Act of 1930, as amended (19 U.S.C. 
1520(c)(1)), and in this section, includes reliquidation of an entry.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 79-221, 44 
FR 46830, Aug. 9, 1979; T.D. 98-16, 63 FR 11005, Mar. 5, 1998]



Sec. 173.4a  Correction of clerical error prior to liquidation.

    Pursuant to section 520(a)(4), Tariff Act of 1930, as amended (19 
U.S.C. 1520(a)(4)), the port director may, prior to liquidation of an 
entry, take appropriate action to correct a clerical error that resulted 
in the deposit or payment of excess duties, fees, charges, or exactions.

[T.D. 85-123, 50 FR 29957, July 23, 1985]



Sec. 173.5  Review of entry covering household or personal effects.

    An error in the liquidation of an entry covering household or 
personal effects may be corrected by the port director even though a 
timely protest was not filed if an application for refund is filed with 
the port director within 1 year after the date of the entry and no 
waiver of compliance with applicable regulations is involved other than 
a waiver which the port director has authority to grant. Where the port 
director has no authority to grant the waiver, the application shall be 
referred to the Commissioner of Customs.



PART 174_PROTESTS--Table of Contents




Sec.
174.0 Scope.

                      Subpart A_General Provisions

174.1 Definitions.
174.2 Applicability of provisions.
174.3 Power of attorney to file protest.

                           Subpart B_Protests

174.11 Matters subject to protest.
174.12 Filing of protests.
174.13 Contents of protest.
174.14 Amendment of protests.
174.15 Consolidation of protests filed by different parties.
174.16 Limitation on protests after reliquidation.

              Subpart C_Review and Disposition of Protests

174.21 Time for review of protests.
174.22 Accelerated disposition of protest.
174.23 Further review of protests.
174.24 Criteria for further review.
174.25 Application for further review.
174.26 Review of protest after application for further review.
174.27 Disposition after further review.
174.28 Consideration of additional arguments.
174.29 Allowance or denial of protests.
174.30 Notice of denial of protest.
174.31 Judicial review of denial of protest.
174.32 Publication.

    Authority: 19 U.S.C. 66, 1514, 1515, 1624.
    Section 174.21 also issued under 19 U.S.C. 1499.

    Source: T.D. 70-181, 35 FR 13429, Aug. 22, 1970, unless otherwise 
noted.



Sec. 174.0  Scope.

    This part deals with the administrative review of decisions of the 
port director, including the requirements for the filing of protests 
against such decisions, amendment of protests, review and accelerated 
disposition, and provisions dealing with further administrative review. 
Provisions applicable to Canadian and Mexican exporters and

[[Page 324]]

producers regarding administrative review and appeal of adverse marking 
decisions under the North American Free Trade Agreement are contained in 
part 181 of this chapter.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 94-1, 58 FR 
69472, Dec. 30, 1993]



                      Subpart A_General Provisions



Sec. 174.1  Definitions.

    When used in this part, the following term shall have the meaning 
indicated:
    Further review. ``Further review'' means review of the decision 
which is the subject of the protest by Customs officers on a level 
higher than the district, and in Region II by Customs officers who did 
not participate directly in the decision which is the subject of the 
protest.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 95-77, 60 
FR 50020, Sept. 27, 1995]



Sec. 174.2  Applicability of provisions.

    (a) In general. The provisions of this part shall be applicable to 
protests against decisions involving:
    (1) Articles excluded from entry or entered or withdrawn from 
warehouse for consumption on or after October 1, 1970;
    (2) Articles entered or withdrawn from warehouse for consumption 
prior to October 1, 1970, for which appraisement has not become final by 
October 1, 1970;
    (3) Articles entered or withdrawn from warehouse for consumption 
prior to October 1, 1970, for which the appraisement has become final 
but with respect to which the entry has not been liquidated prior to 
October 1, 1970;
    (4) Articles entered or withdrawn from warehouse for consumption 
with respect to which the entry has been liquidated prior to October 1, 
1970, if
    (i) The time for filing a protest has not expired and a protest has 
not been filed prior to October 1, 1970; or
    (ii) A protest has been filed and has not been disallowed in whole 
or in part before October 1, 1970; or
    (5) Articles excluded from entry before October 1, 1970, with 
respect to which
    (i) The time for filing a protest has not expired and a protest has 
not been filed prior to October 1, 1970; or
    (ii) A protest has been filed and has not been disallowed in whole 
or in part before October 1, 1970.
    (b) Limitation--(1) Appraisement not final. When the appraisement of 
articles entered or withdrawn from warehouse for consumption prior to 
October 1, 1970, is not final by October 1, 1970, because an appeal for 
reappraisement was timely filed prior to such date, the provisions of 
this part relating to protests shall be applicable to a protest filed 
after the court's decision on the appeal to reappraisement has become 
final. Such protest shall not include issues which were raised or could 
have been raised on the appeal for reappraisement.
    (2) Appraisement final. When the appraisement of articles entered or 
withdrawn from warehouse for consumption prior to October 1, 1970, has 
become final prior to October 1, 1970, but the entry has not been 
liquidated by such date, a protest filed in accordance with the 
provisions of this part after such liquidation shall not include issues 
which were raised or could have been raised on an appeal to 
reappraisement before the appraisement became final.
    (3) Protest not disallowed. When a protest filed prior to October 1, 
1970, has not been disallowed in whole or in part before such date, the 
provisions of this part shall be applicable to such protests. The time 
within which any action must be taken under the provisions of this part 
with respect to such a protest shall commence on the date the protest 
was in fact filed.

[T.D. 70-181, 35 FR, 13429, Aug. 22, 1970, as amended by T.D. 71-60, 36 
FR 3116, Feb. 18, 1971]



Sec. 174.3  Power of attorney to file protest.

    (a) When required. When a protest is filed by a person acting as 
agent or attorney in fact for the principal, other than an attorney at 
law or a customhouse broker or his authorized employee acting in his 
behalf, there shall have been filed or shall be filed with the protest a 
power of attorney which either specifically authorizes such

[[Page 325]]

agent to make, sign, and file the protest or grants unlimited authority 
to such agent. No power of attorney to file a protest shall be required 
in the following cases:
    (1) Attorney at law. When the protest is filed by an attorney at law 
as agent or attorney for the principal, the signing of the protest as 
agent or attorney for the principal by the attorney at law shall be 
considered a declaration by him that he is currently a member in good 
standing of the highest court of a State, possession, territory, 
commonwealth, or the District of Columbia, and has been authorized to 
sign and file the protest for the principal.
    (2) Customhouse broker or his employee. When a protest is filed by a 
customhouse broker, or an authorized employee acting in his behalf, as 
agent or attorney in fact for the principal, the signing of the protest 
by the customhouse broker or an authorized employee in his behalf shall 
be considered a declaration by the broker that he or the employee 
signing in his behalf, is authorized to sign and file the protest for 
the principal. The customhouse broker shall have, however, a general 
power of attorney to transact Customs business for the principal on 
Customs Form 5291.
    (b) Execution of power of attorney--(1) Corporation. A corporate 
power of attorney to file protests shall be signed by a duly authorized 
officer or employee of the corporation. If the port director is 
otherwise satisfied as to the authority of such corporate officer or 
employee to grant such power of attorney, compliance with the 
requirements of Sec. 141.37 of this chapter may be waived with respect 
to such power.
    (2) Partnership. A partnership power of attorney to file protests 
may be signed by one member in the name of the partnership, provided the 
power recites the name of all the members.
    (c) Duration. Powers of attorney issued by a partnership shall be 
limited to a period not to exceed 2 years from the date of receipt 
thereof by the port director. All other powers of attorney may be 
granted for an unlimited period.
    (d) Revocation. Any power of attorney shall be subject to revocation 
at any time by written notice given to and received by the port 
director.

(Secs. 514, 515, 46 Stat. 734, as amended; 19 U.S.C. 1514, 1515)

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 70-224, 35 
FR 16243, Oct. 16, 1970; T.D. 73-175, 38 FR 17487, July 2, 1973]



                           Subpart B_Protests



Sec. 174.11  Matters subject to protest.

    The following decisions of the port director, including the legality 
of all orders and findings entering into the same, may be protested 
under the provisions of section 514, Tariff Act of 1930, as amended (19 
U.S.C. 1514):
    (a) The appraised value of merchandise;
    (b) The classification and rate and amount of duties chargeable;
    (c) All charges or exactions of whatever character including the 
accrural of interest within the jurisdiction of the Secretary of the 
Treasury;
    (d) The exclusion of merchandise from entry or delivery under any 
provision of the Customs laws;
    (e) The liquidation or reliquidation of an entry, or any 
modification thereof;
    (f) The refusal to pay a claim for drawback; and
    (g) The refusal to reliquidate an entry under section 520(c), Tariff 
Act of 1930, as amended (19 U.S.C. 1520(c)).

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 99-75, 64 
FR 56441, Oct. 20, 1999]



Sec. 174.12  Filing of protests.

    (a) By whom filed. Protests may be filed by:
    (1) The importer or consignee shown on the entry papers, or their 
sureties;
    (2) Any person paying or receiving a refund of any charge or 
exaction;
    (3) Any person seeking entry or delivery;
    (4) Any person filing a claim for drawback;
    (5) With respect to a determination of origin under subpart G of 
part 181 of this chapter, any exporter or producer

[[Page 326]]

of the merchandise subject to that determination, if the exporter or 
producer completed and signed a Certificate of Origin covering the 
merchandise as provided for in Sec. 181.11(a) of this chapter; or
    (6) Any authorized agent of any of the persons described in 
paragraphs (a) (1) through (5) of this section, subject to the 
provisions of Sec. 174.3.
    (b) Form and number of copies. Protests against decisions of a port 
director shall be filed in quadruplicate on Customs Form 19 or a form of 
the same size clearly labeled ``Protest'' and setting forth the same 
content in its entirety, in the same order, addressed to the port 
director. All schedules or other attachments to a protest (other than 
samples or similar exhibits) shall also be filed in quadruplicate.
    (c) Identity of filer. The identity of the person filing the protest 
or his agent, or attorney shall be noted on the protest. This may be 
accomplished through a signature which is handwritten in ink, stamped, 
typed, facsimile, telefax, or by electronic certification in ACS. If the 
person filing the protest is not the importer of record or consignee, 
the filer shall include his address and importer number, if any.
    (d) Place of filing. Protests shall be filed with the port director 
whose decision is protested.
    (e) Time of filing. Protests shall be filed, in accordance with 
section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514), within 90 
days after either:
    (1) The date of notice of liquidation or reliquidation in accordance 
with Sec. Sec. 159.9 or 159.10 of this chapter;
    (2) The date of the decision, involving neither a liquidation nor 
reliquidation, as to which the protest is made (e.g., the date of an 
exaction, the date of written notice excluding merchandise from entry or 
delivery under any provision of the Customs laws, the date of a refusal 
to reliquidate under section 520(c)(1) of the Tariff Act of 1930, as 
amended, or the date of written notice of a denial of a claim filed 
under section 520(d) of the Tariff Act of 1930, as amended); or
    (3) The date of mailing of notice of demand for payment against a 
bond in the case of a surety which has an unsatisfied legal claim under 
a bond written by the surety.
    (f) Date of filing. The date on which a protest is received by the 
Customs officer with whom it is required to be filed shall be deemed the 
date on which it is filed.
    (g) Return of fifth copy. If a fifth copy of the protest is 
presented for the purpose of having recorded thereon the date of its 
receipt and the protest number assigned thereto, such information shall 
be recorded thereon and the fifth copy shall be returned to the person 
filing the protest.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 71-15, 36 
FR 778, Jan. 16, 1971; 36 FR 1058, Jan. 22, 1971; T.D. 73-175, 38 FR 
17488, July 2, 1973; T.D. 80-271, 45 FR 75642, Nov. 17, 1980; T.D. 94-1, 
58 FR 69472, Dec. 30, 1993; T.D. 94-55, 59 FR 34971, July 8, 1994; T.D. 
95-68, 60 FR 46363, Sept. 6, 1995; T.D. 99-75, 64 FR 56441, Oct. 20, 
1999]



Sec. 174.13  Contents of protest.

    (a) Contents, in general. A protest shall contain the following 
information:
    (1) The name and address of the protestant, i.e., the importer of 
record or consignee, and the name and address of his agent or attorney 
if signed by one of these;
    (2) The importer number of the protestant. If the protestant is 
represented by an agent having power of attorney, the importer number of 
the agent shall also be shown;
    (3) The number and date of the entry;
    (4) The date of liquidation of the entry, or the date of a decision 
not involving a liquidation or reliquidation;
    (5) A specific description of the merchandise affected by the 
decision as to which protest is made;
    (6) The nature of, and justification for the objection set forth 
distinctly and specifically with respect to each category, payment, 
claim, decision, or refusal;
    (7) The date of receipt and protest number of any protest previously 
filed that is the subject of a pending application for further review 
pursuant to subpart C of this part and that is alleged to involve the 
same merchandise and the same issues, if the protesting party requests 
disposition in accordance with the action taken on such previously filed 
protest;

[[Page 327]]

    (8) If another party has not filed a timely protest, the surety's 
protest shall certify that the protest is not being filed collusively to 
extend another authorized person's time to protest; and
    (9) A declaration, to the best of the protestant's knowledge, as to 
whether the entry is the subject of drawback, or whether the entry has 
been referenced on a certificate of delivery or certificate of 
manufacture and delivery so as to enable a party to make such entry the 
subject of drawback (see Sec. Sec. 181.50(b) and 191.81(b) of this 
chapter).
    (b) Multiple entries. A single protest may be filed with respect to 
more than one entry at any port if all such entries involve the same 
protesting party, and if the same category of merchandise and a decision 
or decisions common to all entries are the subject of the protest. In 
such circumstances, the entry numbers, dates of entry, and dates of 
liquidation of all such entries should be set forth as an attachment to 
the protest.
    (c) Optional designation for refunds. If desired by the importer/
consignee the statement ``any refunds with respect to the entry under 
protest shall be mailed to the importer/consignee in care of ----------
--------------''

                                             (Name and Address of Agent)


may be appended to the protest. This designation supersedes any existing 
designation previously authorized on Customs Form 4811.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 80-271, 45 
FR 75642, Nov. 17, 1980; T.D. 98-16, 63 FR 11005, Mar. 5, 1998; T.D. 99-
99-64, 64 FR 43267, Aug. 10, 1999]



Sec. 174.14  Amendment of protests.

    (a) Time for filing. A protest may be amended at any time prior to 
the expiration of the 90-day period within which such protest may be 
filed determined in accordance with Sec. 174.12(e). The amendment may 
assert additional claims pertaining to the administrative decision which 
is the subject of the protest, or may challenge an additional 
administrative decision relating to the same category of merchandise 
which is the subject of the protest. For the presentation of additional 
grounds or arguments in support of a valid protest after the 90-day 
period has expired see Sec. 174.28.
    (b) Form and number of copies of amendment. An amendment to a 
protest shall be filed in quadruplicate on Customs Form 19 or on a form 
of the same size, clearly labeled ``Amendment to Protest'' at the top of 
the form. Schedules or other attachments (other than samples or similar 
exhibits) shall also be filed in quadruplicate.
    (c) Contents. An amendment to a protest shall contain the following 
information:
    (1) The name, address, and importer number of the protesting party, 
i.e., the importer of record or consignee, and the name and address of 
his agent or attorney if filed by one of these;
    (2) The number and date of filing of the original protest;
    (3) A specific description of the merchandise affected by the 
decision as to which the amendment to the protest is filed;
    (4) The nature of and justification for the objection raised by the 
amendment set forth distinctly and specifically with respect to each 
category, payment, claim, decision, or refusal; and
    (5) The date of receipt and protest number of any protest previously 
filed that is the subject of a pending application for further review 
and that is alleged to involve the same merchandise and the same issues 
involved in the amendment.
    (d) Identification of filer. An amendment to a protest may be filed 
only by the person who originally filed such protest or his agent or 
attorney subject to the provisions of Sec. 174.3. The identity of the 
filer shall be noted on the amendment to a protest. Any acceptable 
method used to identify the filer described in Sec. 174.12(c) as being 
acceptable on a protest will be acceptable on an amendment to a protest.
    (e) Place and date of filing. An amendment to a protest shall be 
filed with the port director with whom the protest was filed. The 
amendment shall be deemed filed on the date it is received by the 
Customs officer with whom it is required to be filed.
    (f) Return of fifth copy. If a fifth copy of the amendment is 
presented for the purpose of having recorded thereon the date of its 
receipt, such information

[[Page 328]]

shall be recorded thereon and the fifth copy shall be returned to the 
person filing the amendment.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 94-55, 59 
FR 34971, July 8, 1994]



Sec. 174.15  Consolidation of protests filed by different parties.

    (a) General. Subject to paragraph (b) of this section, separate 
protests relating to one category of merchandise covered by an entry 
shall be considered as a single protest whether filed as a single 
protest or filed as separate protests relating to the same category by 
one or more parties in interest or an authorized agent.
    (b) NAFTA transactions. The following rules shall apply to a 
consolidation of multiple protests concerning a determination of origin 
under subpart G of part 181 of this chapter if one of the protests is 
filed by or on behalf of an exporter or producer described in Sec. 
174.12(a)(5) of this part:
    (1) If consolidation under paragraph (a) of this section is pursuant 
to specific written requests for consolidation received from all 
interested parties who filed protests under this part, those interested 
parties shall be deemed to have waived their rights to confidentiality 
as regards business information within the meaning of Sec. 181.121 of 
this chapter. In such cases, a separate notice of the decision will be 
issued to each interested party under this part but without regard to 
whether the notice reflects confidential business information obtained 
from one but not all of those interested parties.
    (2) If consolidation under paragraph (a) of this section is done by 
the port director in the absence of specific written requests for 
consolidation from all interested parties who filed protests under this 
part, no waiver of confidentiality by those interested parties shall be 
deemed to have taken place. In such cases, a separate notice of the 
decision will be issued to each interested party and each such notice 
shall adhere to the principle of confidentiality set forth in Sec. 
181.121 of this chapter.

[T.D. 94-1, 58 FR 69472, Dec. 30, 1993]



Sec. 174.16  Limitation on protests after reliquidation.

    A protest shall not be filed against the decision of the port 
director on reliquidation upon any question not involved in the 
reliquidation.



              Subpart C_Review and Disposition of Protests



Sec. 174.21  Time for review of protests.

    (a) In general. Except as provided in paragraph (b) of this section, 
the port director shall review and act on a protest filed in accordance 
with section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514), 
within 2 years from the date the protest was filed. If several timely 
filed protests are treated as part of a single protest pursuant to Sec. 
174.15, the 2-year period shall be deemed to run from the date the last 
such protest was filed in accordance with section 514, Tariff Act of 
1930, as amended (19 U.S.C. 1514).
    (b) Protests relating to exclusion of merchandise. If the protest 
relates to an administrative action involving exclusion of merchandise 
from entry or delivery under any provision of the Customs laws, the port 
director shall review and act on a protest filed in accordance with 
section 514(a)(4), Tariff Act of 1930, as amended (19 U.S.C. 
1514(a)(4)), within 30 days from the date the protest was filed. Any 
protest filed pursuant to this paragraph shall clearly so state on its 
face. Any protest filed pursuant to this paragraph which is not allowed 
or denied in whole or in part before the 30th day after the day on which 
the protest was filed shall be treated as having been denied on such 
30th day for purposes of 28 U.S.C. 1581.

[T.D. 74-37, 39 FR 2470, Jan. 22, 1974, as amended by T.D. 99-65, 64 FR 
43612, Aug. 11, 1999]



Sec. 174.22  Accelerated disposition of protest.

    (a) Request for accelerated disposition. Accelerated disposition of 
a protest filed in accordance with section 514, Tariff Act of 1930, as 
amended (19 U.S.C. 1514) may be obtained at any time after 90 days from 
the filing of such protest, by filing by registered or

[[Page 329]]

certified mail a written request for accelerated disposition with the 
port director to whom the protest was addressed.
    (b) Contents of request. A request for accelerated disposition of 
protest shall contain the following information:
    (1) The name, address, and importer number of the protestant, i.e., 
the importer of record or consignee, and the name and address of his 
agent or attorney if filed by one of these; and
    (2) The date of filing and number of the protest for which 
accelerated disposition is requested.
    (c) Review following request. The port director shall review the 
protest which is the subject of the request within 30 days from the date 
of mailing of a request for accelerated disposition filed in accordance 
with the provisions of this section, and may allow or deny the protest 
in whole or in part.
    (d) Failure to allow or deny protest within 30-day period. If the 
port director fails to allow or deny a protest which is the subject of a 
request for accelerated disposition within 30 days from the date of 
mailing of such request, the protest shall be deemed to have been denied 
at the close of the 30th day following such date of mailing.
    (e) Multiple protests. If several protests by different persons are 
timely filed and treated as part of a single protest pursuant to Sec. 
174.15, a request for accelerated disposition filed by any one of the 
protesting parties shall be treated as a request for accelerated 
disposition by all the parties.



Sec. 174.23  Further review of protests.

    A protesting party may seek further review of a protest in lieu of 
review by the port director by filing, on the form prescribed in Sec. 
174.25, an application for such review within the time allowed and in 
the manner prescribed by Sec. 174.12 for the filing of a protest. The 
filing of an application for further review shall not preclude a 
preliminary examination by the port director whose decision is the 
subject of the protest for the purpose of determining whether the 
protest may be allowed in full. If such preliminary examination 
indicates that the protest would be denied in whole or in part by the 
port director in the absence of an application for further review, 
however, he shall forward the protest and application for consideration 
in accordance with Sec. 174.26.



Sec. 174.24  Criteria for further review.

    Further review of a protest which would otherwise be denied by the 
port director shall be accorded a party filing an application for 
further review which meets the requirements of Sec. 174.25 when the 
decision against which the protest was filed:
    (a) Is alleged to be inconsistent with a ruling of the Commissioner 
of Customs or his designee, or with a decision made at any port with 
respect to the same or substantially similar merchandise;
    (b) Is alleged to involve questions of law or fact which have not 
been ruled upon by the Commissioner of Customs or his designee or by the 
Customs courts;
    (c) Involves matters previously ruled upon by the Commissioner of 
Customs or his designee or by the Customs courts but facts are alleged 
or legal arguments presented which were not considered at the time of 
the original ruling; or
    (d) Is alleged to involve questions which the Headquarters Office, 
United States Customs Service, refused to consider in the form of a 
request for internal advice pursuant to Sec. 177.11(b)(5) of this 
chapter.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 71-133, 36 
FR 8732, May 12, 1971; T.D. 75-186, 40 FR 31928, July 30, 1975]



Sec. 174.25  Application for further review.

    (a) Form and number of copies. An application for further review may 
be filed on the same Customs Form 19 used for filing the protest for 
which further review is requested, or on a separate Customs Form 19. In 
either case, the Customs Form 19 shall be filed in quadruplicate. If a 
fifth copy of the application is presented for the purpose of having 
recorded thereon the date of its receipt, such information shall be 
recorded thereon and the fifth copy shall be returned to the person 
filing the application.
    (b) Contents. An application for further review shall contain the 
following information:

[[Page 330]]

    (1) Information identifying the protest to which it applies and the 
protesting party and his importer number;
    (2) Allegations that the protesting party:
    (i) Has not previously received an adverse administrative decision 
from the Commissioner of Customs or his designee nor has presently 
pending an application for an administrative decision on the same claim 
with respect to the same category of merchandise; and
    (ii) Has not received a final adverse decision from the Customs 
courts on the same claim with respect to the same category of 
merchandise and does not have an action involving such a claim pending 
before the Customs courts.
    (3) A statement of any facts or additional legal arguments, not part 
of the record, upon which the protesting party relies, including the 
criterion set forth in Sec. 174.24 which justifies further review. A 
showing of facts that support the allegation of a criterion set forth in 
Sec. 174.24(c) will constitute a ground for the granting of further 
review in circumstances where the applicant's inability to affirmatively 
make the allegations described in paragraph (b)(2) of this section would 
otherwise result in its denial.

[T.D. 70-81, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 78-99, 43 FR 
13062, Mar. 29, 1978]



Sec. 174.26  Review of protest after application for further review.

    (a) Protest allowed. If upon examination of a protest for which an 
application for further review was filed the port director is satisfied 
that the claim is valid, he shall allow the protest.
    (b) Other protests. If upon examination of a protest for which an 
application for further review was filed the port director decides that 
the protest in his judgment should be denied in whole or in part, he 
shall forward the application together with the protest and appropriate 
documents to be reviewed as follows:
    (1) A protest shall be reviewed by the Commissioner of Customs or 
his designee under Customs Delegation Order No. 1 (Revision 1), T.D. 69-
126 (34 FR 8208), as amended from time to time, if the protest and 
application for review raise an issue involving either:
    (i) Lack of uniformity of treatment;
    (ii) The existence of an established and uniform practice;
    (iii) The interpretation of a court decision or ruling of the 
Commissioner of Customs or his designee; or
    (iv) Questions which have not been the subject of a Headquarters, 
U.S. Customs Service ruling or court decision.
    (2) All other protests shall be reviewed by a designee of the port 
director who did not participate directly in the decision which is the 
subject of the protest.



Sec. 174.27  Disposition after further review.

    Upon completion of further review, the protest and appropriate 
documents forwarded for review shall be returned to the port director 
together with directions for the disposition of the protest.



Sec. 174.28  Consideration of additional arguments.

    In determining whether to allow or deny a protest filed within the 
time allowed, a reviewing officer may consider alternative claims and 
additional grounds or arguments submitted in writing by the protesting 
party with respect to any decision which is the subject of a valid 
protest at any time prior to disposition of the protest. In any case in 
which alternative claims or additional grounds or arguments are 
submitted orally, they shall be considered in the allowance or denial of 
the protest only if submitted in writing in conjunction with, or no 
later than 60 days after, such oral submission.

(R.S. 251, as amended, secs. 514, 624, 46 Stat. 734, as amended, 759; 19 
U.S.C. 66, 1514, 1624)

[T.D. 71-15, 36 FR 778, Jan. 16, 1971]



Sec. 174.29  Allowance or denial of protests.

    The port director shall allow or deny in whole or in part a protest 
filed in accordance with section 514, Tariff Act of 1930, as amended, 19 
U.S.C. 1514) within 2 years from the date the protest was filed. If the 
protest is allowed in whole or in part the port director shall remit

[[Page 331]]

or refund any duties, charge, or exaction found to have been collected 
in excess, or pay any drawback found due. If a protest of an exporter or 
producer under Sec. 174.12(a)(5) of this part is allowed in whole or in 
part, any monies found to have been collected in excess shall be 
refunded to the party who paid the monies even if such party did not 
file an appropriate and timely protest under this part. If the protest 
is denied in whole or in part the port director shall give notice of the 
denial in the form and manner prescribed in Sec. 174.30.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 94-1, 58 FR 
69472, Dec. 30, 1993]



Sec. 174.30  Notice of denial of protest.

    (a) Issuance of notice. Notice of denial of a protest shall be 
mailed to any person filing a protest or his agent in all cases other 
than those in which accelerated disposition was requested and in which 
no action has been taken within 30 days after the date of mailing of the 
request. The notice shall include a statement of the reasons for the 
denial, as well as a statement informing the protesting party of the 
right to file a civil action contesting the denial of the protest under 
section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514). For 
purposes of section 515(a), Tariff Act of 1930, as amended (19 U.S.C. 
1515(a)), the date appearing on such notice shall be deemed the date on 
which such notice was mailed.
    (b) Substitution of persons designated to receive notice. The 
importer of record or consignee may give notice to the port director 
instructing that notice of denial of any protest involving merchandise 
imported in his name or on his behalf shall be mailed to a person other 
than the person filing such protest or the designee of such person. Such 
notice of substitution shall be filed in quadruplicate and shall 
identify the protest by number and date of receipt. Notice of denial of 
a protest shall be mailed to the substituted person so designated only 
if the notice of substitution is received by the port director prior to 
a denial by him of such protest.
    (c) Notification of payment of increased duties. The port director 
shall note on the notice of denial of a protest the payment of all 
liquidated duties, charges, or exactions, if he has actual knowledge of 
such payment at the time that the protest is denied.

[T.D. 70-181, 35 FR 13429, Aug. 22, 1970, as amended by T.D. 80-271, 45 
FR 75642, Nov. 17, 1980]



Sec. 174.31  Judicial review of denial of protest.

    Any person whose protest has been denied, in whole or in part, may 
contest the denial by filing a civil action in the United States Court 
of International Trade in accordance with 28 U.S.C. 2632 within 180 days 
after--
    (a) The date of mailing of notice of denial, in whole or in part, of 
a protest,
    (b) The date a protest, for which accelerated disposition was 
requested, is deemed to have been denied in accordance with Sec. 
174.22(d), or
    (c) The date that a protest is deemed denied in accordance with 
Sec. 174.21(b), or Sec. 151.16(g) of this chapter.

[T.D. 78-17, 43 FR 1938, Jan. 13, 1978, as amended by T.D. 85-90, 50 FR 
21430, May 24, 1985; T.D. 99-65, 64 FR 43612, Aug. 11, 1999]



Sec. 174.32  Publication.

    Within 120 days after issuing a protest review decision, the Customs 
Service shall publish the decision in the Customs Bulletin or otherwise 
make it available for public inspection. Disclosure is governed by 31 
CFR part 1 and 19 CFR part 103.

[T.D. 78-394, 43 FR 49791, Oct. 25, 1978]



PART 175_PETITIONS BY DOMESTIC INTERESTED PARTIES--Table of Contents




Sec.
175.0 Scope.

 Subpart A_Request for Classification, Appraised Value and Rate of Duty

175.1 Submission of request.
175.2 Contents of request.
175.3 Domestic interested party.

                           Subpart B_Petitions

175.11 Filing of petitions.
175.12 Contents of petitions.

[[Page 332]]

                 Subpart C_Procedure Following Petition

175.21 Notice of filing of petition, inspection of petition, and 
          inspection of documents and papers.
175.22 Publication of decisions following petition.
175.23 Notice of desire to contest decision.
175.24 Publication following notice of desire to contest.
175.25 Procedure at port of entry designated by petitioner.

              Subpart D_Procedure Following Court Decision

175.31 Publication of notice of court decision.

    Authority: R.S. 251, as amended, secs. 516, 624, 46 Stat. 735, as 
amended, 759; 19 U.S.C. 66, 1516, 1624, unless otherwise noted.

    Source: T.D. 70-181, 35 FR 13432, Aug. 22, 1970, unless otherwise 
noted.



Sec. 175.0  Scope.

    This part sets forth the procedures applicable to requests by 
domestic interested parties for the classification and rate of duty 
applicable to designated imported merchandise, and to petitions alleging 
that the appraised value is too low, that the classification is not 
correct, or that the proper rate of duty is not being assessed upon 
designated imported merchandise which is claimed to be similar to the 
class or kind of merchandise manufactured, produced, or wholesaled by 
the petitioner.

[T.D. 70-181, 35 FR 13432, Aug. 22, 1970, as amended by T.D. 80-271, 45 
FR 75642, Nov. 17, 1980]



 Subpart A_Request for Classification, Appraised Value and Rate of Duty



Sec. 175.1  Submission of request.

    Written requests pursuant to section 516, Tariff Act of 1930, as 
amended (19 U.S.C. 1516), for information as to the classification, 
appraised value and rate of duty imposed upon designated imported 
merchandise shall be submitted in triplicate to the Commissioner of 
Customs.

[T.D. 70-181, 35 FR 13432, Aug. 22, 1970, as amended by T.D. 80-271, 45 
FR 75642, Nov. 17, 1980]



Sec. 175.2  Contents of request.

    The request for information shall contain the following information:
    (a) The name of the person making the request, his principal place 
of business, and the fact that he is a domestic interested party;
    (b) A designation of the imported merchandise for which the 
classification, appraised value and rate is requested; and
    (c) A showing of the class or kind of merchandise manufactured, 
produced, or sold by him which is claimed to be similar to the imported 
merchandise in such detail as will permit the Commissioner to establish 
the similarity between the domestic and foreign merchandise.

[T.D. 70-181, 35 FR 13432, Aug. 22, 1970, as amended by T.D. 80-271, 45 
FR 75642, Nov. 17, 1980]



Sec. 175.3  Domestic interested party.

    ``Domestic interested party'', when used in this part, means:
    (a) A manufacturer, producer, or wholesaler in the United States of 
a like product,
    (b) A certified union or recognized union or group of workers which 
is representative of an industry engaged in the manufacture, production, 
or wholesale in the United States of a like product, or
    (c) A trade or business association a majority of whose members 
manufacture, produce, or wholesale a like product in the United States.

[T.D. 80-271, 45 FR 75642, Nov. 17, 1980]



                           Subpart B_Petitions



Sec. 175.11  Filing of petitions.

    (a) Number of copies and where filed. All petitions pursuant to 
section 516 Tariff Act of 1930, as amended (19 U.S.C. 1516), shall be 
submitted to the Commissioner of Customs in triplicate.
    (b) By whom filed. Petitions may be filed by the domestic interested 
parties themselves, or by duly authorized attorneys or agents on their 
behalf. A petition filed by a corporation shall be

[[Page 333]]

signed by an officer thereof, and petition filed by a partnership shall 
be signed by a member thereof.

[T.D. 70-181, 35 FR 13432, Aug. 22, 1970, as amended by T.D. 80-271, 45 
FR 75642, Nov. 17, 1980]



Sec. 175.12  Contents of petition.

    The petition shall be itemized as to each class or kind of 
merchandise involved, and shall contain the following:
    (a) The name of the petitioner, his principal place of business, and 
the fact that he is a domestic interested party;
    (b) A statement showing the class or kind of merchandise 
manufactured, produced, or sold by him which is claimed to be similar to 
the imported merchandise in such detail as will permit the Commissioner 
of Customs to establish the similarity between the domestic and foreign 
merchandise; and
    (c) A presentation, in detail, of the information required by 
section 516, Tariff Act of 1930, as amended (19 U.S.C. 1516).

[T.D. 70-181, 35 FR 13432, Aug. 22, 1970, as amended by T.D. 80-271, 45 
FR 75642, Nov. 17, 1980]



                 Subpart C_Procedure Following Petition



Sec. 175.21  Notice of filing of petition, inspection of petition, and inspection of documents and papers.

    (a) Notice of filing of petition. Upon the filing of a petition, a 
notice shall be published in the Federal Register setting forth that a 
petition has been filed by a domestic interested party, identifying the 
merchandise which is the subject of the petition, and its present and 
claimed appraised value or classification or rate of duty. The notice 
shall invite interested persons to make such written submissions as they 
desire within such time as is specified in the notice.
    (b) Inspection of petition; inspection of documents and papers. The 
petition filed by a domestic interested party will be made available for 
inspection by interested parties in accordance with the provisions of 
Sec. 103.11(b) of this chapter. However, neither a petitioner nor other 
interested parties shall in any case be permitted to inspect documents 
or papers of the consignee or importer which are exempted from 
disclosure by Sec. 103.12(d) of this chapter.

(R.S. 251, as amended, secs. 516, 624, 46 Stat. 735, as amended, 759; 5 
U.S.C. 552, 19 U.S.C. 66, 1516, 1624)

[T.D. 74-236, 39 FR 33207, Sept. 16, 1974, as amended by T.D. 80-271, 45 
FR 75642, Nov. 17, 1980; T.D. 81-168, 46 FR 32574, June 24, 1981]



Sec. 175.22  Publication of decisions following petition.

    (a) Incorrect appraised value, classification, or rate of duty. If 
the appraised value of, classification of, or rate of duty upon imported 
merchandise of the character which is the subject of a petition is found 
to be incorrect, the Commissioner of Customs shall so inform the 
petitioner, and shall cause the proper value, classification, or rate of 
duty to be published in the Federal Register and the weekly Customs 
Bulletin. Such merchandise entered for consumption or withdrawn from 
warehouse for consumption after 30 days after the date of publication of 
such notice to the petitioner in the Customs Bulletin shall be 
appraised, classified, or assessed as to rate of duty in accordance with 
the published decision.
    (b) Correct appraised value, classification, or rate of duty. If the 
appraised value of, classification of, or rate of duty upon the imported 
merchandise which is the subject of the petition is found to be correct, 
the Commissioner of Customs shall so notify the petitioner, but the 
decision shall not be published.



Sec. 175.23  Notice of desire to contest decision.

    If the petitioner is dissatisfied with the decision of the 
Commissioner that the appraised value, classification, or rate of duty 
is correct for the merchandise which was the subject of the petition, in 
accordance with section 516, Tariff Act of 1930, as amended (19 U.S.C. 
1516) he may file with the Commissioner of Customs not later than 30 
days after the date of the decision a notice that he desires to contest 
the appraised value of, classification of, or rate of duty assessed upon 
the imported merchandise. Such notice shall designate the port or ports 
at which such merchandise is being imported

[[Page 334]]

into the United States, and at which the petitioner desires to protest.



Sec. 175.24  Publication following notice of desire to contest.

    Upon receipt of a properly filed petitioner's notice that he desires 
to contest the decision as to the appraised value of, classification of, 
or rate of duty assessed upon the imported merchandise, the Commissioner 
of Customs shall cause to be published in the Federal Register and the 
weekly Customs Bulletin a notice of his decision as to the proper 
appraised value of, classification of, or rate of duty assessed upon the 
imported merchandise, and of petitioner's desire to contest the 
decision.



Sec. 175.25  Procedure at port of entry designated by petitioner.

    (a) Information as to character and description of merchandise. All 
information secured by the director of the port designated by the 
petitioner in his notice of desire to contest as to the character and 
description of merchandise of the kind covered by the petition and 
entered after publication by the Commissioner of Customs of his decision 
as to the proper appraised value, classification and rate of duty, and 
samples of such merchandise, shall be made available to the petitioner 
upon application by him to the port director.
    (b) Notice of liquidation. Notice of liquidation of the first of the 
entries to be liquidated which would enable the petitioner to present 
the issue desired shall be given to the petitioner by the director of 
the designated port as required by section 516. Tariff Act of 1930, as 
amended (19 U.S.C. 1516).
    (c) Further notice when issue not presented. If, upon examination of 
the information and inspection of any sample supplied by the port 
director, the petitioner believes and the port director agrees that the 
merchandise or the facts surrounding this importation are not sufficient 
to raise the issue involved in the petition, the port director shall 
then give the petitioner notice of the first liquidation thereafter 
which will permit the framing of the issue covered by the petition. The 
port director shall, under the same conditions, continue to give notice 
for so long as he is of the opinion that the petitioner affirmatively 
intends to contest. When the port director concludes that the petitioner 
does not intend to contest the decision of the Commissioner of Customs, 
he shall refer the matter to the Commissioner of Customs for his 
decision before issuing any further notice of liquidation.

[T.D. 70-181, 35 FR 13432, Aug. 22, 1970, as amended by T.D. 99-27, 64 
FR 13677, Mar. 22, 1999]



              Subpart D_Procedure Following Court Decision



Sec. 175.31  Publication of notice of court decision.

    Notice of a decision of the Court of International Trade or of the 
Court of Appeals for the Federal Circuit which sustains, in whole or in 
part, a cause of action before the court under the provisions of section 
516, Tariff Act of 1930, as amended (19 U.S.C. 1516), shall be published 
by the Commissioner of Customs in the Federal Register within 10 days 
from the date of issuance of the court decision.

[T.D. 80-271, 45 FR 75642, Nov. 17, 1980, as amended by T.D. 85-90, 50 
FR 21430, May 24, 1985]



PART 176_PROCEEDINGS IN THE COURT OF INTERNATIONAL TRADE--Table of Contents




Sec.
176.0 Scope.

                            Subpart A_Service

176.1 Service of summons.
176.2 Service of notice of appeal.

                    Subpart B_Transmission of Records

176.11 Transmission of records to Court of International Trade.

                   Subpart C_Statement of Agreed Facts

176.21 Referral of statements of agreed facts for certification.
176.22 Deletion of protest or entry number.

              Subpart D_Procedure Following Court Decision

176.31 Reliquidation following decision of court.


[[Page 335]]


    Authority: R.S. 251, as amended, sec. 624, 46 Stat. 759; 19 U.S.C. 
66, 1624, unless otherwise noted.



Sec. 176.0  Scope.

    This part deals with service of summons and notice of appeal in 
actions before the Court of International Trade, the transmission of 
records to the court, statements of agreed facts, and Customs procedures 
following a decision by the court.

[T.D. 70-181, 35 FR 13433, Aug. 22, 1970, as amended by T.D. 85-90, 50 
FR 21430, May 24, 1985]



                            Subpart A_Service



Sec. 176.1  Service of summons.

    When an action is initiated in the Court of International Trade a 
copy of the summons shall be served in the manner prescribed by the 
Court of International Trade upon the director of each port where a 
protest cited in the summons was denied, and an additional copy shall be 
served upon the Assistant Chief Counsel for Court of International Trade 
Litigation, United States Customs Service, 26 Federal Plaza, New York, 
N.Y. 10007.

(28 U.S.C. 2632, as amended)

[T.D. 70-181, 35 FR 13433, Aug. 22, 1970, as amended by T.D. 85-90, 50 
FR 21430, May 24, 1985]



Sec. 176.2  Service of notice of appeal.

    When the United States is an appellee in an appeal taken to the 
Court of Appeals for the Federal Circuit, a copy of the notice of appeal 
shall be served upon the Assistant Chief Counsel for Court of 
International Trade Litigation.

(28 U.S.C. 2601, as amended)

[T.D. 70-181, 35 FR 13433, Aug. 22, 1970, as amended by T.D. 85-90, 50 
FR 21430, May 24, 1985]



                    Subpart B_Transmission of Records



Sec. 176.11  Transmission of records to Court of International Trade.

    Upon receipt of service of a summons in an action initiated in the 
Court of International Trade the following items shall be immediately 
transmitted to the Court of International Trade as part of the official 
record by the Customs officer concerned:
    (a) Consumption or other entry;
    (b) Commercial invoice;
    (c) Special Customs invoice;
    (d) Copy of protest and any amendments thereto;
    (e) Copy of denial or protest in whole or in part;
    (f) Importer's exhibits;
    (g) Official samples;
    (h) Any official laboratory reports;
    (i) The summary sheet;
    (j) In any case in which one or more of the items listed in 
paragraphs (a) through (i) of this section do not exist, the Customs 
officer shall include a statement to that effect, identifying the items 
which do not exist.

(28 U.S.C. 2632, as amended)

[T.D. 70-181, 35 FR 13433, Aug. 22, 1970, as amended by T.D. 85-90, 50 
FR 21430, May 24, 1985]



                   Subpart C_Statement of Agreed Facts



Sec. 176.21  Referral of statement of agreed facts for certification.

    Statements of agreed facts (also referred to as stipulations) to be 
used by the Department of Justice in submitting cases to the Court of 
International Trade may be referred for certification to Customs 
officials by the office of the Assistant Attorney General, International 
Trade Field Office, Civil Division, Department of Justice, 26 Federal 
Plaza, New York, N.Y. 10278.

[T.D. 70-181, 35 FR 13433, Aug. 22, 1970, as amended by T.D. 85-90, 50 
FR 21430, May 24, 1985; T.D. 88-47, 53 FR 30984, Aug. 17, 1988]



Sec. 176.22  Deletion of protest or entry number.

    If any protest number or entry number is to be deleted from a 
schedule of protest numbers or entry numbers attached to or embodied in 
a statement of agreed facts, a line shall be drawn through the number 
and the change shall be initialed by the authorized official making and 
approving the deletion.

[T.D. 70-181, 35 FR 13433, Aug. 22, 1970]

[[Page 336]]



              Subpart D_Procedure Following Court Decision



Sec. 176.31  Reliquidation following decision of court.

    (a) Decision of U.S. Court of International Trade. Except as 
provided in paragraph (c) of this section, an entry which is the subject 
of a decision of the U.S. Court of International Trade shall be 
reliquidated in accordance with the judgment order thereon at the 
expiration of 60 days from the date of the decision, unless an appeal or 
motion for a rehearing is filed. However, entries which are the subject 
of decisions of the court following a decision of the Court of Appeals 
for the Federal Circuit which involve the same issue, or which are based 
on submission of an agreed statement of fact, may be reliquidated 
immediately upon receipt of the judgment orders from the U.S. Court of 
International Trade.
    (b) Decision of the Court of Appeals for the Federal Circuit. Except 
as provided in paragraph (c) of this section, an entry covering 
merchandise which is the subject of a decision of the Court of Appeals 
for the Federal Circuit shall be reliquidated at the expiration of 90 
days from the date of entry of decision by that court and only upon 
receipt of the judgment order from the U.S. Court of International 
Trade. However, no such entry shall be reliquidated pursuant to such 
order if a petition for certiorari is taken to the Supreme Court.
    (c) Waiver of right of appeal. Upon receipt of a letter from the 
Assistant Attorney General, Civil Division, Department of Justice, 
signed by the Chief, Customs Section, advising that no appeal will be 
taken from a decision of the U.S. Court of International Trade or that 
it has been determined that no petition for certiorari shall be filed in 
the Supreme Court to review a decision of the Court of Appeals for the 
Federal Circuit, any entry or entries covered by such decision may be 
reliquidated pursuant to the judgment of the U.S. Court of International 
Trade prior to the expiration of the times specified in paragraphs (a) 
and (b) of this section.

(Sec. 514, 46 Stat. 734, as amended; 19 U.S.C. 1514)

[T.D. 70-181, 35 FR 13433, Aug. 22, 1970, as amended by T.D. 85-90, 50 
FR 21430, May 24, 1985]



PART 177_ADMINISTRATIVE RULINGS--Table of Contents




Sec.
177.0 Scope.

                   Subpart A_General Ruling Procedure

177.1 General ruling practice and definitions.
177.2 Submission of ruling requests.
177.3 Nonconforming requests for rulings.
177.4 Oral discussion of issues.
177.5 Change in status of transaction.
177.6 Withdrawal of ruling requests.
177.7 Situations in which no ruling will be issued.
177.8 Issuance of rulings.
177.9 Effect of ruling letters.
177.10 Publication of decisions.
177.11 Requests for advice by field offices.
177.12 Modification or revocation of interpretive rulings, protest 
          review decisions, and previous treatment of substantially 
          identical transactions.
177.13 Inconsistent customs decisions.

   Subpart B_Government Procurement; Country-of-Origin Determinations

177.21 Applicability.
177.22 Definitions.
177.23 Who may request a country-of-origin advisory ruling or final 
          determination.
177.24 By whom request is filed.
177.25 Form and content of request.
177.26 Where request filed.
177.27 Oral discussion of issues.
177.28 Issuance of advisory rulings and final determinations.
177.29 Publication of notice of final determinations.
177.30 Review of final determinations.
177.31 Reexamination of final determinations.

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1502, 1624, 1625.



Sec. 177.0  Scope.

    This part relates to the issuance of rulings to importers and other 
interested persons by the CBP, other than advance rulings under Article 
509 of the North American Free Trade Agreement

[[Page 337]]

(see subpart I of part 181 of this chapter). It describes the situations 
in which a ruling may be requested, the procedures to be followed in 
requesting a ruling, the conditions under which a ruling will be issued, 
the effect of a ruling when it is issued, and the publication of rulings 
in the Customs Bulletin. The rulings issued under the provisions of this 
part will usually be prospective in application and, consequently, will 
usually not relate to specific matters or situations presently or 
previously under consideration by any CBP field office. Accordingly, the 
rulings requested under the provisions of this part should be 
distinguished from the administrative rulings, determinations, or 
decisions which may be requested under procedures set forth elsewhere in 
this chapter, including, but not limited to, those set forth in part 12 
(relating to submissions of proof of admissibility of articles detained 
under section 307 of the Tariff Act of 1930 (19 U.S.C. 1307)), part 103 
(relating to disclosure of information in Customs files), part 133 
(relating to disputed claims of piratical copying of copyrighted 
matter), subpart C of part 152 (relating to determinations concerning 
the dutiable value of merchandise by Customs field officers), part 153 
(relating to enforcement of the Antidumping Act, 1921, as amended), part 
159 (insofar as it relates to countervailing duties), part 171 (relating 
to fines, penalties, and forfeitures), part 172 (relating to liquidated 
damages), part 174 (relating to protests), and part 175 (relating to 
petitions filed by American manufacturers, producers, or wholesalers 
pursuant to section 516 of the Tariff Act of 1930, as amended). Nor do 
the provisions of part 177 apply to requests for decisions of an 
operational, administrative, or investigative nature which are properly 
within the cognizance of a CBP Headquarters Office other than 
Regulations and Rulings, Office of International Trade.

[T.D. 80-285, 45 FR 80103, Dec. 3, 1980, as amended by T.D. 84-149, 49 
FR 28699, July 16, 1984; T.D. 89-74, 54 FR 31515, July 31, 1989; T.D. 
94-1, 58 FR 69473, Dec. 30, 1993]



                   Subpart A_General Ruling Procedure



Sec. 177.1  General ruling practice and definitions.

    (a) The issuance of rulings generally--(1) Prospective transactions. 
It is in the interest of the sound administration of the Customs and 
related laws that persons engaging in any transaction affected by those 
laws fully understand the consequences of that transaction prior to its 
consummation. For this reason, the Customs Service will give full and 
careful consideration to written requests from importers and other 
interested parties for rulings or information setting forth, with 
respect to a specifically described transaction, a definitive 
interpretation of applicable law, or other appropriate information. 
Generally, a ruling may be requested under the provisions of this part 
only with respect to prospective transactions--that is, transactions 
which are not already pending before a Customs Service office by reason 
of arrival, entry, or otherwise.
    (2) Current or completed transactions--(i) Current transactions. A 
question arising in connection with a Customs transaction already before 
a Customs Service office will normally be resolved by that office in 
accordance with the principles and precedents previously announced by 
the Headquarters Office. If such a question cannot be resolved on the 
basis of clearly established rules set forth in the Customs and related 
laws, or in the regulations thereunder, or in applicable Treasury 
Decisions, rulings, opinions, or court decisions published in the 
Customs Bulletin, that office may be requested to forward the question 
to the Headquarters Office for consideration, as more fully described in 
Sec. 177.11.
    (ii) Completed transactions. A question arising in connection with 
an entry of merchandise which has been liquidated, or in connection with 
any other completed Customs transaction, may not be the subject of a 
ruling request.
    (b) Oral advice. The Customs Service will not issue rulings in 
response to oral requests. Oral opinions or advice of Customs Service 
personnel are not binding on the Customs Service. However, oral 
inquiries may be made to

[[Page 338]]

Customs Service offices regarding existing rulings, the scope of such 
rulings, the types of transactions with respect to which the Customs 
Service will issue rulings, the scope of the rulings which may be 
issued, or the procedures to be followed in submitting ruling requests, 
as described in this part.
    (c) Who may request a ruling. Except as otherwise provided in 
subpart I of part 181 of this chapter, a ruling may be requested under 
this part by any person who, as an importer or exporter of merchandise, 
or otherwise, has a direct and demonstrable interest in the question or 
questions presented in the ruling request, or by the authorized agent of 
such person. A ``person'' in this context includes an individual, 
corporation, partnership, association, or other entity or group.
    (d) Definitions. (1) A ``ruling'' is a written statement issued by 
the Headquarters Office or the appropriate office of Customs as provided 
in this part that interprets and applies the provisions of the Customs 
and related laws to a specific set of facts. A ``ruling letter'' is a 
ruling issued in response to a written request therefor and set forth in 
a letter addressed to the person making the request or his designee. A 
``published ruling'' is a ruling which has been published in the Customs 
Bulletin.
    (2) An ``information letter'' is a written statement issued by the 
Customs Service that does no more than call attention to a well-
established interpretation or principle of Customs law, without applying 
it to a specific set of facts. An information letter may be issued in 
response to a request for a ruling when: (i) The request suggests that 
general information, rather than a ruling, is actually being sought, 
(ii) the request is incomplete or otherwise fails to meet the 
requirements set forth in this part, or (iii) the ruling requested 
cannot be issued for any other reason, and (iv) it is believed that 
general information may be of some benefit to the party making the 
request.
    (3) A ``Customs transaction'' is an act or activity to which the 
Customs and related laws apply. A ``prospective'' Customs transaction is 
one that is contemplated or is currently being undertaken and has not 
resulted in any arrival or the filing of any entry or other document, or 
in any other act to bring the transaction, or any part of it, under the 
jurisdiction of any Customs Service office. A ``current'' Customs 
transaction is one which is presently under consideration by a port 
office of the Customs Service. A ``completed'' Customs transaction is 
one which has been acted upon by a Customs Service field office and with 
respect to which that office has issued a determination which is final 
in nature, but is (or was) subject to appeal, petition, protest, or 
other review, as provided in the applicable Customs laws and 
regulations. In a series of identical, recurring transactions, each 
transaction shall be considered an individual transaction for purposes 
of this part.
    (4) An ``authorized agent'' is a person expressly authorized by a 
principal to act on his behalf. A ruling requested by an attorney or 
other person acting as an agent must include a statement describing the 
authority under which the request is made. With the exception of 
attorneys whose authority to represent is known, any person appearing 
before the Customs Service as an agent in connection with a ruling 
request may be required to present evidence of his authority to 
represent the principal. The foregoing requirements will not apply to an 
individual representing his full-time employer, or to a bona-fide 
officer, director, or other qualified representative of a corporation, 
association, or organized group.
    (5) The term ``Customs and related laws,'' as generally used in this 
part, includes any provision of the Tariff Act of 1930, as amended 
(including the Harmonized Tariff Schedule of the United States), or the 
Customs Regulations, or any provision contained in other legislation 
(including the navigation laws), regulations, treaties, orders, 
proclamations, or other agreements administered by the Customs Service.
    (6) The term ``Headquarters Office,'' as used herein, means the 
Regulations and Rulings, Office of international Trade at Headquarters, 
U.S. Customs

[[Page 339]]

and Border Protection, Washington, DC.

[T.D. 75-186, 40 FR 31929, July 30, 1975, as amended by T.D. 80-285, 45 
FR 80104, Dec. 3, 1980; T.D. 84-149, 49 FR 28699, July 16, 1984; T.D. 
89-1, 53 FR 51271, Dec. 21, 1988; T.D. 89-74, 54 FR 31515, July 31, 
1989; T.D. 94-1, 58 FR 69473, Dec. 30, 1993]



Sec. 177.2  Submission of ruling requests.

    (a) Form. A request for a ruling should be in the form of a letter. 
Requests for Valuation and Carrier rulings should be addressed to the 
Commissioner of Customs and Border Protection, Attention: Regulations 
and Rulings, Office of International Trade, Washington, DC 20229. The 
Division and Branch in the Regulations and Rulings, Office of 
International Trade to which the request should be directed may also be 
indicated, if known. Requests for tariff classification rulings should 
be addressed to the Director, National Commodity Specialist Division, 
Regulations and Rulings, Office of International Trade, U.S. Customs and 
Border Protection, New York, New York, 10119, Attn: Classification 
Ruling Requests, New York, New York 10048, or to any service port office 
of the Customs and Border Protection.
    (b) Content--(1) Generally. Each request for a ruling must contain a 
complete statement of all relevant facts relating to the transaction. 
Such facts include the names, addresses, and other identifying 
information of all interested parties (if known); the name of the port 
or place at which any article involved in the transaction will arrive or 
be entered, or which will otherwise have jurisdiction with respect to 
the act or activity described in the transaction; and a description of 
the transaction itself, appropriate in detail to the type of ruling 
requested.
    (2) Description of transaction--(i) Generally. The Customs 
transaction to which the ruling request relates must be described in 
sufficient detail to permit the proper application of relevant customs 
and related laws.
    (ii) Tariff classification rulings. (A) If the transaction involves 
the importation of an article for which a ruling as to its proper 
classification under the provisions of the Harmonized Tariff Schedule of 
the United States is requested, the request for a ruling should include 
a full and complete description of the article and whenever germane to 
the proper classification of the article, information as to the 
article's chief use in the United States, its commercial, common, or 
technical designation, and, where the article is composed of two or more 
materials, the relative quantity (by weight and by volume) and value of 
each. The ruling request should also note, whenever germane, the 
purchase price of the article, and its approximate selling price in the 
United States. Individual requests for rulings submitted to service port 
offices will be limited to five (5) merchandise items, all of which must 
be of the same class or kind.
    (B) Rulings issued by the Director, National Commodity Specialist 
Division, or any service port office are limited to prospective 
transactions. Only the Headquarters Office will prepare final decisions 
under Sec. 177.11 (Requests for Advice by Field Officers), or Sec. 
174.23 (Further Review of Protests), Sec. 177.10 (Change of Practice), 
decisions under part 175 of this chapter (petitions under section 516, 
Tariff Act of 1930, as amended), decisions under Sec. 177.13 
(Inconsistent Customs decisions), and decisions under Policies and 
Procedures Manual Supplement 2126-01.
    (C) The requesting party may send the request directly to the 
Director, Commercial and Trade Facilitation Division, Regulations and 
Rulings, Office of International Trade, U.S. Customs and Border 
Protection, Washington, DC 20229. The Headquarters Office retains 
authority to independently review all tariff classification ruling 
letters issued by the Director, National Commodity Specialist Division, 
and any service port office. If the importer or other person to whom a 
ruling letter is issued disagrees with the tariff classification set 
forth in a ruling issued by the Director, National Commodity Specialist 
Division, or any service port office, he may petition the Director, 
Commercial Rulings Division, U.S. Customs Service, Washington, DC 20229, 
for review of the ruling.
    (iii) Valuation rulings. If the transaction involves the valuation 
of an article for Customs purposes, the request for a ruling should 
include all of the

[[Page 340]]

applicable information described in subpart C of part 152 of this 
chapter, and, insofar as is relevant, the information which would be 
required on an invoice as described in subpart F of part 141 of this 
chapter. The request should also describe the nature of the transaction 
(whether f.o.b./c.i.f., ex-factory, or some other arrangement), the 
relationship (if any) of the parties, whether the transaction was at 
arm's-length, whether there have been other sales of the same or similar 
merchandise in the country of exportation, whether an agency 
relationship exists, or any other information relevant to a 
determination under section 402 or 402a of the Tariff Act of 1930, as 
amended (19 U.S.C. 1401a, 1402).
    (iv) Carrier rulings. If the transaction involves a vessel, the 
request for a ruling should include information relating to place of 
build and nationality of registration and, if to be used in waters under 
the jurisdiction of the United States, the exact place or places of 
intended use, if known. If the request for a ruling involves a 
determination as to whether or not the primary object of a contemplated 
voyage would be considered to be coastwise transportation in violation 
of 46 U.S.C. 289 (see Sec. 4.80a of this chapter), the request should 
completely identify the voyage, including the proposed time of arrival 
at and departure from every port on the itinerary and any coordination 
of the voyage with special events at coastwise ports, and should be 
accompanied by samples, if available, of brochures, advertising, and 
other information that may be relevant to a determination of the primary 
object of the proposed voyage.
    (3) Samples. Each request for a ruling regarding the status of an 
article under any Customs or related law affecting the importation or 
arrival of that article should be accompanied by photographs, drawings, 
or other pictorial representations of the article and, whenever 
possible, by a sample article, unless a precise description of the 
article is not essential to the ruling requested. Any article consisting 
of materials in chemical or physical combination for which a laboratory 
analysis has been prepared by or for the manufacturer should include a 
copy of that analysis. A sample submitted in connection with a request 
for a ruling becomes a part of the Customs Service file in the matter 
and will be retained until the ruling is issued or the ruling request is 
otherwise disposed of. If the return of the sample is desired, the 
ruling request should so state and should specify the desired means of 
return. A sample should only be submitted with the understanding that 
all or a part of it may be damaged or consumed in the course of 
examination, testing, analysis, or other actions undertaken in 
connection with the ruling request.
    (4) Related documents. If the question or questions presented in the 
ruling request directly relate to matters set forth in any invoice, 
contract, agreement, or other document, a copy of the document must be 
submitted with the request. (Original documents should not be submitted 
inasmuch as any documents or exhibits furnished with the ruling request 
become a part of the Customs Service file in the matter and cannot be 
returned.) The relevant facts reflected in any documents submitted, and 
an explanation of their bearing on the question or questions presented, 
must be expressly set forth in the ruling request.
    (5) Prior or current transactions. Each request for a ruling must 
state whether, to the knowledge of the person submitting the request, 
the same transaction, or one identical to it, has ever been considered, 
or is currently being considered by any Customs Service office or 
whether, to the knowledge of the person submitting the request, the 
issues involved have ever been considered, or are currently being 
considered, by the United States Court of International Trade, the 
United States Court of Appeals for the Federal Circuit, or any court of 
appeal therefrom. Where the transaction described in the ruling request 
is but one of a series of similar and related transactions, that fact 
must also be stated.
    (6) Statement of position. If the request for a ruling asks that a 
particular determination or conclusion be reached in the ruling letter, 
a statement must be included in the request setting forth the basis for 
that determination or conclusion, together with a citation of all 
relevant supporting authority.

[[Page 341]]

    (7) Privileged or confidential information. Information which is 
claimed to constitute trade secrets or privileged or confidential 
commercial or financial information regarding the business transactions 
of private parties the disclosure of which would cause substantial harm 
to the competitive position of the person making the request (or of 
another interested party), must be identified clearly and the reasons 
such information should not be disclosed, including, where applicable, 
the reasons the disclosure of the information would prejudice the 
competitive position of the person making the request (or of another 
interested party) must be set forth.
    (c) Signing; instructions as to reply. The request for a ruling must 
be signed by a person authorized to make the request, as described in 
Sec. 177.1(c). A ruling requested by a principal or authorized agent 
may direct that the ruling letter be addressed to the other.
    (d) Requests for immediate consideration. The Customs Service will 
normally process requests for rulings in the order they are received and 
as expeditiously as possible. However, a request that a particular 
matter be given consideration ahead of its regular order, if made in 
writing at the time the request is submitted, or subsequent thereto, and 
showing a clear need for such treatment, will be given consideration as 
the particular circumstances warrant and permit. Requests for special 
consideration made by telegram will be treated in the same manner as 
requests made by letter, but rulings will not ordinarily be issued by 
telegram. In no event can any assurance be given that a particular 
request for a ruling will be acted upon by the time requested. However, 
upon request and where a clear need is shown for such action, a collect 
telephone call will be made to advise that the ruling letter has been 
issued and is being mailed.

(R.S. 251, as amended, secs. 481, 484, 624, 46 Stat. 719, 46 Stat. 719, 
722, as amended, 759 (19 U.S.C. 66, 1481, 1484, 1624))

[T.D. 75-186, 40 FR 31929, July 30, 1975, as amended by T.D. 80-285, 45 
FR 80104, Dec. 3, 1980; T.D. 84-149, 49 FR 28699, July 16, 1984; T.D. 
85-39, 50 FR 9613, Mar. 11, 1985; T.D. 85-90, 50 FR 21430, May 24, 1985; 
T.D. 89-1, 53 FR 51271, Dec. 21, 1988; T.D. 89-74, 54 FR 31515, July 31, 
1989; T.D. 97-82, 62 FR 51771, Oct. 3, 1997; T.D. 99-27, 64 FR 13677, 
Mar. 22, 1999; T.D. 02-49, 67 FR 53496, Aug. 16, 2002]



Sec. 177.3  Nonconforming requests for rulings.

    A person submitting a request for a ruling that does not comply with 
all of the provisions of this part will be so notified in writing, and 
the requirements that have not been met will be pointed out. Except in 
the case of ruling requests submitted to Area or District offices, such 
person will be given a period of thirty (30) days from the date of the 
notice (or such longer period as the notice may provide) to supply any 
additional information that is requested or otherwise conform the ruling 
request to the requirements referred to in the notice. The Customs 
Service file with respect to ruling requests which are not brought into 
compliance with the provisions of this part within the period of time 
allowed will be administratively closed and the request removed from 
active consideration until such time as the deficiencies cited in the 
notice are corrected. A request for a ruling that is removed from active 
consideration by reason of failing to comply with the provisions of this 
part may be treated as withdrawn. In the case of ruling requests made to 
Area or District offices, a failure to comply with the provisions of 
this part will result in the return of the ruling request with the 
notice specifying the deficiencies and such requests will not be 
considered as having been filed until such deficiencies are corrected.

[T.D. 89-74, 54 FR 31515, July 31, 1989]



Sec. 177.4  Oral discussion of issues.

    (a) Generally. A person submitting a request for a ruling and 
desiring an opportunity to orally discuss the issue or

[[Page 342]]

issues involved should indicate that desire in writing at the time the 
ruling request is filed. Such a discussion will only be scheduled when, 
in the opinion of the Customs personnel by whom the ruling request is 
under consideration, a conference will be helpful in deciding the issue 
or issues involved or when a determination or conclusion contrary to 
that advocated in the ruling request is contemplated. Conferences are 
scheduled for the purpose of affording the parties an opportunity to 
freely and openly discuss the matters set forth in the ruling request. 
Accordingly, the parties will not be bound by any argument or position 
advocated or agreed to, expressly or by implication, during the 
conference unless either party subsequently agrees to be so bound in 
writing. The conference will not conclude with the issuance of a ruling 
letter.
    (b) Time, place, and number of conferences. If a request for a 
conference is granted, the person making the request will be notified of 
the time and place of the conference. No more than one conference with 
respect to the matters set forth in a ruling request will be scheduled, 
unless, in the opinion of the Customs personnel by whom the ruling 
request is under consideration, additional conferences are necessary.
    (c) Representation. A person whose request for a conference has been 
granted may be accompanied at that conference by counsel or other 
representatives, or may designate such persons to attend the conference 
in his place.
    (d) Additional information presented at conferences. It will be the 
responsibility of the person submitting the request for a ruling to 
provide for inclusion in the Customs Service file in the matter a 
written record setting forth any and all additional information, 
documents, and exhibits introduced during the conference to the extent 
that person considers such material relevant to the consideration of the 
ruling request.

[T.D. 75-186, 40 FR 31929, July 30, 1975, as amended by T.D. 80-285, 45 
FR 80105, Dec. 3, 1980; T.D. 84-149, 49 FR 28699, July 16, 1984; T.D. 
89-74, 54 FR 31515, July 31, 1989]



Sec. 177.5  Change in status of transaction.

    Each person submitting a request for a ruling in connection with a 
Customs transaction shall immediately advise Customs in writing of any 
change in the status of that transaction, as defined in Sec. 
177.1(d)(3). In particular, the Customs Service office to which the 
request was made must be advised when any transaction described in the 
ruling request as prospective becomes current and under the jurisdiction 
of a Customs Service field office. In addition, any person engaged in a 
Customs transaction coming under the jurisdiction of a Customs Service 
field office and having previously requested a ruling with respect to 
that transaction shall advise the field office of that fact. The field 
office will normally withhold action with respect to any transaction for 
which a ruling has previously been requested pending the disposition of 
the ruling request.

[T.D. 80-285, 45 FR 80105, Dec. 3, 1980, as amended by T.D. 84-149, 49 
FR 28699, July 16, 1984; T.D. 89-74, 54 FR 31516, July 31, 1989]



Sec. 177.6  Withdrawal of ruling requests.

    Any request for a ruling may be withdrawn by the person submitting 
it at any time before the issuance of a ruling letter or any other final 
disposition of the request. All correspondence, documents, and exhibits 
submitted in connection with the request will be retained in the Customs 
Service file and will not be returned. In addition, the Headquarters 
Office may forward to Customs Service field offices which have or may 
have jurisdiction over the transaction to which the ruling request 
relates, its views in regard to the transaction or the issues involved 
therein, as well as appropriate information derived from materials in 
the Customs Service file.

[T.D. 80-285, 45 FR 80105, Dec. 3, 1980]



Sec. 177.7  Situations in which no ruling will be issued.

    (a) Generally. No ruling letter will be issued in response to a 
request for a ruling which fails to comply with the provisions of this 
part. Moreover, no ruling letter will be issued with regard to 
transactions or questions which are essentially hypothetical in nature 
or in any instance in which it appears contrary to the sound 
administration of the Customs and related laws to do so.

[[Page 343]]

No ruling letter will be issued in regard to a completed transaction.
    (b) Pending litigation in the United States Court of International 
Trade. No ruling letter will be issued with respect to any issue which 
is pending before the United States Court of International Trade, the 
United States Court of Appeals for the Federal Circuit, or any court of 
appeal therefrom. Litigation before any other court will not preclude 
the issuance of a ruling letter, provided neither the Customs Service 
nor any of its officers or agents is named as a defendant.

[T.D. 75-186, 40 FR 31929, July 30, 1975, as amended by T.D. 85-90, 50 
FR 21430, May 24, 1985]



Sec. 177.8  Issuance of rulings.

    (a) Ruling letters--(1) Generally. The Customs Service will endeavor 
to issue a ruling letter setting forth a determination with respect to a 
specifically described Customs transaction whenever a request for such a 
ruling is submitted in accordance with the provisions of this part and 
it is in the sound administration of the Customs and related laws to do 
so. Otherwise, a request for a ruling will be answered by an information 
letter or, in those situations in which general information is likely to 
be of little or no value, by a letter stating that no ruling can be 
issued.
    (2) Submission of ruling letters to field offices. Any person 
engaging in a Customs transaction with respect to which a binding tariff 
classification ruling letter (including pre-entry classification 
decisions) has been issued under this part shall ascertain that a copy 
of the ruling letter is attached to the documents filed with the 
appropriate Customs Service office in connection with that transaction, 
or shall otherwise indicate with the information filed for that 
transaction that a ruling has been received. Any person receiving a 
ruling setting forth the tariff classification of merchandise shall set 
forth such classification in the documents or information filed in 
connection with any subsequent entry of that merchandise; the failure to 
do so may result in a rejection of the entry and the imposition of such 
penalties as may be appropriate. A ruling received after the filing of 
such documents or information shall immediately be brought to the 
attention of the appropriate Customs Service field office.
    (3) Disclosure of ruling letters. The ruling letter shall be based 
on the information set forth in the ruling request. No part of the 
ruling letter, including names, addresses, or information relating to 
the business transactions of private parties, shall be deemed to 
constitute privileged or confidential commercial or financial 
information or trade secrets exempt from disclosure pursuant to the 
Freedom of Information Act, as amended (5 U.S.C. 552), unless, as 
provided in Sec. 177.2(b)(7), the information claimed to be exempt from 
disclosure is clearly identified and the reasons for the exemption are 
set forth. Before the issuance of the ruling letter, the person 
submitting the ruling request, will be notified of any decision adverse 
to his claim for exemption from disclosure and will, upon written 
request to Customs within 10 working days of the date of notification, 
be permitted to withdraw the ruling request. All ruling letters issued 
by the Customs Service will be available, upon written request, for 
inspection and copying by any person (with any portions determined to be 
exempt from disclosure deleted).
    (b) Other rulings. The Headquarters Office may from time to time 
issue other rulings with respect to issues or transactions described or 
suggested by requests for rulings submitted under the provisions of this 
part, or with respect to issues or transactions otherwise brought to its 
attention. These rulings, which are statements of the official position 
of the Customs Service which are likely to be of widespread interest and 
application, are published in the Customs Bulletin, as described in 
Sec. 177.10.

[T.D. 75-186, 40 FR 31929, July 30, 1975, as amended by T.D. 80-285, 45 
FR 80105, Dec. 3, 1980; T.D. 84-149, 49 FR 28699, July 16, 1984; T.D. 
89-74, 54 FR 31516, July 31, 1989]



Sec. 177.9  Effect of ruling letters.

    (a) Effect of ruling letters generally. A ruling letter issued by 
the Customs Service under the provisions of this part represents the 
official position of the Customs Service with respect to

[[Page 344]]

the particular transaction or issue described therein and is binding on 
all Customs Service personnel in accordance with the provisions of this 
section until modified or revoked. In the absence of a change of 
practice or other modification or revocation which affects the principle 
of the ruling set forth in the ruling letter, that principle may be 
cited as authority in the disposition of transactions involving the same 
circumstances. Generally, a ruling letter is effective on the date it is 
issued and may be applied to all entries which are unliquidated, or 
other transactions with respect to which the Customs Service has not 
taken final action on that date. See, however, Sec. 177.10(e) (changes 
of practice published in the Federal Register) and Sec. 177.12 (rulings 
which modify or revoke previous rulings, decisions, or treatments).
    (b) Application of rulings to transactions--(1) Generally. Each 
ruling letter is issued on the assumption that all of the information 
furnished in connection with the ruling request and incorporated in the 
ruling letter, either directly, by reference, or by implication, is 
accurate and complete in every material respect. The application of a 
ruling letter by a Customs Service field office to the transaction to 
which it is purported to relate is subject to the verification of the 
facts incorporated in the ruling letter, a comparison of the transaction 
described therein to the actual transaction, and the satisfaction of any 
conditions on which the ruling was based. If, in the opinion of any 
Customs Service field office by whom the transaction is under 
consideration or review, the ruling letter should be modified or 
revoked, the findings and recommendations of that office will be 
forwarded to the Headquarters Office for consideration, as provided in 
Sec. 177.11(b)(1)(i), prior to any final disposition with respect to 
the transaction by that office. Otherwise, if the transaction described 
in the ruling letter and the actual transaction are the same, and any 
and all conditions set forth in the ruling letter have been satisfied, 
the ruling will be applied to the transaction.
    (2) Tariff classification rulings. Each ruling letter setting forth 
the proper classification of an article under the provisions of the 
Harmonized Tariff Schedule of the United States will be applied only 
with respect to transactions involving articles identical to the sample 
submitted with the ruling request or to articles whose description is 
identical to the description set forth in the ruling letter.
    (3) Valuation rulings. Each ruling letter setting forth the proper 
valuation of an article under the provisions of section 402 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1401a), will be applied only 
with respect to transactions involving the same merchandise and like 
facts.
    (4) Carrier rulings. Each ruling letter setting forth the 
applicability of the navigation laws to a vessel will be applied only 
with respect to transactions involving operations identical to those set 
forth in the ruling letter. Each ruling letter setting forth a 
determination as to whether or not the primary object of a contemplated 
voyage is coastwise transportation in violation of 46 U.S.C. 289 will be 
binding on the United States Customs Service with respect to any 
transaction identical to the facts and circumstances described in the 
ruling request and undertaken in reliance on the ruling letter.
    (c) Reliance on ruling letters by others. Except when public notice 
and comment procedures apply under Sec. 177.12, a ruling letter is 
subject to modification or revocation by CBP without notice to any 
person other than the person to whom the ruling letter was addressed. 
Accordingly, no other person should rely on the ruling letter or assume 
that the principles of that ruling will be applied in connection with 
any transaction other than the one described in the letter. However, any 
person eligible to request a ruling under Sec. 177.1(c) may request 
information as to whether a previously-issued ruling letter has been 
modified or revoked by writing the Commissioner of Customs and Border 
Protection, Attention: Regulations and Rulings, Office of International 
Trade, Washington, DC 20229, and either enclosing a copy of the ruling 
letter or furnishing other information sufficient to permit the ruling 
letter in question to be identified.

[[Page 345]]

    (d)-(e) [Reserved]

[T.D. 75-186, 40 FR 31929, July 30, 1975, as amended by T.D. 80-285, 45 
FR 80105, Dec. 3, 1980; T.D. 84-149, 49 FR 28699, July 16, 1984; T.D. 
87-89, 52 FR 24446, July 1, 1987; T.D. 89-1, 53 FR 51271, Dec. 21, 1988; 
T.D. 89-74, 54 FR 31516, July 31, 1989; T.D. 02-49, 67 FR 53496, Aug. 
16, 2002]



Sec. 177.10  Publication of decisions.

    (a) Generally. Within 90 days after issuing any interpretive 
decision under the Tariff Act of 1930, as amended, relating to any 
Customs transaction (prospective, current, or completed), the Customs 
Service shall publish the decision in the Customs Bulletin or otherwise 
make it available for public inspection. For purposes of this paragraph 
an interpretive decision includes any ruling letter, internal advice 
memorandum, or protest review decision. Disclosure is governed by 31 CFR 
part 1, 19 CFR part 103, and 19 CFR 177.8(a)(3).
    (b) [Reserved]
    (c) Changes of practice. Before the publication of a ruling which 
has the effect of changing an established and uniform practice and which 
results in the assessment of a higher rate of duty within the meaning of 
19 U.S.C. 1315(d), notice that the practice (or prior ruling on which 
that practice was based) is under review will be published in the 
Federal Register and interested parties will be given an opportunity to 
make written submissions with respect to the correctness of the 
contemplated change.
    (d) Limiting rulings. A published ruling may limit the application 
of a court decision to the specific article under litigation, or to an 
article of a specific class or kind of such merchandise, or to the 
particular circumstances or entries which were the subject of the 
litigation.
    (e) Effective dates. Except as otherwise provided in Sec. 177.12(e) 
or in the ruling itself, all rulings published under the provisions of 
this part will be applied immediately. If the ruling involves 
merchandise, it will be applicable to all unliquidated entries, except 
that a change of practice resulting in the assessment of a higher rate 
of duty or increased duties shall be effective only as to merchandise 
entered for consumption or withdrawn from warehouse for consumption on 
or after the 90th day after publication of the change in the Federal 
Register.

[T.D. 75-186, 40 FR 31929, July 30, 1975, as amended by T.D. 78-394, 43 
FR 49792, Oct. 25, 1978; T.D. 89-74, 54 FR 31517, July 31, 1989; T.D. 
02-49, 67 FR 53496, Aug. 16, 2002]



Sec. 177.11  Requests for advice by field offices.

    (a) Generally. Advice or guidance as to the interpretation or proper 
application of the Customs and related laws with respect to a specific 
Customs transaction may be requested by Customs Service field offices 
from the Headquarters Office at any time, whether the transaction is 
prospective, current, or completed. Advice as to the proper application 
of the Customs and related laws to a current transaction will be sought 
by a Customs Service field office whenever that office is requested to 
do so, pursuant to paragraph (b) of this section, by an importer or 
other person having an interest in the transaction. Advice or guidance 
will be furnished by the Headquarters Office as a means of assisting 
Customs personnel in the orderly processing of Customs transactions 
under consideration by them and to insure the consistent application of 
the Customs and related laws in the several Customs districts. Requests 
for advice received by the Headquarters Office will be processed as 
expeditiously as possible.
    (b) Certain current transactions--(1) When a ruling has been 
issued--(i) Requests by field offices. If any Customs Service office has 
issued a ruling letter with respect to a particular Customs transaction 
and the Customs Service field office having jurisdiction over that 
transaction believes that the ruling should be modified or revoked, the 
field office will forward to the Headquarters Office, pursuant to Sec. 
177.9(b)(1), a request that the ruling be reconsidered. The field office 
will notify the importer or other person to whom the ruling letter was 
issued, in writing, that it has requested the Headquarters Office to 
reconsider the ruling.
    (ii) Requests by importers and others. If the importer or other 
person to whom a ruling letter is issued disagrees with

[[Page 346]]

the Customs Service field office having jurisdiction over the 
transaction to which the ruling relates as to the proper application of 
the ruling to the transaction, the field office will, upon receipt of a 
written request submitted in accordance with the procedure set forth in 
paragraph (b)(3) of this section, request advice from the Headquarters 
Office as to the proper application of the ruling to the transaction. 
Such advice may not be requested for the purpose of seeking 
reconsideration of a ruling with which the importer or other person to 
whom the ruling letter was issued disagrees.
    (2) When no ruling has been issued. Internal advice will be sought 
by a Customs Service field office with respect to a current transaction 
for which no ruling was requested or issued under the provisions of this 
part whenever a difference of opinion exists as to the interpretation or 
proper application of the Customs and related laws to the transaction, 
and the field office is requested to seek such advice by an importer or 
other person who would have been entitled, under Sec. 177.1(c), to 
request a ruling with respect to the transaction, while prospective. The 
request must be submitted to the field office in writing and in 
accordance with the provisions of paragraph (b)(3) of this section.
    (3) Form of request by importers and others. An importer or other 
person requesting that a Customs Service field office seek advice from 
the Headquarters Office must make such a request, in writing, to the 
field office having jurisdiction over the transaction in question. The 
request shall contain a complete statement setting forth a description 
of the transaction, the specific questions presented, the applicable 
law, and an argument for the conclusions advocated. The statement must 
also specify whether, to the knowledge of the person submitting the 
statement, the same transaction, or one identical to it, has ever been 
considered, or is currently being considered, by any Customs Service 
office. In addition, the statement should indicate at which port or 
ports of entry identical or substantially identical merchandise has been 
entered.
    (4) Review of requests by importers and others. All requests 
submitted by importers and other persons under paragraph (b)(3) of this 
section, will be reviewed by the field office to which they are 
submitted. In the event a difference of opinion exists as to the 
description of the transaction or as to the point or points at issue, 
the person submitting the request will be so advised in writing. If 
agreement cannot be reached, both the statements of the person 
submitting the request and the field office will be forwarded to the 
Headquarters Office for consideration.
    (5) Refusal by Headquarters Office to furnish advice. The 
Headquarters Office may refuse to consider the questions presented to it 
in the form of a request for internal advice whenever (i) the 
Headquarters Office determines that the period of time necessary to give 
adequate consideration to the questions presented would result in a 
withholding of action with respect to the transaction, or in any other 
situation, that is inconsistent with the sound administration of the 
Customs and related laws, and (ii) the questions presented can 
subsequently be raised by the importer or other interested party in the 
form of a protest filed in accordance with the provisions of part 174 of 
this chapter.
    (6) Effect of advice received from the Headquarters Office. Advice 
furnished by the Headquarters Office in response to a request therefor 
represents the official position of the Customs Service as to the 
application of the Customs laws to the facts of a specific transaction. 
If the field office believes that the advice furnished by the 
Headquarters Office should be reconsidered, it shall promptly request 
such reconsideration. Otherwise, the advice furnished by the 
Headquarters Office will be applied by the field office in its 
disposition of the Customs transaction in question.
    (7) Publication. Within 90 days after issuing an internal advice 
memorandum, the Customs Service shall publish the decision in the 
Customs Bulletin or otherwise make it available for public inspection. 
Disclosure is governed by 31 CFR part 1 and 19 CFR part 103.

[[Page 347]]

    (8) Judicial review of importers' requests. A refusal by the 
Headquarters Office to consider the questions raised by an importer in 
the form of a request for internal advice may be appealed to the Court 
of International Trade if the importer demonstrates to the Court that he 
would be irreparably harmed unless given an opportunity to obtain 
judicial review prior to the importation of the merchandise.

[T.D. 75-186, 40 FR 31929, July 30, 1975, as amended by T.D. 78-394, 43 
FR 49792, Oct. 25, 1978; T.D. 80-285, 45 FR 80106, Dec. 3, 1980; T.D. 
84-149, 49 FR 28699, July 16, 1984; T.D. 85-90, 50 FR 21431, May 24, 
1985; T.D. 89-74, 54 FR 31517, July 31, 1989; T.D. 02-49, 67 FR 53496, 
Aug. 16, 2002]



Sec. 177.12  Modification or revocation of interpretive rulings, protest review decisions, and previous treatment of substantially identical transactions.

    (a) General. An interpretive ruling, which includes an internal 
advice decision, issued under this part, or a holding or principle 
covered by a protest review decision issued under part 174 of this 
chapter, if found to be in error or not in accord with the current views 
of Customs, may be modified or revoked by an interpretive ruling issued 
under this section. In addition, an interpretive ruling issued under 
this section may have the effect of modifying or revoking the treatment 
previously accorded by Customs to substantially identical transactions. 
A modification or revocation under this section must be carried out in 
accordance with the notice procedures set forth in paragraph (b) or 
paragraph (c) of this section except as otherwise provided in paragraph 
(d) of this section, and the modification or revocation will take effect 
as provided in paragraph (e) of this section.
    (b) Interpretive rulings or protest review decisions. Customs may 
modify or revoke an interpretive ruling or holding or principle covered 
by a protest review decision that has been in effect for less than 60 
calendar days by simply giving written notice of the modification or 
revocation to the person to whom the original ruling was issued or whose 
current transaction was the subject of the internal advice decision or, 
in the case of a protest review decision, to the person identified on 
the Customs Form 19 as the protestant or to any other person designated 
to receive notice of denial of a protest under Sec. 174.30(b) of this 
chapter. However, when Customs contemplates the issuance of an 
interpretive ruling that would modify or revoke an interpretive ruling 
or holding or principle covered by a protest review decision which has 
been in effect for 60 or more calendar days, the following procedures 
will apply:
    (1) Publication of proposed action. A notice proposing the 
modification or revocation and inviting public comment on the proposal 
will be published in the Customs Bulletin. The notice will refer to all 
previously issued interpretive rulings or protest review decisions that 
Customs has identified as being the subject of the proposed action and 
will invite any member of the public who has received another 
interpretive ruling or protest review decision involving the issue that 
is the subject of the proposed action to advise Customs of that fact. 
Interested parties will have 30 calendar days from the date of 
publication of the notice to submit written comments on the proposed 
modification or revocation and to advise Customs in writing that they 
are recipients of an affected interpretive ruling or protest review 
decision that was not identified in the notice.
    (2) Notice of final action. In the absence of extraordinary 
circumstances, within 30 calendar days after the close of the public 
comment period, any submitted comments will be considered and a final 
modifying or revoking notice or notice of other appropriate final action 
on the proposed modification or revocation will be published in the 
Customs Bulletin. In addition, a written decision will be issued to the 
person to whom, or on whose transaction, the original interpretive 
ruling was issued or, in the case of a protest review decision, to the 
person identified on the Customs Form 19 as the protestant or to any 
other person designated to receive notice of denial of a protest under 
Sec. 174.30(b) of this chapter. Publication of a final modifying or 
revoking notice

[[Page 348]]

in the Customs Bulletin will have the effect of modifying or revoking 
any interpretive ruling or holding or principle covered by a protest 
review decision that involves merchandise or an issue that is 
substantially identical in all material respects to the merchandise or 
issue that is the subject of the modification or revocation, including 
an interpretive ruling or holding or principle covered by a protest 
review decision that is not specifically identified in the final 
modifying or revoking notice.
    (c) Treatment previously accorded to substantially identical 
transactions--(1) General. The issuance of an interpretive ruling that 
has the effect of modifying or revoking the treatment previously 
accorded by Customs to substantially identical transactions must be in 
accordance with the procedures set forth in paragraph (c)(2) of this 
section. The following rules will apply for purposes of determining 
under this section whether a treatment was previously accorded by 
Customs to substantially identical transactions of a person:
    (i) There must be evidence to establish that:
    (A) There was an actual determination by a Customs officer regarding 
the facts and issues involved in the claimed treatment;
    (B) The Customs officer making the actual determination was 
responsible for the subject matter on which the determination was made; 
and
    (C) Over a 2-year period immediately preceding the claim of 
treatment, Customs consistently applied that determination on a national 
basis as reflected in liquidations of entries or reconciliations or 
other Customs actions with respect to all or substantially all of that 
person's Customs transactions involving materially identical facts and 
issues;
    (ii) The determination of whether the requisite treatment occurred 
will be made by Customs on a case-by-case basis and will involve an 
assessment of all relevant factors. In particular, Customs will focus on 
the past transactions to determine whether there was an examination of 
the merchandise (where applicable) by Customs or the extent to which 
those transactions were otherwise reviewed by Customs to determine the 
proper application of the Customs laws and regulations. For purposes of 
establishing whether the requisite treatment occurred, Customs will give 
diminished weight to transactions involving small quantities or values, 
and Customs will give no weight whatsoever to informal entries and to 
other entries or transactions which Customs, in the interest of 
commercial facilitation and accommodation, processes expeditiously and 
without examination or Customs officer review;
    (iii) Customs will not find that a treatment was accorded to a 
person's transactions if:
    (A) The person's own transactions were not accorded the treatment in 
question over the 2-year period immediately preceding the claim of 
treatment;
    (B) The issue in question involves the admissibility of merchandise;
    (C) The person made a material false statement or material omission 
in connection with a Customs transaction or in connection with the 
review of a Customs transaction and that statement or omission affected 
the determination on which the treatment claim is based; or
    (D) Customs advised the person regarding the manner in which the 
transactions should be presented to Customs and the person failed to 
follow that advice; and
    (iv) The evidentiary burden as regards the existence of the previous 
treatment is on the person claiming that treatment. The evidence of 
previous treatment by Customs must include a list of all materially 
identical transactions by entry number (or other Customs assigned 
number), the quantity and value of merchandise covered by each 
transaction (where applicable), the ports of entry, the dates of final 
action by Customs, and, if known, the name and location of the Customs 
officer who made the determination on which the claimed treatment is 
based. In addition, in cases in which an entry is liquidated without any 
Customs review (for example, the entry is liquidated automatically as 
entered), the person claiming a previous treatment must be prepared to 
submit to Customs written or other appropriate evidence

[[Page 349]]

of the earlier actual determination of a Customs officer that the person 
relied on in preparing the entry and that is consistent with the 
liquidation of the entry.
    (2) Notice procedures--(i) When Customs has reason to believe that a 
contemplated interpretive ruling would have the effect of modifying or 
revoking the treatment previously accorded by Customs to substantially 
identical transactions, notice of the intent to modify or revoke that 
treatment will be published in the Customs Bulletin either as a separate 
action or in connection with a proposed modification or revocation of an 
interpretive ruling or holding or principle covered by a protest review 
decision under paragraph (b)(1) of this section. The notice will give 
interested parties 30 calendar days from the date of publication of the 
notice to submit written comments on the proposed modification or 
revocation and will invite any member of the public whose substantially 
identical transactions have been accorded the same treatment to advise 
Customs in writing of that fact, supported by appropriate details 
regarding those transactions, within that 30-day period. Within 30 
calendar days after the close of the public comment period, any 
submitted comments will be considered, notice of the final interpretive 
ruling or other final action on the proposed modification or revocation 
will be published in the Customs Bulletin. Written confirmation of the 
applicability of a final modification or revocation will be sent to each 
person identified as having had substantially identical transactions 
that were accorded the same treatment.
    (ii) If Customs is not aware prior to issuance that a contemplated 
interpretive ruling would have the effect of modifying or revoking the 
treatment previously accorded by Customs to substantially identical 
transactions, the interpretive ruling will be issued and generally will 
be effective as provided in Sec. 177.9. However, Customs will, upon 
written application by a person claiming that the interpretive ruling 
has the effect of modifying or revoking the treatment previously 
accorded by Customs to his substantially identical transactions, 
consider delaying the effective date of the interpretive ruling with 
respect to that person, and continue the treatment previously accorded 
the substantially identical transactions, pending completion of the 
procedures set forth in paragraph (c)(2)(i) of this section.
    (d) Exceptions to notice requirements--(1) Publication and issuance 
not required. The publication and issuance requirements set forth in 
paragraphs (b) and (c) of this section are inapplicable in circumstances 
in which a Customs position is modified, revoked or otherwise materially 
affected by operation of law or by publication pursuant to other legal 
authority or by other appropriate action taken by Customs in furtherance 
of an order, instruction or other policy decision of another 
governmental agency or entity pursuant to statutory or delegated 
authority. Such circumstances include, but are not limited to, the 
following:
    (i) Adoption or amendment of a statutory provision, including any 
change to the Harmonized Tariff Schedule of the United States;
    (ii) Promulgation of a treaty or other international agreement under 
the foreign affairs function of the United States;
    (iii) Issuance of a Presidential Proclamation or Executive Order, or 
issuance of a decision or policy determination pursuant to authority 
delegated by the President;
    (iv) Subject to the provisions of Sec. 152.16 of this chapter, the 
rendering of a judicial decision which has the effect of overturning the 
Customs position;
    (v) Publication of a decision in the Federal Register as a result of 
a petition by a domestic interested party pursuant to 19 U.S.C. 1516 
(see part 175 of this chapter);
    (vi) Publication of an interim or final rule in the Federal Register 
in accordance with 5 U.S.C. 553;
    (vii) Publication of a final interpretative rule in the Federal 
Register in accordance with 5 U.S.C. 553 following public notice and 
comment procedures; and
    (viii) Publication of a final ruling in the Federal Register in 
accordance with 19 U.S.C. 1315(d) and Sec. 177.10(c) relating to change 
of established and uniform practice.

[[Page 350]]

    (2) Publication not required. In the following circumstances a final 
modifying or revoking ruling will be issued to the person entitled to it 
under paragraph (b) or (c) of this section but Customs Bulletin 
publication under paragraph (b) or (c) of this section is not required:
    (i) The modifying ruling corrects a clerical error; or
    (ii) The modifying or revoking ruling is directed to a ruling issued 
under subpart I of part 181 of this chapter relating to advance rulings 
under the North American Free Trade Agreement.
    (e) Effective date and application to transactions--(1) Rulings or 
decisions in effect for less than 60 days. If an interpretive ruling or 
holding or principle covered by a protest review decision that is 
modified or revoked under this section had been in effect for less than 
60 calendar days, the modifying or revoking interpretive ruling:
    (i) Will be effective on its date of issuance with respect to the 
specific transaction covered by the modifying or revoking interpretive 
ruling: and
    (ii) Will be applicable to merchandise entered, or withdrawn from 
warehouse for consumption, on and after its date of issuance.
    (2) Rulings or decisions in effect for 60 or more days. If an 
interpretive ruling or holding or principle covered by a protest review 
decision that is modified or revoked under this section had been in 
effect for 60 or more calendar days, the modifying or revoking notice 
will, provided that liquidation of the entry in question has not become 
final, apply to merchandise entered, or withdrawn from warehouse for 
consumption:
    (i) Sixty calendar days after the date of publication of the final 
modifying or revoking notice in the Customs Bulletin under paragraph 
(b)(2) of this section; or
    (ii) At the option of any person with regard to that person's 
transaction, on and after the date of publication of the final modifying 
or revoking notice in the Customs Bulletin under paragraph (b)(2) of 
this section.
    (3) Previous treatment accorded to substantially identical 
transactions. A final notice that modifies or revokes the treatment 
previously accorded by Customs to substantially identical transactions:
    (i) Will be effective with respect to transactions that are 
substantially identical to the transaction described in the modifying or 
revoking notice 60 calendar days after the date of publication of the 
final modifying or revoking notice in the Customs Bulletin under 
paragraph (b)(2) or paragraph (c)(2)(i) of this section; and
    (ii) Provided that liquidation of the entry in question has not 
become final, will apply to merchandise entered, or withdrawn from 
warehouse for consumption:
    (A) Sixty calendar days after the date of publication of the final 
modifying or revoking notice in the Customs Bulletin under paragraph 
(b)(2) or paragraph (c)(2)(i) of this section; or
    (B) At the option of a person who makes a valid claim regarding 
previous treatment, on and after the date of publication of the final 
modifying or revoking notice in the Customs Bulletin under paragraph 
(b)(2) or paragraph (c)(2)(i) of this section.

[T.D. 02-49, 67 FR 53497, Aug. 16, 2002; 67 FR 54733, Aug. 26, 2002]



Sec. 177.13  Inconsistent customs decisions.

    (a) Generally. Certain decisions made by Customs officials at one 
field location which are inconsistent with decisions being made by 
Customs officials at another location may be brought to the attention of 
Customs Headquarters for resolution by a petition filed by an interested 
party. The types of decisions which may be the subject of such a 
petition, a description of the parties who qualify as interested 
parties, and the period of time in which the petition may be filed are 
set forth below.
    (1) Inconsistent decisions subject to petition. The decisions which 
may be the subject of a petition include:
    (i) Decisions described in section 514(a) of the Tariff Act of 1930, 
as amended (19 U.S.C. 1514(a)), made with respect to the same, or 
substantially similar, merchandise; and
    (ii) Repeated decisions to conduct intensified inspections or 
examinations of merchandise at ports of entry.
    (2) Interested Parties. The following parties shall be considered 
interested

[[Page 351]]

parties entitled to file a petition under this section:
    (i) Parties described in section 514(c)(1) of the Tariff Act of 
1930, as amended (19 U.S.C. 1514(c)(1)), as eligible to file a protest 
under section 514;
    (ii) A port authority; and
    (iii) An ``interested party,'' as described in section 516(a)(2) of 
the Tariff Act of 1930, as amended (19 U.S.C. 1516(a)(2)).
    (3) Time for filing. In the case of decisions described in section 
514(a) of the Tariff Act, the petition must be filed within the time 
prescribed by section 514(c)(2), for filing a protest with respect to 
the later (or latest) of the decisions which are the subject of the 
petition. In the case of repeated decisions to conduct intensified 
inspections or examinations of merchandise at ports of entry, the 
petition must be filed within ninety (90) days of the later (or latest) 
such decision.
    (b) Petition--(1) Form. The petition shall be in the form of a 
letter addressed to the Regulations and Rulings, Office of International 
Trade, U.S. Customs and Border Protection, Washington, DC 20229-0001. 
Three copies of the petition should be submitted, if possible.
    (2) Content. The petition should contain a complete description of 
the inconsistent decisions complained of, including the ports of entry 
(or other Customs office) where the decisions were made, entry numbers, 
and the dates (or approximate dates) such decisions were made. The 
information set forth in the petition must be sufficient to demonstrate 
the inconsistency of the decisions described and that the merchandise, 
or circumstances in which the allegedly inconsistent decisions were 
made, were substantially similar. In the case of repeated decisions 
regarding the inspection or examination of merchandise, the decisions 
must be sufficient in number to demonstrate a pattern of inconsistency 
not attributable to random selection. Any information which the 
petitioner considers to be confidential business information should be 
so noted pursuant to Sec. 177.2(b)(7) of this subpart and a sanitized 
version of his petition should be submitted as well as the three copies 
requested in paragraph (b)(1) of this section. Petitions which do not 
contain information sufficient to permit the Customs Service to verify 
that the decisions described have occurred will not be considered 
properly filed and will be returned to the petitioner for additional 
information. Only one petition will be accepted by the Customs Service 
with respect to the decisions alleged to be inconsistent.
    (i) Tariff classification decision. In the case of decisions 
involving the tariff classification of merchandise, the petition should 
also include, with respect to each of the decisions described, the 
information requested in Sec. 177.2 (b)(1) and (b)(2)(ii) of this 
subpart, including a sample (see Sec. 177.2(b)(3)).
    (ii) Other subjects addressable by administrative rulings. In the 
case of other decisions involving subjects which could be addressed 
under the administrative rulings procedure provided for in Sec. Sec. 
177.1 through 177.10 of this subpart, the information contained in Sec. 
177.2 (b)(1), (b)(2)(iii) and/or (b)(2)(iv), as applicable, should be 
also furnished for each of the decisions addressed by the petition.
    (c) Publication and public comment. Upon receipt of a properly filed 
petition, notice will be published in the Federal Register announcing 
the receipt of the petition and describing the decisions alleged to be 
inconsistent. Public comment on the petition will be permitted for a 
period of fifteen (15) days after publication. Public comment regarding 
the proper disposition of the petition shall be limited to that 
submitted in writing, either with the petition or in response to the 
Federal Register solicitation of public comment.
    (d) Determination of petition; distribution and publication. Within 
fifteen (15) days after the close of the period for public comment 
referred to in paragraph (c) of this section, the Customs Service will 
issue a decision to the petitioner addressing the inconsistency 
complained of. That decision will either conform the inconsistent 
decisions to the current views of the Customs Service as to the proper 
tariff classification or other disposition of the subject of those 
decisions or explain why no inconsistency exists. Copies of the 
decisions to the petitioner will be

[[Page 352]]

transmitted directly to all ports (or other Customs offices) identified 
in the petition and will be distributed through the Customs Information 
Exchange or by other means to such other ports or offices as may be 
necessary to correct any inconsistency identified. A summary of the 
decision will also be published in the Federal Register and the weekly 
Customs Bulletin.
    (e) Effective date. Unless otherwise specified in the decision, a 
decision issued in response to a petition filed under this section will 
be effective immediately and, where applicable, applied to all entries 
for which liquidation is not final.
    (f) Effect on other procedures. The filing of a petition under this 
procedure shall not preclude the petitioner or any other person entitled 
to do so from filing a protest or a domestic interested party petition 
regarding the same matter under the procedures set forth in sections 
514, 515 and 516 of the Tariff Act of 1930, as amended and parts 174 and 
175 of this chapter, provided the applicable requirements set forth 
therein are complied with. However, the decision issued in response to 
the petition may serve as the basis for the disposition of any protest 
so filed, or as an information letter setting forth the position of the 
Customs Service pursuant to subpart A of part 175 of this chapter. The 
decision issued in response to a petition filed under this section is 
not itself a decision subject to protest under sections 514-515 of the 
Tariff Act and part 174 of this chapter.

[T.D. 89-74, 54 FR 31517, July 31, 1989. Redesignated by T.D. 02-49, 67 
FR 53497, Aug. 16, 2002]



   Subpart B_Government Procurement; Country-of-Origin Determinations

    Authority: R.S. 251, as amended (19 U.S.C. 66), sec. 624, 46 Stat. 
759 (19 U.S.C. 1624); Pub. L. 96-39, 93 Stat. 144.

    Source: T.D. 83-13, 48 FR 1189, Jan. 11, 1983, unless otherwise 
noted.



Sec. 177.21  Applicability.

    This subpart applies to the issuance of country-of-origin advisory 
rulings and final determinations relating to Government procurement 
under Title III, ``Trade Agreements Act of 1979,'' Pub. L. 96-39, 93 
Stat. 144, for the purpose of granting waivers of certain ``Buy 
American'' restrictions in U.S. law or practice for products for 
eligible countries. This subpart is intended to be applied consistent 
with the Federal Procurement Regulations (41 CFR part 1-6) and the 
Defense Acquisition Regulation (32 CFR section VI).



Sec. 177.22  Definitions.

    (a) Country of origin. For the purpose of this subpart, an article 
is a product of a country or instrumentality only if (1) it is wholly 
the growth, product, or manufacture of that country or instrumentality, 
or (2) in the case of an article which consists in whole or in part of 
materials from another country or instrumentality, it has been 
substantially transformed into a new and different article of commerce 
with a name, character, or use distinct from that of the article or 
articles from which it was so transformed. The term ``instrumentality'' 
shall not be construed to include any agency or division of the 
government of a country, but may be construed to include such 
arrangements as the European Economic Community.
    (b) Advisory ruling. An advisory ruling is a non-binding, non-
reviewable written statement issued by the Director, Commercial and 
Trade Facilitation Division, Regulations and Rulings, Headquarters, U.S. 
Customs and Border protection, which does no more than call attention to 
a well established interpretation or principal of law relating to the 
country of origin, without applying it to a particular set of facts. CBP 
will issue an advisory ruling in response to a request for a final 
determination if:
    (1) The request suggests that general information, rather than a 
final determination, is actually being sought,
    (2) The request is incomplete or otherwise fails to meet the 
requirements set forth in Sec. 177.25(a), or
    (3) The ruling requested cannot be issued for any other reason, and 
CBP believes that the general information supplied by an advisory ruling 
may be of some benefit to the party making the request. An advisory 
ruling is not a

[[Page 353]]

ruling issued prior to importation under 28 U.S.C. 1581(h).
    (c) Final determination. A final determination is a binding 
judicially reviewable statement issued by the Executive Director, 
Regulations and Rulings, Office of International Trade, Headquarters, 
U.S. Customs and Border Protection, in response to a written request 
submitted under the provisions of this subpart that interprets and 
applies the provisions of law and regulation relating to the country of 
origin to a specific set of facts. A final determination may be issued 
to a party-at-interest prior to actual entry of the merchandise.
    (d) Party-at-interest. For purposes of this subpart the term party-
at-interest means:
    (1) A foreign manufacturer, producer, or exporter, or a United 
States importer of merchandise which is the subject of a final 
determination under this subpart,
    (2) A manufacturer, producer, or wholesaler in the United States of 
a like product,
    (3) United States members of a labor organization or other 
association of workers whose members are employed in the manufacture, 
production, or wholesale in the United States of a like product, and
    (4) A trade or business association a majority of whose members 
manufacture, produce, or wholesale a like product in the United States.

[T.D. 83-13, 48 FR 1189, Jan. 11, 1983, as amended by T.D. 91-77, 56 FR 
46115, Sept. 10, 1991]



Sec. 177.23  Who may request a country-of-origin advisory ruling or final determination.

    A country-of-origin advisory ruling or final determination may be 
requested by:
    (a) A foreign manufacturer, producer, or exporter, or a United 
States importer of merchandise,
    (b) A manufacturer, producer, or wholesaler in the United States of 
a like product,
    (c) United States members of a labor organization or other 
association of workers whose members are employed in the manufacture, 
production, or wholesale in the United States of a like product, or
    (d) A trade or business association a majority of whose members 
manufacture, produce, or wholesale a like product in the United States.



Sec. 177.24  By whom request is filed.

    A request may be filed by an individual or organization listed in 
Sec. 177.23 or by a duly authorized attorney or agent on behalf of the 
individual or organization. A request filed by a corporation shall be 
signed by a corporate officer, and a request filed by a partnership 
shall be signed by a partner.



Sec. 177.25  Form and content of request.

    (a) A request for an advisory ruling shall be in writing and shall 
contain such information as will enable Customs to provide the requester 
with the applicable principle of law or well established interpretation 
relating to the particular country of origin.
    (b) A request for a final determination shall be in writing and 
shall contain the following information:
    (1) The name of the requester, the requester's principal place of 
business, and a statement that the requester is authorized to file the 
request under the provisions of Sec. 177.24;
    (2) A description of the existing article for which a country-of-
origin determination is requested;
    (3) The country or instrumentality an article is claimed to be the 
product of;
    (4) Such further information as will enable Customs to determine if 
an article is a product of a specific country or instrumentality, and;
    (5) If applicable, the specific procurement for which the final 
determination is requested.



Sec. 177.26  Where request filed.

    The request shall be filed with the Executive Director, Regulations 
and Rulings, Office of International Trade, Headquarters, U.S. Customs 
and Border Protection, 1300 Pennsylvania Avenue, NW., Washington, DC 
20229.

[T.D. 83-13, 48 FR 1189, Jan. 11, 1983, as amended by T.D. 99-27, 64 FR 
13677, Mar. 22, 1999]

[[Page 354]]



Sec. 177.27  Oral discussion of issues.

    Any party authorized to request a ruling under the provisions of 
Sec. 177.23 may request an opportunity for oral discussion of the 
issues presented in the request. The oral discussion of issues will be 
governed by the provisions of Sec. 177.4.



Sec. 177.28  Issuance of advisory rulings and final determinations.

    (a) Pursuant to a request for an advisory ruling which meets the 
requirements of this subpart, Customs will promptly issue an advisory 
ruling.
    (b) Pursuant to a request for a final determination which meets the 
requirements of this subpart, Customs will promptly issue a final 
determination. If the request does not meet the requirements of this 
subpart Customs may decline to issue a final determination or may issue 
instead an advisory ruling.
    (c) Requests for final determinations which include the information 
set forth in Sec. 177.25(b)(5) (relating to a specific procurement) 
will be considered by Customs before all other requests (advisory 
rulings and final determinations).



Sec. 177.29  Publication of notice of final determinations.

    Notice of all final determinations shall be published in the Federal 
Register within 60 days of the date the final determination is issued.



Sec. 177.30  Review of final determinations.

    Any party-at-interest listed in Sec. 177.22(d) may seek judicial 
review of a final determination within 30 days after publication of such 
determination in the Federal Register, and may seek judicial review of a 
refusal to issue a final determination within 30 days after such 
refusal. The Court of International Trade shall have exclusive 
jurisdiction to review a final determination or a refusal to issue a 
final determination made under this subpart.



Sec. 177.31  Reexamination of final determinations.

    A party-at-interest, other than the party-at-interest which 
requested and received the initial final determination, may ask Customs 
to consider the matter anew and issue, on an expedited basis, a new 
final determination. Such a request shall specifically identify the 
previous final determination. Upon receipt of such a request, Customs 
will issue a new final determination within five working days of receipt 
of the request unless (a) the previous final determination was the 
subject of a contested lawsuit timely filed in the Court of 
International Trade under 28 U.S.C. 1581(e) or, (b) the merchandise at 
issue in the initial final determination was tendered and deemed 
responsive to the request for proposals or an invitation for bids in a 
competitive procurement subject to the Buy American Act (41 U.S.C. 10a 
et seq.) and a contract under such procurement was let. Any new final 
determination issued under this section shall be published in accordance 
with Sec. 177.29 and is reviewable under Sec. 177.30.



PART 178_APPROVAL OF INFORMATION COLLECTION REQUIREMENTS--Table of Contents




Sec.
178.1 Purpose.
178.2 Listing of OMB control numbers.

    Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 U.S.C. 3501 et seq.



Sec. 178.1  Purpose.

    This part sets forth the control numbers assigned to information 
collections of the Customs Service by the Office of Management and 
Budget pursuant to the Paperwork Reduction Act of 1980, Pub. L. 96-511. 
This part complies with the requirements of the Paperwork Reduction Act 
of 1980, and implements regulations promulgated by the Office of 
Management and Budget, (5 CFR 1320.7(f)(2), 1320.12(d) and 1320.13(j)) 
which require that agencies display a current control number assigned by 
the Director of the Office of Management and Budget for each agency 
information collection.

[T.D. 85-53, 50 FR 11849, Mar. 26, 1985]

[[Page 355]]



Sec. 178.2  Listing of OMB control numbers.

------------------------------------------------------------------------
                                                                  OMB
        19 CFR Section                  Description             control
                                                                  No.
------------------------------------------------------------------------
Sec.  4.7a..................  Unique bill of lading           1515-0142
                                identifier for inward
                                manifests.
Sec.  4.7a(c)(4)............  Transportation manifest         1651-0001
                                (cargo declaration).
Sec. Sec.  4.7b, 4.64,       Electronic manifest             1651-0088
 122.49a, 122.49b, 122.49c,     requirements for carriers
 122.75a, 122.75b.              transporting passengers and
                                crew onboard vessels and
                                aircraft.
Sec. Sec.  4.10, 4.16,       Application-Permit-Special      1515-0013
 4.30, 4.37, 4.39, 4.91,        License, Unlading-Lading,
 10.60, 24.16, 122.29,          Overtime Services (Customs
 122.38, 123.8, 146.32,         Form 3171).
 146.34.
Sec.  4.14..................  Vessel repair declaration and   1515-0082
                                entry.
Sec. Sec.  4.20, 4.23, and   Certification of payment of     1515-0113
 4.24.                          tonnage tax.
Sec.  4.37..................  Notification regarding          1515-0220
                                imported merchandise or
                                baggage for which entry has
                                not been made.
Sec.  4.37(c)...............  Preparation of delivery         1515-0224
                                ticket for transfer of
                                merchandise to general order.
Sec.  4.76..................  Booking information for the     1515-0221
                                Sea Carrier's Module of the
                                AES.
Sec.  4.94a.................  Deferral of duty on large       1515-0223
                                yachts imported for sale.
Sec.  4.97..................  Application for foreign          515-0132
                                vessel to engage in salvage
                                operation/report of salvage
                                operation.
Sec.  7.3...................  Claim for duty-free entry of    1515-0200
                                goods imported from U.S.
                                insular possessions.
Sec.  10.1..................  Declarations covering U.S.      1515-0194
                                articles exported and
                                returned without having been
                                advanced in value or
                                improved in condition.
Sec.  10.8..................  Declarations covering           1515-0194
                                articles exported for
                                repairs or alterations and
                                returned.
Sec.  10.8a(b)(1)...........  Declaration by person abroad    1515-0108
                                who received and is
                                returning articles to the
                                U.S. that do not conform to
                                samples or specifications.
Sec.  10.8a(b)(2)...........  Declaration by owner,           1515-0108
                                importer, consignee or agent
                                that articles being
                                reimported into U.S. were
                                previously imported, with
                                payment of duty, and
                                exported, without benefit of
                                drawback.
Sec.  10.9..................  Declarations covering metal     1515-0194
                                articles exported for
                                processing and returned for
                                further processing.
Sec. Sec.  10.24, 162.1c...  Declaration by foreign          1515-0088
                                assembler and endorsement by
                                importer that articles were
                                assembled in whole or in
                                part from fabricated
                                components that were
                                products of the U.S.
Sec.  10.25.................  Declaration by foreign          1515-0207
                                assembler and endorsement by
                                importer that articles were
                                assembled in whole or in
                                part from textile components
                                cut to shape in the U.S.
Sec.  10.41b................  Requirement to clearly and      1515-0116
                                conspicuously mark serially
                                numbered substantially
                                holders or containers.
Sec.  10.41b(e).............  Requirement to keep adequate    1515-0101
                                records on current status of
                                serially numbered
                                substantial holders or
                                containers.
Sec.  10.48.................  Declaration by originating      1515-0118
                                artist, or seller or
                                shipper, that work of art
                                being imported into the U.S.
                                is an original work of art.
Sec.  10.62b................  Certificate of compliance for   1515-0209
                                turbine fuel withdrawals.
Sec.  10.67(a)(2)...........  Declaration by foreign          1515-0105
                                shipper describing the
                                specific use to which
                                articles exported from U.S.
                                for scientific or
                                educational purposes, and
                                now being returned, were put
                                while abroad.
Sec.  10.67(a)(3)...........  Declaration of ultimate         1515-0104
                                consignee of articles
                                previously exported from
                                U.S. for scientific or
                                educational purposes, and
                                now being returned, that
                                such articles have not been
                                changed in condition while
                                abroad.
Sec.  10.84.................  Origin certificate for          1515-0164
                                automotive products from
                                Canada.
Sec.  10.91.................  Importers of merchandise        1651-0032
                                subject to actual use          and 1651-
                                provisions; proof of use for        0038
                                duty rates dependent on
                                actual use.
Sec.  10.99.................  Importation of ethyl alcohol    1515-0160
                                for nonbeverage purposes.
Sec.  10.107................  Report of person who sent       1515-0130
                                article from foreign
                                country, or of person in
                                U.S. for whose account an
                                article was received, to
                                justify duty-free entry of
                                articles imported under
                                conditions of emergency.
Sec.  10.137................  Requirement of importer to      1515-0091
                                maintain accurate, detailed
                                records on use or other
                                disposition of imported
                                merchandise for ``actual
                                use'' duty assessment
                                requirements.

[[Page 356]]

 
Sec.  10.138................  Certificate of importer to      1515-0109
                                verify actual use of
                                articles imported duty-free
                                or at a reduced rate of duty
                                under actual use provisions.
Sec.  10.173................  Claim for duty-free entry of    1515-0194
                                eligible articles under the
                                Generalized System of
                                Preferences.
Sec.  10.184................  Refund of duties on certain     1515-0227
                                wool imports.
Sec.  10.198................  Claim for duty-free entry of    1515-0194
                                eligible articles under the
                                Caribbean Basin Initiative.
Sec.  10.199................  Claim for duty-free entry of    1515-0194
                                rum beverages from Canada
                                under the Caribbean Basin
                                Initiative.
Sec.  10.207................  Claim for duty-free entry of    1515-0219
                                eligible articles under the
                                Andean Trade Preference Act.
Sec. Sec.  10.244, 10.245,   Claim for duty-free entry       1651-0091
 10.246, 10.248, 10.254,        entry of eligible articles
 10.255, and 10.256.            under the Andean Trade
                                Promotion and Drug
                                Eradication Act.
Sec. Sec.  10.307, 10.310,   Claim for duty-free entry and   1515-0164
 and 10.311.                    election to average for
                                automotive products under
                                the U.S.-Canada Free Trade
                                Agreement.
Sec. Sec.  10.410 and        Claim for preferential tariff   1651-0117
 10.411.                        treatment under the US-Chile
                                Free Trade Agreement.
Sec. Sec.  10.510 and        Claim for preferential tariff   1651-0117
 10.511.                        treatment under the US-
                                Singapore Free Trade
                                Agreement.
Sec. Sec.  10.703 and        Claim for preferential tariff   1651-0128
 10.704.                        treatment under the U.S.-
                                Jordan Free Trade Agreement.
Sec. Sec.  10.763 and        Claim for preferential tariff   1651-0117
 10.764.                        treatment under the U.S.-
                                Morocco Free Trade Agreement.
Sec. Sec.  10.803, 10.804,   Claim for preferential tariff   1651-0130
 10.818, and 10.821.            treatment under the U.S.-
                                Bahrain Free Trade Agreement.
Sec. Sec.  10.847 and        Claim for duty-free treatment        1651
 10.848.                        under the HOPE Act.
Sec. Sec.  12.104c, 12.104e  Certificates and other          1515-0147
                                documentation relating to
                                the importation of items of
                                cultural property.
Sec.  12.121................  Approval of blanket             1515-0173
                                certification under the
                                Toxic Substances Control Act.
Sec.  19.2..................  Information to be supplied by   1515-0121
                                owner or lessee in support
                                of application to estabilsh
                                a bonded warehouse facility.
Sec.  19.3..................  Application to alter,           1515-0134
                                relocate, or discontinue a
                                bonded warehouse/list of
                                employees engaged in the
                                carriage, receiving, storage
                                or delivery of bonded
                                merchandise.
Sec.  19.9(a)...............  Preparation of delivery         1515-0224
                                ticket for transfer of
                                merchandise to general order.
Sec.  19.13(b)..............  Application for establishment   1515-0136
                                of a manufacturing warehouse.
Sec.  19.14(c)..............  Application by proprietor of    1515-0133
                                bonded manufacturing
                                warehouse to receive therein
                                domestic merchandise to be
                                used in connection with the
                                manufacture of articles.
Sec.  19.17.................  Application by manufacturer     1515-0127
                                to bond (or discontinue a
                                previously bonded)
                                establishment engaged in the
                                smelting or refining of
                                metal-bearing materials.
Sec.  19.19.................  Record of smelting and          1515-0135
                                refining operation showing
                                receipt and disposition of
                                each shipment of material.
Sec.  19.40.................  Application for establishment   1515-0117
                                of a container station.
Sec.  19.42.................  Application by container        1515-0142
                                station operator to transfer
                                a container, intact, to a
                                station.
Sec.  19.46.................  List of persons employed by     1515-0138
                                container station operator
                                in moving, receiving,
                                storing or delivering
                                imported merchandise.
Sec.  24.5..................  Importer Identification         1515-0199
                                Information.
Sec.  24.22.................  Users fees for Customs          1515-0154
                                services.
Sec.  24.24.................  Harbor maintenance fee.......   1515-0158
Sec.  24.25.................  Statement processing and        1515-0167
                                Automated Clearinghouse.
Sec.  24.26.................  Automated Clearinghouse         1515-0218
                                Credit.
Sec.  103.31................  Disclosure by Customs of        1515-0124
                                information on cargo
                                declarations of inward
                                vessel manifests.
Part 111.....................  Issuance of customs broker      1515-0076
                                licenses and permits,          and 1515-
                                monitoring performance of          0100.
                                brokers in conducting
                                customs business, and
                                institution of disciplinary
                                action against brokers.
Sec.  111.96................  Users fees for Customs          1515-0154
                                services.
Sec.  112.29(b).............  Requirement to furnish a        1515-0126
                                current list of officers,
                                members or employees, of a
                                customs cartage or
                                lighterage establishment,
                                upon request.
Sec.  112.49................  Request by cartman or           1515-0128
                                lighterman for temporary
                                identification card pending
                                issuance of permanent
                                identification.
Part 113.....................  Customs Bond Structure          1515-0144
                                (Customs Form 301 and
                                Customs Form 5297).

[[Page 357]]

 
Part 113--Appendix B.........  Bond to Indemnify Complainant   1515-0222
                                Under Section 337, Tariff
                                Act of 1930, as Amended.
Part 115.....................  Information to obtaiin          1515-0145
                                certification that
                                containers/road vehicles
                                meet construction
                                requirements.
Sec.  118.11................  Application to establish a      1515-0183
                                centralized examination
                                station.
Sec.  122...................  Air commerce regulations.....   1515-0153
Sec.  122.14................  Customs security areas in       1515-0153
                                international airports.
Sec.  122.27................  Documents required aboard       1515-0175
                                private aircraft.
Sec.  122.48a...............  Transportation manifest         1651-0001
                                (cargo declaration).
Sec.  122.50................  Notification regarding          1515-0220
                                imported merchandise or
                                baggage for which entry has
                                not been made.
Sec.  122.50(c).............  Preparation of delivery         1515-0224
                                ticket for transfer of
                                merchandise to general order.
Sec.  122.173...............  Application for entry into      1515-0171
                                the Air Carrier Smuggling
                                Prevention Program.
Sec.  123.10................  Notification regarding          1515-0220
                                imported merchandise or
                                baggage for which entry has
                                not been made.
Sec.  123.10(c).............  Preparation of delivery         1515-0224
                                ticket for transfer of
                                merchandise to general order.
Sec.  123.73................  Application to participate in   1515-0217
                                the Land Border Carrier
                                Initiative Program.
Sec.  123.91................  Transportation manifest         1651-0001
                                (cargo declaration).
Sec.  123.92................  Transportation manifest         1651-0001
                                (cargo declaration).
Sec. Sec.  125.22, 125.33,   Authorization of bonded         1515-0193
 125.34, 125.35.                carriers to transport cargo
                                within port limits without
                                obtaining cartman's license.
Sec.  128.11................  Express consignment carrier     1515-0144
                                application and approval
                                process.
Sec.  128.21................  Specific description of         1515-0069
                                merchandise.
Sec.  128.23................  Requirement of submission of    1515-0069
                                Customs-approved bar-coded
                                entry numbers for ACS
                                processing.
Sec.  128.24................  Requirement for Invoice,        1515-0069
                                Advance Manifest, or
                                Immediate Delivery
                                application form.
Sec.  133.2.................  Application to record a         1515-0114
                                trademark.
Sec. Sec.  133.12, 133.13..  Application to record a trade-  1515-0119
                                name.
Sec. Sec.  133.32, 133.33..  Application to record a         1515-0097
                                copyright.
Sec.  141.4.................  Requirement to make entry       1515-0065
                                unless specifically exempt.
Sec. Sec.  141.81- 141.83,   Requirement as to the           1515-0120
 141.86.                        existence and contents of
                                special customs invoices,
                                special summary invoices or
                                commercial invoices.
Sec.  141.89(a).............  Additional information on       1515-0047
                                invoices for imported
                                footwear.
Sec.  142.6.................  Name and address of             1515-0170
                                manufacturer or seller.
Sec.  142.42................  Line release application.....   1515-0181
Sec.  143.23................  Requirement to file entry       1515-0065
                                summary form.
Sec.  147.11(c).............  Requirement to use a special    1515-0106
                                form of entry for articles
                                entered into U.S. for
                                exhibition purposes under
                                the Trade Fair Act of 1959.
Sec. Sec.  146.6, 146.7....  Procedures for activation of    1515-0151
                                a foreign trade zone;
                                procedures for zone changes,
                                including alteration,
                                deactivation and suspension.
Sec.  151.12(f).............  Application and other           1515-0155
                                documents pertaining to
                                accreditation of commercial
                                laboratories.
Sec.  151.13(d).............  Application and other           1515-0155
                                documents pertaining to
                                approval of commercial
                                gaugers.
Sec.  151.16(d).............  Detention of merchandise.....   1515-0210
Sec.  158.2.................  Filing of entry summary and     1515-0037
                                payment of duty for less
                                than invoiced number of
                                packages in shipment.
Sec.  159.63................  Distribution of continued       1515-0229
                                dumping and subsidy offset
                                to affected domestic
                                producers.
Sec.  162.74................  Prior disclosure.............   1515-0212
Sec. Sec.  162.94,           Petition for remission or       1515-0052
 162.95(c).                     mitigation of forefeitures
                                and penalties incurred.
Part 163.....................  General recordkeeping and       1515-0214
                                record production
                                requirements.
Sec.  171.11................  Petition for remission or       1515-0052
                                mitigation of forfeitures
                                and penalties incurred.
Part 177.....................  Issuance of administrative      1515-0228
                                rulings on prospective and
                                current customs transactions.
Sec.  181.11................  Certificate of Origin for       1515-0205
                                purposes of the North
                                American Free Trade
                                Agreement.
Sec. Sec.  181.22 and        Claim for preferential tariff   1515-0205
 181.32.                        treatment under the North
                                American Free Trade
                                Agreement.
Sec. Sec.  181.47 and        Claim for refund, waiver or     1515-0205
 181.53.                        reduction of duty under the
                                drawback and duty deferral
                                provisions of the North
                                American Free Trade
                                Agreement.
Sec.  181.64................  Claim for duty-free or          1515-0205
                                reduced-duty treatment on
                                repaired or altered goods
                                under the North American
                                Free Trade Agreement.
Sec.  181.72................  Submission of information in    1515-0205
                                connection with origin
                                verifications under the
                                North American Free Trade
                                Agreement.

[[Page 358]]

 
Sec.  181.82................  Statement accompanying          1515-0205
                                corrected declaration or
                                notification of incorrect
                                certification under the
                                North American Free Trade
                                Agreement.
Sec. Sec.  181.93-181.96     Submission of information in    1515-0205
 and 181.102.                   connection with requests for
                                issuance or review of
                                advance rulings under the
                                North American Free Trade
                                Agreement.
Sec. Sec.  181.113, 181.115  Submission of information in    1515-0205
 and 181.116.                   connection with the review
                                and appeal of adverse
                                marking decisions under the
                                North American Free Trade
                                Agreement.
Sec.  181.131...............  Claim for preferential tariff   1515-0205
                                treatment under the North
                                American Free Trade
                                Agreement.
Sec. Sec.  191.0-191.195...  Recordkeeping and reporting     1515-0213
                                requirements relating to
                                drawbacks.
Sec.  192.2.................  Documentation requirements      1515-0157
                                for esxporting used, self-
                                propelled vehicles, vessels
                                and aircraft.
Sec.  192.14................  Transportation manifest         1651-0001
                                (cargo declaration).
------------------------------------------------------------------------


[T.D. 85-53, 50 FR 11849, Mar. 26, 1985]

    Editorial Note: For Federal Register citations affecting Sec. 
178.2, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



PART 181_NORTH AMERICAN FREE TRADE AGREEMENT--Table of Contents




Sec.
181.0 Scope.

                      Subpart A_General Provisions

181.1 Definitions.

                      Subpart B_Export Requirements

181.11 Certificate of Origin.
181.12 Maintenance and availability of records.
181.13 Failure to comply with requirements.

                      Subpart C_Import Requirements

181.21 Filing of claim for preferential tariff treatment upon 
          importation.
181.22 Maintenance of records and submission of Certificate by importer.
181.23 Effect of noncompliance; failure to provide documentation 
          regarding transshipment.

              Subpart D_Post-Importation Duty Refund Claims

181.31 Right to make post-importation claim and refund duties.
181.32 Filing procedures.
181.33 Customs processing procedures.

      Subpart E_Restrictions on Drawback and Duty-Deferral Programs

181.41 Applicability.
181.42 Duties and fees not subject to drawback.
181.43 Eligible goods subject to drawback.
181.44 Calculation of drawback.
181.45 Goods eligible for full drawback.
181.46 Time and place for filing drawback claim.
181.47 Completion of claim for drawback.
181.48 Person entitled to receive drawback.
181.49 Retention of records.
181.50 Liquidation and payment of drawback claims.
181.51 Prevention of improper payment of claims.
181.52 Subsequent claims for preferential tariff treatment.
181.53 Collection and waiver or reduction of duty under duty-deferral 
          programs.
181.54 Verification of claim for drawback, waiver or reduction of 
          duties.

    Subpart F_Commercial Samples and Goods Returned After Repair or 
                               Alteration

181.61 Applicability.
181.62 Commercial samples of negligible value.
181.63 [Reserved]
181.64 Goods re-entered after repair or alteration in Canada or Mexico.

            Subpart G_Origin Verifications and Determinations

181.71 Denial of preferential tariff treatment dependent on origin 
          verification and determination.
181.72 Verification scope and method.
181.73 Notification of verification visit.
181.74 Verification visit procedures.
181.75 Issuance of origin determination.
181.76 Application of origin determinations.

                           Subpart H_Penalties

181.81 Applicability to NAFTA transactions.
181.82 Exceptions to application of penalties.

                   Subpart I_Advance Ruling Procedures

181.91 Applicability.
181.92 Definitions and general NAFTA advance ruling practice.
181.93 Submission of advance ruling requests.

[[Page 359]]

181.94 Nonconforming requests for advance rulings.
181.95 Oral discussion of issues.
181.96 Change in status of transaction.
181.97 Withdrawal of NAFTA advance ruling requests.
181.98 Situations in which no NAFTA advance ruling may be issued.
181.99 Issuance of NAFTA advance rulings or other advice.
181.100 Effect of NAFTA advance ruling letters; modification and 
          revocation.
181.101 Publication of decisions.
181.102 Administrative and judicial review of advance rulings.

        Subpart J_Review and Appeal of Adverse Marking Decisions

181.111 Applicability.
181.112 Definitions.
181.113 Request for basis of adverse marking decision.
181.114 Customs response to request.
181.115 Intervention in importer's protest.
181.116 Petition regarding adverse marking decision.

            Subpart K_Confidentiality of Business Information

181.121 Maintenance of confidentiality.
181.122 Disclosure to government authorities.

                        Subpart L_Rules of Origin

181.131 Rules of origin.
181.132 Disassembly.

Appendix to Part 181--Rules of Origin Regulations

    Authority: 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff 
Schedule of the United States), 1624, 3314;
    Subpart D of part 181 also issued under 19 U.S.C. 1520(d).

    Source: T.D. 95-68, 60 FR 46364, Sept. 6, 1995, unless otherwise 
noted.



Sec. 181.0  Scope.

    This part implements the duty preference and related Customs 
provisions applicable to imported goods under the North American Free 
Trade Agreement (the NAFTA) entered into on December 17, 1992, and under 
the North American Free Trade Agreement Implementation Act (107 Stat. 
2057) (the Act). Except as otherwise specified in this part, the 
procedures and other requirements set forth in this part are in addition 
to the Customs procedures and requirements of general application 
contained elsewhere in this chapter. Additional provisions implementing 
certain aspects of the NAFTA and the Act are contained in parts 10, 12, 
24, 134 and 174 of this chapter.



                      Subpart A_General Provisions



Sec. 181.1  Definitions.

    As used in this part, the following terms shall have the meanings 
indicated unless either the context in which they are used requires a 
different meaning or a different definition is prescribed for a 
particular subpart, section or other portion of this part:
    (a) Canada. Canada, when used in a geographical rather than 
governmental context, means the territory of Canada as defined in Annex 
201.1 of the NAFTA.
    (b) Commercial importation. Commercial importation means the 
importation of a good into the United States, Canada or Mexico for the 
purpose of sale, or any commercial, industrial or other like use.
    (c) Customs administration. Customs administration means the 
competent authority that is responsible under the law of the United 
States, Canada or Mexico for the administration of its customs laws and 
regulations.
    (d) Customs duty. Customs duty means any customs or import duty and 
a charge of any kind imposed in connection with the importation of a 
good, including any form of surtax or surcharge in connection with such 
importation, other than any:
    (1) Charge equivalent to an internal tax imposed consistently with 
Article III:2 of the General Agreement on Tariffs and Trade, or any 
equivalent provision of a successor agreement to which the United 
States, Canada and Mexico are party, in respect of like, directly 
competitive or substitutable goods of the United States, Canada or 
Mexico, or in respect of goods from which the imported good has been 
manufactured or produced in whole or in part;
    (2) Antidumping or countervailing duty that is applied pursuant to 
the domestic law of the United States, Canada or Mexico and that is not 
applied inconsistently with Chapter Nineteen of the NAFTA;

[[Page 360]]

    (3) Fee or other charge in connection with importation commensurate 
with the cost of services rendered;
    (4) Premium offered or collected on an imported good arising out of 
any tendering system in respect of the administration of quantitative 
import restrictions, tariff rate quotas or tariff preference levels; and
    (5) Fee applied pursuant to section 22 of the U.S. Agricultural 
Adjustment Act, subject to the provisions of Chapter Seven of the NAFTA.
    (e) Determination of origin. Determination of origin means a 
determination as to whether a good qualifies as a good originating in 
the United States, Canada and/or Mexico under the rules set forth in 
General Note 12, HTSUS, and in the appendix to this part.
    (f) Exporter. Exporter means an exporter located, and required under 
this part to maintain records regarding exportations of a good, in the 
United States, Canada or Mexico.
    (g) Generally Accepted Accounting Principles. Generally Accepted 
Accounting Principles means the recognized consensus or substantial 
authoritative support in the United States, Canada or Mexico with 
respect to the recording of revenues, expenses, costs, assets and 
liabilities, the disclosure of information and the preparation of 
financial statements. Generally Accepted Accounting Principles under 
this definition may encompass broad guidelines of general application as 
well as detailed standards, practices and procedures.
    (h) HTSUS. HTSUS means the Harmonized Tariff Schedule of the United 
States.
    (i) Importer. Importer means an importer located, and required under 
this part to maintain records regarding importations of a good, in the 
United States, Canada or Mexico.
    (j) Intermediate material. Intermediate material means an 
``intermediate material'' as defined in the appendix to this part.
    (k) Marking Rules. Marking Rules means the ``NAFTA Marking Rules'' 
as defined in Sec. 134.1(j) of this chapter.
    (l) Measure. Measure means any law, regulation, procedure, 
requirement or practice.
    (m) Mexico. Mexico, when used in a geographical rather than 
governmental context, means the territory of Mexico as defined in Annex 
201.1 of the NAFTA.
    (n) NAFTA. NAFTA means the North American Free Trade Agreement 
approved by the Congress under section 101(a) of the North American Free 
Trade Agreement Implementation Act (107 Stat. 2057).
    (o) NAFTA drawback. NAFTA drawback means any drawback, waiver or 
reduction of U.S. customs duty provided for in subpart E of this part.
    (p) Net cost of a good. Net cost of a good means the ``net cost of a 
good'' as defined in the appendix to this part.
    (q) Originating. Originating, when used with regard to a good or a 
material, means a good or material which qualifies as originating in the 
United States, Canada and/or Mexico under the rules set forth in General 
Note 12, HTSUS, and in the appendix to this part.
    (r) Person. Person means a natural person or an enterprise.
    (s) Preferential tariff treatment. Preferential tariff treatment 
means the duty rate applicable to an originating good or to a good to 
which appendix 6.B. to Annex 300-B of the NAFTA applies.
    (t) Producer. Producer means a producer as defined in the appendix 
to this part.
    (u) Production. Production means production as defined in the 
appendix to this part.
    (v) Transaction value. Transaction value means transaction value as 
defined in the appendix to this part.
    (w) United States. United States, when used in a geographical rather 
than governmental context, means the territory of the United States as 
defined in Annex 201.1 of the NAFTA.
    (x) Used. Used means used as defined in the appendix to this part.
    (y) Value. Value means the value of a good or material for purposes 
of calculating customs duties or for purposes of applying the provisions 
of the appendix to this part.

[[Page 361]]



                      Subpart B_Export Requirements



Sec. 181.11  Certificate of Origin.

    (a) General. A Certificate of Origin shall be employed to certify 
that a good being exported either from the United States into Canada or 
Mexico or from Canada or Mexico into the United States qualifies as an 
originating good for purposes of preferential tariff treatment under the 
NAFTA.
    (b) Preparation of Certificate in the United States. An exporter in 
the United States who completes and signs a Certificate of Origin for 
the purpose set forth in paragraph (a) of this section shall use Customs 
Form 434 or such other medium or format as approved by the Canadian or 
Mexican customs administration for that purpose. Where the U.S. exporter 
is not the producer of the good, that exporter may complete and sign a 
Certificate on the basis of:
    (1) Its knowledge of whether the good qualifies as an originating 
good;
    (2) Its reasonable reliance on the producer's written representation 
that the good qualifies as an originating good; or
    (3) A completed and signed Certificate for the good voluntarily 
provided to the exporter by the producer.
    (c) Submission of Certificate to Customs. An exporter in the United 
States, and a producer in the United States who has voluntarily provided 
a copy of a Certificate of Origin to that exporter pursuant to paragraph 
(b)(3) of this section, shall provide a copy of the Certificate to 
Customs upon request.
    (d) Notification of errors in Certificate. An exporter or producer 
in the United States who has completed and signed a Certificate of 
Origin, and who has reason to believe that the Certificate contains 
information that is not correct, shall within 30 calendar days after the 
date of discovery of the error notify in writing all persons to whom the 
Certificate was given by the exporter or producer of any change that 
could affect the accuracy or validity of the Certificate.



Sec. 181.12  Maintenance and availability of records.

    (a) Maintenance of records--(1) General. An exporter or producer in 
the United States who completes and signs a Certificate of Origin shall 
maintain in the United States, for five years after the date on which 
the Certificate was signed, the Certificate (or copy thereof) and all 
other records relating to the origin of a good for which preferential 
tariff treatment may be claimed in Canada or Mexico, including records 
associated with:
    (i) The purchase of, cost of, value of, and payment for, the good 
that is exported from the United States;
    (ii) The purchase of, cost of, value of, and payment for, all 
materials, including indirect materials, used in the production of the 
good that is exported from the United States; and
    (iii) The production of the good in the form in which the good is 
exported from the United States.
    (2) Method of maintenance. The records referred to in paragraph (a) 
of this section shall be maintained in accordance with the Generally 
Accepted Accounting Principles applied in the United States and may be 
maintained in hard-copy form, on microfilm or microfiche or in automated 
record storage devices (for example, magnetic discs and tapes) if 
associated computer programs are available to facilitate retrieval of 
the data in a usable form.
    (b) Availability of records--(1) To Customs. For purposes of 
determining compliance with the provisions of this part, the records 
required to be maintained under this section shall be made available for 
examination and inspection by the port director or other appropriate 
Customs officer in the same manner as provided in part 163 of this 
chapter in the case of U.S. importer records.
    (2) To the Canadian or Mexican customs administration. If a U.S. 
exporter or producer receives notification of, and consents to, an 
origin verification visit by the Canadian or Mexican customs 
administration under Article 506 of the NAFTA (see Sec. 181.74(e) of 
this part), such consent shall constitute agreement by the U.S. exporter 
or producer to make available to an officer of that customs 
administration all records required to be maintained under this section 
and to provide facilities for the inspection thereof. If, during the 
course of an origin verification of a U.S. producer, the Canadian or 
Mexican customs administration finds

[[Page 362]]

that the U.S. producer has failed to maintain its records in accordance 
with the Generally Accepted Accounting Principles applied in the United 
States, that customs administration will so inform the U.S. producer in 
writing and will give the U.S. producer 60 calendar days to conform the 
records to those Principles. If a U.S. exporter or producer fails to 
maintain records or make records available to the Canadian or Mexican 
customs administration in accordance with the provisions of this 
section, or if a U.S. producer fails to conform its records to Generally 
Accepted Accounting Principles as provided in this paragraph, the 
Canadian or Mexican customs administration may deny preferential tariff 
treatment to the good that is the subject of the verification visit.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as ameded by T.D. 98-56, 63 FR 
32955, June 16, 1998]



Sec. 181.13  Failure to comply with requirements.

    The port director may apply such measures as the circumstances may 
warrant where an exporter or a producer in the United States fails to 
comply with any requirement of this part. Such measures may include the 
imposition of penalties pursuant to 19 U.S.C. 1508(e) for failure to 
retain records required to be maintained under Sec. 181.12.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as ameded by T.D. 98-56, 63 FR 
32955, June 16, 1998]



                      Subpart C_Import Requirements



Sec. 181.21  Filing of claim for preferential tariff treatment upon importation.

    (a) Declaration. In connection with a claim for preferential tariff 
treatment, or for the exemption from the merchandise processing fee, for 
a good under the NAFTA, the U.S. importer must make a formal declaration 
that the good qualifies for such treatment. The declaration may be made 
by including on the entry summary, or equivalent documentation, 
including electronic submissions, the symbol ``CA'' for a good of 
Canada, or the symbol ``MX'' for a good of Mexico, as a prefix to the 
subheading of the HTSUS under which each qualifying good is classified. 
Except as otherwise provided in 19 CFR 181.22 and except in the case of 
a good to which Appendix 6.B to Annex 300-B of the NAFTA applies (see 
also 19 CFR 102.25), the declaration must be based on a complete and 
properly executed original Certificate of Origin, or copy thereof, which 
is in the possession of the importer and which covers the good being 
imported.
    (b) Corrected declaration. If, after making the declaration required 
under paragraph (a) of this section or under Sec. 181.32(b)(2) of this 
part, the U.S. importer has reason to believe that a Certificate of 
Origin on which a declaration was based contains information that is not 
correct, the importer shall within 30 calendar days after the date of 
discovery of the error make a corrected declaration and pay any duties 
that may be due. A corrected declaration shall be effected by submission 
of a letter or other written statement to the CBP office where the 
original declaration was filed.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by CBP Dec. 07-76, 
72 FR 52782, Sept. 17, 2007]



Sec. 181.22  Maintenance of records and submission of Certificate by importer.

    (a) Maintenance of records. Each importer claiming preferential 
tariff treatment for a good imported into the United States shall 
maintain in the United States, for five years after the date of entry of 
the good, all documentation relating to the importation of the good. 
Such documentation shall include a copy of the Certificate of Origin and 
any other relevant records as specified in Sec. 163.1(a) of this 
chapter.
    (b) Submission of Certificate. An importer who claims preferential 
tariff treatment on a good under Sec. 181.21 of this part shall 
provide, at the request of the port director, a copy of each Certificate 
of Origin pertaining to the good which is in the possession of the 
importer. A Certificate of Origin submitted to CBP under this paragraph 
or under Sec. 181.32(b)(3) of this part:
    (1) Shall be on CBP Form 434, including privately-printed copies 
thereof, or on such other form as approved by the

[[Page 363]]

Canadian or Mexican customs administration, or, as an alternative to CBP 
Form 434 or such other approved form, in an approved computerized format 
or such other medium or format as is approved by the Office of 
International Trade, U.S. Customs and Border Protection, Washington, DC 
20229. An alternative format must contain the same information and 
certification set forth on CBP Form 434;
    (2) Shall be signed by the exporter or by the exporter's authorized 
agent having knowledge of the relevant facts;
    (3) Shall be completed either in the English language or in the 
language of the country from which the good is exported. If the 
Certificate is completed in a language other than English, the importer 
shall also provide to the port director, upon request, a written English 
translation thereof;
    (4) Shall be accepted by CBP for four years after the date on which 
the Certificate was signed by the exporter or producer; and
    (5) May be applicable to:
    (i) A single importation of a good into the United States, including 
a single shipment that results in the filing of one or more entries and 
a series of shipments that results in the filing of one entry; or
    (ii) Multiple importations of identical goods into the United States 
that occur within a specified period, not exceeding 12 months, set out 
therein by the exporter or producer.
    (c) Acceptance of Certificate. A Certificate of Origin shall be 
accepted by the port director as valid for the purpose set forth in 
Sec. 181.11(a) of this part, provided that the Certificate is 
completed, signed and dated in accordance with the requirements of 
paragraph (b) of this section. If the port director determines that a 
Certificate is illegible or defective or has not been completed in 
accordance with paragraph (b) of this section, the importer shall be 
given a period of not less than five working days to submit a corrected 
Certificate. Acceptance of a Certificate will result in the granting of 
preferential tariff treatment to the imported good unless, in connection 
with an origin verification initiated under subpart G of this part or 
based on a pattern of conduct within the meaning of Sec. 181.76(c) of 
this part, the port director determines that the imported good does not 
qualify as an originating good or should not be accorded such treatment 
for any other reason as specifically provided for elsewhere in this 
part. A Certificate shall not be accepted in connection with subsequent 
importations during a period referred to in paragraph (b)(5)(ii) of this 
section if, based on an origin verification under subpart G of this 
part, the port director determined that a previously imported identical 
good covered by the Certificate did not qualify as an originating good.
    (d) Certificate not required--(1) General. Except as otherwise 
provided in paragraph (d)(2) of this section, an importer shall not be 
required to have a Certificate of Origin in his possession for:
    (i) An importation of a good for which the port director has in 
writing waived the requirement for a Certificate of Origin because the 
port director is otherwise satisfied that the good qualifies for 
preferential tariff treatment under the NAFTA;
    (ii) A non-commercial importation of a good; or
    (iii) A commercial importation for which the total value of 
originating goods does not exceed US$2,500, provided that, unless waived 
by the port director, the producer, exporter, importer or authorized 
agent includes on, or attaches to, the invoice or other document 
accompanying the shipment the following signed statement:

    I hereby certify that the good covered by this shipment qualifies as 
an originating good for purposes of preferential tariff treatment under 
the NAFTA.

Check One:
( ) Producer
( ) Exporter
( ) Importer
( ) Agent

________________________________________________________________________
Name

________________________________________________________________________
Title

________________________________________________________________________
Address

________________________________________________________________________
Signature and Date

    (2) Exception. If the port director determines that an importation 
described

[[Page 364]]

in paragraph (d)(1) of this section forms part of a series of 
importations that may reasonably be considered to have been undertaken 
or arranged for the purpose of avoiding a certification requirement set 
forth in this part, the port director shall notify the importer in 
writing that for that importation the importer must have in his 
possession a valid Certificate of Origin to support the claim for 
preferential tariff treatment. The importer shall have 30 calendar days 
from the date of the written notice to obtain a valid Certificate, and a 
failure to timely obtain the Certificate will result in denial of the 
claim for preferential tariff treatment. For purposes of paragraph 
(d)(2) of this section, a ``series of importations'' means two or more 
entries covering goods arriving on the same day from the same exporter 
and consigned to the same person.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as ameded by T.D. 98-56, 63 FR 
32955, June 16, 1998; CBP Dec. 07-76, 72 FR 52782, Sept. 17, 2007]



Sec. 181.23  Effect of noncompliance; failure to provide documentation regarding transshipment.

    (a) Effect of noncompliance. If the importer fails to comply with 
any requirement under this part, including submission of a Certificate 
of Origin under Sec. 181.22(b) or submission of a corrected Certificate 
under Sec. 181.22(c), the port director may deny preferential tariff 
treatment to the imported good.
    (b) Failure to provide documentation regarding transshipment. Where 
the requirements for preferential tariff treatment set forth elsewhere 
in this part are met, the port director nevertheless may deny 
preferential tariff treatment to an originating good if the good is 
shipped through or transshipped in a country other than the United 
States, Canada or Mexico and the importer of the good does not provide, 
at the request of the port director, copies of the customs control 
documents that indicate to the satisfaction of the port director that 
the good remained under customs control while in such other country.



              Subpart D_Post-Importation Duty Refund Claims



Sec. 181.31  Right to make post-importation claim and refund duties.

    Notwithstanding any other available remedy, including the right to 
amend an entry so long as liquidation of the entry has not become final, 
where a good would have qualified as an originating good when it was 
imported into the United States but no claim for preferential tariff 
treatment on that originating good was made at that time under Sec. 
181.21(a) of this part, the importer of that good may file a claim for a 
refund of any excess duties at any time within one year after the date 
of importation of the good in accordance with the procedures set forth 
in Sec. 181.32 of this part. Subject to the provisions of Sec. 181.23 
of this part, Customs may refund any excess duties by liquidation or 
reliquidation of the entry covering the good in accordance with Sec. 
181.33(c) of this part.



Sec. 181.32  Filing procedures.

    (a) Place of filing. A post-importation claim for a refund under 
Sec. 181.31 of this part shall be filed with the director of the port 
at which the entry covering the good was filed.
    (b) Contents of claim. A post-importation claim for a refund shall 
be filed by presentation of the following:
    (1) A written declaration stating that the good qualified as an 
originating good at the time of importation and setting forth the number 
and date of the entry covering the good;
    (2) Subject to Sec. 181.22(d) of this part, a copy of each 
Certificate of Origin (see Sec. 181.11 of this part) pertaining to the 
good;
    (3) A written statement indicating whether or not the importer of 
the good provided a copy of the entry summary or equivalent 
documentation to any other person. If such documentation was so 
provided, the statement shall identify each recipient by name, Customs 
identification number and address and shall specify the date on which 
the documentation was provided;
    (4) A written statement indicating whether or not the importer of 
the good is aware of any claim for refund, waiver or reduction of duties 
relating

[[Page 365]]

to the good within the meaning of Article 303 of the NAFTA (see subpart 
E of this part). If the importer is aware of any such claim, the 
statement shall identify each claim by number and date and shall 
identify the person who made the claim by name, Customs identification 
number and address; and
    (5) A written statement indicating whether or not any person has 
filed a protest or a petition or request for reliquidation relating to 
the good under any provision of law, and if any such protest or petition 
or request for reliquidation has been filed, the statement shall 
identify the protest, petition or request by number and date.



Sec. 181.33  Customs processing procedures.

    (a) Status determination. After receipt of a post-importation claim 
under Sec. 181.32 of this part, the port director shall determine 
whether the entry covering the good has been liquidated and, if 
liquidation has taken place, whether the liquidation has become final.
    (b) Pending protest, petition or request for reliquidation or 
judicial review. If the port director determines that any protest or any 
petition or request for reliquidation relating to the good has not been 
finally decided, the port director shall suspend action on the claim 
filed under this subpart until the decision on the protest, petition or 
request becomes final. If a summons involving the tariff classification 
or dutiability of the good is filed in the Court of International Trade, 
the port director shall suspend action on the claim filed under this 
subpart until judicial review has been completed.
    (c) Allowance of claim--(1) Unliquidated entry. If the port director 
determines that a claim for a refund filed under this subpart should be 
allowed and the entry covering the good has not been liquidated, the 
port director shall take into account the claim for refund under this 
subpart in connection with the liquidation of the entry.
    (2) Liquidated entry. If the port director determines that a claim 
for a refund filed under this subpart should be allowed and the entry 
covering the good has been liquidated, whether or not the liquidation 
has become final, the entry must be reliquidated in order to effect a 
refund of duties pursuant to this subpart. If the entry is otherwise to 
be reliquidated based on administrative review of a protest or petition 
for reliquidation or as a result of judicial review, the port director 
shall reliquidate the entry taking into account the claim for refund 
under this subpart.
    (3) Information to be provided to Canada or Mexico. If any 
information is provided to Customs pursuant to Sec. 181.32(b) (4) or 
(5) of this part, that information, together with notice of the 
allowance of the claim and the amount of duty refunded pursuant to this 
subpart, shall be provided by the port director to the customs 
administration of the country from which the good was exported.
    (d) Denial of claim--(1) General. The port director may deny a claim 
for a refund filed under this subpart if the claim was not filed timely, 
if the importer has not complied with the requirements of this subpart, 
if the Certificate of Origin submitted under Sec. 181.32(b)(3) of this 
part cannot be accepted as valid (see Sec. 181.22(c) of this part), or 
if, following initiation of an origin verification under Sec. 181.72(a) 
of this part, the port director determines either that the imported good 
did not qualify as an originating good at the time of importation or 
that a basis exists upon which preferential tariff treatment may be 
denied under Sec. 181.72(d), Sec. 181.74(c) or Sec. 181.76(c) of this 
part.
    (2) Unliquidated entry. If the port director determines that a claim 
for a refund filed under this subpart should be denied and the entry 
covering the good has not been liquidated, the port director shall deny 
the claim in connection with the liquidation of the entry, and written 
notice of the denial and the reason therefor shall be given to the 
importer and, in the case of a denial on the merits, to any person who 
completed and signed a Certificate of Origin relating to the good. Each 
notice of denial given to a person who completed and signed a 
Certificate of Origin shall also include a statement regarding the right 
to file a protest against the denial under part 174 of this chapter.

[[Page 366]]

    (3) Liquidated entry. If the port director determines that a claim 
for a refund filed under this subpart should be denied and the entry 
covering the good has been liquidated, whether or not the liquidation 
has become final, the claim may be denied without reliquidation of the 
entry. If the entry is otherwise to be reliquidated based on 
administrative review of a protest or petition for reliquidation or as a 
result of judicial review, such reliquidation may include denial of the 
claim filed under this subpart. In either case, the port director shall 
give written notice of the denial and the reason therefor to the 
importer and, in the case of a denial on the merits, to any person who 
completed and signed a Certificate of Origin relating to the good. Each 
notice of denial given to a person who completed and signed a 
Certificate of Origin shall also include a statement regarding the right 
to file a protest against the denial under part 174 of this chapter.



      Subpart E_Restrictions on Drawback and Duty-Deferral Programs



Sec. 181.41  Applicability.

    This subpart sets forth the provisions regarding drawback claims and 
duty-deferral programs under Article 303 of the NAFTA and applies to any 
good that is a ``good subject to NAFTA drawback'' within the meaning of 
19 U.S.C. 3333. Except in the case of Sec. 181.42(d), the provisions of 
this subpart apply to goods which are imported into the United States 
and then subsequently exported from the United States to Canada on or 
after January 1, 1996, or to Mexico on or after January 1, 2001. The 
requirements and procedures set forth in this subpart for NAFTA drawback 
are in addition to the general definitions, requirements and procedures 
for all drawback claims set forth in part 191 of this chapter, unless 
otherwise specifically provided in this subpart. Also, the requirements 
and procedures set forth in this subpart for NAFTA duty-deferral 
programs are in addition to the requirements and procedures for 
manipulation, manufacturing and smelting and refining warehouses 
contained in part 19 and part 144 of this chapter, for foreign trade 
zones under part 146 of this chapter, and for temporary importations 
under bond contained in part 10 of this chapter.



Sec. 181.42  Duties and fees not subject to drawback.

    The following duties or fees which may be applicable to a good 
entered for consumption in the Customs territory of the United States 
are not subject to drawback under this subpart:
    (a) Antidumping and countervailing duties;
    (b) A premium offered or collected on a good with respect to 
quantitative import restrictions, tariff rate quotas or tariff 
preference levels;
    (c) Fees applied under section 22 of the U.S. Agricultural 
Adjustment Act; and
    (d) Customs duties paid or owed under unused merchandise 
substitution drawback. There shall be no payment of such drawback under 
19 U.S.C. 1313(j)(2) on goods exported to Canada or Mexico on or after 
January 1, 1994.



Sec. 181.43  Eligible goods subject to drawback.

    Except as otherwise provided in this subpart, drawback is authorized 
for an imported good that is entered for consumption and is:
    (a) Subsequently exported to Canada or Mexico (see 19 U.S.C. 
1313(j)(1));
    (b) Used as a material in the production of another good that is 
subsequently exported to Canada or Mexico (see 19 U.S.C. 1313(a)); or
    (c) Substituted by a good of the same kind and quality as defined in 
Sec. 181.44(c) of this subpart and used as a material in the production 
of another good that is subsequently exported to Canada or Mexico (see 
19 U.S.C. 1313(b)).



Sec. 181.44  Calculation of drawback.

    (a) General. Except in the case of goods specified in Sec. 181.45 
of this part, drawback of the duties previously paid upon importation of 
a good into the United States may be granted by the United States, upon 
presentation of a NAFTA drawback claim under this subpart, on the lower 
amount of:
    (1) The total duties paid or owed on the good in the United States; 
or

[[Page 367]]

    (2) The total amount of duties paid on the exported good upon 
subsequent importation into Canada or Mexico.
    (b) Individual relative value and duty comparison principle. For 
purposes of this section, relative value shall be determined, and the 
comparison between the duties referred to in paragraph (a)(1) of this 
section and the duties referred to in paragraph (a)(2) of this section 
shall be made, separately with reference to each individual exported 
good, including where two components or materials are used to produce 
one exported good or one component or material is divided among multiple 
exported goods.

    Example. Upon importation of Chemical X into the United States, 
Company A entered Chemical X and paid $2.00 in duties. Company A 
processed Chemical X into Products Y and Z, each having the same 
relative value; that is, $1.00 in duty is attributable to Product Y and 
$1.00 in duty is attributable to Product Z. Company A exported Product Y 
to Canada and Canada assessed a free rate of duty. Company A exported 
Product Z to Mexico and Mexico assessed the equivalent of US$2.00 in 
duty. There is no entitlement to drawback on the export of Product Y to 
Canada because zero is the lesser amount when compared to the $1.00 in 
duty attributable to Product Y as a result of the separation of Chemical 
X into Products Y and Z. There would be entitlement to drawback on the 
export to Mexico, consisting of the $1.00 duty attributable to Product 
Z, because that amount is the lesser amount when comparing the duty paid 
to the United States and the US$ equivalent duty paid to Mexico.

    (c) Direct identification manufacturing drawback under 19 U.S.C. 
1313(a). Upon presentation of the NAFTA drawback claim under 19 U.S.C. 
1313(a), in which the amount of drawback payable is based on the lesser 
amount of the customs duties paid on the good either to the United 
States or to Canada or Mexico, the amount of drawback refunded shall not 
exceed 99 percent of the duty paid on such imported merchandise into the 
United States.

    Example 1. Upon the importation of Product X to the United States 
from Japan, Company A paid $2.00 in duties. Company A manufactured the 
imported Product X into Product Y, and subsequently exported it to 
Mexico. Mexico assessed the equivalent of US$11.00 in duties upon 
importation of Product Y. Upon presenting a drawback claim in the United 
States, in accordance with 19 U.S.C. 1313(a), Company A would be 
entitled to a refund of 99 percent of the $2.00, or $1.98. The $2.00 
paid by Company A (less 1 percent) on the importation of Product X into 
the United States is a lesser amount of duties than the total amount of 
customs duties paid to Mexico (the equivalent of US$11.00) on Product Y.
    Example 2. Upon the importation of Product X into the United States 
from Hong Kong, Company A entered Product X and paid $5.00 in duties. 
Company A manufactured Product X into Product Y, sold it to Company B in 
Mexico and subsequently exported it to Mexico. Company A reserved its 
right to drawback. Upon Product Y's importation, Company B was assessed 
a free rate of duty. Company A's claim for drawback will be denied 
because Company A is entitled to zero drawback for the reason that, as 
between the duty paid in the United States and the duty paid in Mexico, 
the duty in Mexico was zero.

    (d) Substitution manufacturing drawback under 19 U.S.C. 1313(b). 
Upon presentation of a NAFTA drawback claim under 19 U.S.C. 1313(b), on 
which the amount of drawback payable is based on the lesser amount of 
the customs duties paid on the good either to the United States or to 
Canada or Mexico, the amount of drawback is the same as that which would 
have been allowed had the substituted merchandise used in manufacture 
been itself imported. For purposes of drawback under this subpart, the 
term ``same kind and quality'' used in Sec. 1313(b) (see Sec. 
191.2(x)(1) of this chapter) shall have the same meaning as the term 
``identical or similar good'' used in Article 303 of the NAFTA except 
that there shall be no requirement that the good be manufactured in the 
same country.

    Example 1. Upon importation of Product X from Japan to the United 
States, Company A paid $5.00 in duties. Company A substituted a same 
kind and quality domestic Product X for the Japanese Product X in its 
production of Product Y under its 19 U.S.C. 1313(b) drawback contract. 
Company A sold Product Y to Company B which subsequently exported it to 
Canada. On the importation of Product Y by Company B, Company B paid the 
equivalent of US$2.00 in duties assessed by Revenue Canada and waived 
its right to drawback to Company A. Company A is entitled to obtain 
drawback under 19 U.S.C. 1313(b) in the United States in the amount of 
$1.98 (or 99 percent of the US$2.00 equivalent Company B paid in duty to 
Canada) since that $2.00 was

[[Page 368]]

the lesser of the total amount of customs duties paid on the product to 
either Canada or the United States.
    Example 2. Same facts as above example, but Company B paid the 
equivalent of US$5.00 to Revenue Canada. Company A is entitled to obtain 
$4.95 in drawback (a refund of 99 percent of $5.00 paid to the United 
States). Since the same amount of duty was assessed by each country, 
drawback is allowable because the drawback paid does not exceed the 
lesser amount paid.

    (e) Meats cured with imported salt. Meats, whether packed or smoked, 
which have been cured with imported salt may be eligible for drawback in 
aggregate amounts of not less than $100 in duties paid on the imported 
salt upon exportation of the meats to Canada or Mexico (see 19 U.S.C. 
1313(f)).

    Example. Company Z produced Virginia smoked ham on its Smithfield, 
Virginia farm, using 4,000 pounds of imported salt in curing the meat. 
The salt was imported from an HTSUS Column 2 country, with a duty of 
$200. Upon exportation of the hams to Mexico, Company Z pays the 
equivalent of US$250.00 in duties to Mexico. Company Z is entitled to 
drawback of the full 100 percent of the $200.00 in duties it paid on the 
importation of the salt into the United States because that $200.00 is a 
lesser amount than the total amount of customs duties paid to Mexico on 
the exported meat.

    (f) Jet aircraft engines. A foreign-built jet aircraft engine that 
has been overhauled, repaired, rebuilt, or reconditioned in the United 
States with the use of imported merchandise, including parts, may be 
eligible for drawback of duties paid on the imported merchandise in 
aggregate amounts of not less than $100 upon exportation of the engine 
to Canada or Mexico (19 U.S.C. 1313(h)).

    Example. A Swedish-made jet aircraft engine is repaired in the 
United States using imported parts from Korea on which $160.00 in duties 
have been paid by Company W. The engine is subsequently exported to 
Canada by Company W and Company W pays the equivalent of US$260.00 in 
duties to Canada. Upon showing the country in which the engine was 
manufactured and a description of the processing performed thereon in 
the United States on Customs Form 7551, appropriately modified, Company 
W is entitled to the full refund of the duties paid to the United States 
since that $160.00 was a lesser amount than the duties paid on the 
engine to Canada.

    (g) Unused goods under 19 U.S.C. 1313(j)(1) that have changed in 
condition. An imported good that is unused in the United States under 19 
U.S.C. 1313(j)(1) and that is shipped to Canada or Mexico not in the 
same condition within the meaning of Sec. 181.45(b)(1) may be eligible 
for drawback under this section, except when the shipment to Canada or 
Mexico does not constitute an exportation under 19 U.S.C. 1313(j)(4).

    Example. Upon importation of Product X from Spain to the United 
States, the U.S. importer pays $10.00 in duties. While in the original 
package in the importer's warehouse, Product X becomes damaged. A 
Canadian purchaser buys Product X and imports it into Canada and pays 
the equivalent of US$5.00 in duties assessed by Revenue Canada. The 
Canadian purchaser who exported Product X from the United States to 
Canada and who otherwise qualifies for drawback is entitled to drawback 
under 19 U.S.C. 1313(j)(1) in the amount of $4.95 (99 percent of the 
US$5.00 equivalent in duties paid to Canada). Eligibility for full 
drawback of the $10.00 in U.S. duties under Sec. 181.45(b) would be 
precluded because Product X, although unused, was not exported to Canada 
in the same condition as when imported into the United States within the 
meaning of Sec. 181.45(b)(1).

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 98-16, 63 FR 
11005, Mar. 5, 1998]



Sec. 181.45  Goods eligible for full drawback.

    (a) Goods originating in Canada or Mexico. A Canadian or Mexican 
originating good that is dutiable and is imported into the United States 
is eligible for drawback without regard to the limitation on drawback 
set forth in Sec. 181.44 of this part if that originating good is:
    (1) Subsequently exported to Canada or Mexico;
    (2) Used as a material in the production of another good that is 
subsequently exported to Canada or Mexico; or
    (3) Substituted by a good of the same kind and quality and used as a 
material in the production of another good that is subsequently exported 
to Canada or Mexico.

    Example. Company A imports a dutiable (3 percent rate) Canadian 
originating good. During Company A's manufacturing process, Company A 
substitutes a German good of the

[[Page 369]]

same kind and quality (on which duty was paid at a 2.5 percent rate) in 
the production of another good that is subsequently exported to Canada. 
Company A may designate the dutiable Canadian entry and claim full 
drawback (99 percent) on the 3 percent duty paid under 19 U.S.C. 
1313(b). (Note: NAFTA originating goods will continue to receive full 
drawback as they cross NAFTA borders for successive stages of production 
until NAFTA tariffs are fully phased out.)

    (b) Claims under 19 U.S.C 1313(j)(1) for goods in same condition. A 
good imported into the United States and subsequently exported to Canada 
or Mexico in the same condition is eligible for drawback under 19 U.S.C. 
1313(j)(1) without regard to the limitation on drawback set forth in 
Sec. 181.44 of this part.

    Example. X imports a desk into the United States from England and 
pays $25.00 in duty. X immediately exports the desk to Z in Mexico and Z 
pays the equivalent of US$10.00 in Mexican duties. X can obtain a refund 
of 99 percent of the $25.00 paid upon importation of the desk into the 
United States.

    (1) Same condition defined. For purposes of this subpart, a 
reference to a good in the ``same condition'' includes a good that has 
been subjected to any of the following operations provided that no such 
operation materially alters the characteristics of the good:
    (i) Mere dilution with water or another substance;
    (ii) Cleaning, including removal of rust, grease, paint or other 
coatings;
    (iii) Application of preservative, including lubricants, protective 
encapsulation, or preservation paint;
    (iv) Trimming, filing, slitting or cutting;
    (v) Putting up in measured doses, or packing, repacking, packaging 
or repackaging; or
    (vi) Testing, marking, labelling, sorting or grading.
    (2) Commingling of fungible goods--(i) General--(A) Inventory of 
other than all non-originating goods. Commingling of fungible 
originating and non-originating goods in inventory is permissable 
provided that the origin of the goods and the identification of entries 
for designation for same condition drawback are on the basis of an 
approved inventory method set forth in the appendix to this part.
    (B) Inventory of the non-originating goods. If all goods in a 
particular inventory are non-originating goods, identification of 
entries for designation for same condition drawback shall be on the 
basis of one of the accounting methods in Sec. 191.14 of this chapter, 
as provided therein.
    (ii) Exception. Agricultural goods imported from Mexico may not be 
commingled with fungible agricultural goods in the United States for 
purposes of same condition drawback under this subpart.
    (c) Goods not conforming to sample or specifications or shipped 
without consent of consignee under 19 U.S.C. 1313(c). An imported good 
exported to Canada or Mexico by reason of failure of the good to conform 
to sample or specification or by reason of shipment of the good without 
the consent of the consignee is eligible for drawback under 19 U.S.C. 
1313(c) without regard to the limitation on drawback set forth in Sec. 
181.44 of this part. Such a good must be returned to Customs custody for 
exportation under Customs supervision within three years after the 
release from Customs custody.

    Example. X orders, after seeing a sample in the ABC Company's 
catalog, a certain quantity of 2-by-4 lumber from ABC Company located in 
Honduras. ABC Company, having run out of the specific lumber, ships 
instead a different kind of lumber. X rejects the lumber because it did 
not conform to the sample and is asked to send it to a customer of ABC 
in Canada. X exports it within 90 days of its release from Customs 
custody. X may recover 99 percent of the $500 duties it paid to U.S. 
Customs upon the exportation of the lumber, or $495.00.

    (d) Certain goods exported to Canada. Goods identified in Annex 
303.6 of the NAFTA and in sections 203(a) (7) and (8) of the North 
American Free Trade Agreement Implementation Act, if exported to Canada, 
are eligible for drawback without regard to the limitation on drawback 
set forth in Sec. 181.44 of this part.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 98-16, 63 FR 
11005, Mar. 5, 1998]

[[Page 370]]



Sec. 181.46  Time and place for filing drawback claim.

    (a) Time of filing. A drawback claim under this subpart shall be 
filed or applied for, as applicable, within 3 years after the date of 
exportation of the goods on which drawback is claimed. No extension will 
be granted unless it is established that a Customs officer was 
responsible for the untimely filing. Drawback shall be allowed only if 
the completed good is exported within 5 years after importation of the 
merchandise identified or designated to support the claim. A good 
subject to a claim for same condition drawback must be exported before 
the close of the 3-year period beginning on the date of importation of 
the good into the United States.
    (b) Place of filing. A drawback claim must be filed at the drawback 
office(s) where the manufacturing drawback contract is on file, whether 
a general rate or specific rate, but exportation need not occur from 
that port. To facilitate expedited processing of claims, claimants 
should file same condition drawback claims in the port where the 
examination would take place (see Sec. 191.141(b)(3) (ii) and (iii) of 
this chapter). Customs must be notified at least 2 working days in 
advance of the intended date of exportation in order to have the 
opportunity to examine the goods.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 98-16, 63 FR 
11005, Mar. 5, 1998]



Sec. 181.47  Completion of claim for drawback.

    (a) General. A claim for drawback shall be granted, upon the 
submission of appropriate documentation to substantiate compliance with 
the drawback laws and regulations of the United States, evidence of 
exportation to Canada or Mexico, and satisfactory evidence of the 
payment of duties to Canada or Mexico. Unless otherwise provided in this 
subpart, the documentation, filing procedures, time and place 
requirements and other applicable procedures required to determine 
whether a good qualifies for drawback shall be in accordance with the 
provisions of part 191 of this chapter; however, a drawback claim 
subject to the provisions of this subpart shall be filed separately from 
any part 191 drawback claim (that is, a claim that involves goods 
exported to countries other than Canada or Mexico). Claims 
inappropriately filed or otherwise not completed within the 3-year 
period specified in Sec. 181.46 of this part shall be considered 
abandoned.
    (b) Complete drawback claim--(1) General. A complete drawback claim 
under this subpart shall consist of the filing of the appropriate 
completed drawback entry form, evidence of exportation (a copy of the 
Canadian or Mexican customs entry showing the amount of duty paid to 
Canada or Mexico) and its supporting documents, certificate(s) of 
delivery, when necessary, or certificate(s) of manufacture and delivery, 
and a certification from the Canadian or Mexican importer as to the 
amount of duties paid. Each drawback entry form filed under this subpart 
shall be conspicuously marked at the top with the word ``NAFTA''.
    (2) Specific claims. The following documentation, for the drawback 
claims specified below, must be submitted to Customs in order for a 
drawback claim to be processed under this subpart. Missing documentation 
or incorrect or incomplete information on required customs forms or 
supporting documentation will result in an incomplete drawback claim.
    (i) Manufacturing drawback claim. The following shall be submitted 
in connection with a claim for direct identification manufacturing 
drawback or substitution manufacturing drawback:
    (A) A completed Customs Form 331, to establish the manufacture of 
goods made with imported merchandise and, if applicable, the identity of 
substituted domestic, duty-paid or duty-free merchandise, and including 
the tariff classification number of the imported merchandise;
    (B) Customs Form 7501 or the import entry number;
    (C) Exporter summary procedure, if applicable. For purposes of this 
subpart, the exporter summary procedure must include the Canadian or 
Mexican customs entry number and the amount of duty paid to Canada or 
Mexico;
    (D) Evidence of exportation and satisfactory evidence of the payment 
of

[[Page 371]]

duties in Canada or Mexico, as provided in paragraph (c) of this 
section;
    (E) Waiver of right to drawback. If the person exporting to Canada 
or Mexico was not the importer or the manufacturer, written waivers 
executed by the importer or manufacturer and by any intervening person 
to whom the good was transferred shall be submitted in order for the 
claim to be considered complete; and
    (F) An affidavit of the party claiming drawback stating that no 
other drawback claim has been made on the designated goods, that such 
party has not provided an exporter's Certificate of Origin pertaining to 
the exported goods to another party except as stated on the drawback 
claim, and that the party agrees to notify Customs if he subsequently 
provides such an exporter's Certificate of Origin to any person.
    (ii) Same condition drawback claim under 19 U.S.C. 1313(j)(1). The 
following shall be submitted in connection with a drawback claim 
covering a good in the same condition:
    (A) A completed Customs Form 7551. In addition, the tariff 
classification number of the imported goods shall be recorded on the 
form;
    (B) Customs Form 7501. The form must show the entry number, date of 
entry, port of importation, date of importation, importing carrier, and 
importer of record or ultimate consignee name and Customs or taxpayer 
identification number. Explicit line item information shall be clearly 
noted on the Customs Form 7501 so that the subject goods are easily 
discernible;
    (C) Customs Form 7505, if applicable, to trace the movement of the 
imported goods after importation;
    (D) A certificate of delivery on Customs Form 7552, if applicable, 
for purposes of tracing the transfer of ownership of the imported goods 
from the importer to the claimant. This is required if the drawback 
claimant is not the original importer of the merchandise which is the 
subject of a same condition claim;
    (E) Customs Form 7512, if applicable. This is required for 
merchandise which is examined at one port but exported through border 
points outside of that port. Such goods must travel in bond from the 
location where they were examined to the point of the border crossing 
(exportation). If examination is waived, in-bond transportation is not 
required;
    (F) Notification of intent to export or waiver of prior notice;
    (G) Evidence of exportation. Acceptable documentary evidence of 
exportation to Canada or Mexico shall include a bill of lading, air 
waybill, freight waybill, export ocean bill of lading, Canadian customs 
manifest, cargo manifest, or certified copies thereof, issued by the 
exporting carrier. Supporting documentary evidence shall establish fully 
the time and fact of exportation, the identity of the exporter, and the 
identity and location of the ultimate consignee of the exported goods;
    (H) Waiver of right to drawback. If the party exporting to Canada or 
Mexico was not the importer, a written waiver from the importer and from 
each intermediate person to whom the goods were transferred shall be 
required in order for the claim to be considered complete; and
    (I) An affidavit of the party claiming drawback stating that no 
other drawback claim has been made on the designated goods.
    (iii) Nonconforming or improperly shipped goods drawback claim. The 
following shall be submitted in the case of goods not conforming to 
sample or specifications or shipped without the consent of the consignee 
and subject to a drawback claim under 19 U.S.C. 1313(c):
    (A) Customs Form 7551, completed and submitted at the time the goods 
are returned to Customs custody;
    (B) Customs Form 7501 to establish the fact of importation, the 
receipt of the imported goods and the identity of the party to whom 
drawback is payable (see Sec. 181.48(c) of this part);
    (C) Documentary evidence to support the claim that the goods did not 
conform to sample or specifications or were shipped without the consent 
of the consignee. In the case of nonconforming goods, such documentation 
may include a copy of a purchase order and any related documents such as 
a specification sheet, catalogue or advertising brochure from the 
supplier, the basis for which the order was placed,

[[Page 372]]

and copy of a letter or telex or credit memo from the supplier 
indicating acceptance of the returned merchandise. This documentation is 
necessary to establish that the goods are, in fact, being returned to 
the party from which they were procured or that they are being sent to 
the supplier's other customer directly;
    (D) Customs Form 7512, if applicable; and
    (E) Evidence of exportation, as provided in paragraph (b)(2)(ii)(G) 
of this section.
    (iv) Meats cured with imported salt. The provisions of paragraph 
(b)(2)(i) of this section relating to direct identification 
manufacturing drawback shall apply to claims for drawback on meats cured 
with imported salt filed under this subpart insofar as applicable to and 
not inconsistent with the provisions of this subpart, and the forms 
referred to in that paragraph shall be modified to show that the claim 
is being made for refund of duties paid on salt used in curing meats.
    (v) Jet aircraft engines. The provisions of paragraph (b)(2)(i) of 
this section relating to direct identification manufacturing drawback 
shall apply to claims for drawback on foreign-built jet aircraft engines 
repaired or reconditioned in the United States filed under this subpart 
insofar as applicable to and not inconsistent with the provisions of 
this subpart and the provisions of subpart N of part 191 of this 
chapter.
    (c) Evidence of exportation and of duties paid in Canada or Mexico. 
For purposes of this subpart, evidence of exportation and satisfactory 
evidence of payment of duties in Canada or Mexico shall consist of one 
of the following types of documentation, provided that, for purposes of 
evidence of duties paid, such documentation includes the import entry 
number, the date of importation, the tariff classification number, the 
rate of duty and the amount of duties paid:
    (1) In the case of Canada, the Canadian entry document, referred to 
as the Canada Customs Invoice or B-3, presented with either the K-84 
Statement or the Detailed Coding Statement. A Canadian customs document 
that is not accompanied by a valid receipt is not adequate evidence of 
exportation and payment of duty in Canada;
    (2) In the case of Mexico, the Mexican entry document (the 
``pedimento'');
    (3) The final customs duty determination of Canada or Mexico, or a 
copy thereof, respecting the relevant entry; or
    (4) An affidavit, from the person claiming drawback, which is based 
on information received from the importer of the good in Canada or 
Mexico.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 98-16, 63 FR 
11005, Mar. 5, 1998]



Sec. 181.48  Person entitled to receive drawback.

    (a) Manufacturing drawback. The person named as exporter on the 
notice of exportation or on the bill of lading, air waybill, freight 
waybill, Canadian or Mexican customs manifest, cargo manifest, or 
certified copies of these documents, shall be considered the exporter 
and entitled to manufacturing drawback, unless the manufacturer or 
producer shall reserve the right to claim drawback. The manufacturer or 
producer who reserves this right may claim drawback, and he shall 
receive payment upon production of satisfactory evidence that the 
reservation was made with the knowledge and consent of the exporter. 
Drawback also may be granted to the agent of the manufacturer, producer, 
or exporter, or to the person the manufacturer, producer, exporter, or 
agent directs in writing to receive the drawback of duties.
    (b) Nonconforming or improperly shipped goods drawback. Only the 
importer of record or the actual owner of the merchandise or its agent 
may claim drawback under 19 U.S.C. 1313(c).
    (c) Same condition drawback. The importer of record on the 
consumption entry is entitled to claim same condition drawback under 19 
U.S.C. 1313(j)(1) unless he has in writing waived his right to claim 
drawback.



Sec. 181.49  Retention of records.

    All records required to be kept by the exporter, importer, 
manufacturer or producer under this subpart with respect to 
manufacturing drawback claims, and all records kept by others which 
complement the records of the

[[Page 373]]

importer, exporter, manufacturer or producer (see Sec. 191.15 (see also 
Sec. Sec. 191.26(f), 191.38, 191.175(c)) of this chapter) shall be 
retained for at least three years after payment of such claims. However, 
any person who issues a drawback certificate that enables another person 
to make or perfect a drawback claim shall keep records in support of 
that certificate commencing on the date that the certificate is issued 
and shall retain those records for three years following the date of 
payment of the claim.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 98-16, 63 FR 
11006, Mar. 5, 1998]



Sec. 181.50  Liquidation and payment of drawback claims.

    (a) General. When the drawback claim has been fully completed by the 
filing of all required documents, and exportation of the articles has 
been established and the amount of duties paid to Canada or Mexico has 
been established, the entry will be liquidated to determine the proper 
amount of drawback due either in accordance with the limitation on 
drawback set forth in Sec. 181.44 of this part or in accordance with 
the regular drawback calculation. The liquidation procedures of subpart 
G of part 191 of this chapter shall control for purposes of this 
subpart.
    (b) Time for liquidation. A drawback claim shall not be liquidated 
until either a written waiver of the right to protest under 19 U.S.C. 
1514 is filed with Customs or the liquidation of the import entry has 
become final under U.S. law. In addition, except in the case of goods 
covered by Sec. 181.45 of this part, a drawback claim shall not be 
liquidated for a period of 3 years after the date of entry of the goods 
in Canada or Mexico. A drawback claim may be adjusted pursuant to 19 
U.S.C. 1508(b)(2)(B)(iii) even after liquidation of the U.S. import 
entry has become final.
    (c) Accelerated payment. Accelerated drawback payment procedures 
shall apply as set forth in Sec. 191.92 of this chapter. However, a 
person who receives drawback of duties under this procedure shall repay 
the duties paid if a NAFTA drawback claim is adversely affected 
thereafter by administrative or court action.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 98-16, 63 FR 
11006, Mar. 5, 1998]



Sec. 181.51  Prevention of improper payment of claims.

    (a) Double payment of claim. The drawback claimant shall certify to 
Customs that he has not earlier received payment on the same import 
entry for the same designation of goods. If, notwithstanding such a 
certification, such an earlier payment was in fact made to the claimant, 
the claimant shall repay any amount paid on the second claim.
    (b) Preparation of Certificate of Origin. The drawback claimant 
shall, within 30 calendar days after the filing of the drawback claim 
under this subpart, submit to Customs a written statement as to whether 
he has prepared, or has knowledge that another person has prepared, a 
Certificate of Origin provided for under Sec. 181.11(a) of this part 
and pertaining to the goods which are covered by the claim. If, 
following such 30-day period, the claimant prepares, or otherwise learns 
of the existence of, any such Certificate of Origin, the claimant shall, 
within 30 calendar days thereafter, disclose that fact to Customs.



Sec. 181.52  Subsequent claims for preferential tariff treatment.

    If a claim for a refund of duties is allowed by the Canadian or 
Mexican customs administration under Article 502(3) of the NAFTA (post-
importation claim) or under any other circumstance after drawback has 
been granted under this subpart, the appropriate Customs officer shall 
reliquidate the drawback claim and obtain a refund of the amount paid in 
drawback in excess of the amount permitted to be paid under Sec. 181.44 
of this part.



Sec. 181.53  Collection and waiver or reduction of duty under duty-deferral programs.

    (a) General--(1) Definitions. The following definitions shall apply 
for purposes of this section:
    (i) Date of exportation. ``Date of exportation'' means the date of 
importation into Canada or Mexico as reflected on the applicable 
Canadian or Mexican

[[Page 374]]

entry document (see Sec. 181.47(c) (1) and (2)).
    (ii) Duty-deferral program. A ``duty-deferral program'' means any 
measure which postpones duty payment upon arrival of a good in the 
United States until withdrawn or removed for exportation to Canada or 
Mexico or for entry into a Canadian or Mexican duty-deferral program. 
Such measures govern manipulation warehouses, manufacturing warehouses, 
smelting and refining warehouses, foreign trade zones, and those 
temporary importations under bond that are specified in paragraph (b)(5) 
of this section.
    (2) Treatment as entered or withdrawn for consumption--(i) General. 
(A) Where a good is imported into the United States pursuant to a duty-
deferral program and is subsequently withdrawn from the duty-deferral 
program for exportation to Canada or Mexico or is used as a material in 
the production of another good that is subsequently withdrawn from the 
duty-deferral program for exportation to Canada or Mexico, and provided 
that the good is a ``good subject to NAFTA drawback'' within the meaning 
of 19 U.S.C. 3333 and is not described in Sec. 181.45 of this part, the 
documentation required to be filed under this section in connection with 
the exportation of the good shall, for purposes of this chapter, 
constitute an entry or withdrawal for consumption and the exported good 
shall be subject to duty which shall be assessed in accordance with 
paragraph (b) of this section.
    (B) Where a good is imported into the United States pursuant to a 
duty-deferral program and is subsequently withdrawn from the duty-
deferral program and entered into a duty-deferral program in Canada or 
Mexico or is used as a material in the production of another good that 
is subsequently withdrawn from the duty-deferral program and entered 
into a duty-deferral program in Canada or Mexico, and provided that the 
good is a ``good subject to NAFTA drawback'' within the meaning of 19 
U.S.C. 3333 and is not described in Sec. 181.45, the documentation 
required to be filed under this section in connection with the 
withdrawal of the good from the U.S. duty-deferral program shall, for 
purposes of this chapter, constitute an entry or withdrawal for 
consumption and the withdrawn good shall be subject to duty which shall 
be assessed in accordance with paragraph (b) of this section.
    (C) Any assessment of duty under this section shall include the 
duties and fees referred to in Sec. 181.42 (a) through (c) and the fees 
provided for in Sec. 24.23 of this chapter; these inclusions shall not 
be subject to refund, waiver, reduction or drawback.
    (ii) Bond requirements. The provisions of Sec. 142.4 of this 
chapter shall apply to each withdrawal and exportation transaction 
described in paragraph (a)(2)(i) of this section. However, in applying 
the provisions of Sec. 142.4 of this chapter in the context of this 
section, any reference to release from Customs custody in Sec. 142.4 of 
this chapter shall be taken to mean exportation to Canada or Mexico.
    (iii) Documentation filing and duty payment procedures--(A) Persons 
required to file. In the circumstances described in paragraph (a)(2)(i) 
of this section, the documentation described in paragraph (a)(2)(iii)(B) 
of this section must be filed by one of the following persons:
    (1) In the case of a withdrawal of the goods from a warehouse, the 
person who has the right to withdraw the goods;
    (2) In the case of a temporary importation under bond (TIB) 
specified in paragraph (b)(5) of this section, the TIB importer whether 
or not he sells the goods for export to Canada or Mexico unless Sec. 
10.31(h) of this chapter applies; or
    (3) In the case of a withdrawal from a foreign trade zone, the 
person who has the right to make entry. However, if a zone operator is 
not the person with the right to make entry of the good, the zone 
operator shall be responsible for the payment of any duty due in the 
event the zone operator permits such other person to remove the goods 
from the zone and such other person fails to comply with Sec. Sec. 
146.67 and 146.68 of this chapter.
    (B) Documentation required to be filed and required filing date. The 
person required to file shall file Customs Form 7501 no later than 10 
working days after the date of exportation to Canada or

[[Page 375]]

Mexico or 10 working days after being entered into a duty-deferral 
program in Canada or Mexico. Except where the context otherwise requires 
and except as otherwise specifically provided in this paragraph, the 
procedures for completing and filing Customs Form 7501 in connection 
with the entry of merchandise under this chapter shall apply for 
purposes of this paragraph. For purposes of completing Customs Form 7501 
under this paragraph, any reference on the form to the entry date shall 
be taken to refer to the date of exportation of the good or the date the 
goods are entered into a duty-deferral program in Canada or Mexico. The 
Customs Form 7501 required under this paragraph may be transmitted 
electronically.
    (C) Duty payment. The duty estimated to be due under paragraph (b) 
of this section shall be deposited with Customs 60 calendar days after 
the date of exportation of the good. If a good is entered into a duty-
deferral program in Canada or Mexico, the duty estimated to be due under 
paragraph (b) of this section, but without any waiver or reduction 
provided for in that paragraph, shall be deposited with Customs 60 
calendar days after the date the good is entered into such duty-deferral 
program. Nothing shall preclude the deposit of such estimated duty at 
the time of filing the Customs Form 7501 under paragraph (a)(2)(iii)(B) 
of this section or at any other time within the 60-day period prescribed 
in this paragraph. However, any interest calculation shall run from the 
date the duties are required to be deposited.
    (3) Waiver or reduction of duties--(i) General. Except in the case 
of duties and fees referred to in Sec. Sec. 181.42(a) through (c) and 
fees provided for in Sec. 24.23 of this chapter, Customs shall waive or 
reduce the duties paid or owed under paragraph (a)(2) of this section by 
the person who is required to file the Customs Form 7501 (see paragraph 
(a)(2)(iii)(A) of this section) in accordance with paragraph (b) of this 
section, provided that a claim for waiver or reduction of the duties is 
filed with Customs within the appropriate 60-day time frame. The claim 
shall be based on evidence of exportation or entry into a Canadian or 
Mexican duty-deferral program and satisfactory evidence of duties paid 
in Canada or Mexico (see Sec. 181.47(c)).
    (ii) Filing of claim and payment of reduced duties. A claim for a 
waiver or reduction of duties under paragraph (a)(3)(i) of this section 
shall be made on Customs Form 7501 which shall set forth, in addition to 
the information required under paragraph (a)(2)(iii)(B) of this section, 
a description of the good exported to Canada or Mexico and the Canadian 
or Mexican import entry number, date of importation, tariff 
classification number, rate of duty and amount of duty paid. If a claim 
for reduction of duties is filed under this paragraph, the reduced 
duties shall be deposited with Customs when the claim is filed.
    (iii) Drawback on goods entered into a duty-deferral program in 
Canada or Mexico. After goods in a duty-deferral program in the United 
States which have been sent from the United States and entered into a 
duty-deferral program in Canada or Mexico are then withdrawn from that 
Canadian or Mexican duty-deferral program either for entry into Canada 
or Mexico or for export to a non-NAFTA country, the person who filed the 
Customs Form 7501 (see paragraph (a)(2)(iii)(A) of this section) may 
file a claim for drawback if the goods are withdrawn within 5 years from 
the date of the original importation of the good into the United States. 
If the goods are entered for consumption in Canada or Mexico, drawback 
will be calculated in accordance with Sec. 181.44 of this part.
    (4) Liquidation of entry--(i) If no claim is filed. If no claim for 
a waiver or reduction of duties is filed in accordance with paragraph 
(a)(3) of this section, Customs shall determine the final duties due 
under paragraph (a)(2)(i) of this section and shall post a bulletin 
notice of liquidation of the entry filed under this section in 
accordance with Sec. 159.9 of this chapter. Where no claim was filed in 
accordance with this section and Customs fails to liquidate, or extend 
liquidation of, the entry filed under this section within 1 year from 
the date of the entry, upon the date of expiration of that 1-year period 
the entry shall be deemed liquidated by operation of law in the amount 
asserted

[[Page 376]]

by the exporter on the Customs Form 7501 filed under paragraph 
(a)(2)(iii)(A) of this section. A protest under section 514, Tariff Act 
of 1930, as amended (19 U.S.C. 1514), and part 174 of this chapter shall 
be filed within 90 days from the date of posting of the notice of 
liquidation under this section.
    (ii) If a claim is filed. If a claim for a waiver or reduction of 
duties is filed in accordance with paragraph (a)(3) of this section, an 
extension of liquidation of the entry filed under this section shall 
take effect for a period not to exceed 3 years from the date the entry 
was filed. Before the close of the extension period, Customs shall 
liquidate the entry filed under this section and shall post a bulletin 
notice of liquidation in accordance with Sec. 159.9 of this chapter. If 
Customs fails to liquidate the entry filed under this section within 4 
years from the date of the entry, upon the date of expiration of that 4-
year period the entry shall be deemed liquidated by operation of law in 
the amount asserted by the exporter on the Customs Form 7501 filed under 
paragraph (a)(3)(ii) of this section. A protest under section 514, 
Tariff Act of 1930, as amended (19 U.S.C. 1514), and part 174 of this 
chapter shall be filed within 90 days from the date of posting of the 
notice of liquidation under this section.
    (b) Assessment and waiver or reduction of duty--(1) Manipulation in 
warehouse. Where a good subject to NAFTA drawback under this subpart is 
withdrawn from a bonded warehouse (19 U.S.C. 1562) after manipulation 
for exportation to Canada or Mexico or for entry into a duty-deferral 
program in Canada or Mexico, duty shall be assessed on the good in its 
condition and quantity, and at its weight, at the time of such 
withdrawal from the warehouse and with such additions to, or deductions 
from, the final appraised value as may be necessary by reason of its 
change in condition. Such duty shall be paid no later than 60 calendar 
days after the date of exportation or of entry into the duty-deferral 
program of Canada or Mexico, except that, upon filing of a proper claim 
under paragraph (a)(3) of this section, the duty shall be waived or 
reduced in an amount that does not exceed the lesser of the total amount 
of duty payable on the good under this section or the total amount of 
customs duties paid to Canada or Mexico.
    (2) Bonded manufacturing warehouse. Where a good is manufactured in 
a bonded warehouse (19 U.S.C. 1311) with imported materials and is then 
withdrawn for exportation to Canada or Mexico or for entry into a duty-
deferral program in Canada or Mexico, duty shall be assessed on the 
materials in their condition and quantity, and at their weight, at the 
time of their importation into the United States. Such duty shall be 
paid no later than 60 calendar days after either the date of exportation 
or of entry into a duty-deferral program of Canada or Mexico, except 
that, upon filing of a proper claim under paragraph (a)(3) of this 
section, the duty shall be waived or reduced in an amount that does not 
exceed the lesser of the total amount of duty payable on the materials 
under this section or the total amount of customs duties paid to Canada 
or Mexico.

    Example. Company N imports tea into the United States and makes a 
Class 6 warehouse entry. Company N manufactures sweetened ice tea mix by 
combining the imported tea with refined cane sugar and other flavorings 
and packaging it in retail size canisters. Upon withdrawal of the ice 
tea mix from the warehouse for exportation to Canada, a Customs Form 
7501 is filed showing $900 in estimated U.S. duties on the basis of the 
unmanufactured tea. Upon entry into Canada, the equivalent of US$800 is 
assessed on the exported ice tea mix. Company N submits to Customs a 
proper claim under paragraph (a)(3) of this section showing payment of 
the US$800 equivalent in duties to Canada. Company N will only be 
required to pay $100 in U.S. duties out of the $900 amount reflected on 
the Customs Form 7501.

    (3) Bonded smelting or refining warehouse. For any qualifying 
imported metal-bearing materials (19 U.S.C. 1312), duty shall be 
assessed on the imported materials and the charges against the bond 
canceled no later than 60 calendar days after either the date of 
exportation of the treated materials to Canada or Mexico or the date of 
entry of the treated materials into a duty-deferral program of Canada or 
Mexico, either from the bonded smelting or refining warehouse or from 
such other customs bonded warehouse after the transfer of the same 
quantity of

[[Page 377]]

material from a bonded smelting or refining warehouse. However, upon 
filing of a proper claim under paragraph (a)(3) of this section, the 
duty on the imported materials shall be waived or reduced in an amount 
that does not exceed the lesser of the total amount of duty payable on 
the imported materials under this section or the total amount of customs 
duties paid to Canada or Mexico.

    Example. Company Z imports 47 million pounds of electrolytic zinc 
which is entered into a bonded smelting and refining warehouse (Class 7) 
for processing. Thereafter, Company Z withdraws the merchandise for 
exportation to Canada and files a Customs Form 7501 showing $90,000 in 
estimated U.S. duty on the dutiable quantity of metal contained in the 
imported metal-bearing materials. Upon entry of the processed zinc into 
Canada, the equivalent of US$50,000 in duties are assessed. Within 60 
days of exportation Company Z files a proper claim under paragraph 
(a)(3) of this section and Customs liquidates the entry with duty due in 
the amount of $40,000.

    (4) Foreign trade zone. For a good that is manufactured or otherwise 
changed in condition in a foreign trade zone (19 U.S.C. 81c(a)) and then 
withdrawn from the zone for exportation to Canada or Mexico or for entry 
into a Canadian or Mexican duty-deferral program, the duty assessed, as 
calculated under paragraph (b)(4)(i) or (b)(4)(ii) of this section, 
shall be paid no later than 60 calendar days after either the date of 
exportation of the good to Canada or Mexico or the date of entry of the 
good into a duty-deferral program of Canada or Mexico, except that, upon 
filing of a proper claim under paragraph (a)(3) of this section, the 
duty shall be waived or reduced in an amount that does not exceed the 
lesser of the total amount of duty payable on the good under this 
section or the total amount of customs duties paid to Canada or Mexico.
    (i) Nonprivileged foreign status. In the case of a nonprivileged 
foreign status good, duty is assessed on the good in its condition and 
quantity, and at its weight, at the time of its exportation from the 
zone to Canada or Mexico or its entry into a duty-deferral program of 
Canada or Mexico.

    Example. CMG imports $1,000,000 worth of auto parts from Korea and 
admits them into Foreign-Trade Subzone number 00, claiming nonprivileged 
foreign status. (If the auto parts had been regularly entered they would 
have been dutiable at 4 percent, or $40,000.) CMG manufactures 
subcompact automobiles. Automobiles are dutiable at 2.5 percent 
($25,000) if entered for consumption in the United States. CMG withdraws 
the automobiles from the zone and exports them to Mexico. Upon entry of 
the automobiles in Mexico, CMG pays the equivalent of US$20,000 in duty. 
Before the expiration of 60 calendar days from the date of exportation, 
CMG files a proper claim under paragraph (a)(3) of this section and pays 
$5,000 in duty to Customs representing the difference between the 
$25,000 which would have been paid if the automobiles had been entered 
for consumption from the zone and the US$20,000 equivalent paid to 
Mexico.

    (ii) Privileged foreign status. In the case of a privileged foreign 
status good, duty is assessed on the good in its condition and quantity, 
and at its weight, at the time privileged status is granted in the zone.

    Example. O&G, Inc. admits Kuwaiti crude petroleum into its zone and 
requests, one month later, privileged foreign status on the crude before 
refining the crude into motor gasoline and kerosene. Upon withdrawal of 
the refined goods from the zone by O&G, Inc. for exportation to Canada, 
a Customs Form 7501 is filed showing $700 in estimated duties on the 
imported crude petroleum (rather than on the refined goods which would 
have been assessed $1,200). D&O is the consignee in Canada and pays the 
Canadian customs duty assessment of the equivalent of US$1,500 on the 
goods. O&G, Inc. is entitled to a waiver of the full $700 in duties upon 
filing of a proper claim under paragraph (a)(3) of this section.

    (5) Temporary importation under bond. Except in the case of a good 
imported from Canada or Mexico for repair or alteration, where a good, 
regardless of its origin, was imported temporarily free of duty for 
repair, alteration or processing (subheading 9813.00.05, Harmonized 
Tariff Schedule of the United States) and is subsequently exported to 
Canada or Mexico, duty shall be assessed on the good on the basis of its 
condition at the time of its importation into the United States. Such 
duty shall be paid no later than 60 calendar days after either the date 
of exportation or the date of entry into a duty-deferral program of 
Canada or Mexico, except that, upon filing of a proper claim under 
paragraph (a)(3) of this

[[Page 378]]

section, the duty shall be waived or reduced in an amount that does not 
exceed the lesser of the total amount of duty payable on the good under 
this section or the total amount of customs duties paid to Canada or 
Mexico.

    Example. Company A imports glassware under subheading 9813.00.05, 
HTSUS. The glassware is from France and would be dutiable under a 
regular consumption entry at $6,000. Company A alters the glassware by 
etching hotel logos on the glassware. Two weeks later, Company A sells 
the glassware to Company B, a Mexican company, and ships the glassware 
to Mexico. Company B enters the glassware and is assessed duties in an 
amount equivalent to US$6,200 and claims NAFTA preferential tariff 
treatment. Company B provides a copy of the Mexican landing certificate 
to Company A showing that the US$6,200 equivalent in duties was assessed 
but not yet paid to Mexico. If Mexico ultimately denies Company B's 
NAFTA claim and the Mexican duty payment becomes final, Company A, upon 
submission to Customs of a proper claim under paragraph (a)(3) of this 
section, is entitled to a waiver of the full $6,000 in U.S. duty.

    (c) Recordkeeping requirements. If a person intends to claim a 
waiver or reduction of duty on goods under this section, that person 
shall maintain records concerning the value of all involved goods or 
materials at the time of their importation into the United States and 
concerning the value of the goods at the time of their exportation to 
Canada or Mexico or entry into a duty-deferral program of Canada or 
Mexico, and if a person files a claim under this section for a waiver or 
reduction of duty on goods exported to Canada or Mexico or entered into 
a Canadian or Mexican duty-deferral program, that person shall maintain 
evidence of exportation or entry into a Canadian or Mexican duty-
deferral program and satisfactory evidence of the amount of any customs 
duties paid to Canada or Mexico on the good (see Sec. 181.47(c)). 
Failure to maintain adequate records will result in denial of the claim 
for waiver or reduction of duty.
    (d) Failure to file proper claim. If the person identified in 
paragraph (a)(2)(iii)(A) of this section fails to file a proper claim 
within the 60-day period specified in this section, that person, or the 
FTZ operator pursuant to paragraph (a)(2)(iii)(A)(3) of this section, 
will be liable for payment of the full duties assessed under this 
section and without any waiver or reduction thereof.
    (e) Subsequent claims for preferential tariff treatment. If a claim 
for a refund of duties is allowed by the Canadian or Mexican customs 
administration under Article 502(3) of the NAFTA or under any other 
circumstance after duties have been waived or reduced under this 
section, Customs may reliquidate the entry filed under this section 
pursuant to 19 U.S.C. 1508(b)(2)(B)(iii) even after liquidation of the 
entry has become final.

[T.D. 96-14, 61 FR 2911, Jan. 30, 1996; T.D. 96-14, 61 FR 6111, Feb. 16, 
1996]



Sec. 181.54  Verification of claim for drawback, waiver or reduction of duties.

    The allowance of a claim for drawback, waiver or reduction of duties 
submitted under this subpart shall be subject to such verification, 
including verification with the Canadian or Mexican customs 
administration of any documentation obtained in Canada or Mexico and 
submitted in connection with the claim, as Customs may deem necessary.



    Subpart F_Commercial Samples and Goods Returned After Repair or 
                               Alteration



Sec. 181.61  Applicability.

    This subpart sets forth the rules which apply for purposes of duty-
free entry of commercial samples of negligible value as provided for in 
Article 306 of the NAFTA and for purposes of the re-entry of goods after 
repair or alteration in Canada or Mexico as provided for in Article 307 
of the NAFTA.



Sec. 181.62  Commercial samples of negligible value.

    (a) General. Commercial samples of negligible value imported from 
Canada or Mexico may qualify for duty-free entry under subheading 
9811.00.60, HTSUS. For purposes of this section, ``commercial samples of 
negligible value'' means commercial samples which have a value, 
individually or in the aggregate as shipped, of not more than US$1, or 
the equivalent amount in

[[Page 379]]

the currency of Canada or Mexico, or which are so marked, torn, 
perforated, or otherwise treated that they are unsuitable for sale or 
for use except as commercial samples.
    (b) Qualification for duty-free entry. Commercial samples of 
negligible value imported from Canada or Mexico will qualify for duty-
free entry under subheading 9811.00.60, HTSUS, only if:
    (1) The samples are imported solely for the purpose of soliciting 
orders for foreign goods; and
    (2) If valued over US$1, the samples are properly marked, torn, 
perforated or otherwise treated prior to arrival in the United States so 
that they are unsuitable for sale or for use except as commercial 
samples.



Sec. 181.63  [Reserved]



Sec. 181.64  Goods re-entered after repair or alteration in Canada or Mexico.

    (a) General. This section sets forth the rules which apply for 
purposes of obtaining duty-free or reduced-duty treatment on goods 
returned after repair or alteration in Canada or Mexico as provided for 
in subheadings 9802.00.40 and 9802.00.50, HTSUS. Goods returned after 
having been repaired or altered in Mexico, whether or not pursuant to a 
warranty, and goods returned after having been repaired or altered in 
Canada pursuant to a warranty, are eligible for duty-free treatment, 
provided that the requirements of this section are met. Goods returned 
after having been repaired or altered in Canada other than pursuant to a 
warranty are subject to duty upon the value of the repairs or 
alterations using the applicable duty rate under the United States-
Canada Free-Trade Agreement (see Sec. 10.301 of this chapter), provided 
that the requirements of this section are met. For purposes of this 
section, ``repairs or alterations'' means restoration, addition, 
renovation, redyeing, cleaning, resterilizing, or other treatment which 
does not destroy the essential characteristics of, or create a new or 
commercially different good from, the good exported from the United 
States.

    Example. Glass mugs produced in the United States are exported to 
Canada for etching and tempering operations, after which they are 
returned to the United States for sale. The foreign operations exceed 
the scope of an alteration because they are manufacturing processes 
which create commercially different products with distinct new 
characteristics.

    (b) Goods not eligible for duty-free or reduced-duty treatment after 
repair or alteration. The duty-free or reduced-duty treatment referred 
to in paragraph (a) of this section shall not apply to goods which, in 
their condition as exported from the United States to Canada or Mexico, 
are incomplete for their intended use and for which the processing 
operation performed in Canada or Mexico constitutes an operation that is 
performed as a matter of course in the preparation or manufacture of 
finished goods.

    Example. Unflanged metal wheel rims are exported to Canada for a 
flanging operation to strengthen them so as to conform to U.S. Army 
specifications for wheel rims; although the goods when exported from the 
United States are dedicated for use in the making of wheel rims, they 
cannot be used for that purpose until flanged. The flanging operation 
does not constitute a repair or alteration because that operation is 
necessary for the completion of the wheel rims.

    (c) Documentation--(1) Declarations required. Except as otherwise 
provided in this section, the following declarations shall be filed in 
connection with the entry of goods which are returned from Canada or 
Mexico after having been exported for repairs or alterations and which 
are claimed to be duty free or subject to duty only on the value of the 
repairs or alterations performed abroad:
    (i) A declaration from the person who performed such repairs or 
alterations, in substantially the following form:

    I/We, ------------, declare that the goods herein specified are the 
goods which, in the condition in which they were exported from the 
United States, were received by me (us) on ----------------, 19----, 
from ------------ (name and address of owner or exporter in the United 
States); that they were received by me (us) for the sole purpose of 
being repaired or altered; that only the repairs or alterations 
described below were performed by me (us); that such repairs or 
alterations were (were not) performed pursuant to a warranty; that the 
full cost or (when no charge is made) value of such repairs or 
alterations is correctly stated below; and that no substitution whatever 
has been made to replace

[[Page 380]]

any of the goods originally received by me (us) from the owner or 
exporter thereof mentioned above.

----------------------------------------------------------------------------------------------------------------
                                                     Full cost or (when no charge
                      Description of goods and of    is made) value of repairs or    Total value of goods after
 Marks and numbers       repairs or alterations      alterations (see Subchapter       repairs or alterations
                                                        II, Chapter 98, HTSUS)
----------------------------------------------------------------------------------------------------------------
                     .............................  .............................  .............................
                     .............................  .............................  .............................
                     .............................  .............................  .............................
----------------------------------------------------------------------------------------------------------------

________________________________________________________________________
Date

Signature

________________________________________________________________________
Address

________________________________________________________________________
________________________________________________________________________
Capacity

________________________________________________________________________

    (ii) A declaration by the owner, importer, consignee, or agent 
having knowledge of the pertinent facts in substantially the following 
form:

    I, ----------------, declare that the (above) (attached) declaration 
by the person who performed the repairs or alterations abroad is true 
and correct to the best of my knowledge and belief; that the goods ----
---- were -------- were not (check one) subject to NAFTA drawback; that 
such goods were exported from the United States for repairs or 
alterations from -------- (port) on ------------------, 19----; and that 
the goods entered in their repaired or altered condition are the same 
goods that were exported on the above date and that are identified in 
the (above) (attached) declaration.

________________________________________________________________________
Date
 Signature______________________________________________________________

 Address________________________________________________________________

________________________________________________________________________
Capacity

________________________________________________________________________

    (2) Additional documentation. The port director may require such 
additional documentation as is deemed necessary to prove actual 
exportation of the goods from the United States for repairs or 
alterations, such as a foreign customs entry, a foreign customs invoice, 
a foreign landing certificate, bill of lading, or airway bill.
    (3) Waiver of declarations. If the port director concerned is 
satisfied, because of the nature of the goods or production of other 
evidence, that the goods are imported under circumstances meeting the 
requirements of this section, he may waive submission of the 
declarations provided for in paragraph (c)(1) of this section.
    (4) Deposit of estimated duties. For goods returned after having 
been repaired or altered in Canada other than pursuant to a warranty, 
the port director shall require a deposit of estimated duties based upon 
the full cost or value of the repairs or alterations. The cost or value 
of the repairs or alterations performed in Canada other than pursuant to 
a warranty, which is to be set forth in the invoice and entry papers as 
the basis for the assessment of duty for such goods, shall be limited to 
the cost or value of the repairs or alterations actually performed in 
Canada, which shall include all domestic and foreign articles furnished 
for the repairs or alterations but shall not include any of the expenses 
incurred in the United States whether by way of engineering costs, 
preparation of plans or specifications, furnishing of tools or equipment 
for doing the repairs or alterations in Canada, or otherwise.



            Subpart G_Origin Verifications and Determinations



Sec. 181.71  Denial of preferential tariff treatment dependent on origin verification and determination.

    Except where a Certificate of Origin either is not submitted when 
requested under Sec. 181.22(b) of this part or is not acceptable and a 
corrected Certificate is not submitted or accepted as provided in Sec. 
181.22(c) of this part and except as otherwise provided in Sec. 181.23 
of this part and except in the case of a pattern of conduct provided for 
in Sec. 181.76(c) of this part, Customs shall deny preferential tariff 
treatment on an imported good, or shall deny a post-

[[Page 381]]

importation claim for a refund filed under subpart D of this part, only 
after initiation of an origin verification under Sec. 181.72(a) of this 
part which results in a determination that the imported good does not 
qualify as an originating good or should not be accorded such treatment 
for any other reason as specifically provided for elsewhere in this 
part.



Sec. 181.72  Verification scope and method.

    (a) General. Subject to paragraph (e) of this section, Customs may 
initiate a verification in order to determine whether a good imported 
into the United States qualifies as an originating good for purposes of 
preferential tariff treatment under the NAFTA as stated on the 
Certificate of Origin pertaining to the good. Such a verification:
    (1) May also involve a verification of the origin of a material that 
is used in the production of a good that is the subject of a 
verification under this section;
    (2) May include verification of the applicable rate of duty applied 
to an originating good in accordance with Annex 302.2 of the NAFTA and 
may include a determination of whether a good is a qualifying good for 
purposes of Annex 703.2 of the NAFTA; and
    (3) Shall be conducted only by means of one or more of the 
following:
    (i) A verification letter which requests information from a Canadian 
or Mexican exporter or producer, including a Canadian or Mexican 
producer of a material, and which identifies the good or material that 
is the subject of the verification. The verification letter may be on 
Customs Form 28 or other appropriate format and may be sent:
    (A) By certified or registered mail, or by any other method that 
produces a confirmation of receipt by the exporter or producer; or
    (B) By any other method, regardless of whether it produces proof of 
receipt by the exporter or producer;
    (ii) A written questionnaire sent to an exporter or a producer, 
including a producer of a material, in Canada or Mexico. The 
questionnaire:
    (A) May be sent by certified or registered mail, or by any other 
method that produces a confirmation of receipt by the exporter or 
producer; or
    (B) May be sent by any other method, regardless of whether it 
produces proof of receipt by the exporter or producer; and
    (C) May be completed by the Canadian or Mexican exporter or producer 
either in the English language or in the language of the country in 
which that exporter or producer is located;
    (iii) Visits to the premises of an exporter or a producer, including 
a producer of a material, in Canada or Mexico to review the types of 
records referred to in Sec. 181.12 of this part and observe the 
facilities used in the production of the good or material; and
    (iv) Any other method which results in information from a Canadian 
or Mexican exporter or producer, including a Canadian or Mexican 
producer of a material, that is relevant to the origin determination. 
The information so obtained may form a basis for a negative 
determination regarding a good (see Sec. 181.75(b) of this part) only 
if the information is in writing and is signed by the exporter or 
producer.
    (b) Applicable accounting principles. When conducting a verification 
of origin to which Generally Accepted Accounting Principles may be 
relevant, Customs will apply and accept the Generally Accepted 
Accounting Principles applicable in the country in which the good is 
produced or in which the exporter is located.
    (c) Inquiries to importer not precluded. Nothing in paragraph (a) of 
this section shall preclude Customs from directing inquiries or requests 
to a U.S. importer for documents or other information regarding the 
imported good. If such an inquiry or request involves requesting the 
importer to obtain and provide written information from the exporter or 
producer of the good or from the producer of a material that is used in 
the production of the good, such information shall be requested by the 
importer and provided to the importer by the exporter or producer only 
on a voluntary basis, and a failure or refusal on the part of the 
importer to obtain and provide such information shall not be considered 
a failure of the exporter or producer to provide the information and 
shall not constitute a ground for

[[Page 382]]

denying preferential tariff treatment on the good.
    (d) Failure to respond to letter or questionnaire--(1) Nonresponse 
to initial letter or questionnaire. If the exporter or producer, 
including a producer of a material, fails to respond to a verification 
letter or questionnaire sent under paragraph (a)(2)(i) or (a)(2)(ii) of 
this section within 30 calendar days from the date on which the letter 
or questionnaire was sent, or such longer period as may be specified in 
the letter or questionnaire, Customs shall send a follow-up verification 
letter or questionnaire to that exporter or producer. The follow-up 
letter or questionnaire:
    (i) Except where the verification letter or questionnaire only 
involved the origin of a material used in the production of a good and 
was sent to the producer of the material, may include the written 
determination referred to in Sec. 181.75 of this part, provided that 
the information specified in paragraph (b) of that section is also 
included; and
    (ii) Shall be sent:
    (A) By certified or registered mail, or by any other method that 
produces a confirmation of receipt by the exporter or producer, if so 
requested by the customs administration of Canada or Mexico from which 
the good was exported; or
    (B) By any method, if no request under paragraph (d)(1)(ii)(A) of 
this section has been made by the Canadian or Mexican customs 
administration.
    (2) Nonresponse to follow-up letter or questionnaire--(i) Producer 
of a material. If a producer of a material fails to respond to a follow-
up verification letter or questionnaire sent under paragraph (d)(1) of 
this section, Customs may consider the material to be non-originating 
for purposes of determining whether the good to which that material 
relates is an originating good.
    (ii) Exporter or producer of a good. If the exporter or producer of 
a good fails to respond to a follow-up verification letter or 
questionnaire sent under paragraph (d)(1) of this section, Customs may 
consider the good to be non-originating and consequently may deny 
preferential tariff treatment on the good as follows:
    (A) If the follow-up letter or questionnaire included a written 
determination as provided for in paragraph (d)(1)(i) of this section and 
the exporter or producer fails to respond to the follow-up letter or 
questionnaire within 30 calendar days or such longer period as specified 
therein:
    (1) From the date on which the follow-up letter or questionnaire and 
written determination were received by the exporter or producer, if sent 
pursuant to paragraph (d)(1)(ii)(A) of this section; or
    (2) From the date on which the follow-up letter or questionnaire and 
written determination were either received by the exporter or producer 
or sent by Customs, if sent in accordance with paragraph (d)(1)(ii)(B) 
of this section; or
    (B) Provided that the procedures set forth in Sec. Sec. 181.75 and 
181.76 of this part are followed, if the follow-up letter or 
questionnaire does not include a written determination as provided for 
in paragraph (d)(1)(i) of this section and the exporter or producer 
fails to respond to the follow-up letter or questionnaire within 30 
calendar days or such longer period as specified in the letter or 
questionnaire:
    (1) From the date on which the follow-up letter or questionnaire was 
received by the exporter or producer, if sent pursuant to paragraph 
(d)(1)(ii)(A) of this section; or
    (2) From the date on which the follow-up letter or questionnaire was 
either received by the exporter or producer or sent by Customs, if sent 
in accordance with paragraph (d)(1)(ii)(B) of this section.
    (e) Calculation of regional value content under net cost method--(1) 
General. Where a Canadian or Mexican producer of a good elects to 
calculate the regional value content of a good under the net cost method 
as set forth in General Note 12, HTSUS, and in the appendix to this 
part, Customs may not, during the time period over which that net cost 
is calculated, conduct a verification under Sec. 181.72(a) of this part 
with respect to the regional value content of that good.
    (2) Cost submission for motor vehicles. Where, pursuant to General 
Note 12, HTSUS, and the appendix to this part, a Canadian or Mexican 
producer of a

[[Page 383]]

light duty vehicle or heavy duty vehicle, as defined in the appendix to 
this part, elects to average its regional value content calculation over 
its fiscal year, Customs may request, in writing, that the producer 
provide a cost submission reflecting the actual costs incurred in the 
production of the category of motor vehicles for which the election was 
made. Such a written request shall constitute a verification letter 
under paragraph (a)(2)(i) of this section, and the requested cost 
submission shall be submitted to Customs within 180 calendar days after 
the close of the producer's fiscal year or within 60 days from the date 
on which the request was made, whichever is later.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 02-15, 67 FR 
15482, Apr. 2, 2002]



Sec. 181.73  Notification of verification visit.

    (a) Written notification required. Prior to conducting a 
verification visit in Canada or Mexico pursuant to Sec. 
181.72(a)(2)(iii) of this part, Customs shall give written notification 
of the intention to conduct the visit. Such notification shall be 
delivered:
    (1) By certified or registered mail, or by any other method that 
produces a confirmation of receipt, to the address of the Canadian or 
Mexican exporter or producer whose premises are to be visited;
    (2) To the customs administration of the country in which the visit 
is to occur; and
    (3) If requested by the country in which the visit is to occur, to 
the embassy of that country located in the United States.
    (b) Contents of notification. The notification referred to in 
paragraph (a) of this section shall include:
    (1) The identity of the Customs office and officer issuing the 
notification;
    (2) The name of the Canadian or Mexican exporter or producer of the 
good, or producer of the material, whose premises are to be visited;
    (3) The date and place of the proposed verification visit;
    (4) The object and scope of the proposed verification visit, 
including specific reference to the good or material that is the subject 
of the verification;
    (5) The names and titles of the Customs officers performing the 
proposed verification visit;
    (6) The legal authority for the proposed verification visit; and
    (7) A request that the Canadian or Mexican exporter or producer of 
the good, or producer of the material, provide its written consent for 
the proposed verification visit.



Sec. 181.74  Verification visit procedures.

    (a) Written consent required. Prior to conducting a verification 
visit in Canada or Mexico pursuant to Sec. 181.72(a)(3)(iii) of this 
part, CBP shall obtain the written consent of the Canadian or Mexican 
exporter or producer of the good or producer of the material whose 
premises are to be visited.
    (b) Written consent procedures. The written consent provided for in 
paragraph (a) of this section shall be delivered by certified or 
registered mail, or by any other method that generates a reliable 
receipt, to the CBP officer who gave the notification provided for in 
Sec. 181.73 of this part.
    (c) Failure to provide written consent or to cooperate or to 
maintain records. Except as otherwise provided in paragraph (d) of this 
section, where a Canadian or Mexican exporter or producer of a good, or 
a Canadian or Mexican producer of a material, has not given its written 
consent to a proposed verification visit within 30 calendar days of 
receipt of notification pursuant to Sec. 181.73 of this part, CBP may 
deny preferential tariff treatment to that good, or for purposes of 
determining whether a good is an originating good may consider as non-
originating that material, that would have been the subject of the 
visit, provided that, as regards the good, notice of intent to deny such 
treatment is given to that exporter or producer of the good and to the 
U.S. importer thereof prior to taking such action. A failure on the part 
of the Canadian or Mexican exporter or producer of a good, or on the 
part of the Canadian or Mexican producer of a material, to maintain 
records or provide access to such records or otherwise cooperate during 
the verification visit shall mean that the verification visit never took 
place and may be treated by CBP in the same manner as

[[Page 384]]

a failure to give written consent to a verification visit. However, in 
the case of a Canadian or Mexican producer of a good who is found during 
a verification visit to have not maintained records in accordance with 
the Generally Accepted Accounting Principles applied in the producer's 
country, CBP may deny preferential tariff treatment on the good based 
solely on a failure to so maintain those records only if the producer 
does not conform the records to those Principles within 60 calendar days 
after CBP informs the producer in writing of that failure.
    (d) Postponement of visit in Canada or Mexico. Following receipt of 
the notification provided for in Sec. 181.73 of this part, the Canadian 
or Mexican customs administration may, within 15 calendar days of 
receipt of the notification, postpone the proposed verification visit 
for a period not exceeding 60 calendar days from the date of such 
receipt by providing written notice of the postponement to the CBP 
officer who issued the notification of the verification visit, unless a 
longer period is requested and agreed to by CBP. Such a postponement 
shall not constitute a failure to provide written consent within the 
meaning of paragraph (c) of this section and shall not otherwise by 
itself constitute a valid basis upon which CBP may:
    (1) Consider a material that is used in the production of a good to 
be a non-originating material; or
    (2) Deny preferential tariff treatment to a good.
    (e) Verification visits within the United States--(1) Notification 
and consent procedure. When the Canadian or Mexican customs 
administration intends to conduct a verification visit in the United 
States, notification of such intent will be given, and consent will be 
required, as provided for under Article 506 of the NAFTA. For purposes 
of the required notification to CBP, such notification shall be sent to 
U.S. Customs and Border Protection, Office of International Trade, 
Commercial Targeting and Enforcement, 1300 Pennsylvania Ave., NW., 
Washington, DC 20229.
    (2) Postponement of visit. Following receipt of notification from 
the Canadian or Mexican customs administration of its intention to 
conduct a verification visit in the United States, CBP may, within 15 
calendar days of receipt of the notification, postpone the proposed 
verification visit for a period not exceeding 60 calendar days from the 
date of such receipt by providing written notice of the postponement to 
the Canadian or Mexican customs administration.
    (3) Designation of observers. A U.S. exporter or producer, including 
a producer of a material, whose good or material is the subject of a 
verification visit by the Canadian or Mexican customs administration 
shall be allowed to designate two observers to be present during the 
visit, subject to the following conditions:
    (i) The U.S. exporter or producer shall not be required to designate 
observers;
    (ii) There shall be no restriction on the class of persons that may 
be designated as observers by the U.S. exporter or producer;
    (iii) The observers to be present are designated in the written 
consent to the proposed visit or subsequent thereto;
    (iv) The observers do not participate in the verification visit in a 
manner other than as passive observers;
    (v) The presence of observers shall in no way affect the right to 
have legal counsel or other advisors present during the visit;
    (vi) There shall be no obligation on the part of the United States 
government or on the part of the Canadian or Mexican government to 
designate observers from its staff, even when the U.S. exporter or 
producer fails to, or specifically declines to, designate observers; and
    (vii) The failure of the U.S. exporter or producer to designate 
observers shall not result in the postponement of the visit.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by CBP Dec. 07-76, 
72 FR 52783, Sept. 17, 2007]



Sec. 181.75  Issuance of origin determination.

    (a) General. Except in the case of a pattern of conduct within the 
meaning of Sec. 181.76(c) of this part, following receipt and analysis 
of the results of an origin verification initiated under

[[Page 385]]

Sec. 181.72(a) of this part in regard to a good imported into the 
United States and prior to denying preferential tariff treatment on the 
import transaction which gave rise to the origin verification, Customs 
shall provide the exporter or producer whose good is the subject of the 
verification with a written determination of whether the good qualifies 
as an originating good. Subject to paragraph (b) of this section, the 
written origin determination shall be sent within 60 calendar days after 
conclusion of the origin verification process, unless circumstances 
require additional time, and shall set forth:
    (1) A description of the good that was the subject of the 
verification together with the identifying numbers and dates of the 
export and import documents pertaining to the good;
    (2) Subject to the provisions of Sec. 181.131 of this part and 
except in the case of a negative origin determination where specific 
findings of fact cannot be made because of a failure to respond to a 
follow-up verification letter or questionnaire sent under Sec. 181.72 
of this part, a statement setting forth the findings of fact made in 
connection with the verification and upon which the determination is 
based; and
    (3) With specific reference to the rules applicable to originating 
goods as set forth in General Note 12, HTSUS, and in the appendix to 
this part, the legal basis for the determination.
    (b) Negative origin determinations. If Customs determines, as a 
result of an origin verification initiated under Sec. 181.72(a) of this 
part, that the good which is the subject of the verification does not 
qualify as an originating good, the written determination required under 
paragraph (a) of this section:
    (1) Shall be sent by certified or registered mail, or by any other 
method that produces a confirmation of receipt by the exporter or 
producer, if so requested by the customs administration of Canada or 
Mexico from which the good was exported; and
    (2) Shall, in addition to the information specified in paragraph (a) 
of this section, set forth the following:
    (i) A notice of intent to deny preferential tariff treatment on the 
good which is the subject of the determination;
    (ii) The specific date after which preferential tariff treatment 
will be denied, as established in accordance with Sec. 181.76(a)(1) of 
this part;
    (iii) The period, established in accordance with Sec. 181.76(a)(1) 
of this part, during which the exporter or producer of the good may 
provide written comments or additional information regarding the 
determination; and
    (iv) A statement advising the exporter or producer of the right to 
file a protest under 19 U.S.C. 1514 and part 174 of this chapter:
    (A) Within 90 days after notice of liquidation is provided pursuant 
to part 159 of this chapter; or
    (B) In cases where the negative origin determination does not result 
in a liquidation, within 90 days after the date of issuance of the 
written determination.



Sec. 181.76  Application of origin determinations.

    (a) General. Except as otherwise provided in this section, an origin 
determination may be applied upon issuance of the determination under 
Sec. 181.75 of this part.
    (b) Negative origin determinations. In the case of a negative origin 
determination issued under Sec. 181.75(b) of this part:
    (1) The date on which preferential tariff treatment may be denied 
shall be no earlier than 30 calendar days from the date on which:
    (i) Receipt of the written determination by the exporter or producer 
is confirmed, if a request under Sec. 181.75(b)(1) of this part has 
been made; or
    (ii) The written determination is sent by Customs, if no request 
under Sec. 181.75(b)(1) of this part has been made; and
    (2) Before denying preferential tariff treatment, Customs shall take 
into account any comments or additional information provided by the 
exporter or producer during the period established in accordance with 
paragraph (b)(1) of this section.
    (c) Cases involving a pattern of conduct. Where multiple origin 
verifications initiated under Sec. 181.72(a)

[[Page 386]]

of this part indicate a pattern of conduct by an exporter or producer 
involving false or unsupported representations on Certificates of Origin 
that a good imported into the United States qualifies as an originating 
good, Customs may deny subsequent claims for preferential tariff 
treatment on identical goods exported or produced by such person until 
that person establishes compliance with the rules applicable to 
originating goods as set forth in General Note 12, HTSUS, and in this 
part, provided that advance written notice of the intent to deny such 
claims is given to the importer. For purposes of this paragraph, a 
``pattern of conduct'' means repeated instances of false or unsupported 
representations by an exporter or producer as established by Customs on 
the basis of not fewer than two origin verifications of two or more 
importations of the good that result in the issuance of not fewer than 
two written determinations issued to that exporter or producer pursuant 
to Sec. 181.75 of this part which conclude, as a finding of fact, that 
Certificates of Origin completed and signed by that exporter or producer 
with respect to identical goods contain false or unsupported 
representations.
    (d) Differing determinations. Where Customs determines, either as a 
result of an origin verification initiated under Sec. 181.72(a) of this 
part or under any other circumstance, that a certain good imported into 
the United States does not qualify as an originating good based on a 
tariff classification or a value applied in the United States to one or 
more materials used in the production of the good, including a material 
used in the production of another material that is used in the 
production of the good, which differs from the tariff classification or 
value applied to the materials by the country from which the good was 
exported, the Customs determination shall not become effective until 
Customs provides written notification thereof both to the U.S. importer 
of the good and to the person who completed and signed the Certificate 
of Origin upon which the claim for preferential tariff treatment for the 
good was based.
    (e) Applicability of a determination to prior importations. Customs 
shall not apply a determination made under paragraph (d) of this section 
to an importation made before the effective date of the determination 
if, prior to notification of the determination, the customs 
administration of the country from which the good was exported either 
issued an advance ruling under Article 509 of the NAFTA or any other 
ruling on the tariff classification or on the value of such materials, 
or gave consistent treatment to the entry of the materials under the 
tariff classification or value at issue, on which a person is entitled 
to rely and on which that person did in fact rely. For purposes of this 
paragraph, the person who received notification of the determination 
shall demonstrate to the satisfaction of Customs, in writing within 30 
calendar days of receipt of the notification, that the conditions set 
forth herein have been met. For purposes of this paragraph:
    (1) A ``ruling'' on which a person is entitled to rely in the case 
of Canada must be issued pursuant to section 43.1(1) of the Customs Act 
(Advance Rulings) or in accordance with Departmental Memorandum 11-11-1 
(National Customs Rulings) and in the case of Mexico must be issued 
pursuant to Article 34 of the Codigo Fiscal de la Federacion and 
pursuant to Article 30 of the Ley Aduanera or the applicable provision 
of Mexican law related to advance rulings under Article 509 of the 
NAFTA; and
    (2) ``Consistent treatment'' means the established application by 
the Canadian or Mexican customs administration that can be substantiated 
by the continued acceptance by the customs administration of the tariff 
classification or value of identical materials on importations of the 
materials into Canada or Mexico by the same importer over a period of 
not less than two years immediately prior to the date of signature of 
the Certificate of Origin for the good that is the subject of the 
determination referred to in paragraph (d) of this section, provided 
that with regard to those importations:
    (i) The tariff classification or value of the materials was not the 
subject of a verification, review or appeal by that customs 
administration on the date of

[[Page 387]]

the determination under paragraph (d) of this section; and
    (ii) The materials had not been accorded a different tariff 
classification or value by one or more district, regional or local 
offices of that customs administration on the date of the determination 
under paragraph (d) of this section.
    (f) Detrimental reliance. If Customs proposes to deny preferential 
tariff treatment to a good pursuant to a determination made under 
paragraph (d) of this section, Customs shall postpone the application of 
the determination for a period not exceeding 90 calendar days from the 
date of issuance of the determination where the U.S. importer of the 
good, or the person who completed and signed the Certificate of Origin 
upon which the claim for preferential tariff treatment for the good was 
based, demonstrates to the satisfaction of Customs that it has relied in 
good faith to its detriment on the tariff classification or value 
applied to such materials by the customs administration of the country 
from which the good was exported.

[T.D 95-68, 60 FR 46364, Sept. 6, 1995; T.D. 95-68, 61 FR 1829, Jan. 24, 
1996]



                           Subpart H_Penalties



Sec. 181.81  Applicability to NAFTA transactions.

    Except as otherwise provided in Sec. 181.82 of this part, all 
criminal, civil or administrative penalties which may be imposed on U.S. 
importers, exporters and producers for violations of the Customs and 
related laws and regulations shall also apply to U.S. importers, 
exporters and producers for violations of the laws and regulations 
relating to the NAFTA.



Sec. 181.82  Exceptions to application of penalties.

    (a) General. A U.S. importer who makes a corrected declaration under 
Sec. 181.21(b) of this part shall not be subject to civil or 
administrative penalties for having made an incorrect declaration, 
provided that the corrected declaration was voluntarily made. In 
addition, civil or administrative penalties provided for under the U.S. 
Customs laws and regulations shall not be imposed on an exporter or 
producer in the United States who voluntarily provides written 
notification pursuant to Sec. 181.11(d) of this part with respect to 
the making of an incorrect certification.
    (b) ``Voluntarily'' defined--(1) General. For purposes of paragraph 
(a) of this section, the making of a corrected declaration or the 
providing of written notification of an incorrect certification will be 
deemed to have been done voluntarily if:
    (i) Done before the commencement of a formal investigation;
    (ii) Done before any of the events specified in Sec. 162.74(i) of 
this chapter have occurred;
    (iii) Done within 30 calendar days after either the U.S. importer 
with respect to a declaration that an imported good qualified as an 
originating good, or the U.S. exporter or producer with respect to a 
certification pertaining to a good exported to Canada or Mexico, had 
reason to believe that the declaration or certification was not correct;
    (iv) Accompanied by a written statement setting forth the 
information specified in paragraph (b)(3) of this section; and
    (v) In the case of a corrected declaration, accompanied or followed 
by a tender of any actual loss of duties in accordance with paragraph 
(b)(5) of this section.
    (2) Cases involving fraud. Notwithstanding paragraph (b)(1) of this 
section, a person who acted by means of fraud in making an incorrect 
declaration or certification may not make a voluntary correction 
thereof. For purposes of this paragraph (b)(2), the term ``fraud'' shall 
have the meaning set forth in paragraph (B)(3) of appendix B to part 171 
of this chapter.
    (3) Written statement. For purposes of paragraph (a) of this 
section, each corrected declaration or notification of an incorrect 
certification shall be accompanied by a written statement which:
    (i) Identifies the class or kind of good to which the incorrect 
declaration or certification relates;
    (ii) Identifies each import or export transaction affected by the 
incorrect declaration or certification with reference to each port of 
importation or exportation and the approximate date

[[Page 388]]

of each importation or exportation. A U.S. producer who provides written 
notification that certain information in a Certificate of Origin is 
incorrect and who is unable to identify the specific export transactions 
under this paragraph shall provide as much information concerning those 
transactions as the producer, by the exercise of good faith and due 
diligence, is able to obtain;
    (iii) Specifies the nature of the incorrect statements or omissions 
regarding the declaration or certification; and
    (iv) Sets forth, to the best of the person's knowledge, the true and 
accurate information or data which should have been covered by or 
provided in the declaration or certification, and states that the person 
will provide any additional information or data which is unknown at the 
time of making the corrected declaration or certification within 30 
calendar days or within any extension of that 30-day period as Customs 
may permit in order for the person to obtain the information or data.
    (4) Substantial compliance. For purposes of this section, a person 
shall be deemed to have voluntarily corrected a declaration or 
certification even though that person provides corrected information in 
a manner which does not conform to the requirements of the written 
statement specified in paragraph (b)(3) of this section, provided that:
    (i) Customs is satisfied that the information was provided before 
the commencement of a formal investigation; and
    (ii) The information provided includes, orally or in writing, 
substantially the same information as that specified in paragraph (b)(3) 
of this section.
    (5) Tender of actual loss of duties. A U.S. importer who makes a 
corrected declaration shall tender any actual loss of duties at the time 
of making the corrected declaration, or within 30 calendar days 
thereafter, or within any extension of that 30-day period as Customs may 
allow in order for the importer to obtain the information or data 
necessary to calculate the duties owed.
    (6) Applicability of prior disclosure provisions. Where a person 
fails to meet the requirements of this section because the correction of 
the declaration or the written notification of an incorrect 
certification is not considered to be done voluntarily as provided in 
this section, that person may nevertheless qualify for prior disclosure 
treatment under 19 U.S.C. 1592(c)(4) and the regulations issued 
thereunder.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 99-64, 64 FR 
43267, Aug. 10, 1999]



                   Subpart I_Advance Ruling Procedures



Sec. 181.91  Applicability.

    This subpart sets forth the rules which govern the issuance and 
application of advance rulings under Article 509 of the NAFTA and the 
procedures which apply for purposes of review of advance rulings under 
Article 510 of the NAFTA. Importers in the United States and exporters 
and producers located in Canada or Mexico may request and obtain an 
advance ruling on a NAFTA transaction only in accordance with the 
provisions of this subpart whenever the requested ruling involves a 
subject matter specified in Sec. 181.92(b)(6) of this part. 
Accordingly, the provisions of this subpart shall apply in lieu of the 
administrative ruling provisions contained in subpart A of part 177 of 
this chapter except where the request for a ruling involves a subject 
matter not specified in Sec. 181.92(b)(6).



Sec. 181.92  Definitions and general NAFTA advance ruling practice.

    (a) Definitions. For purposes of this subpart:
    (1) An advance ruling is a written statement issued by the 
Headquarters Office or the National Commodity Specialist Division or by 
such other office as designated by the Commissioner of Customs that 
interprets and applies the provisions of NAFTA to a specific set of 
facts involving any subject matter specified in Sec. 181.92(b)(6) of 
this part. An ``advance ruling letter'' is an advance ruling issued in 
response to a written request and set forth in a letter addressed to the 
person making the request or his designee. A ``published advance 
ruling'' is an advance ruling

[[Page 389]]

which has been published in full text in the Customs Bulletin.
    (2) An authorized agent is a person expressly authorized by a 
principal to act on his or her behalf. An advance ruling requested by an 
attorney or other person acting as an agent must include a statement 
describing the authority under which the request is made. With the 
exception of attorneys whose authority to represent is known, any person 
appearing before Customs as an agent in connection with an advance 
ruling request may be required to present evidence of his or her 
authority to represent the principal. The foregoing requirements will 
not apply to an individual representing his or her full-time employer or 
to a bona-fide officer, director or other qualified representative of a 
corporation, association, or organized group.
    (3) The term Headquarters Office, means the Regulations and Rulings, 
Office of International Trade at Headquarters, U. S. Customs and Border 
Protection, Washington, DC.
    (4) An information letter is a written statement issued by the 
Headquarters Office or the National Commodity Specialist Division or by 
such other office as designated by the Commissioner of Customs that does 
no more than call attention to a well-established interpretation of 
principles under the NAFTA, without applying it to a specific set of 
facts. If Customs believes that general information may be of some 
benefit to the person making the request, an information letter may be 
issued in response to a request for an advance ruling when:
    (i) The request suggests that general information, rather than an 
advance ruling, is actually being sought;
    (ii) The request is incomplete or otherwise fails to meet the 
requirements set forth in this subpart; or
    (iii) The requested advance ruling cannot be issued for any other 
reason.
    (5) A NAFTA transaction is an act or activity to which the NAFTA 
provisions apply. A ``prospective'' NAFTA transaction is one that is 
merely contemplated or is currently being undertaken but has not 
resulted in any arrival or in the filing of any entry or entry summary 
or other document or in any other act so as to bring the transaction, or 
any part of it, under the jurisdiction of any Customs office. A 
``current'' NAFTA transaction is one which is presently under 
consideration by a field office of Customs. A ``completed'' NAFTA 
transaction is one which has been acted upon by a Customs field office 
and with respect to which that office has issued a determination which 
is final in nature, but is (or was) subject to appeal, petition, protest 
or other review as provided in the applicable Customs laws and 
regulations. An ``ongoing'' NAFTA transaction is a series of identical, 
recurring transactions, consisting of current and completed transactions 
where future transactions are contemplated.
    (6) The term National Commodity Specialist Division means the 
National Commodity Specialist Division, U.S. Customs and Border 
Protection, New York, New York.
    (b) General advance ruling practice. An advance ruling may be 
requested under the provisions of this subpart with respect to 
prospective NAFTA transactions. An advance ruling will be based on the 
facts and circumstances presented by the requester.
    (1) Prospective NAFTA transactions. It is in the interest of the 
sound administration of the NAFTA that persons engaging in any 
transaction affected by NAFTA fully understand the consequences of that 
transaction prior to its consummation. For this reason, Customs will 
give full and careful consideration to written requests from importers 
in the United States and exporters or producers in Canada or Mexico for 
advance rulings or information setting forth, with respect to a 
specifically described transaction, a definitive interpretation of 
applicable law or other appropriate information.
    (2) Current or ongoing NAFTA transactions. A question arising in 
connection with a NAFTA transaction already before a Customs field 
office by reason of arrival, entry or otherwise will be resolved by that 
office in accordance with the principles and precedents previously 
announced by the Headquarters Office. If such a question cannot be 
resolved on the basis of clearly established rules set forth in

[[Page 390]]

the NAFTA or the regulations thereunder, or in applicable Treasury 
Decisions, rulings, opinions, or court decisions published in the 
Customs Bulletin, that field office may, if it believes it appropriate, 
forward the question to the Headquarters Office for consideration.
    (3) Completed NAFTA transactions. A question arising in connection 
with an entry of merchandise which has been liquidated, or in connection 
with any other completed NAFTA transaction, may not be the subject of an 
advance ruling request under this subpart.
    (4) Oral advice. Customs will not issue an advance ruling in 
response to an oral request. Oral opinions or advice of Customs 
personnel are not binding on Customs. However, oral inquiries may be 
made to Customs offices regarding existing advance rulings, the scope of 
such advance rulings, the types of transactions with respect to which 
Customs will issue advance rulings, the scope of the advance rulings 
which may be issued, or the procedures to be followed in submitting 
advance ruling requests, as prescribed in this subpart.
    (5) Who may request an advance ruling. An advance ruling may be 
requested by any of the following persons (individuals, corporations, 
partnerships, associations, or other entities or groups) having a direct 
and demonstrable interest in the question or questions presented in the 
advance ruling request, or by the authorized agent of any such person:
    (i) An importer in the United States;
    (ii) An exporter or a producer of a good in Canada or Mexico; or
    (iii) A Canadian or Mexican producer of a material that is used in 
the production of a good imported into the United States, but only with 
regard to that material and only in regard to a matter described in 
paragraphs (b)(6)(i) through (v) and (vii) of this section.
    (6) Subject matter of advance rulings. Customs shall issue advance 
rulings under this subpart concerning the following:
    (i) Whether materials imported from a country other than the United 
States, Canada or Mexico and used in the production of a good undergo an 
applicable change in tariff classification set forth in General Note 12, 
HTSUS, as a result of production occurring entirely in the United 
States, Canada and/or Mexico;
    (ii) Whether a good satisfies a regional value-content requirement 
under the transaction value method or under the net cost method as 
provided for in General Note 12, HTSUS, and in this part;
    (iii) For purposes of determining whether a good satisfies a 
regional value-content requirement under General Note 12, HTSUS, and 
under this part, the appropriate basis or method for value to be applied 
by an exporter or a producer in Canada or Mexico, in accordance with the 
principles set forth in the appendix to this part, for calculating the 
transaction value of the good or of the materials used in the production 
of the good;
    (iv) For purposes of determining whether a good satisfies a regional 
value-content requirement under General Note 12, HTSUS, and under this 
part, the appropriate basis or method for reasonably allocating costs, 
in accordance with the allocation methods set forth in the appendix to 
this part, for calculating the net cost of the good or the value of an 
intermediate material;
    (v) Whether a good qualifies as an originating good under General 
Note 12, HTSUS, and under the appendix to this part;
    (vi) Whether a good that re-enters the United States after having 
been exported from the United States to Canada or Mexico for repair or 
alteration qualifies for duty-free treatment in accordance with Sec. 
181.64 of this part;
    (vii) Whether the proposed or actual marking of a good satisfies 
country of origin marking requirements under part 134 of this chapter 
and under the Marking Rules set forth in part 102 of this chapter;
    (viii) Whether an originating good qualifies as a good of Canada or 
Mexico under Annex 300-B, Annex 302.2 and Chapter Seven of the NAFTA; 
and
    (ix) Whether a good is a qualifying good under Chapter Seven of the 
NAFTA.

[[Page 391]]



Sec. 181.93  Submission of advance ruling requests.

    (a) Form. A request for an advance ruling should be written in the 
English language and in the form of a letter. For any subject matter 
specified in Sec. 181.92(b)(6) (i), (v), (vi), (vii), (viii) or (ix) of 
this part, the request may be directed either to the Commissioner of 
U.S. Customs and Border Protection, Attention: Regulations and Rulings, 
Office of International Trade, Washington, DC 20229, or to the National 
Commodity Specialist Division, U.S. Customs and Border Protection, One 
Penn Plaza, 10th Floor, New York, NY 10119. For any subject matter 
specified in Sec. 181.92(b)(6)(ii), (iii) or (iv) of this part, the 
request must be directed to the Commissioner of U.S. Customs and Border 
Protection, Attention: Regulations and Rulings, Office of International 
Trade, Washington, DC 20229.
    (b) Content--(1) General. Each request for an advance ruling must 
identify the specific subject matter under Sec. 181.92(b)(6) of this 
part to which the request relates, must contain a complete statement of 
all relevant facts relating to the NAFTA transaction and must state that 
the information presented is accurate and complete. The following facts 
must be included: the names, addresses, and other identifying 
information of all interested parties (if known); the name of the port 
or place at which any good involved in the transaction will be imported 
or which will otherwise have jurisdiction with respect to the act or 
activity described in the transaction; and a description of the 
transaction itself, appropriate in detail to the subject matter of the 
requested advance ruling. Where the request for an advance ruling is 
submitted by or on behalf of the importer of the good involved in the 
transaction, the request must include the name and address of the 
exporter and, if known, producer of the good. Where the request for an 
advance ruling is submitted by or on behalf of the exporter of the good 
involved in the transaction, the request must include the name and 
address of the producer and importer of the good, if known. Where the 
request for an advance ruling is submitted by or on behalf of the 
producer of the good involved in the transaction, the request must 
include the name and address of the exporter and importer of the good, 
if known. In addition, where relevant to the issue that is the subject 
of the request for an advance ruling, and regardless of the specific 
nature of the advance ruling requested, the request must include:
    (i) A copy of any advance ruling or other ruling with respect to the 
tariff classification of the good that has been issued by CBP to the 
person submitting the request; or
    (ii) Sufficient information to enable CBP to classify the good where 
no advance ruling or other ruling with respect to the tariff 
classification of the good has been issued by CBP to the person 
submitting the request. Such information includes a full description of 
the good, including, where relevant, the composition of the good, a 
description of the process by which the good is manufactured, a 
description of the packaging in which the good is contained, the 
anticipated use of the good and its commercial, common or technical 
designation, and product literature, drawings, photographs or 
schematics.
    (2) Description of transaction--(i) General. The prospective Customs 
transaction to which the advance ruling request relates must be 
described in sufficient detail to permit proper application of the 
relevant NAFTA provisions.
    (ii) Tariff change rulings--(A) General. If the transaction involves 
the importation of a good or material for which a ruling is requested as 
to whether a change in tariff classification has occurred, the request 
should set forth: The principal or chief use of the good or material in 
the United States and the commercial, common, or technical designation 
of the good or material; if the good or material is composed of two or 
more substances, the relative quantity (by both weight and by volume) 
and value of each substance; any applicable special invoicing 
requirements set forth in part 141 of this chapter (if known); and any 
other information which may assist in determining the appropriate tariff 
classification of the good or material. The advance ruling request 
should also note, whenever germane, the purchase price of the good or 
material, and its approximate

[[Page 392]]

selling price in the United States. Each individual request for an 
advance ruling must be limited to five merchandise items, all of which 
must be of the same class or kind. Only NAFTA tariff change rulings will 
be issued under this subpart. Tariff classification rulings which do not 
involve the application of the NAFTA shall be issued under part 177 of 
this chapter.
    (B) Issues involving a change in tariff classification of a 
material. Where the request for the advance ruling involves the 
application of a rule of origin that requires an assessment of whether 
materials used in the production of an imported good undergo an 
applicable change in tariff classification, the request must list each 
material used in the production of the good and must:
    (1) Identify each material which is claimed to be an originating 
material and provide a complete description of each such material, 
including the basis for the claim as to originating status;
    (2) Identify each material which is a non-originating material, or 
for which the origin is unknown, and provide a complete description of 
each such material, including its tariff classification if known; and
    (3) Describe all processing operations employed in the production of 
the good, the location of each operation and the sequence in which the 
operations occur.
    (iii) NAFTA rulings on regional value content. NAFTA advance ruling 
requests, if involving the issue of whether a good satisfies a regional 
value content requirement under the transaction value method or under 
the net cost method, or under both methods, as provided for in General 
Note 12, HTSUS, and in the appendix to this part, must specify each 
method under which eligibility is sought. Where the transaction value 
method is specified, the advance ruling request must include: 
information sufficient to calculate the transaction value of the good in 
accordance with schedule II of the appendix to this part with respect to 
the transaction of the producer of the good, adjusted to an F.O.B. 
basis; information sufficient to calculate the value of each non-
originating material, or material the origin of which is unknown, that 
is used by the producer in the production of the good in accordance with 
the provisions of section 7 and, where applicable, section 6(10) of the 
appendix to this part; a complete description of each material that is 
claimed to be an originating material and that is used in the production 
of the good, including the basis for the claim as to originating status; 
information sufficient to permit an examination of the factors 
enumerated in schedule III or VIII of the appendix to this part where 
the advance ruling request involves an issue of whether, with respect to 
the good or material under the applicable schedule, the transaction 
value is acceptable; and information sufficient for any other 
circumstance to make any determination relevant to the application of 
the regional value content requirement to the good. Where the net cost 
method is specified, the advance ruling request must include: a list of 
all product, period and other costs relevant to determining the total 
cost of the good as defined in the appendix to this part; a list of all 
excluded costs to be subtracted from the total cost of the good as 
provided in the appendix to this part; information sufficient to 
calculate the value of each non-originating material, or material the 
origin of which is unknown, that is used in the production of the good, 
in accordance with section 7 of the appendix to this part; the basis for 
any allocation of costs in accordance with schedule VII of the appendix 
to this part; the period over which the net cost calculation is to be 
made; and any other information relevant to determining the appropriate 
value of any cost under this part. Where the advance ruling request 
concerns only the calculation of an element of a regional value content 
formula, and with regard to the information specified in paragraphs 
(b)(1) through (b)(5) of this section, the request need only contain the 
following: the information in paragraph (b)(1), other than the 
information specified in paragraph (b)(1)(i) or (b)(1)(ii); the 
information in paragraph (b)(5); and any information in this paragraph 
(b)(2)(iii) which is relevant to the issue that is the subject of the 
request.
    (iv) NAFTA rulings on producer materials. W here the advance ruling 
request

[[Page 393]]

involves an issue with respect to an intermediate material under Article 
402(10) of the NAFTA (see section 7(4) of the appendix to this part), 
the request must contain sufficient information to determine the origin 
and value of the material in accordance with Article 402(11) of the 
NAFTA (see section 7(6) of the appendix to this part). Where the advance 
ruling request is submitted by a Canadian or Mexican producer of a 
material under Sec. 181.92(b)(5)(iii) of this part and concerns only 
the origin of such material, and with regard to the information 
specified in paragraphs (b)(1) through (b)(5) of this section, the 
request need only include the following: the information in paragraph 
(b)(1), including any information specified in paragraph (b)(1)(i) or 
(b)(1)(ii) which is relevant to the issue that is the subject of the 
request; any information in paragraph (b)(2)(ii)(B) which is relevant to 
the issue that is the subject of the request; a sample as provided for 
in paragraph (b)(3) if relevant to the issue that is the subject of the 
request; and the information in paragraph (b)(5).
    (3) Samples. Each request for an advance ruling should be 
accompanied by photographs, drawings, or other pictorial representations 
of the good and, whenever possible, by a sample of the good unless a 
precise description of the good is not essential to the advance ruling 
requested. Any good consisting of materials in chemical or physical 
combination for which a laboratory analysis has been prepared by or for 
the manufacturer should include a copy of that analysis, flow charts, 
CAS number, and related information. A sample submitted in connection 
with a request for an advance ruling becomes a part of the CBP file in 
the matter and will be retained until the advance ruling is issued or 
the advance ruling request is otherwise disposed of. A sample should 
only be submitted with the understanding that all or a part of it may be 
damaged or consumed in the course of examination, testing, analysis, or 
other actions undertaken in connection with the advance ruling request.
    (4) Related documents. If the question or questions presented in the 
advance ruling request directly relate to matters set forth in any 
invoice, contract, agreement, or other document, a copy of the document 
must be submitted with the request. (Original documents should not be 
submitted inasmuch as any documents or exhibits furnished with the 
advance ruling request become a part of the CBP file in the matter and 
cannot be returned.) The relevant facts reflected in any documents 
submitted, and an explanation of their bearing on the question or 
questions presented, must be expressly set forth in the advance ruling 
request.
    (5) Prior or current transactions--(i) General. Each request for an 
advance ruling must state:
    (A) Whether, to the knowledge of the person submitting the request, 
the same transaction or issue, or one identical to it, has ever been 
considered, or is currently being considered by any CBP office;
    (B) Whether, to the knowledge of the person submitting the request, 
the issue involved has ever been, or is currently, the subject of:
    (1) Review by the United States Court of International Trade, the 
United States Court of Appeals for the Federal Circuit, or any court of 
appeal therefrom, or review by a judicial or quasi-judicial body in 
Canada or Mexico;
    (2) A verification of origin performed in the United States, Canada 
or Mexico;
    (3) An administrative appeal in the United States, Canada or Mexico; 
or
    (4) A request for an advance ruling under this subpart, or a request 
for an advance ruling in Canada or Mexico under an appropriate authority 
referred to in Sec. 181.76(e)(1) of this part;
    (C) The status or disposition of any matter on which an affirmative 
statement is made under paragraph (b)(5)(i)(B) of this section; and
    (D) Whether the transaction described in the advance ruling request 
is but one of a series of similar and related transactions.
    (ii) Change in status of transaction. If a prospective transaction 
which is the subject of an advance ruling request becomes a current 
transaction, the person who submitted the request shall so notify the 
office processing the request.

[[Page 394]]

    (6) Statement of position. If the request for an advance ruling asks 
that a particular determination or conclusion be reached in the advance 
ruling letter, a statement must be included in the request setting forth 
the basis for that determination or conclusion, together with a citation 
of all relevant supporting authority.
    (7) Privileged or confidential information. Information which is 
claimed to constitute trade secrets or privileged or confidential 
commercial or financial information regarding the business transactions 
of private parties the disclosure of which would cause substantial harm 
to the competitive position of the person making the request (or of 
another interested party) must be identified clearly, and the reasons 
such information should not be disclosed, including, where applicable, 
the reasons the disclosure of the information would prejudice the 
competitive position of the person making the request (or of another 
interested party), must be set forth. An advance ruling will not be 
issued until all trade secret, privilege or confidentiality issues are 
resolved (see Sec. 181.99(a)(3) of this part).
    (c) Signing; instruction as to reply. The request for an advance 
ruling must be signed by a person authorized to make the request, as 
described in Sec. 181.92(b)(5) of this part. An advance ruling 
requested by a principal or authorized agent may direct that the advance 
ruling letter be addressed to the other.
    (d) Requests for immediate consideration. CBP will normally process 
requests for advance rulings in the order they are received and as 
expeditiously as possible, as specified in Sec. 181.99 of this part. 
However, a request that a particular matter be given consideration ahead 
of its regular order, if made in writing at the time the request is 
submitted, or subsequent thereto, and showing a clear need for such 
treatment, will be given consideration as the particular circumstances 
warrant and permit. Requests for special consideration made by telegram 
or electronic transmission will be treated in the same manner as 
requests made by letter, but advance rulings will not be issued by 
telegram or electronic transmission. A telegram or electronic 
transmission must be followed up with a signed original within 14 
calendar days of the submission of the telegram or electronic 
transmission. In no event can any assurance be given that a particular 
request for an advance ruling will be acted upon by the time requested.

[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 99-64, 64 FR 
43267, Aug. 10, 1999; CBP Dec. 07-76, 72 FR 52783, Sept. 17, 2007]



Sec. 181.94  Nonconforming requests for advance rulings.

    A person submitting a request for an advance ruling that does not 
comply with all of the provisions of this subpart will be so notified in 
writing, and the requirements that have not been met will be pointed 
out. Such person will be given a period of 30 calendar days from the 
date of the notice (or such longer period as the notice may provide) to 
supply any additional information that is requested or otherwise conform 
the advance ruling request to the requirements referred to in the 
notice. The Customs file with respect to advance ruling requests which 
are not brought into compliance with the provisions of this subpart 
within the period of time allowed will be administratively closed and 
the request removed from active consideration. A request for an advance 
ruling that is removed from active consideration by reason of failure to 
comply with the provisions of this subpart may be treated as withdrawn. 
A failure to comply with the provisions of this subpart will result in 
the rejection of the advance ruling request with the notice specifying 
the deficiencies.



Sec. 181.95  Oral discussion of issues.

    (a) General. A person submitting a request for an advance ruling and 
desiring an opportunity to orally discuss the issue or issues involved 
should indicate that desire in writing at the time the advance ruling 
request is filed. Such a discussion will only be scheduled when, in the 
opinion of the Customs personnel by whom the advance ruling request is 
under consideration, a conference will be helpful in deciding the issue 
or issues involved or when a determination or conclusion contrary to 
that advocated in the advance ruling

[[Page 395]]

request is contemplated. Conferences are scheduled for the purpose of 
affording the parties an opportunity to freely and openly discuss the 
matters set forth in the advance ruling request. Accordingly, the 
parties will not be bound by any argument or position advocated or 
agreed to, expressly or by implication, during the conference unless 
either party subsequently agrees to be so bound in writing. The 
conference will not conclude with the issuance of an advance ruling 
letter.
    (b) Time, place and number of conferences. If a request for a 
conference is granted, the person making the request will be notified of 
the time and place of the conference. No more than one conference with 
respect to the matters set forth in an advance ruling request will be 
scheduled, unless, in the opinion of the Customs personnel by whom the 
advance ruling request is under consideration, additional conferences 
are necessary.
    (c) Representation. A person whose request for a conference has been 
granted may be accompanied at that conference by counsel or other 
representatives, or may designate such persons to attend the conference 
in his or her place.
    (d) Additional information presented at conferences. It will be the 
responsibility of the person submitting the request for an advance 
ruling to provide for inclusion in the Customs file in the matter a 
written record setting forth any and all additional information, 
documents, and exhibits introduced during the conference to the extent 
that person considers such material relevant to the consideration of the 
advance ruling request. Such information, documents and exhibits shall 
be given consideration only if received by Customs within 30 calendar 
days following the conference.



Sec. 181.96  Change in status of transaction.

    Each person submitting a request for an advance ruling in connection 
with a NAFTA transaction must immediately advise Customs in writing of 
any change in the status of that transaction upon becoming aware of the 
change. In particular, Customs must be advised when any transaction 
described in the advance ruling request as prospective becomes current 
and under the jurisdiction of a Customs field office. In addition, any 
person engaged in a NAFTA transaction coming under the jurisdiction of a 
Customs field office who has previously requested a NAFTA advance ruling 
with respect to that transaction must advise the field office of that 
fact.



Sec. 181.97  Withdrawal of NAFTA advance ruling requests.

    Any request for an advance ruling may be withdrawn by the person 
submitting it at any time before the issuance of an advance ruling 
letter or any other final disposition of the request. All 
correspondence, documents, and exhibits submitted in connection with the 
request will be retained in the Customs file and will not be returned. 
In addition, the Headquarters Office may forward, to Customs field 
offices which have or may have jurisdiction over the transaction to 
which the advance ruling request relates, its views in regard to the 
transaction or the issues involved therein, as well as appropriate 
information derived from materials in the Customs file.



Sec. 181.98  Situations in which no NAFTA advance ruling may be issued.

    (a) General. No advance ruling letter will be issued in response to 
a request therefor which fails to comply with the provisions of this 
subpart. No advance ruling letter will be issued in regard to a 
completed transaction.
    (b) Pending matters. Where a request for an advance ruling involves 
an issue that is under review in connection with an origin verification 
under subpart G of this part or that is the subject of an administrative 
review procedure provided for in subpart J of this part or in part 174 
of this chapter, Customs may decline to issue the requested advance 
ruling. In addition, no NAFTA advance ruling letter will be issued with 
respect to any issue which is pending before the United States Court of 
International Trade, the United States Court of Appeals for the Federal 
Circuit, or any court of appeal therefrom. Litigation before any other 
court will not preclude the issuance of an advance ruling letter, 
provided neither Customs

[[Page 396]]

nor any of its officers or agents is named as a party to the action.



Sec. 181.99  Issuance of NAFTA advance rulings or other advice.

    (a) NAFTA advance ruling letters--(1) General. Except as otherwise 
provided in paragraph (a)(2) of this section, Customs will, within 120 
calendar days of receipt of a request, including any required 
information supplemental thereto, issue an advance ruling letter in the 
English language setting forth the position of Customs and the reasons 
therefor with respect to a specifically described Customs transaction 
whenever a request for such an advance ruling is submitted in accordance 
with the provisions of this subpart and it is in the sound 
administration of the NAFTA provisions to do so. Otherwise, a request 
for an advance ruling will be answered by an information letter or, in 
those situations in which general information is likely to be of little 
or no value, by a letter stating that no advance ruling can be issued. 
In the course of evaluating the advance ruling request Customs may 
solicit supplemental information from the person requesting the advance 
ruling. The submission of supplemental information will extend the time 
for response. The time for response will also be extended if it is 
necessary to obtain information from other government agencies or in the 
form of a laboratory analysis.
    (2) Submission of NAFTA advance ruling letters to field offices. Any 
importer engaging in a NAFTA transaction with respect to which an 
advance ruling letter has been issued under this subpart either must 
ensure that a copy of the advance ruling letter is attached to the 
documents filed with the appropriate Customs office in connection with 
that transaction or must otherwise indicate with the information filed 
for that transaction that an advance ruling has been received. Any 
person receiving an advance ruling stating Customs determination must 
set forth such determination in the documents or information filed in 
connection with any subsequent entry of that merchandise; failure to do 
so may result in a rejection of the entry and the imposition of such 
penalties as may be appropriate. An advance ruling received after the 
filing of such documents or information must immediately be brought to 
the attention of the appropriate Customs field office.
    (3) Disclosure of NAFTA advance ruling letters. No part of the 
advance ruling letter, including names, addresses, or information 
relating to the business transactions of private parties, shall be 
deemed to constitute privileged or confidential commercial or financial 
information or trade secrets exempt from disclosure pursuant to the 
Freedom of Information Act, as amended (5 U.S.C. 552), and part 103 of 
this chapter, or shall be deemed to be subject to the confidentiality 
principle set forth in Sec. 181.121 of this part, unless, as provided 
in Sec. 181.93(b)(7) of this part, the information claimed to be exempt 
from disclosure is clearly identified and a valid basis for 
nondisclosure is set forth. Before the issuance of the advance ruling 
letter, the person submitting the advance ruling request will be 
notified of any decision adverse to his request for nondisclosure and 
will, upon written request to Customs within 10 working days of the date 
of notification, be permitted to withdraw the advance ruling request. If 
in the opinion of Customs an impasse exists on the issue of 
confidentiality and the person who submitted the advance ruling request 
does not withdraw the request, Customs will decline to issue the advance 
ruling. All advance ruling letters issued by Customs will be available, 
upon written request, for inspection and copying by any person (with any 
portions determined to be exempt from disclosure deleted).
    (4) Penalties for misrepresented or omitted material facts or for 
noncompliance. If Customs determines that an issued advance ruling was 
based on incorrect information, the person to whom the advance ruling 
was issued may be subject to appropriate penalties unless that person 
demonstrates that he used reasonable care and acted in good faith in 
presenting the facts and circumstances on which the advance ruling was 
based. In addition, Customs may apply such measures as the circumstances 
may warrant in a case where a person to whom an advance ruling was 
issued has failed to act in accordance with the

[[Page 397]]

terms and conditions of the advance ruling.
    (b) Other NAFTA advice and guidance. The Headquarters Office may on 
its own initiative from time to time issue other external advice and 
guidance with respect to issues or transactions arising under the NAFTA 
which come to its attention. Such NAFTA advice and guidance, which 
represent the official position of Customs and which are likely to be of 
widespread interest and application, are published in the Customs 
Bulletin, as described in Sec. 181.101 of this part. Nothing in this 
subpart shall preclude Customs from issuing advice and guidance to its 
field offices concerning the application of the NAFTA.



Sec. 181.100  Effect of NAFTA advance ruling letters; modification and revocation.

    (a) Effect of NAFTA advance ruling letters--(1) General. An advance 
ruling letter issued by Customs under the provisions of this subpart 
represents the official position of Customs with respect to the 
particular transaction or issue described therein and is binding on all 
Customs personnel in accordance with the provisions of this subpart 
until modified or revoked. In the absence of a change of practice or 
other modification or revocation which affects the principle of the 
advance ruling set forth in the advance ruling letter, that principle 
may be cited as authority in the disposition of transactions involving 
the same circumstances. An advance ruling letter is generally effective 
on the date it is issued or such later date as may be specified in the 
advance ruling and, commencing on its effective date, may be applied to 
entries for consumption and warehouse withdrawals for consumption which 
are unliquidated, or to other transactions with respect to which Customs 
has not taken final action on that date. See, however, paragraph (b) of 
this section (ruling letters which modify previous advance ruling 
letters) and Sec. 181.101 of this part (advance ruling letters 
published in the Customs Bulletin).
    (2) Application of NAFTA rulings to transactions--(i) General. Each 
NAFTA ruling letter is issued on the assumption that all of the 
information furnished in connection with the ruling request and 
incorporated in the ruling letter, either directly, by reference, or by 
implication, is accurate and complete in every material respect. The 
application of an advance ruling letter by a Customs field office to the 
transaction to which it is purported to relate is subject to the 
verification of the facts incorporated in the advance ruling letter, a 
comparison of the transaction described therein to the actual 
transaction, and the satisfaction of any conditions on which the advance 
ruling was based, and if the facts are materially different or a 
condition has not been satisfied, the treatment specified in the advance 
ruling will not be applied to the actual transaction. If, in the opinion 
of any Customs field office by whom the transaction is under 
consideration or review, the advance ruling letter should be modified or 
revoked, the findings and recommendations of that office will be 
forwarded to the Headquarters Office for consideration, prior to any 
final disposition with respect to the transaction by that office. If the 
transaction described in the NAFTA advance ruling letter and the actual 
transaction are the same, and any and all conditions set forth in the 
advance ruling letter have been satisfied, the advance ruling will be 
applied to the transaction.
    (ii) Tariff change rulings. Each advance ruling letter concerning 
whether a change in tariff classification has occurred will be applied 
only with respect to transactions involving either articles which are 
identical to the sample submitted with the advance ruling request and 
reflect the same processing or articles which conform to the description 
set forth in the advance ruling letter.
    (iii) Regional value content rulings. Each advance ruling letter 
concerning the application of a regional value content requirement will 
be applied only with respect to transactions involving the same 
merchandise and identical facts.
    (3) Reliance on NAFTA advance rulings by others. An advance ruling 
letter is subject to modification or revocation without notice to any 
person other than the person to whom the letter was

[[Page 398]]

addressed. Accordingly, no other person may rely on the advance ruling 
letter or assume that the principles of that advance ruling will be 
applied in connection with any transaction other than the one described 
in the letter. However, any person eligible to request an advance ruling 
under Sec. 181.92(b)(5) of this part may request information as to 
whether a previously-issued advance ruling letter has been modified or 
revoked by writing the Commissioner of Customs and Border Protection, 
Attention: Regulations and Rulings, Office of International Trade, 
Washington, DC 20229, and either enclosing a copy of the advance ruling 
letter or furnishing other information sufficient to permit the advance 
ruling letter in question to be identified.
    (b) Modification or revocation of NAFTA advance ruling letters--(1) 
General. Any NAFTA advance ruling letter may be modified or revoked by 
Customs Headquarters in any of the following circumstances or for any of 
the following purposes, provided that written notice of the modification 
or revocation is given to the person to whom the advance ruling letter 
was addressed:
    (i) If the ruling letter reflects or is based on an error:
    (A) Of fact;
    (B) In the tariff classification of a good or material that is the 
subject of the ruling;
    (C) In the application of a regional value-content requirement under 
General Note 12, HTSUS, and under this part;
    (D) In the application of the rules for determining whether a good 
qualifies as a good of Canada or Mexico under Annex 300-B, Annex 302.2 
or Chapter Seven of the NAFTA;
    (E) In the application of the rules for determining whether a good 
is a qualifying good under Chapter Seven of the NAFTA; or
    (F) In the application of the rules for determining whether a good 
qualifies for duty-free treatment under Sec. 181.64 of this part when 
the good re-enters the United States after having been exported to 
Canada or Mexico for repair or alteration;
    (ii) If the ruling letter is not in accordance with an 
interpretation agreed on by the United States, Canada and Mexico 
regarding Chapter Three or Chapter Four of the NAFTA;
    (iii) If there is a change in the material facts or circumstances on 
which the ruling is based;
    (iv) To conform to a modification of Chapter Three, Four, Five or 
Seven of the NAFTA, or of the Marking Rules, or of the regulations set 
forth in this part; or
    (v) To conform to a judicial decision or change in domestic law.
    (2) Application of modification or revocation of NAFTA advance 
ruling letters. The modification or revocation of a NAFTA advance ruling 
letter will not be applied to entries or warehouse withdrawals for 
consumption which were made prior to the effective date of such 
modification or revocation, except where the person to whom the advance 
ruling was issued has not acted in accordance with its terms and 
conditions.
    (3) Effective dates. Generally, a NAFTA letter modifying or revoking 
an earlier advance ruling will be effective on the date it is issued. 
However, Customs may, upon request or on its own initiative, delay the 
effective date of such a modification or revocation for a period of up 
to 90 calendar days from the date of issuance. Such a delay may be 
granted at the request of the party to whom the ruling letter was 
issued, provided such party can demonstrate to the satisfaction of 
Customs that it relied on the earlier advance ruling in good faith and 
to its detriment. The evidence of such reliance must cover the period 
from the date of the letter modifying or revoking the advance ruling 
back to the date of that advance ruling and must list all transactions 
claimed to be covered by the modified or revoked advance ruling by entry 
number (or other Customs assigned number), the quantity and value of 
merchandise covered by each such transaction (where applicable), the 
ports of entry, and the dates of final action by Customs. Such evidence 
must also include contracts, purchase orders, or other materials tending 
to establish that future transactions were arranged based on the earlier 
advance ruling. The request for delay must specifically

[[Page 399]]

identify the prior ruling on which reliance is claimed. All persons 
requesting a delay will be issued a separate letter setting forth the 
period, if any, of the delay to be provided. In appropriate 
circumstances, Customs may decide to make its decision, with respect to 
a delay, applicable to all persons, irrespective of demonstrated 
reliance; in this event, a notice announcing the delay will be published 
in the Customs Bulletin and individual ruling letters will not be 
issued.



Sec. 181.101  Publication of decisions.

    Within 90 days after issuing any precedential decision relating to 
any NAFTA transaction, Customs shall publish the decision in the Customs 
Bulletin or otherwise make it available for public inspection. 
Disclosure is governed by 31 CFR part 1, part 103 of this chapter, and 
Sec. 181.99(a)(3) of this part.



Sec. 181.102  Administrative and judicial review of advance rulings.

    (a) Administrative review--(1) Submission of request for review. Any 
person who received an advance ruling issued under this subpart, or an 
authorized agent of such person, may request administrative review, at 
CBP Headquarters, of that advance ruling, including any modification or 
revocation thereof, by letter addressed to the Executive Director, 
Regulations and Rulings, Office of International Trade, U.S. Customs and 
Border Protection, Washington, DC 20229. Such request shall be filed 
within 30 calendar days after issuance of the advance ruling and shall 
set forth the following information:
    (i) The name and address of the person seeking review and the name 
and address of his authorized agent if the request is signed by such an 
agent;
    (ii) The Customs identification number or employer identification 
number in the case of a U.S. importer and authorized agent thereof, the 
employer number or importer/exporter number assigned by Revenue Canada 
in the case of a Canadian exporter or producer and authorized agent 
thereof, and the federal taxpayer registry number (RFC) in the case of a 
Mexican exporter or producer and authorized agent thereof;
    (iii) The number and date of the advance ruling at issue;
    (iv) The numbers and dates of any involved entries for consumption 
or warehouse withdrawals for consumption;
    (v) The nature of, and justification for, the objection to the 
advance ruling set forth distinctly and specifically with respect to 
each aspect of the advance ruling for which administrative review is 
sought; and
    (vi) Whether an oral discussion of the issues, as provided in Sec. 
181.95 of this part, is desired.
    (2) Issuance of review decision. Customs will normally issue a 
written decision within 120 days of receipt of the request for 
administrative review submitted under this section. However, Customs 
will, upon a reasonable showing of business necessity, issue a written 
decision within 60 days of receipt of the request for administrative 
review. For purposes of this paragraph, the date of receipt of the 
request for administrative review shall be the date on which all 
information necessary to process the request, including any information 
provided after submission of the request in connection with a 
conference, is filed with Customs.
    (b) Judicial review. Any person whose claims with regard to a 
request for administrative review of an advance ruling have been denied 
in whole or in part under this section may seek judicial review by 
filing a civil action in the United States Court of International Trade 
in accordance with 28 U.S.C. 2632 within 180 days after the date of 
mailing of notice of the denial.



        Subpart J_Review and Appeal of Adverse Marking Decisions



Sec. 181.111  Applicability.

    This subpart sets forth the circumstances and procedures under which 
exporters and producers of merchandise imported into the United States 
may obtain information about, and administrative and judicial review of, 
an adverse marking decision, as provided for in Article 510 of the 
NAFTA. This subpart does not apply to the review of advance rulings 
issued under

[[Page 400]]

Article 509 of the NAFTA (see subpart I of this part) or to the review 
of determinations that a good is not an originating good under General 
Note 12, HTSUS, and the appendix to this part (see part 174 of this 
chapter).



Sec. 181.112  Definitions.

    For purposes of this subpart, the following words and phrases have 
the meanings indicated:
    (a) Adverse marking decision means a decision made by the port 
director which an exporter or producer of merchandise believes to be 
contrary to the provisions of Annex 311 of the NAFTA and which may be 
protested by the importer pursuant to Sec. 514, Tariff Act of 1930, as 
amended (19 U.S.C. 1514), and part 174 of this chapter. Notification of 
an adverse marking decision is given to an importer in the form of a 
Customs Form 4647 (Notice to Mark and/or Notice to Redeliver) and/or by 
assessing marking duties on improperly marked merchandise. Examples of 
adverse marking decisions include determinations by the port director: 
that an imported article is not a good of a NAFTA country, as determined 
under the Marking Rules, and that it therefore cannot be marked 
``Canada'' or ``Mexico''; that a good of a NAFTA country is not marked 
in a manner which is sufficiently permanent; and that a good of a NAFTA 
country does not qualify for an exception from marking specified in 
Annex 311 of the NAFTA. Adverse marking decisions do not include: 
decisions issued in response to requests for advance rulings under 
subpart I of this part or for internal advice under part 177 of this 
chapter; decisions on protests under part 174 of this chapter; and 
determinations that an article does not qualify as an originating good 
under General Note 12, HTSUS, and the appendix to this part.
    (b) An exporter of merchandise is an exporter located in Canada or 
Mexico who must maintain records in that country relating to the 
transaction to which the adverse marking decision relates. The records 
must be sufficient to enable Customs to evaluate the merits of the 
exporter's claim(s) regarding the adverse marking decision.
    (c) A producer of merchandise is a person who grows, mines, 
harvests, fishes, traps, hunts, manufactures, processes or assembles 
such merchandise in Canada or Mexico.



Sec. 181.113  Request for basis of adverse marking decision.

    (a) Request; form and filing. The exporter or producer of the 
merchandise which is the subject of an adverse marking decision may 
request a statement concerning the basis for the decision by filing a 
typewritten request, in English, with the port director who issued the 
decision. The request should be on letterhead paper in the form of a 
letter and clearly designated as a ``Request for Basis of Adverse 
Marking Decision'' and shall be signed by the exporter, producer or his 
authorized agent. The provisions of Sec. 174.3 of this chapter shall 
apply for purposes of signature by a person other than the principal.
    (b) Content. The Request for Basis of Adverse Marking Decision 
letter shall set forth the following information:
    (1) The name and address of the exporter or producer of the 
merchandise and the name and address of any authorized agent filing the 
request on behalf of such principal;
    (2) A statement that the inquirer is the exporter or producer of the 
merchandise that was the subject of the adverse marking decision;
    (3) In the case of a Canadian exporter or producer, the employer 
number assigned by Revenue Canada, Customs and Excise; in the case of a 
Mexican exporter or producer, the Federal taxpayer registry number 
(RFC); and the Customs identification number of an authorized agent 
filing the request on behalf of such principal;
    (4) The number and date of each entry involved in the request;
    (5) A specific description of the merchandise which is the subject 
of the adverse marking decision; and
    (6) A complete statement of all relevant facts relating to the 
adverse marking decision and the transaction to which it relates, 
including the date of the decision.

[[Page 401]]



Sec. 181.114  Customs response to request.

    (a) Time for response. The port director will issue a written 
response to the requestor within 30 days of receipt of a request 
containing the information specified in Sec. 181.113 of this part. If 
the request is incomplete, such that the transaction in question cannot 
be identified, the port director will notify the requestor in writing 
within 30 days of receipt of the request regarding what information is 
needed.
    (b) Content. The response by the port director shall include the 
following:
    (1) A statement concerning the basis for the adverse marking 
decision;
    (2) A copy of the relevant Customs Form 4647 (Notice to Mark and/or 
Notice to Redeliver), if one was issued to the importer and is 
available. If the basis for the adverse marking decision is indicated on 
the Customs Form 4647, no statement under paragraph (b)(1) of this 
section is required;
    (3) A statement as to whether the importer has filed a protest 
regarding the adverse marking decision and, if so, where the protest was 
filed and the protest number; and
    (4) A statement concerning the exporter's or producer's right to 
either intervene in the importer's protest as provided in Sec. 181.115 
of this part or file a petition as provided in Sec. 181.116 of this 
part.



Sec. 181.115  Intervention in importer's protest.

    (a) Conditional right to intervene. An exporter or producer of 
merchandise does not have an independent right to protest an adverse 
marking decision. However, if an importer protests the adverse marking 
decision in accordance with section 514, Tariff Act of 1930, as amended 
(19 U.S.C. 1514), and part 174 of this chapter, the exporter or producer 
of the merchandise which is the subject of the adverse marking decision 
may intervene in the importer's protest. Such intervention shall not 
affect any time limits applicable to the protest or delay action on the 
protest.
    (b) Form and filing of intervention. In order to intervene in an 
importer's protest, as provided for in paragraph (a) of this section, 
the exporter or producer of the merchandise shall file, in triplicate, a 
typewritten statement of intervention, in English, with the port 
director with whom the protest was filed. The statement should be on 
letterhead paper in the form of a letter and should be clearly 
designated ``NAFTA Exporter or Producer Intervention in Protest''. The 
statement shall be signed by the exporter, producer or his authorized 
agent. The provisions of Sec. 174.3 of this chapter shall apply for 
purposes of signature by a person other than the principal.
    (c) Content. The NAFTA Exporter or Producer Intervention in Protest 
letter shall include the following:
    (1) The name and address of the exporter or producer of the 
merchandise and the name and address of any authorized agent filing the 
request on behalf of such principal;
    (2) In the case of a Canadian exporter or producer, the employer 
number assigned by Revenue Canada, Customs and Excise; in the case of a 
Mexican exporter or producer, the Federal taxpayer registry number 
(RFC); and the Customs identification number of an authorized agent 
filing the request on behalf of such principal;
    (3) The number and date of each entry involved in the adverse 
marking decision;
    (4) A specific description of the merchandise which is the subject 
of the adverse marking decision;
    (5) A complete statement of all relevant facts relating to the 
adverse marking decision and the transaction to which it relates, 
including the date of the decision;
    (6) A detailed statement of position regarding why the exporter or 
producer believes the adverse marking decision is contrary to the 
provision of Annex 311 of the NAFTA;
    (7) A statement as to whether a Request for Basis of Adverse Marking 
Decision was filed under Sec. 181.113 of this part, and if so, the date 
of such Request and of any Customs response thereto issued under Sec. 
181.114 of this part. Copies of the Request and the Customs response 
shall be submitted, if available;
    (8) The number assigned to the importer's protest;
    (9) A statement that the intervenor is the exporter or producer of 
the merchandise that was the subject of the

[[Page 402]]

adverse marking decision being protested by the importer and, if the 
intervenor is the exporter, a statement that it maintains sufficient 
records to enable Customs to evaluate the merits of its claim(s) 
regarding the adverse marking decision; and
    (10) If the intervenor prefers that the principle of confidentiality 
set forth in Sec. 181.121 of this part be applied to the information 
submitted under this section, a statement to that effect. If no such 
statement is included in the letter, the intervention and information 
submitted in connection therewith shall be subject to the same treatment 
as that provided in the case of requests by all interested parties for 
consolidation of protests as set forth in Sec. 174.15(b)(1) of this 
chapter.
    (d) Effect of Intervention. The rights of the intervenor under this 
section are subordinate to the importer's protest rights. Accordingly, 
intervention by an exporter or producer of merchandise will not affect 
the procedures under part 174 of this chapter, and the importer's 
elections concerning accelerated disposition and application for further 
review of the protest will govern how the protest is handled and how the 
intervention is considered. If the importer withdraws or settles the 
protest, the exporter or producer has no right to continue the 
intervention action.
    (e) Action by port director. If final administrative action has 
already been taken with respect to the importer's protest at the time 
the intervention is filed, the port director shall so advise the 
exporter or producer and, if the importer has filed a civil action in 
the Court of International Trade as a result of a denial of the protest, 
the port director shall advise the exporter or producer of that filing 
and of the exporter's or producer's right to seek to intervene in such 
judicial proceeding. If final administrative action has not been taken 
on the protest, the port director shall forward the intervention letter 
to the Customs office which has the importer's protest under review for 
consideration in connection with the protest.
    (f) Final disposition. The intervenor shall be notified in writing 
of the final disposition of the protest. If the protest is denied in 
whole or in part, the intervenor shall be furnished a copy of the notice 
given to the importer under Sec. 174.29.



Sec. 181.116  Petition regarding adverse marking decision.

    (a) Right to petition. If the importer does not protest an adverse 
marking decision in accordance with section 514, Tariff Act of 1930, as 
amended (19 U.S.C. 1514), and part 174 of this chapter, the exporter or 
producer of the merchandise which was the subject of the adverse marking 
decision may file a petition with Customs requesting reconsideration of 
the decision. The petition may not be filed until after the importer's 
time to protest the adverse marking decision has expired (see Sec. 
174.12(e) of this chapter for the time limits for filing protests). If 
the importer filed a protest upon which final administrative action has 
been taken, the exporter or producer may file a petition under this 
section, provided that the exporter or producer was not given notice of 
the pending protest pursuant to Sec. 181.114 of this part. If the 
importer filed a protest on which final administrative action has not 
been taken and notice of the pending protest was not provided to the 
exporter or producer under Sec. 181.114 of this part, a petition filed 
under this section shall be treated by the port director as an 
intervention under Sec. 181.115 of this part.
    (b) Form and filing of petition. A petition under this section shall 
be typewritten, in English, and shall be filed, in triplicate, with the 
port director who issued the adverse marking decision. The petition 
under this subpart should be on letterhead paper in the form of a 
letter, clearly designated as a ``Petition for NAFTA Review of Adverse 
Marking Decision'' and shall be signed by the exporter, producer or his 
authorized agent. The provisions of Sec. 174.3 of this chapter shall 
apply for purposes of signature by a person other than the principal.
    (c) Content. The Petition for NAFTA Review of Adverse Marking 
Decision letter shall contain all the information specified Sec. 
181.115 of this part, except for the protest number. It shall also 
include a statement that petitioner was

[[Page 403]]

not notified by Customs in writing of a pending protest.
    (d) Review of petition--(1) Review by port director. Within 60 days 
of the date of receipt of the petition, the port director shall 
determine if the petition is to be granted or denied, in whole or in 
part. If, after reviewing the petition, the port director agrees with 
all of the petitioner's claims and determines that the initial adverse 
marking decision was not correct, a written notice granting the petition 
shall be issued to the petitioner. A description of the merchandise, a 
brief summary of the issue(s) and the port director's findings shall be 
forwarded to the Director, Tariff Classification Appeals Division, 
Customs Headquarters, for publication in the Customs Bulletin. If, after 
reviewing the petition, the port director determines that the initial 
adverse marking decision was correct in its entirety, a written notice 
shall be issued to the petitioner advising that the matter has been 
forwarded to the Director, Tariff Classification Appeals Division, 
Customs Headquarters, for further review and decision. All relevant 
background information, including available samples, a description of 
the adverse marking decision and the reasons for the decision, and the 
port director's recommendation shall be furnished to Headquarters.
    (2) Review by Headquarters. Within 120 days of the date the petition 
and background information are received at Customs Headquarters, the 
Director, Tariff Classification Appeals Division, shall determine if the 
petition is to be granted or denied, in whole or in part, and the 
petitioner shall be notified in writing of the determination. If the 
petition is granted in whole or in part, a description of the 
merchandise, a brief summary of the issue(s) and the director's findings 
will be published in the Customs Bulletin.
    (3) Effect of granting the petition. The decision on the petition, 
if contrary to the initial adverse marking decision, will be implemented 
with respect to merchandise entered or withdrawn from warehouse for 
consumption after 30 days from the date on which the notice of 
determination is published in the Customs Bulletin.
    (e) Pending litigation. No decision on a petition will be issued 
under this section with respect to any issue which is pending before the 
United States Court of International Trade, the United States Court of 
Appeals for the Federal Circuit, or any court of appeal therefrom. 
Litigation before any other court will not preclude the issuance of a 
decision on a petition under this section, provided neither Customs nor 
any of its officers or agents is named as a party to the action.
    (f) Judicial review of denial of petition. Any person whose petition 
under this section has been denied, in whole or in part, may contest the 
denial by filing a civil action in the United States Court of 
International Trade within 30 days after the date of mailing of the 
notice of denial.



            Subpart K_Confidentiality of Business Information



Sec. 181.121  Maintenance of confidentiality.

    The port director or other Customs officer who has possession of 
confidential business information collected pursuant to this part shall, 
in accordance with part 103 of this chapter, maintain its 
confidentiality and protect it from any disclosure that could prejudice 
the competitive position of the persons providing the information.



Sec. 181.122  Disclosure to government authorities.

    Nothing in Sec. 181.121 of this part shall preclude the disclosure 
of confidential business information to governmental authorities in the 
United States responsible for the administration and enforcement of 
determinations of origin and of customs and revenue matters.



                        Subpart L_Rules of Origin



Sec. 181.131  Rules of origin.

    (a) The regulations effective October 1, 1995, implementing the 
rules of origin provisions of General Note 12, HTSUS, and Chapter Four 
of the NAFTA are contained in the appendix to this part.
    (b) If the fiscal year of a producer of goods begins before October 
1, 1995, the

[[Page 404]]

producer may choose to have the regulations implementing the rules of 
origin provisions of General Note 12, HTSUS, and Chapter Four of the 
NAFTA that were in effect prior to October 1, 1995 (see 19 CFR chapter 
I, 1994 edition, appendix to part 181) continue to apply in regard to 
all goods produced by that producer for the remainder of that fiscal 
year.
    (c) If a motor vehicle producer's fiscal year that has been chosen 
by a producer of goods pursuant to section 12(5) of the regulations 
referred to in paragraph (b) of this section begins before October 1, 
1995, the producer of the goods may choose to have those regulations 
continue to apply in regard to the goods produced by that producer for 
the remainder of that fiscal year, provided that:
    (1) The producer of the goods has made an election under section 
12(1) of those regulations or has provided a statement referred to in 
section 9(6) or 10(8) of those regulations that states the value of non-
originating materials determined in accordance with section 12(3) of 
those regulations; and
    (2) The period chosen under section 12(5) of those regulations is 
the fiscal year of the motor vehicle producer to whom those goods are 
sold.



Sec. 181.132  Disassembly.

    (a) Treated as production. For purposes of implementing the rules of 
origin provisions of General Note 12, HTSUS, and Chapter Four of the 
NAFTA, except as provided in paragraph (b) of this section, disassembly 
is considered to be production, and a component recovered from a good 
disassembled in the territory of a Party will be considered to be 
originating as the result of such disassembly provided that the 
recovered component satisfies all applicable requirements of Annex 401 
and this part.
    (b) Exception; new goods. Disassembly, as provided in paragraph (a) 
of this section, will not be considered production in the case of 
components that are recovered from new goods. For purposes of this 
paragraph, a ``new good'' means a good which is in the same condition as 
it was when it was manufactured and which meets the commercial standards 
for new goods in the relevant industry.

[70 FR 37674, June 30, 2005]



         Sec. Appendix to Part 181--Rules of Origin Regulations

                           SECTION 1. CITATION
 
 This appendix may be cited as the NAFTA Rules of Origin Regulations.
 
                                 PART I
                SECTION 2. DEFINITIONS AND INTERPRETATION
                               Definitions
 
(1) For purposes of this appendix,
``accessories, spare parts or tools that are delivered with a good and
 form part of the good's standard accessories, spare parts or tools''
 means goods that are delivered with a good, whether or not they are
 physically affixed to that good, and that are used for the transport,
 protection, maintenance or cleaning of the good, for instruction in the
 assembly, repair or use of that good, or as replacements for consumable
 or interchangeable parts of that good;
``adjusted to an F.O.B. basis'' means, with respect to a good, adjusted
 by
  (a) deducting
    (i) the costs of transporting the good after it is shipped from the
     point of direct shipment,
    (ii) the costs of unloading, loading, handling and insurance that
     are associated with that transportation, and
    (iii) the cost of packing materials and containers,
  where those costs are included in the transaction value of the good,
   and
  (b) adding
    (i) the costs of transporting the good from the place of production
     to the point of direct shipment,

[[Page 405]]

 
    (ii) the costs of loading, unloading, handling and insurance that
     are associated with that transportation, and
    (iii) the costs of loading the good for shipment at the point of
     direct shipment,
  where those costs are not included in the transaction value of the
   good;
``Agreement'' means the North American Free Trade Agreement;
``applicable change in tariff classification'' means, with respect to a
 non-originating material used in the production of a good, a change in
 tariff classification specified in a rule set out in Schedule I for the
 tariff provision under which the good is classified;
``automotive component'' means a good that is referred to in column I of
 an item of Schedule V;
``automotive component assembly'' means a good, other than a heavy-duty
 vehicle, that incorporates an automotive component;
``costs incurred in packing'' means, with respect to a good or material,
 the value of the packing materials and containers in which the good or
 material is packed for shipment and the labor costs incurred in packing
 it for shipment, but does not include the costs of preparing and
 packaging it for retail sale;
``customs value'' means
  (a) in the case of Canada, value for duty as defined in the Customs
   Act, except that for purposes of determining that value the reference
   in section 55 of that Act to ``in accordance with the regulations
   made under the Currency Act'' shall be read as a reference to ``in
   accordance with subsection 3(1) of these Regulations'',
  (b) in the case of Mexico, the valor en aduana as determined in
   accordance with the Ley Aduanera, converted, in the event such value
   is not expressed in Mexican currency, to Mexican currency at the rate
   of exchange determined in accordance with subsection 3(1) of these
   Regulations, and
  (c) in the case of the United States, the value of imported
   merchandise as determined by the Customs Service in accordance with
   section 402 of the Tariff Act of 1930, as amended, converted, in the
   event such value is not expressed in United States currency, to
   United States currency at the rate of exchange determined in
   accordance with subsection 3(1) of these Regulations.
``days'' means calendar days, and includes weekends and holidays;
``direct labor costs'' means costs, including fringe benefits, that are
 associated with employees who are directly involved in the production
 of a good;
``direct material costs'' means the value of materials, other than
 indirect materials and packing materials and containers, that are used
 in the production of a good;
``direct overhead'' means costs, other than direct material costs and
 direct labor costs, that are directly associated with the production of
 a good;
``enterprise'' means any entity constituted or organized under
 applicable laws, whether or not for profit and whether privately owned
 or governmentally owned, including any corporation, trust, partnership,
 sole proprietorship, joint venture or other association;
``excluded costs'' means sales promotion, marketing and after-sales
 service costs, royalties, shipping and packing costs and non-allowable
 interest costs;
``fungible goods'' means goods that are interchangeable for commercial
 purposes and the properties of which are essentially identical;
``fungible materials'' means materials that are interchangeable for
 commercial purposes and the properties of which are essentially
 identical;
``Harmonized System'' means the Harmonized Commodity Description and
 Coding System, including its General Rules of Interpretation, Section
 Notes and Chapter Notes, as set out in
  (a) in the case of Canada, the Customs Tariff,
  (b) in the case of Mexico, the Tarifa de la Ley del Impuesto General
   de Importaci[oacute]n, and
  (c) in the case of the United States, the Harmonized Tariff Schedule
   of the United States;

[[Page 406]]

 
``heavy-duty vehicle'' means a motor vehicle provided for in any of
 heading 8701, tariff items 8702.10.30 and 8702.90.30 (vehicles for the
 transport of 16 or more persons), subheadings 8704.10, 8704.22,
 8704.23, 8704.32 and 8704.90 and heading 8705 and 8706;
``identical goods'' means, with respect to a good, goods that
  (a) are the same in all respects as that good, including physical
   characteristics, quality and reputation but excluding minor
   differences in appearance,
  (b) were produced in the same country as that good, and
  (c) were produced
    (i) by the producer of that good, or
    (ii) by another producer, where no goods that satisfy the
     requirements of paragraphs (a) and (b) were produced by the
     producer of that good;
``identical materials'' means, with respect to a material, materials
 that
  (a) are the same as that material in all respects, including physical
   characteristics, quality and reputation but excluding minor
   differences in appearance,
  (b) were produced in the same country as that material, and
  (c) were produced
    (i) by the producer of that material, or
    (ii) by another producer, where no materials that satisfy the
     requirements of paragraphs (a) and (b) were produced by the
     producer of that material;
``incorporated'' means, with respect to the production of a good, a
 material that is physically incorporated into that good, and includes a
 material that is physically incorporated into another material before
 that material or any subsequently produced material is used in the
 production of the good;
``indirect material'' means a good used in the production, testing or
 inspection of a good but not physically incorporated into the good, or
 a good used in the maintenance of buildings or the operation of
 equipment associated with the production of a good, and includes
  (a) fuel and energy,
  (b) tools, dies and molds,
  (c) spare parts and materials used in the maintenance of equipment and
   buildings,
  (d) lubricants, greases, compounding materials and other materials
   used in production or used to operate equipment and buildings,
  (e) gloves, glasses, footwear, clothing, safety equipment and
   supplies,
  (f) equipment, devices and supplies used for testing or inspecting the
   other goods,
  (g) catalysts and solvents, and
  (h) any other goods that are not incorporated into the good but the
   use of which in the production of the good can reasonably be
   demonstrated to be part of that production;
``interest costs'' means all costs paid or payable by a person to whom
 credit is, or is to be advanced, for the advancement of credit or the
 obligation to advance credit;
``intermediate material'' means a self-produced material that is used in
 the production of a good and is designated as an intermediate material
 under section 7(4) ;
``light-duty automotive good'' means a light-duty vehicle or a good of a
 tariff provision listed in Schedule IV that is subject to a regional
 value-content requirement and is for use as original equipment in the
 production of a light-duty vehicle;
``light-duty vehicle'' means a motor vehicle provided for in any of
 tariff items 8702.10.60 and 8702.90.60 (vehicles for the transport of
 15 or fewer persons) and subheadings 8703.21 through 8703.90, 8704.21
 and 8704.31;
``listed material'' means a good that is referred to in column II of an
 item of Schedule V;
``location of the producer'' means,

[[Page 407]]

 
  (a) where the warehouse or other receiving station at which a producer
   receives materials for use by the producer in the production of a
   good is located within a radius of 75 km (46.60 miles) from the place
   at which the producer produces the good, the location of that
   warehouse or other receiving station, and
  (b) in any other case, the place at which the producer produces the
   good in which a material is to be used;
``material'' means a good that is used in the production of another
 good, and includes a part or ingredient;
``motor vehicle assembler'' means a producer of motor vehicles and any
 related person with whom, or joint venture in which, the producer
 participates with respect to the production of motor vehicles;
``month'' means a calendar month;
``NAFTA country'' means a Party to the Agreement;
``national'' means a natural person who is a citizen or permanent
 resident of a NAFTA country, and includes
  (a) with respect to Mexico, a national or citizen according to
   Articles 30 and 34, respectively, of the Mexican Constitution, and
  (b) with respect to the United States, a ``national of the United
   States'' as defined in the Immigration and Nationality Act on the
   date of entry into force of the Agreement;
``net cost method'' means the method of calculating the regional value
 content of a good that is set out in section 6(3);
``non-allowable interest costs'' means interest costs incurred by a
 producer on the producer's debt obligations that are more than 700
 basis points above the yield on debt obligations of comparable
 maturities issued by the federal government of the country in which the
 producer is located;
``non-originating good'' means a good that does not qualify as
 originating under this appendix;
``non-originating material'' means a material that does not qualify as
 originating under this appendix;
``original equipment'' means a material that is incorporated into a
 motor vehicle before the first transfer of title or consignment of the
 motor vehicle to a person who is not a motor vehicle assembler, and
 that is
  (a) a good of a tariff provision listed in Schedule IV, or
  (b) an automotive component assembly, automotive component, sub-
   component or listed material;
``originating good'' means a good that qualifies as originating under
 this appendix;
``originating material'' means a material that qualifies as originating
 under this appendix;
``other costs,'' with respect to total cost, means all costs that are
 not product costs or period costs;
``packaging materials and containers'' means materials and containers in
 which a good is packaged for retail sale;
``packing materials and containers'' means materials and containers that
 are used to protect a good during transportation, but does not include
 packaging materials and containers;
``payments'' means, with respect to royalties and sales promotion,
 marketing and after-sales service costs, the costs expensed on the
 books of a producer, whether or not an actual payment is made;
``period costs'' means costs, other than product costs, that are
 expensed in the period in which they are incurred;
``person'' means a natural person or an enterprise;
``person of a NAFTA country'' means a national, or an enterprise
 constituted or organized under the laws of a NAFTA country;
``point of direct shipment'' means the location from which a producer of
 a good normally ships that good to the buyer of the good;

[[Page 408]]

 
``producer'' means a person who grows, mines, harvests, fishes, traps,
 hunts, manufactures, processes or assembles a good;
``product costs'' means costs that are associated with the production of
 a good, and includes the value of materials, direct labor costs and
 direct overhead;
``production'' means growing, mining, harvesting, fishing, trapping,
 hunting, manufacturing, processing or assembling a good;
``related person'' means a person related to another person on the basis
 that
  (a) they are officers or directors of one another's businesses,
  (b) they are legally recognized partners in business,
  (c) they are employer and employee,
  (d) any person directly or indirectly owns, controls or holds 25
   percent or more of the outstanding voting stock or shares of each of
   them,
  (e) one of them directly or indirectly controls the other,
  (f) both of them are directly or indirectly controlled by a third
   person, or
  (g) they are members of the same family (members of the same family
   are natural or adopted children, brothers, sisters, parents,
   grandparents, or spouses);
``reusable scrap or by-product'' means waste and spoilage that is
 generated by the producer of a good and that is used in the production
 of a good or sold by that producer;
``right to use,'' for purposes of the definition of royalties, includes
 the right to sell or distribute a good;
``royalties'' means payments of any kind, including payments under
 technical assistance agreements or similar agreements, made as
 consideration for the use of, or right to use, any copyright, literary,
 artistic, or scientific work, patent, trademark, design, model, plan,
 secret formula or process, excluding those payments under technical
 assistance agreements or similar agreements that can be related to
 specific services such as
  (a) personnel training, without regard to where performed, and
  (b) if performed in the territory of one or more of the NAFTA
   countries, engineering, tooling, die-setting, software design and
   similar computer services, or other services;
``sales promotion, marketing and after-sales service costs'' means the
 following costs related to sales promotion, marketing and after-sales
 service:
  (a) sales and marketing promotion; media advertising; advertising and
   market research; promotional and demonstration materials; exhibits;
   sales conferences, trade shows and conventions; banners; marketing
   displays; free samples; sales, marketing and after-sales service
   literature (product brochures, catalogs, technical literature, price
   lists, service manuals, sales aid information); establishment and
   protection of logos and trademarks; sponsorships; wholesale and
   retail restocking charges; entertainment;
  (b) sales and marketing incentives; consumer, retailer or wholesaler
   rebates; merchandise incentives;
  (c) salaries and wages, sales commissions, bonuses, benefits (for
   example, medical, insurance, pension), traveling and living expenses,
   membership and professional fees, for sales promotion, marketing and
   after-sales service personnel;
  (d) recruiting and training of sales promotion, marketing and after-
   sales service personnel, and after-sales training of customers'
   employees, where such costs are identified separately for sales
   promotion, marketing and after-sales service of goods on the
   financial statements or cost accounts of the producer;
  (e) product liability insurance;
  (f) office supplies for sales promotion, marketing and after-sales
   service of goods, where such costs are identified separately for
   sales promotion, marketing and after-sales service of goods on the
   financial statements or cost accounts of the producer;

[[Page 409]]

 
  (g) telephone, mail and other communications, where such costs are
   identified separately for sales promotion, marketing and after-sales
   service of goods on the financial statements or cost accounts of the
   producer;
  (h) rent and depreciation of sales promotion, marketing and after-
   sales service offices and distribution centers;
  (i) property insurance premiums, taxes, cost of utilities, and repair
   and maintenance of sales promotion, marketing and after-sales service
   offices and distribution centers, where such costs are identified
   separately for sales promotion, marketing and after-sales service of
   goods on the financial statements or cost accounts of the producer;
   and
  (j) payments by the producer to other persons for warranty repairs;
``self-produced material'' means a material that is produced by the
 producer of a good and used in the production of that good;
``shipping and packing costs'' means the costs incurred in packing a
 good for shipment and shipping the good from the point of direct
 shipment to the buyer, excluding the costs of preparing and packaging
 the good for retail sale;
``similar goods'' means, with respect to a good, goods that
  (a) although not alike in all respects to that good, have similar
   characteristics and component materials that enable the goods to
   perform the same functions and to be commercially interchangeable
   with that good,
  (b) were produced in the same country as that good, and
  (c) were produced
    (i) by the producer of that good, or
    (ii) by another producer, where no goods that satisfy the
     requirements of paragraphs (a) and (b) were produced by the
     producer of that good;
``similar materials'' means, with respect to a material, materials that
  (a) although not alike in all respects to that material, have similar
   characteristics and component materials that enable the materials to
   perform the same functions and to be commercially interchangeable
   with that material,
  (b) were produced in the same country as that material, and (c) were
   produced
    (i) by the producer of that material, or
    (ii) by another producer, where no materials that satisfy the
     requirements of paragraphs (a) and (b) were produced by the
     producer of that material;
``subject to a regional value-content requirement'' means, with respect
 to a good, that the provisions of this appendix that are applied to
 determine whether the good is an originating good include a regional
 value-content requirement;
``sub-component'' means a good that comprises a listed material and one
 or more other materials or listed materials;
``tariff provision'' means a heading, subheading or tariff item;
``territory'' means, with respect to
  (a) Canada, the territory to which its customs laws apply, including
   any areas beyond the territorial seas of Canada within which, in
   accordance with international law and its domestic law, Canada may
   exercise rights with respect to the seabed and subsoil and their
   natural resources,
  (b) Mexico,
    (i) the states of the Federation and the Federal District,
    (ii) the islands, including the reefs and keys, in adjacent seas,
    (iii) the islands of Guadalupe and Revillagigedo situated in the
     Pacific Ocean,
    (iv) the continental shelf and the submarine shelf of such islands,
     keys and reefs,
    (v) the waters of the territorial seas, in accordance with
     international law, and its interior maritime waters,
    (vi) the space located above the national territory, in accordance
     with international law, and

[[Page 410]]

 
    (vii) any areas beyond the territorial seas of Mexico within which,
     in accordance with international law, including the United Nations
     Convention on the Law of the Sea, and its domestic law, Mexico may
     exercise rights with respect to the seabed and subsoil and their
     natural resources, and
  (c) the United States,
    (i) the customs territory of the United States, which includes the
     50 states, the District of Columbia and Puerto Rico,
    (ii) the foreign trade zones located in the United States and Puerto
     Rico, and
    (iii) any areas beyond the territorial seas of the United States
     within which, in accordance with international law and its domestic
     law, the United States may exercise rights with respect to the
     seabed and subsoil and their natural resources;
``total cost'' means the total of all product costs, period costs and
 other costs incurred in the territory of one or more of the NAFTA
 countries;
``transaction value method'' means the method of calculating the
 regional value content of a good that is set out in subsection 6(2);
``used'' means used or consumed in the production of a good;
``verification of origin'' means a verification of origin of goods under
  (a) in the case of Canada, paragraph 42.1(1)(a) or subsection 42.2(2)
   of the Customs Act,
  (b) in the case of Mexico, Article 506 of the Agreement, and
  (c) in the case of the United States, section 509 of the Tariff Act of
   1930, as amended.
                       Interpretation: ``similar''
 
(2) For purposes of the definitions of ``similar goods'' and ``similar
 materials,'' the quality of the goods or materials, their reputation
 and the existence of a trademark are among the factors to be considered
 for purposes of determining whether goods or materials are similar.
 
   Interpretation: terms used to refer to HTSUS; use of term ``books''
 
(3) For purposes of this appendix,
  (a) ``chapter,'' unless otherwise indicated, refers to a chapter of
   the Harmonized System;
  (b) ``heading'' refers to any four-digit number, or the first four
   digits of any number, set out in the column ``Heading/Subheading'' in
   the Harmonized System;
  (c) ``subheading'' refers to any six-digit number, or the first six
   digits of any number, set out in the column ``Heading/Subheading'' in
   the Harmonized System;
  (d) ``tariff item'' refers to any eight-digit number set out in the
   column ``Heading/Subheading'' in the Harmonized System;
  (e) any reference to a tariff item in Chapter Four of the Agreement or
   this appendix that includes letters shall be reflected as the
   appropriate eight-digit number in the Harmonized System as
   implemented in each NAFTA country; and
  (f) ``books'' refers to,
    (i) with respect to the books of a person who is located in a NAFTA
     country,
      (A) books and other documents that support the recording of
       revenues, expenses, costs, assets and liabilities and that are
       maintained in accordance with Generally Accepted Accounting
       Principles set out in the publications listed in Schedule XII
       with respect to the territory of the NAFTA country in which the
       person is located, and
      (B) financial statements, including note disclosures, that are
       prepared in accordance with Generally Accepted Accounting
       Principles set out in the publications listed in Schedule XII
       with respect to the territory of the NAFTA country in which the
       person is located, and

[[Page 411]]

 
    (ii) with respect to the books of a person who is located outside
     the territories of the NAFTA countries,
      (A) books and other documents that support the recording of
       revenues, expenses, costs, assets and liabilities and that are
       maintained in accordance with generally accepted accounting
       principles applied in that location or, where there are no such
       principles, in accordance with the International Accounting
       Standards, and
      (B) financial statements, including note disclosures, that are
       prepared in accordance with generally accepted accounting
       principles applied in that location or, where there are no such
       principles, in accordance with the International Accounting
       Standards.
 
      Use of Examples to illustrate the application of a provision
 
(4) Where an example, referred to as an ``Example,'' is set out in this
 appendix, the example is for purposes of illustrating the application
 of a provision, and where there is any inconsistency between the
 example and the provision, the provision prevails to the extent of the
 inconsistency.
 
                       References to domestic laws
 
(5) Except as otherwise provided, references in this appendix to
 domestic laws of the NAFTA countries apply to those laws as they may be
 amended or superseded.
 
                        Calculation of total cost
 
(6) For purposes of sections 5(9), 6(11) and 7(6) and sections 10(1)(a)
 (i) and (ii),
  (a) total cost consists of all product costs, period costs and other
   costs that are recorded, except as otherwise provided in paragraphs
   (b) (i) and (ii), on the books of the producer without regard to the
   location of the persons to whom payments with respect to those costs
   are made;
  (b) in calculating total cost,
    (i) the value of materials, other than intermediate materials,
     indirect materials and packing materials and containers, shall be
     the value determined in accordance with section 7(1),
    (ii) the value of intermediate materials used in the production of
     the good or material with respect to which total cost is being
     calculated shall be calculated in accordance with section 7(6),
    (iii) the value of indirect materials and the value of packing
     materials and containers shall be the costs that are recorded on
     the books of the producer for those materials, and
    (iv) product costs, period costs and other costs, other than costs
     referred to in subparagraphs (i) and (ii), shall be the costs
     thereof that are recorded on the books of the producer for those
     costs;
  (c) total cost does not include profits that are earned by the
   producer, regardless of whether they are retained by the producer or
   paid out to other persons as dividends, or taxes paid on those
   profits, including capital gains taxes;
  (d) gains related to currency conversion that are related to the
   production of the good shall be deducted from total cost, and losses
   related to currency conversion that are related to the production of
   the good shall be included in total cost;
  (e) the value of materials with respect to which production is
   accumulated under section 14 shall be determined in accordance with
   that section; and
  (f) total cost includes the impact of inflation as recorded on the
   books of the producer, if recorded in accordance with the Generally
   Accepted Accounting Principles of the producer's country.
(7) For purposes of calculating total cost under sections 5(9) and 7(6)
 and sections 10(1)(a) (i) and (ii),

[[Page 412]]

 
  (a) where the regional value content of the good is calculated on the
   basis of the net cost method and the producer has chosen under
   section 6(15), 11 (1), (3) or (6), 12(5) or 13(4) to calculate the
   regional value content over a period, the total cost shall be
   calculated over that period; and
  (b) in any other case, the producer may choose that the total cost be
   calculated over
    (i) a month,
    (ii) any consecutive three month or six month period that falls
     within and is evenly divisible into the number of months of the
     producer's fiscal year remaining at the beginning of that period,
     or
    (iii) the producer's fiscal year.
(8) A choice made under subsection (7) may not be rescinded or modified
 with respect to the good or material, or the period, with respect to
 which the choice is made.
(9) Where a producer chooses a one, three or six month period under
 subsec tion (7) with respect to a good or material, the producer shall
 be considered to have chosen under that subsection a period or periods
 of the same duration for the remainder of the producer's fiscal year
 with respect to that good or material.
(10) With respect to a good exported to a NAFTA country, a choice to
 average is considered to have been made
  (a) in the case of a choice referred to in section 11 (1), (3) or (6)
   or 13(4), if the choice is received by the customs administration of
   that NAFTA country; and
  (b) in the case of a choice referred to in section 2(7), 6(15) or
   12(1), if the customs administration of that NAFTA country is
   informed in writing during the course of a verification of the origin
   of the good that the choice has been made.
                     SECTION 3. CURRENCY CONVERSION
 
(1) Where the value of a good or a material is expressed in a currency
 other than the currency of the country in which the producer of the
 good is located, that value shall be converted to the currency of the
 country in which that producer is located on the basis of
  (a) in the case of the sale of that good or the purchase of that
   material, the rate of exchange used by the producer for purposes of
   recording that sale or purchase, as the case may be; and
  (b) in the case of a material that is acquired by the producer other
   than by a purchase,
    (i) where the producer used a rate of exchange for purposes of
     recording another transaction in that other currency that occurred
     within 30 days of the date on which the producer acquired the
     material, that rate, and
    (ii) in any other case,
      (A) with respect to a producer located in Canada, the rate of
       exchange referred to in section 5 of the Currency Exchange for
       Customs Valuation Regulations for the date on which the material
       was shipped directly to the producer,
      (B) with respect to a producer located in Mexico, the rate of
       exchange published by the Banco de Mexico in the Diario Oficial
       de la Federacion, under the title ``TIPO de cambio para solventar
       obligaciones denominadas en moneda extranjera pagaderas en la
       Republica Mexicana'', for the date on which the material was
       shipped directly to the producer, and
      (C) with respect to a producer located in the United States, the
       rate of exchange referred to in 31 U.S.C. 5151 for the date on
       which the material was shipped directly to the producer.
(2) Where a producer of a good has a statement referred to in section 9,
 10 or 14 that includes information in a currency other than the
 currency of the country in which that producer is located, the currency
 shall be converted to the currency of the country in which the producer
 is located on the basis of

[[Page 413]]

 
  (a) if the material was purchased by the producer in the same currency
   as the currency in which the information in the statement is
   provided, the rate of exchange used by the producer for purposes of
   recording the purchase;
  (b) if the material was purchased by the producer in a currency other
   than the currency in which the information in the statement is
   provided,
    (i) where the producer used a rate of exchange for purposes of
     recording a transaction in that other currency that occurred within
     30 days of the date on which the producer acquired the material,
     that rate, and
    (ii) in any other case,
      (A) with respect to a producer located in Canada, the rate of
       exchange referred to in section 5 of the Currency Exchange for
       Customs Valuation Regulations for the date on which the material
       was shipped directly to the producer,
      (B) with respect to a producer located in Mexico, the rate of
       exchange published by the Banco de Mexico in the Diario Oficial
       de la Federacion, under the title ``TIPO de cambio para solventar
       obligaciones denominadas en moneda extranjera pagaderas en la
       Republica Mexicana'', for the date on which the material was
       shipped directly to the producer, and
      (C) with respect to a producer located in the United States, the
       rate of exchange referred to in 31 U.S.C. 5151 for the date on
       which the material was shipped directly to the producer; and
  (c) if the material was acquired by the producer other than by a
   purchase,
    (i) where the producer used a rate of exchange for purposes of
     recording a transaction in that other currency that occurred within
     30 days of the date on which the producer acquired the material,
     that rate, and
    (ii) in any other case,
      (A) with respect to a producer located in Canada, the rate of
       exchange referred to in section 5 of the Currency Exchange for
       Customs Valuation Regulations for the date on which the material
       was shipped directly to the producer,
      (B) with respect to a producer located in Mexico, the rate of
       exchange published by the Banco de Mexico in the Diario Oficial
       de la Federacion, under the title ``TIPO de cambio para solventar
       obligaciones denominadas en moneda extranjera pagaderas en la
       Republica Mexicana'', for the date on which the material was
       shipped directly to the producer, and
      (C) with respect to a producer located in the United States, the
       rate of exchange referred to in 31 U.S.C. 5151 for the date on
       which the material was shipped directly to the producer.
 
                                 PART II
                      SECTION 4. ORIGINATING GOODS
    Identification of goods which are ``wholly obtained or produced''
 
(1) A good originates in the territory of a NAFTA country where the good
 is
  (a) a mineral good extracted in the territory of one or more of the
   NAFTA countries;
  (b) a vegetable or other good harvested in the territory of one or
   more of the NAFTA countries;
  (c) a live animal born and raised in the territory of one or more of
   the NAFTA countries;
  (d) a good obtained from hunting, trapping or fishing in the territory
   of one or more of the NAFTA countries;
  (e) fish, shellfish or other marine life taken from the sea by a
   vessel registered or recorded with a NAFTA country and flying its
   flag;
  (f) a good produced on board a factory ship from a good referred to in
   paragraph (e), where the factory ship is registered or recorded with
   the same NAFTA country as the vessel that took that good and flies
   that country's flag;

[[Page 414]]

 
  (g) a good taken by a NAFTA country or a person of a NAFTA country
   from or beneath the seabed outside the territorial waters of that
   country, where a NAFTA country has the right to exploit that seabed;
  (h) a good taken from outer space, where the good is obtained by a
   NAFTA country or a person of a NAFTA country and is not processed
   outside the territories of the NAFTA countries;
  (i) waste and scrap derived from
    (i) production in the territory of one or more of the NAFTA
     countries, or
    (ii) used goods collected in the territory of one or more of the
     NAFTA countries, where those goods are fit only for the recovery of
     raw materials; or
  (j) a good produced in the territory of one or more of the NAFTA
   countries exclusively from a good referred to in any of paragraphs
   (a) through (i), or from the derivatives of such a good, at any stage
   of production.
 
       Goods made from non-originating materials: change in tariff
     classification requirement; regional value-content requirement
 
(2) A good originates in the territory of a NAFTA country where
  (a) each of the non-originating materials used in the production of
   the good undergoes the applicable change in tariff classification as
   a result of production that occurs entirely in the territory of one
   or more of the NAFTA countries, where the applicable rule in Schedule
   I for the tariff provision under which the good is classified
   specifies only a change in tariff classification, and the good
   satisfies all other applicable requirements of this appendix;
  (b) each of the non-originating materials used in the production of
   the good undergoes the applicable change in tariff classification as
   a result of production that occurs entirely in the territory of one
   or more of the NAFTA countries and the good satisfies the applicable
   regional value-content requirement, where the applicable rule in
   Schedule I for the tariff provision under which the good is
   classified specifies both a change in tariff classification and a
   regional value-content requirement, and the good satisfies all other
   applicable requirements of this appendix; or
  (c) the good satisfies the applicable regional value-content
   requirement, where the applicable rule in Schedule I for the tariff
   provision under which the good is classified specifies only a
   regional value-content requirement, and the good satisfies all other
   applicable requirements of this appendix.
 
            Goods made exclusively from originating materials
 
(3) A good originates in the territory of a NAFTA country where the good
 is produced entirely in the territory of one or more of the NAFTA
 countries exclusively from originating materials.
 
      Exceptions to the change in tariff classification requirement
 
(4) A good originates in the territory of a NAFTA country where
  (a) except in the case of a good provided for in any of Chapters 61
   through 63,
    (i) the good is produced entirely in the territory of one or more of
     the NAFTA countries,
    (ii) one or more of the non-originating materials used in the
     production of the good do not undergo an applicable change in
     tariff classification because the materials were imported together,
     whether or not with originating materials, into the territory of a
     NAFTA country as an unassembled or disassembled good, and were
     classified as an assembled good pursuant to Rule 2(a) of the
     General Rules for the Interpretation of the Harmonized System,
    (iii) the regional value content of the good, calculated in
     accordance with section 6, is not less than 60 percent where the
     transaction value method is used, or is not less than 50 percent
     where the net cost method is used, and

[[Page 415]]

 
    (iv) the good satisfies all other applicable requirements of this
     appendix, including any applicable, higher regional value-content
     requirement provided for in section 13 or Schedule I; or
  (b) except in the case of a good provided for in any of Chapters 61
   through 63,
    (i) the good is produced entirely in the territory of one or more of
     the NAFTA countries,
    (ii) one or more of the non-originating materials used in the
     production of the good do not undergo an applicable change in
     tariff classification because
      (A) those materials are provided for under the Harmonized System
       as parts of the good, and
      (B) the heading for the good provides for both the good and its
       parts and is not further subdivided into subheadings, or the
       subheading for the good provides for both the good and its parts,
    (iii) the non-originating materials that do not undergo a change in
     tariff classification in the circumstances described in
     subparagraph (ii) and the good are not both classified as parts of
     goods under the heading or subheading referred to in subparagraph
     (ii)(B),
    (iv) each of the non-originating materials that is used in the
     production of the good and is not referred to in subparagraph (iii)
     undergoes an applicable change in tariff classification or
     satisfies any other applicable requirement set out in Schedule I,
    (v) the regional value content of the good, calculated in accordance
     with section 6, is not less than 60 percent where the transaction
     value method is used, or is not less than 50 percent where the net
     cost method is used, and
    (vi) the good satisfies all other applicable requirements of this
     appendix, including any applicable, higher regional value-content
     requirement provided for in section 13 or Schedule I.
 
Interpretation: heading or subheading which provides for both a good and
                            parts of the good
 
(5) For purposes of subsection (4)(b),
  (a) the determination of whether a heading or subheading provides for
   a good and its parts shall be made on the basis of the nomenclature
   of the heading or subheading and the relevant Section or Chapter
   Notes, in accordance with the General Rules for the Interpretation of
   the Harmonized System; and
  (b) where, in accordance with the Harmonized System, a heading
   includes parts of goods by application of a Section Note or Chapter
   Note of the Harmonized System and the subheadings under that heading
   do not include a subheading designated ``Parts'', a subheading
   designated ``Other'' under that heading shall be considered to cover
   only the goods and parts of the goods that are themselves classified
   under that subheading.
(6) For purposes of subsection (2), where Schedule I sets out two or
 more alternative rules for the tariff provision under which a good is
 classified, if the good satisfies the requirements of one of those
 rules, it need not satisfy the requirements of another of the rules in
 order to qualify as an originating good.
 
                     Special rule for certain goods
 
(7) A good originates in the territory of a NAFTA country if the good is
 referred to in Table 308.1.1 of Section B of Annex 308.1 to Chapter
 Three of the Agreement and is imported from the territory of a NAFTA
 country at a time when the NAFTA countries' most-favored-nation rate of
 duty for that good is in accordance with paragraph 1 of Section A of
 that Annex.
 

[[Page 416]]

 
 Self-produced material may be a material for determining applicability
                           of rules of origin
 
(8) For purposes of determining whether non-originating materials
 undergo an applicable change in tariff classification, a self-produced
 material may, at the choice of the producer of a good into which the
 self-produced material is incorporated, be considered as an originating
 material or non-originating material, as the case may be, used in the
 production of that good.
(9) The following example is an ``Example'' as referred to in section
 2(4).
 


Example: section 4(8), Self-produced Materials as Materials for Purposes
 of Determining Whether Non-originating Materials Undergo an Applicable
 Change in Tariff Classification
 Producer A, located in a NAFTA country, produces Good A. In the
 production process, Producer A uses originating Material X and non-
 originating Material Y to produce Material Z. Material Z is a self-
 produced material that will be used to produce Good A.
 The rule set out in Schedule I for the heading under which Good A is
 classified specifies a change in tariff classification from any other
 heading. In this case, both Good A and the non-originating Material Y
 are of the same heading. However, the self-produced Material Z is of a
 heading different than that of Good A.
 For purposes of determining whether the non-originating materials that
 are used in the production of Good A undergo the applicable change in
 tariff classification, Producer A has the option to consider the self-
 produced Material Z as the material that must undergo a change in
 tariff classification. As Material Z is of a heading different than
 that of Good A, Material Z satisfies the applicable change in tariff
 classification and Good A would qualify as an originating good.
 


                          SECTION 5. DE MINIMIS
    De minimis rule for non-originating materials that do not undergo
           subject to authorization, a required tariff change
 
(1) Except as otherwise provided in subsection (4), a good shall be
 considered to originate in the territory of a NAFTA country where the
 value of all non-originating materials that are used in the production
 of the good and that do not undergo an applicable change in tariff
 classification as a result of production occurring entirely in the
 territory of one or more of the NAFTA countries is not more than seven
 percent
  (a) of the transaction value of the good determined in accordance with
   Schedule II with respect to the transaction in which the producer of
   the good sold the good, adjusted to an F.O.B. basis, or
  (b) of the total cost of the good, where there is no transaction value
   for the good under section 2(1) of Schedule III or the transaction
   value of the good is unacceptable under section 2(2) of that
   Schedule,
provided that,
  (c) if, under the rule in which the applicable change in tariff
   classification is specified, the good is also subject to a regional
   value-content requirement, the value of those non-originating
   materials shall be taken into account in calculating the regional
   value content of the good in accordance with the method set out for
   that good, and
  (d) the good satisfies all other applicable requirements of this
   appendix.
(2) For purposes of subsection (1), where
  (a) Schedule I sets out two or more alternative rules for the tariff
   provision under which the good is classified, and
  (b) the good, in accordance with subsection (1), is considered to
   originate under one of those rules,
the good is not required to satisfy the requirements specified in any
 alternative rule referred to in paragraph (a).
(3) For purposes of subsection (1), in the case of a good that is
 provided for in heading 2402, the percentage shall be nine percent
 instead of seven percent.
 

[[Page 417]]

 
                               Exceptions
 
(4) Subsections (1) and (2) do not apply to
  (a) a non-originating material provided for in Chapter 4 or tariff
   items 1901.90.31, 1901.90.41 and 1901.90.81 (dairy preparations
   containing over 10 percent by weight of milk solids) that is used in
   the production of a good provided for in Chapter 4;
  (b) a non-originating material provided for in Chapter 4 or tariff
   items 1901.90.31, 1901.90.41 and 1901.90.81 (dairy preparations
   containing over 10 percent by weight of milk solids) that is used in
   the production of a good provided for in any of tariff items
   1901.10.10 (infant preparations containing over 10 percent by weight
   of milk solids), 1901.20.10 (mixes and doughs, containing over 25
   percent by weight of butterfat, not put up for retail sale),
   1901.90.31, 1901.90.41 and 1901.90.81 (dairy preparations containing
   over 10 percent by weight of milk solids), heading 2105 and tariff
   items 2106.90.05, 2106.90.13, 2106.90.41, 2106.90.51 and 2106.90.61
   (preparations containing over 10 percent by weight of milk solids),
   2202.90.10 and 2202.90.20 (beverages containing milk) and 2309.90.31
   (animal feeds containing over 10 percent by weight of milk solids);
  (c) a non-originating material provided for in any of heading 0805 and
   subheadings 2009.11 through 2009.39 that is used in the production of
   a good provided for in any of subheadings 2009.11 through 2009.39 and
   tariff items 2106.90.48 and 2106.90.52 (concentrated fruit or
   vegetable juice of any single fruit or vegetable, fortified with
   minerals or vitamins) and 2202.90.30, 2202.90.35 and 2202.90.36
   (fruit or vegetable juice of any single fruit or vegetable, fortified
   with minerals or vitamins);
  (d) a non-originating material provided for in Chapter 9 that is used
   in the production of a good provided for in tariff item 2101.11.21
   (instant coffee, not flavored);
  (e) a non-originating material provided for in Chapter 15 that is used
   in the production of a good provided for in any of headings 1501
   through 1508, 1512, 1514 and 1515;
  (f) a non-originating material provided for in heading 1701 that is
   used in the production of a good provided for in any of headings 1701
   through 1703;
  (g) a non-originating material provided for in Chapter 17 or heading
   1805 that is used in the production of a good provided for in
   subheading 1806.10;
  (h) a non-originating material provided for in any of headings 2203
   through 2208 that is used in the production of a good provided for in
   any of headings 2207 through 2208;
  (i) a non-originating material that is used in the production of a
   good provided for in any of tariff item 7321.11.30 (gas stove or
   range), subheadings 8415.10 through 8415.83, 8418.10 through 8418.21,
   8418.29 through 8418.40, 8421.12, 8422.11, 8450.11 through 8450.20
   and 8451.21 through 8451.29, and tariff items 8479.89.55 (trash
   compactors) and 8516.60.40 (electric stove or range);
  (j) a printed circuit assembly that is a non-originating material used
   in the production of a good, where the applicable change in tariff
   classification for the good places restrictions on the use of that
   non-originating material, such as by prohibiting, or limiting the
   quantity of, that non-originating material;
  (k) a non-originating material that is a single juice ingredient
   provided for in heading 2009 that is used in the production of a good
   provided for in any of subheading 2009.90 and tariff items 2106.90.18
   (concentrated mixtures of fruit or vegetable juice, fortified with
   minerals or vitamins) and 2202.90.37 (mixtures of fruit or vegetable
   juices, fortified with minerals or vitamins);
  (l) a non-originating material that is used in the production of a
   good provided for in any of Chapters 1 through 27, unless the non-
   originating material is of a different subheading than the good for
   which origin is being determined under this section; or
  (m) a non-originating material that is used in the production of a
   good provided for in any of Chapters 50 through 63.
 

[[Page 418]]

 
         De minimis rule for regional value-content requirement
 
(5) A good that is subject to a regional value-content requirement shall
 be considered to originate in the territory of a NAFTA country and
 shall not be required to satisfy that requirement where
  (a) the value of all non-originating materials used in the production
   of the good is not more than seven percent
    (i) of the transaction value of the good determined in accordance
     with Schedule II with respect to the transaction in which the
     producer of the good sold the good, adjusted to an F.O.B. basis, or
    (ii) of the total cost of the good, where there is no transaction
     value for the good under section 2(1) of Schedule III or the
     transaction value of the good is unacceptable under section 2(2) of
     that Schedule; and
  (b) the good satisfies all other applicable requirements of this
   appendix.
 
                    De minimis rule for textile goods
 
(6) A good provided for in any of Chapters 50 through 63, that does not
 originate in the territory of a NAFTA country because certain fibers or
 yarns that are used in the production of the component of the good that
 determines the tariff classification of the good do not undergo an
 applicable change in tariff classification as a result of production
 occurring entirely in the territory of one or more of the NAFTA
 countries, shall be considered to originate in the territory of a NAFTA
 country if
  (a) the total weight of all those fibers or yarns is not more than
   seven percent of the total weight of that component; and
  (b) the good satisfies all other applicable requirements of this
   appendix.
(7) For purposes of subsection (6),
  (a) the component of a good that determines the tariff classification
   of that good shall be identified in accordance with the first of the
   following General Rules for the Interpretation of the Harmonized
   System under which the identification can be determined, namely, Rule
   3(b), Rule 3(c) and Rule 4; and
  (b) where the component of the good that determines the tariff
   classification of the good is a blend of two or more yarns or fibers,
   all yarns and fibers used in the production of the component shall be
   taken into account in determining the weight of fibers and yarns in
   that component.
(8) For purposes of subsections (1) and (5), the value of non-
 originating materials shall be determined in accordance with sections
 7(1) through (4).
 
  Calculation of ``total cost'' for de minimis rules: choice of methods
 
(9) For purposes of subsection (1)(b) and subsection (5)(a)(ii), the
 total cost of a good shall be, at the choice of the producer of the
 good,
  (a) the total cost incurred with respect to all goods produced by the
   producer that can be reasonably allocated to that good in accordance
   with Schedule VII; or
  (b) the aggregate of each cost that forms part of the total cost
   incurred with respect to that good that can be reasonably allocated
   to that good in accordance with Schedule VII.
 
    Calculation of total cost; application of Schedules IX and X for
             determining value of non-originating materials
 
(10) Total cost under subsection (9) consists of the costs referred to
 in section 2(6), and is calculated in accordance with that subsection
 and section 2(7).
(11) For purposes of determining the value under subsection (1) of non-
 originating materials that do not undergo an applicable change in
 tariff classification, where Schedule X is not being used to determine
 the value of those non-originating materials,

[[Page 419]]

 
  (a) if the value of those non-originating materials is being
   determined as a percentage of the transaction value of the good and
   the producer chooses under section 6(10) that one of the methods set
   out in Schedule IX be used to determine the value of those non-
   originating materials for purposes of calculating the regional value
   content of the good, the value of those non-originating materials
   shall be determined in accordance with that method;
  (b) if
    (i) the value of those non-originating materials is being determined
     as a percentage of the total cost of the good,
    (ii) under the rule in which the applicable change in tariff
     classification is specified, the good is also subject to a regional
     value-content requirement and subsection (5)(a) does not apply with
     respect to that good,
    (iii) the regional value content of the good is calculated on the
     basis of the net cost method, and
    (iv) the producer chooses under section 6(15), 11(1), (3) or (6),
     12(1) or 13(4) that the regional value content of the good be
     calculated over a period,
  the value of those non-originating materials shall be the sum of the
   values of non-originating materials determined in accordance with
   that choice, divided by the number of units of the goods with respect
   to which the choice is made;
  (c) if
    (i) the value of those non-originating materials is being determined
     as a percentage of the total cost of the good,
    (ii) under the rule in which the applicable change in tariff
     classification is specified, the good is not also subject to a
     regional value-content requirement or subsection (5)(a) applies
     with respect to that good, and
    (iii) the producer chooses under section 2(7)(b) that, for purposes
     of section 5(9), the total cost of the good be calculated over a
     period,
  the value of those non-originating materials shall be the sum of the
   values of non-originating materials divided by the number of units
   produced during that period; and
  (d) in any other case, the value of those non-originating materials
   may, at the choice of the producer, be determined in accordance with
   one of the methods set out in Schedule IX.
(12) For purposes of subsection (5), the value of the non-originating
 materials used in the production of the good may, at the choice of the
 producer, be determined in accordance with one of the methods set out
 in Schedule IX.
 
                 Examples illustrating de minimis rules
 
(13) Each of the following examples is an ``Example'' as referred to in
 section 2(4).
 


Example 1: section 5(1)
 Producer A, located in a NAFTA country, uses originating materials and
 non-originating materials in the production of copper anodes provided
 for in heading 7402. The rule set out in Schedule I for heading 7402
 specifies a change in tariff classification from any other chapter.
 There is no applicable regional value-content requirement for this
 heading. Therefore, in order for the copper anode to qualify as an
 originating good under the rule set out in Schedule I, Producer A may
 not use in the production of the copper anode any non-originating
 material provided for in Chapter 74.
 All of the materials used in the production of the copper anode are
 originating materials, with the exception of a small amount of copper
 scrap provided for in heading 7404, that is in the same chapter as the
 copper anode. Under section 5(1), if the value of the non-originating
 copper scrap does not exceed seven percent of the transaction value of
 the copper anode or the total cost of the copper anode, whichever is
 applicable, the copper anode would be considered an originating good.
Example 2: section 5(2)

[[Page 420]]

 
 Producer A, located in a NAFTA country, uses originating materials and
 non-originating materials in the production of ceiling fans provided
 for in subheading 8414.51. There are two alternative rules set out in
 Schedule I for subheading 8414.51, one of which specifies a change in
 tariff classification from any other heading. The other rule specifies
 both a change in tariff classification from the subheading under which
 parts of the ceiling fans are classified and a regional value-content
 requirement. Therefore, in order for the ceiling fan to qualify as an
 originating good under the first of the alternative rules, all of the
 materials that are classified under the subheading for parts of ceiling
 fans and used in the production of the completed ceiling fan must be
 originating materials.
 In this case, all of the non-originating materials used in the
 production of the ceiling fan satisfy the change in tariff
 classification set out in the rule that specifies a change in tariff
 classification from any other heading, with the exception of one non-
 originating material that is classified under the subheading for parts
 of ceiling fans. Under section 5(1), if the value of the non-
 originating material that does not satisfy the change in tariff
 classification specified in the first rule does not exceed seven
 percent of the transaction value of the ceiling fan or the total cost
 of the ceiling fan, whichever is applicable, the ceiling fan would be
 considered an originating good. Therefore, under section 5(2), the
 ceiling fan would not be required to satisfy the alternative rule that
 specifies both a change in tariff classification and a regional value-
 content requirement.
Example 3: section 5(2)
 Producer A, located in a NAFTA country, uses originating materials and
 non-originating materials in the production of plastic bags provided
 for in subheading 3923.29. The rule set out in Schedule I for
 subheading 3923.29 specifies both a change in tariff classification
 from any other heading, except from subheadings 3920.20 or 3920.71,
 under which certain plastic materials are classified, and a regional
 value-content requirement. Therefore, with respect to that part of the
 rule that specifies a change in tariff classification, in order for the
 plastic bag to qualify as an originating good, any plastic materials
 that are classified under subheading 3920.20 or 3920.71 and that are
 used in the production of the plastic bag must be originating
 materials.
 In this case, all of the non-originating materials used in the
 production of the plastic bag satisfy the specified change in tariff
 classification, with the exception of a small amount of plastic
 materials classified under subheading 3920.71. Section 5(1) provides
 that the plastic bag can be considered an originating good if the value
 of the non-originating plastic materials that do not satisfy the
 specified change in tariff classification does not exceed seven percent
 of the transaction value of the plastic bag or the total cost of the
 plastic bag, whichever is applicable. In this case, the value of those
 non-originating materials that do not satisfy the specified change in
 tariff classification does not exceed the seven percent limit.
 However, the rule set out in Schedule I for subheading 3923.29
 specifies both a change in tariff classification and a regional value-
 content requirement. Therefore, under section 5(1)(c), in order to be
 considered an originating good, the plastic bag must also, except as
 otherwise provided in section 5(5), satisfy the regional value-content
 requirement specified in that rule. As provided in section 5(1)(c), the
 value of the non-originating materials that do not satisfy the
 specified change in tariff classification, together with the value of
 all other non-originating materials used in the production of the
 plastic bag, will be taken into account in calculating the regional
 value content of the plastic bag.
Example 4: section 5(5)

[[Page 421]]

 
 Producer A, located in a NAFTA country, primarily uses originating
 materials in the production of shoes provided for in heading 6405. The
 rule set out in Schedule I for heading 6405 specifies both a change in
 tariff classification from any subheading other than subheadings
 6401.10 through 6406.10 and a regional value-content requirement.
 With the exception of a small amount of materials provided for in
 Chapter 39, all of the materials used in the production of the shoes
 are originating materials.
 Under section 5(5), if the value of all of the non-originating
 materials used in the production of the shoes does not exceed seven
 percent of the transaction value of the shoes or the total cost of the
 shoes, whichever is applicable, the shoes are not required to satisfy
 the regional value-content requirement specified in the rule set out in
 Schedule I in order to be considered originating goods.
Example 5: section 5(5)
 Producer A, located in a NAFTA country, produces barbers' chairs
 provided for in subheading 9402.10. The rule set out in Schedule I for
 goods provided for in heading 9402 specifies a change in tariff
 classification from any other chapter. All of the materials used in the
 production of these chairs are originating materials, with the
 exception of a small quantity of non-originating materials that are
 classified as parts of barbers' chairs. These parts undergo no change
 in tariff classification because subheading 9402.10 provides for both
 barbers' chairs and their parts.
 Although Producer A's barbers' chairs do not qualify as originating
 goods under the rule set out in Schedule I, section 4(4)(b) provides,
 among other things, that, where there is no change in tariff
 classification from the non-originating materials to the goods because
 the subheading under which the goods are classified provides for both
 the goods and their parts, the goods shall qualify as originating goods
 if they satisfy a specified regional value-content requirement.
 However, under section 5(5), if the value of the non-originating
 materials does not exceed seven percent of the transaction value of the
 barbers' chairs or the total cost of the barbers' chairs, whichever is
 applicable, the barbers' chairs will be considered originating goods
 and are not required to satisfy the regional value-content requirement
 set out in section 4(4)(b)(v).
Example 6: sections 5 (6) and (7)
 Producer A, located in a NAFTA country, produces women's dresses
 provided for in subheading 6204.41 from fine wool fabric of heading
 5112. This fine wool fabric, also produced by Producer A, is the
 component of the dress that determines its tariff classification under
 subheading 6204.41.
 The rule set out in Schedule I for subheading 6204.41, under which the
 dress is classified, specifies both a change in tariff classification
 from any other chapter, except from those headings and chapters under
 which certain yarns and fabrics, including combed wool yarn and wool
 fabric, are classified, and a requirement that the good be cut and sewn
 or otherwise assembled in the territory of one or more of the NAFTA
 countries.
 Therefore, with respect to that part of the rule that specifies a
 change in tariff classification, in order for the dress to qualify as
 an originating good, the combed wool yarn and the fine wool fabric made
 therefrom that are used by Producer A in the production of the dress
 must be originating materials.
 At one point Producer A uses a small quantity of non-originating combed
 wool yarn in the production of the fine wool fabric. Under section
 5(6), if the total weight of the non-originating combed wool yarn does
 not exceed seven percent of the total weight of all the yarn used in
 the production of the component of the dress that determines its tariff
 classification, that is, the wool fabric, the dress would be considered
 an originating good.
 


[[Page 422]]


                                PART III
                    SECTION 6. REGIONAL VALUE CONTENT
 
(1) Except as otherwise provided in subsection (6), the regional value
 content of a good shall be calculated, at the choice of the exporter or
 producer of the good, on the basis of either the transaction value
 method or the net cost method.
 
                        Transaction Value Method
 
(2) The transaction value method for calculating the regional value
 content of a good is as follows:
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.000


where
  RVC is the regional value content of the good, expressed as a
   percentage;
  TV is the transaction value of the good, determined in accordance with
   Schedule II with respect to the transaction in which the producer of
   the good sold the good, adjusted to an F.O.B. basis; and
  VNM is the value of non-originating materials used by the producer in
   the production of the good, determined in accordance with section 7.
 
                             Net Cost Method
 
(3) The net cost method for calculating the regional value content of a
 good is as follows:
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.001


where
  RVC is the regional value content of the good, expressed as a
   percentage;
  NC is the net cost of the good, calculated in accordance with
   subsection (11); and
  VNM is the value of non-originating materials used by the producer in
   the production of the good, determined, except as otherwise provided
   in sections 9 and 10, in accordance with section 7.
 
     VNM does not include value of non-originating materials used in
                          originating material
 
(4) Except as otherwise provided in section 9 and section 10(1)(d), for
 purposes of calculating the regional value content of a good under
 subsection (2) or (3), the value of non-originating materials used by a
 producer in the production of the good shall not include
  (a) the value of any non-originating materials used by another
   producer in the production of originating materials that are
   subsequently acquired and used by the producer of the good in the
   production of that good; or
  (b) the value of any non-originating materials used by the producer in
   the production of a self-produced material that is an originating
   material and is designated as an intermediate material.
(5) For purposes of subsection (4),
  (a) in the case of any self-produced material that is not designated
   as an intermediate material, only the value of any non-originating
   materials used in the production of the self-produced material shall
   be included in the value of non-originating materials used in the
   production of the good; and
  (b) where a self-produced material that is designated as an
   intermediate material and is an originating material is used by the
   producer of the good with non-originating materials (whether or not
   those non-originating materials are produced by that producer) in the
   production of the good, the value of those non-originating materials
   shall be included in the value of non-originating materials.
 

[[Page 423]]

 
            Net Cost Method required in certain circumstances
 
(6) The regional value content of a good shall be calculated only on the
 basis of the net cost method where
  (a) there is no transaction value for the good under section 2(1) of
   Schedule III;
  (b) the transaction value of the good is unacceptable under section
   2(2) of Schedule III;
  (c) the good is sold by the producer to a related person and the
   volume, by units of quantity, of sales by that producer of identical
   goods or similar goods, or any combination thereof, to related
   persons during the six month period immediately preceding the month
   in which the goods are sold exceeds 85 percent of the producer's
   total sales to all persons, whether or not related and regardless of
   location, after ``the producer's total sales''of identical goods or
   similar goods, or any combination thereof, during that period;
  (d) the good is
    (i) a motor vehicle provided for in any of headings 8701 and 8702,
     subheadings 8703.21 through 8703.90 and headings 8704, 8705 and
     8706,
    (ii) a good provided for in a tariff provision listed in Schedule IV
     or an automotive component assembly, automotive component, sub-
     component or listed material, and is for use in a motor vehicle
     referred to in subparagraph (i), either as original equipment or as
     an after-market part,
    (iii) a good provided for in any of subheadings 6401.10 through
     6406.10, or
    (iv) a good provided for in subheading 8469.11;
  (e) the exporter or producer chooses to accumulate with respect to the
   good in accordance with section 14; or
  (f) the good is an intermediate material and is subject to a regional
   value-content requirement.
 
   Option to change from TVM to NCM for calculation of regional value
                                 content
 
(7) If the exporter or producer of a good calculates the regional value
 content of the good on the basis of the transaction value method and
 the customs administration of a NAFTA country subsequently notifies
 that exporter or producer in writing, during the course of a
 verification of origin, that
  (a) the transaction value of the good, as determined by the exporter
   or producer, is required to be adjusted under section 4 of Schedule
   II or is unacceptable under section 2(2) of Schedule III, there is no
   transaction value for the good under section 2(1) of Schedule III or
   the transaction value method may not be used because of the
   application of subsection (6)(c), or
  (b) the value of any material used in the production of the good, as
   determined by the exporter or producer, is required to be adjusted
   under section 5 of Schedule VIII or is unacceptable under section
   2(3) of Schedule VIII, or there is no transaction value for the
   material under section 2(2) of Schedule VIII or the transaction value
   method may not be used to calculate the regional value content of the
   material because of the application of subsection (6)(c),
the exporter or producer may choose that the regional value content of
 the good be calculated on the basis of the net cost method, in which
 case the calculation must be made within 60 days after the producer
 receives the notification, or such longer period as that customs
 administration specifies.
 

[[Page 424]]

 
                  Change from NCM to TVM not permitted
 
(8) If the exporter or producer of a good chooses that the regional
 value content of the good be calculated on the basis of the net cost
 method and the customs administration of a NAFTA country subsequently
 notifies that exporter or producer in writing, during the course of a
 verification of origin, that the good does not satisfy the applicable
 regional value-content requirement, the exporter or producer of the
 good may not recalculate the regional value content on the basis of the
 transaction value method.
(9) Nothing in subsection (7) shall be construed as preventing any
 review and appeal under Article 510 of the Agreement, as implemented in
 each NAFTA country, of an adjustment to or a rejection of
  (a) the transaction value of the good; or
  (b) the value of any material used in the production of the good.
 
 Application of Schedule IX for determining value of ``identical'' non-
                     originating materials under TVM
 
(10) For purposes of the transaction value method, where non-originating
 materials that are the same as one another in all respects, including
 physical characteristics, quality and reputation but excluding minor
 differences in appearance, are used in the production of a good, the
 value of those non-originating materials may, at the choice of the
 producer of the good, be determined in accordance with one of the
 methods set out in Schedule IX.
 
             Options for calculating the net cost of a good
 
(11) For purposes of subsection (3), the net cost of a good may be
 calculated, at the choice of the producer of the good, by
  (a) calculating the total cost incurred with respect to all goods
   produced by that producer, subtracting any excluded costs that are
   included in that total cost, and reasonably allocating, in accordance
   with Schedule VII, the remainder to the good;
  (b) calculating the total cost incurred with respect to all goods
   produced by that producer, reasonably allocating, in accordance with
   Schedule VII, that total cost to the good, and subtracting any
   excluded costs that are included in the amount allocated to that
   good; or
  (c) reasonably allocating, in accordance with Schedule VII, each cost
   that forms part of the total cost incurred with respect to the good
   so that the aggregate of those costs does not include any excluded
   costs.
 
                        Calculation of total cost
 
(12) Total cost under subsection (11) consists of the costs referred to
 in section 2(6), and is calculated in accordance with that subsection.
 
                 Calculation of net cost; excluded costs
 
(13) For purposes of calculating net cost under subsection (11),
  (a) excluded costs shall be the excluded costs that are recorded on
   the books of the producer of the good;
  (b) excluded costs that are included in the value of a material that
   is used in the production of the good shall not be subtracted from or
   otherwise excluded from the total cost; and
  (c) excluded costs do not include any amount paid for research and
   development services performed in the territory of a NAFTA country.
 
         Non-allowable interest; determination under Schedule XI
 
(14) For purposes of calculating non-allowable interest costs, the
 determination of whether interest costs incurred by a producer are more
 than 700 basis points above the yield on debt obligations of comparable
 maturities issued by the federal government of the country in which the
 producer is located shall be made in accordance with Schedule XI.
 

[[Page 425]]

 
  Use of ``averaging'' over a period to calculate RVC under NCM; period
                            cannot be changed
 
(15) For purposes of the net cost method, the regional value content of
 the good, other than a good with respect to which a choice to average
 may be made under section 11(1), (3) or (6), 12(1) or 13(4), may be
 calculated, where the producer chooses to do so, by
  (a) calculating the sum of the net costs incurred and the sum of the
   values of non-originating materials used by the producer of the good
   with respect to the good and identical goods or similar goods, or any
   combination thereof, produced in a single plant by the producer over
    (i) a month,
    (ii) any consecutive three month or six month period that falls
     within and is evenly divisible into the number of months of the
     producer's fiscal year remaining at the beginning of that period,
     or
    (iii) the producer's fiscal year; and
  (b) using the sums referred to in paragraph (a) as the net cost and
   the value of non-originating materials, respectively.
(16) The calculation made under subsection (15) shall apply with respect
 to all units of the good produced during the period chosen by the
 producer under subsection (15)(a).
(17) A choice made under subsection (15) may not be rescinded or
 modified with respect to the goods or the period with respect to which
 the choice is made.
  Choice of averaging period cannot be changed for remainder of fiscal
                                  year
 
(18) Where a producer chooses a one, three or six month period under
 subsection (15) with respect to goods, the producer shall be considered
 to have chosen under that subsection a period or periods of the same
 duration for the remainder of the producer's fiscal year with respect
 to those goods.
 
 Choice of net cost method cannot be changed for remainder of the fiscal
                                  year
 
(19) Where the net cost method is required to be used or has been chosen
 and a choice has been made under subsection (15), the regional value
 content of the good shall be calculated on the basis of the net cost
 method over the period chosen under that subsection and for the
 remainder of the producer's fiscal year.
 
  Obligation to perform self-analysis and give notification of changed
       circumstance if RVC calculated on basis of estimated costs
 
(20) Except as otherwise provided in sections 11(10), 12(11) and 13(10),
 where the producer of a good has calculated the regional value content
 of the good under the net cost method on the basis of estimated costs,
 including standard costs, budgeted forecasts or other similar
 estimating procedures, before or during the period chosen in subsection
 (15)(a), the producer shall conduct an analysis at the end of the
 producer's fiscal year of the actual costs incurred over the period
 with respect to the production of the good and, if the good does not
 satisfy the regional value-content requirement on the basis of the
 actual costs during that period, immediately inform any person to whom
 the producer has provided a Certificate of Origin for the good, or a
 written statement that the good is an originating good, that the good
 is a non-originating good.
 
             Option to treat any material as non-originating
 
(21) For purposes of calculating the regional value content of a good,
 the producer of that good may choose to treat any material used in the
 production of that good as a non-originating material.
 
            Examples of Calculation of RVC under TVM and NCM
 
(22) Each of the following examples is an ``Example'' as referred to in
 section 2(4).
 


Example 1: example of point of direct shipment (with respect to adjusted
 to an F.O.B. basis)

[[Page 426]]

 
 A producer has only one factory, at which the producer manufactures
 finished office chairs. Because the factory is located close to
 transportation facilities, all units of the finished good are stored in
 a factory warehouse 200 meters from the end of the production line.
 Goods are shipped worldwide from this warehouse. The point of direct
 shipment is the warehouse.
Example 2: examples of point of direct shipment (with respect to
 adjusted to an F.O.B. basis)
 A producer has six factories, all located within the territory of one
 of the NAFTA countries, at which the producer produces garden tools of
 various types. These tools are shipped worldwide, and orders usually
 consist of bulk orders of various types of tools. Because different
 tools are manufactured at different factories, the producer decided to
 consolidate storage and shipping facilities and ships all finished
 products to a large warehouse located near the seaport, from which all
 orders are shipped. The distance from the factories to the warehouse
 varies from 3 km to 130 km. The point of direct shipment for each of
 the goods is the warehouse.
Example 3: examples of point of direct shipment (with respect to
 adjusted to an F.O.B. basis)
 A producer has only one factory, located near the center of one of the
 NAFTA countries, at which the producer manufactures finished office
 chairs. The office chairs are shipped from that factory to three
 warehouses leased by the producer, one on the west coast, one near the
 factory and one on the east coast. The office chairs are shipped to
 buyers from these warehouses, the shipping location depending on the
 shipping distance from the buyer. Buyers closest to the west coast
 warehouse are normally supplied by the west coast warehouse, buyers
 closest to the east coast are normally supplied by the warehouse
 located on the east coast and buyers closest to the warehouse near the
 factory are normally supplied by that warehouse. In this case, the
 point of direct shipment is the location of the warehouse from which
 the office chairs are normally shipped to customers in the location in
 which the buyer is located.
Example 4: section 6(3), net cost method
 A producer located in NAFTA country A sells Good A that is subject to a
 regional value-content requirement to a buyer located in NAFTA country
 B. The producer of Good A chooses that the regional value content of
 that good be calculated using the net cost method. All applicable
 requirements of this appendix, other than the regional value-content
 requirement, have been met. The applicable regional value-content
 requirement is 50 percent.
 In order to calculate the regional value-content of Good A, the
 producer first calculates the net cost of Good A. Under section
 6(11)(a), the net cost is the total cost of Good A (the aggregate of
 the product costs, period costs and other costs) per unit, minus the
 excluded costs (the aggregate of the sales promotion, marketing and
 after-sales service costs, royalties, shipping and packing costs and
 non-allowable interest costs) per unit. The producer uses the following
 figures to calculate the net cost:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................       $30.00
    Value of non-originating materials.....................        40.00
    Other product costs....................................        20.00
Period costs...............................................        10.00
Other costs................................................         0.00
                                                            ------------
Total cost of Good A, per unit.............................      $100.00
Excluded costs:
    Sales promotion, marketing and after-sales service cost        $5.00
    Royalties..............................................         2.50
    Shipping and packing costs.............................         3.00

[[Page 427]]

 
    Non-allowable interest costs...........................         1.50
                                                            ------------
Total excluded costs.......................................       $12.00
------------------------------------------------------------------------


 The net cost is the total cost of Good A, per unit, minus the excluded
 costs.
 


------------------------------------------------------------------------
 
Total cost of Good A, per unit:............................      $100.00
Excluded costs.............................................       -12.00
                                                            ------------
Net cost of Good A, per unit...............................       $88.00
------------------------------------------------------------------------


 The value for net cost ($88) and the value of non-originating materials
 ($40) are needed in order to calculate the regional value content. The
 producer calculates the regional value content of Good A under the net
 cost method in the following manner:
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.002


 Therefore, under the net cost method, Good A qualifies as an
 originating good, with a regional value-content of 54.5 percent.
Example 5: section 6(6)(c), net cost method required for certain sales
 to related persons
 On January 15, 1994, a producer located in NAFTA country A sells 1,000
 units of Good A to a related person, located in NAFTA country B. During
 the six month period beginning on July 1, 1993 and ending on December
 31, 1993, the producer sold 90,000 units of identical goods and similar
 goods to related persons from various countries, including that buyer.
 The producer's total sales of those identical goods and similar goods
 to all persons from all countries during that six month period were
 100,000 units.
 The total quantity of identical goods and similar goods sold by the
 producer to related persons during that six month period was 90 percent
 of the producer's total sales of those identical goods and similar
 goods to all persons. Under section 6(6)(c), the producer must use the
 net cost method to calculate the regional value content of Good A sold
 in January 1994, because the 85 percent limit was exceeded.
Example 6: section 6(11)(a)
 A producer in a NAFTA country produces Good A and Good B during the
 producer's fiscal year.
 The producer uses the following figures, which are recorded on the
 producer's books and represent all of the costs incurred with respect
 to both Good A and Good B, to calculate the net cost of those goods:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................       $2,000
    Value of non-originating materials.....................        1,000
    Other product costs....................................        2,400
Period costs: (including $1,200 in excluded costs).........        3,200
Other costs................................................          400
                                                            ------------
Total cost of Good A and Good B............................       $9,000

[[Page 428]]

 
The net cost is the total cost of Good A and Good B, minus
 the excluded costs incurred with respect to those goods.
Total cost of Good A and Good B............................       $9,000
Excluded costs.............................................       -1,200
                                                            ------------
Net cost of Good A and Good B..............................       $7,800
------------------------------------------------------------------------


 The net cost must then be reasonably allocated, in accordance with
 Schedule VII, to Good A and Good B.
Example 7: section 6(11)(b)
 A producer located in a NAFTA country produces Good A and Good B during
 the producer's fiscal year. In order to calculate the regional value
 content of Good A and Good B, the producer uses the following figures
 that are recorded on the producer's books and incurred with respect to
 those goods:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................       $2,000
    Value of non-originating materials.....................        1,000
    Other product costs....................................        2,400
Period costs: (including $1,200 in excluded costs).........        3,200
Other costs................................................          400
                                                            ------------
Total cost of Good A and Good B............................       $9,000
------------------------------------------------------------------------


 Under section 6(11)(b), the total cost of Good A and Good B is then
 reasonably allocated, in accordance with Schedule VII, to those goods.
 The costs are allocated in the following manner:
 


------------------------------------------------------------------------
                                        Allocated to      Allocated to
                                           Good A            Good B
------------------------------------------------------------------------
Total cost ($9,000 for both Good A              $5,220            $3,780
 and Good B)........................
------------------------------------------------------------------------


 The excluded costs ($1,200) that are included in total cost allocated
 to Good A and Good B, in accordance with Schedule VII, are subtracted
 from that amount.
 


------------------------------------------------------------------------
                                                  Excluded     Excluded
                                                    Cost         Cost
                                                 Allocated    Allocated
                                                 to Good A    to Good B
------------------------------------------------------------------------
Total excluded costs:
    Sales promotion, marketing             500          290          210
     and after-sale service costs
    Royalties....................          200          116           84
    Shipping and packing costs...          500          290          210
                                  --------------------------------------
Net cost (total cost minus         ...........       $4,524       $3,276
 excluded costs).................
------------------------------------------------------------------------


 The net cost of Good A is thus $4,524, and the net cost of Good B is
 $3,276.
Example 8: section 6(11)(c)
 A Producer located in a NAFTA country produces Good C and Good D. The
 following costs are recorded on the producer's books for the months of
 January, February and March, and each cost that forms part of the total
 cost are reasonably allocated, in accordance with Schedule VII, to Good
 C and Good D.
 


------------------------------------------------------------------------
                                   Total cost:   Allocated    Allocated
                                    Good C and   to Good C    to Good D
                                    Good D (in      (in          (in
                                    thousands    thousands    thousands
                                   of dollars)  of dollars)  of dollars)
------------------------------------------------------------------------
Product costs:
    Value of originating                   100            0          100
     materials...................
    Value of non-originating               900          800          100
     materials...................
    Other product costs..........          500          300          200

[[Page 429]]

 
Period costs (including $420 in          5,679        3,036        2,643
 excluded costs).................
Minus Excluded Costs.............          420          300          120
Other costs......................            0            0            0
                                  --------------------------------------
Total cost (aggregate of product         6,759        3,836        2,923
 costs, period costs and other
 costs)..........................
------------------------------------------------------------------------


Example 9: section 6(12)
 Producer A, located in a NAFTA country, produces Good A that is subject
 to a regional value-content requirement. The producer chooses that the
 regional value content of that good be calculated using the net cost
 method. Producer A buys Material X from Producer B, located in a NAFTA
 country. Material X is a non-originating material and is used in the
 production of Good A. Producer A provides Producer B, at no charge,
 with tools to be used in the production of Material X. The cost of the
 tools that is recorded on the books of Producer A has been expensed in
 the current year. Pursuant to section 5(1)(b)(ii) of Schedule VIII, the
 value of the tools is included in the value of Material X. Therefore,
 the cost of the tools that is recorded on the books of Producer A and
 that has been expensed in the current year cannot be included as a
 separate cost in the net cost of Good A because it has already been
 included in the value of Material X.
Example 10: section 6(12)
 Producer A, located in a NAFTA country, produces Good A that is subject
 to a regional value-content requirement. The producer chooses that the
 regional value content of that good be calculated using the net cost
 method and averages the calculation over the producer's fiscal year
 under section 6(15). Producer A determines that during that fiscal year
 Producer A incurred a gain on foreign currency conversion of $10,000
 and a loss on foreign currency conversion of $8,000, resulting in a net
 gain of $2,000. Producer A also determines that $7,000 of the gain on
 foreign currency conversion and $6,000 of the loss on foreign currency
 conversion is related to the purchase of non-originating materials used
 in the production of Good A, and $3,000 of the gain on foreign currency
 conversion and $2,000 of the loss on foreign currency conversion is not
 related to the production of Good A. The producer determines that the
 total cost of Good A is $45,000 before deducting the $1,000 net gain on
 foreign currency conversion related to the production of Good A. The
 total cost of Good A is therefore $44,000. That $1,000 net gain is not
 included in the value of non-originating materials under section 7(1).
Example 11: section 6(12)
 Given the same facts as in example 10, except that Producer A
 determines that $6,000 of the gain on foreign currency conversion and
 $7,000 of the loss on foreign currency conversion is related to the
 purchase of non-originating materials used in the production of Good A.
 The total cost of Good A is $45,000, which includes the $1,000 net loss
 on foreign currency conversion related to the production of Good A.
 That $1,000 net loss is not included in the value of non-originating
 materials under section 7(1).
 


                                 PART IV
                          SECTION 7. MATERIALS
   Valuation of materials used in the production of a good other than
                        certain automotive goods
 
(1) Except as otherwise provided for non-originating materials used in
 the production of a good referred to in section 9(1) or 10(1), and
 except in the case of indirect materials, intermediate materials and
 packing materials and containers, for purposes of calculating the
 regional value content of a good and for purposes of sections 5(1) and
 (5), the value of a material that is used in the production of the good
 shall be

[[Page 430]]

 
  (a) except as otherwise provided in subsection (2), where the material
   is imported by the producer of the good into the territory of the
   NAFTA country in which the good is produced, the customs value of the
   material with respect to that importation, or
  (b) where the material is acquired by the producer of the good from
   another person located in the territory of the NAFTA country in which
   the good is produced
    (i) the transaction value, determined in accordance with section
     2(1) of Schedule VIII, with respect to the transaction in which the
     producer acquired the material, or
    (ii) the value determined in accordance with sections 6 through 11
     of Schedule VIII, where, with respect to the transaction in which
     the producer acquired the material, there is no transaction value
     under section 2(2) of that Schedule or the transaction value is
     unacceptable under section 2(3) of that Schedule,
and shall include the following costs if they are not included under
 paragraph (a) or (b):
  (c) the costs of freight, insurance and packing and all other costs
   incurred in transporting the material to the location of the
   producer,
  (d) duties and taxes paid or payable with respect to the material in
   the territory of one or more of the NAFTA countries, other than
   duties and taxes that are waived, refunded, refundable or otherwise
   recoverable, including credit against duty or tax paid or payable,
  (e) customs brokerage fees, including the cost of in-house customs
   brokerage services, incurred with respect to the material in the
   territory of one or more of the NAFTA countries, and
  (f) the cost of waste and spoilage resulting from the use of the
   material in the production of the good, minus the value of any
   reusable scrap or by-product.
 
    Valuation of material if customs value is not in accordance with
                              Schedule VIII
 
(2) For purposes of subsection (1)(a), where the customs value of the
 material referred to in that paragraph was not determined in a manner
 consistent with Schedule VIII, the value of the material shall be
 determined in accordance with Schedule VIII with respect to the
 importation of that material and, where the costs referred to in
 subsections (1)(c) through (f) are not included in that value, those
 costs be added to that value.
 
                         Costs recorded on books
 
(3) For purposes of subsection (1), the costs referred to in subsections
 (1)(c) through (f) shall be the costs referred to in those paragraphs
 that are recorded on the books of the producer of the good.
   Designation of self-produced material as an intermediate material;
           limitation on designations; designation is optional
 
(4) Except for purposes of determining the value of non-originating
 materials used in the production of a light-duty automotive good and
 except in the case of an automotive component assembly, automotive
 component or sub-component for use as original equipment in the
 production of a heavy-duty vehicle, for purposes of calculating the
 regional value content of a good the producer of the good may designate
 as an intermediate material any self-produced material that is used in
 the production of the good, provided that where an intermediate
 material is subject to a regional value-content requirement, no other
 self-produced material that is subject to a regional value-content
 requirement and is incorporated into that intermediate material is also
 designated by the producer as an intermediate material.
(5) For purposes of subsection (4),

[[Page 431]]

 
  (a) in order to qualify as an originating material, a self-produced
   material that is designated as an intermediate material must qualify
   as an originating material under these Regulations;
  (b) the designation of a self-produced material as an intermediate
   material shall be made solely at the choice of the producer of that
   self-produced material; and
  (c) except as otherwise provided in section 14(4), the proviso set out
   in subsection (4) does not apply with respect to an intermediate
   material used by another producer in the production of a material
   that is subsequently acquired and used in the production of a good by
   the producer referred to in subsection (4).
 
                  Valuation of an intermediate material
 
(6) The value of an intermediate material shall be, at the choice of the
 producer of the good,
  (a) the total cost incurred with respect to all goods produced by the
   producer that can be reasonably allocated to that intermediate
   material in accordance with Schedule VII; or
  (b) the aggregate of each cost that forms part of the total cost
   incurred with respect to that intermediate material that can be
   reasonably allocated to that intermediate material in accordance with
   Schedule VII.
 
                        Calculation of total cost
 
(7) Total cost under subsection (6) consists of the costs referred to in
 section 2(6), and is calculated in accordance with that section and
 section 2(7).
 
  Rescission of a designation during course of verification; option to
                 designate another intermediate material
 
(8) Where a producer of a good designates a self-produced material as an
 intermediate material under subsection (4) and the customs
 administration of a NAFTA country into which the good is imported
 determines during a verification of origin of the good that the
 intermediate material is a non-originating material and notifies the
 producer of this in writing before the written determination of whether
 the good qualifies as an originating good, the producer may rescind the
 designation, and the regional value content of the good shall be
 calculated as though the self-produced material were not so designated.
(9) A producer of a good who rescinds a designation under subsection (8)
  (a) shall retain any rights of review and appeal under Article 510 of
   the Agreement, as implemented in each NAFTA country, with respect to
   the determination of the origin of the intermediate material as
   though the producer did not rescind the designation; and
  (b) may, not later than 30 days after the customs administration
   referred to in subsection (8) notifies the producer in writing that
   the self-produced material referred to in paragraph (a) is a non-
   originating material, designate as an intermediate material another
   self-produced material that is incorporated into the good, subject to
   the proviso set out in subsection (4).
(10) Where a producer of a good designates another self-produced
 material as an intermediate material under subsection (9)(b) and the
 customs administration referred to in subsection (8) determines during
 the verification of origin of the good that that self-produced material
 is a non-originating material,
  (a) the producer may rescind the designation, and the regional value
   content of the good shall be calculated as though the self-produced
   material were not so designated;
  (b) the producer shall retain any rights of review and appeal under
   Article 510 of the Agreement, as implemented in each NAFTA country,
   with respect to the determination of the origin of the intermediate
   material as though the producer did not rescind the designation; and
  (c) the producer may not designate another self-produced material that
   is incorporated into the good as an intermediate material.
 

[[Page 432]]

 
  Indirect Materials; deemed originating; value as recorded on books of
                                producer
 
(11) For purposes of determining whether a good is an originating good,
 an indirect material that is used in the production of the good
  (a) shall be considered to be an originating material, regardless of
   where that indirect material is produced; and
  (b) if the good is subject to a regional value-content requirement,
   for purposes of calculating the net cost under the net cost method,
   the value of the indirect material shall be the costs of that
   material that are recorded on the books of the producer of the good.
 
Packaging Materials and Containers; origin disregarded for tariff change
                                  rules
 
(12) Packaging materials and containers, if classified under the
 Harmonized System with the good that is packaged therein, shall be
 disregarded for purposes of
  (a) determining whether all of the non-originating materials used in
   the production of the good undergo an applicable change in tariff
   classification; and
  (b) determining under section 5(1) the value of non-originating
   materials that do not undergo an applicable change in tariff
   classification.
 
 Actual originating status considered for RVC requirement; valuation of
                                packaging
 
(13) Where packaging materials and containers are classified under the
 Harmonized System with the good that is packaged therein and that good
 is subject to a regional value-content requirement, the value of those
 packaging materials and containers shall be taken into account as
 originating materials or non-originating materials, as the case may be,
 for purposes of calculating the regional value content of the good.
(14) For purposes of subsection (13), where packaging materials and
 containers are self-produced materials, the producer may choose to
 designate those materials as intermediate materials under subsection
 (4).
 
Packing materials and containers; disregarded for tariff change rule and
             for RVC requirement; value as recorded on books
 
(15) For purposes of determining whether a good is an originating good,
 packing materials and containers in which the good is packed
  (a) shall be disregarded for purposes of determining whether
    (i) the non-originating materials used in the production of the good
     undergo an applicable change in tariff classification, and
    (ii) the good satisfies a regional value-content requirement; and
  (b) if the good is subject to a regional value-content requirement,
   the value of the packing materials and containers shall be the costs
   thereof that are recorded on the books of the producer of the good.
 
   Fungible materials; fungible commingled goods; inventory management
               methods for determining whether originating
 
(16) Subject to subsection (16.1), for purposes of determining whether a
 good is an originating good,
  (a) where originating materials and non-originating materials that are
   fungible materials
  (i) are withdrawn from an inventory in one location and used in the
   production of the good, or
  (ii) are withdrawn from inventories in more than one location in the
   territory of one or more of the NAFTA countries and used in the
   production of the good at the same production facility,
  the determination of whether the materials are originating materials
   may be made on the basis of any of the applicable inventory
   management methods set out in Schedule X; and

[[Page 433]]

 
  (b) where originating goods and non-originating goods that are
   fungible goods are physically combined or mixed in inventory and
   prior to exportation do not undergo production or any other operation
   in the territory of the NAFTA country in which they were physically
   combined or mixed in inventory, other than unloading, reloading or
   any other operation necessary to preserve the goods in good condition
   or to transport the goods for exportation to the territory of another
   NAFTA country, the determination of whether the good is an
   originating good may be made on the basis of any of the applicable
   inventory management methods set out in Schedule X.
(16.1) Where fungible materials referred to in subsection (16)(a) and
 fungible goods referred to in subsection (16)(b) are withdrawn from the
 same inventory, the inventory management method used for the materials
 must be the same as the inventory management method used for goods, and
 where the averaging method is used, the respective averaging periods
 for fungible materials and fungible goods are to be used.
(16.2) A choice of inventory management methods under subsection (16)
 shall be considered to have been made when the customs administration
 of the NAFTA country into which the good is imported is informed in
 writing of the choice during the course of a verification of the origin
 of the good.
 
Accessories, spare parts and tools; deemed originating for tariff change
           rule; actual origin applicable for RVC requirement
 
(17) Accessories, spare parts or tools that are delivered with a good
 and form part of the good's standard accessories, spare parts or tools
 are originating materials if the good is an originating good, and shall
 be disregarded for purposes of determining whether all the non-
 originating materials used in the production of the good undergo an
 applicable change in tariff classification or determining under section
 5(1) the value of non-originating materials that do not undergo an
 applicable change in tariff classification, provided that
  (a) the accessories, spare parts or tools are not invoiced separately
   from the good; and
  (b) the quantities and value of the accessories, spare parts or tools
   are customary for the good, within the industry that produces the
   good.
(18) Where a good is subject to a regional value-content requirement,
 the value of accessories, spare parts and tools that are delivered with
 that good and form part of the good's standard accessories, spare parts
 or tools shall be taken into account as originating or non-originating
 materials, as the case may be, in calculating the regional value
 content of the good.
(19) For purposes of subsection (18), where accessories, spare parts and
 tools are self-produced materials, the producer may choose to designate
 those materials as intermediate materials under subsection (4).
 
            Examples illustrating the provisions on materials
 
(20) Each of the following examples is an ``Example'' as referred to in
 section 2(4).
 


Example 1: section 7(2), Customs Value not Determined in a Manner
 Consistent with Schedule VIII

[[Page 434]]

 
 Producer A, located in NAFTA country A, imports material A into NAFTA
 country A. Producer A purchased material A from a middleman located in
 country B. The middleman purchased the material from a manufacturer
 located in country B. Under the laws in NAFTA country A that implement
 the Agreement on Implementation of Article VII of the General Agreement
 on Tariffs and Trade, the customs value of material A was based on the
 price actually paid or payable by the middleman to the manufacturer.
 Producer A uses material A to produce Good C, and exports Good C to
 NAFTA country D. Good C is subject to a regional value-content
 requirement.
 Under section 4(1) of Schedule VIII, the price actually paid or payable
 is the total payment made or to be made by the producer to or for the
 benefit of the seller of the material. Section 1 of that Schedule
 defines producer and seller for purposes of the Schedule. A producer is
 the person who uses the material in the production of a good that is
 subject to a regional value-content requirement. A seller is the person
 who sells the material being valued to the producer.
 The customs value of material A was not determined in a manner
 consistent with Schedule VIII because it was based on the price
 actually paid or payable by the middleman to the manufacturer, rather
 than on the price actually paid or payable by Producer A to the
 middleman. Thus, section 7(2) applies and material A is valued in
 accordance with Schedule VIII.
Example 2: section 7(5), Value of Intermediate Materials
 A producer located in a NAFTA country produces Good B, which is subject
 to a regional value-content requirement under section 4(2)(b). The
 producer also produces Material A, which is used in the production of
 Good B. Both originating materials and non-originating materials are
 used in the production of Material A. Material A is subject to a change
 in tariff classification requirement under section 4(2)(a). The costs
 to produce Material A are the following:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................        $1.00
    Value of non-originating materials.....................         7.50
    Other product costs....................................         1.50
Period costs (including $0.30 in royalties)................         0.50
Other costs................................................         0.10
                                                            ------------
Total cost of Material A...................................       $10.60
------------------------------------------------------------------------


 The producer designates Material A as an intermediate material and
 determines that, because all of the non-originating materials that are
 used in the production of Material A undergo an applicable change in
 tariff classification set out in Schedule I, Material A would, under
 paragraph 4(2)(a) qualify as an originating material. The cost of the
 non-originating materials used in the production of Material A is
 therefore not included in the value of non-originating materials that
 are used in the production of Good B for the purpose of determining the
 regional value content of Good B. Because Material A has been
 designated as an intermediate material, the total cost of Material A,
 which is $10.60, is treated as the cost of originating materials for
 the purpose of calculating the regional value content of Good B. The
 total cost of Good B is determined in accordance with the following
 figures:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials
        --intermediate materials...........................       $10.60
        --other materials..................................         3.00
    Value of non-originating materials.....................         5.50
    Other product costs....................................         6.50
Period costs...............................................         2.50

[[Page 435]]

 
Other costs................................................         0.10
                                                            ------------
Total cost of Good B.......................................       $28.20
------------------------------------------------------------------------


Example 3: section 7(5), Effects of the Designation of Self-produced
 Materials on Net Cost
 The ability to designate intermediate materials helps to put the
 vertically integrated producer who is self-producing materials that are
 used in the production of a good on par with a producer who is
 purchasing materials and valuing those materials in accordance with
 subsection 7(1). The following situations demonstrate how this is
 achieved:
 Situation 1
 A producer located in a NAFTA country produces Good B, which is subject
 to a regional value-content requirement of 50 percent under the net
 cost method. Good B satisfies all other applicable requirements of
 these Regulations. The producer purchases Material A, which is used in
 the production of Good B, from a supplier located in a NAFTA country.
 The value of Material A determined in accordance with subsection 7(1)
 is $11.00. Material A is an originating material. All other materials
 used in the production of Good B are non-originating materials. The net
 cost of Good B is determined as follows:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials (Material A)............       $11.00
    Value of non-originating materials.....................         5.50
    Other product costs....................................         6.50
Period costs: (including $0.20 in excluded costs)..........         0.50
Other costs................................................         0.10
                                                            ------------
Total cost of Good B.......................................       $23.60
                                                            ============
Excluded costs: (included in period costs).................        -0.20
                                                            ------------
Net cost of Good B.........................................       $23.40
------------------------------------------------------------------------


 The regional value content of Good B is calculated as follows:
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.003


 The regional value content of Good B is 76.5 percent, and Good B,
 therefore, qualifies as an originating good.
 Situation 2
 A producer located in a NAFTA country produces Good B, which is subject
 to a regional value-content requirement of 50 percent under the net
 cost method. Good B satisfies all other applicable requirements of
 these Regulations. The producer self-produces Material A which is used
 in the production of Good B. The costs to produce Material A are the
 following:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................        $1.00
    Value of non-originating materials.....................         7.50

[[Page 436]]

 
    Other product costs....................................         1.50
Period costs: (including $0.20 in excluded costs)..........         0.50
Other costs................................................         0.10
                                                            ------------
Total cost of Material A...................................       $10.60
------------------------------------------------------------------------


 Additional costs to produce Good B are the following:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................        $0.00
    Value of non-originating materials.....................         5.50
    Other product costs....................................         6.50
Period costs: (including $0.20 in excluded costs)..........         0.50
Other costs................................................         0.10
                                                            ------------
Total additional costs.....................................       $12.60
------------------------------------------------------------------------


 The producer does not designate Material A as an intermediate material
 under subsection 7(4). The net cost of Good B is calculated as follows:
 


----------------------------------------------------------------------------------------------------------------
                                                               Costs of Material
                                                               A (not designated
                                                                     as an         Additional Costs     Total
                                                                  intermediate    to Produce Good B
                                                                   material)
----------------------------------------------------------------------------------------------------------------
Product costs:
    Value of originating materials...........................              $1.00              $0.00        $1.00
    Value of non-originating materials.......................               7.50               5.50        13.00
    Other product costs......................................               1.50               6.50         8.00
Period costs (including $0.20 in excluded costs).............               0.50               0.50         1.00
Other costs..................................................               0.10               0.10         0.20
                                                              --------------------------------------------------
Total cost of Good B.........................................             $10.60             $12.60       $23.20
                                                              ==================================================
Excluded costs (in period costs).............................               0.20               0.20        -0.40
                                                              --------------------------------------------------
Net cost of Good B (total cost minus excluded costs).........  .................  .................       $22.80
----------------------------------------------------------------------------------------------------------------


 The regional value content of Good B is calculated as follows:
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.004


 The regional value content of Good B is 42.9 percent, and Good B,
 therefore, does not qualify as an originating good.
 Situation 3
 A producer located in a NAFTA country produces Good B, which is subject
 to a regional value-content requirement of 50 percent under the net
 cost method. Good B satisfies all other applicable requirements of
 these Regulations. The producer self-produces Material A, which is used
 in the production of Good B. The costs to produce Material A are the
 following:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................        $1.00
    Value of non-originating materials.....................         7.50
    Other product costs....................................         1.50

[[Page 437]]

 
Period costs: (including $0.20 in excluded costs)..........         0.50
Other costs................................................         0.10
                                                            ------------
Total cost of Material A...................................       $10.60
------------------------------------------------------------------------


 Additional costs to produce Good B are the following:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................        $0.00
    Value of non-originating materials.....................         5.50
    Other product costs....................................         6.50
Period costs: (including $0.20 in excluded costs)..........         0.50
Other costs................................................         0.10
                                                            ------------
Total additional costs.....................................       $12.60
------------------------------------------------------------------------


 The producer designates Material A as an intermediate material under
 subsection 7(4). Material A qualifies as an originating material under
 paragraph 4(2)(a). Therefore, the value of non-originating materials
 used in the production of Material A is not included in the value of
 non-originating materials for the purposes of calculating the regional
 value content of Good B. The net cost of Good B is calculated as
 follows:
 


----------------------------------------------------------------------------------------------------------------
                                                                            Costs of
                                                                           Material A    Additional
                                                                           (designated    Costs to
                                                                              as an       Produce       Total
                                                                          intermediate     Good B
                                                                            material)
----------------------------------------------------------------------------------------------------------------
Product costs:
    Value of originating materials......................................        $10.60        $0.00       $10.60
    Value of non-originating materials..................................  ............         5.50         5.50
    Other product costs.................................................  ............         6.50         6.50
Period costs (including $0.20 in excluded costs)........................  ............         0.50         0.50
Other costs.............................................................  ............         0.10         0.10
                                                                         ---------------------------------------
Total cost of Good B....................................................        $10.60       $12.60       $23.20
                                                                         =======================================
Excluded costs (in period costs)........................................  ............          .20        -0.20
                                                                                                    ------------
Net cost of Good B (total cost minus excluded costs)....................  ............  ...........       $23.00
----------------------------------------------------------------------------------------------------------------


 The regional value content of Good B is calculated as follows:
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.005


 The regional value content of Good B is 76.1 percent, and Good B,
 therefore, qualifies as an originating good.
Example 4: Originating Materials Acquired from a Producer Who Produced
 Them Using Intermediate Materials

[[Page 438]]

 
 Producer A, located in NAFTA country A, produces switches. In order for
 the switches to qualify as originating goods, Producer A designates
 subassemblies of the switches as intermediate materials. The
 subassemblies are subject to a regional value-content requirement. They
 satisfy that requirement, and qualify as originating materials. The
 switches are also subject to a regional value-content requirement, and,
 with the subassemblies designated as intermediate materials, are
 determined to have a regional value content of 65 percent.
 Producer A sells the switches to Producer B, located in NAFTA country
 B, who uses them to produce switch assemblies that are used in the
 production of Good B. The switch assemblies are subject to a regional
 value-content requirement. Producers A and B are not accumulating their
 production within the meaning of section 14. Producer B is therefore
 able, under section 7(4), to designate the switch assemblies as
 intermediate materials.
 If Producers A and B were accumulating their production within the
 meaning of section 14, Producer B would be unable to designate the
 switch assemblies as intermediate materials, because the production of
 both producers would be considered to be the production of one
 producer.
Example 5: Single Producer and Successive Designations of Materials
 Subject to a Regional Value-Content Requirement as Intermediate
 Materials
 Producer A, located in NAFTA country, produces Material X and uses
 Material X in the production of Good B. Material X qualifies as an
 originating material because it satisfies the applicable regional value-
 content requirement. Producer A designates Material A as an
 intermediate material.
 Producer A uses Material X in the production of Material Y, which is
 also used in the production of Good B. Material Y is also subject to a
 regional value-content requirement. Under the proviso set out in
 section 7(4), Producer A cannot designate Material Y as an intermediate
 material, even if Material Y satisfies the applicable regional value-
 content requirement, because Material X was already designated by
 Producer A as an intermediate material.
Example 6: Single Producer and Multiple Designations of Materials as
 Intermediate Materials
 Producer X, who is located in NAFTA country X, uses non-originating
 materials in the production of self-produced materials A, B, and C.
 None of the self-produced materials are used in the production of any
 of the other self-produced materials.
 Producer X uses the self-produced materials in the production of Good
 O, which is exported to NAFTA country Y. Materials A, B and C qualify
 as originating materials because they satisfy the applicable regional
 value-content requirements.
 Because none of the self-produced materials are used in the production
 of any of the other self-produced materials, then even though each self-
 produced material is subject to a regional value-content requirement,
 Producer X may, under section 7(4), designate all of the self-produced
 materials as intermediate materials. The proviso set out in section
 7(4) only applies where self-produced materials are used in the
 production of other self-produced materials and both are subject to a
 regional value-content requirement.
Example 7: section 7(17)
 The following are examples of accessories, spare parts or tools that
 are delivered with a good and form part of the good's standard
 accessories, spare parts or tools:
  (a) consumables that must be replaced at regular intervals, such as
   dust collectors for an air-conditioning system,
  (b) a carrying case for equipment,
  (c) a dust cover for a machine,
  (d) an operational manual for a vehicle,
  (e) brackets to attach equipment to a wall,
  (f) a bicycle tool kit or a car jack,
  (g) a set of wrenches to change the bit on a chuck,
  (h) a brush or other tool to clean out a machine, and

[[Page 439]]

 
  (i) electrical cords and power bars for use with electronic goods.
Example 8: Value of Indirect Materials that are Assists
 Producer A, located in a NAFTA country, produces Good A that is subject
 to a regional value-content requirement. The producer chooses that the
 regional value content of that good be calculated using the net cost
 method. Producer A buys Material X from Producer B, located in a NAFTA
 country, and uses it in the production of Good A. Producer A provides
 to Producer B, at no charge, tools to be used in the production of
 Material X. The tools have a value of $100 which is expensed in the
 current year by Producer A.
 Material X is subject to a regional value-content requirement which
 Producer B chooses to calculate using the net cost method. For purposes
 of determining the value of non-originating materials in order to
 calculate the regional value content of Material X, the tools are
 considered to be an originating material because they are an indirect
 material. However, pursuant to section 7(11) they have a value of nil
 because the cost of the tools with respect to Material X is not
 recorded on the books of Producer B.
 It is determined that Material X is a non-originating material. The
 cost of the tools that is recorded on the books of producer A is
 expensed in the current year. Pursuant to section 5 of Schedule VIII,
 the value of the tools (see section 5(1)(b)(ii) of Schedule VIII) must
 be included in the value of Material X by Producer A when calculating
 the regional value content of Good A. The cost of the tools, although
 recorded on the books of producer A, cannot be included as a separate
 cost in the net cost of Good A because it is already included in the
 value of Material X. The entire cost of Material X, which includes the
 cost of the tools, is included in the value of non-originating
 materials for purposes of the regional value content of Good A.
 


                                 PART V
                            AUTOMOTIVE GOODS
                SECTION 8. DEFINITIONS AND INTERPRETATION
 
 For purposes of this part,
``after-market parts'' means goods that are not for use as original
 equipment in the production of light-duty vehicles or heavy-duty
 vehicles and that are
  (a) goods provided for in a tariff provision listed in Schedule IV, or
  (b) automotive component assemblies, automotive components, sub-
   components or listed materials;
``class of motor vehicles'' means any one of the following categories of
 motor vehicles:
  (a) motor vehicles provided for in any of subheading 8701.20, tariff
   items 8702.10.30 and 8702.90.30 (vehicles for the transport of 16 or
   more persons), subheadings 8704.10, 8704.22, 8704.23, 8704.32 and
   8704.90 and headings 8705 and 8706,
  (b) motor vehicles provided for in any of subheadings 8701.10 and
   8701.30 through 8701.90,
  (c) motor vehicles provided for in any of tariff items 8702.10.60 and
   8702.90.60 (vehicles for the transport of 15 or fewer persons) and
   subheadings 8704.21 and 8704.31, and
  (d) motor vehicles provided for in any of subheadings 8703.21 through
   8703.90;
``complete motor vehicle assembly process'' means the production of a
 motor vehicle from separate constituent parts, which parts include the
 following:
  (a) a structural frame or unibody,
  (b) body panels,
  (c) an engine, a transmission and a drive train,
  (d) brake components,
  (e) steering and suspension components,
  (f) seating and internal trim,
  (g) bumpers and external trim,
  (h) wheels, and
  (i) electrical and lighting components;
``first prototype'' means the first motor vehicle that

[[Page 440]]

 
  (a) is produced using tooling and processes intended for the
   production of motor vehicles to be offered for sale, and
  (b) follows the complete motor vehicle assembly process in a manner
   not specifically designed for testing purposes;
``floor pan of a motor vehicle'' means a component, comprising a single
 part or two or more parts joined together, with or without additional
 stiffening members, that forms the base of a motor vehicle, beginning
 at the firewall or bulkhead of the motor vehicle and ending
  (a) where there is a luggage floor panel in the motor vehicle, at the
   place where that luggage floor panel begins, and
  (b) where there is no luggage floor panel in the motor vehicle, at the
   place where the passenger compartment of the motor vehicle ends;
``heavy-duty automotive good'' means a heavy-duty vehicle or a heavy-
 duty component;
``heavy-duty component'' means an automotive component or automotive
 component assembly that is for use as original equipment in the
 production of a heavy-duty vehicle;
``marque'' means a trade name used by a marketing division of a motor
 vehicle assembler that is separate from any other marketing division of
 that motor vehicle assembler;
``model line'' means a group of motor vehicles having the same platform
 or model name;
``model name'' means the word, group of words, letter, number or similar
 designation assigned to a motor vehicle by a marketing division of a
 motor vehicle assembler
  (a) to differentiate the motor vehicle from other motor vehicles that
   use the same platform design,
  (b) to associate the motor vehicle with other motor vehicles that use
   different platform designs, or
  (c) to denote a platform design;
``new building'' means a new construction to house a complete motor
 vehicle assembly process, where that construction includes the pouring
 or construction of a new foundation and floor, the erection of a new
 frame and roof, and the installation of new plumbing and electrical and
 other utilities;
``plant'' means a building, or buildings in close proximity but not
 necessarily contiguous, machinery, apparatus and fixtures that are
 under the control of a producer and are used in the production of any
 of the following:
  (a) light-duty vehicles and heavy-duty vehicles,
  (b) goods of a tariff provision listed in Schedule IV, and
  (c) automotive component assemblies, automotive components, sub-
   components and listed materials;
``platform'' means the primary load-bearing structural assembly of a
 motor vehicle that determines the basic size of the motor vehicle, and
 is the structural base that supports the driveline and links the
 suspension components of the motor vehicle for various types of frames,
 such as the body-on-frame or space-frame, and monocoques;
``received in the territory of a NAFTA country'' means, with respect to
 section 9(2), the location at which a traced material arrives in the
 territory of a NAFTA country and is documented for any customs purpose,
 which, in the case of a traced material imported into
  (a) Canada,
    (i) where the traced material is imported on a vessel, as defined in
     section 2 of the Reporting of Imported Goods Regulations, is the
     location at which the traced material is last unloaded from the
     vessel and reported, under section 12 of the Customs Act, to a
     customs office, including reported for transportation under bond by
     a conveyance other than that vessel, and

[[Page 441]]

 
    (ii) in any other case, is the location at which the traced material
     is reported, under section 12 of the Customs Act, to a customs
     office, including reported for transportation under bond,
  (b) Mexico,
    (i) where the traced material is imported on a vessel, the location
     at which the traced material is last unloaded from the vessel and
     reported for any customs purpose, and
    (ii) in any other case, the location at which the traced material is
     reported for any customs purpose, and
  (c) the United States, is the location at which the traced material is
   entered for any customs purpose, including entered for consumption,
   entered for warehouse or entered for transportation under bond, or
   admitted into a foreign trade zone;
``refit'' means a closure of a plant for a period of at least three
 consecutive months that is for purposes of plant conversion or
 retooling;
``size category'', with respect to a light-duty vehicle, means that the
 total of the interior volume for passengers and the interior volume for
 luggage is
  (a) 85 cubic feet (2.38 m3) or less,
  (b) more than 85 cubic feet (2.38 m3) but less than 100 cubic feet
   (2.80 m3),
  (c) 100 cubic feet (2.80 m3) or more but not more than 110 cubic feet
   (3.08 m3),
  (d) more than 110 cubic feet (3.08 m3) but less than 120 cubic feet
   (3.36 m3), or
  (e) 120 cubic feet (3.36 m3) or more;
``traced material'' means a material, produced outside the territories
 of the NAFTA countries, that is imported from outside the territories
 of the NAFTA countries and is, when imported, of a tariff provision
 listed in Schedule IV;
``underbody'' means the floor pan of a motor vehicle.
 
                 SECTION 9. LIGHT-DUTY AUTOMOTIVE GOODS
     VNM determined by tracing of certain non-originating materials
 
(1) For purposes of calculating the regional value content of a light-
 duty automotive good under the net cost method, the value of non-
 originating materials used by the producer in the production of the
 good shall be the sum of the values of the non-originating materials
 that are traced materials and are incorporated into the good.
 
            Valuation of traced materials for VNM in the RVC
 
(2) Except as otherwise provided in subsections (3) and (6) through (8),
 the value of each of the traced materials that is incorporated into a
 good shall be
  (a) where the producer imports the traced material from outside the
   territories of the NAFTA countries and has or takes title to it at
   the time of importation, the sum of
    (i) the customs value of the traced material,
    (ii) where not included in that customs value, any freight,
     insurance, packing and other costs that were incurred in
     transporting the traced material to the first place at which it was
     received in the territory of a NAFTA country, and
    (iii) where not included in that customs value, the costs referred
     to in subsection (4);
  (b) where the producer imports the traced material from outside the
   territories of the NAFTA countries and does not have or take title to
   it at the time of importation, the sum of
    (i) the customs value of the traced material,
    (ii) where not included in that customs value, any freight,
     insurance, packing and other costs that were incurred in
     transporting the traced material to the place at which it was when
     the producer takes title in the territory of a NAFTA country, and
    (iii) where not included in that customs value, the costs referred
     to in subsection (4);

[[Page 442]]

 
  (c) where a person other than the producer imports the traced material
   from outside the territories of the NAFTA countries and that person
   has or takes title to the material at the time of importation, if the
   producer has a statement that
    (i) is signed by the person from whom the producer acquired the
     traced material, whether in the form in which it was imported into
     the territory of a NAFTA country or incorporated into another
     material, and
    (ii) states
      (A) the customs value of the traced material,
      (B) where not included in that customs value, any freight,
       insurance, packing and other costs that were incurred in
       transporting the traced material to the first place at which it
       was received in the territory of a NAFTA country, and
      (C) where not included in that customs value, the costs referred
       to in subsection (4),
  the sum of the customs value of the traced material, the freight,
   insurance, packing and other costs referred to in subparagraph
   (ii)(B) and the costs referred to in subparagraph (ii)(C);
  (d) where a person other than the producer imports the traced material
   from outside the territories of the NAFTA countries and that person
   does not have or take title to the material at the time of
   importation, if the producer has a statement that
    (i) is signed by the person from whom the producer acquired the
     traced material, whether in the form in which it was imported into
     the territory of a NAFTA country or incorporated into another
     material, and
    (ii) states
      (A) the customs value of the traced material,
      (B) where not included in that customs value, any freight,
       insurance, packing and other costs that were incurred in
       transporting the traced material to the place at which it was
       located when the first person in the territory of a NAFTA country
       takes title, and
      (C) where not included in that customs value, the costs referred
       to in subsection (4),
      the sum of the customs value of the traced material, the freight,
       insurance, packing and other costs referred to in subparagraph
       (ii)(B) and the costs referred to in subparagraph (ii)(C);
  (e) where a person other than the producer imports the traced material
   from outside the territories of the NAFTA countries and the producer
   acquires the traced material or a material that incorporates the
   traced material from a person in the territory of a NAFTA country who
   has title to it, if the producer has a statement that
    (i) is signed by the person from whom the producer acquired the
     traced material or the material that incorporates it, and
    (ii) states the value of the traced material or a material that
     incorporates the traced material, determined in accordance with
     subsection (5), with respect to a transaction that occurs after the
     customs value of the traced material was determined,
  the value of the traced material or the material that incorporates the
   traced material, determined in accordance with subsection (5), with
   respect to the transaction referred to in that statement;
  (f) where a person other than the producer imports the traced material
   from outside the territories of the NAFTA countries, and the producer
   acquires a material that incorporates that traced material and the
   acquired material was produced in the territory of a NAFTA country
   and is subject to a regional value-content requirement, if the
   producer has a statement that
    (i) is signed by the person from whom the producer acquired that
     material, and
    (ii) states that the acquired material is an originating material
     and states the regional value content of the material,

[[Page 443]]

 
  an amount equal to VM x (1 - RVC)
  where
      VM is the value of the acquired material, determined in accordance
       with subsection (5), with respect to the transaction in which the
       producer acquired that material, and
      RVC is the regional value content of the acquired material,
       expressed as a decimal;
  (g) where a person other than the producer imports the traced material
   from outside the territories of the NAFTA countries, and the producer
   acquires a material that incorporates that traced material and the
   acquired material was produced in the territory of a NAFTA country
   and is subject to a regional value-content requirement, if the
   producer has a statement that
    (i) is signed by the person from whom the producer acquired that
     material, and
    (ii) states that the acquired material is an originating material
     but does not state any value with respect to the traced material,
  an amount equal to VM x (1 - RVCR)
  where
      VM is the value of the acquired material, determined in accordance
       with subsection (5), with respect to the transaction in which the
       producer acquired that material, and
      RVCR is the regional value-content requirement for the acquired
       material, expressed as a decimal;
  (h) where a person other than the producer imports the traced material
   from outside the territories of the NAFTA countries and the producer
   acquires a material that
    (i) incorporates that traced material,
    (ii) was produced in the territory of a NAFTA country, and
    (iii) with respect to which an amount was determined in accordance
     with paragraph (f) or (g),
  if the producer of the good has a statement signed by the person from
   whom the producer acquired that material that states that amount, the
   amount as determined in accordance with paragraph (f) or (g), as the
   case may be; and
  (i) where a person other than the producer imports the traced material
   from outside the territories of the NAFTA countries and the producer
   does not have a statement described in any of paragraphs (c) through
   (h), the value of the traced material or any material that
   incorporates it, determined in accordance with subsection (5) with
   respect to the transaction in which the producer acquires the traced
   material or any material that incorporates it.
 
   Value of traced material if customs value is not in accordance with
                              Schedule VIII
 
(3) For purposes of subsections (2) (a) through (d), where the customs
 value of the traced material referred to in those paragraphs was not
 determined in a manner consistent with Schedule VIII, the value of the
 material shall be the sum of
  (a) the value of the material determined in accordance with Schedule
   VIII with respect to the transaction in which the person who imported
   the material from outside the territories of the NAFTA countries
   acquired it; and
  (b) where not included in that value, the costs referred to in
   subsections (2)(a) (ii) and (iii), subsections (2)(b) (ii) and (iii),
   subsections (2)(c)(ii) (B) and (C) or subsections (2)(d)(ii) (B) and
   (C), as the case may be.
 
  Additional costs included in traced value if not already included in
                              customs value
 
(4) The costs referred to in subsections (2) (a) through (d) and
 subsection (3) are the following:

[[Page 444]]

 
  (a) duties and taxes paid or payable with respect to the material in
   the territory of one or more of the NAFTA countries, other than
   duties and taxes that are waived, refunded, refundable or otherwise
   recoverable, including credit against duty or tax paid or payable;
   and
  (b) customs brokerage fees, including the cost of in-house customs
   brokerage services, incurred with respect to the material in the
   territory of one or more of the NAFTA countries.
 
 Value of traced material determined under Schedule VIII if value is not
                              customs value
 
(5) For purposes of subsections (2) (e) through (g) and (i) and
 subsections (6) and (7), the value of a material
  (a) shall be the transaction value of the material, determined in
   accordance with section 2(1) of Schedule VIII with respect to the
   transaction referred to in that paragraph or subsection, or
  (b) shall be determined in accordance with sections 6 through 11 of
   Schedule VIII, where, with respect to the transaction referred to in
   that paragraph or subsection, there is no transaction value for the
   material under section 2(2) of that Schedule, or the transaction
   value of the material is unacceptable under section 2(3) of that
   Schedule,
and, where not included under paragraph (a) or (b), shall include taxes,
 other than duties paid on an importation of a material from a NAFTA
 country, paid or payable with respect to the material in the territory
 of one or more of the NAFTA countries, other than taxes that are
 waived, refunded, refundable or otherwise recoverable, including credit
 against tax paid or payable.
(6) Where it is determined, during the course of a verification of
 origin of a light-duty automotive good with respect to which the
 producer of that good has a statement referred to in subsection (2) (f)
 or (g), that the acquired material referred to in that statement is not
 an originating material, the value of the acquired material shall, for
 purposes of subsection (2), be determined in accordance with subsection
 (5) with respect to the transaction in which that producer acquired it.
 
  Effect on value of traced material if value on a statement cannot be
                                verified
 
(7) Where any person who has information with respect to a statement
 referred to in any of subsections (2)(c) through (h) does not allow a
 customs administration to verify that information during a verification
 of origin, the value of the material with respect to which that person
 did not allow the customs administration to verify the information may
 be determined by that customs administration in accordance with
 subsection (5) with respect to the transaction in which that person
 sells, or otherwise transfers to another person, that material or a
 material that incorporates that material.
 
    Use of value of VNM as determined under section 12(3) for traced
               material incorporated into another material
 
(8) Where a traced material is incorporated into a material produced in
 the territory of a NAFTA country and that material is incorporated into
 a light-duty automotive good, the statement referred to in subsection
 (2)(c), (d) or (e) may state the value of non-originating materials,
 determined in accordance with section 12(3), with respect to the
 material that incorporates the traced material.
 
 Interpretations and clarifications for provisions applicable to tracing
                  rules for light-duty automotive goods
 
(9) For purposes of this section,
  (a) where a producer, in accordance with section 7(4), designates as
   an intermediate material any self-produced material used in the
   production of a light-duty automotive good,
    (i) the designation applies solely to the calculation of the net
     cost of that good, and

[[Page 445]]

 
    (ii) the value of a traced material that is incorporated into that
     good shall be determined as though the designation had not been
     made;
  (b) the value of a material not listed in Schedule IV, when imported
   from outside the territories of the NAFTA countries,
    (i) shall not be included in the value of non-originating materials
     that are used in the production of a light-duty automotive good,
     and
    (ii) shall be included in calculating the net cost of a light-duty
     automotive good that incorporates that material;
  (c) except as otherwise provided in section 12(10), this section does
   not apply with respect to after-market parts;
  (d) the costs referred to in subsections (2)(a)(ii) and (b)(ii),
   subsections (2)(c)(ii)(B) and (d)(ii)(B) and subsections (4) and (5)
   shall be the costs referred to in those paragraphs that are recorded
   on the books of the producer of the light-duty automotive good;
  (e) for purposes of calculating the regional value content of a light-
   duty automotive good, the producer of that good may choose to treat
   any material used in the production of that good as a non-originating
   material, and the value of that material shall be determined in
   accordance with subsection (5) with respect to the transaction in
   which the producer acquired it; and
  (f) any information set out in a statement referred to in subsection
   (2) that concerns the value of materials or costs shall be in the
   same currency as the currency of the country in which the person who
   provided the statement is located.
 
   Examples of application of tracing for light-duty automotive goods
 
(10) Each of the following examples is an ``Example'' as referred to in
 section 2(4).
 


Example 1:
 Nuts and bolts provided for in heading 7318 are imported from outside
 the territories of the NAFTA countries and are used in the territory of
 a NAFTA country in the production of a light-duty automotive good
 referred to in section 9(1). Heading 7318 is not listed in Schedule IV
 so the nuts and bolts are not traced materials.
 Because the nuts and bolts are not traced materials the value, under
 section 9(1), of the nuts and bolts is not included in the value of non-
 originating materials used in the light-duty automotive good even
 though the nuts and bolts are imported from outside the territories of
 the NAFTA countries.
 The value, under section 9(9)(b), of the nuts and bolts is included in
 the net cost of the light-duty automotive good for the purposes of
 calculating, under section 9(1), regional value content of the motor
 vehicle.
Example 2:
 A rear view mirror provided for in subheading 7009.10 is imported from
 outside the territories of the NAFTA countries and is used in the
 territory of a NAFTA country as original equipment in the production of
 a light-duty vehicle.
 Subheading 7009.10 is listed in Schedule IV. The rear view mirror is a
 traced material. For purposes of calculating, under section 9(1),
 regional value content of the light-duty vehicle, the value of the
 mirror is included in the value of non-originating materials in
 accordance with sections 9(2) through (9).
Example 3:

[[Page 446]]

 
 Glass provided for in heading 7005 is imported from outside the
 territories of the NAFTA countries and is used in the territory of
 NAFTA country A in the production of a rear view mirror. The rear view
 mirror is a non-originating good because it fails to satisfy the
 applicable change in tariff classification.
 That rear view mirror is exported to NAFTA country B where it is used
 as original equipment in the production of a light-duty vehicle. Even
 though the rear view mirror is a non-originating material and is
 provided for in a tariff item listed in Schedule IV, it is not a traced
 material because it was not imported from outside the territories of
 the NAFTA countries.
 For purposes of calculating, under section 9(1), the regional value
 content of a light-duty vehicle in which the rear view mirror is
 incorporated, the value of the rear view mirror, under section 9(1), is
 not included in the value of non-originating materials used in the
 production of the light-duty vehicle.
 Even though the glass provided for in heading 7005 that was used in the
 production of the rear view mirror and incorporated into the light-duty
 vehicle was imported from outside the territories of the NAFTA
 countries, the glass is not a traced material because heading 7005 is
 not listed in Schedule IV. For purposes of calculating, under section
 9(1), the regional value content of the light-duty vehicle that
 incorporates the glass, the value of the glass is not included in the
 value of non-originating materials used in the production of the light-
 duty vehicle. The value of the rear view mirror would be included in
 the net cost of the light-duty vehicle, but the value of the imported
 glass would not be separately included in the value of non-originating
 materials of the light-duty vehicle.
Example 4:
 An electric motor provided for in subheading 8501.10 is imported from
 outside the territories of the NAFTA countries and is used in the
 territory of a NAFTA country in the production of a seat frame provided
 for in subheading 9401.90. The seat frame, with the electric motor
 attached, is sold to a producer of seats provided for in subheading
 9401.20. The seat producer sells the seat to a producer of light-duty
 vehicles. The seat is to be used as original equipment in the
 production of that light-duty vehicle.
 Subheadings 8501.10 and 9401.20 are listed in Schedule IV; subheading
 9401.90 is not. The electric motor is a traced material; the seat is
 not a traced material because it was not imported from outside the
 territories of the NAFTA countries.
 The seat is a light-duty automotive good referred to in section 9(1).
 For purposes of calculating, under section 9(1), the regional value
 content of the seat, the value of traced materials incorporated into it
 is included in the value of non-originating materials used in the
 production of the seat. The value of the electric motor is included in
 that value. (However, the value of the motor would not be included
 separately in the net cost of the seat because the value of the motor
 is included as part of the cost of the seat frame.)
 For purposes of calculating, under section 9(1), the regional value
 content of the light-duty vehicle, the value of the electric motor is
 included in the value of non-originating materials used in the
 production of the light-duty vehicle, even if the seat is an
 originating material.
Example 5:

[[Page 447]]

 
 Cast blocks, cast heads and connecting rod assemblies provided for in
 heading 8409 are imported from outside the territories of the NAFTA
 countries by an engine producer, who has title to them at the time of
 importation, and are used by the producer in the territory of NAFTA
 country A in the production of an engine provided for in heading 8407.
 After the regional value content of the engine is calculated, the
 engine is an originating good. It is not a traced material because it
 was not imported from outside the territories of the NAFTA countries.
 The engine is exported to NAFTA country B, to be used as original
 equipment by a producer of light-duty vehicles.
 For purposes of calculating, under section 9(1), the regional value
 content of the light-duty vehicle that incorporates the engine, because
 heading 8409 is listed in Schedule IV and because the cast blocks, cast
 heads and connecting rod assemblies were imported into the territory of
 a NAFTA country and are incorporated into the light-duty vehicle, the
 value of those materials, which are traced materials, is included in
 the value of non-originating materials used in the production of the
 light-duty vehicle, even though the engine is an originating material.
 The producer of the light-duty vehicle did not import the traced
 materials. However, because that producer has a statement referred to
 in section 9(2)(c) and that statement states the value of non-
 originating materials of the traced materials in accordance with
 section 12(2), the producer of the light-duty vehicle may, in
 accordance with section 9(8), use that value as the value of non-
 originating materials of the light-duty vehicle with respect to that
 engine.
Example 6:
 Aluminum ingots provided for in subheading 7601.10 and piston
 assemblies provided for in heading 8409 are imported from outside the
 territories of the NAFTA countries by an engine producer and are used
 by that producer in the territory of NAFTA country A in the production
 of an engine provided for in heading 8407. The aluminum ingots are used
 by the producer to produce an engine block; the piston assembly is then
 incorporated into the engine block and the producer designates, in
 accordance with section 7(4), a short block provided for in heading
 8409 as an intermediate material. The intermediate material qualifies
 as an originating material. The engine that incorporates the short
 block is exported to NAFTA country B and used as original equipment in
 the production of a light-duty vehicle. The piston assemblies provided
 for in heading 8409 are traced materials; neither the engine nor the
 short block are traced materials because they were not imported from
 outside the territories of the NAFTA countries.
 For purposes of calculating, under section 9(1), the regional value
 content of the engine, the value of the piston assemblies is included,
 under section 9(9)(a)(ii), in the value of non-originating materials,
 even if the intermediate material is an originating material. However,
 the value of the aluminum ingots is not included in the value of non-
 originating materials because subheading 7601.10 is not listed in
 Schedule IV. The value of the aluminum ingots does not need to be
 included separately in the net cost of the engine because that value is
 included in the value of the intermediate material, and the total cost
 of the intermediate material is included in the net cost of the engine.
 For purposes of calculating, under section 9(1), the regional value
 content of the light-duty vehicle that incorporates the engine (and the
 piston assemblies), the value of the piston assemblies incorporated
 into that light-duty vehicle is included in the value of non-
 originating materials of the light-duty vehicle.
Example 7:

[[Page 448]]

 
 An engine provided for in heading 8407 is imported from outside the
 territories of the NAFTA countries. The producer of the engine, located
 in the country from which the engine is imported, used in the
 production of the engine a piston assembly provided for in heading 8409
 that was produced in a NAFTA country and is an originating good. The
 engine is used in the territory of a NAFTA country as original
 equipment in the production of a light-duty vehicle. The engine is a
 traced material.
 For purposes of calculating, under section 9(1), the regional value
 content of a light-duty vehicle that incorporates that engine, the
 value of the engine is included in the value of non-originating
 materials of that light-duty vehicle. The value of the piston assembly,
 which was, before its exportation to outside the territories of the
 NAFTA countries, an originating good, shall not be deducted from the
 value of non-originating materials used in the production of the light-
 duty vehicle. Under section 18 (transshipment), the piston assembly is
 no longer considered to be an originating good because it was used in
 the production of a good outside the territories of the NAFTA
 countries.
Example 8:
 A wholesaler, located in City A in the territory of a NAFTA country,
 imports from outside the territories of the NAFTA countries rubber
 hoses provided for in heading 4009, which is listed in Schedule IV. The
 wholesaler takes title to the goods at the wholesaler's place of
 business in City A. The customs value of the imported goods is $500.
 All freight, taxes and duties associated with the good to the
 wholesaler's place of business total $100; the cost of the freight,
 included in that $100, from the place where it was received in the
 territory of a NAFTA country to the location of the wholesaler's place
 of business in City A is $25. The wholesaler sells the rubber hoses for
 $650 to a producer of light-duty vehicles who uses the goods in the
 territory of a NAFTA country as original equipment in the production of
 a light-duty vehicle. The light-duty vehicle producer pays $50 to have
 the goods shipped from the location of the wholesaler's place of
 business in City A to the location at which the light-duty vehicle is
 produced.
 The rubber hoses are traced materials and they are incorporated into a
 light-duty automotive good. For purposes of calculating, under section
 9(1), the regional value content of the light-duty vehicle,
  (1) if the wholesaler takes title to the goods before the first place
   at which they were received in the territory of a NAFTA country, then
   the value of non-originating materials, where the light-duty vehicle
   producer has a statement referred to in section 9(2)(c), would not
   include the cost of freight from the place where they were received
   in the territory of a NAFTA country to the location of the
   wholesaler's place of business: in this situation, the value of non-
   originating materials would be $575;
  (2) if the producer has a statement referred to in section 9(2)(d)
   that states the customs value of the traced material and, where not
   included in that price, the cost of taxes, duties, fees and
   transporting the goods to the place where title is taken, the light-
   duty vehicle producer may use those values as the value of non-
   originating materials with respect to the goods: in this situation,
   the value of non-originating materials would be $600; or
  (3) if the wholesaler is unwilling to provide the light-duty vehicle
   producer with such a statement, the value of non-originating
   materials with respect to the traced materials will be the value of
   the materials with respect to the transaction in which the producer
   acquired them, as provided for in section 9(2)(i), in this instance
   $650; the costs of transporting the goods from the location of the
   wholesaler's place of business to the location of the producer will
   be included in the net cost of the goods, but not in the value of non-
   originating materials.
Example 9:

[[Page 449]]

 
 A wholesaler, located in City A in the territory of a NAFTA country,
 imports from outside the territories of the NAFTA countries rubber hose
 provided for in heading 4009, which is listed in Schedule IV. The
 wholesaler sells the good to a producer located in the territory of the
 NAFTA country who uses the hose to produce a power steering hose
 assembly, also provided for in heading 4009. The power steering hose
 assembly is then sold to a producer of light-duty vehicles who uses
 that good in the production of a light-duty vehicle. The rubber hose is
 a traced material; the power steering hose assembly is not a traced
 material because it was not imported from outside the territories of
 the NAFTA countries.
 The wholesaler who imported the rubber hose from outside the
 territories of the NAFTA countries has title to it at the time of
 importation. The customs value of the good is $3, including freight and
 insurance and all other costs incurred in transporting the good to the
 first place at which it was received in the territory of the NAFTA
 country. Duties and fees and all other costs referred to in section
 9(4), paid by the wholesaler with respect to the good, total an
 additional $1. The wholesaler sells the good to the producer of the
 power steering hose assemblies for $5, not including freight to the
 location of that producer. The power steering hose producer pays $2 to
 have the good delivered to the location of production. The value of the
 power steering hose assembly sold to the light-duty vehicle producer is
 $10, including freight for delivery of the goods to the location of the
 light-duty vehicle producer.
 For purposes of calculating, under section 9(1), the regional value
 content of the light-duty vehicle:
  (1) if the motor vehicle producer has a statement referred to in
   section 9(2)(c) from the producer of the power steering hose assembly
   that states the customs value of the imported rubber hose
   incorporated in the power steering hose assembly, and the value of
   the duties, fees and other costs referred to in section 9(4), the
   producer may use those values as the value of non-originating
   materials with respect to that traced good: in this situation, that
   value would be the customs value of $3 and the cost of duties and
   fees of $1, provided that the wholesaler has provided the producer of
   the power steering hose assembly with the information regarding the
   customs value of the imported good and the other costs;
  (2) if the light-duty vehicle producer has a statement from the
   producer of the power steering hose assembly that states the value of
   the imported hose, with respect to the transaction in which the power
   steering hose assembly producer acquires the imported hose from the
   wholesaler, the light-duty vehicle producer may include that value as
   the value of non-originating materials, in accordance with section
   9(2)(e): in this situation, that value is $5; and the $2 cost of
   transporting the good from the location of the wholesaler to the
   location of the producer, because that cost is separately identified,
   would not be included in the value of non-originating materials of
   the light-duty vehicle;
  (3) if the light-duty vehicle producer has a statement referred to in
   section 9(2)(f) signed by the producer of the power steering hose
   assembly, the light-duty vehicle producer may use the formula set out
   in section 9(2)(f) to calculate the value of non-originating
   materials with respect to that acquired material: in this situation,
   assuming the regional value content is 55 per cent, the value of non-
   originating materials would be $4.50; and because the cost of
   transportation from the location of the producer of the power
   steering hose assembly to the location of the light-duty vehicle
   producer is included in the purchase price and not separately
   identified, it may not be deducted from the purchase price, because
   the formula referred to in section 9(2)(f) does not allow for the
   deduction of transportation costs that would otherwise not be non-
   originating;

[[Page 450]]

 
  (4) if the light-duty vehicle producer has a statement referred to in
   section 9(2)(g) signed by the producer of the power steering hose
   assembly, the light-duty vehicle producer may use the formula set out
   in section 9(2)(g) to calculate the value of non-originating
   materials with respect to that acquired material: in this situation,
   assuming the regional value-content requirement is 50 per cent, the
   value of non-originating materials would be $5; and because the cost
   of transportation from the location of the producer of the power
   steering hose assembly to the location of the light-duty vehicle
   producer is included in the purchase price and not separately
   identified, it may not be deducted from the purchase price, because
   the formula referred to in section 9(2)(g) does not allow for the
   deduction of transportation costs that would otherwise not be non-
   originating; or
  (5) if the light-duty vehicle producer does not have a statement
   referred to in any of sections 9(2)(c) through (h) from the producer
   of the power steering hose assembly, the light-duty vehicle producer
   includes in the value of non-originating materials of the vehicles
   the value, determined in accordance with section 9(2)(i), of the
   power steering hose assembly: in this situation, that amount would be
   $10, the cost to the producer of acquiring that material.
Example 10:
 A producer of light-duty vehicles located in City C in the territory of
 a NAFTA country imports from outside the territories of the NAFTA
 countries rubber hose provided for in heading 4009, which is listed in
 Schedule IV, and uses that good as original equipment in the production
 of a light-duty vehicle.
 The rubber hose arrives at City A in the NAFTA country, but the
 producer of the light-duty vehicle does not have title to the good; it
 is transported under bond to City B, and on its arrival in City B, the
 producer of the light-duty vehicle takes title to it and the good is
 received in the territory of a NAFTA country. The good is then
 transported to the location of the light-duty vehicle producer in City
 C.
 The customs value of the imported good is $4, the transportation and
 other costs referred to in subparagraph 9(2)(b)(ii) to City A are $3
 and to City B are $2, and the cost of duties, taxes and other fees
 referred to in section 9(4) is $1. The cost of transporting the good
 from City B to the location of the producer in City C is $1. The rubber
 hose is traced material.
 For purposes of calculating, under section 9(1), the regional value
 content of the light-duty vehicle, the value, under section 9(2)(b), of
 non-originating materials of that vehicle is the customs value of the
 traced material and, where not included in that value, the cost of
 taxes, duties, fees and the cost of transporting the traced material to
 the place where title is taken. In this situation, the value of non-
 originating materials would be the customs value of the traced
 material, $4, the cost of duties taxes and other fees, $1, the cost of
 transporting the material to City A, $3, and the cost of transporting
 that material from City A to City B, $2, for a total of $10. The $1
 cost of transporting the good from City B to the location of the
 producer in City C would not be included in the value of non-
 originating materials of the light-duty vehicle because a person of a
 NAFTA country has taken title to the traced material.
Example 11:

[[Page 451]]

 
 A radiator provided for in subheading 8708.91 is imported from outside
 the territories of the NAFTA countries by a producer of light-duty
 vehicles and is used in the territory of a NAFTA country as original
 equipment in the production of a light-duty vehicle.
 The radiator is transported by ship from outside the territories of the
 NAFTA countries and arrives in the territory of the NAFTA country at
 City A. The radiator is not, however, unloaded at City A and although
 the radiator is physically present in the territory of the NAFTA
 country, it has not been received in the territory of a NAFTA country.
 The ship sails in territorial waters from City A to City B and the
 radiator is unloaded there. The light-duty vehicle producer files, from
 City C in the same country, the entry for the radiator; the radiator
 enters the territory of the NAFTA country at City B.
 Subheading 8708.91 is listed in Schedule IV. The radiator is a traced
 material.
 For purposes of calculating, under section 9(1), the regional value
 content of the light-duty vehicle, the value of the radiator is
 included in the value of non-originating materials of the light-duty
 vehicle. The costs of any freight, insurance, packing and other costs
 incurred in transporting the radiator to City B are included in the
 value of non-originating materials of the light-duty vehicle, including
 the cost of transporting the radiator from City A to City B. The costs
 of any freight, insurance, packing and other costs that were incurred
 in transporting the radiator from City B to the location of the
 producer are not included in the value of non-originating materials of
 the light-duty vehicle.
Example 12:
 Producer X, located in NAFTA country A, produces a car seat of
 subheading No. 9401.20 that is used in the production of a light-duty
 vehicle. The only non-originating material used in the production of
 the car seat is an electric motor of subheading No. 8501.20 that was
 imported by Producer X from outside the territories of the NAFTA
 countries. The electric motor is a material of a tariff provision
 listed in Schedule IV and thus is a traced material.
 Producer X sells the car seat as original equipment to Producer Y, a
 light-duty vehicle producer, located in NAFTA country B. The car seat
 is an originating good because the non-originating material in the car
 seat (the electric motor) undergoes the applicable change in tariff
 classification set out in a rule that specifies only a change in tariff
 classification. Consequently, Producer X does not choose to calculate
 the regional value content of the car seat in accordance with section
 12(1).
 For purposes of determining, under section 9(1), the value of non-
 originating materials used in the production of the light-duty vehicle
 that incorporates the car seat, the value of the electric motor is
 included even though the car seat qualifies as an originating material.
 Producer X provides Producer Y with a statement described in section
 9(2)(c), with the value of non-originating material used in the
 production of the car seat determined in accordance with section 12(3),
 as is permitted by section 9(8). Producer Y uses that value as the
 value of non-originating materials used in the production of the light-
 duty vehicle with respect to the car seat.
Example 13:
 This example has the same facts as in Example 12, except that the car
 seat does not qualify as an originating good under the rule that
 specifies only a change in tariff classification. Instead, it qualifies
 as an originating good under a rule that specifies a regional value-
 content requirement and a change in tariff classification. For purposes
 of that rule, Producer X chose to calculate the regional value content
 of the car seat in accordance with section 12(1) over a period set out
 in section 12(5)(a) and using a category set out in section 12(4)(a).
 For purposes of the statement described in section 9(2)(c), Producer X
 determined, as is permitted under section 9(8), the value of non-
 originating material used in the production of the car seat in
 accordance with section 12(3) over a period set out in section 12(5)(a)
 and using a category set out in section 12(4)(e).
 


[[Page 452]]


                 SECTION 10. HEAVY-DUTY AUTOMOTIVE GOODS
Determining VNM for the calculation of the RVC for heavy-duty automotive
                                  goods
 
(1) Except as otherwise provided in subsections (3) through (8) and
 section 12(10)(a), for purposes of calculating the regional value
 content of a heavy-duty automotive good under the net cost method, the
 value of non-originating materials used by the producer of the good in
 the production of the good shall be the sum of
  (a) for each listed material that is a non-originating material, is a
   self-produced material and is used by the producer in the production
   of the good, at the choice of the producer, either
    (i) the total cost incurred with respect to all goods produced by
     the producer that can be reasonably allocated to that listed
     material in accordance with Schedule VII,
    (ii) the aggregate of each cost that forms part of the total cost
     incurred with respect to that listed material that can be
     reasonably allocated to that listed material in accordance with
     Schedule VII, or
    (iii) the sum of
      (A) the customs value of each non-originating material imported by
       the producer and used in the production of the listed material,
       and, where not included in that customs value, the costs referred
       to in subsections (2)(c) through (f), and
      (B) the value of each non-originating material that is not
       imported by the producer of the listed material and is used in
       the production of the listed material, determined in accordance
       with subsection (2) with respect to the transaction in which the
       producer of the listed material acquired it;
  (b) for each listed material that is a non-originating material, is
   produced in the territory of a NAFTA country and is acquired and used
   by the producer in the production of the good, at the choice of the
   producer, either
    (i) the value of that non-originating listed material, determined in
     accordance with subsection (2), with respect to the transaction in
     which the producer acquired the listed material, or
    (ii) where the producer of the good has a statement described in
     clause (A) or (B) with respect to each material that is a non-
     originating material used in the production of that listed
     material, the sum of
      (A) the customs value of each non-originating material imported by
       the producer of the listed material and used in the production of
       that listed material, and, where not included in that customs
       value, the costs referred to in subsections (2)(c) through (f),
       if the producer of the good has a statement signed by the
       producer of the listed material that states the customs value of
       that non-originating material and the costs referred to in
       subsections (2)(c) through (f) that the producer of the listed
       material incurred with respect to the non-originating material,
       and
      (B) the value of each non-originating material that is not
       imported by the producer of the listed material, and is acquired
       and used in the production of the listed material, determined in
       accordance with subsection (2) with respect to the transaction in
       which the producer of the listed material acquired that non-
       originating material, if the producer of the good has a statement
       signed by the producer of the listed material that states the
       value of the acquired material, determined in accordance with
       subsection (2) with respect to the transaction in which the
       producer of the listed material acquired the non-originating
       material;

[[Page 453]]

 
  (c) for each listed material, automotive component assembly,
   automotive component or sub-component that is imported from outside
   the territories of the NAFTA countries, and is used by the producer
   in the production of the good,
    (i) where it is imported by the producer, the customs value of that
     non-originating listed material, automotive component assembly,
     automotive component or sub-component, and, where not included in
     that customs value, the costs referred to in subsections (2)(c)
     through (f), and
    (ii) where it is not imported by the producer, the value of that non-
     originating listed material, automotive component assembly,
     automotive component or sub-component, determined in accordance
     with subsection (2) with respect to the transaction in which the
     producer acquired it;
  (d) for each automotive component assembly, automotive component or
   sub-component that is an originating material and is acquired and
   used by the producer in the production of the good, at the choice of
   the producer,
    (i) the sum of
      (A) the value of each non-originating listed material used in the
       production of the originating material, determined under
       paragraphs (a) and (b),
      (B) the value of each non-originating material incorporated into
       the originating material, determined under paragraph (c),
      (C) the value of each non-originating listed material used in the
       production of a material referred to in paragraph (e) that is
       used in the production of the originating material, determined
       under paragraphs (a) and (b), and
      (D) where the value of a non-originating listed material referred
       to in clause (C), and used in the production of a non-originating
       automotive component assembly, automotive component or sub-
       component that is used in the production of the originating
       material, is not included under clause (C), the value of that
       automotive component assembly, automotive component or sub-
       component, determined under paragraph (e)(ii),
    if the producer has a statement, signed by the person from whom the
     originating material was acquired, that states the sum of the
     values, as determined by the producer of the originating material
     under paragraphs (a), (b), (c) and (e) of each non-originating
     material referred to in any of clauses (A) through (D) that is
     incorporated into that originating material;
    (ii) an amount equal to the number resulting from applying the
     following formula:
 
                             VM x (1 - RVC)
 
    where
        VM is the value of the acquired material, determined in
         accordance with subsection (2), with respect to the transaction
         in which the producer of the good acquired that material, and
        RVC is the regional value content of the acquired material,
         expressed as a decimal,
    if the material is subject to a regional value-content requirement
     and the producer has a statement, signed by the person from whom
     the producer acquired that material, that states that the acquired
     material is an originating material and states the regional value
     content of the material,
    (iii) an amount equal to the number resulting from applying the
     following formula:
 
                             VM x (1 - RVCR)
 
    where

[[Page 454]]

 
        VM is the value of the acquired material, determined in
         accordance with subsection (2), with respect to the transaction
         in which the producer of the good acquired that material, and
        RVCR is the regional value-content requirement for the acquired
         material, expressed as a decimal,
    if the material is subject to a regional value-content requirement
     and the producer has a statement, signed by the person from whom
     the producer acquired that material, that states that the acquired
     material is an originating material but does not state the value of
     non-originating materials with respect to that acquired material;
     or
    (iv) the value of that automotive component assembly, automotive
     component or sub-component determined in accordance with subsection
     (2) with respect to the transaction in which the producer acquired
     the material;
  (e) for each automotive component assembly, automotive component or
   sub-component that is a non-originating material produced in the
   territory of a NAFTA country and that is acquired by the producer and
   used by the producer in the production of the good, at the choice of
   the producer, either
    (i) the sum of the values of the non-originating materials
     incorporated into that non-originating material that is acquired by
     the producer, determined under paragraphs (a), (b), (c), (d) and
     (f), if the producer has a statement, signed by the person from
     whom the non-originating material was acquired, that states the sum
     of the values of the non-originating materials incorporated into
     that non-originating material, determined by the producer of the
     non-originating material in accordance with paragraphs (a), (b),
     (c), (d) and (f), or
    (ii) the value of that non-originating automotive component
     assembly, automotive component or sub-component, determined in
     accordance with subsection (2) with respect to the transaction in
     which the producer acquired the material; and
  (f) for each non-originating material that is not referred to in
   paragraph (a), (b), (c) or (e) and that is used by the producer in
   the production of the good,
    (i) where it is imported by the producer, the customs value of that
     non-originating material, and, where not included in that customs
     value, the costs referred to in subsections (2)(c) through (f), and
    (ii) where it is not imported by the producer, the value of that non-
     originating material, determined in accordance with subsection (2)
     with respect to the transaction in which the producer acquired the
     material.
 
  Application of Schedule VIII to determine VNM; additional costs to be
                                included
 
(2) For purposes of subsection (1)(a)(ii)(B), subsection (1)(b)(i),
 subsection (1)(b)(ii)(B), subsections (1)(c)(ii), (1)(d)(ii) through
 (iv), (1)(e)(ii) and subsection (1)(f)(ii), the value of a material
  (a) shall be the transaction value of the material, determined in
   accordance with section 2(1) of Schedule VIII with respect to the
   transaction referred to in that clause, subparagraph or paragraph, or
  (b) where, with respect to the transaction referred to in that clause,
   subparagraph, or paragraph, there is no transaction value for the
   material under section 2(2) of Schedule VIII or the transaction value
   of the material is unacceptable under section 2(3) of that Schedule,
   shall be determined in accordance with sections 6 through 11 of that
   Schedule,
and shall include the following costs where they are not included under
 paragraph (a) or (b):
  (c) the costs of freight, insurance and packing, and all other costs
   incurred in transporting the material to the location of the
   producer,

[[Page 455]]

 
  (d) duties and taxes paid or payable with respect to the material in
   the territory of one or more of the NAFTA countries, other than
   duties and taxes that are waived, refunded, refundable or otherwise
   recoverable, including credit against duty or tax paid or payable,
  (e) customs brokerage fees, including the cost of in-house customs
   brokerage and customs clearance services, incurred with respect to
   the material in the territory of one or more of the NAFTA countries,
   and
  (f) the cost of waste and spoilage resulting from the use of the
   material in the production of the good, minus the value of any
   reusable scrap or by-product.
 
  Value of imported material if customs value is not in accordance with
                              Schedule VIII
 
(3) For purposes of subsections (1)(a)(ii)(A) and (b)(ii)(A) and
 subsections (1)(c)(i) and (f)(i), where the customs value of an
 imported material referred to in those clauses or paragraphs was not
 determined in a manner consistent with Schedule VIII, the value of the
 material shall be determined in accordance with Schedule VIII with
 respect to the importation for which that customs value was determined
 and, where the costs referred to in sections (2)(c) through (f) are not
 included in that value, those costs shall be added to the value of the
 material.
     Option to use section 9 tracing rules in certain circumstances
 
(4) For purposes of calculating the regional value content of a heavy-
 duty component, where
  (a) a heavy-duty component is produced in the same plant as an
   automotive component assembly or automotive component that is of the
   same heading or subheading as that heavy-duty component and is for
   use as original equipment in a light-duty vehicle, and
  (b) it is not reasonable for the producer to know which of the
   production will constitute a heavy-duty component for use in a heavy-
   duty vehicle,
the value of the non-originating materials used in the production of the
 heavy-duty component in that plant may, at the choice of the producer,
 be determined in the manner set out in section 9.
(5) For purposes of calculating the regional value content of a heavy-
 duty vehicle, where a producer of such a vehicle acquires, for use by
 that producer in the production of the vehicle, a heavy-duty component
 with respect to which the value of non-originating materials has been
 determined in accordance with subsection (4), the value of the non-
 originating materials used by the producer with respect to that heavy-
 duty component is the value of non-originating materials determined
 under that subsection.
 
         VNM may be redetermined for certain acquired materials
 
(6) Where it is determined, during the course of a verification of
 origin of a heavy-duty automotive good with respect to which the
 producer of that good has a statement referred to in subsection
 (1)(d)(ii) or (iii) that the acquired material referred to in that
 statement is not an originating material, the value of the acquired
 material shall, for purposes of subsection (1), be determined in
 accordance with subsection (2) with respect to the transaction in which
 that producer acquired it.
 
  Effect on value of traced material if value on a statement cannot be
                                verified
 
(7) Where any person who has information with respect to a statement
 referred to in subsection (1)(b)(ii), (d)(i) or (e)(i) does not allow a
 customs administration to verify that information during a verification
 of origin, the value of any material with respect to which that person
 did not allow the customs administration to verify the information may
 be determined by that customs administration in accordance with
 subsection (2) with respect to the transaction in which that person
 sells, or otherwise transfers to another person, that material or a
 material that incorporates that material.

[[Page 456]]

 
    Use of value of VNM as determined under section 12(3) for traced
               material incorporated into another material
 
(8) Where a heavy-duty component, sub-component or listed material is
 incorporated into a material produced in the territory of a NAFTA
 country and that material is incorporated into a heavy-duty automotive
 good, the statement referred to in subsection (1)(b)(ii), (d)(i) or
 (e)(i) may state the value of non-originating materials, determined in
 accordance with section 12(3), with respect to the material that
 incorporates the heavy-duty component, sub-component or listed
 material.
 
 
  Interpretations and clarifications for provisions applicable to rules
           for determining VNM for heavy-duty automotive goods
 
(9) For purposes of this section,
  (a) for purposes of calculating the regional value content of a heavy-
   duty automotive good, sub-component or listed material, a producer of
   such a good may, in accordance with section 7(4), designate as an
   intermediate material any self-produced material, other than a heavy-
   duty component or sub-component, that is used in the production of
   that good;
  (b) except as otherwise provided in section 12(10), this section does
   not apply with respect to after-market parts;
  (c) this section does not apply to a sub-component for purposes of
   calculating its regional value content before it is incorporated into
   a heavy-duty automotive good;
  (d) for purposes of calculating the regional value content of a heavy-
   duty automotive good, the producer of that good may choose to treat
   any material used in the production of that good as a non-originating
   material, and the value of that material shall be determined in
   accordance with subsection (2) with respect to the transaction in
   which the producer acquired it;
  (e) any information set out in a statement referred to in subsections
   (1)(b)(ii), (d)(i) through (iii) or (e)(i) that concerns the value of
   materials or costs shall be in the same currency as the currency of
   the country in which the person who provided the statement is
   located; and
  (f) total cost under subsections (1)(a)(i) and (ii) consists of the
   costs referred to section 2(6), and is calculated in accordance with
   that section and section 2(7).
 
   Examples of application of rules for determining VNM for heavy-duty
                            automotive goods
 
(10) Each of the following examples is an ``Example'' as referred to in
 section 2(4).
 


Example 1: A listed material is imported from outside the territories of
 the NAFTA countries
 A cast head, produced outside the territories of the NAFTA countries,
 is imported into the territory of a NAFTA country and used in that
 country in the production of an engine that will be used as original
 equipment in the production of a heavy-duty vehicle. No other non-
 originating materials are used in the production of the engine. The
 cast head is a listed material; the engine is an automotive component.

[[Page 457]]

 
 Situation 1: Use of the listed material in an automotive component
 For purposes of calculating the regional value content of the engine,
 the value of listed materials imported from outside the territories of
 the NAFTA countries is included in the value of non-originating
 materials used in the production of the engine. Because the cast head
 was produced outside the territories of the NAFTA countries, its value,
 under section 10(1)(c), is included in the value of non-originating
 materials used in the production of the engine.
 Situation 2: Use of an originating automotive component incorporating
 the listed material
 The engine is an originating material acquired by the producer of the
 heavy-duty vehicle. For purposes of calculating the regional value
 content of the heavy-duty vehicle that incorporates that engine (and
 incorporates the cast head), the value of non-originating materials
 used in the production of the heavy-duty vehicle is determined under
 section 10(1)(d) with respect to that engine. The producer may choose
 to include in the value of non-originating materials of the heavy-duty
 vehicle
  (a) the value, determined under section 10(1)(d)(i), of the non-
   originating materials that are incorporated into the engine, which is
   the value, determined under sections 10(1) (a) through (c) and
   paragraph (e)(ii), of the non-originating materials;
  (b) the value, determined under section 10(1)(d)(ii), which is an
   amount equal to the amount determined under section 10(1)(d)(iv)
   multiplied by the remainder of one minus the regional value content,
   expressed as a decimal, of the engine;
  (c) the value, determined under section 10(1)(d)(iii), which is an
   amount equal to the amount determined under section 10(1)(d)(iv)
   multiplied by the remainder of one minus the regional value-content
   requirement, expressed as a decimal, for the engine; or
  (d) the value, determined under section 10(1)(d)(iv), of the engine.
 The heavy-duty vehicle producer may only choose the first option if
 that producer has a statement, referred to in section 10(1)(d)(i), from
 the person from whom the engine was acquired. In this situation, the
 value, determined under section 10(1)(c), of the cast head, is included
 in the value of non-originating materials of the heavy-duty vehicle,
 with respect to the engine that is used in the production of the heavy-
 duty vehicle.
 The heavy-duty vehicle producer may only choose the second option if
 that producer has a statement, referred to in section 10(1)(d)(ii),
 from the person from whom the engine was acquired. In this situation,
 because of the application of the equation, the value of the cast head
 will be included in the amount determined under section 10(1)(d)(ii)
 and is, consequently, included in the value of non-originating
 materials used in the production of the heavy-duty vehicle.
 The heavy-duty vehicle producer may only choose the third option if
 that producer has a statement, referred to in section 10(1)(d)(iii),
 from the person from whom the engine was acquired. In this situation,
 because of the application of the equation, the value of the cast head
 will be included in the amount determined under section 10(1)(d)(iii)
 and is, consequently, included in the value of non-originating
 materials used in the production of the heavy-duty vehicle.
 Situation 3: Use of a non-originating automotive component
 incorporating the listed material
 The engine is a non-originating material acquired by the producer of
 the heavy-duty vehicle. For purposes of calculating the regional value
 content of the heavy-duty vehicle that incorporates that engine (and
 incorporates the cast head), the value of non-originating materials
 used in the production of the heavy-duty vehicle is determined under
 section 10(1)(e) with respect to that engine. The producer of the heavy-
 duty vehicle may choose to include in the value of non-originating
 materials either

[[Page 458]]

 
  (a) the value, as determined under section 10(1)(e)(i), of the non-
   originating materials that are incorporated into the engine, which is
   the value of the non-originating materials as determined under
   sections 10(1)(a) through (d) and (f), or
  (b) the value of the engine, determined under section 10(1)(e)(ii).
 The heavy-duty vehicle producer may only choose the first option if
 that producer has a statement, referred to in section 10(1)(e)(i), from
 the person from whom the engine was acquired. In this situation, the
 value of the cast head, as determined under section 10(1)(c), is
 included in the value of non-originating materials used in the
 production of the heavy-duty vehicle, with respect to the engine that
 is used in the production of the heavy-duty vehicle.
Example 2: A material is imported from outside the territories of the
 NAFTA countries
 A rocker arm assembly, produced outside the territories of the NAFTA
 countries, is imported into the territory of a NAFTA country and used
 in that country in the production of an engine that will be used as
 original equipment in the production of a heavy-duty vehicle. No other
 non-originating materials are used in the production of the engine. The
 rocker arm assembly is neither a listed material nor a sub-component;
 the engine is an automotive component.
 Situation 1: Use of the material in an automotive component
 For purposes of calculating the regional value content of the engine,
 the value of non-originating materials that are not listed materials is
 included in the value of non-originating materials used in the
 production of the engine. Because the rocker arm assembly was produced
 outside the territories of the NAFTA countries, it is a non-originating
 material and its value, under section 10(1)(f), is included in the
 value of non-originating materials used in the production of the
 engine.
 Situation 2: Use of an originating automotive component incorporating
 the material
 The engine is an originating material acquired by the producer of the
 heavy-duty vehicle. For purposes of calculating the regional value
 content of the heavy-duty vehicle that incorporates that engine (and
 incorporates the rocker arm assembly), the value of non-originating
 materials used in the production of the heavy-duty vehicle is
 determined under section 10(1)(d) with respect to that engine. The
 producer may choose to include in the value of non-originating
 materials of the heavy-duty vehicle
  (a) the value, determined under section 10(1)(d)(i), of the non-
   originating materials that are incorporated into the engine, which is
   the value, determined under sections 10(1) (a) through (c) and
   paragraph (e)(ii), of the non-originating materials;
  (b) the value, determined under section 10(1)(d)(ii), which is an
   amount equal to the amount determined under section 10(1)(d)(iv)
   multiplied by the remainder of one minus the regional value content,
   expressed as a decimal, of the engine;
  (c) the value, determined under section 10(1)(d)(iii), which is an
   amount equal to the amount determined under section 10(1)(d)(iv)
   multiplied by the remainder of one minus the regional value-content
   requirement, expressed as a decimal, for the engine; or
  (d) the value, determined under section 10(1)(d)(iv), of the engine.

[[Page 459]]

 
 The heavy-duty vehicle producer may only choose the first option if
 that producer has a statement, referred to in section 10(1)(d)(i), from
 the person from whom the engine was acquired. In this situation, the
 value of the rocker arm assembly, as determined under section 10(1)(f),
 is not included in the value of non-originating materials of the heavy-
 duty vehicle, with respect to the engine that is used in the production
 of the heavy-duty vehicle.
 The heavy-duty vehicle producer may only choose the second option if
 that producer has a statement, referred to in section 10(1)(d)(ii),
 from the person from whom the engine was acquired. In this situation,
 because of the application of the equation, the value of the rocker arm
 assembly will be included in the amount determined under section
 10(1)(d)(ii) and will, consequently, be included in the value of non-
 originating materials used in the production of the heavy-duty vehicle.
 The heavy-duty vehicle producer may only choose the third option if
 that producer has a statement, referred to in section 10(1)(d)(iii),
 from the person from whom the engine was acquired. In this situation,
 because of the application of the equation, the value of the rocker arm
 assembly will be included in the amount determined under section
 10(1)(d)(iii) and will, consequently, be included in the value of non-
 originating materials used in the production of the heavy-duty vehicle.
 Situation 3: Use of a non-originating automotive component
 incorporating the material
 The engine is a non-originating material acquired by the producer of
 the heavy-duty vehicle. For purposes of calculating the regional value
 content of the heavy-duty vehicle that incorporates that engine (and
 incorporates the rocker arm assembly), the value of non-originating
 materials used in the production of the heavy-duty vehicle is
 determined under section 10(1)(e) with respect to that engine. The
 producer of the heavy-duty vehicle may choose to include in the value
 of non-originating materials either
  (a) the value, as determined under section 10(1)(e)(i), of the non-
   originating materials that are incorporated into the engine, which is
   the value of the non-originating materials as determined under
   sections 10(1) (a) through (d) and (f), or
  (b) the value of the engine, determined under section 10(1)(e)(ii).
 The heavy-duty vehicle producer may only choose the first option if
 that producer has a statement, referred to in section 10(1)(e)(i), from
 the person from whom the engine was acquired. In this situation, the
 value of the rocker arm assembly, as determined under section 10(1)(f),
 is included in the value of non-originating materials used in the
 production of the heavy-duty vehicle, with respect to the engine that
 is used in the production of the heavy-duty vehicle.
 Situation 4: Use of the material in a self-produced automotive
 component
 If the engine is a self-produced material rather than an acquired
 material, the heavy-duty vehicle producer is using the rocker arm
 assembly in the production of the heavy-duty vehicle rather than in the
 production of the engine, because, under section 7(4), the engine
 cannot be designated as an intermediate material. For purposes of
 calculating the regional value content of the heavy-duty vehicle, the
 value, under section 10(1)(f), of the rocker arm assembly is included
 in the value of non-originating materials used in the production of the
 heavy-duty vehicle.
Example 3: An automotive component is imported from outside the
 territories of the NAFTA countries

[[Page 460]]

 
 A transmission, produced outside the territories of the NAFTA
 countries, is imported into the territory of a NAFTA country and used
 in that country as original equipment in the production of a heavy-duty
 vehicle. The transmission is an automotive component.
 Situation: Use of the automotive component
 For purposes of calculating the regional value content of the heavy-
 duty vehicle in which the transmission is used, the value of the
 transmission is included in the value of the non-originating materials
 under section 10(1)(c), regardless of whether the producer imported the
 transmission or acquired it from someone else in the territory of a
 NAFTA country.
Example 4: An automotive component is imported from outside the
 territories of the NAFTA countries
 A transmission, produced outside the territories of the NAFTA
 countries, is imported into the territory of a NAFTA country and
 combined with an engine to produce an engine-transmission assembly that
 will be used as original equipment in the production of a heavy-duty
 vehicle. The transmission is an automotive component; the engine-
 transmission assembly is an automotive component assembly.
 Situation: Use of the automotive component assembly
 The automotive component assembly is acquired by a producer who uses it
 in the production of a heavy-duty vehicle. If the automotive component
 assembly that incorporates the imported transmission is an originating
 material, the value of non-originating materials used in the production
 of the automotive component assembly is determined, at the choice of
 the producer, under any of section 10(1)(d) (i), (ii), (iii) and (iv).
 (See example 1 for more detailed explanations of these provisions.) If
 the automotive component assembly that incorporates the imported
 transmission is a non-originating material, the value of non-
 originating materials used in the production of the automotive
 component assembly is determined, at the choice of the producer, under
 section 10(1)(e) (i) or (ii). (See example 1 for more detailed
 explanations of these provisions.)
 Regardless of whether the automotive component assembly is an
 originating material or a non-originating material, the value of the
 automotive component that was imported from outside the territories of
 the NAFTA countries is included in the value of non-originating
 materials used in the production of the heavy-duty vehicle. The
 transmission is a non-originating material, and, for purposes of
 calculating the regional value content of an automotive component
 assembly or heavy-duty vehicle that incorporates that transmission, the
 value of the transmission is included in the value of non-originating
 materials used in the production of the automotive component assembly
 or heavy-duty vehicle that incorporates it.
Example 5: A material is imported from outside the territories of the
 NAFTA countries

[[Page 461]]

 
 An aluminum ingot, produced outside the territories of the NAFTA
 countries, is imported into the territory of a NAFTA country and used
 in that country in the production of cast block that will be used in an
 engine that will be used as original equipment in the production of a
 heavy-duty vehicle. The aluminum ingot is not a listed material; the
 cast block is a listed material; the engine is an automotive component.
 Situation 1: Use of the material in an intermediate material that is a
 listed material
 The engine producer designates the cast block as an intermediate
 material under section 7(4). For purposes of determining the origin of
 that cast block, because the aluminum ingot is classified under a
 different heading than the cast block, the cast block satisfies the
 applicable change in tariff classification and is an originating
 material.
 Situation 2: Use of the listed material incorporating the material
 For purposes of calculating the regional value content of the engine
 that incorporates that cast block (and thus incorporates the aluminum
 ingot), the value of non-originating materials is determined under
 section 10(1). Because none of sections 10(1) (a) through (f) require
 that a listed material that is an originating material be included in
 the value of non-originating materials used in the production of a
 good, the value of the cast block is not included in the value of non-
 originating materials used in the production of the engine or in the
 value of non-originating materials used in the production of an
 automotive component assembly or heavy-duty vehicle that incorporates
 the engine.
 Because section 10(1)(d) does not refer to a listed material that is an
 originating material, the value of the non-originating aluminum ingot
 used in the production of the originating cast block is not included in
 the value of non-originating materials used in the production of any
 good or material that incorporates the originating cast block.
Example 6: A non-originating listed material is used to produce a sub-
 component that is used to produce another sub-component

[[Page 462]]

 
 A crankshaft, produced in the territory of NAFTA country A from a
 forging imported from outside the territories of the NAFTA countries,
 is a non-originating material. The crankshaft is sold to another
 producer, located in the same country, who uses it to produce an
 originating block assembly. That block assembly is sold to another
 producer, also located in the same country, who uses it to produce a
 finished block. The finished block is sold to a producer of engines,
 who is located in NAFTA country B, for use in the production of a heavy-
 duty vehicle. The crankshaft is a listed material; the block assembly
 is a sub-component, as is the finished block.
 Situation 1: Calculating the regional value content of the finished
 block
 A sub-component is not a heavy-duty automotive good. As referred to in
 section 10(9)(c), for purposes of calculating the regional value
 content of the sub-component before it is incorporated into a heavy-
 duty automotive good, such as when the sub-component is exported from
 the territory of one NAFTA country to the territory of another NAFTA
 country, the value of non-originating materials of the sub-component
 includes only the value of non-originating materials used in the
 production of that sub-component. Because the block assembly is an
 originating material, its value is not included in the value of non-
 originating materials of the finished block, nor is the value of the
 non-originating crankshaft included in the value of non-originating
 materials used in the production of the finished block because the
 crankshaft was used in the production of the block assembly and was not
 used in the production of the finished block.
 Situation 2: Calculating the regional value content of the component
 that incorporates the finished block
 For purposes of calculating the regional value content of the heavy-
 duty vehicle that incorporates a sub-component, the value of non-
 originating materials used in the production of the sub-component is
 determined under section 10(1) (d) or (e) with respect to that sub-
 component. In this situation, the value, under section 10(1)(b), of the
 non-originating crankshaft is included in the value of non-originating
 materials used in the production of the engine. (See examples 1 and 2
 for more detailed explanations of sections 10(1) (d) and (e).)
Example 7: A non-listed material is imported from outside the
 territories of the NAFTA countries and is used in the production of
 another non-listed material
 A bumper part, produced outside the territories of the NAFTA countries,
 is imported into the territory of a NAFTA country and is used in the
 production of a bumper. The bumper is used in the territory of a NAFTA
 country as original equipment in the production of a heavy-duty
 vehicle. Neither a bumper part nor a bumper is a listed material, sub-
 component, automotive component or automotive component assembly.
 Situation 1: The non-listed material is an originating material
 The bumper is an originating material. For purposes of calculating the
 regional value content of the heavy-duty vehicle, neither the value of
 the imported bumper part nor the value of the bumper is included in the
 value of the non-originating materials.
 Situation 2: The non-listed material is a non-originating material
 The bumper is a non-originating material. For purposes of calculating
 the regional value content of the heavy-duty vehicle, the value of non-
 originating materials used in the production of the heavy-duty vehicle
 is determined under section 10(1)(f) with respect to the bumper. In
 this situation, the value of the bumper is included in the value of non-
 originating materials of the heavy-duty vehicle. Because a bumper is
 not a listed material, the producer of the heavy-duty vehicle does not
 have the option, under section 10(1)(b)(ii), to include only the value
 of the imported bumper part in the value of non-originating materials
 used in the production of the heavy-duty vehicle.
Example 8:

[[Page 463]]

 
 Situation: Transhipment of a listed material
 A producer, located in the territory of a NAFTA country, produces, in
 that country, a cast head that is an originating good. The producer
 exports the cast head to outside the territories of the NAFTA
 territories, where valves, springs, valve lifters, a camshaft and gears
 are added to it to create a cast head assembly. An engine producer,
 located in the territory of a NAFTA country, imports the cast head
 assembly into that country and uses it in the production of an engine
 that will be used as original equipment in the production of a heavy-
 duty vehicle. A cast head is a listed material; a cast head assembly is
 a sub-component.
 For purposes of calculating the regional value content of the engine,
 the value of the imported cast head assembly is included in the value
 of non-originating materials under section 10(1)(c). The value of the
 cast head cannot be deducted from the value determined under section
 10(1)(c). Although the cast head was once an originating good, under
 section 18 when further production was performed with respect to the
 cast head outside the territories of the NAFTA countries, it was no
 longer an originating good.
Example 9: A material is imported from outside the territories of the
 NAFTA countries and a heavy-duty vehicle producer self-produces a non-
 originating listed material
 A material, produced outside the territories of the NAFTA countries, is
 imported into the territory of a NAFTA country and used in that country
 in the production of a water pump that will be used as original
 equipment by the same producer in the production of a heavy-duty
 vehicle. Although the producer, under section 7(4), designates the
 water pump as an intermediate material it is a non-originating material
 because it fails to satisfy the regional value-content requirement. A
 water pump is a listed material.
 For purposes of calculating the regional value content of the heavy-
 duty vehicle, the value of non-originating materials includes, at the
 choice of the producer, either the total cost, determined under section
 10(1)(a)(i), of the water pump or the value, determined under section
 10(1)(a)(iii)(A), of the material imported from outside the territories
 of the NAFTA countries.
Example 10: A material is acquired and used to produce a non-originating
 listed material
 A material, produced outside the territories of the NAFTA countries, is
 acquired in the territory of a NAFTA country and is used in that
 country in the production of a water pump that will be used as original
 equipment in the production of a heavy-duty vehicle. The producer of
 the water pump and the producer of the heavy-duty vehicle are separate,
 unrelated producers, located in the same country. A water pump is a
 listed material. The producer of the water pump chose to calculate the
 regional value content of the water pump in accordance with section
 12(1) over a period set out in section 12(5)(a) and using a category
 set out in section 12(4)(b). The water pump is a non-originating
 material because it fails to satisfy the regional value-content
 requirement.
 For purposes of calculating the regional value content of the heavy-
 duty vehicle, the value of non-originating materials includes, at the
 choice of the producer, either the value, determined under section
 10(1)(b)(i), of the water pump or, if the producer has a statement
 referred to in section 10(1)(b)(ii)(B), the value, determined under
 that section, of the material imported from outside the territories of
 the NAFTA countries.
 The producer has a statement referred to in section 10(1)(b)(ii)(B) and
 chooses to use the value of non-originating material determined under
 that section. The statement states, as is permitted under section
 10(8), the value of non-originating material used in the production of
 the water pump in accordance with section 12(3) over a period set out
 in section 12(5)(a) and using a category set out in section 12(4)(e).
 


[[Page 464]]


                   SECTION 11. MOTOR VEHICLE AVERAGING
  NC and VNM for motor vehicles may be averaged over producer's fiscal
                                  year
 
(1) For purposes of calculating the regional value content of light-duty
 vehicles or heavy-duty vehicles, the producer of those motor vehicles
 may choose that
  (a) the sum of the net costs incurred and the sum of the values of non-
   originating materials used by the producer be calculated over the
   producer's fiscal year with respect to the motor vehicles that are in
   any one of the categories set out in subsection (5) that is chosen by
   the producer; and
  (b) the sums referred to in paragraph (a) be used in the calculation
   referred to in section 6(3) as the net cost and the value of non-
   originating materials, respectively.
 
Information required when producer chooses to average for motor vehicles
 
(2) A choice made under subsection (1) shall
  (a) state the category chosen by the producer, and
    (i) where the category referred to in subsection (5)(a) is chosen,
     state the model line, model name, class of motor vehicle and tariff
     classification of the motor vehicles in that category, and the
     location of the plant at which the motor vehicles are produced,
    (ii) where the category referred to in subsection (5)(b) is chosen,
     state the model name, class of motor vehicle and tariff
     classification of the motor vehicles in that category, and the
     location of the plant at which the motor vehicles are produced, and
    (iii) where the category referred to in subsection (5)(c) is chosen,
     state the model line, model name, class of motor vehicle and tariff
     classification of the motor vehicles in that category, and the
     locations of the plants at which the motor vehicles are produced;
  (b) state the basis of the calculation described in subsection (9);
  (c) state the producer's name and address;
  (d) state the period with respect to which the choice is made,
   including the starting and ending dates;
  (e) state the estimated regional value content of motor vehicles in
   the category on the basis stated under paragraph (b);
  (f) be dated and signed by an authorized officer of the producer; and
  (g) be filed with the customs administration of each NAFTA country to
   which vehicles in that category are to be exported during the period
   covered by the choice, at least 10 days before the first day of the
   producer's fiscal year, or such shorter period as that customs
   administration may accept.
 
                            Averaging period
 
(3) Where the fiscal year of a producer begins after the date of the
 entry into force of the Agreement but before one year after that date,
 the producer may choose that the calculation of regional value content
 referred to in subsection (1) or (6) be made under that subsection over
 the period beginning on the date of the entry into force of the
 Agreement and ending at the end of that fiscal year, in which case the
 choice shall be filed with the customs administration of each NAFTA
 country to which vehicles are to be exported during the period covered
 by the choice not later than 10 days after the entry into force of the
 Agreement, or such longer period as that customs administration may
 accept.
(4) Where the fiscal year of a producer begins on the date of the entry
 into force of the Agreement, the producer may make the choice referred
 to in subsection (1) not later than 10 days after the entry into force
 of the Agreement, or such longer period as the customs administration
 referred to in subsection (2)(g) may accept.
 
               Categories of motor vehicles for averaging
 
(5) The categories referred to in subsection (1) are the following:

[[Page 465]]

 
  (a) the same model line of motor vehicles in the same class of motor
   vehicles produced in the same plant in the territory of a NAFTA
   country;
  (b) the same class of motor vehicles produced in the same plant in the
   territory of a NAFTA country; and
  (c) the same model line of motor vehicles produced in the territory of
   a NAFTA country.
(6) Where applicable, a producer may choose that the calculation of the
 regional value content of motor vehicles referred to in Schedule VI be
 made in accordance with that schedule.
 
                   Timely filing of choice to average
 
(7) Subject to section 5(4) of Schedule VI, the choice referred to in
 subsection (6) shall be filed with the customs administration of the
 NAFTA country to which vehicles referred to in that schedule are to be
 exported, at least 10 days before the first day of the producer's
 fiscal year with respect to which that choice is to apply or such
 shorter period as the customs administration may accept.
 
                  Choice to average cannot be rescinded
 
(8) A choice filed for the period referred to in subsection (1) or (3)
 may not be
  (a) rescinded; or
  (b) modified with respect to the category or basis of calculation.
 
Averaged net cost and VNM included in calculation of RVC on the basis of
  producer's option to include all vehicles of category or only certain
                      exported vehicles of category
 
(9) For purposes of this section, where a producer files a choice under
 subsection (1), (3) or (4), including a choice referred to in section
 13(9), the net cost incurred and the values of non-originating
 materials used by the producer, with respect to
  (a) all motor vehicles that fall within the category chosen by the
   producer and that are produced during the fiscal year or, in the case
   of a choice filed under subsection (3), during the period with
   respect to which the choice is made, or
  (b) those motor vehicles to be exported to the territory of one or
   more of the NAFTA countries that fall within the category chosen by
   the producer and that are produced during the fiscal year or, in the
   case of a choice filed under subsection (3), during the period with
   respect to which the choice is made,
shall be included in the calculation of the regional value content under
 any of the categories set out in subsection (5).
 
    Year-end analysis required if averaging based on estimated costs;
                obligation to notify of change in status
 
(10) Where the producer of a motor vehicle has calculated the regional
 value content of the motor vehicle on the basis of estimated costs,
 including standard costs, budgeted forecasts or other similar
 estimating procedures, before or during the producer's fiscal year, the
 producer shall conduct an analysis at the end of the producer's fiscal
 year of the actual costs incurred over the period with respect to the
 production of the motor vehicle, and, if the motor vehicle does not
 satisfy the regional value content requirement on the basis of the
 actual costs, immediately inform any person to whom the producer has
 provided a Certificate of Origin for the motor vehicle, or a written
 statement that the motor vehicle is an originating good, that the motor
 vehicle is a non-originating good.
(11) The following example is an ``Example'' as referred to in section
 2(4).
 


Example:

[[Page 466]]

 
 A motor vehicle producer located in NAFTA country A produces vehicles
 that fall within a category set out in section 11(5) that is chosen by
 the producer. The motor vehicles are to be sold in NAFTA countries A, B
 and C, as well as in country D, which is not a NAFTA country. Under
 section 11(1), the motor vehicle producer may choose that the sum of
 the net costs incurred and the sum of the values of non-originating
 materials used by the producer be calculated over the producer's fiscal
 year. The producer may state in the choice the basis of the calculation
 as described in section 11(9)(a), in which case the calculation would
 be on the basis of all the motor vehicles produced regardless of where
 they are destined. Alternatively, the producer may state in the choice
 the basis of the calculation as described in section 11(9)(b). In this
 case, the producer would also need to state that the calculation is on
 the basis of
  (a) the motor vehicles produced that are for export to NAFTA countries
   B and C;
  (b) the motor vehicles produced that are for export to only NAFTA
   country B; or
  (c) the motor vehicles produced that are for export to only NAFTA
   country C.
 The calculation would be on the basis as described in the choice.
 


                 SECTION 12. AUTOMOTIVE PARTS AVERAGING
   NC and VNM for automotive parts may be averaged to determine RVC of
                                  parts
 
(1) The regional value content of any or all goods that are of the same
 tariff provision listed in Schedule IV, or an automotive component
 assembly, an automotive component, a sub-component or a listed
 material, produced in the same plant, may, where the producer of those
 goods chooses to do so, be calculated by
  (a) calculating the sum of the net costs incurred and the sum of the
   values of non-originating materials used by the producer of the goods
   over the period set out in subsection (5) that is chosen by the
   producer with respect to any or all of those goods in any one of the
   categories set out in subsection (4) that is chosen by the producer;
   and
  (b) using the sums referred to in paragraph (a) in the calculation
   referred to in section 6(3) as the net cost and the value of non-
   originating materials, respectively.
(2) The calculation of the regional value content made under subsection
 (1) shall apply with respect to each unit of the goods in the category
 set out in subsection (4) that is chosen by the producer and produced
 during the period chosen by the producer under subsection (5).
 
    VNM for each unit in a category of goods for which averaging used
 
(3) The value of non-originating materials of each unit of the goods
  (a) in the category set out in subsection (4) chosen by the producer,
   and
  (b) produced during the period chosen by the producer under subsection
   (5),
shall be the sum of the values of non-originating materials referred to
 in subsection (1)(a) divided by the number of units of the goods in
 that category and produced during that period.
 
              Categories of automotive parts for averaging
 
(4) The categories referred to in subsection (1)(a) are the following:
  (a) original equipment for use in the production of light- duty
   vehicles;
  (b) original equipment for use in the production of heavy-duty
   vehicles;
  (c) after-market parts;
  (d) any combination of goods referred to in paragraphs (a) through
   (c);
  (e) goods that are in a category set out in any of paragraphs (a)
   through (d) and are sold to one or more motor vehicle producers; and
  (f) goods that are in a category set out in any of paragraphs (a)
   through (e) and are exported to the territory of one or more of the
   NAFTA countries.
 

[[Page 467]]

 
             Periods for averaging RVC for automotive parts
 
(5) The period referred to in subsection (1)(a) is,
  (a) with respect to goods referred to in subsection (4)(a), (b) or
   (d), or subsection 4(e) or (f) where the goods in that category are
   in a category referred to in subsection 4(a) or (b), any month, any
   consecutive three month period that is evenly divisible into the
   number of months of the producer's fiscal year, or of the fiscal year
   of the motor vehicle producer to whom those goods are sold, remaining
   at the beginning of that period, or the fiscal year of that motor
   vehicle producer to whom those goods are sold; and
  (b) with respect to goods referred to in subsection (4)(c), or
   subsection (4)(e) or (f) where the goods in that category are in a
   category referred to in subsection (4)(c), any month, any consecutive
   three month period that is evenly divisible into the number of months
   of the producer's fiscal year, or of the fiscal year of the motor
   vehicle producer to whom those goods are sold, remaining at the
   beginning of that period, or the fiscal year of that producer or of
   that motor vehicle producer to whom those goods are sold.
 
                 Choice to average may not be rescinded
 
(6) A choice made under subsection (1) may not be rescinded or modified
 with respect to the goods or the period with respect to which the
 choice is made.
(7) Where a producer of goods chooses a one or three month period under
 subsection (5) with respect to the goods referred to in subsection
 (5)(a), that producer shall be considered to have chosen under that
 subsection a period or periods of the same duration for
  (a) the remainder of the fiscal year of the motor vehicle producer to
   whom those goods are sold, where the producer chooses under
   subsection (9)(a) the fiscal year of that motor vehicle producer; and
  (b) the remainder of the fiscal year of the producer of those goods,
   where the producer does not choose under subsection (9)(a) the fiscal
   year of the motor vehicle producer to whom the goods are sold.
(8) Where a producer of goods chooses a one or three month period under
 subsection (5) with respect to the goods referred to in subsection
 (5)(b), that producer shall be considered to have chosen under that
 subsection a period or periods of the same duration for the remainder
 of, at the choice of the producer, the producer's fiscal year or the
 fiscal year of the motor vehicle producer to whom those goods are sold.
(9) Where a producer of goods chooses a one or three month period under
 subsection (5) with respect to the goods, the producer may,
  (a) with respect to goods referred to in subsection (5)(a), at the end
   of the fiscal year of the motor vehicle producer to whom those goods
   are sold, choose the fiscal year of that motor vehicle producer; and
  (b) with respect to goods referred to in subsection (5)(b), at the end
   of the producer's fiscal year or the fiscal year of the motor vehicle
   producer to whom those goods are sold, as the case may be, choose the
   producer's fiscal year or the fiscal year of that motor vehicle
   producer.
 
     Applicable method for averaging VNM under different categories
 
(10) Where a producer chooses that the regional value content of goods
 be calculated in accordance with subsection (1) and the goods are in
 any of the categories set out in subsections (4) (d) through (f), the
 value of non-originating materials
  (a) shall be determined in the manner set out in section 9, where any
   of those goods are light-duty automotive goods;
  (b) shall be determined in the manner set out in section 10, where any
   of those goods are heavy-duty automotive goods but none of the goods
   are light-duty automotive goods; and
  (c) shall be determined in the manner set out in section 7, where none
   of those goods are light-duty automotive goods or heavy-duty
   automotive goods.
 

[[Page 468]]

 
    Year-end analysis required if averaging based on estimated costs;
                obligation to notify of change in status
 
(11) Where the producer of a good has calculated the regional value
 content of the good on the basis of estimated costs, including standard
 costs, budgeted forecasts or other similar estimating procedures,
 before or during the period chosen under subsection (1), the producer
 shall conduct an analysis, at the end of the producer's fiscal year
 following the end of that period, of the actual costs incurred over the
 period with respect to the production of the good and, if the good does
 not satisfy the regional value content requirement on the basis of the
 actual costs during that period, immediately inform any person to whom
 the producer has provided a Certificate of Origin for the good, or a
 written statement that the good is an originating good, that the good
 is a non-originating good.
 
         SECTION 13. SPECIAL REGIONAL VALUE-CONTENT REQUIREMENTS
      Changes in regional value content level for automotive goods
 
(1) Notwithstanding the regional value-content requirement set out in
 Schedule I, and except as otherwise provided in subsection (2), the
 regional value-content requirement for a good referred to in paragraph
 (a) or (b) is as follows:
  (a) for the fiscal year of a producer that begins on the day closest
   to January 1, 1998 and for the three following fiscal years of that
   producer, not less than 56 percent, and for the fiscal year of a
   producer that begins on the day closest to January 1, 2002 and
   thereafter, not less than 62.5 percent, in the case of
    (i) a light-duty vehicle, and
    (ii) a good provided for in any of headings 8407 and 8408 and
     subheading 8708.40, that is for use in a light-duty vehicle; and
  (b) for the fiscal year of a producer that begins on the day closest
   to January 1, 1998 and for the three following fiscal years of that
   producer, not less than 55 percent, and for the fiscal year of a
   producer that begins on the day closest to January 1, 2002 and
   thereafter, not less than 60 percent, in the case of
    (i) a heavy-duty vehicle,
    (ii) a good provided for in any of headings 8407 and 8408 and
     subheading 8708.40 that is for use in a heavy-duty vehicle, and
    (iii) except in the case of a good referred to in paragraph (a)(ii)
     or provided for in any of subheadings 8482.10 through 8482.80,
     8483.20 and 8483.30, a good of a tariff provision listed in
     Schedule IV that is subject to a regional value-content requirement
     and is for use in a light-duty vehicle or a heavy-duty vehicle.
 
 Regional value content level for motor vehicles produced in a new plant
                           or in a refit plant
 
(2) Notwithstanding the regional value-content requirement set out in
 Schedule I, the regional value-content requirement for a light-duty
 vehicle or a heavy-duty vehicle that is produced in a plant is as
 follows:
  (a) not less than 50 percent for five years after the date on which
   the first prototype of the motor vehicle is produced in the plant by
   a motor vehicle assembler, if
    (i) the motor vehicle is of a class, marque or, except in the case
     of a heavy-duty vehicle, size category and type of underbody, that
     was not previously produced by the motor vehicle assembler in the
     territory of any of the NAFTA countries,
    (ii) the plant consists of, or includes, a new building in which the
     motor vehicle is assembled, and
    (iii) the value of machinery that was never previously used for
     production, and that is used in the new building or buildings for
     the purposes of the complete motor vehicle assembly process with
     respect to that motor vehicle, is at least 90 percent of the value
     of all machinery used for purposes of that process; and

[[Page 469]]

 
  (b) not less than 50 percent for two years after the date on which the
   first prototype of the motor vehicle is produced in the plant by a
   motor vehicle assembler following a refit of that plant, if the motor
   vehicle is of a class, marque or, except in the case of a heavy-duty
   vehicle, size category and type of underbody, that was not assembled
   by the motor vehicle assembler in the plant before the refit.
 
                    Value of machinery in a new plant
 
(3) For purposes of subsection (2)(a)(iii), the value of machinery shall
 be
  (a) where the machinery was acquired by the producer of the motor
   vehicle from another person, the cost of that machinery that is
   recorded on the books of the producer;
  (b) where the machinery was used previously by the producer of the
   motor vehicle in the production of another good, the cost of the
   machinery that is recorded on the books of the producer minus
   accumulated depreciation of that machinery that is recorded on those
   books; and
  (c) where the machinery was produced by the producer of the good, the
   total cost incurred with respect to that machinery, calculated on the
   basis of the costs that are recorded on the books of the producer.
 
  Averaging period for calculation of RVC for vehicles of new plant or
                               refit plant
 
(4) For purposes of calculating the regional value content of a motor
 vehicle referred to in subsection (2) that is in any one of the
 categories set out in subsection (7) that is chosen by the producer,
 the producer may file with the customs administration of the NAFTA
 country into the territory of which vehicles in that category are to be
 imported a choice to calculate the regional value content of such
 vehicles by
  (a) calculating the sum of the net costs incurred and the sum of the
   values of non-originating materials used by the producer with respect
   to all of such motor vehicles in the category chosen over
    (i) the period beginning on the day on which the first prototype of
     the motor vehicle is produced and ending on the last day of the
     producer's first fiscal year that begins on or after the beginning
     of the period,
    (ii) a fiscal year of the producer that starts after the period
     referred to in subparagraph (i) and ends on or before the end of
     the period referred to in subsection (2)(a) or (b), or
    (iii) the period beginning on the first day of the producer's fiscal
     year that begins before the end of the period referred to in
     subsection (2)(a) or (b) and ending at the end of that period; and
  (b) using the sums referred to in paragraph (a) in the calculation
   referred to in section 6(3) as the net cost and the value of non-
   originating materials, respectively.
 
 Information required on document filed when choosing to average; timely
                                 filing;
 
(5) A choice made under subsection (4) shall
  (a) state the category chosen by the producer and
    (i) where the category referred to in subsection (7)(a) is chosen,
     the model name, model line, class of motor vehicle and tariff
     classification of the motor vehicles in that category, and the
     location of the plant at which the motor vehicles are produced, and
    (ii) where the category referred to in subsection (7)(b) is chosen,
     state the model name, class of motor vehicle and tariff
     classification of the motor vehicles in that category, and the
     plant location at which the motor vehicles are produced;
  (b) state the basis of the calculation described in subsection (8);
  (c) state the producer's name and address;
  (d) state the period with respect to which the choice is made,
   including the starting and ending dates;

[[Page 470]]

 
  (e) state the estimated regional value content of motor vehicles in
   the category on the basis stated under paragraph (b);
  (f) state whether the choice is with respect to a motor vehicle
   referred to in subsection (2)(a) or (b);
  (g) be dated and signed by an authorized officer of the producer; and
  (h) be filed with the customs administration of each NAFTA country to
   which vehicles in that category are to be exported during the period
   covered by the choice, at least 10 days before the first day of the
   producer's fiscal year, or such shorter period as that customs
   administration may accept.
 
                 No rescission or modification permitted
 
(6) A choice filed for the period referred to in subsection (4) may not
 be
  (a) rescinded; or
  (b) modified with respect to the category or basis of calculation.
 
               Categories of motor vehicles for averaging
 
(7) The categories referred to in subsection (4) are the following:
  (a) the same model line of motor vehicles in the same class of motor
   vehicles produced in the same plant in the territory of a NAFTA
   country; and
  (b) the same class of motor vehicles produced in the same plant in the
   territory of a NAFTA country.
(8) For purposes of subsection (4), the net cost incurred and the values
 of non-originating materials used by the producer, with respect to
  (a) all motor vehicles that fall within the category chosen by the
   producer and that are produced during the period with respect to
   which the choice is made, or
  (b) those motor vehicles to be exported to the territory of one or
   more of the NAFTA countries that fall within the category chosen by
   the producer and that are produced during the period with respect to
   which the choice is made,
shall be included in the calculation of the regional value content under
 any of the categories set out in subsection (7).
 
    Period for averaging RVC of motor vehicles of new or refit plant
 
(9) Where the period referred to in subsection (4) ends on a day other
 than the last day of the producer's fiscal year, the producer may, for
 purposes of section 11, make the choice referred to in that section
 with respect to
  (a) the period beginning on the day following the end of that period
   and ending on the last day of that fiscal year; or
  (b) the period beginning on the day following the end of that period
   and ending on the last day of the following full fiscal year.
 
    Year-end analysis required if averaging based on estimated costs;
                obligation to notify of change in status
 
(10) Where the producer of a motor vehicle has calculated the regional
 value content of the motor vehicle on the basis of estimated costs,
 including standard costs, budgeted forecasts or other similar
 estimating procedures, before or during the producer's fiscal year, the
 producer shall conduct an analysis at the end of the producer's fiscal
 year of the actual costs incurred over the period with respect to the
 production of the motor vehicle, and, if the motor vehicle does not
 satisfy the regional value-content requirement on the basis of the
 actual costs, immediately inform any person to whom the producer has
 provided a Certificate of Origin for the motor vehicle, or a written
 statement that the motor vehicle is an originating good, that the motor
 vehicle is a non-originating good.

[[Page 471]]

 
                                 PART VI
                           GENERAL PROVISIONS
                        SECTION 14. ACCUMULATION
 Option to determine origin of good by accumulating the production of a
   material with production of the good in which the material is used
 
(1) Subject to subsections (2) and (4), for purposes of determining
 whether a good is an originating good, an exporter or producer of a
 good may choose to accumulate the production, by one or more producers
 in the territory of one or more of the NAFTA countries, of materials
 that are incorporated into that good so that the production of the
 materials shall be considered to have been performed by that exporter
 or producer.
 
    Statement required; information as to net cost and value of non-
  originating materials from production of material if accumulating for
                   regional value content requirement
 
(2) Where a good is subject to a regional value-content requirement and
 an exporter or producer of the good has a statement signed by a
 producer of a material that is used in the production of the good that
  (a) states the net cost incurred and the value of non-originating
   materials used by the producer of the material in the production of
   that material,
    (i) the net cost incurred by the producer of the good with respect
     to the material shall be the net cost incurred by the producer of
     the material plus, where not included in the net cost incurred by
     the producer of the material, the costs referred to in sections
     7(1)(c) through (e), and
    (ii) the value of non-originating materials used by the producer of
     the good with respect to the material shall be the value of non-
     originating materials used by the producer of the material; or
  (b) states any amount, other than an amount that includes any of the
   value of non-originating materials, that is part of the net cost
   incurred by the producer of the material in the production of that
   material,
    (i) the net cost incurred by the producer of the good with respect
     to the material shall be the value of the material, determined in
     accordance with section 7(1), and
    (ii) the value of non-originating materials used by the producer of
     the good with respect to the material shall be the value of the
     material, determined in accordance with section 7(1), minus the
     amount stated in the statement.
 
             Averaging of costs from accumulated production
 
(3) Where a good is subject to a regional value-content requirement and
 an exporter or producer of the good does not have a statement described
 in subsection (2) but has a statement signed by a producer of a
 material that is used in the production of the good that
  (a) states the sum of the net costs incurred and the sum of the values
   of non-originating materials used by the producer of the material in
   the production of that material and identical materials or similar
   materials, or any combination thereof, produced in a single plant by
   the producer of the material over a month or any consecutive three,
   six or twelve month period that falls within the fiscal year of the
   producer of the good, divided by the number of units of materials
   with respect to which the statement is made,
    (i) the net cost incurred by the producer of the good with respect
     to the material shall be the sum of the net costs incurred by the
     producer of the material with respect to that material and the
     identical materials or similar materials, divided by the number of
     units of materials with respect to which the statement is made,
     plus, where not included in the net costs incurred by the producer
     of the material, the costs referred to in sections 7(1) (c) through
     (e), and

[[Page 472]]

 
    (ii) the value of non-originating materials used by the producer of
     the good with respect to the material shall be the sum of the
     values of non-originating materials used by the producer of the
     material with respect to that material and the identical materials
     or similar materials divided by the number of units of materials
     with respect to which the statement is made; or
  (b) states any amount, other than an amount that includes any of the
   values of non-originating materials, that is part of the sum of the
   net costs incurred by the producer of the material in the production
   of that material and identical materials or similar materials, or any
   combination thereof, produced in a single plant by the producer of
   the material over a month or any consecutive three, six or twelve
   month period that falls within the fiscal year of the producer of the
   good, divided by the number of units of materials with respect to
   which the statement is made,
    (i) the net cost incurred by the producer of the good with respect
     to the material shall be the value of the material, determined in
     accordance with section 7(1), and
    (ii) the value of non-originating materials used by the producer of
     the good with respect to the material shall be the value of the
     material, determined in accordance with section 7(1), minus the
     amount stated in the statement.
 
 Accumulated production considered to be production of a single producer
 
(4) For purposes of section 7(4), where a producer of the good chooses
 to accumulate the production of materials under subsection (1), that
 production shall be considered to be the production of the producer of
 the good.
(5) For purposes of this section,
  (a) in order to accumulate the production of a material,
    (i) where the good is subject to a regional value-content
     requirement, the producer of the good must have a statement
     described in subsection (2) or (3) that is signed by the producer
     of the material, and
    (ii) where an applicable change in tariff classification is applied
     to determine whether the good is an originating good, the producer
     of the good must have a statement signed by the producer of the
     material that states the tariff classification of all non-
     originating materials used by that producer in the production of
     that material and that the production of the material took place
     entirely in the territory of one or more of the NAFTA countries;
  (b) a producer of a good who chooses to accumulate is not required to
   accumulate the production of all materials that are incorporated into
   the good; and
  (c) any information set out in a statement referred to in subsection
   (2) or (3) that concerns the value of materials or costs shall be in
   the same currency as the currency of the country in which the person
   who provided the statement is located.
 
                 Examples of accumulation of production
 
(6) Each of the following examples is an ``Example'' as referred to in
 section 2(4).
 


Example 1: section 14(1)
 Producer A, located in NAFTA country A, imports unfinished bearing
 rings provided for in subheading 8482.99 into NAFTA country A from a
 non-NAFTA territory. Producer A further processes the unfinished
 bearing rings into finished bearing rings, which are of the same
 subheading. The finished bearing rings of Producer A do not satisfy an
 applicable change in tariff classification and therefore do not qualify
 as originating goods. The net cost of the finished bearing rings (per
 unit) is calculated as follows:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................        $0.15

[[Page 473]]

 
    Value of non-originating materials.....................         0.75
    Other product costs....................................         0.35
Period costs: (including $0.05 in excluded costs)..........         0.15
Other costs................................................         0.05
                                                            ------------
Total cost of the finished bearing rings, per unit.........        $1.45
Excluded costs: (included in period costs).................         0.05
                                                            ------------
Net cost of the finished bearing rings, per unit...........        $1.40
------------------------------------------------------------------------


 Producer A sells the finished bearing rings to Producer B who is
 located in NAFTA country A for $1.50 each. Producer B further processes
 them into bearings, and intends to export the bearings to NAFTA country
 B. Although the bearings satisfy the applicable change in tariff
 classification, the bearings are subject to a regional value-content
 requirement.
 Situation A:
 Producer B does not choose to accumulate costs incurred by Producer A
 with respect to the bearing rings used in the production of the
 bearings. The net cost of the bearings (per unit) is calculated as
 follows:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................        $0.45
    Value of non-originating materials (value, per unit, of         1.50
     the bearing rings purchased from Producer A)..........
    Other product costs....................................         0.75
Period costs: (including $0.05 in excluded costs)                   0.15
Other costs................................................         0.05
                                                            ------------
Total cost of the bearings, per unit.......................        $2.90
Excluded costs: (included in period costs).................         0.05
                                                            ------------
Net cost of the bearings, per unit.........................        $2.85
------------------------------------------------------------------------


 Under the net cost method, the regional value content of the bearings
 is
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.006


 Therefore, the bearings are non-originating goods.
 Situation B:
 Producer B chooses to accumulate costs incurred by Producer A with
 respect to the bearing rings used in the production of the bearings.
 Producer A provides a statement described in section 14(2)(a) to
 Producer B. The net cost of the bearings (per unit) is calculated as
 follows:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials ($0.45+$0.15)...........        $0.60
    Value of non-originating materials (value, per unit, of         0.75
     the unfinished bearing rings imported by Producer A)..
    Other product costs ($0.75+$0.35)......................         1.10
Period costs: (($0.15+$0.15), including $0.10 in excluded           0.30
 costs)....................................................

[[Page 474]]

 
Other costs: ($0.05+$0.05).................................         0.10
                                                            ------------
Total cost of the bearings, per unit.......................        $2.85
Excluded costs: (included in period costs).................         0.10
                                                            ------------
Net cost of the bearings, per unit.........................        $2.75
------------------------------------------------------------------------


 Under the net cost method, the regional value content of the bearings
 is
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.007


 Therefore, the bearings are originating goods.
 Situation C:
 Producer B chooses to accumulate costs incurred by Producer A with
 respect to the bearing rings used in the production of the bearings.
 Producer A provides to Producer B a statement described in section
 14(2)(b) that specifies an amount equal to the net cost minus the value
 of non-originating materials used to produce the finished bearing rings
 ($1.40-$0.75 = $0.65). The net cost of the bearings (per unit) is
 calculated as follows:
 


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials ($0.45+$0.65)...........        $1.10
    Value of non-originating materials ($1.50-$0.65).......         0.85
    Other product costs....................................         0.75
Period costs: (including $0.05 in excluded costs)..........         0.15
Other costs................................................         0.05
                                                            ------------
Total cost of the bearings, per unit.......................        $2.90
Excluded costs: (included in period costs).................         0.05
                                                            ------------
Net cost of the bearings, per unit.........................        $2.85
------------------------------------------------------------------------


 Under the net cost method, the regional value content of the bearings
 is
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.008


 Therefore, the bearings are originating goods.
 Situation D:
 Producer B chooses to accumulate costs incurred by Producer A with
 respect to the bearing rings used in the production of the bearings.
 Producer A provides to Producer B a statement described in section
 14(2)(b) that specifies an amount equal to the value of other product
 costs used in the production of the finished bearing rings ($0.35). The
 net cost of the bearings (per unit) is calculated as follows:
 


[[Page 475]]


------------------------------------------------------------------------
 
Product costs:
    Value of originating materials.........................        $0.45
    Value of non-originating materials ($1.50-$0.35).......         1.15
    Other product costs ($0.75 + $0.35)....................         1.10
Period costs: (including $0.05 in excluded costs)..........         0.15
Other costs................................................         0.05
                                                            ------------
Total cost of the bearings, per unit.......................        $2.90
Excluded costs: (included in period costs).................         0.05
                                                            ------------
Net cost of the bearings, per unit.........................        $2.85
------------------------------------------------------------------------


 Under the net cost method, the regional value content of the bearings
 is
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.009


 Therefore, the bearings are originating goods.
Example 2: section 14(1)
 Producer A, located in NAFTA country A, imports non-originating cotton,
 carded or combed, provided for in heading 5203 for use in the
 production of cotton yarn provided for in heading 5205. Because the
 change from cotton, carded or combed, to cotton yarn is a change within
 the same chapter, the cotton does not satisfy the applicable change in
 tariff classification for heading 5205, which is a change from any
 other chapter, with certain exceptions. Therefore, the cotton yarn that
 Producer A produces from non-originating cotton is a non-originating
 good.
 Producer A then sells the non-originating cotton yarn to Producer B,
 also located in NAFTA country A, who uses the cotton yarn in the
 production of woven fabric of cotton provided for in heading 5208. The
 change from non-originating cotton yarn to woven fabric of cotton is
 insufficient to satisfy the applicable change in tariff classification
 for heading 5208, which is a change from any heading outside headings
 5208 through 5212, except from certain headings, under which various
 yarns, including cotton yarn provided for in heading 5205, are
 classified. Therefore, the woven fabric of cotton that Producer B
 produces from non-originating cotton yarn produced by Producer A is a
 non-originating good.
 However, under section 14(1), if Producer B chooses to accumulate the
 production of Producer A, the production of Producer A would be
 considered to have been performed by Producer B. The rule for heading
 5208, under which the cotton fabric is classified, does not exclude a
 change from heading 5203, under which carded or combed cotton is
 classified. Therefore, under section 15(1), the change from carded or
 combed cotton provided for in heading 5203 to the woven fabric of
 cotton provided for in heading 5208 would satisfy the applicable change
 of tariff classification for heading 5208. The woven fabric of cotton
 would be considered as an originating good.
 Producer B, in order to choose to accumulate Producer A's production,
 must have a statement described in section 14(4)(a)(ii).
 


[[Page 476]]


         SECTION 15. INABILITY TO PROVIDE SUFFICIENT INFORMATION
  Supplier of material unable to provide information; beyond control of
              supplier; procedure to be followed by Customs
 
(1) Where, during a verification of origin of a good, the person from
 whom a producer of the good acquired a material used in the production
 of that good is unable to provide the customs administration that is
 conducting the verification with sufficient information to substantiate
 that the material is an originating material or that the value of the
 material declared for purpose of calculating the regional value content
 of the good is accurate, and the inability of that person to provide
 the information is due to reasons beyond the control of that person,
 the customs administration shall, before making a determination as to
 the origin or value of the material, consider, where relevant, the
 following:
  (a) whether the customs administration of the NAFTA country into the
   territory of which the good was imported issued an advance ruling
   under Article 509 of the Agreement, as implemented in each NAFTA
   country, with respect to that material that concluded that the
   material is an originating material or that the value of the material
   declared for purposes of calculating the regional value content of
   the good is accurate;
  (b) whether an independent auditor has confirmed the accuracy of
    (i) any signed statement referred to in this appendix with respect
     to the material,
    (ii) the information that was used by the person from whom the
     producer acquired the material to substantiate whether the material
     is an originating material, or
    (iii) the information submitted by the producer of the material with
     an application for an advance ruling where, on the basis of that
     information, the customs administration concluded that the material
     is an originating material or that the value declared for the
     purpose of calculating the regional value content of the good is
     accurate;
  (c) whether the customs administration has, before the start of the
   origin verification of the good, conducted a verification of origin
   of identical materials or similar materials produced by the producer
   of the material and determined that
    (i) the identical materials or similar materials are originating
     materials, or
    (ii) any signed statement referred to in this appendix with respect
     to those identical materials or similar materials is accurate;
  (d) whether the producer of the good has exercised due diligence to
   ensure that any signed statement that is referred to in this appendix
   with respect to the material and that was provided by the person from
   whom the producer acquired the material is accurate;
  (e) where the customs administration has access only to partial
   records of the person from whom the producer acquired the material,
   whether the records provide sufficient evidence to substantiate that
   the material is an originating material or that the value of the
   material declared for purposes of calculating the regional value
   content of the good is accurate;
  (f) whether the customs administration can obtain, subject to Article
   507 of the Agreement, as implemented in each NAFTA country, by means
   other than those referred to in paragraphs (a) through (e), relevant
   information regarding the determination of the origin or value of the
   material from the customs administration of the NAFTA country in the
   territory of which the person from whom the producer acquired the
   material was located; and
  (g) whether the producer of the good, the person from whom the
   producer acquired the material or a representative of that person or
   producer agrees to bear the expenses incurred in providing the
   customs administration with the assistance that it may require for
   determining the origin or value of the material.
 

[[Page 477]]

 
                 ``Reasons beyond control'' of supplier
 
(2) For purposes of subsection (1), ``reasons beyond the control'' of
 the person from whom the producer of the good acquired the material
 includes
  (a) the bankruptcy of the person from whom the producer acquired the
   material or any other financial distress situation or business
   reorganization that resulted in that person or a related person
   having lost control of the records containing the information that
   substantiate that the material is an originating material or the
   value of the material declared for the purpose of calculating the
   regional value content of the good;
  (b) any other reason that results in partial or complete loss of
   records of that producer that the producer could not reasonably have
   been expected to foresee, including loss of records due to fire,
   flooding or other natural cause.
   Exporter or producer of good unable to provide information; reasons
   beyond control of exporter or producer; procedure to be followed by
                                 Customs
 
(3) Where, during a verification of origin of a good, the exporter or
 producer of the good is unable to provide the customs administration
 conducting the verification with sufficient information to substantiate
 that the good is an originating good, and the inability of that person
 to provide the information is due to reasons beyond the control of that
 person, the customs administration shall, before making a determination
 as to the origin of the good, consider, where relevant, the following:
  (a) whether the customs administration of the NAFTA country into the
   territory of which the good was imported issued an advance ruling
   under Article 509 of the Agreement, as implemented in each NAFTA
   country, with respect to that good that concluded that the good is an
   originating good;
  (b) whether an independent auditor has confirmed the accuracy of an
   origin statement with respect to the good;
  (c) whether the customs administration has, before the start of the
   origin verification of the good, conducted a verification of origin
   of identical goods or similar goods produced by the producer of the
   good and determined that the identical goods or similar goods are
   originating goods;
  (d) whether the exporter or producer of the good has exercised due
   diligence to ensure that the information provided to substantiate
   that the good is an originating good is sufficient; and
  (e) where the customs administration has access only to partial
   records of the exporter or producer of the good, whether the records
   provide sufficient evidence to substantiate that the good is an
   originating good;
  (f) whether the customs administration can obtain, subject to Article
   507 of the Agreement, as implemented in each NAFTA country, by means
   other than those referred to in paragraphs (a) through (e), relevant
   information regarding the determination of the origin of the good
   from the customs administration of the NAFTA country in the territory
   of which the exporter or producer of the good was located; and
  (g) whether the exporter or producer of the good or a representative
   of that person agrees to bear the expenses incurred in providing the
   customs administration with the assistance that it may require for
   determining the origin or value of the good.
 
                       ``Reasons beyond control''
 
(4) For purposes of subsection (3), ``reasons beyond the control'' of
 the exporter or producer of the good includes
  (a) the bankruptcy of the exporter or producer or any other financial
   distress situation or business reorganization that resulted in that
   person or a related person having lost control of the records
   containing the information that substantiate that the good is an
   originating good;

[[Page 478]]

 
  (b) any other reason that results in partial or complete loss of
   records of that exporter or producer that that person could not
   reasonably have been expected to foresee, including loss of records
   due to fire, flooding or other natural cause.
 
                        SECTION 16. TRANSSHIPMENT
    Effect of subsequent processing outside the territory of a NAFTA
                country; loss of originating good status
 
(1) A good is not an originating good by reason of having undergone
 production that occurs entirely in the territory of one or more of the
 NAFTA countries that would enable the good to qualify as an originating
 good if subsequent to that production
  (a) the good is withdrawn from customs control outside the territories
   of the NAFTA countries; or
  (b) the good undergoes further production or any other operation
   outside the territories of the NAFTA countries, other than unloading,
   reloading or any other operation necessary to preserve the good in
   good condition, such as inspection, removal of dust that accumulates
   during shipment, ventilation, spreading out or drying, chilling,
   replacing salt, sulphur dioxide or other aqueous solutions, replacing
   damaged packing materials and containers and removal of units of the
   good that are spoiled or damaged and present a danger to the
   remaining units of the good, or to transport the good to the
   territory of a NAFTA country.
 
          Transshipped good considered entirely non-originating
 
(2) A good that is a non-originating good by application of subsection
 (1) is considered to be entirely non-originating for purposes of this
 appendix.
 
                      Exceptions for certain goods
 
(3) Subsection (1) does not apply with respect to a good provided for in
 any of subheadings 8541.10 through 8541.60 and 8542.10 through 8542.70
 where any further production or other operation that that good
 undergoes outside the territories of the NAFTA countries does not
 result in a change in the tariff classification of the good to a
 subheading outside subheadings 8541.10 through 8542.90.
 
                  SECTION 17. NON-QUALIFYING OPERATIONS
     Mere dilution; production or pricing practice to circumvent the
                       provisions of this appendix
 
17. A good is not an originating good merely by reason of
  (a) mere dilution with water or another substance that does not
   materially alter the characteristics of the good; or
  (b) any production or pricing practice with respect to which it may be
   demonstrated, on the basis of a preponderance of evidence, that the
   object was to circumvent this appendix.
 
                               SCHEDULE I
 
Schedule I shall be the text of Annex 401 to the Agreement as
 implemented in General Note 12 of the HTSUS.
 
                               SCHEDULE II
                             VALUE OF GOODS
 
SECTION 1. Definitions.
 For purposes of this Schedule, unless otherwise stated:
``buyer'' refers to a person who purchases a good from the producer;

[[Page 479]]

 
``buying commissions'' means fees paid by a buyer to that buyer's agent
 for the agent's services in representing the buyer in the purchase of a
 good;
``producer'' refers to the producer of the good being valued.
SECTION 2.
 For purposes of Article 402(2) of the Agreement, as implemented by
 section 6(2) of this appendix, the transaction value of a good shall be
 the price actually paid or payable for the good, determined in
 accordance with section 3 and adjusted in accordance with section 4.
SECTION 3.
(1) The price actually paid or payable is the total payment made or to
 be made by the buyer to or for the benefit of the producer. The payment
 need not necessarily take the form of a transfer of money; it may be
 made by letters of credit or negotiable instruments. The payment may be
 made directly or indirectly to the producer. For an illustration of
 this, the settlement by the buyer, whether in whole or in part, of a
 debt owed by the producer is an indirect payment.
(2) Activities undertaken by the buyer on the buyer's own account, other
 than those for which an adjustment is provided in section 4, shall not
 be considered to be an indirect payment, even though the activities
 might be regarded as being for the benefit of the producer. For an
 illustration of this, the buyer, by agreement with the producer,
 undertakes activities relating to the marketing of the good. The costs
 of such activities shall not be added to the price actually paid or
 payable.
(3) The transaction value shall not include the following charges or
 costs, provided that they are distinguished from the price actually
 paid or payable:
  (a) charges for construction, erection, assembly, maintenance or
   technical assistance related to the good undertaken after the good
   has been sold to the buyer; or
  (b) duties and taxes paid in the country in which the buyer is located
   with respect to the good.
(4) The flow of dividends or other payments from the buyer to the
 producer that do not relate to the purchase of the good are not part of
 the transaction value.
SECTION 4.
(1) In determining the transaction value of a good, the following shall
 be added to the price actually paid or payable:
  (a) to the extent that they are incurred by the buyer, or by a related
   person on behalf of the buyer, with respect to the good being valued
   and are not included in the price actually paid or payable
    (i) commissions and brokerage fees, except buying commissions,
    (ii) the costs of transporting the good to the producer's point of
     direct shipment and the costs of loading, unloading, handling and
     insurance that are associated with that transportation, and
    (iii) where the packaging materials and containers in which the good
     is packaged for retail sale are classified with the good under the
     Harmonized System, the value of the packaging materials and
     containers;
  (b) the value, reasonably allocated in accordance with subsection
   (12), of the following elements where they are supplied directly or
   indirectly to the producer by the buyer, free of charge or at reduced
   cost for use in connection with the production and sale of the good,
   to the extent that the value is not included in the price actually
   paid or payable:
    (i) a material, other than an indirect material, used in the
     production of the good,
    (ii) tools, dies, molds and similar indirect materials used in the
     production of the good,
    (iii) an indirect material, other than those referred to in
     subparagraph (ii) or in paragraphs (c), (e) or (f) of the
     definition ``indirect material'' set out in Article 415 of the
     Agreement, as implemented by section 2(1) of this appendix, used in
     the production of the good, and

[[Page 480]]

 
    (iv) engineering, development, artwork, design work, and plans and
     sketches necessary for the production of the good, regardless of
     where performed;
  (c) the royalties related to the good, other than charges with respect
   to the right to reproduce the good in the territory of one or more of
   the NAFTA countries, that the buyer must pay directly or indirectly
   as a condition of sale of the good, to the extent that such royalties
   are not included in the price actually paid or payable; and
  (d) the value of any part of the proceeds of any subsequent resale,
   disposal or use of the good that accrues directly or indirectly to
   the producer.
(2) The additions referred to in subsection (1) shall be made to the
 price actually paid or payable under this section only on the basis of
 objective and quantifiable data.
(3) Where objective and quantifiable data do not exist with regard to
 the additions required to be made to the price actually paid or payable
 under subsection (1), the transaction value cannot be determined under
 section 2.
(4) No additions shall be made to the price actually paid or payable for
 the purpose of determining the transaction value except as provided in
 this section.
(5) The amounts to be added under subsections (1)(a) (i) and (ii) shall
 be
  (a) those amounts that are recorded on the books of the buyer, or
  (b) where those amounts are costs incurred by a related person on
   behalf of the buyer and are not recorded on the books of the buyer,
   those amounts that are recorded on the books of that related person.
(6) The value of the packaging materials and containers referred to in
 subsection (1)(a)(iii) and the value of the elements referred to in
 subsection (1)(b)(i) shall be
  (a) where the packaging materials and containers or the elements are
   imported from outside the territory of the NAFTA country in which the
   producer is located, the customs value of the packaging materials and
   containers or the elements,
  (b) where the buyer, or a related person on behalf of the buyer,
   purchases the packaging materials and containers or the elements from
   an unrelated person in the territory of the NAFTA country in which
   the producer is located, the price actually paid or payable for the
   packaging materials and containers or the elements,
  (c) where the buyer, or a related person on behalf of the buyer,
   acquires the packaging materials and containers or the elements from
   an unrelated person in the territory of the NAFTA country in which
   the producer is located other than through a purchase, the value of
   the consideration related to the acquisition of the packaging
   materials and containers or the elements, based on the cost of the
   consideration that is recorded on the books of the buyer or the
   related person, or
  (d) where the packaging materials and containers or the elements are
   produced by the buyer, or by a related person, in the territory of
   the NAFTA country in which the producer is located, the total cost of
   the packaging materials and containers or the elements, determined in
   accordance with subsection (7),
and shall include the following costs that are recorded on the books of
 the buyer or the related person supplying the packaging materials and
 containers or the elements on behalf of the buyer, to the extent that
 such costs are not included under paragraphs (a) through (d):
  (e) the costs of freight, insurance, packing, and all other costs
   incurred in transporting the packaging materials and containers or
   the elements to the location of the producer,
  (f) duties and taxes paid or payable with respect to the packaging
   materials and containers or the elements, other than duties and taxes
   that are waived, refunded, refundable or otherwise recoverable,
   including credit against duty or tax paid or payable,

[[Page 481]]

 
  (g) customs brokerage fees, including the cost of in-house customs
   brokerage services, incurred with respect to the packaging materials
   and containers or the elements, and
  (h) the cost of waste and spoilage resulting from the use of the
   packaging materials and containers or the elements in the production
   of the good, less the value of renewable scrap or by-product.
(7) For purposes of subsection (6)(d), the total cost of the packaging
 materials and containers referred to in subsection (1)(a)(iii) or the
 elements referred to in subsection (1)(b)(i) shall be
  (a) where the packaging materials and containers or the elements are
   produced by the buyer, at the choice of the buyer,
    (i) the total cost incurred with respect to all goods produced by
     the buyer, calculated on the basis of the costs that are recorded
     on the books of the buyer, that can be reasonably allocated to the
     packaging materials and containers or the elements in accordance
     with Schedule VII, or
    (ii) the aggregate of each cost incurred by the buyer that forms
     part of the total cost incurred with respect to the packaging
     materials and containers or the elements, calculated on the basis
     of the costs that are recorded on the books of the buyer, that can
     be reasonably allocated to the packaging materials and containers
     or the elements in accordance with Schedule VII; and
  (b) where the packaging materials and containers or the elements are
   produced by a person who is related to the buyer, at the choice of
   the buyer,
    (i) the total cost incurred with respect to all goods produced by
     that related person, calculated on the basis of the costs that are
     recorded on the books of that person, that can be reasonably
     allocated to the packaging materials and containers or the elements
     in accordance with Schedule VII, or
    (ii) the aggregate of each cost incurred by that related person that
     forms part of the total cost incurred with respect to the packaging
     materials and containers or the elements, calculated on the basis
     of the costs that are recorded on the books of that person, that
     can be reasonably allocated to the packaging materials and
     containers or the elements in accordance with Schedule VII.
(8) Except as provided in subsections (10) and (11), the value of the
 elements referred to in subsections (1)(b)(ii) through (iv) shall be
  (a) the cost of those elements that is recorded on the books of the
   buyer, or
  (b) where such elements are provided by another person on behalf of
   the buyer and the cost is not recorded on the books of the buyer, the
   cost of those elements that is recorded on the books of that other
   person.
(9) Where the elements referred to in subsections (1)(b)(ii) through
 (iv) were previously used by or on behalf of the buyer, the value of
 the elements shall be adjusted downward to reflect that use.
(10) Where the elements referred to in subsections (1)(b)(ii) and (iii)
 were leased by the buyer or a person related to the buyer, the value of
 the elements shall be the cost of the lease as recorded on the books of
 the buyer or that related person.
(11) No addition shall be made to the price actually paid or payable for
 the elements referred to in subsection (1)(b)(iv) that are available in
 the public domain, other than the cost of obtaining copies of them.

[[Page 482]]

 
(12) The producer shall choose the method of allocating to the good the
 value of the elements referred to in subsections (1)(b)(ii) through
 (iv), provided that the value is reasonably allocated to the good in a
 manner appropriate to the circumstances. The methods the producer may
 choose to allocate the value include allocating the value over the
 number of units produced up to the time of the first shipment or
 allocating the value over the entire anticipated production where
 contracts or firm commitments exist for that production. For an
 illustration of this, a buyer provides the producer with a mold to be
 used in the production of the good and contracts with the producer to
 buy 10,000 units of that good. By the time the first shipment of 1,000
 units arrives, the producer has already produced 4,000 units. In these
 circumstances, the producer may choose to allocate the value of the
 mold over 4,000 units or 10,000 units but shall not choose to allocate
 the value of the elements to the first shipment of 1,000 units. The
 producer may choose to allocate the entire value of the elements to a
 single shipment of a good only where that single shipment comprises all
 of the units of the good acquired by the buyer under the contract or
 commitment for that number of units of the good between the producer
 and the buyer.
(13) The addition for the royalties referred to in subsection (1)(c)
 shall be the payment for the royalties that is recorded on the books of
 the buyer, or where the payment for the royalties is recorded on the
 books of another person, the payment for the royalties that is recorded
 on the books of that other person.
(14) The value of the proceeds referred to in subsection (1)(d) shall be
 the amount that is recorded for such proceeds on the books of the buyer
 or the producer.
 
                              SCHEDULE III
                     UNACCEPTABLE TRANSACTION VALUE
 
SECTION 1. Definitions.
 For purposes of this Schedule, unless otherwise stated
``buyer'' refers to a person who purchases a good from the producer;
``customs administration'' refers to the customs administration of the
 NAFTA country into whose territory the good being valued is imported;
``producer'' refers to the producer of the good being valued.
SECTION 2.
(1) There is no transaction value for a good where the good is not the
 subject of a sale.
(2) The transaction value of a good is unacceptable where
  (a) there are restrictions on the disposition or use of the good by
   the buyer, other than restrictions that
    (i) are imposed or required by law or by the public authorities in
     the territory of the NAFTA country in which the buyer is located,
    (ii) limit the geographical area in which the good may be resold, or
    (iii) do not substantially affect the value of the good;
  (b) the sale or price actually paid or payable is subject to a
   condition or consideration for which a value cannot be determined
   with respect to the good;
  (c) part of the proceeds of any subsequent resale, disposal or use of
   the good by the buyer will accrue directly or indirectly to the
   producer, and an appropriate addition to the price actually paid or
   payable cannot be made in accordance with section 4(1)(d) of Schedule
   II; or
  (d) except as provided in section 3, the producer and the buyer are
   related persons and the relationship between them influenced the
   price actually paid or payable for the good.
(3) The conditions or considerations referred to in subsection (2)(b)
 include the following circumstances:
  (a) the producer establishes the price actually paid or payable for
   the good on condition that the buyer will also buy other goods in
   specified quantities;
  (b) the price actually paid or payable for the good is dependent on
   the price or prices at which the buyer sells other goods to the
   producer of the good; and

[[Page 483]]

 
  (c) the price actually paid or payable is established on the basis of
   a form of payment extraneous to the good, such as where the good is a
   semi-finished good that has been provided by the producer to the
   buyer on condition that the producer will receive a specified
   quantity of the finished good from the buyer.
(4) For purposes of subsection (2)(b), conditions or considerations
 relating to the production or marketing of the good shall not render
 the transaction value unacceptable, such as where the buyer undertakes
 on the buyer's own account, even though by agreement with the producer,
 activities relating to the marketing of the good.
(5) Where objective and quantifiable data do not exist with regard to
 the additions required to be made to the price actually paid or payable
 under section 4(1) of Schedule II, the transaction value cannot be
 determined under the provisions of section 2 of that Schedule. For an
 illustration of this, a royalty is paid on the basis of the price
 actually paid or payable in a sale of a liter of a particular good that
 was purchased by the kilogram and made up into a solution. If the
 royalty is based partially on the purchased good and partially on other
 factors that have nothing to do with that good, such as when the
 purchased good is mixed with other ingredients and is no longer
 separately identifiable, or when the royalty cannot be distinguished
 from special financial arrangements between the producer and the buyer,
 it would be inappropriate to add the royalty and the transaction value
 of the good could not be determined. However, if the amount of the
 royalty is based only on the purchased good and can be readily
 quantified, an addition to the price actually paid or payable can be
 made and the transaction value can be determined.
SECTION 3.
(1) In determining whether the transaction value is unacceptable under
 section 2(2)(d), the fact that the producer and the buyer are related
 persons shall not in itself be grounds for the customs administration
 to render the transaction value unacceptable. In such cases, the
 circumstances surrounding the sale shall be examined and the
 transaction value shall be accepted provided that the relationship
 between the producer and the buyer did not influence the price actually
 paid or payable. Where the customs administration has reasonable
 grounds for considering that the relationship between the producer and
 the buyer influenced the price, the customs administration shall
 communicate the grounds to the producer, and that producer shall be
 given a reasonable opportunity to respond to the grounds communicated
 by the customs administration. If that producer so requests, the
 customs administration shall communicate in writing the grounds on
 which it considers that the relationship between the producer and the
 buyer influenced the price actually paid or payable.
(2) Subsection (1) provides that, where the producer and the buyer are
 related persons, the circumstances surrounding the sale shall be
 examined and the transaction value shall be accepted as the value
 provided that the relationship between the producer and the buyer did
 not influence the price actually paid or payable. It is not intended
 under subsection (1) that there should be an examination of the
 circumstances in all cases where the producer and the buyer are related
 persons. Such an examination will only be required where the customs
 administration has doubts that the price actually paid or payable is
 acceptable because of the relationship between the producer and the
 buyer. Where the customs administration does not have doubts that the
 price actually paid or payable is acceptable, it shall accept that
 price without requesting further information. For an illustration of
 this, the customs administration may have previously examined the
 relationship between the producer and the buyer, or it may already have
 detailed information concerning the relationship between the producer
 and the buyer, and may already be satisfied from that examination or
 information that the relationship between them did not influence the
 price actually paid or payable.

[[Page 484]]

 
(3) In applying subsection (1), where the producer and the buyer are
 related persons and the customs administration has doubts that the
 transaction value is acceptable without further inquiry, the customs
 administration shall give the producer an opportunity to supply such
 further information as may be necessary to enable it to examine the
 circumstances surrounding the sale. In such a case, the customs
 administration shall examine the relevant aspects of the sale,
 including the way in which the producer and the buyer organize their
 commercial relations and the way in which the price actually paid or
 payable for the good being valued was arrived at, in order to determine
 whether the relationship between the producer and the buyer influenced
 that price actually paid or payable. Where it can be shown that the
 producer and the buyer buy from and sell to each other as if they were
 not related persons, the price actually paid or payable shall be
 considered as not having been influenced by the relationship between
 them. For an illustration of this, if the price actually paid or
 payable for the good had been settled in a manner consistent with the
 normal pricing practices of the industry in question or with the way in
 which the producer settles prices for sales to unrelated buyers, the
 price actually paid or payable shall be considered as not having been
 influenced by the relationship between the buyer and the producer. As
 another illustration, where it is shown that the price actually paid or
 payable for the good is adequate to ensure recovery of the total cost
 of producing the good plus a profit that is representative of the
 producer's overall profit realized over a representative period of
 time, such as on an annual basis, in sales of goods of the same class
 or kind, the price actually paid or payable shall be considered as not
 having been influenced by the relationship between the producer and the
 buyer.
(4) In a sale between a producer and a buyer who are related persons,
 the transaction value shall be accepted and determined in accordance
 with section 2 of Schedule II wherever the producer demonstrates that
 the transaction value of the good in that sale closely approximates a
 test value referred to in subsection (5).
(5) The value to be used as a test value shall be the transaction value
 of identical goods or similar goods sold at or about the same time as
 the good being valued is sold to an unrelated buyer who is located in
 the territory of the NAFTA country in which the buyer is located.
(6) In applying a test value referred to in subsection (4), due account
 shall be taken of demonstrated differences in commercial levels,
 quantity levels, the value of the elements specified in section 4(1)(b)
 of Schedule II and the costs incurred by the producer in sales to
 unrelated buyers that are not incurred by the producer in sales to a
 related person.
(7) The application of the test value referred to in subsection (4)
 shall be used at the initiative of the producer and shall be used only
 for comparison purposes to determine whether the transaction value of
 the good is acceptable. The test value shall not be used as the
 transaction value of that good.
(8) Subsection (4) provides an opportunity for the producer to
 demonstrate that the transaction value closely approximates a test
 value previously accepted by the customs administration, and is
 therefore acceptable under subsections (1) and (4). Where the
 application of a test value under subsection (4) demonstrates that the
 transaction value of the good being valued is acceptable, the customs
 administration shall not examine the question of influence in regard to
 the relationship between the producer and the buyer under subsection
 (1). Where the customs administration already has sufficient
 information available, without further inquiries, that the transaction
 value closely approximates a test value referred to in subsection (4),
 the producer is not required to apply a test value to demonstrate that
 the transaction value is acceptable under that subsection.

[[Page 485]]

 
(9) A number of factors must be taken into consideration for the purpose
 of determining whether the transaction value of the identical goods or
 similar goods closely approximates the transaction value of the good
 being valued. These factors include the nature of the good, the nature
 of the industry itself, the season in which the good is sold, and
 whether the difference in values is commercially significant. Since
 these factors may vary from case to case, it would be impossible to
 apply an acceptable standardized difference such as a fixed amount or
 fixed percentage difference in each case. For an illustration of this,
 a small difference in value in a case involving one type of good could
 be unacceptable, while a large difference in a case involving another
 type of good might be acceptable for the purposes of determining
 whether the transaction value closely approximates a test value set out
 in subsection (4).
 
                               SCHEDULE IV
 LIST OF TARIFF PROVISIONS FOR THE PURPOSES OF SECTION 9 OF THE APPENDIX
 
4009
4010.31 through 4010.34 and 4010.39.10 through 4010.39.20
4011
4016.93.10
4016.99.30 and 4016.99.55
7007.11 and 7007.21
7009.10
8301.20
8407.31
8407.32
8407.33
8407.34.05, 8407.34.15 and 8407.34.25
8407.34.35, 8407.34.45 and 8407.34.55
8408.20
8409
8413.30
8414.59.30
8414.80.05
8415.20
8421.39.40
8481.20, 8481.30 and 8481.80
8482.10 through 8482.80
8483.10 through 8483.40
8483.50
8501.10
8501.20
8501.31
8501.32.45
8507.20.40, 8507.30.40, 8507.40.40 and 8507.80.40
8511.30
8511.40
8511.50
8512.20
8512.40
8519.93
8527.21
8527.29
8536.50
8536.90
8537.10.60
8539.10
8539.21
8544.30

[[Page 486]]

 
8706
8707
8708.10.30
8708.21
8708.29.20
8708.29.10
8708.29.15
8708.39
8708.40
8708.50
8708.60
8708.70.05, 8708.70.25 and 8708.70.45
8708.80
8708.91
8708.92
8708.93.15 and 8708.93.60
8708.94
8708.99.03, 8708.99.27 and 8708.99.55
8708.99.06, 8708.99.31 and 8708.99.58
8708.99.09, 8708.99.34 and 8708.99.61
8708.99.12, 8708.99.37 and 8708.99.64
8708.99.15, 8708.99.40 and 8708.99.67
8708.99.18, 8708.99.43 and 8708.99.70
8708.99.21, 8708.99.46 and 8708.99.73
8708.99.24, 8708.99.49 and 8708.99.80
9031.80
9032.89
9401.20
 


                               SCHEDULE V
 LIST OF AUTOMOTIVE COMPONENTS AND MATERIALS FOR THE PURPOSES OF SECTION
                           10 OF THE APPENDIX
 


------------------------------------------------------------------------
              Column I
  Item       automotive              Column II  listed materials
             components
------------------------------------------------------------------------
1.       Engines provided    Cast blocks, cast heads, fuel nozzles, fuel
          for in heading      injector pumps, glow plugs, turbochargers,
          8407 or 8408.       superchargers, electronic engine controls,
                              intake manifolds, exhaust manifolds,
                              intake valves, exhaust valves,
                              crankshafts, camshafts, alternators,
                              starters, air cleaner assemblies, pistons,
                              connecting rods and assemblies made
                              therefrom, rotor assemblies for rotary
                              engines, flywheels (for manual
                              transmissions), flexplates (for automatic
                              transmissions), oil pans, oil pumps,
                              pressure regulators, water pumps,
                              crankshaft gears, camshaft gears, radiator
                              assemblies, charge-air coolers.
2.       Gear boxes          (a) For manual transmissions: transmission
          (transmissions)     cases and clutch housings; clutches;
          provided for in     internal shifting mechanisms; gear sets,
          subheading          synchronizers and shafts; and
          8708.40.
                             (b) For torque convertor type
                              transmissions: transmission cases and
                              convertor housings; torque convertor
                              assemblies; gear sets and clutches;
                              electronic transmission controls.
------------------------------------------------------------------------


                               SCHEDULE VI
               REGIONAL VALUE-CONTENT CALCULATION FOR CAMI
 
SECTION 1. Definitions.
 In this Schedule,
``closed'' means, with respect to a plant, a closure

[[Page 487]]

 
  (a) for purposes of re-tooling for a change in model line, or
  (b) as a result of any event or circumstance (other than the
   imposition of antidumping duties or countervailing duties, or an
   interruption of operations resulting from a labor strike, lock-out,
   labor dispute, picketing or boycott of or by employees of CAMI
   Automotive, Inc. or General Motors of Canada Limited) that CAMI
   Automotive, Inc. or General Motors of Canada Limited could not
   reasonably have been expected to avert by corrective action or by
   exercise of due care and diligence, including a shortage of
   materials, failure of utilities, or inability to obtain or a delay in
   obtaining raw materials, parts, fuel or utilities;
``GM'' means General Motors of Canada Limited, General Motors
 Corporation, General Motors de Mexico, S.A. de C.V., and any subsidiary
 directly or indirectly owned by any of them, or by any combination
 thereof;
``producer'' means CAMI Automotive, Inc.
SECTION 2.
 For purposes of section 11 of this appendix, for purposes of
 determining the regional value content, in a fiscal year, of a motor
 vehicle of a class of motor vehicles or a model line produced by the
 producer in the territory of Canada and imported into the territory of
 the United States, the producer may choose to calculate the regional
 value content by
 (a) calculating
 


    (i) the sum of
      (A) the net cost incurred by the producer, during that fiscal
       year, in the production in the territory of Canada of motor
       vehicles of a category referred to in section 3 that is chosen by
       the producer, and
      (B) the net cost incurred by General Motors of Canada Limited,
       during the fiscal year that corresponds most closely to the
       producer's fiscal year, in the production in the territory of
       Canada of a corresponding class of motor vehicles or model line,
       and
    (ii) the sum of
      (A) the value, determined in accordance with section 9 of this
       appendix for light-duty vehicles and section 10 of this appendix
       for heavy-duty vehicles, of the non-originating materials that
       are used by the producer, during that fiscal year, in the
       production in the territory of Canada of motor vehicles of a
       category referred to in section 2.1 that is chosen by the
       producer, and
      (B) the value, determined in accordance with section 9 of this
       appendix for light-duty vehicles and section 10 of this appendix
       for heavy-duty vehicles, of the non-originating materials that
       are used by General Motors of Canada Limited, during the fiscal
       year that corresponds most closely to the producer's fiscal year,
       in the production in the territory of Canada of a corresponding
       class of motor vehicles or model line, and

[[Page 488]]

 
  (b) using the sums referred to in paragraphs (a)(i) and (ii) as the
   net cost and the value of non-originating materials, respectively, in
   the calculation referred to in section 6(3) of this appendix,
provided that
  (c) at the beginning of the producer's fiscal year, General Motors of
   Canada Limited owns 50 percent or more of the voting common stock of
   the producer, and
  (d) GM acquires 75 percent or more by unit of quantity of the class of
   motor vehicles or model line, as the case may be, that the producer
   produced in the territory of Canada in the producer's fiscal year for
   sale in the territory of one or more of the NAFTA countries.
SECTION 3.
 The categories referred to in clauses 2(a)(i)(A) and (ii)(A) are the
 following:
  (a) the class of motor vehicles that the producer produced in the
   territory of Canada in the producer's fiscal year for sale in the
   territory of one or more of the NAFTA countries; and
  (b) the model line that the producer produced in the territory of
   Canada in the producer's fiscal year for sale in the territory of one
   or more of the NAFTA countries.
SECTION 4.
 Where GM does not satisfy the requirement set out in section 2(d), the
 producer may choose that the regional value content be calculated in
 accordance with section 2 only for those motor vehicles that are
 acquired by GM for distribution under the GEO marque or another GM
 marque.
SECTION 5.
(1) The producer may choose that the calculation referred to in section
 2 be made over a period of two fiscal years where
  (a) any plant operated by the producer or by General Motors of Canada
   Limited is closed for more than two consecutive months; and
  (b) the motor vehicles of a category referred to in section 3, with
   respect to which the producer chooses that the regional value content
   be calculated in accordance with section 2, are produced in that
   plant.
(2) Subject to subsection (3), the period of two fiscal years referred
 to in subsection (1) corresponds to the fiscal year in which the plant
 is closed and, at the choice of the producer, the preceding or the
 subsequent fiscal year.
(3) Where the plant is closed for a period that spans two fiscal years,
 the calculation referred to in section 2 may be made only over those
 two fiscal years.
(4) Where the producer has chosen that the regional value content be
 calculated over two fiscal years under this section, the choice
 referred to in section 11(6) of this appendix shall be filed not later
 than 10 days after the end of the period during which the plant is
 closed, or at such later time as the customs administration may accept.
SECTION 6.
 For purposes of this Schedule, a motor vehicle producer shall be deemed
 to be GM where, as a result of an amalgamation, reorganization,
 division or similar transaction, that motor vehicle producer
  (a) acquires all or substantially all of the assets used by GM, and
  (b) directly or indirectly controls, or is controlled by, GM, or both
   that motor vehicle producer and GM are controlled by the same person.
 
                              SCHEDULE VII
                     REASONABLE ALLOCATION OF COSTS
 
SECTION 1. Definitions.
 For purposes of this Schedule,
``costs'' means any costs that are included in total cost and that need
 to be allocated pursuant to sections 5(9), 6(11) and 7(6) and sections
 10(1)(a)(i) and (ii) of these Regulations, section 4(7) of Schedule II
 and sections 5(7) and 10(2) of Schedule VIII;

[[Page 489]]

 
``discontinued operations'', in the case of a producer located in a
 NAFTA country, has the meaning set out in that NAFTA country's
 Generally Accepted Accounting Principles;
``indirect overhead'' means period costs and other costs;
``internal management purpose'' means any purpose relating to tax
 reporting, financial reporting, financial planning, decision-making,
 pricing, cost recovery, cost control management or performance
 measurement; and
``overhead'' means costs, other than direct material costs and direct
 labor costs.
SECTION 2. Interpretation.
(1) In this Schedule, reference to ``producer'' shall, for purposes of
 section 4(7) of Schedule II, be read as a reference to ``buyer''.
(2) In this Schedule, reference to ``good'' shall,
  (a) for purposes of section 6(14) of this appendix, be read as a
   reference to ``identical goods or similar goods, or any combination
   thereof'';
  (b) for purposes of section 7(6) of this appendix, be read as a
   reference to ``intermediate material'';
  (c) for purposes of section 11 of this appendix, be read as a
   reference to ``category of vehicles that is chosen pursuant to
   section 11(1) of this appendix'';
  (d) for purposes of section 12 of this appendix, be read as a
   reference to ``category of goods chosen pursuant to section 12(1) of
   this appendix'';
  (e) for purposes of section 13(4) of this appendix, be read as a
   reference to ``category of vehicles chosen pursuant to section 13(4)
   of this appendix'';
  (f) for purposes of section 4(7) of Schedule II, be read as a
   reference to ``packaging materials and containers or the elements'';
   and
  (g) for purposes of section 5(7) of Schedule VIII, be read as a
   reference to ``elements''.
 
                  Methods to Reasonably Allocate Costs
 
SECTION 3.
(1) Where a producer of a good is using, for an internal management
 purpose, a cost allocation method to allocate to the good direct
 material costs, or part thereof, and that method reasonably reflects
 the direct material used in the production of the good based on the
 criterion of benefit, cause or ability to bear, that method shall be
 used to reasonably allocate the costs to the good.
(2) Where a producer of a good is using, for an internal management
 purpose, a cost allocation method to allocate to the good direct labor
 costs, or part thereof, and that method reasonably reflects the direct
 labor used in the production of the good based on the criterion of
 benefit, cause or ability to bear, that method shall be used to
 reasonably allocate the costs to the good.
(3) Where a producer of a good is using, for an internal management
 purpose, a cost allocation method to allocate to the good overhead, or
 part thereof, and that method is based on the criterion of benefit,
 cause or ability to bear, that method shall be used to reasonably
 allocate the costs to the good.
SECTION 4.
 Where costs are not reasonably allocated to a good under section 3,
 those costs are reasonably allocated to the good if they are allocated,
  (a) with respect to direct material costs, on the basis of any method
   that reasonably reflects the direct material used in the production
   of the good based on the criterion of benefit, cause or ability to
   bear;
  (b) with respect to direct labor costs, on the basis of any method
   that reasonably reflects the direct labor used in the production of
   the good based on the criterion of benefit, cause or ability to bear;
   and
  (c) with respect to overhead, on the basis of any of the following
   methods:
    (i) the method set out in Addendum A, Addendum B or Addendum C,
    (ii) a method based on a combination of the methods set out in
     Addenda A and B or Addenda A and C, and
    (iii) a cost allocation method based on the criterion of benefit,
     cause or ability to bear.
SECTION 4.1.

[[Page 490]]

 
 Nothwithstanding section 3 and 7, where a producer allocates, for an
 internal management purpose, costs to a good that is not produced in
 the period in which the costs are expensed on the books of the producer
 (such as costs with respect to research and development, and obsolete
 materials), those costs shall be considered reasonably allocated if
  (a) for purposes of section 6(11), they are allocated to a good that
   is produced in the period in which the costs are expensed, and
  (b) the good produced in that period is within a group or range of
   goods, including identical goods or similar goods, that is produced
   by the same industry or industry sector as the goods to which the
   costs are expensed.
SECTION 5.
 Any cost allocation method referred to in section 3, 4 or 4.1 that is
 used by a producer for the purposes of this appendix shall be used
 throughout the producer's fiscal year.
 
                     Costs Not Reasonably Allocated
 
SECTION 6.
 The allocation to a good of any of the following is considered not to
 be reasonably allocated to the good:
  (a) costs of a service provided by a producer of a good to another
   person where the service is not related to the good;
  (b) gains or losses resulting from the disposition of a discontinued
   operation, except gains or losses related to the production of the
   good;
  (c) cumulative effects of accounting changes reported in accordance
   with a specific requirement of the applicable Generally Accepted
   Accounting Principles; and''.
  (d) gains or losses resulting from the sale of a capital asset of the
   producer.
SECTION 7.
 Any costs allocated under section 3 on the basis of a cost allocation
 method that is used for an internal management purpose that is solely
 for the purpose of qualifying a good as an originating good are
 considered not to be reasonably allocated.
 
                               ADDENDUM A
                            COST RATIO METHOD
 
Calculation of Cost Ratio
 
 For the overhead to be allocated, the producer may choose one or more
 allocation bases that reflect a relationship between the overhead and
 the good based on the criterion of benefit, cause or ability to bear.
 With respect to each allocation base that is chosen by the producer for
 allocating overhead, a cost ratio is calculated for each good produced
 by the producer in accordance with the following formula:
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.010

where
CR is the cost ratio with respect to the good;
AB is the allocation base for the good; and
TAB is the total allocation base for all the goods produced by the 
producer.

Allocation to a Good of Costs Included in Overhead
 
 The costs with respect to which an allocation base is chosen are
 allocated to a good in accordance with the following formula:
 
                              CAG = CA x CR
 
where
  CAG is the costs allocated to the good;

[[Page 491]]

 
  CA is the costs to be allocated; and
  CR is the cost ratio with respect to the good.
 
Excluded Costs
 
 Under section 6(11)(b) of this appendix, where excluded costs are
 included in costs to be allocated to a good, the cost ratio used to
 allocate that cost to the good is used to determine the amount of
 excluded costs to be subtracted from the costs allocated to the good.
 
Allocation Bases for Costs
 
 The following is a non-exhaustive list of allocation bases that may be
 used by the producer to calculate cost ratios:
  Direct Labor Hours
  Direct Labor Costs
  Units Produced
  Machine-hours
  Sales Dollars or Pesos
  Floor Space
 
``Examples''
 
 The following examples illustrate the application of the cost ratio
 method to costs included in overhead.
 


Example 1: Direct Labor Hours
 A producer who produces Good A and Good B may allocate overhead on the
 basis of direct labor hours spent to produce Good A and Good B. A total
 of 8,000 direct labor hours have been spent to produce Good A and Good
 B: 5,000 hours with respect to Good A and 3,000 hours with respect to
 Good B. The amount of overhead to be allocated is $6,000,000.
  Calculation of the Ratios:
  Good A: 5,000 hours/8,000 hours = .625
  Good B: 3,000 hours/8,000 hours = .375
  Allocation of overhead to Good A and Good B:
  Good A: $6,000,000 x .625 = $3,750,000
  Good B: $6,000,000 x .375 = $2,250,000
Example 2: Direct Labor Costs
 A producer who produces Good A and Good B may allocate overhead on the
 basis of direct labor costs incurred in the production of Good A and
 Good B. The total direct labor costs incurred in the production of Good
 A and Good B is $60,000: $50,000 with respect to Good A and $10,000
 with respect to Good B. The amount of overhead to be allocated is
 $6,000,000.
  Calculation of the Ratios:
  Good A: $50,000/$60,000 = .833
  Good B: $10,000/$60,000 = .167
  Allocation of Overhead to Good A and Good B:
  Good A: $6,000,000 x .833 = $4,998,000
  Good B: $6,000,000 x .167 = $1,002,000
Example 3: Units Produced
 A producer of Good A and Good B may allocate overhead on the basis of
 units produced. The total units of Good A and Good B produced is
 150,000: 100,000 units of Good A and 50,000 units of Good B. The amount
 of overhead to be allocated is $6,000,000.
  Calculation of the Ratios:
  Good A: 100,000 units/150,000 units = .667
  Good B: 50,000 units/150,000 units = .333
  Allocation of Overhead to Good A and Good B:
  Good A: $6,000,000 x .667 = $4,002,000
  Good B: $6,000,000 x .333 = $1,998,000
Example 4: Machine-hours

[[Page 492]]

 
 A producer who produces Good A and Good B may allocate machine-related
 overhead on the basis of machine-hours utilized in the production of
 Good A and Good B. The total machine-hours utilized for the production
 of Good A and Good B is 3,000 hours: 1,200 hours with respect to Good A
 and 1,800 hours with respect to Good B. The amount of machine-related
 overhead to be allocated is $6,000,000.
  Calculation of the Ratios:
  Good A: 1,200 machine-hours/3,000 machine-hours = .40
  Good B: 1,800 machine-hours/3,000 machine-hours = .60
  Allocation of Machine-Related Overhead to Good A and Good B:
  Good A: $6,000,000 x .40 = $2,400,000
  Good B: $6,000,000 x .60 = $3,600,000
Example 5: Sales Dollars or Pesos
 A producer who produces Good A and Good B may allocate overhead on the
 basis of sales dollars. The producer sold 2,000 units of Good A at
 $4,000 and 200 units of Good B at $3,000. The amount of overhead to be
 allocated is $6,000,000.
  Total Sales Dollars for Good A and Good B:
  Good A: $4,000 x 2,000 = $8,000,000
  Good B: $3,000 x 200 = $600,000
  Total Sales Dollars: $8,000,000 + $600,000 = $8,600,000
  Calculation of the Ratios:
  Good A: $8,000,000/$8,600,000 = .93
  Good B: $600,000/$8,600,000 = .07
  Allocation of Overhead to Good A and Good B:
  Good A: $6,000,000 x .93 = $5,580,000
  Good B: $6,000,000 x .07 = $420,000
Example 6: Floor Space
 A producer who produces Good A and Good B may allocate overhead
 relating to utilities (heat, water and electricity) on the basis of
 floor space used in the production and storage of Good A and Good B.
 The total floor space used in the production and storage of Good A and
 Good B is 100,000 square feet: 40,000 square feet with respect to Good
 A and 60,000 square feet with respect to Good B. The amount of overhead
 to be allocated is $6,000,000.
  Calculation of the Ratios:
  Good A: 40,000 square feet/100,000 square feet = .40
  Good B: 60,000 square feet/100,000 square feet = .60
  Allocation of Overhead (Utilities) to Good A and Good B:
  Good A: $6,000,000 x .40 = $2,400,000
  Good B: $6,000,000 x .60 = $3,600,000
 


                               ADDENDUM B
              DIRECT LABOR AND DIRECT MATERIAL RATIO METHOD
 
Calculation of Direct Labor and Direct Material Ratio
 
 For each good produced by the producer, a direct labor and direct
 material ratio is calculated in accordance with the following formula:
 
 

[GRAPHIC] [TIFF OMITTED] TR06SE95.011

where

DLDMR is the direct labor and direct material ratio for the good;
DLC is the direct labor costs of the good;
DMC is the direct material costs of the good;
TDLC is the total direct labor costs of all goods produced by the 
producer; and
TDMC is the total direct material costs of all goods produced by the 
producer.

Allocation of Overhead to a Good
 Overhead is allocated to a good in accordance with the following
 formula:
 

[[Page 493]]

 
                             OAG = O x DLDMR
 
where
  OAG is the overhead allocated to the good;
  O is the overhead to be allocated; and
  DLDMR is the direct labor and direct material ratio for the good.
Excluded Costs
 Under section 6(11)(b) of this appendix, where excluded costs are
 included in overhead to be allocated to a good, the direct labor and
 direct material ratio used to allocate overhead to the good is used to
 determine the amount of excluded costs to be subtracted from the
 overhead allocated to the good.
 


                              ``Examples''
 
Example 1:
 The following example illustrates the application of the direct labor
 and direct material ratio method used by a producer of a good to
 allocate overhead where the producer chooses to calculate the net cost
 of the good in accordance with section 6(11)(a) of this appendix.
 A producer produces Good A and Good B. Overhead (O) minus excluded
 costs (EC) is $30 and the other relevant costs are set out in the
 following table:
 


------------------------------------------------------------------------
                                      Good A       Good B       Total
------------------------------------------------------------------------
Direct labor costs (DLC).........           $5           $5          $10
Direct material costs (DMC)......           10            5           15
                                  --------------------------------------
Totals...........................          $15          $10          $25
------------------------------------------------------------------------

Overhead Allocated to Good A
    OAG (Good A) = O ($30) x DLDMR ($15/$25)
    OAG (Good A) = $18.00
Overhead Allocated to Good B
    OAG (Good B) = O ($30) x DLDMR ($10/$25)
    OAG (Good B) = $12.00
Example 2:

 The following example illustrates the application of the direct labor
 and direct material ratio method used by a producer of a good to
 allocate overhead where the producer chooses to calculate the net cost
 of the good in accordance with section 6(11)(b) of this appendix and
 where excluded costs are included in overhead.
 A producer produces Good A and Good B. Overhead (O) is $50 (including
 excluded costs (EC) of $20). The other relevant costs are set out in
 the table of Example 1.
Overhead Allocated to Good A
  OAG (Good A) = [O ($50) x DLDMR ($15/$25)] - [EC ($20) x DLDMR ($15/
   $25)]
  OAG (Good A) = $18.00
Overhead Allocated to Good B
  OAG (Good B) = [O ($50) x DLDMR ($10/$25)] - [EC ($20) x DLDMR ($10/
   $25)]
  OAG (Good B) = $12.00
 


                               ADDENDUM C
                        DIRECT COST RATIO METHOD
 
Direct Overhead
 Direct overhead is allocated to a good on the basis of a method based
 on the criterion of benefit, cause or ability to bear.
Indirect Overhead
 Indirect overhead is allocated on the basis of a direct cost ratio.
Calculation of Direct Cost Ratio
 For each good produced by the producer, a direct cost ratio is
 calculated in accordance with the following formula:
 
 


[[Page 494]]

[GRAPHIC] [TIFF OMITTED] TR06SE95.012

where

 DCR is the direct cost ratio for the good;
 DLC is the direct labor costs of the good;
 DMC is the direct material costs of the good;
 DO is the direct overhead of the good;
 TDLC is the total direct labor costs of all goods produced by the 
producer;
 TDMC is the total direct material costs of all goods produced by the 
producer; and
 TDO is the total direct overhead of all goods produced by the producer;

Allocation of Indirect Overhead to a Good
 Indirect overhead is allocated to a good in accordance with the
 following formula:
 
  IOAG = IO x DCR
 
where
  IOAG is the indirect overhead allocated to the good;
  IO is the indirect overhead of all goods produced by the producer; and
  DCR is the direct cost ratio of the good.
Excluded Costs
 Under section 6(11)(b) of this appendix, where excluded costs are
 included in
  (a) direct overhead to be allocated to a good, those excluded costs
   are subtracted from the direct overhead allocated to the good; and
  (b) indirect overhead to be allocated to a good, the direct cost ratio
   used to allocate indirect overhead to the good is used to determine
   the amount of excluded costs to be subtracted from the indirect
   overhead allocated to the good.
 


                              ``Examples''
 
Example 1:
 The following example illustrates the application of the direct cost
 ratio method used by a producer of a good to allocate indirect overhead
 where the producer chooses to calculate the net cost of the good in
 accordance with section 6(11)(a) of this appendix.
 A producer produces Good A and Good B. Indirect overhead (IO) minus
 excluded costs (EC) is $30. The other relevant costs are set out in the
 following table:
 


------------------------------------------------------------------------
                                      Good A       Good B       Total
------------------------------------------------------------------------
Direct labor costs (DLC).........           $5           $5          $10
Direct material costs (DMC)......           10            5           15
Direct overhead (DO).............            8            2           10
                                  --------------------------------------
Totals...........................          $23          $12          $35
------------------------------------------------------------------------


Indirect Overhead Allocated to Good A
    IOAG (Good A) = IO ($30) x DCR ($23/$35)
    IOAG (Good A) = $19.71
Indirect Overhead Allocated to Good B
    IOAG (Good B) = IO ($30) x DCR ($12/$35)
    IOAG (Good B) = $10.29

Example 2:
 The following example illustrates the application of the direct cost
 ratio method used by a producer of a good to allocate indirect overhead
 where the producer has chosen to calculate the net cost of the good in
 accordance with section 6(11)(b) of this appendix and where excluded
 costs are included in indirect overhead.

[[Page 495]]

 
 A producer produces Good A and Good B. The indirect overhead (IO) is
 $50 (including excluded costs (EC) of $20). The other relevant costs
 are set out in the table to Example 1.
Indirect Overhead Allocated to Good A
  IOAG (Good A) = [IO ($50) x DCR ($23/$35)] - [EC ($20) x DCR ($23/
   $35)]
  IOAG (Good A) = $19.72
Indirect Overhead Allocated to Good B
  IOAG (Good B) = [IO ($50) x DCR ($12/$35)] - [EC ($20) x DCR ($12/
   $35)]
  IOAG (Good B) = $10.28
 


                              SCHEDULE VIII
                           VALUE OF MATERIALS
 
SECTION 1. Definitions.
(1) For purposes of this Schedule, unless otherwise stated,
``buying commissions'' means fees paid by a producer to that producer's
 agent for the agent's services in representing the producer in the
 purchase of a material;
``customs administration'' refers to the customs administration of the
 NAFTA country into whose territory the good, in the production of which
 the material being valued is used, is imported;
``materials of the same class or kind'' means, with respect to materials
 being valued, materials that are within a group or range of materials
 that
  (a) is produced by a particular industry or industry sector, and
  (b) includes identical materials or similar materials;
``producer'' refers to
  (a) in the case of section 10(1)(b)(i) of these Regulations, the
   producer of the listed material, and
  (b) in any other case, the producer who used the material in the
   production of a good that is subject to a regional value-content
   requirement;
``seller'' refers to a person who sells the material being valued to the
 producer.
 
                             Interpretation
 
(2) Where it is to be determined under section 9(3) of these Regulations
 whether the customs value of a material was determined in a manner
 consistent with this Schedule for purposes of section 9(2) (c) or (d)
 of these Regulations, a reference in this Schedule to ``producer''
 shall be read as a reference to ``person other than the producer who
 imports the traced material from outside the territories of the NAFTA
 countries.
SECTION 2.
(1) Except as provided under subsections (2) and (3), the transaction
 value of a material under Article 402(9)(a) of the Agreement, as
 implemented by section 7(1)(b) and sections 9(5) and 10(2) of this
 appendix, shall be the price actually paid or payable for the material
 determined in accordance with section 4 and adjusted in accordance with
 section 5.
(2) There is no transaction value for a material where the material is
 not the subject of a sale.
(3) The transaction value of a material is unacceptable where
  (a) there are restrictions on the disposition or use of the material
   by the producer, other than restrictions that
    (i) are imposed or required by law or by the public authorities in
     the territory of the NAFTA country in which the producer of the
     good or the seller of the material is located,
    (ii) limit the geographical area in which the material may be used,
     or
    (iii) do not substantially affect the value of the material;
  (b) the sale or price actually paid or payable is subject to a
   condition or consideration for which a value cannot be determined
   with respect to the material;

[[Page 496]]

 
  (c) part of the proceeds of any subsequent disposal or use of the
   material by the producer will accrue directly or indirectly to the
   seller, and an appropriate addition to the price actually paid or
   payable cannot be made in accordance with section 5(1)(d); and
  (d) except as provided in section 3, the producer and the seller are
   related persons and the relationship between them influenced the
   price actually paid or payable for the material.
(4) The conditions or considerations referred to in subsection (3)(b)
 include the following circumstances:
  (a) the seller establishes the price actually paid or payable for the
   material on condition that the producer will also buy other materials
   or goods in specified quantities;
  (b) the price actually paid or payable for the material is dependent
   on the price or prices at which the producer sells other materials or
   goods to the seller of the material; and
  (c) the price actually paid or payable is established on the basis of
   a form of payment extraneous to the material, such as where the
   material is a semi-finished material that has been provided by the
   seller to the producer on condition that the seller will receive a
   specified quantity of the finished material from the producer.
(5) For purposes of subsection (3)(b), conditions or considerations
 relating to the use of the material shall not render the transaction
 value unacceptable, such as where the producer undertakes on the
 producer's own account, even though by agreement with the seller,
 activities relating to the warranty of the material used in the
 production of a good.
(6) Where objective and quantifiable data do not exist with regard to
 the additions required to be made to the price actually paid or payable
 under section 5(1), the transaction value cannot be determined under
 the provisions of section 2(1). For an illustration of this, a royalty
 is paid on the basis of the price actually paid or payable in a sale of
 a liter of a particular good that is produced by using a material that
 was purchased by the kilogram and made up into a solution. If the
 royalty is based partially on the purchased material and partially on
 other factors that have nothing to do with that material, such as when
 the purchased material is mixed with other ingredients and is no longer
 separately identifiable, or when the royalty cannot be distinguished
 from special financial arrangements between the seller and the
 producer, it would be inappropriate to add the royalty and the
 transaction value of the material could not be determined. However, if
 the amount of the royalty is based only on the purchased material and
 can be readily quantified, an addition to the price actually paid or
 payable can be made and the transaction value can be determined.
SECTION 3.
(1) In determining whether the transaction value is unacceptable under
 section 2(3)(d), the fact that the seller and the producer are related
 persons shall not in itself be grounds for the customs administration
 to render the transaction value unacceptable. In such cases, the
 circumstances surrounding the sale shall be examined and the
 transaction value shall be accepted provided that the relationship
 between the seller and the producer did not influence the price
 actually paid or payable. Where the customs administration has
 reasonable grounds for considering that the relationship between the
 seller and the producer influenced the price, the customs
 administration shall communicate the grounds to the producer, and that
 producer shall be given a reasonable opportunity to respond to the
 grounds communicated by the customs administration. If that producer so
 requests, the customs administration shall communicate in writing the
 grounds on which it considers that the relationship between the seller
 and the producer influenced the price actually paid or payable.

[[Page 497]]

 
(2) Subsection (1) provides that, where the seller and the producer are
 related persons, the circumstances surrounding the sale shall be
 examined and the transaction value shall be accepted as the value
 provided that the relationship between the seller and the producer did
 not influence the price actually paid or payable. It is not intended
 under subsection (1) that there should be an examination of the
 circumstances in all cases where the seller and the producer are
 related persons. Such an examination will only be required where the
 customs administration has doubts that the price actually paid or
 payable is acceptable because of the relationship between the seller
 and the producer. Where the customs administration does not have doubts
 that the price actually paid or payable is acceptable, it shall accept
 that price without requesting further information. For an illustration
 of this, the customs administration may have previously examined the
 relationship between the seller and the producer, or it may already
 have detailed information concerning the relationship between the
 seller and the producer, and may already be satisfied from that
 examination or information that the relationship between them did not
 influence the price actually paid or payable.
(3) In applying subsection (1), where the seller and the producer are
 related persons and the customs administration has doubts that the
 transaction value is acceptable without further inquiry, the customs
 administration shall give the producer an opportunity to supply such
 further information as may be necessary to enable it to examine the
 circumstances surrounding the sale. In such a case, the customs
 administration shall examine the relevant aspects of the sale,
 including the way in which the seller and the producer organize their
 commercial relations and the way in which the price actually paid or
 payable by that producer for the material being valued was arrived at,
 in order to determine whether the relationship between the seller and
 the producer influenced that price actually paid or payable. Where it
 can be shown that the seller and the producer buy from and sell to each
 other as if they were not related persons, the price actually paid or
 payable shall be considered as not having been influenced by the
 relationship between them. For an illustration of this, if the price
 actually paid or payable for the material had been settled in a manner
 consistent with the normal pricing practices of the industry in
 question or with the way in which the seller settles prices for sales
 to unrelated buyers, the price actually paid or payable shall be
 considered as not having been influenced by the relationship between
 the producer and the seller. For another illustration of this, where it
 is shown that the price actually paid or payable for the material is
 adequate to ensure recovery of the total cost of producing the material
 plus a profit that is representative of the seller's overall profit
 realized over a representative period of time, such as on an annual
 basis, in sales of materials of the same class or kind, the price
 actually paid or payable shall be considered as not having been
 influenced by the relationship between the seller and the producer.
(4) In a sale between a seller and a producer who are related persons,
 the transaction value shall be accepted and determined in accordance
 with section 2(1), wherever the seller or the producer demonstrates
 that the transaction value of the material in that sale closely
 approximates one of the following test values that occurs at or about
 the same time as the sale and is chosen by the seller or the producer:
  (a) the transaction value in sales to unrelated buyers of identical
   materials or similar materials, as determined in accordance with
   section 2(1);
  (b) the value of identical materials or similar materials, as
   determined in accordance with section 9; or
  (c) the value of identical materials or similar materials, as
   determined in accordance with section 10.
(5) In applying a test value referred to in subsection (4), due account
 shall be taken of demonstrated differences in commercial levels,
 quantity levels, the value of the elements specified in section 5(1)(b)
 and the costs incurred by the seller in sales to unrelated buyers that
 are not incurred by the seller in sales by the seller to a related
 person.

[[Page 498]]

 
(6) The application of a test value referred to in subsection (4) shall
 be used at the initiative of the seller, or at the initiative of the
 producer with the consent of the seller, and shall be used only for
 comparison purposes to determine whether the transaction value of the
 material is acceptable. The test value shall not be used as the
 transaction value of that material.
(7) Subsection (4) provides an opportunity for the seller or the
 producer to demonstrate that the transaction value closely approximates
 a test value previously accepted by the customs administration of the
 NAFTA country in which the producer is located, and is therefore
 acceptable under subsection (1). Where the application of a test value
 under subsection (4) demonstrates that the transaction value of the
 material being valued is acceptable, the customs administration shall
 not examine the question of influence in regard to the relationship
 between the seller and the producer under subsection (1). Where the
 customs administration already has sufficient information available,
 without further inquiries, that the transaction value closely
 approximates one of the test values determined under subsection (4),
 the seller or the producer is not required to apply a test value to
 demonstrate that the transaction value is acceptable under that
 subsection.
(8) A number of factors must be taken into consideration for the purpose
 of determining whether the transaction value of the identical materials
 or similar materials closely approximates the transaction value of the
 material being valued. These factors include the nature of the
 material, the nature of the industry itself, the season in which the
 material is sold, and whether the difference in values is commercially
 significant. Since these factors may vary from case to case, it would
 be impossible to apply an acceptable standardized difference such as a
 fixed amount or fixed percentage difference in each case. For an
 illustration of this, a small difference in value in a case involving
 one type of material could be unacceptable, while a large difference in
 a case involving another type of material might be acceptable for the
 purposes of determining whether the transaction value closely
 approximates a test value set out in subsection (4).
SECTION 4.
(1) The price actually paid or payable is the total payment made or to
 be made by the producer to or for the benefit of the seller of the
 material. The payment need not necessarily take the form of a transfer
 of money: it may be made by letters of credit or negotiable
 instruments. Payment may be made directly or indirectly to the seller.
 For an illustration of this, the settlement by the producer, whether in
 whole or in part, of a debt owed by the seller, is an indirect payment.
(2) Activities undertaken by the producer on the producer's own account,
 other than those for which an adjustment is provided in section 5,
 shall not be considered to be an indirect payment, even though the
 activities might be regarded as being for the benefit of the seller.
(3) The transaction value shall not include charges for construction,
 erection, assembly, maintenance or technical assistance related to the
 use of the material by the producer, provided that they are
 distinguished from the price actually paid or payable.
(4) The flow of dividends or other payments from the producer to the
 seller that do not relate to the purchase of the material are not part
 of the transaction value.
SECTION 5.
(1) In determining the transaction value of the material, the following
 shall be added to the price actually paid or payable:
  (a) to the extent that they are incurred by the producer with respect
   to the material being valued and are not included in the price
   actually paid or payable,
    (i) commissions and brokerage fees, except buying commissions, and
    (ii) the costs of containers which, for customs purposes, are
     classified with the material under the Harmonized System;

[[Page 499]]

 
  (b) the value, reasonably allocated in accordance with subsection
   (12), of the following elements where they are supplied directly or
   indirectly to the seller by the producer free of charge or at reduced
   cost for use in connection with the production and sale of the
   material, to the extent that the value is not included in the price
   actually paid or payable:
    (i) a material, other than an indirect material, used in the
     production of the material being valued,
    (ii) tools, dies, molds and similar indirect materials used in the
     production of the material being valued,
    (iii) an indirect material, other than those referred to in
     subparagraph (ii) or in paragraphs (c), (e) or (f) of the
     definition ``indirect material'' set out in Article 415 of the
     Agreement, as implemented by section 2(1) of this appendix, used in
     the production of the material being valued, and
    (iv) engineering, development, artwork, design work, and plans and
     sketches performed outside the territory of the NAFTA country in
     which the producer is located that are necessary for the production
     of the material being valued;
  (c) the royalties related to the material, other than charges with
   respect to the right to reproduce the material in the territory of
   the NAFTA country in which the producer is located that the producer
   must pay directly or indirectly as a condition of sale of the
   material, to the extent that such royalties are not included in the
   price actually paid or payable; and
  (d) the value of any part of the proceeds of any subsequent disposal
   or use of the material that accrues directly or indirectly to the
   seller.
(2) The additions referred to in subsection (1) shall be made to the
 price actually paid or payable under this section only on the basis of
 objective and quantifiable data.
(3) Where objective and quantifiable data do not exist with regard to
 the additions required to be made to the price actually paid or payable
 under subsection (1), the transaction value cannot be determined under
 section 2(1).
(4) No additions shall be made to the price actually paid or payable for
 the purpose of determining the transaction value except as provided in
 this section.
(5) The amounts to be added under subsection (1)(a) shall be those
 amounts that are recorded on the books of the producer.
(6) The value of the elements referred to in subsection (1)(b)(i) shall
 be
  (a) where the elements are imported from outside the territory of the
   NAFTA country in which the seller is located, the customs value of
   the elements,
  (b) where the producer, or a related person on behalf of the producer,
   purchases the elements from an unrelated person in the territory of
   the NAFTA country in which the seller is located, the price actually
   paid or payable for the elements,
  (c) where the producer, or a related person on behalf of the producer,
   acquires the elements from an unrelated person in the territory of
   the NAFTA country in which the seller is located other than through a
   purchase, the value of the consideration related to the acquisition
   of the elements, based on the cost of the consideration that is
   recorded on the books of the producer or the related person, or
  (d) where the elements are produced by the producer, or by a related
   person, in the territory of the NAFTA country in which the seller is
   located, the total cost of the elements, determined in accordance
   with subsection (7),
and shall include the following costs, that are recorded on the books of
 the producer or the related person supplying the elements on behalf of
 the producer, to the extent that such costs are not included under
 paragraph (a) through (d):
  (e) the costs of freight, insurance, packing, and all other costs
   incurred in transporting the elements to the location of the seller,
  (f) duties and taxes paid or payable with respect to the elements,
   other than duties and taxes that are waived, refunded, refundable or
   otherwise recoverable, including credit against duty or tax paid or
   payable,

[[Page 500]]

 
  (g) customs brokerage fees, including the cost of in-house customs
   brokerage services, incurred with respect to the elements, and
  (h) the cost of waste and spoilage resulting from the use of the
   elements in the production of the material, minus the value of
   reusable scrap or by-product.
(7) For the purposes of subsection (6)(d), the total cost of the
 elements referred to in subsection (1)(b)(i) shall be
  (a) where the elements are produced by the producer, at the choice of
   the producer,
    (i) the total cost incurred with respect to all goods produced by
     the producer, calculated on the basis of the costs that are
     recorded on the books of the producer, that can be reasonably
     allocated to the elements in accordance with Schedule VII, or
    (ii) the aggregate of each cost incurred by the producer that forms
     part of the total cost incurred with respect to the elements,
     calculated on the basis of the costs that are recorded on the books
     of the producer, that can be reasonably allocated to the elements
     in accordance with Schedule VII; and
  (b) where the elements are produced by a person who is related to the
   producer, at the choice of the producer,
    (i) the total cost incurred with respect to all goods produced by
     that related person, calculated on the basis of the costs that are
     recorded on the books of that person, that can be reasonably
     allocated to the elements in accordance with Schedule VII, or
    (ii) the aggregate of each cost incurred by that related person that
     forms part of the total cost incurred with respect to the elements,
     calculated on the basis of the costs that are recorded on the books
     of that person, that can be reasonably allocated to the elements in
     accordance with Schedule VII.
(8) Except as provided in subsections (10) and (11), the value of the
 elements referred to in subsections (1)(b)(ii) through (iv) shall be
  (a) the cost of those elements that is recorded on the books of the
   producer; or
  (b) where such elements are provided by another person on behalf of
   the producer and the cost is not recorded on the books of the
   producer, the cost of those elements that is recorded on the books of
   that other person.
(9) Where the elements referred to in subsections (1)(b)(ii) through
 (iv) were previously used by or on behalf of the producer, the value of
 the elements shall be adjusted downward to reflect that use.
(10) Where the elements referred to in subsections (1)(b)(ii) and (iii)
 were leased by the producer or a person related to the producer, the
 value of the elements shall be the cost of the lease that is recorded
 on the books of the producer or that related person.
(11) No addition shall be made to the price actually paid or payable for
 the elements referred to in subsection (1)(b)(iv) that are available in
 the public domain, other than the cost of obtaining copies of them.

[[Page 501]]

 
(12) The producer shall choose the method of allocating to the material
 the value of the elements referred to in subsections (1)(b)(ii) through
 (iv), provided that the value is reasonably allocated to the material
 in a manner appropriate to the circumstances. The methods the producer
 may choose to allocate the value include allocating the value over the
 number of units produced up to the time of the first shipment or
 allocating the value over the entire anticipated production where
 contracts or firm commitments exist for that production. For an
 illustration of this, a producer provides the seller with a mold to be
 used in the production of the material and contracts with the seller to
 buy 10,000 units of that material. By the time the first shipment of
 1,000 units arrives, the seller has already produced 4,000 units. In
 these circumstances, the producer may choose to allocate the value of
 the mold over 4,000 units or 10,000 units but shall not choose to
 allocate the value of the elements to the first shipment of 1,000
 units. The producer may choose to allocate the entire value of the
 elements to a single shipment of material only where that single
 shipment comprises all of the units of the material acquired by the
 producer under the contract or commitment for that number of units of
 the material between the seller and the producer.
(13) The addition for the royalties referred to in subsection (1)(c)
 shall be the payment for the royalties that is recorded on the books of
 the producer, or where the payment for the royalties is recorded on the
 books of another person, the payment for the royalties that is recorded
 on the books of that other person.
(14) The value of the proceeds referred to in subsection (1)(d) shall be
 the amount that is recorded for such proceeds on the books of the
 producer or the seller.
SECTION 6.
(1) If there is no transaction value under section 2(2) or the
 transaction value is unacceptable under section 2(3), the value of the
 material, referred to in Article 402(9)(b) of the Agreement, as
 implemented by section 7(1)(b)(ii) of part IV of this appendix, shall
 be the transaction value of identical materials sold, at or about the
 same time as the material being valued was shipped to the producer, to
 a buyer located in the same country as the producer.
(2) In applying this section, the transaction value of identical
 materials in a sale at the same commercial level and in substantially
 the same quantity of materials as the material being valued shall be
 used to determine the value of the material. Where no such sale is
 found, the transaction value of identical materials sold at a different
 commercial level or in different quantities, adjusted to take into
 account the differences attributable to the commercial level or
 quantity, shall be used, provided that such adjustments can be made on
 the basis of evidence that clearly establishes that the adjustment is
 reasonable and accurate, whether the adjustment leads to an increase or
 a decrease in the value.
(3) A condition for adjustment under subsection (2) because of different
 commercial levels or different quantities is that such adjustment be
 made only on the basis of evidence that clearly establishes that an
 adjustment is reasonable and accurate. For an illustration of this, a
 bona fide price list contains prices for different quantities. If the
 material being valued consists of a shipment of 10 units and the only
 identical materials for which a transaction value exists involved a
 sale of 500 units, and it is recognized that the seller grants quantity
 discounts, the required adjustment may be accomplished by resorting to
 the seller's bona fide price list and using the price applicable to a
 sale of 10 units. This does not require that sales had to have been
 made in quantities of 10 as long as the price list has been established
 as being bona fide through sales at other quantities. In the absence of
 such an objective measure, however, the determination of a value under
 this section is not appropriate.
(4) If more than one transaction value of identical materials is found,
 the lowest such value shall be used to determine the value of the
 material under this section.
SECTION 7.

[[Page 502]]

 
(1) If there is no transaction value under section 2(2) or the
 transaction value is unacceptable under section 2(3), and the value of
 the material cannot be determined under section 6, the value of the
 material, referred to in Article 402(9)(b) of the Agreement, as
 implemented by section 7(1)(b)(ii) of part IV of this appendix, shall
 be the transaction value of similar materials sold, at or about the
 same time as the material being valued was shipped to the producer, to
 a buyer located in the same country as the producer.
(2) In applying this section, the transaction value of similar materials
 in a sale at the same commercial level and in substantially the same
 quantity of materials as the material being valued shall be used to
 determine the value of the material. Where no such sale is found, the
 transaction value of similar materials sold at a different commercial
 level or in different quantities, adjusted to take into account the
 differences attributable to the commercial level or quantity, shall be
 used, provided that such adjustments can be made on the basis of
 evidence that clearly establishes that the adjustment is reasonable and
 accurate, whether the adjustment leads to an increase or a decrease in
 the value.
(3) A condition for adjustment under subsection (2) because of different
 commercial levels or different quantities is that such adjustment be
 made only on the basis of evidence that clearly establishes that an
 adjustment is reasonable and accurate. For an illustration of this, a
 bona fide price list contains prices for different quantities. If the
 material being valued consists of a shipment of 10 units and the only
 similar materials for which a transaction value exists involved a sale
 of 500 units, and it is recognized that the seller grants quantity
 discounts, the required adjustment may be accomplished by resorting to
 the seller's bona fide price list and using the price applicable to a
 sale of 10 units. This does not require that sales had to have been
 made in quantities of 10 as long as the price list has been established
 as being bona fide through sales at other quantities. In the absence of
 such an objective measure, however, the determination of a value under
 this section is not appropriate.
(4) If more than one transaction value of similar materials is found,
 the lowest such value shall be used to determine the value of the
 material under this section.
SECTION 8.
 If there is no transaction value under section 2(2) or the transaction
 value is unacceptable under section 2(3), and the value of the material
 cannot be determined under section 6 or 7, the value of the material,
 referred to in Article 402(9)(b) of the Agreement, as implemented by
 section 7(1)(b)(ii) of part IV of this appendix, shall be determined
 under section 9 or, when the value cannot be determined under that
 section, under section 10 except that, at the request of the producer,
 the order of application of sections 9 and 10 shall be reversed.
SECTION 9.
(1) Under this section, if identical materials or similar materials are
 sold in the territory of the NAFTA country in which the producer is
 located, in the same condition as the material was in when received by
 the producer, the value of the material, referred to in Article
 402(9)(b) of the Agreement, as implemented by section 7(1)(b)(ii) of
 part IV of this appendix, shall be based on the unit price at which
 those identical materials or similar materials are sold, in the
 greatest aggregate quantity by the producer or, where the producer does
 not sell those identical materials or similar materials, by a person at
 the same trade level as the producer, at or about the same time as the
 material being valued is received by the producer, to persons located
 in that territory who are not related to the seller, subject to
 deductions for the following:
  (a) either the amount of commissions usually earned or the amount
   generally reflected for profit and general expenses, in connection
   with sales, in the territory of that NAFTA country, of materials of
   the same class or kind as the material being valued; and
  (b) taxes, if included in the unit price, payable in the territory of
   that NAFTA country, which are either waived, refunded or recoverable
   by way of credit against taxes actually paid or payable.

[[Page 503]]

 
(2) If neither identical materials nor similar materials are sold at or
 about the same time the material being valued is received by the
 producer, the value shall, subject to the deductions provided for under
 subsection (1), be based on the unit price at which identical materials
 or similar materials are sold in the territory of the NAFTA country in
 which the producer is located, in the same condition as the material
 was in when received by the producer, at the earliest date within 90
 days after the date the material being valued was received by the
 producer.
(3) The expression ``unit price at which those identical materials or
 similar materials are sold, in the greatest aggregate quantity'' in
 subsection (1) means the price at which the greatest number of units is
 sold in sales between unrelated persons. For an illustration of this,
 materials are sold from a price list which grants favorable unit prices
 for purchases made in larger quantities.
 


----------------------------------------------------------------------------------------------------------------
                                                                                                  Total quantity
              Sale quantity                Unit price               Number of sales                sold at each
                                                                                                       price
----------------------------------------------------------------------------------------------------------------
1-10 units..............................          100  10 sales of 5 units......................              65
                                          ...........  5 sales of 3 units.......................  ..............
11-25 units.............................           95  5 sales of 11 units......................              55
                                          ...........  1 sale of 20 units.......................  ..............
Over 25 units...........................           90  1 sale of 30 units.......................              80
                                          ...........  1 sale of 50 units.......................  ..............
----------------------------------------------------------------------------------------------------------------



 The greatest number of units sold at a particular price is 80;
 therefore, the unit price in the greatest aggregate quantity is 90.
 As another illustration of this, two sales occur. In the first sale 500
 units are sold at a price of 95 currency units each. In the second sale
 400 units are sold at a price of 90 currency units each. In this
 illustration, the greatest number of units sold at a particular price
 is 500; therefore, the unit price in the greatest aggregate quantity is
 95.
(4) Any sale to a person who supplies, directly or indirectly, free of
 charge or at reduced cost for use in connection with the production of
 the material, any of the elements specified in section 5(1)(b), shall
 not be taken into account in establishing the unit price for the
 purposes of this section.
(5) The amount generally reflected for profit and general expenses
 referred to in subsection (1)(a) shall be taken as a whole. The figure
 for the purposes of deducting an amount for profit and general expenses
 shall be determined on the basis of information supplied by or on
 behalf of the producer unless the figures provided by the producer are
 inconsistent with those usually reflected in sales, in the country in
 which the producer is located, of materials of the same class or kind
 as the material being valued. Where the figures provided by the
 producer are inconsistent with those figures, the amount for profit and
 general expenses shall be based on relevant information other than that
 supplied by or on behalf of the producer.
(6) For the purposes of this section, general expenses are the direct
 and indirect costs of marketing the material in question.
(7) In determining either the commissions usually earned or the amount
 generally reflected for profit and general expenses under this section,
 the question as to whether certain materials are materials of the same
 class or kind as the material being valued shall be determined on a
 case-by-case basis with reference to the circumstances involved. Sales
 in the country in which the producer is located of the narrowest group
 or range of materials of the same class or kind as the material being
 valued, for which the necessary information can be provided, shall be
 examined. For the purposes of this section, ``materials of the same
 class or kind'' includes materials imported from the same country as
 the material being valued as well as materials imported from other
 countries or acquired within the territory of the NAFTA country in
 which the producer is located.

[[Page 504]]

 
(8) For the purposes of subsection (2), the earliest date shall be the
 date by which sales of identical materials or similar materials are
 made, in sufficient quantity to establish the unit price, to other
 persons in the territory of the NAFTA country in which the producer is
 located.
SECTION 10.
(1) Under this section, the value of a material, referred to in Article
 402(9)(b) of the Agreement, as implemented by section 7(1)(b)(ii) of
 part IV of this appendix, shall be the sum of
  (a) the cost or value of the materials used in the production of the
   material being valued, as determined on the basis of the costs that
   are recorded on the books of the producer of the material,
  (b) the cost of producing the material being valued, as determined on
   the basis of the costs that are recorded on the books of the producer
   of the material, and
  (c) an amount for profit and general expenses equal to that usually
   reflected in sales
    (i) where the material being valued is imported by the producer into
     the territory of the NAFTA country in which the producer is
     located, to persons located in the territory of the NAFTA country
     in which the producer is located by producers of materials of the
     same class or kind as the material being valued who are located in
     the country in which the material is produced, and
    (ii) where the material being valued is acquired by the producer
     from another person located in the territory of the NAFTA country
     in which the producer is located, to persons located in the
     territory of the NAFTA country in which the producer is located by
     producers of materials of the same class or kind as the material
     being valued who are located in the country in which the producer
     is located,
  (d) the value of elements referred to in section 5(1)(b)(i),
   determined in accordance with section 5(6), and
  (e) the value of elements referred to in sections 5(1)(b)(ii) through
   (iv), determined in accordance with section 5(8) and reasonably
   allocated to the material in accordance with section 5(12).
(2) For purposes of subsections (1)(a) and (b), where the costs recorded
 on the books of the producer of the material relate to the production
 of other goods and materials as well as to the production of the
 material being valued, the costs referred to in subsections (1)(a) and
 (b) with respect to the material being valued shall be those costs
 recorded on the books of the producer of the material that can be
 reasonably allocated to that material in accordance with Schedule VII.
(3) The amount for profit and general expenses referred to in subsection
 (1)(c) shall be determined on the basis of information supplied by or
 on behalf of the producer of the material being valued unless the
 profit and general expenses figures that are supplied with that
 information are inconsistent with those usually reflected in sales by
 producers of materials of the same class or kind as the material being
 valued who are located in the country in which the material is produced
 or the producer is located, as the case may be. The information
 supplied shall be prepared in a manner consistent with generally
 accepted accounting principles of the country in which the material
 being valued is produced. Where the material is produced in the
 territory of a NAFTA country, the information shall be prepared in
 accordance with the Generally Accepted Accounting Principles set out in
 the authorities listed for that NAFTA country in Schedule XII.
(4) For purposes of subsection (1)(c) and subsection (3), general
 expenses means the direct and indirect costs of producing and selling
 the material that are not included under subsections (1)(a) and (b).

[[Page 505]]

 
(5) For purposes of subsection (3), the amount for profit and general
 expenses shall be taken as a whole. Where, in the information supplied
 by or on behalf of the producer of a material, the profit figure is low
 and the general expenses figure is high, the profit and general expense
 figures taken together may nevertheless be consistent with those
 usually reflected in sales of materials of the same class or kind as
 the material being valued. Where the producer of a material can
 demonstrate that it is taking a nil or low profit on its sales of the
 material because of particular commercial circumstances, its actual
 profit and general expense figures shall be taken into account,
 provided that the producer of the material has valid commercial reasons
 to justify them and its pricing policy reflects usual pricing policies
 in the branch of industry concerned. For an illustration of this, such
 a situation might occur where producers have been forced to lower
 prices temporarily because of an unforeseeable drop in demand, or where
 the producers sell the material to complement a range of materials and
 goods being produced in the country in which the material is sold and
 accept a low profit to maintain competitiveness. A further illustration
 is where a material was being launched and the producer accepted a nil
 or low profit to offset high general expenses associated with the
 launch.
(6) Where the figures for the profit and general expenses supplied by or
 on behalf of the producer of the material are not consistent with those
 usually reflected in sales of materials of the same class or kind as
 the material being valued that are made by other producers in the
 country in which that material is sold, the amount for profit and
 general expenses may be based on relevant information other than that
 supplied by or on behalf of the producer of the material.
(7) Where a customs administration uses information other than that
 supplied by or on behalf of the producer of the material for the
 purposes of determining the value of a material under this section, the
 customs administration shall communicate to the producer, if that
 producer so requests, the source of such information, the data used and
 the calculations based upon such data, subject to the provisions on
 confidentiality under Article 507 of the Agreement, as implemented in
 each NAFTA country.
(8) Whether certain materials are of the same class or kind as the
 material being valued shall be determined on a case-by-case basis with
 reference to the circumstances involved. For purposes of determining
 the amount for profit and general expenses usually reflected under the
 provisions of this section, sales of the narrowest group or range of
 materials of the same class or kind, which includes the material being
 valued, for which the necessary information can be provided, shall be
 examined. For the purposes of this section, the materials of the same
 class or kind must be from the same country as the material being
 valued.
SECTION 11.
(1) Where there is no transaction value under section 2(2) or the
 transaction value is unacceptable under section 2(3), and the value of
 the materials cannot be determined under sections 6 through 10, the
 value of the material, referred to in Article 402(9)(b) of the
 Agreement, as implemented by section 7(1)(b)(ii) of part IV of this
 appendix, shall be determined under this section using reasonable means
 consistent with the principles and general provisions of this Schedule
 and on the basis of data available in the country in which the producer
 is located.
(2) The value of the material determined under this section shall not be
 determined on the basis of
  (a) a valuation system which provides for the acceptance of the higher
   of two alternative values;
  (b) a cost of production other than the value determined in accordance
   with section 10;
  (c) minimum values;
  (d) arbitrary or fictitious values;
  (e) where the material is produced in the territory of the NAFTA
   country in which the producer is located, the price of the material
   for export from that territory; or

[[Page 506]]

 
  (f) where the material is imported, the price of the material for
   export to a country other than to the territory of the NAFTA country
   in which the producer is located.
(3) To the greatest extent possible, the value of the material
 determined under this section shall be based on the methods of
 valuation set out in sections 2 through 10, but a reasonable
 flexibility in the application of such methods would be in conformity
 with the aims and provisions of this section. For an illustration of
 this, under section 6, the requirement that the identical materials
 should be sold at or about the same time as the time the material being
 valued is shipped to the producer could be flexibly interpreted.
 Similarly, identical materials produced in a country other than the
 country in which the material is produced could be the basis for
 determining the value of the material, or the value of identical
 materials already determined under section 9 could be used. For another
 illustration, under section 7, the requirement that the similar
 materials should be sold at or about the same time as the material
 being valued are shipped to the producer could be flexibly interpreted.
 Likewise, similar materials produced in a country other than the
 country in which the material is produced could be the basis for
 determining the value of the material, or the value of similar
 materials already determined under the provisions of section 9 could be
 used. For a further illustration, under section 9, the ninety days
 requirement could be administered flexibly.
 
                               SCHEDULE IX
 METHODS FOR DETERMINING THE VALUE OF NON-ORIGINATING MATERIALS THAT ARE
    IDENTICAL MATERIALS AND THAT ARE USED IN THE PRODUCTION OF A GOOD
                     Definitions and Interpretation
 
SECTION 1. Definitions.
 For purposes of this Schedule,
``FIFO method'' means the method by which the value of non-originating
 materials first received in materials inventory, determined in
 accordance with section 7 of this appendix, is considered to be the
 value of non-originating materials used in the production of the good
 first shipped to the buyer of the good;
``identical materials'' means, with respect to a material, materials
 that are the same as that material in all respects, including physical
 characteristics, quality and reputation but excluding minor differences
 in appearance;
``LIFO method'' means the method by which the value of non-originating
 materials last received in materials inventory, determined in
 accordance with section 7 of this appendix, is considered to be the
 value of non-originating materials used in the production of the good
 first shipped to the buyer of the good;
``materials inventory'' means, with respect to a single plant of the
 producer of a good, an inventory of non-originating materials that are
 identical materials and that are used in the production of the good;
 and
``rolling average method'' means the method by which the value of non-
 originating materials used in the production of a good that is shipped
 to the buyer of the good is based on the average value, calculated in
 accordance with section 4, of the non-originating materials in
 materials inventory.
 
                                 General
 
SECTION 2.
 For purposes of sections 5(11) and (12) and 6(10) of this appendix, the
 following are the methods for determining the value of non-originating
 materials that are identical materials and are used in the production
 of a good:
  (a) FIFO method;
  (b) LIFO method; and
  (c) rolling average method.
SECTION 3.

[[Page 507]]

 
(1) Where a producer of a good chooses, with respect to non-originating
 materials that are identical materials, any of the methods referred to
 in section 2, the producer may not use another of those methods with
 respect to any other non-originating materials that are identical
 materials and that are used in the production of that good or in the
 production of any other good.
(2) Where a producer of a good produces the good in more than one plant,
 the method chosen by the producer shall be used with respect to all
 plants of the producer in which the good is produced.
(3) The method chosen by the producer to determine the value of non-
 originating materials may be chosen at any time during the producer's
 fiscal year and may not be changed during that fiscal year.
 
                Average Value for Rolling Average Method
 
SECTION 4.
(1) The average value of non-originating materials that are identical
 materials and that are used in the production of a good that is shipped
 to the buyer of the good is calculated by dividing
  (a) the total value of non-originating materials that are identical
   materials in materials inventory prior to the shipment of the good,
   determined in accordance with section 7 of this appendix,
by
  (b) the total units of those non-originating materials in materials
   inventory prior to the shipment of the good.
(2) The average value calculated under subsection (1) is applied to the
 remaining units of non-originating materials in materials inventory.
 
                                ADDENDUM
``EXAMPLES'' ILLUSTRATING THE APPLICATION OF THE METHODS FOR DETERMINING
 THE VALUE OF NON-ORIGINATING MATERIALS THAT ARE IDENTICAL MATERIALS AND
                THAT ARE USED IN THE PRODUCTION OF A GOOD
 
 The following ``examples'' are based on the figures set out in the
 table below and on the following assumptions:
  (a) Materials A are non-originating materials that are identical
   materials that are used in the production of Good A;
  (b) one unit of Materials A is used to produce one unit of Good A;
  (c) all other materials used in the production of Good A are
   originating materials; and
  (d) Good A is produced in a single plant.
 


----------------------------------------------------------------------------------------------------------------
                                                           Materials inventory  (Receipts of   Sales  (Shipments
                                                                     materials A)                  of good A)
                     Date  (M/D/Y)                      --------------------------------------------------------
                                                         Quantity  (units)     Unit  cost *    Quantity  (units)
----------------------------------------------------------------------------------------------------------------
01/01/94...............................................                200              $1.05  .................
01/03/94...............................................              1,000               1.00  .................
01/05/94...............................................              1,000               1.10  .................
01/08/94...............................................  .................  .................                500
01/09/94...............................................  .................  .................                500
01/10/94...............................................              1,000               1.05  .................
01/14/94...............................................  .................  .................              1,500
01/16/94...............................................              2,000               1.10  .................
01/18/94...............................................  .................  .................             1,500
----------------------------------------------------------------------------------------------------------------
* Unit cost is determined in accordance with section 7 of this appendix.


Example 1: FIFO method
 By applying the FIFO method:

[[Page 508]]

 
(1) the 200 units of Materials A received on 01/01/94 and valued at
 $1.05 per unit and 300 units of the 1,000 units of Material A received
 on 01/03/94 and valued at $1.00 per unit are considered to have been
 used in the production of the 500 units of Good A shipped on 01/08/94;
 therefore, the value of the non-originating materials used in the
 production of those goods is considered to be $510 [(200 unit x $1.05)
 + ($300 units x $1.00)];
(2) 500 units of the remaining 700 units of Materials A received on 01/
 03/94 and valued at $1.00 per unit are considered to have been used in
 the production of the 500 units of Good A shipped on 01/09/94;
 therefore, the value of the non-originating materials used in the
 production of those goods is considered to be $500 (500 units x $1.00);
(3) the remaining 200 units of the 1,000 of Materials A received on 01/
 03/94 and valued at $1.00 per unit, the 1,000 units of Materials A
 received on 01/05/94 and valued at $1.10 per unit, and 300 units of the
 1,000 Materials A received on 01/10/94 and valued at $1.05 per unit are
 considered to have been used in the production of the 1,500 units of
 Good A shipped on 01/14/94; therefore, the value of non-originating
 materials used in the production of those goods is considered to be
 $1,615 [(200 units x $1.00) + (1,000 units x $1.10) + (300 units x
 $1.05)]; and
(4) the remaining 700 units of the 1,000 units of Materials A received
 on 01/10/94 and valued at $1.05 per unit and 800 units of the 2,000
 units of Materials A received on 01/16/94 and valued at $1.10 per unit
 are considered to have been used in the production of the 1,500 units
 of Good A shipped on 01/18/94; therefore, the value of non-originating
 materials used in the production of those goods is considered to be
 $1,615 [(700 x $1.05) + (800 x $1.10)].
Example 2: LIFO method
 By applying the LIFO method:
(1) 500 units of the 1,000 units of Materials A received on 01/05/94 and
 valued at $1.10 per unit are considered to have been used in the
 production of the 500 units of Good A shipped on 01/08/94; therefore,
 the value of the non-originating materials used in the production of
 those goods is considered to be $550 (500 units x $1.10);
(2) the remaining 500 units of the 1,000 units of Materials A received
 on 01/05/94 and valued at $1.10 per unit are considered to have been
 used in the production of the 500 units of Good A shipped on 01/09/94;
 therefore, the value of non-originating materials used in the
 production of those goods is considered to be $550 (500 units x $1.10);
(3) the 1,000 units of Materials A received on 01/10/94 and valued at
 $1.05 per unit and 500 units of the 1,000 units of Material A received
 on 01/03/94 and valued at $1.00 per unit are considered to have been
 used in the production of the 1,500 units of Good A shipped on 01/14/
 94; therefore, the value of non-originating materials used in the
 production of those goods is considered to be $1,550 [(1,000 units x
 $1.05) + (500 units x $1.00)]; and
(4) 1,500 units of the 2,000 units of Materials A received on 01/16/94
 and valued at $1.10 per unit are considered to have been used in the
 production of the 1,500 units of Good A shipped on 01/18/94; therefore,
 the value of non-originating materials used in the production of those
 goods is considered to be $1,650 (1,500 units x $1.10).
Example 3: Rolling average method
 The following table identifies the average value of non-originating
 Materials A as determined under the rolling average method. For
 purposes of this example, a new average value of non-originating
 Materials A is calculated after each receipt.
 


----------------------------------------------------------------------------------------------------------------
                                               Materials inventory
-----------------------------------------------------------------------------------------------------------------
                                        Date  (M/D/Y)    Quantity  (units)      Unit cost*        Total value
----------------------------------------------------------------------------------------------------------------
Beginning Inventory.................             1/1/94                200              $1.05               $210
Receipt.............................             1/3/94              1,000               1.00              1,000
AVERAGE VALUE.......................  .................              1,200              1.008              1,210

[[Page 509]]

 
Receipt.............................             1/5/94              1,000               1.10              1,100
AVERAGE VALUE.......................  .................              2,200               1.05              2,310
Shipment............................             1/8/94                500               1.05                525
AVERAGE VALUE.......................  .................              1,700               1.05              1,785
Shipment............................             1/9/94                500               1.05                525
AVERAGE VALUE.......................  .................              1,200               1.05              1,260
Receipt.............................            1/16/94              2,000               1.10              2,200
AVERAGE VALUE.......................  .................              3,200               1.08             3,460
----------------------------------------------------------------------------------------------------------------
* Unit cost is determined in accordance with section 7 of this appendix.


 By applying the rolling average method:
(1) the value of non-originating materials used in the production of the
 500 units of Good A shipped on 01/08/94 is considered to be $525 (500
 units x $1.05); and
(2) the value of non-originating materials used in the production of the
 500 units of Good A shipped on 01/09/94 is considered to be $525 (500
 units x $1.05).
 


                               SCHEDULE X
                      INVENTORY MANAGEMENT METHODS
 
                                 PART I
                           FUNGIBLE MATERIALS
 
                     Definitions and Interpretation
 
SECTION 1. Definitions.
 For purposes of this part,
``average method'' means the method by which the origin of fungible
 materials withdrawn from materials inventory is based on the ratio,
 calculated under section 5, of originating materials and non-
 originating materials in materials inventory;
``FIFO method'' means the method by which the origin of fungible
 materials first received in materials inventory is considered to be the
 origin of fungible materials first withdrawn from materials inventory;
``LIFO method'' means the method by which the origin of fungible
 materials last received in materials inventory is considered to be the
 origin of fungible materials first withdrawn from materials inventory;
``materials inventory'' means,
  (a) with respect to a producer of a good, an inventory of fungible
   materials that are used in the production of the good, and
  (b) with respect to a person from whom the producer of the good
   acquired those fungible materials, an inventory from which fungible
   materials are sold or otherwise transferred to the producer of the
   good;
``opening inventory'' means the materials inventory at the time an
 inventory management method is chosen;
``origin identifier'' means any mark that identifies fungible materials
 as originating materials or non-originating materials.
 
                                 General
 
SECTION 2.
 The inventory management methods for determining whether fungible
 materials referred to in section 7(16)(a) of this appendix are
 originating materials are the following:
  (a) specific identification method;
  (b) FIFO method;
  (c) LIFO method; and
  (d) average method.
SECTION 3.

[[Page 510]]

 
 A producer of a good, or a person from whom the producer acquired the
 fungible materials that are used in the production of the good, may
 choose only one of the inventory management methods referred to in
 section 2, and, if the averaging method is chosen, only one averaging
 period in each fiscal year of that producer or person for the materials
 inventory.
 
                     Specific Identification Method
 
SECTION 4.
(1) Except as otherwise provided under subsection (2), where the
 producer or person referred to in section 3 chooses the specific
 identification method, the producer or person shall physically
 segregate, in materials inventory, originating materials that are
 fungible materials from non-originating materials that are fungible
 materials.
(2) Where originating materials or non-originating materials that are
 fungible materials are marked with an origin identifier, the producer
 or person need not physically segregate those materials under
 subsection (1) if the origin identifier remains visible throughout the
 production of the good.
 
                             Average Method
 
SECTION 5.
 Where the producer or person referred to in section 3 chooses the
 average method, the origin of fungible materials withdrawn from
 materials inventory is determined on the basis of the ratio of
 originating materials and non-originating materials in materials
 inventory that is calculated under sections 6 through 8.
SECTION 6.
(1) Except as otherwise provided in sections 7 and 8, the ratio is
 calculated with respect to a month or three-month period, at the choice
 of the producer or person, by dividing
  (a) the sum of
    (i) the total units of originating materials or non-originating
     materials that are fungible materials and that were in materials
     inventory at the beginning of the preceding one-month or three-
     month period, and
    (ii) the total units of originating materials or non-originating
     materials that are fungible materials and that were received in
     materials inventory during that preceding one-month or three-month
     period,
by
  (b) the sum of
    (i) the total units of originating materials and non-originating
     materials that are fungible materials and that were in materials
     inventory at the beginning of the preceding one-month or three-
     month period, and
    (ii) the total units of originating materials and non-originating
     materials that are fungible materials and that were received in
     materials inventory during that preceding one-month or three-month
     period.
(2) The ratio calculated with respect to a preceding month or three-
 month period under subsection (1) is applied to the fungible materials
 remaining in materials inventory at the end of the preceding month or
 three-month period.
SECTION 7.
(1) Where the good is subject to a regional value-content requirement
 and the regional value content is calculated under the net cost method
 and the producer or person chooses to average over a period under
 sections 6(15), 11(1), (3) or (6), 12(1) or 13(4) of this appendix, the
 ratio is calculated with respect to that period by dividing
  (a) the sum of
    (i) the total units of originating materials or non-originating
     materials that are fungible materials and that were in materials
     inventory at the beginning of the period, and
    (ii) the total units of originating materials or non-originating
     materials that are fungible materials and that were received in
     materials inventory during that period,
by

[[Page 511]]

 
  (b) the sum of
    (i) the total units of originating materials and non-originating
     materials that are fungible materials and that were in materials
     inventory at the beginning of the period, and
    (ii) the total units of originating materials and non-originating
     materials that are fungible materials and that were received in
     materials inventory during that period.
(2) The ratio calculated with respect to a period under subsection (1)
 is applied to the fungible materials remaining in materials inventory
 at the end of the period.
SECTION 8.
(1) Where the good is subject to a regional value-content requirement
 and the regional value content of that good is calculated under the
 transaction value method or the net cost method, the ratio is
 calculated with respect to each shipment of the good by dividing
  (a) the total units of originating materials or non-originating
   materials that are fungible materials and that were in materials
   inventory prior to the shipment,
by
  (b) the total units of originating materials and non-originating
   materials that are fungible materials and that were in materials
   inventory prior to the shipment.
(2) The ratio calculated with respect to a shipment of a good under
 subsection (1) is applied to the fungible materials remaining in
 materials inventory after the shipment.
 
                Manner of Dealing With Opening Inventory
 
SECTION 9.
(1) Except as otherwise provided under subsections (2) and (3), where
 the producer or person referred to in section 3 has fungible materials
 in opening inventory, the origin of those fungible materials is
 determined by
  (a) identifying, in the books of the producer or person, the latest
   receipts of fungible materials that add up to the amount of fungible
   materials in opening inventory;
  (b) determining the origin of the fungible materials that make up
   those receipts; and
  (c) considering the origin of those fungible materials to be the
   origin of the fungible materials in opening inventory.
(2) Where the producer or person chooses the specific identification
 method and has, in opening inventory, originating materials or non-
 originating materials that are fungible materials and that are marked
 with an origin identifier, the origin of those fungible materials is
 determined on the basis of the origin identifier.
(3) The producer or person may consider all fungible materials in
 opening inventory to be non-originating materials.
 
                                 PART II
                             FUNGIBLE GOODS
 
                     Definitions and Interpretation
 
SECTION 10. Definitions.
 For purposes of this part,
``average method'' means the method by which the origin of fungible
 goods withdrawn from finished goods inventory is based on the ratio,
 calculated under section 12, of originating goods and non-originating
 goods in finished goods inventory;
``FIFO method'' means the method by which the origin of fungible goods
 first received in finished goods inventory is considered to be the
 origin of fungible goods first withdrawn from finished goods inventory;

[[Page 512]]

 
``finished goods inventory'' means an inventory from which fungible
 goods are sold or otherwise transferred to another person;
``LIFO method'' means the method by which the origin of fungible goods
 last received in finished goods inventory is considered to be the
 origin of fungible goods first withdrawn from finished goods inventory;
``opening inventory'' means the finished goods inventory at the time an
 inventory management method is chosen; and
``origin identifier'' means any mark that identifies fungible goods as
 originating goods or non-originating goods.
 
                                 General
 
SECTION 11.
 The inventory management methods for determining whether fungible goods
 referred to in section 7(16)(b) of this appendix are originating goods
 are the following:
  (a) specific identification method;
  (b) FIFO method;
  (c) LIFO method; and
  (d) average method.
SECTION 12.
 An exporter of a good, or a person from whom the exporter acquired the
 fungible good, may choose only one of the inventory management methods
 referred to in section 11, including only one averaging period in the
 case of the average method, in each fiscal year of that exporter or
 person for each finished goods inventory of the exporter or person.
 
                     Specific Identification Method
 
SECTION 13.
(1) Except as provided under subsection (2), where the exporter or
 person referred to in section 12 chooses the specific identification
 method, the exporter or person shall physically segregate, in finished
 goods inventory, originating goods that are fungible goods from non-
 originating goods that are fungible goods.
(2) Where originating goods or non-originating goods that are fungible
 goods are marked with an origin identifier, the exporter or person need
 not physically segregate those goods under subsection (1) if the origin
 identifier is visible on the fungible goods.
 
                             Average Method
 
SECTION 14.
(1) Where the exporter or person referred to in section 12 chooses the
 average method, the origin of each shipment of fungible goods withdrawn
 from finished goods inventory during a month or three-month period, at
 the choice of the exporter or person, is determined on the basis of the
 ratio of originating goods and non-originating goods in finished goods
 inventory for the preceding one-month or three-month period that is
 calculated by dividing
  (a) the sum of
    (i) the total units of originating goods or non-originating goods
     that are fungible goods and that were in finished goods inventory
     at the beginning of the preceding one-month or three-month period,
     and
    (ii) the total units of originating goods or non-originating goods
     that are fungible goods and that were received in finished goods
     inventory during that preceding one-month or three-month period,
by
  (b) the sum of
    (i) the total units of originating goods and non-originating goods
     that are fungible goods and that were in finished goods inventory
     at the beginning of the preceding one-month or three-month period,
     and
    (ii) the total units of originating goods and non-originating goods
     that are fungible goods and that were received in finished goods
     inventory during that preceding one-month or three-month period.

[[Page 513]]

 
(2) The calculation with respect to a preceding month or three-month
 period under subsection (1) is applied to the fungible goods remaining
 in finished goods inventory at the end of the preceding month or three-
 month period.
 
                Manner of Dealing with Opening Inventory
 
SECTION 15.
(1) Except as otherwise provided under subsections (2) and (3), where
 the exporter or person referred to in section 12 has fungible goods in
 opening inventory, the origin of those fungible goods is determined by
  (a) identifying, in the books of the exporter or person, the latest
   receipts of fungible goods that add up to the amount of fungible
   goods in opening inventory;
  (b) determining the origin of the fungible goods that make up those
   receipts; and
  (c) considering the origin of those fungible goods to be the origin of
   the fungible goods in opening inventory.
(2) Where the exporter or person chooses the specific identification
 method and has, in opening inventory, originating goods or non-
 originating goods that are fungible goods and that are marked with an
 origin identifier, the origin of those fungible goods is determined on
 the basis of the origin identifier.
(3) The exporter or person may consider all fungible goods in opening
 inventory to be non-originating goods.
 
                               ADDENDUM A
  ``EXAMPLES'' ILLUSTRATING THE APPLICATION OF THE INVENTORY MANAGEMENT
          METHODS TO DETERMINE THE ORIGIN OF FUNGIBLE MATERIALS
 
 The following ``examples'' are based on the figures set out in the
 table below and on the following assumptions:
  (a) originating Material A and non-originating Material A that are
   fungible materials are used in the production of Good A;
  (b) one unit of Material A is used to produce one unit of Good A;
  (c) Material A is only used in the production of Good A;
  (d) all other materials used in the production of Good A are
   originating materials; and
  (e) the producer of Good A exports all shipments of Good A to the
   territory of a NAFTA country.
 


----------------------------------------------------------------------------------------------------------------
                                            Materials inventory (Receipts of material A)        Sales (Shipments
                                     ---------------------------------------------------------     of good A)
            Date (M/D/Y)                                                                      ------------------
                                       Quantity (units)     Unit cost *        Total value      Quantity (units)
----------------------------------------------------------------------------------------------------------------
12/18/93............................        100 (O \1\)              $1.00               $100
12/27/93............................        100 (N \2\)               1.10                110
01/01/94............................       200 (OI \3\)
01/01/94............................          1,000 (O)               1.00              1,000
01/05/94............................          1,000 (N)               1.10              1,100
01/10/94............................  .................  .................  .................                100
01/10/94............................          1,000 (O)               1.05              1,050
01/15/94............................  .................  .................  .................                700
01/16/94............................          2,000 (N)               1.10              2,200
01/20/94............................  .................  .................  .................              1,000
01/23/94............................  .................  .................  .................               900
----------------------------------------------------------------------------------------------------------------
* Unit cost is determined in accordance with section 7 of this appendix.
\1\ ``O'' denotes originating materials.
\2\ ``N'' denotes non-originating materials.
\3\ ``OI'' denotes opening inventory.


Example 1: FIFO method
 Good A is subject to a regional value-content requirement. Producer A
 is using the transaction value method to determine the regional value
 content of Good A.

[[Page 514]]

 
 By applying the FIFO method:
(1) the 100 units of originating Material A in opening inventory that
 were received in materials inventory on 12/18/93 are considered to have
 been used in the production of the 100 units of Good A shipped on 01/10/
 94; therefore, the value of non-originating materials used in the
 production of those goods is considered to be $0;
(2) the 100 units of non-originating Material A in opening inventory
 that were received in materials inventory on 12/27/93 and 600 units of
 the 1,000 units of originating Material A that were received in
 materials inventory on 01/01/94 are considered to have been used in the
 production of the 700 units of Good A shipped on 01/15/94; therefore,
 the value of non-originating materials used in the production of those
 goods is considered to be $110 (100 units x $1.10);
(3) the remaining 400 units of the 1,000 units of originating Material A
 that were received in materials inventory on 01/01/94 and 600 units of
 the 1,000 units of non-originating Material A that were received in
 materials inventory on 01/05/94 are considered to have been used in the
 production of the 1,000 units of Good A shipped on 01/20/94; therefore,
 the value of non-originating materials used in the production of those
 goods is considered to be $660 (600 units x $1.10); and
(4) the remaining 400 units of the 1,000 units of non-originating
 Material A that were received in materials inventory on 01/05/94 and
 500 units of the 1,000 units of originating Material A that were
 received in materials inventory on 01/10/94 are considered to have been
 used in the production of the 900 units of Good A shipped on 01/23/94;
 therefore, the value of non-originating materials used in the
 production of those goods is considered to be $440 (400 units x $1.10).
Example 2: LIFO method
 Good A is subject to a change in tariff classification requirement and
 the non-originating Material A used in the production of Good A does
 not undergo the applicable change in tariff classification. Therefore,
 where originating Material A is used in the production of Good A, Good
 A is an originating good and, where non-originating Material A is used
 in the production of Good A, Good A is a non-originating good.
 By applying the LIFO method:
(1) 100 units of the 1,000 units of non-originating Material A that were
 received in materials inventory on 01/05/94 are considered to have been
 used in the production of the 100 units of Good A shipped on 01/10/94;
(2) 700 units of the 1,000 units of originating Material A that were
 received in materials inventory on 01/10/94 are considered to have been
 used in the production of the 700 units of Good A shipped on 01/15/94;
(3) 1,000 units of the 2,000 units of non-originating Material A that
 were received in materials inventory on 01/16/94 are considered to have
 been used in the production of the 1,000 units of Good A shipped on 01/
 20/94; and
(4) 900 units of the remaining 1,000 units of non-originating Material A
 that were received in materials inventory on 01/16/94 are considered to
 have been used in the production of the 900 units of Good A shipped on
 01/23/94.
Example 3: Average method
 Good A is subject to an applicable regional value-content requirement.
 Producer A is using the transaction value method to determine the
 regional value content of Good A. Producer A determines the average
 value of non-originating Material A and the ratio of originating
 Material A to total value of originating Material A and non-originating
 Material A in the following table.
 


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Materials inventory                                    Sales
                                                         ------------------------------------------------------------------------------------ (Shipments
                                               Date (M/D/              (Receipts of material A)                 (Non-originating material)    of good A)
                                                   Y)    -----------------------------------------------------------------------------------------------
                                                                                         Total    Unit cost   Quantity    Total                Quantity
                                                                Quantity (units)         value        *       (units)     value      Ratio      (units)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Receipt......................................   12/18/93  100 (O \1\)                       $100      $1.00
Receipt......................................   12/27/93  100 (N \2\)                        110       1.10        100    $110.00
                                                         -------------------------------------------------------------------------

[[Page 515]]

 
NEW AVERAGE INV. VALUE.......................  .........  200 (OI \3\)                       210       1.05        100     105.00       0.50
Receipt......................................   01/01/94  1,000 (O)                        1,000       1.00
                                                         -------------------------------------------------------------------------
NEW AVERAGE INV. VALUE.......................  .........  1,200                            1,210       1.01        100     101.00       0.08
Receipt......................................   01/05/94  1,000 (N)                        1,100       1.10      1,000   1,100.00
                                                         -------------------------------------------------------------------------
NEW AVERAGE INV. VALUE.......................  .........  2,200                            2,310       1.05      1,100   1,155.00       0.50
Shipment.....................................   01/10/94  (100)                            (105)       1.05       (50)    (52.50)  .........         100
Receipt......................................   01/10/94  1,000 (O)                        1,050       1.05
                                                         -------------------------------------------------------------------------
NEW AVERAGE INV. VALUE.......................  .........  3,100                            3,255       1.05      1,050   1,102.50       0.34
Shipment.....................................   01/15/94  (700)                            (735)       1.05      (238)   (249.90)  .........         700
Receipt......................................   01/16/94  2,000 (N)                        2,200       1.10      2,000   2,000.00
                                                         -------------------------------------------------------------------------
NEW AVERAGE INV. VALUE.......................  .........  4,400                            4,720       1.07      2,816   3,013.20       0.64
Shipment.....................................   01/20/94  (1,000)                        (1,070)       1.07      (640)   (648.80)  .........       1,000
Shipment.....................................   01/23/94  (900)                            (963)       1.07      (576)   (616.32)  .........         900
                                                         -------------------------------------------------------------------------
NEW AVERAGE INV. VALUE.......................  .........  2,500                            2,687       1.07      1,596   1,707.24      0.64
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Unit cost is determined in accordance with section 7 of this appendix.
\1\ ``O'' denotes originating materials.
\2\ ``N'' denotes non-originating materials.
\3\ ``OI'' denotes opening inventory.


 
 
 
 By applying the average method:
(1) before the shipment of the 100 units of Material A on 01/10/94, the
 ratio of units of originating Material A to total units of Material A
 in materials inventory was .50 (1,100 units/2,200 units) and the ratio
 of units of non-originating Material A to total units of Material A in
 materials inventory was .50 (1,100 units/2,200 units); based on those
 ratios, 50 units (100 units x .50) of originating Material A and 50
 units (100 units x .50) of non-originating Material A are considered to
 have been used in the production of the 100 units of Good A shipped on
 01/10/94; therefore, the value of non-originating Material A used in
 the production of those goods is considered to be $52.50 [100 units x
 $1.05 (average unit value) x .50]; the ratios are applied to the units
 of Material A remaining in materials inventory after the shipment:
 1,050 units (2,100 units x .50) are considered to be originating
 materials and 1,050 units (2,100 units x .50) are considered to be non-
 originating materials;
(2) before the shipment of the 700 units of Good A on 01/15/94, the
 ratio of units of originating Material A to total units of Material A
 in materials inventory was 66% (2,050 units/3,100 units) and the ratio
 of units of non-originating Material A to total units of Material A in
 materials inventory was 34% (1,050 units/3,100 units); based on those
 ratios, 462 units (700 units x .66) of originating Material A and 238
 units (700 units x .34) of non-originating Material A are considered to
 have been used in the production of the 700 units of Good A shipped on
 01/15/94; therefore, the value of non-originating Material A used in
 the production of those goods is considered to be $249.90 [700 units x
 $1.05 (average unit value) x 34%]; the ratios are applied to the units
 of Material A remaining in materials inventory after the shipment:
 1,584 units (2,400 units x .66) are considered to be originating
 materials and 816 units (2,400 units x .34) are considered to be non-
 originating materials;

[[Page 516]]

 
(3) before the shipment of the 1,000 units of Material A on 01/20/94,
 the ratio of units of originating Material A to total units of Material
 A in materials inventory was 36% (1,584 units/4,400 units) and the
 ratio of units of non-originating Material A to total units of Material
 A in materials inventory was 64% (2,816 units/4,400 units); based on
 those ratios, 360 units (1,000 units x .36) of originating Material A
 and 640 units (1,000 units x .64) of non-originating Material A are
 considered to have been used in the production of the 1,000 units of
 Good A shipped on 01/20/94; therefore, the value of non-originating
 Material A used in the production of those goods is considered to be
 $684.80 [1,000 units x $1.07 (average unit value) x 64%]; those ratios
 are applied to the units of Material A remaining in materials inventory
 after the shipment: 1,224 units (3,400 units x .36) are considered to
 be originating materials and 2,176 units (3,400 units x .64) are
 considered to be non-originating materials;
(4) before the shipment of the 900 units of Good A on 01/23/94, the
 ratio of units of originating Material A to total units of Material A
 in materials inventory was 36% (1,224 units/3,400 units) and the ratio
 of units of non-originating Material A to total units of Material A in
 materials inventory was 64% (2,176 units/3,400 units; based on those
 ratios, 324 units (900 units x .36) of originating Material A and 576
 units (900 units x .64) of non-originating Material A are considered to
 have been used in the production of the 900 units of Good A shipped on
 01/23/94; therefore, the value of non-originating Material A used in
 the production of those goods is considered to be $616.32 [900 units x
 $1.07 (average unit value) x 64%]; those ratios are applied to the
 units of Material A remaining in materials inventory after the
 shipment: 900 units (2,500 units x .36) are considered to be
 originating materials and 1,600 units (2,500 units x .64) are
 considered to be non-originating materials.
Example 4: Average method
 Good A is subject to an applicable regional value-content requirement.
 Producer A is using the net cost method and is averaging over a period
 of one month under section 6(15)(a) of this appendix to determine the
 regional value content of Good A.
 By applying the average method:
  the ratio of units of originating Material A to total units of
   Material A in materials inventory for January 1994 is 40.4% (2,100
   units/5,200 units);
  based on that ratio, 1,091 units (2,700 units x .404) of originating
   Material A and 1,609 units (2,700 units-1,091 units) of non-
   originating Material A are considered to have been used in the
   production of the 2,700 units of Good A shipped in January 1994;
   therefore, the value of non-originating materials used in the
   production of those goods is considered to be $0.64 per unit [$5,560
   (total value of Material A in materials inventory)/ $5,200 (units of
   Material A in materials inventory) = $1.07 (average unit value) x (1-
   .404)] or $1,728 ($0.64 x 2,700 units); and
  that ratio is applied to the units of Material A remaining in
   materials inventory on January 31, 1994: 1,010 units (2,500 units x
   .404) are considered to be originating materials and 1,490 units
   (2,500 units-1,010 units) are considered to be non-originating
   materials.
 


                               ADDENDUM B
  ``EXAMPLES'' ILLUSTRATING THE APPLICATION OF THE INVENTORY MANAGEMENT
                          METHODS TO DETERMINE
                      THE ORIGIN OF FUNGIBLE GOODS
 
 The following ``examples'' are based on the figures set out in the
 table below and on the assumption that Exporter A acquires originating
 Good A and non-originating Good A that are fungible goods and
 physically combines or mixes Good A before exporting those goods to the
 buyer of those goods.
 


[[Page 517]]


----------------------------------------------------------------------------------------------------------------
                                                                     Finished goods        Sales (shipments of
                                                                 inventory (receipts of          good A)
                         Date (M/D/Y)                                   good A)         ------------------------
                                                               -------------------------
                                                                    Quantity (units)         Quantity (units)
----------------------------------------------------------------------------------------------------------------
12/18/93......................................................                100 (O 1)
12/27/93......................................................                100 (N 2)
01/01/94......................................................               200 (OI 3)
01/01/94......................................................                1,000 (O)
01/05/94......................................................                1,000 (N)
01/10/94......................................................  .......................                      100
01/15/94......................................................                1,000 (O)
01/16/94......................................................  .......................                      700
01/20/94......................................................                2,000 (N)
01/20/94......................................................  .......................                    1,000
01/23/94......................................................  .......................                     900
----------------------------------------------------------------------------------------------------------------
1 ``O'' denotes originating goods.
2 ``N'' denotes non-originating goods.
3 ``OI'' denotes opening inventory.


Example 1: FIFO method
 By applying the FIFO method:
(1) the 100 units of originating Good A in opening inventory that were
 received in finished goods inventory on 12/18/93 are considered to be
 the 100 units of Good A shipped on 01/10/94;
(2) the 100 units of non-originating Good A in opening inventory that
 were received in finished goods inventory on 12/27/93 and 600 units of
 the 1,000 units of originating Good A that were received in finished
 goods inventory on 01/01/94 are considered to be the 700 units of Good
 A shipped on 01/15/94;
(3) the remaining 400 units of the 1,000 units of originating Good A
 that were received in finished goods inventory on 01/01/94 and 600
 units of the 1,000 units of non-originating Good A that were received
 in finished goods inventory on 01/05/94 are considered to be the 1,000
 units of Good A shipped on 01/20/94; and
(4) the remaining 400 units of the 1,000 units of non-originating Good A
 that were received in finished goods inventory on 01/05/94 and 500
 units of the 1,000 units of originating Good A that were received in
 finished goods inventory on 01/10/94 are considered to be the 900 units
 of Good A shipped on 01/23/94.
Example 2: LIFO method
 By applying the LIFO method:
(1) 100 units of the 1,000 units of non-originating Good A that were
 received in finished goods inventory on 01/05/94 are considered to be
 the 100 units of Good A shipped on 01/10/94;
(2) 700 units of the 1,000 units of originating Good A that were
 received in finished goods inventory on 01/10/94 are considered to be
 the 700 units of Good A shipped on 01/15/94;
(3) 1,000 units of the 2,000 units of non-originating Good A that were
 received in finished goods inventory on 01/16/94 are considered to be
 the 1,000 units of Good A shipped on 01/20/94; and
(4) 900 units of the remaining 1,000 units of non-originating Good A
 that were received in finished goods inventory on 01/16/94 are
 considered to be the 900 units of Good A shipped on 01/23/94.
Example 3: Average method
 Exporter A chooses to determine the origin of Good A on a monthly
 basis. Exporter A exported 3,000 units of Good A during the month of
 February 1994. The origin of the units of Good A exported during that
 month is determined on the basis of the preceding month, that is
 January 1994.
 By applying the average method:
  the ratio of originating goods to all goods in finished goods
   inventory for the month of January 1994 is 40.4% (2,100 units/5,200
   units);
  based on that ratio, 1,212 units (3,000 units x .404) of Good A
   shipped in February 1994 are considered to be originating goods and
   1,788 units (3,000 units - 1,212 units) of Good A are considered to
   be non-originating goods; and

[[Page 518]]

 
  that ratio is applied to the units of Good A remaining in finished
   goods inventory on January 31, 1994: 1,010 units (2,500 units x .404)
   are considered to be originating goods and 1,490 units (2,500 units -
   1,010 units) are considered to be non-originating goods.
 


                               SCHEDULE XI
           METHOD FOR CALCULATING NON-ALLOWABLE INTEREST COSTS
 
                     Definitions and Interpretation
SECTION 1. Definitions.
 For purposes of this Schedule,
``fixed-rate contract'' means a loan contract, installment purchase
 contract or other financing agreement in which the interest rate
 remains constant throughout the life of the contract or agreement;
``linear interpolation'' means, with respect to the yield on federal
 government debt obligations, the application of the following
 mathematical formula:
 
                         A+[((B-A)x(E-D))/(C-D)]
 
where
    A is the yield on federal government debt obligations that are
     nearest in maturity but of shorter maturity than the weighted
     average principal maturity of the payment schedule under the fixed-
     rate contract or variable-rate contract to which they are being
     compared,
    B is the yield on federal government debt obligations that are
     nearest in maturity but of greater maturity than the weighted
     average principal maturity of that payment schedule,
    C is the maturity of federal government debt obligations that are
     nearest in maturity but of greater maturity than the weighted
     average principal maturity of that payment schedule,
    D is the maturity of federal government debt obligations that are
     nearest in maturity but of shorter maturity than the weighted
     average principal maturity of that payment schedule, and
    E is the weighted average principal maturity of that payment
     schedule; ``payment schedule'' means the schedule of payments,
     whether on a weekly, bi-weekly, monthly, yearly or other basis, of
     principal and interest, or any combination thereof, made by a
     producer to a lender in accordance with the terms of a fixed-rate
     contract or variable-rate contract;
``variable-rate contract'' means a loan contract, installment purchase
 contract or other financing agreement in which the interest rate is
 adjusted at intervals during the life of the contract or agreement in
 accordance with its terms;
``weighted average principal maturity'' means, with respect to fixed-
 rate contracts and variable-rate contracts, the number of years, or
 portion thereof, that is equal to the number obtained by
  (a) dividing the sum of the weighted principal payments,
    (i) in the case of a fixed-rate contract, by the original amount of
     the loan, and
    (ii) in the case of a variable-rate contract, by the principal
     balance at the beginning of the interest rate period for which the
     weighted principal payments were calculated, and
  (b) rounding the amount determined under paragraph (a) to the nearest
   single decimal place and, where that amount is the midpoint between
   two such numbers, to the greater of those two numbers;
``weighted principal payment'' means,
  (a) with respect to fixed-rate contracts, the amount determined by
   multiplying each principal payment under the contract by the number
   of years, or portion thereof, between the date the producer entered
   into the contract and the date of that principal payment, and
  (b) with respect to variable-rate contracts

[[Page 519]]

 
    (i) the amount determined by multiplying each principal payment made
     during the current interest rate period by the number of years, or
     portion thereof, between the beginning of that interest rate period
     and the date of that payment, and
    (ii) the amount equal to the outstanding principal owing, but not
     necessarily due, at the end of the current interest rate period,
     multiplied by the number of years, or portion thereof, between the
     beginning and the end of that interest rate period;
``yield on federal government debt obligations'' means
  (a) in the case of a producer located in Canada, the yield for federal
   government debt obligations set out in the Bank of Canada's Weekly
   Financial Statistics
    (i) where the interest rate is adjusted at intervals of less than
     one year, under the title ``Treasury Bills'', and
    (ii) in any other case, under the title ``Selected Government of
     Canada benchmark bond yields'',
 
  for the week that the producer entered into the contract or the week
   of the most recent interest rate adjustment date, if any, under the
   contract,
  (b) in the case of a producer located in Mexico, the yield for federal
   government debt obligations set out in La Seccion de Indicadores
   Monetarios, Financieros, y de Finanzas Publicas, de los Indicadores
   Economicos, published by the Banco de Mexico under the title
   ``Certificados de la Tesoreria de la Federacion'' for the week that
   the producer entered into the contract or the week of the most recent
   interest rate adjustment date, if any, under the contract, and
  (c) in the case of a producer located in the United States, the yield
   for federal government debt obligations set out in the Federal
   Reserve statistical release (H.15) Selected Interest Rates
    (i) where the interest rate is adjusted at intervals of less than
     one year, under the title ``U.S. government securities, Treasury
     bills, Secondary market'', and
    (ii) in any other case, under the title ``U.S. Government
     Securities, Treasury constant maturities'',
 
  for the week that the producer entered into the contract or the week
   of the most recent interest rate adjustment date, if any, under the
   contract.
 
                                 General
 
SECTION 2.
 For purposes of calculating non-allowable interest costs
  (a) with respect to a fixed-rate contract, the interest rate under
   that contract shall be compared with the yield on federal government
   debt obligations that have maturities of the same length as the
   weighted average principal maturity of the payment schedule under the
   contract (that yield determined by linear interpolation, where
   necessary);
  (b) with respect to a variable-rate contract
    (i) in which the interest rate is adjusted at intervals of less than
     or equal to one year, the interest rate under that contract shall
     be compared with the yield on federal government debt obligations
     that have maturities closest in length to the interest rate
     adjustment period of the contract, and
    (ii) in which the interest rate is adjusted at intervals of greater
     than one year, the interest rate under the contract shall be
     compared with the yield on federal government debt obligations that
     have maturities of the same length as the weighted average
     principal maturity of the payment schedule under the contract (that
     yield determined by linear interpolation, where necessary); and

[[Page 520]]

 
  (c) with respect to a fixed-rate or variable-rate contract in which
   the weighted average principal maturity of the payment schedule under
   the contract is greater than the maturities offered on federal
   government debt obligations, the interest rate under the contract
   shall be compared to the yield on federal government debt obligations
   that have maturities closest in length to the weighted average
   principal maturity of the payment schedule under the contract.
 
                                ADDENDUM
 ``EXAMPLE'' ILLUSTRATING THE APPLICATION OF THE METHOD FOR CALCULATING
    NON-ALLOWABLE INTEREST COSTS IN THE CASE OF A FIXED-RATE CONTRACT
 
 The following example is based on the figures set out in the table
 below and on the following assumptions:
  (a) a producer in a NAFTA country borrows $1,000,000 from a person of
   the same NAFTA country under a fixed-rate contract;
  (b) under the terms of the contract, the loan is payable in 10 years
   with interest paid at the rate of 6 percent per year on the declining
   principal balance;
  (c) the payment schedule calculated by the lender based on the terms
   of the contract requires the producer to make annual payments of
   principal and interest of $135,867.36 over the life of the contract;
  (d) there are no federal government debt obligations that have
   maturities equal to the 6-year weighted average principal maturity of
   the contract; and
  (e) the federal government debt obligations that are nearest in
   maturity to the weighted average principal maturity of the contract
   are of 5- and 7-year maturities, and the yields on them are 4.7
   percent and 5.0 percent, respectively.
 


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Weighted
                      Years of loan                        Principal balance   Interest payment  Principal payment   Payment schedule  principal payment
                                                                  \1\                \2\                \3\                                   \4\
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................        $924,132.04          $60,000.00         $75,867.96        $135,867.96         $75,867.96
2.......................................................         843,712.00           55,447.92          80,420.04         135,867.96         160,840.08
3.......................................................         758,466.76           50,622.72          85,245.24         135,867.96         255,735.72
4.......................................................         668,106.81           45,508.01          90,359.95         135,867.96         361,439.82
5.......................................................         572,325.26           40,086.41          95,781.55         135,867.96         478,907.76
6.......................................................         470,796.81           34,339.52         101,528.44         135,867.96         609,170.67
7.......................................................         363,176.66           28,247.81         107,620.15         135,867.96         753,341.06
8.......................................................         249,099.30           21,790.60         114,077.36         135,867.96         912,618.88
9.......................................................         128,177.30           14,945.96         120,922.00         135,867.96       1,088,298.02
10......................................................              (0.00)           7,690.66         128,177.32         135,867.96       1,281,773.22
                                                                                                                                      ------------------
                                                          ..................  .................  .................  .................     $5,977,993.19
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The principal balance represents the loan balance at the end of each full year the loan is in effect and is calculated by subtracting the current
  year's principal payment from the prior year's ending loan balance.
\2\ Interest payments are calculated by multiplying the prior year's ending loan balance by the contract interest rate of 6 percent.
\3\ Principal payments are calculated by subtracting the current year's interest payments from the annual payment schedule amount.
\4\ The weighted principal payment is determined by, for each year of the loan, multiplying that year's principal payment by the number of years the
  loan had been in effect at the end of that year.
\5\ The weighted average principal maturity of the contract is calculated by dividing the sum of the weighted principal payments by the original loan
  amount and rounding the amount determined to the nearest decimal place.


Weighted Average Principal Maturity
    $5,977,993.19/$1,000,000=5.977993 or 6 years \5\
By applying the above method:
  (1) the weighted average principal maturity of the payment schedule
   under the 6 percent contract is 6 years;
  (2) the yields on the closest maturities for comparable federal
   government debt obligations of 5 years and 7 years are 4.7 percent
   and 5.0 percent, respectively; therefore, using linear interpolation,
   the yield on a federal government debt obligation that has a maturity
   equal to the weighted average principal maturity of the contract is
   4.85 percent. This number is calculated as follows:
    4.7+[((5.0-4.7)x(6-5))/(7-5)]

[[Page 521]]

 
    =4.7+0.15
    =4.85%; and
 
  (3) the producer's contract interest rate of 6 percent is within 700
   basis points of the 4.85 percent yield on the comparable federal
   government debt obligation; therefore, none of the producer's
   interest costs are considered to be non-allowable interest costs for
   purposes of the definition ``non-allowable interest costs.''
 
 ``EXAMPLE'' ILLUSTRATING THE APPLICATION OF THE METHOD FOR CALCULATING
  NON-ALLOWABLE INTEREST COSTS IN THE CASE OF A VARIABLE-RATE CONTRACT
 
 The following example is based on the figures set out in the tables
 below and on the following assumptions:
  (a) a producer in a NAFTA country borrows $1,000,000 from a person of
   the same NAFTA country under a variable-rate contract;
  (b) under the terms of the contract, the loan is payable in 10 years
   with interest paid at the rate of 6 percent per year for the first
   two years and 8 percent per year for the next two years on the
   principal balance, with rates adjusted each two years after that;
  (c) the payment schedule calculated by the lender based on the terms
   of the contract requires the producer to make annual payments of
   principal and interest of $135,867.96 for the first two years of the
   loan, and of $146,818.34 for the next two years of the loan;
  (d) there are no federal government debt obligations that have
   maturities equal to the 1.9-year weighted average principal maturity
   of the first two years of the contract;
  (e) there are no federal government debt obligations that have
   maturities equal to the 1.9-year weighted average principal maturity
   of the third and fourth years of the contract; and
  (f) the federal government debt obligations that are nearest in
   maturity to the weighted average principal maturity of the contract
   are 1- and 2-year maturities, and the yields on them are 3.0 percent
   and 3.5 percent respectively.
 


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Weighted
                 Beginning of year                     Principal      Interest rate       Interest        Principal         Payment         principal
                                                        balance            (%)            payment          payment          schedule         payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................    $1,000,000.00             6.00       $60,000.00       $75,867.96      $135,867.96       $75,867.96
2.................................................       924,132.04             6.00        55,447.92        80,420.04       135,867.96     1,848,264.08
                                                                                                                                        ----------------
                                                    ...............  ...............  ...............  ...............  ...............    $1,924,132.04
--------------------------------------------------------------------------------------------------------------------------------------------------------


Weighted Average Principal Maturity
    $1,924,132.04/$1,000,000=1.92413204 or 1.9 years
By applying the above method:
  (1) the weighted average principal maturity of the payment schedule of
   the first two years of the contract is 1.9 years;
  (2) the yield on the closest maturities of federal government debt
   obligations of 1 year and 2 years are 3.0 and 3.5 percent,
   respectively; therefore, using linear interpolation, the yield on a
   federal government debt obligation that has a maturity equal to the
   weighted average principal maturity of the payment schedule of the
   first two years of the contract is 3.45 percent. This amount is
   calculated as follows:
 
    3.0+[((3.5-3.0)x(1.9-1.0))/(2.0-1.0)]
    =3.0+0.45
    =3.45%; and

[[Page 522]]

 
  (3) the producer's contract rate of 6 percent for the first two years
   of the loan is within 700 basis points of the 3.45 percent yield on
   federal government debt obligations that have maturities equal to the
   1.9-year weighted average principal maturity of the payment schedule
   of the first two years of the producer's loan contract; therefore,
   none of the producer's interest costs are considered to be non-
   allowable interest costs for purposes of the definition ``non-
   allowable interest costs''.
 


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Weighted
                 Beginning of year                     Principal      Interest rate       Interest        Principal         Payment         principal
                                                        balance            (%)            payment          payment          schedule         payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................    $1,000,000.00             6.00       $60,000.00       $75,867.96      $135,867.96
2.................................................       924,132.04             6.00        55,447.92        80,420.04       135,867.96
3.................................................       843,712.01             8.00        67,496.96        79,321.38       146,818.34       $79,321.38
4.................................................       764,390.62             8.00        61,151.25        85,667.09       146,818.34     1,528,781.24
                                                                                                                                        ----------------
                                                    ...............  ...............  ...............  ...............  ...............    $1,608,102.62
--------------------------------------------------------------------------------------------------------------------------------------------------------


Weighted Average Principal Maturity
    $1,608,102.62/$843,712.01=1.905985 or 1.9 years
By applying the above method:
  (1) the weighted average principal maturity of the payment schedule
   under the first two years of the contract is 1.9 years;
  (2) the federal government debt obligations that are nearest in
   maturities to the weighted average principal maturity of the contract
   are 1- and 2-year maturities, and the yields on them are 3.0 and 3.5
   percent, respectively; therefore, using linear interpolation, the
   yield on a federal government debt obligation that has a maturity
   equal to the weighted average principal maturity of the payment
   schedule of the first two years of the contract is 3.45 percent. This
   amount is calculated as follows:
 
    3.0+[((3.5-3.0)x(1.9-1.0))/(2.0-1.0)]
    =3.0+0.45
    =3.45%
 
  (3) the producer's contract interest rate, for the third and fourth
   years of the loan, of 8 percent is within 700 basis points of the
   3.45 percent yield on federal government debt obligations that have
   maturities equal to the 1.9-year weighted average principal maturity
   of the payment schedule under the third and fourth years of the
   producer's loan contract; therefore, none of the producer's interest
   costs are considered to be non-allowable interest costs for purposes
   of the definition ``non-allowable interest costs''.
 
                              SCHEDULE XII
                GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
 
SECTION 1.
 Generally Accepted Accounting Principles means the recognized consensus
 or substantial authoritative support in the territory of a NAFTA
 country with respect to the recording of revenues, expenses, costs,
 assets and liabilities, disclosure of information and preparation of
 financial statements. These standards may be broad guidelines of
 general application as well as detailed standards, practices and
 procedures.
SECTION 2.
 For purposes of Generally Accepted Accounting Principles, the
 recognized consensus or authoritative support are referred to or set
 out in the following publications:
  (a) with respect to the territory of Canada, The Canadian Institute of
   Chartered Accountants Handbook, as updated from time to time;
  (b) with respect to the territory of Mexico, Los Principios de
   Contabilidad Generalmente Aceptados, issued by the Instituto Mexicano
   de Contadores P[uacute]blicos A.C. (IMCP), including the boletines
   complementarios, as updated from time to time; and

[[Page 523]]

 
  (c) with respect to the territory of the United States,
    (i) the following publications of the American Institute of
     Certified Public Accountants (AICPA), as updated from time to time:
      (A) AICPA Professional Standards,
      (B) Committee on Accounting Procedure Accounting Research
       Bulletins,
      (C) Accounting Principles Board Opinions and Statements,
      (D) APB Accounting and Auditing Guides,
      (E) AICPA Statements of Position, and
      (F) AICPA Issues Papers and Practice Bulletins,
    (ii) the following publications of the Financial Accounting
     Standards Board (FASB), as updated from time to time:
      (A) FASB Accounting Standards and Interpretations,
      (B) FASB Technical Bulletins, and
      (C) FASB Concepts Statements.
 


[T.D. 95-68, 60 FR 46364, Sept. 6, 1995, as amended by T.D. 02-15, 67 FR 
15482, Apr. 2, 2002; 67 FR 19810, Apr. 23, 2002]



PART 191_DRAWBACK--Table of Contents




Sec.
191.0 Scope.
191.0a Claims filed under NAFTA.

                      Subpart A_General Provisions

191.1 Authority of the Commissioner of Customs.
191.2 Definitions.
191.3 Duties and fees subject or not subject to drawback.
191.4 Merchandise in which a U.S. Government interest exists.
191.5 Guantanamo Bay, insular possessions, trust territories.
191.6 Authority to sign drawback documents.
191.7 General manufacturing drawback ruling.
191.8 Specific manufacturing drawback ruling.
191.9 Agency.
191.10 Certificate of delivery.
191.11 Tradeoff.
191.12 Claim filed under incorrect provision.
191.13 Packaging materials.
191.14 Identification of merchandise or articles by accounting method.
191.15 Recordkeeping.

                    Subpart B_Manufacturing Drawback

191.21 Direct identification drawback.
191.22 Substitution drawback.
191.23 Methods of claiming drawback.
191.24 Certificate of manufacture and delivery.
191.25 Destruction under Customs supervision.
191.26 Recordkeeping for manufacturing drawback.
191.27 Time limitations.
191.28 Person entitled to claim drawback.

                  Subpart C_Unused Merchandise Drawback

191.31 Direct identification.
191.32 Substitution drawback.
191.33 Person entitled to claim drawback.
191.34 Certificate of delivery required.
191.35 Notice of intent to export; examination of merchandise.
191.36 Failure to file Notice of Intent to Export, Destroy or Return 
          Merchandise for Purposes of Drawback.
191.37 Destruction under Customs supervision.
191.38 Records.

                     Subpart D_Rejected Merchandise

191.41 Rejected merchandise drawback.
191.42 Procedure.
191.43 Unused merchandise claim.
191.44 Destruction under Customs supervision.

                 Subpart E_Completion of Drawback Claims

191.51 Completion of drawback claims.
191.52 Rejecting, perfecting or amending claims.
191.53 Restructuring of claims.

                    Subpart F_Verification of Claims

191.61 Verification of drawback claims.
191.62 Penalties.

                  Subpart G_Exportation and Destruction

191.71 Drawback on articles destroyed under Customs supervision.
191.72 Exportation procedures.
191.73 Export summary procedure.
191.74 Certification of exportation by mail.
191.75 Exportation by the Government.
191.76 Landing certificate.

[[Page 524]]

          Subpart H_Liquidation and Protest of Drawback Entries

191.81 Liquidation.
191.82 Person entitled to claim drawback.
191.83 Person entitled to receive payment.
191.84 Protests.

   Subpart I_Waiver of Prior Notice of Intent To Export; Accelerated 
                           Payment of Drawback

191.91 Waiver of prior notice of intent to export.
191.92 Accelerated payment.
191.93 Combined applications.

 Subpart J_Internal Revenue Tax on Flavoring Extracts and Medicinal or 
  Toilet Preparations (Including Perfumery) Manufactured From Domestic 
                            Tax-Paid Alcohol

191.101 Drawback allowance.
191.102 Procedure.
191.103 Additional requirements.
191.104 Alcohol, Tobacco and Firearms certificates.
191.105 Liquidation.
191.106 Amount of drawback.

           Subpart K_Supplies for Certain Vessels and Aircraft

191.111 Drawback allowance.
191.112 Procedure.

                Subpart L_Meats Cured With Imported Salt

191.121 Drawback allowance.
191.122 Procedure.
191.123 Refund of duties.

   Subpart M_Materials for Construction and Equipment of Vessels and 
            Aircraft Built for Foreign Ownership and Account

191.131 Drawback allowance.
191.132 Procedure.
191.133 Explanation of terms.

  Subpart N_Foreign-Built Jet Aircraft Engines Processed in the United 
                                 States

191.141 Drawback allowance.
191.142 Procedure.
191.143 Drawback entry.
191.144 Refund of duties.

     Subpart O_Merchandise Exported From Continuous Customs Custody

191.151 Drawback allowance.
191.152 Merchandise released from Customs custody.
191.153 Continuous Customs custody.
191.154 Filing the entry.
191.155 Merchandise withdrawn from warehouse for exportation.
191.156 Bill of lading.
191.157 Landing certificates.
191.158 Procedures.
191.159 Amount of drawback.

Subpart P_Distilled Spirits, Wines, or Beer Which Are Unmerchantable or 
               Do Not Conform to Sample or Specifications

191.161 Refund of taxes.
191.162 Procedure.
191.163 Documentation.
191.164 Return to Customs custody.
191.165 No exportation by mail.
191.166 Destruction of merchandise.
191.167 Liquidation.
191.168 Time limit for exportation or destruction.

        Subpart Q_Substitution of Finished Petroleum Derivatives

191.171 General; drawback allowance.
191.172 Definitions.
191.173 Imported duty-paid derivatives (no manufacture).
191.174 Derivatives manufactured under 19 U.S.C. 1313(a) or (b).
191.175 Drawback claimant; maintenance of records.
191.176 Procedures for claims filed under 19 U.S.C. 1313(p).

 Subpart R_Merchandise Transferred to a Foreign Trade Zone From Customs 
                                 Custody

191.181 Drawback allowance.
191.182 Zone-restricted merchandise.
191.183 Articles manufactured or produced in the United States.
191.184 Merchandise transferred from continuous Customs custody.
191.185 Unused merchandise drawback and merchandise not conforming to 
          sample or specification, shipped without consent of the 
          consignee, or found to be defective as of the time of 
          importation.
191.186 Person entitled to claim drawback.

                  Subpart S_Drawback Compliance Program

191.191 Purpose.
191.192 Certification for compliance program.
191.193 Application procedure for compliance program.
191.194 Action on application to participate in compliance program.
191.195 Combined application for certification in drawback compliance 
          program and waiver of prior notice and/or approval of 
          accelerated payment of drawback.

[[Page 525]]


Appendix A to Part 191--General Manufacturing Drawback Rulings
Appendix B to Part 191--Sample Formats for Applications for Specific 
          Manufacturing Drawback Rulings

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States), 1313, 1624;
    Sec. 191.84 also issued under 19 U.S.C. 1514;
    Sec. Sec. 191.111, 191.112 also issued under 19 U.S.C. 1309;
    Sec. Sec. 191.151(a)(1), 191.153, 191.157, 191.159 also issued 
under 19 U.S.C. 1557;
    Sec. Sec. 191.182-191.186 also issued under 19 U.S.C. 81c;
    Sec. Sec. 191.191-191.195 also issued under 19 U.S.C. 1593a.

    Source: T.D. 98-16, 63 FR 11006, Mar. 5, 1998, unless otherwise 
noted.



Sec. 191.0  Scope.

    This part sets forth general provisions applicable to all drawback 
claims and specialized provisions applicable to specific types of 
drawback claims. Additional drawback provisions relating to the North 
American Free Trade Agreement (NAFTA) are contained in subpart E of part 
181 of this chapter.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by CBP Dec. 05-07, 70 
FR 10884, Mar. 7, 2005; CBP Dec. 06-39, 71 FR 76134, Dec. 20, 2006]



Sec. 191.0a  Claims filed under NAFTA.

    Claims for drawback filed under the provisions of part 181 of this 
chapter shall be filed separately from claims filed under the provisions 
of this part.



                      Subpart A_General Provisions



Sec. 191.1  Authority of the Commissioner of Customs.

    Pursuant to Treasury Department Order No. 165, Revised (T.D. 53654, 
19 FR 7241), as amended, the Commissioner of Customs, with the approval 
of the Secretary of the Treasury, shall prescribe rules and regulations 
regarding drawback.



Sec. 191.2  Definitions.

    For the purposes of this part:
    (a) Abstract. Abstract means the summary of the actual production 
records of the manufacturer.
    (b) Act. Act, unless indicated otherwise, means the Tariff Act of 
1930, as amended.
    (c) Certificate of delivery. Certificate of delivery (see Sec. 
191.10 of this part) means Customs Form 7552, Delivery Certificate for 
Purposes of Drawback, summarizing information contained in original 
documents, establishing:
    (1) The transfer from one party (transferor) to another (transferee) 
of:
    (i) Imported merchandise;
    (ii) Substituted merchandise under 19 U.S.C. 1313(j)(2);
    (iii) A qualified article under 19 U.S.C. 1313(p)(2)(A)(ii) from the 
manufacturer or producer to the exporter or under 1313(p)(2)(A)(iv) from 
the importer to the exporter; or
    (iv) Drawback product;
    (2) The identity of such merchandise or article as being that to 
which a potential right to drawback exists; and
    (3) The assignment of drawback rights for the merchandise or article 
transferred from the transferor to the transferee.
    (d) Certificate of manufacture and delivery. Certificate of 
manufacture and delivery (see Sec. 191.24 of this part) means Customs 
Form 7552, Delivery Certificate for Purposes of Drawback, summarizing 
information contained in original documents, establishing:
    (1) The transfer of an article manufactured or processed under 19 
U.S.C. 1313(a) or 1313(b) from one party (transferor) to another 
(transferee);
    (2) The identity of such article as being that to which a potential 
right to drawback exists; and
    (3) The assignment of drawback rights for the article transferred 
from the transferor to the transferee.
    (e) Commercially interchangeable merchandise. Commercially 
interchangeable merchandise means merchandise which may be substituted 
under the substitution unused merchandise drawback law, Sec. 313(j)(2) 
of the Act, as amended (19 U.S.C. 1313(j)(2)) (see Sec. 191.32(b)(2) 
and (c) of this part), or under the provision for the substitution of 
finished petroleum derivatives, Sec. 313(p), as amended (19 U.S.C. 
1313(p)).
    (f) Designated merchandise. Designated merchandise means either 
eligible imported duty-paid merchandise or drawback products selected by 
the drawback claimant as the basis for a drawback claim under 19 U.S.C. 
1313(b) or

[[Page 526]]

(j)(2), as applicable, or qualified articles selected by the claimant as 
the basis for drawback under 19 U.S.C. 1313(p).
    (g) Destruction. Destruction means the complete destruction of 
articles or merchandise to the extent that they have no commercial 
value.
    (h) Direct identification drawback. Direct identification drawback 
means drawback authorized either under Sec. 313(a) of the Act, as 
amended (19 U.S.C. 1313(a)), on imported merchandise used to manufacture 
or produce an article which is either exported or destroyed, or under 
Sec. 313(j)(1) of the Act, as amended (19 U.S.C. 1313(j)(1)), on 
imported merchandise exported, or destroyed under Customs supervision, 
without having been used in the United States (see also Sec. Sec. 
313(c), (e), (f), (g), (h), and (q)). Merchandise or articles may be 
identified for purposes of direct identification drawback by use of the 
accounting methods provided for in Sec. 191.14 of this subpart.
    (i) Drawback. Drawback means the refund or remission, in whole or in 
part, of a customs duty, fee or internal revenue tax which was imposed 
on imported merchandise under Federal law because of its importation, 
and the refund of internal revenue taxes paid on domestic alcohol as 
prescribed in 19 U.S.C. 1313(d) (see also Sec. 191.3 of this subpart).
    (j) Drawback claim. Drawback claim means the drawback entry and 
related documents required by regulation which together constitute the 
request for drawback payment.
    (k) Drawback entry. Drawback entry means the document containing a 
description of, and other required information concerning, the exported 
or destroyed article on which drawback is claimed. Drawback entries are 
filed on Customs Form 7551.
    (l) Drawback product. A drawback product means a finished or 
partially finished product manufactured in the United States under the 
procedures in this part for manufacturing drawback. A drawback product 
may be exported, or destroyed under Customs supervision with a claim for 
drawback, or it may be used in the further manufacture of other drawback 
products by manufacturers or producers operating under the procedures in 
this part for manufacturing drawback, in which case drawback would be 
claimed upon exportation or destruction of the ultimate product. 
Products manufactured or produced from substituted merchandise (imported 
or domestic) also become ``drawback products'' when applicable 
substitution provisions of the Act are met. For purposes of Sec. 313(b) 
of the Act, as amended (19 U.S.C. 1313(b)), drawback products may be 
designated as the basis for drawback or deemed to be substituted 
merchandise (see Sec. 1313(b)). For a drawback product to be designated 
as the basis for drawback, the product must be associated with a 
certificate of manufacture and delivery (see Sec. 191.24 of this part).
    (m) Exportation; exporter--(1) Exportation. Exportation means the 
severance of goods from the mass of goods belonging to this country, 
with the intention of uniting them with the mass of goods belonging to 
some foreign country. An exportation may be deemed to have occurred when 
goods subject to drawback are admitted into a foreign trade zone in 
zone-restricted status, or are laden upon qualifying aircraft or vessels 
as aircraft or vessel supplies in accordance with Sec. 309(b) of the 
Act, as amended (19 U.S.C. 1309(b)) (see Sec. Sec. 10.59 through 10.65 
of this chapter).
    (2) Exporter. Exporter means that person who, as the principal party 
in interest in the export transaction, has the power and responsibility 
for determining and controlling the sending of the items out of the 
United States. In the case of ``deemed exportations'' (see paragraph 
(m)(1) of this section), the exporter means that person who, as the 
principal party in interest in the transaction deemed to be an 
exportation, has the power and responsibility for determining and 
controlling the transaction (in the case of aircraft or vessel supplies 
under 19 U.S.C. 1309(b), the party who has the power and responsibility 
for lading the vessel supplies on the qualifying aircraft or vessel).
    (n) Filing. Filing means the delivery to Customs of any document or 
documentation, as provided for in this part, and includes electronic 
delivery of any such document or documentation.
    (o) Fungible merchandise or articles. Fungible merchandise or 
articles means

[[Page 527]]

merchandise or articles which for commercial purposes are identical and 
interchangeable in all situations.
    (p) General manufacturing drawback ruling. A general manufacturing 
drawback ruling means a description of a manufacturing or production 
operation for drawback and the regulatory requirements and 
interpretations applicable to that operation (see Sec. 191.7 of this 
subpart).
    (q) Manufacture or production. Manufacture or production means:
    (1) A process, including, but not limited to, an assembly, by which 
merchandise is made into a new and different article having a 
distinctive ``name, character or use''; or
    (2) A process, including, but not limited to, an assembly, by which 
merchandise is made fit for a particular use even though it does not 
meet the requirements of paragraph (q)(1) of this section.
    (r) Multiple products. Multiple products mean two or more products 
produced concurrently by a manufacture or production operation or 
operations.
    (s) Possession. Possession, for purposes of substitution unused 
merchandise drawback (19 U.S.C. 1313(j)(2)), means physical or 
operational control of the merchandise, including ownership while in 
bailment, in leased facilities, in transit to, or in any other manner 
under the operational control of, the party claiming drawback.
    (t) Records. Records include, but are not limited to, statements, 
declarations, documents and electronically generated or machine readable 
data which pertain to the filing of a drawback claim or to the 
information contained in the records required by Chapter 4 of Title 19, 
United States Code, in connection with the filing of a drawback claim 
and which are normally kept in the ordinary course of business (see 19 
U.S.C. 1508).
    (u) Relative value. Relative value means, except for purposes of 
Sec. 191.51(b), the value of a product divided by the total value of 
all products which are necessarily manufactured or produced concurrently 
in the same operation. Relative value is based on the market value, or 
other value approved by Customs, of each such product determined as of 
the time it is first separated in the manufacturing or production 
process. Market value is generally measured by the selling price, not 
including any packaging, transportation, or other identifiable costs, 
which accrue after the product itself is processed. Drawback law 
requires the apportionment of drawback to each such product based on its 
relative value at the time of separation.
    (v) Schedule. A schedule means a document filed by a drawback 
claimant, under Sec. 313(a) or (b), as amended (19 U.S.C. 1313(a) or 
(b)), showing the quantity of imported or substituted merchandise used 
in or appearing in each article exported or destroyed for drawback.
    (w) Specific manufacturing drawback ruling. A specific manufacturing 
drawback ruling means a letter of approval issued by Customs 
Headquarters in response to an application, by a manufacturer or 
producer for a ruling on a specific manufacturing or production 
operation for drawback, as described in the format used. Synopses of 
approved specific manufacturing drawback rulings are published in the 
Customs Bulletin with each synopsis being published under an identifying 
Treasury Decision. Specific manufacturing drawback rulings are subject 
to the provisions in part 177 of this chapter.
    (x) Substituted merchandise or articles. Substituted merchandise or 
articles means merchandise or articles that may be substituted under 19 
U.S.C. 1313(b), 1313(j)(2), or 1313(p) as follows:
    (1) Under Sec. 1313(b), substituted merchandise must be of the same 
kind and quality as the imported designated merchandise or drawback 
product, that is, the imported designated merchandise or drawback 
products and the substituted merchandise must be capable of being used 
interchangeably in the manufacture or production of the exported or 
destroyed articles with no substantial change in the manufacturing or 
production process;
    (2) Under Sec. 1313(j)(2), substituted merchandise must be 
commercially interchangeable with the imported designated merchandise; 
and
    (3) Under Sec. 1313(p), a substituted article must be of the same 
kind and quality as the qualified article for which it is substituted, 
that is, the articles

[[Page 528]]

must be commercially interchangeable or described in the same 8-digit 
HTSUS tariff classification.
    (y) Verification. Verification means the examination of any and all 
records, maintained by the claimant, or any party involved in the 
drawback process, which are required by the appropriate Customs officer 
to render a meaningful recommendation concerning the drawback claimant's 
conformity to the law and regulations and the determination of 
supportability, correctness, and validity of the specific claim or 
groups of claims being verified.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998, as 
amended by T.D. 01-18, 66 FR 9649, Feb. 9, 2001]



Sec. 191.3  Duties and fees subject or not subject to drawback.

    (a) Duties and fees subject to drawback include:
    (1) All ordinary Customs duties, including:
    (i) Duties paid on an entry, or withdrawal from warehouse, for 
consumption for which liquidation has become final;
    (ii) Estimated duties paid on an entry, or withdrawal from 
warehouse, for consumption, for which liquidation has not become final, 
subject to the conditions and requirements of Sec. 191.81(b) of this 
subpart; and
    (iii) Tenders of duties after liquidation of the entry, or 
withdrawal from warehouse, for consumption for which the duties are 
paid, subject to the conditions and requirements of Sec. 191.81(c) of 
this part, including:
    (A) Voluntary tenders (for purposes of this section, a ``voluntary 
tender'' is a payment of duties on imported merchandise in excess of 
duties included in the liquidation of the entry, or withdrawal from 
warehouse, for consumption, provided that the liquidation has become 
final and that the other conditions of this section and Sec. 191.81 of 
this part are met);
    (B) Tenders of duties in connection with notices of prior disclosure 
under 19 U.S.C. 1592(c)(4); and
    (C) Duties restored under 19 U.S.C. 1592(d).
    (2) Marking duties assessed under Sec. 304(c), Tariff Act of 1930, 
as amended (19 U.S.C. 1304(c));
    (3) Internal revenue taxes which attach upon importation (see Sec. 
101.1 of this chapter); and
    (4) Merchandise processing fees (see Sec. 24.23 of this chapter) 
for unused merchandise drawback pursuant to 19 U.S.C. 1313(j), and 
drawback for substitution of finished petroleum derivatives pursuant to 
19 U.S.C. 1313(p)(2)(A)(iii) or (iv).
    (b) Duties and fees not subject to drawback include:
    (1) Harbor maintenance fee (see Sec. 24.24 of this chapter);
    (2) Merchandise processing fees (see Sec. 24.23 of this chapter), 
except where unused merchandise drawback pursuant to 19 U.S.C. 1313(j) 
or drawback for substitution of finished petroleum derivatives pursuant 
to 19 U.S.C. 1313(p)(2)(A)(iii) or (iv) is claimed; and
    (3) Antidumping and countervailing duties on merchandise entered, or 
withdrawn from warehouse, for consumption on or after August 23, 1988.
    (c) No drawback shall be allowed when the identified merchandise, 
the designated imported merchandise, or the substituted other 
merchandise (when applicable), consists of an agricultural product which 
is duty-paid at the over-quota rate of duty established under a tariff-
rate quota, except that:
    (1) Agricultural products as described in this paragraph are 
eligible for drawback under 19 U.S.C. 1313(j)(1); and
    (2) Tobacco otherwise meeting the description of agricultural 
products in this paragraph is eligible for drawback under 19 U.S.C. 
1313(j)(1) or 19 U.S.C. 1313(a).

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 27489, May 19, 1998, as 
amended by T.D. 01-18, 66 FR 9649, Feb. 9, 2001; CBP Dec. 04-33, 69 FR 
60083, Oct. 7, 2004]



Sec. 191.4  Merchandise in which a U.S. Government interest exists.

    (a) Restricted meaning of Government. A U.S. Government 
instrumentality operating with nonappropriated funds is considered a 
Government entity within the meaning of this section.

[[Page 529]]

    (b) Allowance of drawback. If the merchandise is sold to the U.S. 
Government, drawback shall be available only to the:
    (1) Department, branch, agency, or instrumentality of the U.S. 
Government which purchased it; or
    (2) Supplier, or any of the parties specified in Sec. 191.82 of 
this part, provided the claim is supported by documentation signed by a 
proper officer of the department, branch, agency, or instrumentality 
concerned certifying that the right to drawback was reserved by the 
supplier or other parties with the knowledge and consent of the 
department, branch, agency, or instrumentality.
    (c) Bond. No bond shall be required when a United States Government 
entity claims drawback.



Sec. 191.5  Guantanamo Bay, insular possessions, trust territories.

    Guantanamo Bay Naval Station shall be considered foreign territory 
for drawback purposes and, accordingly, drawback may be permitted on 
articles shipped there. Under 19 U.S.C. 1313, drawback of Customs duty 
is not allowed on articles shipped to Puerto Rico, the U.S. Virgin 
Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef, 
Guam, Canton Island, Enderbury Island, Johnston Island, or Palmyra 
Island.



Sec. 191.6  Authority to sign drawback documents.

    (a) Documents listed in paragraph (b) of this section shall be 
signed only by one of the following:
    (1) The president, a vice-president, secretary, treasurer, or any 
other employee legally authorized to bind the corporation;
    (2) A full partner of a partnership;
    (3) The owner of a sole proprietorship;
    (4) Any employee of the business entity with a power of attorney;
    (5) An individual acting on his or her own behalf; or
    (6) A licensed Customs broker with a power of attorney.
    (b) The following documents require execution in accordance with 
paragraph (a) of this section:
    (1) Drawback entries;
    (2) Certificates of delivery;
    (3) Certificates of manufacture and delivery;
    (4) Notices of Intent to Export, Destroy, or Return Merchandise for 
Purposes of Drawback;
    (5) Certifications of exporters on bills of lading or evidence of 
exportation (see Sec. Sec. 191.28 and 191.82 of this part); and
    (6) Abstracts, schedules and extracts from monthly abstracts if not 
included as part of a drawback claim.
    (c) The following documents (see also part 177 of this chapter) may 
be executed by one of the persons described in paragraph (a) of this 
section or by any other individual legally authorized to bind the person 
(or entity) for whom the document is executed:
    (1) A letter of notification of intent to operate under a general 
manufacturing drawback ruling under Sec. 191.7 of this part;
    (2) An application for a specific manufacturing drawback ruling 
under Sec. 191.8 of this part;
    (3) A request for a nonbinding predetermination of commercial 
interchangeability under Sec. 191.32(c) of this part;
    (4) An application for waiver of prior notice under Sec. 191.91 of 
this part;
    (5) An application for approval of accelerated payment of drawback 
under Sec. 191.92 of this part; and
    (6) An application for certification in the Drawback Compliance 
Program under Sec. 191.193 of this part.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998; 63 
FR 27489, May 19, 1998]



Sec. 191.7  General manufacturing drawback ruling.

    (a) Purpose; eligibility. General manufacturing drawback rulings are 
designed to simplify drawback for certain common manufacturing 
operations but do not preclude or limit the use of applications for 
specific manufacturing drawback rulings (see Sec. 191.8). A 
manufacturer or producer engaged in an operation that falls within a 
published general manufacturing drawback ruling may submit a letter of 
notification of intent to operate under that general ruling. Where a 
separately-incorporated subsidiary of a parent corporation is engaged in 
manufacture or production for drawback, the subsidiary is

[[Page 530]]

the proper party to submit the letter of notification, and cannot 
operate under a letter of notification submitted by the parent 
corporation.
    (b) Procedures--(1) Publication. General manufacturing drawback 
rulings are contained in appendix A to this part. As deemed necessary by 
Customs, new general manufacturing drawback rulings will be issued as 
Treasury Decisions and added to the appendix thereafter.
    (2) Submission--(i) Where filed. Letters of notification of intent 
to operate under a general manufacturing drawback ruling shall be 
submitted to any drawback office where drawback entries will be filed 
and liquidated, provided that the general manufacturing drawback ruling 
will be followed without variation. If there is any variation in the 
general manufacturing drawback ruling, the manufacturer or producer 
shall apply for a specific manufacturing drawback ruling under Sec. 
191.8 of this subpart.
    (ii) Copies. Letters of notification of intent shall be submitted in 
duplicate unless claims are to be filed at more than one drawback 
office, in which case one additional copy of the letter of notification 
shall be filed for each additional office. Upon issuance of a letter of 
acknowledgment (paragraph (c)(1) of this section), the drawback office 
with which the letter of notification is submitted shall forward the 
additional copy to such additional office(s), with a copy of the letter 
of acknowledgment.
    (3) Information required. Each manufacturer or producer submitting a 
letter of notification of intent to operate under a general 
manufacturing drawback ruling under this section must provide the 
following specific detailed information:
    (i) Name and address of manufacturer or producer (if the 
manufacturer or producer is a separately-incorporated subsidiary of a 
corporation, the subsidiary corporation must submit a letter of 
notification in its own name);
    (ii) In the case of a business entity, the names of the persons 
listed in Sec. 191.6(a)(1) through (6) who will sign drawback 
documents;
    (iii) Locations of the factories which will operate under the letter 
of notification;
    (iv) Identity (by T.D. number and title) of the general 
manufacturing drawback ruling under which the manufacturer or producer 
will operate;
    (v) Description of the merchandise and articles, unless specifically 
described in the general manufacturing drawback ruling;
    (vi) Description of the manufacturing or production process, unless 
specifically described in the general manufacturing drawback ruling;
    (vii) Basis of claim used for calculating drawback; and
    (viii) IRS (Internal Revenue Service) number (with suffix) of the 
manufacturer or producer.
    (c) Review and action by CBP. The drawback office to which the 
letter of notification of intent to operate under a general 
manufacturing drawback ruling was submitted shall review the letter of 
notification of intent.
    (1) Acknowledgment. The drawback office shall promptly issue a 
letter of acknowledgment, acknowledging receipt of the letter of intent 
and authorizing the person to operate under the identified general 
manufacturing drawback ruling, subject to the requirements and 
conditions of that general manufacturing drawback ruling and the law and 
regulations, to the person who submitted the letter of notification if:
    (i) The letter of notification is complete (i.e., containing the 
information required in paragraph (b)(3) of this section);
    (ii) The general manufacturing drawback ruling identified by the 
manufacturer or producer is applicable to the manufacturing or 
production process;
    (iii) The general manufacturing drawback ruling identified by the 
manufacturer or producer is followed without variation; and
    (iv) The described manufacturing or production process is a 
manufacture or production under Sec. 191.2(q) of this subpart.
    (2) Computer-generated number. With the letter of acknowledgment the 
drawback office shall include the unique computer-generated number 
assigned to the acknowledgment of the

[[Page 531]]

letter of notification of intent to operate. This number must be stated 
when the person files manufacturing drawback claims with Customs under 
the general manufacturing drawback ruling.
    (3) Non-conforming letters of notification of intent. If the letter 
of notification of intent to operate does not meet the requirements of 
paragraph (c)(1) of this section in any respect, the drawback office 
shall promptly and in writing specifically advise the person of this 
fact and why this is so. A letter of notification of intent to operate 
which is not acknowledged may be resubmitted to the drawback office with 
which it was initially submitted with modifications and/or explanations 
addressing the reasons given for non-acknowledgment, or the matter may 
be referred (by letter from the manufacturer or producer) to CBP 
Headquarters (Attention: Entry Process and Duty Refunds Branch, 
Regulations and Rulings, Office of International Trade).
    (d) Duration. Acknowledged letters of notification under this 
section shall remain in effect under the same terms as provided for in 
Sec. 191.8(h) for specific manufacturing drawback rulings.



Sec. 191.8  Specific manufacturing drawback ruling.

    (a) Applicant. Unless operating under a general manufacturing 
drawback ruling (see Sec. 191.7), each manufacturer or producer of 
articles intended to be claimed for drawback shall apply for a specific 
manufacturing drawback ruling. Where a separately-incorporated 
subsidiary of a parent corporation is engaged in manufacture or 
production for drawback, the subsidiary is the proper party to apply for 
a specific manufacturing drawback ruling, and cannot operate under any 
specific manufacturing drawback ruling approved in favor of the parent 
corporation.
    (b) Sample application. Sample formats for applications for specific 
manufacturing drawback rulings are contained in appendix B to this part.
    (c) Content of application. The application of each manufacturer or 
producer shall include the following information as applicable:
    (1) Name and address of the applicant;
    (2) Internal Revenue Service (IRS) number (with suffix) of the 
applicant;
    (3) Description of the type of business in which engaged;
    (4) Description of the manufacturing or production process, which 
shows how the designated and substituted merchandise are used to make 
the article that is to be exported or destroyed;
    (5) In the case of a business entity, the names of persons listed in 
Sec. 191.6(a)(1) through (6) who will sign drawback documents;
    (6) Description of the imported merchandise including 
specifications;
    (7) Description of the exported article;
    (8) Basis of claim for calculating manufacturing drawback;
    (9) Summary of the records kept to support claims for drawback; and
    (10) Identity and address of the recordkeeper if other than the 
claimant.
    (d) Submission. An application for a specific manufacturing drawback 
ruling shall be submitted, in triplicate, to CBP Headquarters 
(Attention: Entry Process and Duty Refunds Branch, Regulations and 
Rulings, Office of International Trade). If drawback claims are to be 
filed under the ruling at more than one drawback office, one additional 
copy of the application shall be filed with CBP Headquarters for each 
additional office.
    (e) Review and action by CBP. CBP Headquarters shall review the 
application for a specific manufacturing drawback ruling.
    (1) Approval. If consistent with the drawback law and regulations, 
Customs Headquarters shall issue a letter of approval to the applicant 
and shall forward 1 copy of the application for the specific 
manufacturing drawback ruling to the appropriate drawback office(s) with 
a copy of the letter of approval. Synopses of approved specific 
manufacturing drawback rulings shall be published in the weekly Customs 
Bulletin with each synopsis being published under an identifying 
Treasury Decision (T.D.). Each specific manufacturing drawback ruling 
shall be assigned a unique computer-generated manufacturing number which 
shall be included in the letter of approval to the applicant from 
Customs Headquarters, shall appear in the published

[[Page 532]]

synopsis, and must be used when filing manufacturing drawback claims 
with Customs.
    (2) Disapproval. If not consistent with the drawback law and 
regulations, CBP Headquarters shall promptly and in writing inform the 
applicant that the application cannot be approved and shall specifically 
advise the applicant why this is so. A disapproved application may be 
resubmitted with modifications and/or explanations addressing the 
reasons given for disapproval, or the disapproval may be appealed to CBP 
Headquarters (Attention: Director, Entry Process and Duty Refunds 
Branch, Regulations and Rulings, Office of International Trade).
    (f) Schedules and supplemental schedules. When an application for a 
specific manufacturing drawback ruling states that drawback is to be 
based upon a schedule filed by the manufacturer or producer, the 
schedule will be reviewed by Customs Headquarters. The application may 
include a request for authorization for the filing of supplemental 
schedules with the drawback office where claims are filed.
    (g) Procedure to modify a specific manufacturing drawback ruling--
(1) Supplemental application. Except as provided for limited 
modifications in paragraph (g)(2) of this section, a manufacturer or 
producer desiring to modify an existing specific manufacturing drawback 
ruling shall submit a supplemental application for such a ruling to CBP 
Headquarters (Attention: Entry Process and Duty Refunds Branch, 
Regulations and Rulings, Office of International Trade). Such a 
supplemental application may, at the discretion of the manufacturer or 
producer, be in the form of the original application, or it may identify 
the specific manufacturing drawback ruling to be modified (by T.D. 
number and unique computer-generated number) and include only those 
paragraphs of the application to be modified, with a statement that all 
other paragraphs are unchanged and are incorporated by reference in the 
supplemental application.
    (2) Limited modifications. (i) A supplemental application for a 
specific manufacturing drawback ruling shall be submitted to the 
drawback office(s) where claims are filed if the modifications are 
limited to:
    (A) The location of a factory, or the addition of one or more 
factories where the methods followed and records maintained are the same 
as those at another factory operating under the existing specific 
manufacturing drawback ruling of the manufacturer or producer;
    (B) The succession of a sole proprietorship, partnership or 
corporation to the operations of a manufacturer or producer;
    (C) A change in name of the manufacturer or producer;
    (D) A change in the persons who will sign drawback documents in the 
case of a business entity;
    (E) A change in the basis of claim used for calculating drawback;
    (F) A change in the decision to use or not to use an agent under 
Sec. 191.9 of this chapter, or a change in the identity of an agent 
under that section;
    (G) A change in the drawback office where claims will be filed under 
the ruling (see paragraph (g)(2)(iii) of this section); or
    (H) Any combination of the foregoing changes.
    (ii) A limited modification, as provided for in this paragraph, 
shall contain only the modifications to be made, in addition to 
identifying the specific manufacturing drawback ruling and being signed 
by an authorized person. To effect a limited modification, the 
manufacturer or producer shall file with the drawback office(s) where 
claims are filed (with a copy to CBP Headquarters, Attention, Entry 
Process and Duty Refunds Branch, Regulations and Rulings, Office of 
International Trade) a letter stating the modifications to be made. The 
drawback office shall promptly acknowledge, in writing, acceptance of 
the limited modifications, with a copy to CBP Headquarters, Attention, 
Entry Process and Duty Refunds Branch, Regulations and Rulings Office of 
International Trade.
    (iii) To effect a change in the drawback office where claims will be 
filed, the manufacturer or producer shall file with the new drawback 
office where claims will be filed, a written application to file claims 
at that office, with

[[Page 533]]

a copy of the application and approval letter under which claims are 
currently filed. The manufacturer or producer shall provide a copy of 
the written application to file claims at the new drawback office to the 
drawback office where claims are currently filed.
    (h) Duration. Subject to 19 U.S.C. 1625 and part 177 of this 
chapter, a specific manufacturing drawback ruling under this section 
shall remain in effect indefinitely unless:
    (1) No drawback claim or certificate of manufacture and delivery is 
filed under the ruling for a period of 5 years and notice of termination 
is published in the Customs Bulletin; or
    (2) The manufacturer or producer to whom approval of the ruling was 
issued files a request to terminate the ruling, in writing, with Customs 
Headquarters.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.9  Agency.

    (a) General. An owner of the identified merchandise, the designated 
imported merchandise and/or the substituted other merchandise that is 
used to produce the exported articles may employ another person to do 
part, or all, of the manufacture or production under 19 U.S.C. 1313(a) 
or (b) and Sec. 191.2(q) of this subpart. For purposes of this section, 
such owner is the principal and such other person is the agent. Under 19 
U.S.C. 1313(b), the principal shall be treated as the manufacturer or 
producer of merchandise used in manufacture or production by the agent. 
The principal must be able to establish by its manufacturing records, 
the manufacturing records of its agent(s), or the manufacturing records 
of both (or all) parties, compliance with all requirements of this part 
(see, in particular, Sec. 191.26 of this part).
    (b) Requirements--(1) Contract. The manufacturer must establish that 
it is the principal in a contract between it and its agent who actually 
does the work on either the designated or substituted merchandise, or 
both, for the principal. The contract must include:
    (i) Terms of compensation to show that the relationship is an agency 
rather than a sale;
    (ii) How transfers of merchandise and articles will be recorded by 
the principal and its agent;
    (iii) The work to be performed on the merchandise by the agent for 
the principal;
    (iv) The degree of control that is to be exercised by the principal 
over the agent's performance of work;
    (v) The party who is to bear the risk of loss on the merchandise 
while it is in the agent's custody; and
    (vi) The period that the contract is in effect.
    (2) Ownership of the merchandise by the principal. The records of 
the principal and/or the agent must establish that the principal had 
legal and equitable title to the merchandise before receipt by the 
agent. The right of the agent to assert a lien on the merchandise for 
work performed does not derogate the principal's ownership interest 
under this section.
    (3) Sales prohibited. The relationship between the principal and 
agent must not be that of a seller and buyer. If the parties' records 
show that, with respect to the merchandise that is the subject of the 
principal-agent contract, the merchandise is sold to the agent by the 
principal, or the articles manufactured by the agent are sold to the 
principal by the agent, those records are inadequate to establish 
existence of a principal-agency relationship under this section.
    (c) Specific manufacturing drawback rulings; general manufacturing 
drawback rulings--(1) Owner. An owner who intends to operate under the 
principal-agent procedures of this section must state that intent in any 
letter of notification of intent to operate under a general 
manufacturing drawback ruling filed under Sec. 191.7 of this subpart or 
in any application for a specific manufacturing drawback ruling filed 
under Sec. 191.8 of this subpart.
    (2) Agent. Each agent operating under this section must have filed a 
letter of notification of intent to operate under a general 
manufacturing drawback ruling (see Sec. 191.7), for an agent, covering 
the articles manufactured or produced, or have obtained a specific 
manufacturing drawback ruling (see Sec. 191.8), as appropriate.

[[Page 534]]

    (d) Certificate; Drawback entry; Certificate of manufacture and 
delivery--(1) Contents of certificate; when filing not required. 
Principals and agents operating under this section are not required to 
file a certificate of delivery (for the merchandise transferred from the 
principal to the agent) or a certificate of manufacture and delivery 
(for the articles transferred from the agent to the principal). The 
principal for whom processing is conducted under this section shall 
file, with any drawback claim or certificate of manufacture and delivery 
based on an article manufactured or produced under the principal-agent 
procedures in this section, a certificate, subject to the recordkeeping 
requirements of Sec. Sec. 191.15 of this subpart and 191.26 of this 
part, certifying that upon request by Customs it can establish the 
following:
    (i) Quantity, kind and quality of merchandise transferred from the 
principal to the agent;
    (ii) Date of transfer of the merchandise from the principal to the 
agent;
    (iii) Date of manufacturing or production operations performed by 
the agent;
    (iv) Total quantity and description of merchandise appearing in or 
used in manufacturing or production operations performed by the agent;
    (v) Total quantity and description of articles produced in 
manufacturing or production operations performed by the agent;
    (vi) Quantity, kind and quality of articles transferred from the 
agent to the principal; and
    (vii) Date of transfer of the articles from the agent to the 
principal.
    (2) Blanket certificate. The certificate required under paragraph 
(d)(1) of this section may be a blanket certificate for a particular 
kind and quality of merchandise for a stated period.



Sec. 191.10  Certificate of delivery.

    (a) Purpose; when required. A party who: imports and pays duty on 
imported merchandise; receives imported merchandise; in the case of 19 
U.S.C. 1313(j)(2), receives imported merchandise, commercially 
interchangeable merchandise, or any combination of imported and 
commercially interchangeable merchandise; or receives an article 
manufactured or produced under 19 U.S.C. 1313(a) and/or (b): may 
transfer such merchandise or manufactured article to another party. The 
party shall record this transfer by preparing and issuing in favor of 
such other party a certificate of delivery, certified by the importer or 
other party through whose possession the merchandise or manufactured 
article passed (see paragraph (c) of this section). A certificate of 
delivery issued with respect to the delivered merchandise or article:
    (1) Documents the transfer of that merchandise or article;
    (2) Identifies such merchandise or article as being that to which a 
potential right to drawback exists; and
    (3) Assigns such right to the transferee (see Sec. 191.82 of this 
part).
    (b) Required information. The certificate of delivery must include 
the following information:
    (1) The party to whom the merchandise or articles are delivered;
    (2) Date of delivery;
    (3) Import entry number;
    (4) Quantity delivered;
    (5) Total duty paid on, or attributable to, the delivered 
merchandise;
    (6) Date certificate was issued;
    (7) Date of importation;
    (8) Port where import entry filed;
    (9) Person from whom received;
    (10) Description of the merchandise delivered;
    (11) The HTSUS number with a minimum of 6 digits, for the designated 
imported merchandise (such HTSUS number shall be from the entry summary 
and other entry documentation for the merchandise unless the issuer of 
the certificate of delivery received the merchandise under another 
certificate of delivery, or a certificate of manufacture and delivery, 
in which case such HTSUS number shall be from the other certificate); 
and
    (12) If the merchandise transferred is substituted for the 
designated imported merchandise under 19 U.S.C. 1313(j)(2), the HTSUS or 
Schedule B commodity number, with a minimum of 6 digits.
    (c) Intermediate transfer--(1) Imported merchandise. If the imported 
merchandise was not delivered directly from the importer to the 
manufacturer, or

[[Page 535]]

from the importer to the exporter (or destroyer), each intermediate 
transfer of the imported merchandise shall be documented by means of a 
certificate of delivery issued in favor of the receiving party, and 
certified by the person through whose possession the merchandise passed.
    (2) Manufactured article. If the article manufactured or produced 
under 19 U.S.C. 1313 (a) or (b) is not delivered directly from the 
manufacturer to the exporter (or destroyer), each transfer after the 
transfer from the manufacturer (which shall be documented by means of a 
certificate of manufacture and delivery) shall be documented by means of 
a certificate of delivery, issued in favor of the receiving party, and 
certified by the person through whose possession the article passed.
    (d) Retention period; supporting records. Records supporting the 
information required on the certificate(s) of delivery, as listed in 
paragraph (b) of this section, must be retained by the issuing party for 
3 years from the date of payment of the related claim or longer period 
if required by law (see 19 U.S.C. 1508(c)(3)).
    (e) Retention; submission to Customs. The certificate of delivery 
shall be retained by the party to whom the merchandise or article 
covered by the certificate was delivered. Customs may request the 
certificate from the claimant for the drawback claim based upon the 
certificate (see Sec. Sec. 191.51, 191.52). If the certificate is 
requested by Customs, but is not provided by the claimant, the part of 
the drawback claim dependent on that certificate will be denied.
    (f) Warehouse transfer and withdrawals. The person in whose name 
merchandise is withdrawn from a bonded warehouse shall be considered the 
importer for drawback purposes. No certificate of delivery is required 
covering prior transfers of merchandise while in a bonded warehouse.



Sec. 191.11  Tradeoff.

    (a) Exchanged merchandise. To comply with Sec. Sec. 191.21 and 
191.22 of this part, the use of domestic merchandise taken in exchange 
for imported merchandise of the same kind and quality (as defined in 
Sec. 191.2(x)(1) of this part for purposes of 19 U.S.C. 1313(b)) shall 
be treated as use of the imported merchandise if no certificate of 
delivery is issued covering the transfer of the imported merchandise. 
This provision shall be known as tradeoff and is authorized by Sec. 
313(k) of the Act, as amended (19 U.S.C. 1313(k)).
    (b) Requirements. Tradeoff must occur between two separate legal 
entities but it is not necessary that the entity exchanging the imported 
merchandise be the importer thereof. In addition, tradeoff must consist 
of an exchange of same kind and quality merchandise and nothing else 
(the exchange may be of different quantities of same kind and quality 
merchandise, but may not involve the payment or receipt of cash payments 
or other than same kind and quality merchandise). If the quantities of 
merchandise exchanged are different, the lesser quantity shall be the 
quantity available for drawback. If the quantity of domestic merchandise 
received is greater than the quantity of imported merchandise exchanged, 
the merchandise identified for drawback shall be the portion of the 
domestic merchandise equal to the quantity of imported merchandise which 
is first received.
    (c) Application. Each would-be user of tradeoff, except those 
operating under an approved specific manufacturing drawback ruling 
covering substitution, must apply to the Entry Process and Duty Refunds 
Branch, Regulations and Rulings, Office of International Trade, CBP 
Headquarters, for a determination of whether the imported and domestic 
merchandise are of the same kind and quality. For those users 
manufacturing under substitution drawback, this request should be 
contained in the application for a specific manufacturing drawback 
ruling (Sec. 191.8). For those users manufacturing under a general 
manufacturing drawback ruling (Sec. 191.7), the request should be made 
by a separate letter.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.12  Claim filed under incorrect provision.

    A drawback claim filed pursuant to any provision of Sec. 313 of the 
Act, as amended (19 U.S.C. 1313) may be deemed filed pursuant to any 
other

[[Page 536]]

provision thereof should the drawback office determine that drawback is 
not allowable under the provision as originally filed, but that it is 
allowable under such other provision. To be allowable under such other 
provision, the claim must meet each of the requirements of such 
provision. The claimant may raise alternative provisions prior to 
liquidation or by protest.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.13  Packaging materials.

    (a) Imported packaging material. Drawback of duties is provided in 
Sec. 313(q)(1) of the Act, as amended (19 U.S.C. 1313(q)(1)), on 
imported packaging material when used to package or repackage 
merchandise or articles exported or destroyed pursuant to Sec. 313(a), 
(b), (c), or (j) of the Act, as amended (19 U.S.C. 1313(a), (b), (c), or 
(j)). Drawback is payable on the packaging material pursuant to the 
particular drawback provision to which the packaged goods themselves are 
subject. The drawback will be based on the duty, tax or fee paid on the 
importation of the packaging material. The packaging material must be 
separately identified on the claim, and all other information and 
documents required for the particular drawback provision under which the 
claim is made shall be provided for the packaging material.
    (b) Packaging material manufactured in United States from imported 
materials. Drawback of duties is provided in Sec. 313(q)(2) of the Act, 
as amended (19 U.S.C. 1313(q)(2)), on packaging material that is 
manufactured or produced in the United States from imported materials 
and used to package or repackage articles that are exported or destroyed 
under Sec. 313(a) or (b) of the Act, as amended (19 U.S.C. 1313(a) or 
(b)). Drawback is payable on the packaging material under the particular 
manufacturing drawback provision to which the packaged articles 
themselves are subject, either 19 U.S.C. 1313(a) or (b), as applicable. 
The drawback will be based on the duty, tax, or fee that is paid on the 
imported merchandise used to manufacture or produce the packaging 
material. The packaging material and the imported merchandise used in 
its manufacture or production must be separately identified on the 
claim, and all other information and documents required for the 
particular drawback provision under which the claim is made must be 
provided for the packaging material as well as the imported merchandise 
used in its manufacture or production, for purposes of determining the 
applicable drawback payable.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 
16637, Apr. 8, 2002]



Sec. 191.14  Identification of merchandise or articles by accounting method.

    (a) General. This section provides for the identification of 
merchandise or articles for drawback purposes by the use of accounting 
methods. This section applies to identification of merchandise or 
articles in inventory or storage, as well as identification of 
merchandise used in manufacture or production (see Sec. 191.2(h) of 
this subpart). This section is not applicable to situations in which the 
drawback law authorizes substitution (substitution is allowed in 
specified situations under 19 U.S.C. 1313(b), 1313(j)(2), 1313(k), and 
1313(p); this section does apply to situations in these subsections in 
which substitution is not allowed, as well as to the subsections of the 
drawback law under which no substitution is allowed). When substitution 
is authorized, merchandise or articles may be substituted without 
reference to this section, under the criteria and conditions 
specifically authorized in the statutory and regulatory provisions 
providing for the substitution.
    (b) Conditions and criteria for identification by accounting method. 
Manufacturers, producers, claimants, or other appropriate persons may 
identify for drawback purposes lots of merchandise or articles under 
this section, subject to each of the following conditions and criteria:
    (1) The lots of merchandise or articles to be so identified must be 
fungible (see Sec. 191.2(o) of this part);
    (2) The person using the identification method must be able to 
establish that inventory records (for example, material control 
records), prepared and used in the ordinary course of business, account 
for the lots of merchandise or

[[Page 537]]

articles to be identified as being received into and withdrawn from the 
same inventory. Even if merchandise or articles are received or 
withdrawn at different geographical locations, if such inventory records 
treat receipts or withdrawals as being from the same inventory, those 
inventory records may be used to identify the merchandise or articles 
under this section, subject to the conditions of this section. If any 
such inventory records (that is, inventory records prepared and used in 
the ordinary course of business) treat receipts and withdrawals as being 
from different inventories, those inventory records must be used and 
receipts into or withdrawals from the different inventories may not be 
accounted for together. If units of merchandise or articles can be 
specifically identified (for example, by serial number), the merchandise 
or articles must be specifically identified and may not be identified by 
accounting method, unless it is established that inventory records, 
prepared and used in the ordinary course of business, treat the 
merchandise or articles to be identified as being received into and 
withdrawn from the same inventory (subject to the above conditions);
    (3) Unless otherwise provided in this section or specifically 
approved by Customs (by a binding ruling under part 177 of this 
chapter), all receipts (or inputs) into and all withdrawals from the 
inventory must be recorded in the accounting record;
    (4) The records which support any identification method under this 
section are subject to verification by Customs (see Sec. 191.61 of this 
part). If Customs requests such verification, the person using the 
identification method must be able to demonstrate how, under generally 
accepted accounting procedures, the records which support the 
identification method used account for all merchandise or articles in, 
and all receipts into and withdrawals from, the inventory, and the 
drawback per unit for each receipt and withdrawal; and
    (5) Any accounting method which is used by a person for drawback 
purposes under this section must be used without variation with other 
methods for a period of at least one year, unless approval is given by 
Customs for a shorter period.
    (c) Approved accounting methods. The following accounting methods 
are approved for use in the identification of merchandise or articles 
for drawback purposes under this section.
    (1) First-in, first-out (FIFO)--(i) General. The FIFO method is the 
method by which fungible merchandise or articles are identified by 
recordkeeping on the basis of the first merchandise or articles received 
into the inventory. Under this method, withdrawals are from the oldest 
(first-in) merchandise or articles in the inventory at the time of 
withdrawal.
    (ii) Example. If the beginning inventory is zero, 100 units with $1 
drawback attributable per unit are received in inventory on the 2nd of 
the month, 50 units with no drawback attributable per unit are received 
into inventory on the 5th of the month, 75 units are withdrawn for 
domestic (non-export) shipment on the 10th of the month, 75 units with 
$2 drawback attributable per unit are received in inventory on the 15th 
of the month, 100 units are withdrawn for export on the 20th of the 
month, and no other receipts or withdrawals occurred in the month, the 
drawback attributable to the 100 units withdrawn for export on the 20th 
is a total of $75 (25 units from the receipt on the 2nd with $1 drawback 
attributable per unit, 50 units from the receipt on the 5th with no 
drawback attributable per unit, and 25 units from the receipt on the 
15th with $2 drawback attributable per unit). The basis of the foregoing 
and the effects on the inventory of the receipts and withdrawals, and 
balance in the inventory thereafter are as follows: On the 2nd of the 
month the receipt of 100 units ($1 drawback/unit) results in a balance 
of that amount; the receipt of 50 units ($0 drawback/unit) on the 5th 
results in a balance of 150 units (100 with $1 drawback/unit and 50 with 
$0 drawback/unit); the withdrawal on the 10th of 75 units ($1 drawback/
unit) results in a balance of 75 units (25 with $1 drawback/unit and 50 
with $0 drawback/unit); the receipt of 75 units ($2 drawback/unit) on 
the 15th results in a balance of 150 units (25 with $1 drawback/unit, 50 
with $0 drawback/unit, and 75 with $2 drawback/unit); the withdrawal

[[Page 538]]

on the 20th of 100 units (25 with $1 drawback/unit, 50 with $0 drawback/
unit, and 25 with $2 drawback unit) results in a balance of 50 units 
(all 50 with $2 drawback/unit).
    (2) Last-in, first out (LIFO)--(i) General. The LIFO method is the 
method by which fungible merchandise or articles are identified by 
recordkeeping on the basis of the last merchandise or articles received 
into the inventory. Under this method, withdrawals are from the newest 
(last-in) merchandise or articles in the inventory at the time of 
withdrawal.
    (ii) Example. In the example in paragraph (c)(1)(ii) of this 
section, the drawback attributable to the 100 units withdrawn for export 
on the 20th is a total of $175 (75 units from the receipt on the 15th 
with $2 drawback attributable per unit and 25 units from the receipt on 
the 2nd with $1 drawback attributable per unit). The basis of the 
foregoing and the effects on the inventory of the receipts and 
withdrawals, and balance in the inventory thereafter are as follows: On 
the 2nd of the month the receipt of 100 units ($1 drawback/unit) results 
in a balance of that amount; the receipt of 50 units ($0 drawback/unit) 
on the 5th results in a balance of 150 units (100 with $1 drawback/unit 
and 50 with $0 drawback/unit); the withdrawal on the 10th of 75 units 
(50 with $0 drawback/unit and 25 with $1 drawback/unit) results in a 
balance of 75 units (all with $1 drawback/unit); the receipt of 75 units 
($2 drawback/unit) on the 15th results in a balance of 150 units (75 
with $1 drawback/unit and 75 with $2 drawback/unit); the withdrawal on 
the 20th of 100 units (75 with $2 drawback/unit and 25 with $1 drawback/
unit) results in a balance of 50 units (all 50 with $1 drawback/unit).
    (3) Low-to-high--(i) General. The low-to-high method is the method 
by which fungible merchandise or articles are identified by 
recordkeeping on the basis of the lowest drawback amount per unit of the 
merchandise or articles in inventory. Merchandise or articles with no 
drawback attributable to them (for example, domestic merchandise or 
duty-free merchandise) must be accounted for and are treated as having 
the lowest drawback attributable to them. Under this method, withdrawals 
are from the merchandise or articles with the least amount of drawback 
attributable to them, then those with the next higher amount, and so 
forth. If the same amount of drawback is attributable to more than one 
lot of merchandise or articles, withdrawals are from the oldest (first-
in) merchandise or articles among those lots with the same amount of 
drawback attributable. Drawback requirements are applicable to withdrawn 
merchandise or articles as identified (for example, if the merchandise 
or articles identified were attributable to an import more than 5 years 
(more than 3 years for unused merchandise drawback) before the claimed 
export, no drawback could be granted).
    (ii) Ordinary--(A) Method. Under the ordinary low-to-high method, 
all receipts into and all withdrawals from the inventory are recorded in 
the accounting record and accounted for so that each withdrawal, whether 
for export or domestic shipment, is identified by recordkeeping on the 
basis of the lowest drawback amount per unit of the merchandise or 
articles available in the inventory.
    (B) Example. In this example, the beginning inventory is zero, and 
receipts into and withdrawals from the inventory are as follows:

------------------------------------------------------------------------
                                 Receipt  ($ per
             Date                     unit)             Withdrawals
------------------------------------------------------------------------
Jan. 2........................  100 (zero).......
Jan. 5........................  50 ($1.00).......
Jan. 15.......................  .................  50 (export).
Jan. 20.......................  50 ($1.01).......
Jan. 25.......................  50 ($1.02).......
Jan. 28.......................  .................  50 (domestic).
Jan. 31.......................  50 ($1.03).......
Feb. 5........................  .................  100 (export).
Feb. 10.......................  50 ($.95)........
Feb. 15.......................  .................  50 (export).
Feb. 20.......................  50 (zero)........
Feb. 23.......................  .................  50 (domestic).
Feb. 25.......................  50 ($1.05).......
Feb. 28.......................  .................  100 (export).
Mar. 5........................  50 ($1.06).......
Mar. 10.......................  50 ($.85)........
Mar. 15.......................  .................  50 (export).
Mar. 21.......................  .................  50 (domestic).
Mar. 20.......................  50 ($1.08).......
Mar. 25.......................  50 ($.90)........
Mar. 31.......................  .................  100 (export).
------------------------------------------------------------------------

    The drawback attributable to the January 15 withdrawal for export is 
zero (the available receipt with the lowest drawback amount per unit is 
the January 2 receipt), the drawback

[[Page 539]]

attributable to the January 28 withdrawal for domestic shipment (no 
drawback) is zero (the remainder of the January 2 receipt), the drawback 
attributable to the February 5 withdrawal for export is $100.50 (the 
January 5 and January 20 receipts), the drawback attributable to the 
February 15 withdrawal for export is $47.50 (the February 10 receipt), 
the drawback attributable to the February 23 withdrawal for domestic 
shipment (no drawback) is zero (the February 20 receipt), the drawback 
attributable to the February 28 withdrawal for export is $102.50 (the 
January 25 and January 31 receipts), the drawback attributable to the 
March 15 withdrawal for export is $42.50 (the March 10 receipt), the 
drawback attributable to the March 21 withdrawal for domestic shipment 
(no drawback) is $52.50 (the February 25 receipt), and the drawback 
attributable to the March 31 withdrawal for export is $98.00 (the March 
25 and March 5 receipts). Remaining in inventory is the March 20 receipt 
of 50 units ($1.08 drawback/unit). Total drawback attributable to 
withdrawals for export in this example would be $391.00.
    (iii) Low-to-high method with established average inventory turn-
over period--(A) Method. Under the low-to-high method with established 
average inventory turn-over period, all receipts into and all 
withdrawals for export are recorded in the accounting record and 
accounted for so that each withdrawal is identified by recordkeeping on 
the basis of the lowest drawback amount per available unit of the 
merchandise or articles received into the inventory in the established 
average inventory turn-over period preceding the withdrawal.
    (B) Accounting for withdrawals (for domestic shipments and for 
export). Under this method, domestic withdrawals (withdrawals for 
domestic shipment) are not accounted for and do not affect the available 
units of merchandise or articles. All withdrawals for export must be 
accounted for whether or not drawback is available or claimed on the 
withdrawals. Once a withdrawal for export is made and accounted for 
under this method, the merchandise or articles withdrawn are no longer 
available for identification.
    (C) Establishment of inventory turn-over period. For purposes of 
this section, average inventory turn-over period is based on the rate of 
withdrawal from inventory and represents the time in which all of the 
merchandise or articles in the inventory at a given time must have been 
withdrawn. To establish an average of this time, at least 1 year, or 
three (3) turn-over periods (if inventory turns over less than 3 times 
per year), must be averaged. The inventory turn-over period must be that 
for the merchandise or articles to be identified, except that if the 
person using the method has more than one kind of merchandise or 
articles with different inventory turn-over periods, the longest average 
turn-over period established under this section may be used (instead of 
using a different inventory turn-over period for each kind of 
merchandise or article).
    (D) Example. In the example in paragraph (c)(3)(ii)(B) of this 
section (but, as required for this method, without accounting for 
domestic withdrawals, and with an established average inventory turn-
over period of 30 days), the drawback attributable to the January 15 
withdrawal for export is zero (the available receipt in the preceding 30 
days with the lowest amount of drawback is the January 2 receipt, of 
which 50 units will remain after the withdrawal), the drawback 
attributable to the February 5 withdrawal for export is $101.50 (the 
January 20 and January 25 receipts), the drawback attributable to the 
February 15 withdrawal for export is $47.50 (the February 10 receipt), 
the drawback attributable to the February 28 withdrawal for export is 
$51.50 (the February 20 and January 31 receipts), the drawback 
attributable to the March 15 withdrawal for export is $42.50 (the March 
10 receipt), and the drawback attributable to the March 31 withdrawal 
for export is $98.00 (the March 25 and March 5 receipts). No drawback 
may be claimed on the basis of the January 5 receipt or the February 25 
receipt because in the case of each, there were insufficient withdrawals 
for export within the established average inventory turn-over period; 
the 50 units remaining from the January 2 receipt after the January 15 
withdrawal are

[[Page 540]]

not identified for a withdrawal for export because there is no other 
withdrawal for export (other than the January 15 withdrawal) within the 
established average inventory turn-over period; the March 20 receipt (50 
units at $1.08) is not yet attributed to withdrawals for export. Total 
drawback attributable to withdrawals for export in this example would be 
$341.00.
    (iv) Low-to-high blanket method--(A) Method. Under the low-to-high 
blanket method, all receipts into and all withdrawals for export are 
recorded in the accounting record and accounted for so that each 
withdrawal is identified by recordkeeping on the basis of the lowest 
drawback amount per available unit of the merchandise or articles 
received into inventory in the period preceding the withdrawal equal to 
the statutory period for export under the kind of drawback involved 
(e.g., 180 days under 19 U.S.C. 1313(p), 3 years under 19 U.S.C. 1313(c) 
and 1313(j), and 5 years otherwise under 19 U.S.C. 1313(i)). Drawback 
requirements are applicable to withdrawn merchandise or articles as 
identified (for example, if the merchandise or articles identified were 
attributable to an import more than 5 years (more than 3 years for 19 
U.S.C. 1313(j); more than 180 days after the date of import or after the 
close of the manufacturing period for 19 U.S.C. 1313(p)) before the 
claimed export, no drawback could be granted).
    (B) Accounting for withdrawals (for domestic shipments and for 
export). Under this method, domestic withdrawals (withdrawals for 
domestic shipment) are not accounted for and do not affect the available 
units of merchandise or articles. All withdrawals for export must be 
accounted for whether or not drawback is available or claimed on the 
withdrawals. Once a withdrawal for export is made and accounted for 
under this method, the merchandise or articles withdrawn are no longer 
available for identification.
    (C) Example. In the example in paragraph (c)(3)(ii)(B) of this 
section (but, as required for this method, without accounting for 
domestic withdrawals), the drawback attributable to the January 15 
withdrawal for export is zero (the available receipt in the inventory 
with the lowest amount of drawback is the January 2 receipt, of which 50 
units will remain after the withdrawal), the drawback attributable to 
the February 5 withdrawal for export is $50.00 (the remainder of the 
January 2 receipt and the January 5 receipt), the drawback attributable 
to the February 15 withdrawal for export is $47.50 (the February 10 
receipt), the drawback attributable to the February 28 withdrawal for 
export is $50.50 (the February 20 and January 20 receipts), the drawback 
attributable to the March 15 withdrawal for export is $42.50 (the March 
10 receipt), and the drawback attributable to the March 31 withdrawal 
for export is $96.00 (the March 25 and January 25 receipts). Receipts 
not attributed to withdrawals for export are the January 31 (50 units at 
$1.03), February 25 (50 units at $1.05), March 5 (50 units at $1.06), 
and March 20 (50 units at $1.08) receipts. Total drawback attributable 
to withdrawals for export in this example would be $286.50.
    (4) Average--(i) General. The average method is the method by which 
fungible merchandise or articles are identified on the basis of the 
calculation by recordkeeping of the amount of drawback that may be 
attributed to each unit of merchandise or articles in the inventory. In 
this method, the ratio of:
    (A) The total units of a particular receipt of the fungible 
merchandise in the inventory at the time of a withdrawal to;
    (B) The total units of all receipts of the fungible merchandise 
(including each receipt into inventory) at the time of the withdrawal;
    (C) Is applied to the withdrawal, so that the withdrawal consists of 
a proportionate quantity of units from each particular receipt and each 
receipt is correspondingly decreased. Withdrawals and corresponding 
decreases to receipts are rounded to the nearest whole number.
    (ii) Example. In the example in paragraph (c)(1)(ii) of this 
section, the drawback attributable to the 100 units withdrawn for export 
on the 20th is a total of $133 (50 units from the receipt on the 15th 
with $2 drawback attributable per unit, 33 units from the receipt on the 
2nd with $1 drawback attributable per unit, and 17 units from the 
receipt on the 5th with $0 drawback

[[Page 541]]

attributable per unit). The basis of the foregoing and the effects on 
the inventory of the receipts and withdrawals, and balance in the 
inventory thereafter are as follows: On the 2nd of the month the receipt 
of 100 units ($1 drawback/unit) results in a balance of that amount; the 
receipt of 50 units ($0 drawback/unit) on the 5th results in a balance 
of 150 units (100 with $1 drawback/unit and 50 with $0 drawback/unit); 
the withdrawal on the 10th of 75 units (50 with $1 drawback/unit 
(applying the ratio of 100 units from the receipt on the 2nd to the 
total of 150 units at the time of withdrawal) and 25 with $0 drawback/
unit (applying the ratio of 50 units from the receipt on the 5th to the 
total of 150 units at the time of withdrawal)) results in a balance of 
75 units (with 50 with $1 drawback/unit and 25 with $0 drawback/unit, on 
the basis of the same ratios); the receipt of 75 units ($2 drawback/
unit) on the 15th results in a balance of 150 units (50 with $1 
drawback/unit, 25 with $0 drawback/unit, and 75 with $2 drawback/unit); 
the withdrawal on the 20th of 100 units (50 with $2 drawback/unit 
(applying the ratio of the 75 units from the receipt on the 15th to the 
total of 150 units at the time of withdrawal), 33 with $1 drawback/unit 
(applying the ratio of the 50 units remaining from the receipt on the 
2nd to the total of 150 units at the time of withdrawal, and 17 with $0 
drawback/unit (applying the ratio of the 25 units remaining from the 
receipt on the 5th to the total of 150 units at the time of withdrawal)) 
results in a balance of 50 units (25 with $2 drawback/unit, 17 with $1 
drawback/unit, and 8 with $0 drawback/unit, on the basis of the same 
ratios).
    (5) Inventory turn-over for limited purposes. A properly established 
average inventory turn-over period, as provided for in paragraph 
(c)(3)(iii)(C) of this section, may be used to determine:
    (i) The fact and date(s) of use in manufacture or production of the 
imported designated merchandise and other (substituted) merchandise (see 
19 U.S.C. 1313(b)); or
    (ii) The fact and date(s) of manufacture or production of the 
finished articles (see 19 U.S.C. 1313(a) and (b)).
    (d) Approval of other accounting methods. (1) Persons proposing to 
use an accounting method for identification of merchandise or articles 
for drawback purposes which has not been previously approved for such 
use (see paragraph (c) of this section), or which includes modifications 
from the methods listed in paragraph (c) of this section, may seek 
approval by Customs of the proposed accounting method under the 
provisions for obtaining an administrative ruling (see part 177 of this 
chapter). The conditions applied and the criteria used by Customs in 
approving such an alternative accounting method, or a modification of 
one of the approved accounting methods, will be the criteria in 
paragraph (b) of this section, as well as those in paragraph (d)(2) of 
this section.
    (2) In order for a proposed accounting method to be approved by 
Customs for purposes of this section, it shall meet the following 
criteria:
    (i) For purposes of calculations of drawback, the proposed 
accounting method must be either revenue neutral or favorable to the 
Government; and
    (ii) The proposed accounting method should be:
    (A) Generally consistent with commercial accounting procedures, as 
applicable for purposes of drawback;
    (B) Consistent with inventory or material control records used in 
the ordinary course of business by the person proposing the method; and
    (C) Easily administered by both Customs and the person proposing the 
method.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998; 63 
FR 27489, May 19, 1998]



Sec. 191.15  Recordkeeping.

    Pursuant to 19 U.S.C. 1508(c)(3), all records which pertain to the 
filing of a drawback claim or to the information contained in the 
records required by 19 U.S.C. 1313 in connection with the filing of a 
drawback claim shall be retained for 3 years after payment of such 
claims or longer period if required by law (under 19 U.S.C. 1508, the 
same records may be subject to a different period for different 
purposes).

[[Page 542]]



                    Subpart B_Manufacturing Drawback



Sec. 191.21  Direct identification drawback.

    Section 313(a) of the Act, as amended (19 U.S.C. 1313(a)), provides 
for drawback upon the exportation, or destruction under Customs 
supervision, of articles which are not used in the United States prior 
to their exportation or destruction, and which are manufactured or 
produced in the United States wholly or in part with the use of 
particular imported, duty-paid merchandise and/or drawback product(s). 
Where two or more products result, drawback shall be distributed among 
the products in accordance with their relative value (see Sec. 
191.2(u)) at the time of separation. Merchandise may be identified for 
drawback purposes under 19 U.S.C. 1313(a) in the manner provided for and 
prescribed in Sec. 191.14 of this part.



Sec. 191.22  Substitution drawback.

    (a) General. If imported, duty-paid, merchandise and any other 
merchandise (whether imported or domestic) of the same kind and quality 
are used in the manufacture or production of articles within a period 
not to exceed 3 years from the receipt of the imported merchandise by 
the manufacturer or producer of the articles, then upon the exportation, 
or destruction under Customs supervision, of any such articles, without 
their having been used in the United States prior to such exportation or 
destruction, drawback is provided for in Sec. 313(b) of the Act, as 
amended (19 U.S.C. 1313(b)), even though none of the imported, duty-paid 
merchandise may have been used in the manufacture or production of the 
exported or destroyed articles. The amount of drawback allowable cannot 
exceed that which would have been allowable had the merchandise used 
therein been the imported, duty-paid merchandise.
    (b) Use by same manufacturer or producer at different factory. Duty-
paid merchandise or drawback products used at one factory of a 
manufacturer or producer within 3 years after the date on which the 
material was received by the manufacturer or producer may be designated 
as the basis for drawback on articles manufactured or produced in 
accordance with these regulations at other factories of the same 
manufacturer or producer.
    (c) Designation. A manufacturer or producer may designate any 
eligible imported merchandise or drawback product which it has used in 
manufacture or production.
    (d) Designation by successor; 19 U.S.C. 1313(s)--(1) General rule. 
Upon compliance with the requirements in this section and under 19 
U.S.C. 1313(s), a drawback successor as defined in paragraph (d)(2) of 
this section may designate merchandise or drawback product used by a 
predecessor before the date of succession as the basis for drawback on 
articles manufactured or produced by the successor after the date of 
succession.
    (2) Drawback successor. A ``drawback successor'' is a manufacturer 
or producer to whom another entity (predecessor) has transferred, by 
written agreement, merger, or corporate resolution:
    (i) All or substantially all of the rights, privileges, immunities, 
powers, duties, and liabilities of the predecessor; or
    (ii) The assets and other business interests of a division, plant, 
or other business unit of such predecessor, provided that the value of 
the transferred assets and interests (realty, personalty, and 
intangibles, exclusive of the drawback rights) exceeds the value of such 
drawback rights, whether vested or contingent.
    (3) Certifications and required evidence--(i) Records of 
predecessor. The predecessor or successor must certify that the 
successor is in possession of the predecessor's records which are 
necessary to establish the right to drawback under the law and 
regulations with respect to the merchandise or drawback product.
    (ii) Merchandise not otherwise designated. The predecessor or 
successor must certify in an attachment to the claim, that the 
predecessor has not designated and will not designate, nor enable any 
other person to designate, such merchandise or product as the basis for 
drawback.
    (iii) Value of transferred property. In instances in which assets 
and other business interests of a division, plant, or other business 
unit of a predecessor

[[Page 543]]

are transferred, the predecessor or successor must specify, and maintain 
supporting records to establish, the value of the drawback rights and 
the value of all other transferred property.
    (iv) Review by Customs. The written agreement, merger, or corporate 
resolution, provided for in paragraph (d)(2) of this section, and the 
records and evidence provided for in paragraph (d)(3) (i) through (iii) 
of this section, must be retained by the appropriate party(s) for 3 
years from the date of payment of the related claim and are subject to 
review by Customs upon request.
    (e) Multiple products--(1) General. Where two or more products are 
produced concurrently in a substitution manufacturing operation, 
drawback shall be distributed to each product in accordance with its 
relative value (see Sec. 191.2(u)) at the time of separation.
    (2) Claims covering a manufacturing period. Where the claim covers a 
manufacturing period rather than a manufacturing lot, the entire period 
covered by the claim is the time of separation of the products and the 
value per unit of product is the market value for the period (see Sec. 
191.2(u) of this part). Manufacturing periods in excess of one month may 
not be used without specific approval of Customs.
    (3) Recordkeeping. Records shall be maintained showing the relative 
value of each product at the time of separation.



Sec. 191.23  Methods of claiming drawback.

    (a) Used in. Drawback may be paid based on the amount of the 
imported or substituted merchandise used in the manufacture of the 
exported article, where there is no waste or the waste is valueless or 
unrecoverable. This method must be used when multiple products also 
necessarily and concurrently result from the manufacturing process, and 
there is no valuable waste (see paragraph (c) of this section).
    (b) Appearing in. Drawback is allowable under this method based only 
on the amount of imported or substituted merchandise that appears in (is 
contained in) the exported articles. This method may not be used if 
there are multiple products also necessarily and concurrently resulting 
from the manufacturing process.
    (c) Used in less valuable waste. Drawback is allowable under this 
method based on the quantity of merchandise or drawback products used to 
manufacture the exported or destroyed article, reduced by an amount 
equal to the quantity of this merchandise that the value of the waste 
would replace. This method must be used when multiple products also 
necessarily and concurrently result from the manufacturing process, and 
there is valuable waste.
    (d) Abstract or schedule. A drawback claimant may use either the 
abstract or schedule method to show the quantity of material used or 
appearing in the exported or destroyed article. An abstract is the 
summary of records which shows the total quantity used in or appearing 
in all articles produced during the period covered by the abstract. A 
schedule shows the quantity of material used in producing, or appearing 
in, each unit of product. Manufacturers or producers submitting letters 
of notification of intent to operate under a general manufacturing 
drawback ruling (see Sec. 191.7) and applicants for approval of 
specific manufacturing drawback rulings (see Sec. 191.8) shall state 
whether the abstract or schedule method is used; if no such statement is 
made, drawback claims must be based upon the abstract method.
    (e) Recordkeeping--(1) Valuable waste. When the waste has a value 
and the drawback claim is not limited to the quantity of imported or 
substituted merchandise or drawback products appearing in the exported 
or destroyed articles claimed for drawback, the manufacturer or producer 
shall keep records to show the market value of the merchandise or 
drawback products used to manufacture or produce the exported or 
destroyed articles, as well as the market value of the resulting waste, 
under the used in less valuable waste method (see Sec. 191.2(u) of this 
part).
    (2) If claim for waste is waived. If claim for waste is waived, only 
the ``appearing in'' basis may be used (see paragraph (b) of this 
section). Waste

[[Page 544]]

records need not be kept unless required to establish the quantity of 
imported duty-paid merchandise or drawback products appearing in the 
exported or destroyed articles claimed for drawback.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.24  Certificate of manufacture and delivery.

    (a) When required. When an article or drawback product manufactured 
or produced under a general manufacturing drawback ruling or a specific 
manufacturing drawback ruling is transferred from the manufacturer or 
producer to another party, a certificate of manufacture and delivery 
shall be prepared and certified by the manufacturer.
    (b) Information required on certificate. The following information 
shall be required on the certificate of manufacture and delivery 
executed by the manufacturer or producer:
    (1) The person to whom the article or drawback product is delivered;
    (2) If the article or drawback product was manufactured or produced 
under a general manufacturing drawback ruling, the unique computer-
generated number assigned to the letter of acknowledgment for that 
ruling, and if the article or drawback product was manufactured or 
produced under a specific manufacturing drawback ruling, either the 
unique computer number or the T.D. number for that ruling;
    (3) The quantity, kind and quality of imported, duty-paid 
merchandise or drawback product designated;
    (4) Import entry numbers, HTSUS number for the imported merchandise 
to at least the 6th digit (such HTSUS number shall be from the entry 
summary and other entry documentation for the imported, duty-paid 
merchandise unless the issuer of the certificate of manufacture and 
delivery received the merchandise under another certificate (either of 
delivery or of manufacture and delivery), in which case such HTSUS 
number shall be from the other certificate), and applicable duty 
amounts;
    (5) Date received at factory;
    (6) Date used in manufacture;
    (7) Value at factory, if applicable;
    (8) Quantity of waste, if any, if applicable;
    (9) Market value of any waste, if applicable;
    (10) Total quantity and description of merchandise appearing in or 
used;
    (11) Total quantity and description of articles produced;
    (12) Date of manufacture or production of the articles;
    (13) The quantity of articles transferred; and
    (14) The person from whom the article or drawback product is 
delivered.
    (c) Filing of certificate. The certificate of manufacture and 
delivery shall be filed with the drawback claim it supports (unless 
previously filed) (see Sec. 191.51 of this part).
    (d) Effect of certificate. A certificate of manufacture and delivery 
documents the delivery of articles from the manufacturer or producer to 
another party, identifies such articles as being those to which a 
potential right to drawback exists, and assigns such potential rights to 
the transferee (see also Sec. 191.82 of this part).



Sec. 191.25  Destruction under Customs supervision.

    A claimant may destroy merchandise and obtain manufacturing drawback 
by complying with the procedures set forth in Sec. 191.71 of this part 
relating to destruction.



Sec. 191.26  Recordkeeping for manufacturing drawback.

    (a) Direct identification manufacturing--(1) Records required. Each 
manufacturer or producer under 19 U.S.C. 1313(a) shall keep records to 
allow the verifying Customs official to trace all articles manufactured 
or produced for exportation or destruction with drawback, from 
importation, through production, to exportation or destruction. To this 
end, these records shall specifically establish:
    (i) The date or inclusive dates of manufacture or production;
    (ii) The quantity and identity of the imported duty-paid merchandise 
or drawback products used in or appearing in (see Sec. 191.23) the 
articles manufactured or produced;
    (iii) The quantity, if any, of the nondrawback merchandise used, 
when

[[Page 545]]

these records are necessary to determine the quantity of imported duty-
paid merchandise or drawback product used in the manufacture or 
production of the exported or destroyed articles or appearing in them;
    (iv) The quantity and description of the articles manufactured or 
produced;
    (v) The quantity of waste incurred, if applicable; and
    (vi) That the finished articles on which drawback is claimed were 
exported or destroyed within 5 years after the importation of the duty-
paid merchandise, without having been used in the United States prior to 
such exportation or destruction. (If the completed articles were 
commingled after manufacture, their identity may be maintained in the 
manner prescribed in Sec. 191.14 of this part.)
    (2) Accounting. The merchandise and articles to be exported or 
destroyed shall be accounted for in a manner which will enable the 
manufacturer, producer, or claimant:
    (i) To determine, and the Customs official to verify, the applicable 
import entry, certificate of delivery, and/or certificate of manufacture 
and delivery associated with the claim; and
    (ii) To identify with respect to that import entry, certificate of 
delivery, and/or certificate of manufacture and delivery, the imported 
duty-paid merchandise or drawback products used in manufacture or 
production.
    (b) Substitution manufacturing. The records of the manufacturer or 
producer of articles manufactured or produced in accordance with 19 
U.S.C. 1313(b) shall establish the facts in paragraph (a)(1)(i), (iv) 
through (vi) of this section, and:
    (1) The quantity, identity, and specifications of the merchandise 
designated (imported duty-paid, or drawback product);
    (2) The quantity, identity, and specifications of merchandise of the 
same kind and quality as the designated merchandise before its use to 
manufacture or produce (or appearing in) the exported or destroyed 
articles;
    (3) That, within 3 years after receiving the designated merchandise 
at its plant, the manufacturer or producer used it in manufacturing or 
production and that during the same 3-year period it manufactured or 
produced the exported or destroyed articles; and
    (4) If the designated merchandise is a chemical element that was 
contained in imported material that was subject to an ad valorem rate of 
duty, and a substitution drawback claim is made based on that chemical 
element:
    (i) The duty paid on the imported material must be apportioned among 
its constituent components. The claim on the chemical element that is 
the designated merchandise must be limited to the duty apportioned to 
that element on a unit-for-unit attribution using the unit of measure 
set forth in the Harmonized Tariff Schedule of the United States (HTSUS) 
that is applicable to the imported material. If the material is a 
compound with other constituents, including impurities, and the purity 
of the compound in the imported material is shown by satisfactory 
analysis, that purity, converted to a decimal equivalent of the 
percentage, is multiplied against the entered amount of the material to 
establish the amount of pure compound. The amount of the element in the 
pure compound is to be determined by use of the atomic weights of the 
constituent elements and converting to the decimal equivalent of their 
respective percentages and multiplying that decimal equivalent against 
the above-determined amount of pure compound.
    (ii) The amount claimed as drawback based on the chemical element 
must be deducted from the duty paid on the imported material that may be 
claimed on any other drawback claim.

    Example to paragraph (b)(4): Synthetic rutile that is shown by 
appropriate analysis in the entry papers to be 91.7% pure titanium 
dioxide is imported and dutiable at a 5% ad valorem duty rate. The 
amount of imported synthetic rutile is 30,000 pounds with an entered 
value of $12,000. The total duty paid is $600. Titanium in the synthetic 
rutile is designated as the basis for a drawback claim under 19 U.S.C. 
1313(b). The amount of titanium dioxide in the synthetic rutile is 
determined by converting the purity percentage (91.7%) to its decimal 
equivalent (.917) and multiplying the entered amount of synthetic rutile 
(30,000 pounds) by that decimal equivalent (.917 x 30,000 = 27,510 
pounds of titanium dioxide contained in the 30,000 pounds of imported 
synthetic rutile). The titanium, based on atomic weight, represents 
59.93% of the

[[Page 546]]

constituents in titanium dioxide. Multiplying that percentage, converted 
to its decimal equivalent, by the amount of titanium dioxide determines 
the titanium content of the imported synthetic rutile (.5993 x 27,510 
pounds of titanium dioxide = 16,486.7 pounds of titanium contained in 
the imported synthetic rutile). Therefore, up to 16,486.7 pounds of 
titanium is available to be designated as the basis for drawback. As the 
per-unit duty paid on the synthetic rutile is calculated by dividing the 
duty paid ($600) by the amount of imported synthetic rutile (30,000 
pounds), the per-unit duty is two cents of duty per pound of the 
imported synthetic rutile ($600 / 30,000 = $0.02). The duty on the 
titanium is calculated by multiplying the amount of titanium contained 
in the imported synthetic rutile by two cents of duty per pound 
(16,486.7 x $0.02 = $329.73 duty apportioned to the titanium). The 
product is then multiplied by 99% to determine the maximum amount of 
drawback available ($329.73 x .99=$326.44). If an exported titanium 
alloy ingot weighs 17,000 pounds, in which 16,000 pounds of titanium was 
used to make the ingot, drawback is determined by multiplying the duty 
per pound ($0.02) by the weight of the titanium contained in the ingot 
(16,000 pounds) to calculate the duty available for drawback ($0.02 x 
16,000 = $320.00). Because only 99% of the duty can be claimed, drawback 
is determined by multiplying this available duty amount by 99% (.99 x 
$320.00 = $316.80). As the oxygen content of the titanium dioxide is 45% 
of the synthetic rutile, if oxygen is the designated merchandise on 
another drawback claim, 45% of the duty claimed on the synthetic rutile 
would be available for drawback based on the substitution of oxygen.

    (c) Valuable waste records. When waste has a value and the 
manufacturer, producer, or claimant, has not limited the claims based on 
the quantity of imported or substituted merchandise appearing in the 
articles exported or destroyed, the manufacturer or producer shall keep 
records to show the market value of the merchandise used to manufacture 
or produce the exported or destroyed article, as well as the quantity 
and market value of the waste incurred (see Sec. 191.2(u) of this 
part). In such records, the quantity of merchandise identified or 
designated for drawback, under 19 U.S.C. 1313(a) or 1313(b), 
respectively, shall be based on the quantity of merchandise actually 
used to manufacture or produce the exported or destroyed articles. The 
waste replacement reduction will be determined by reducing from the 
quantity of merchandise actually used the amount of merchandise which 
the value of the waste would replace.
    (d) Purchase of manufactured articles for exportation. Where the 
claimant purchases articles from the manufacturer and exports them, the 
claimant shall file the related certificate of manufacture and delivery 
as part of the claim (see Sec. 191.51(a)(1) of this part).
    (e) Multiple claimants--(1) General. Multiple claimants may file for 
drawback with respect to the same export (for example, if an automobile 
is exported, where different parts of the automobile have been produced 
by different manufacturers under drawback conditions and the exporter 
waives the right to claim drawback and assigns such right to the 
manufacturers under Sec. 191.82 of this part).
    (2) Procedures--(i) Submission of letter. Each drawback claimant 
shall file a separate letter, as part of the claim, describing the 
component article on the export bill of lading to which each claim will 
relate. Each letter shall show the name of the claimant and bear a 
statement that the claim shall be limited to its respective component 
article. The exporter shall endorse the letters, as required, to show 
the respective interests of the claimants.
    (ii) Blanket waivers and assignments of drawback rights. Exporters 
may waive and assign their drawback rights for all, or any portion, of 
their exportations with respect to a particular commodity for a given 
period to a drawback claimant.
    (iii) Use of export summary procedure. If the parties elect to use 
the export summary procedure (Sec. 191.73 of this part) each drawback 
claimant shall complete a chronological summary of exports for the 
respective component product to which each claim will relate. Each 
claimant shall identify in the chronological summary the name of the 
other claimant(s) and the component product for which each will 
independently claim drawback, if known at the time the drawback claim is 
filed. The exporter shall endorse the summaries, as required, to show 
the respective interests of the claimants. Each claimant shall have on 
file and

[[Page 547]]

make available to Customs upon request, the endorsement from the 
exporter assigning the right to claim drawback.
    (f) Retention of records. Pursuant to 19 U.S.C. 1508(c)(3), all 
records required to be kept by the manufacturer, producer, or claimant 
with respect to drawback claims, and records kept by others to 
complement the records of the manufacturer, producer, or claimant with 
respect to drawback claims shall be retained for 3 years after the date 
of payment of the related claims (under 19 U.S.C. 1508, the same records 
may be subject to a different retention period for different purposes).

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-38, 67 FR 
48370, July 24, 2002; CBP Dec. 03-23, 68 FR 50703, Aug. 22, 2003]



Sec. 191.27  Time limitations.

    (a) Direct identification manufacturing. Drawback shall be allowed 
on imported merchandise used to manufacture or produce articles that are 
exported or destroyed under Customs supervision within 5 years after 
importation of the merchandise identified to support the claim.
    (b) Substitution manufacturing. Drawback shall be allowed on the 
imported merchandise if the following conditions are met:
    (1) The designated merchandise is used in manufacture or production 
within 3 years after receipt by the manufacturer or producer at its 
factory;
    (2) Within the 3-year period described in paragraph (b)(1) of this 
section, the exported or destroyed articles, or drawback products, were 
manufactured or produced; and
    (3) The completed articles must be exported or destroyed under 
Customs supervision within 5 years of the date of importation of the 
designated merchandise, or within 5 years of the earliest date of 
importation associated with a drawback product.
    (c) Drawback claims filed before specific or general manufacturing 
drawback ruling approved or acknowledged. Drawback claims may be filed 
before the letter of notification of intent to operate under a general 
manufacturing drawback ruling covering the claims is acknowledged (Sec. 
191.7), or before the specific manufacturing drawback ruling covering 
the claims is approved (Sec. 191.8), but no drawback shall be paid 
until such acknowledgement or approval, as appropriate.



Sec. 191.28  Person entitled to claim drawback.

    The exporter (or destroyer) shall be entitled to claim drawback, 
unless the exporter (or destroyer), by means of a certification, assigns 
the right to claim drawback to the manufacturer, producer, importer, or 
intermediate party. Such certification shall also affirm that the 
exporter (or destroyer) has not and will not itself claim drawback or 
assign the right to claim drawback on the particular exportation or 
destruction to any other party. The certification provided for under 
this section may be a blanket certification for a stated period. 
Drawback is paid to the claimant, who may be the manufacturer, producer, 
intermediate party, importer, or exporter (destroyer).



                  Subpart C_Unused Merchandise Drawback



Sec. 191.31  Direct identification.

    (a) General. Section 313(j)(1) of the Act, as amended (19 U.S.C. 
1313(j)(1)), provides for drawback upon the exportation or destruction 
under Customs supervision of imported merchandise upon which was paid 
any duty, tax, or fee imposed under Federal law because of its 
importation, if the merchandise has not been used within the United 
States before such exportation or destruction.
    (b) Time of exportation or destruction. Drawback shall be allowed on 
imported merchandise if, before the close of the 3-year period beginning 
on the date of importation, the merchandise is exported from the United 
States or destroyed under Customs supervision.
    (c) Operations performed on imported merchandise. In cases in which 
an operation or operations is or are performed on the imported 
merchandise, the performing of any operation or combination of 
operations, not amounting to manufacture or production under the 
provisions of the manufacturing drawback law, on the imported 
merchandise

[[Page 548]]

is not a use of that merchandise for purposes of this section.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.32  Substitution drawback.

    (a) General. Section 313(j)(2) of the Act, as amended (19 U.S.C. 
1313(j)(2)), provides for drawback on merchandise which is commercially 
interchangeable with imported merchandise if the commercially 
interchangeable merchandise is exported, or destroyed under Customs 
supervision, before the close of the 3-year period beginning on the date 
of importation of the imported merchandise, and before such exportation 
or destruction, the commercially interchangeable merchandise is not used 
in the United States (see paragraph (e) of this section) and is in the 
possession of the party claiming drawback.
    (b) Requirements. (1) The claimant must have possessed the 
substituted merchandise that was exported or destroyed, as provided in 
paragraph (d)(1) of this section;
    (2) The substituted merchandise must be commercially interchangeable 
with the imported merchandise that is designated for drawback; and
    (3) The substituted merchandise exported or destroyed must not have 
been used in the United States before its exportation or destruction 
(see paragraph (e) of this section).
    (c) Determination of commercial interchangeability. In determining 
commercial interchangeability, Customs shall evaluate the critical 
properties of the substituted merchandise and in that evaluation factors 
to be considered include, but are not limited to, Governmental and 
recognized industrial standards, part numbers, tariff classification and 
value. A party may seek a nonbinding predetermination of commercial 
interchangeability directly from the appropriate drawback office. A 
determination of commercial interchangeability can be obtained in one of 
two ways:
    (1) A formal ruling from the Entry Process and Duty Refunds Branch, 
Regulations and Rulings, Office of International Trade; or
    (2) A submission of all the required documentation necessary to make 
a commercial interchangeability determination with each individual 
drawback claim filed.
    (d) Time limitations. For substitution unused merchandise drawback:
    (1) The claimant must have had possession of the exported or 
destroyed merchandise at some time during the 3-year period following 
the date of importation of the imported designated merchandise; and
    (2) The merchandise to be exported or destroyed to qualify for 
drawback must be exported, or destroyed under Customs supervision, 
before the close of the 3-year period beginning on the date of 
importation of the imported designated merchandise.
    (e) Operations performed on substituted merchandise. In cases in 
which an operation or operations is or are performed on the substituted 
merchandise, the performing of any operation or combination of 
operations, not amounting to manufacture or production under the 
provisions of the manufacturing drawback law, on the commercially 
interchangeable substituted merchandise is not a use of that merchandise 
for purposes of this section.
    (f) Designation by successor; 19 U.S.C. 1313(s)--(1) General rule. 
Upon compliance with the requirements of this section and under 19 
U.S.C. 1313(s), a drawback successor as defined in paragraph (f)(2) of 
this section may designate either of the following as the basis for 
drawback on merchandise possessed by the successor after the date of 
succession:
    (i) Imported merchandise which the predecessor, before the date of 
succession, imported; or
    (ii) Imported and/or commercially interchangeable merchandise which 
was transferred to the predecessor and for which the predecessor 
received, before the date of succession, a certificate of delivery from 
the person who imported and paid duty on the imported merchandise.
    (2) Drawback successor. A ``drawback successor'' is an entity to 
which another entity (predecessor) has transferred, by written 
agreement, merger, or corporate resolution:
    (i) All or substantially all of the rights, privileges, immunities, 
powers, duties, and liabilities of the predecessor; or

[[Page 549]]

    (ii) The assets and other business interests of a division, plant, 
or other business unit of such predecessor, provided that the value of 
the transferred assets and interests (realty, personality, and 
intangibles, exclusive of the drawback rights) exceeds the value of such 
drawback rights, whether vested or contingent.
    (3) Certifications and required evidence--(i) Records of 
predecessor. The predecessor or successor must certify in an attachment 
to the drawback claim that the successor is in possession of the 
predecessor's records which are necessary to establish the right to 
drawback under the law and regulations with respect to the imported and/
or commercially interchangeable merchandise.
    (ii) Merchandise not otherwise designated. The predecessor or 
successor must certify in an attachment to the drawback claim, that the 
predecessor has not and will not designate, nor enable any other person 
to designate, the imported and/or commercially interchangeable 
merchandise as the basis for drawback.
    (iii) Value of transferred property. In instances in which assets 
and other business interests of a division, plant, or other business 
unit of a predecessor are transferred, the predecessor or successor must 
specify, and maintain supporting records to establish, the value of the 
drawback rights and the value of all other transferred property.
    (iv) Review by Customs. The written agreement, merger, or corporate 
resolution, provided for in paragraph (f)(2) of this section, and the 
records and evidence provided for in paragraph (f)(3)(i) through (iii) 
of this section, must be retained by the appropriate party(ies) for 3 
years from the date of payment of the related claim and are subject to 
review by Customs upon request.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.33  Person entitled to claim drawback.

    (a) Direct identification. (1) Under 19 U.S.C. 1313(j)(1), the 
exporter (or destroyer) shall be entitled to claim drawback.
    (2) The exporter or destroyer may waive the right to claim drawback 
and assign such right to the importer or any intermediate party. A 
drawback claimant under 19 U.S.C. 1313(j)(1) other than the exporter or 
destroyer shall secure and retain a certification signed by the exporter 
or destroyer that such party waived the right to claim drawback, and did 
not and will not authorize any other party to claim the exportation or 
destruction for drawback (see Sec. 191.82 of this part). The 
certification provided for under this section may be a blanket 
certification for a stated period. The claimant shall file such 
certification at the time of, or prior to, the filing of the claim(s) 
covered by the certification.
    (b) Substitution. (1) Under 19 U.S.C. 1313(j)(2), the following 
parties may claim drawback:
    (i) In situations where the exporter or destroyer of the substituted 
merchandise is also the importer of the imported merchandise, that party 
shall be entitled to claim drawback.
    (ii) In situations where the exporter or destroyer receives from the 
person who imported and paid the duty on the imported merchandise a 
certificate of delivery documenting the transfer of imported 
merchandise, commercially interchangeable merchandise, or any 
combination of imported and commercially interchangeable merchandise, 
and exports or destroys such transferred merchandise, that exporter or 
destroyer shall be entitled to claim drawback. (Any such transferred 
merchandise, regardless of its origin, will be treated as imported 
merchandise for purposes of drawback under Sec. 1313(j)(2), and any 
retained merchandise will be treated as domestic merchandise.)
    (iii) In situations where the transferred merchandise described in 
paragraph (b)(1)(ii) of this section is the subject of further 
transfer(s), such transfer(s) shall be documented by certificate(s) of 
delivery, and the exporter or destroyer shall be entitled to claim 
drawback (multiple substitutions are not permitted).
    (2) The exporter or destroyer may waive the right to claim drawback 
and assign such right to the importer or to any intermediate party, 
provided that the claimant had possession of the substituted merchandise 
prior to its exportation or destruction. A drawback

[[Page 550]]

claimant under 19 U.S.C. 1313(j)(2) other than the exporter or destroyer 
shall secure and retain a certification signed by the exporter or 
destroyer that such party waived the right to claim drawback, and did 
not and will not authorize any other party to claim the exportation or 
destruction for drawback (see Sec. 191.82 of this part). The 
certification provided for under this section may be a blanket 
certification for a stated period. The claimant shall file such 
certification at the time of, or prior to, the filing of the claim(s) 
covered by the certification.



Sec. 191.34  Certificate of delivery required.

    (a) Direct identification; purpose; when required. If the exported 
or destroyed merchandise claimed for drawback under 19 U.S.C. 1313(j)(1) 
was not imported by the exporter or destroyer, a properly executed 
certificate of delivery must be prepared by the importer and each 
intermediate party. Each such transfer of the merchandise must be 
documented by its own certificate of delivery.
    (1) Completion. The certificate of delivery shall be completed as 
provided in Sec. 191.10 of this part. Each party must also certify on 
the certificate of delivery that the party did not use the transferred 
merchandise (see Sec. 191.31(c) of this part).
    (2) Retention; submission to Customs. The certificate of delivery 
shall be retained by the party to whom the merchandise or article 
covered by the certificate was delivered. Customs may request the 
certificate from the claimant for the drawback claim based upon the 
certificate (see Sec. Sec. 191.51, 191.52). If the certificate is 
requested by Customs, but is not provided by the claimant, the part of 
the drawback claim dependent on that certificate will be denied.
    (b) Substitution. For purposes of substitution unused merchandise 
drawback, 19 U.S.C. 1313(j)(2), if the importer, or a party who received 
imported merchandise and a certificate of delivery for that imported 
merchandise, directly or indirectly, from the importer, transfers to 
another party imported merchandise, duty-paid merchandise, commercially 
interchangeable merchandise, or any combination thereof, the transferor 
shall prepare and issue in favor of such party a certificate of delivery 
covering the transferred merchandise. The certificate of delivery must 
expressly state that it is prepared pursuant to 19 U.S.C. 1313(j)(2). 
Merchandise so transferred for which drawback is allowed under 19 U.S.C. 
1313(j)(2) may not be designated for any other drawback purposes. Each 
transfer, whether of the imported merchandise or of imported 
merchandise, duty-paid merchandise, commercially interchangeable 
merchandise, or any combination thereof, must be documented by its own 
certificate of delivery. Certificates of delivery under this paragraph 
are subject to the provisions for completion and retention of 
certificates of delivery in paragraphs (a)(1) and (a)(2) of this 
section.
    (c) Warehouse transfer and withdrawals. The person in whose name 
merchandise is withdrawn from a bonded warehouse shall be considered the 
importer for drawback purposes. No certificate of delivery need be 
prepared covering prior transfers of merchandise while in a bonded 
warehouse, because such transfers will be recorded in the warehouse 
entry (see Sec. 144.22 of this chapter).



Sec. 191.35  Notice of intent to export; examination of merchandise.

    (a) Notice. A notice of intent to export merchandise which may be 
the subject of an unused merchandise drawback claim (19 U.S.C. 1313(j)) 
must be provided to the Customs Service to give Customs the opportunity 
to examine the merchandise. The claimant, or the exporter, must file at 
the port of intended examination a Notice of Intent to Export, Destroy, 
or Return Merchandise for Purposes of Drawback on Customs Form 7553 at 
least 2 working days prior to the date of intended exportation unless 
Customs approves another filing period or the claimant has been granted 
a waiver of prior notice (see Sec. 191.91 of this part).
    (b) Required Information. The notice shall certify that the 
merchandise has not been used in the United States before exportation. 
In addition, the notice shall provide the bill of lading number, if 
known, the name and telephone number, mailing address, and, if

[[Page 551]]

available, fax number and e-mail address of a contact person, and the 
location of the merchandise.
    (c) Decision to examine or to waive examination. Within two (2) 
working days after receipt of the Notice of Intent to Export, Destroy, 
or Return Merchandise for Purposes of Drawback (see paragraph (a) of 
this section), Customs will notify the party designated on the Notice in 
writing of Customs decision to either examine the merchandise to be 
exported, or to waive examination. If Customs timely notifies the 
designated party, in writing, of its decision to examine the merchandise 
(see paragraph (d) of this section), but the merchandise is exported 
without having been presented to Customs for examination, any drawback 
claim, or part thereof, based on the Notice of Intent to Export, 
Destroy, or Return Merchandise for Purposes of Drawback shall be denied. 
If Customs notifies the designated party, in writing, of its decision to 
waive examination of the merchandise, or, if timely notification of a 
decision by Customs to examine or to waive examination is absent, the 
merchandise may be exported without delay.
    (d) Time and place of examination. If Customs gives timely notice of 
its decision to examine the export merchandise, the merchandise to be 
examined shall be promptly presented to Customs. Customs shall examine 
the merchandise within five (5) working days after presentation of the 
merchandise. The merchandise may be exported without examination if 
Customs fails to timely examine the merchandise after presentation to 
Customs. If the examination is completed at a port other than the port 
of actual exportation, the merchandise shall be transported in-bond to 
the port of exportation.
    (e) Extent of examination. The appropriate Customs office may permit 
release of merchandise without examination, or may examine routinely (to 
the extent determined to be necessary) the items exported.



Sec. 191.36  Failure to file Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback.

    (a) General; application. Merchandise which has been exported 
without complying with the requirements of Sec. 191.35(a) or Sec. 
191.91 of this part may be eligible for unused merchandise drawback 
under 19 U.S.C. 1313(j) subject to the following conditions:
    (1) Application. The claimant must file a written application with 
the drawback office where the drawback claims will be filed. Such 
application shall include the following:
    (i) Required information.
    (A) Name, address, and Internal Revenue Service (IRS) number (with 
suffix) of applicant;
    (B) Name, address, and Internal Revenue Service (IRS) number(s) 
(with suffix) of exporter(s), if applicant is not the exporter;
    (C) Export period covered by this application;
    (D) Commodity/product lines of imported and exported merchandise 
covered in this application;
    (E) The origin of the above merchandise;
    (F) Estimated number of export transactions covered in this 
application;
    (G) Estimated number of drawback claims and estimated time of filing 
those claims to be covered in this application;
    (H) The port(s) of exportation;
    (I) Estimated dollar value of potential drawback to be covered in 
this application; and
    (J) The relationship between the parties involved in the import and 
export transactions;
    (ii) Written declarations regarding:
    (A) The reason(s) that Customs was not notified of the intent to 
export; and
    (B) Whether the applicant, to the best of its knowledge, will have 
future exportations on which unused merchandise drawback might be 
claimed; and
    (iii) A certification that the following documentary evidence will 
be made available for Customs review upon request:
    (A) For the purpose of establishing that the imported merchandise 
was not

[[Page 552]]

used in the United States (for purposes of drawback under 19 U.S.C. 
1313(j)(1)) or that the exported merchandise was not used in the United 
States and was commercially interchangeable with the imported 
merchandise (for purposes of drawback under 19 U.S.C. 1313(j)(2)), and, 
as applicable:
    (1) Business records prepared in the ordinary course of business;
    (2) Laboratory records prepared in the ordinary course of business; 
and/or
    (3) Inventory records prepared in the ordinary course of business 
tracing all relevant movements and storage of the imported merchandise, 
substituted merchandise, and/or exported merchandise; and
    (B) Evidence establishing compliance with all other applicable 
drawback requirements.
    (2) One-Time Use. The procedure provided for in this section may be 
used by a claimant only once, unless good cause is shown (for example, 
successorship).
    (3) Claims filed pending disposition of application. Drawback claims 
may be filed under this section pending disposition of the application. 
However, those drawback claims will not be processed or paid until the 
application is approved by Customs.
    (b) Customs action. In order for Customs to evaluate the application 
under this section, Customs may request, and the applicant shall 
provide, any of the information listed in paragraph (a)(1)(iii)(A)(1) 
through (3) of this section. In making its decision to approve or deny 
the application under this section, Customs will consider factors such 
as, but not limited to, the following:
    (1) Information provided by the claimant in the written application;
    (2) Any of the information listed in paragraph (a)(1)(iii)(A)(1) 
through (3) of this section and requested by Customs under this 
paragraph; and
    (3) The applicant's prior record with Customs.
    (c) Time for Customs action. Customs will notify the applicant in 
writing within 90 days after receipt of the application of its decision 
to approve or deny the application, or of Customs inability to approve, 
deny or act on the application and the reason therefor.
    (d) Appeal of denial of application. If CBP denies the application, 
the applicant may file a written appeal with the drawback office which 
issued the denial, provided that the applicant files this appeal within 
30 days of the date of denial. If CBP denies this initial appeal, the 
applicant may file a further written appeal with CBP Headquarters, 
Office of International Trade, Trade Policy and Programs, provided that 
the applicant files this further appeal within 30 days of the denial 
date of the initial appeal. CBP may extend the 30 day period for appeal 
to the drawback office or to CBP Headquarters, for good cause, if the 
applicant applies in writing for such extension within the appropriate 
30 day period above.
    (e) Future intent to export unused merchandise. If an applicant 
states it will have future exportations on which unused merchandise 
drawback may be claimed (see paragraph (a)(1)(ii)(B) of this section), 
the applicant will be informed of the procedures for waiver of prior 
notice (see Sec. 191.91 of this part). If the applicant seeks waiver of 
prior notice under Sec. 191.91, any documentation submitted to Customs 
to comply with this section will be included in the request under Sec. 
191.91. An applicant which states that it will have future exportations 
on which unused merchandise drawback may be claimed (see paragraph 
(a)(1)(ii)(B) of this section) and which does not obtain waiver of prior 
notice shall notify Customs of its intent to export prior to each such 
exportation, in accordance with Sec. 191.35.



Sec. 191.37  Destruction under Customs supervision.

    A claimant may destroy merchandise and obtain unused merchandise 
drawback by complying with the procedures set forth in Sec. 191.71 of 
this part relating to destruction.



Sec. 191.38  Records.

    (a) Maintained by claimant; by others. Pursuant to 19 U.S.C. 
1508(c)(3), all records which are necessary to be maintained by the 
claimant under this part with respect to drawback claims, and records 
kept by others to complement the records of the claimant, which are 
essential to establish compliance with the legal requirements of

[[Page 553]]

19 U.S.C. 1313(j)(1) or (j)(2), as applicable, and this part with 
respect to drawback claims, shall be retained for 3 years after payment 
of such claims (under 19 U.S.C. 1508, the same records may be subject to 
a different retention period for different purposes).
    (b) Accounting for the merchandise. Merchandise subject to drawback 
under 19 U.S.C. 1313(j)(1) and (j)(2) shall be accounted for in a manner 
which will enable the claimant:
    (1) To determine, and Customs to verify, the applicable import entry 
or certificate of delivery;
    (2) To determine, and Customs to verify, the applicable exportation 
or destruction; and
    (3) To identify with respect to the import entry or certificate of 
delivery, the imported duty-paid merchandise.



                     Subpart D_Rejected Merchandise



Sec. 191.41  Rejected merchandise drawback.

    Section 313(c) of the Act, as amended (19 U.S.C. 1313(c)), provides 
for drawback upon the exportation or destruction under Customs 
supervision of imported merchandise which has been entered, or withdrawn 
from warehouse, for consumption, duty-paid; and which does not conform 
to sample or specifications; has been shipped without the consent of the 
consignee; or has been determined to be defective as of the time of 
importation. The claimant must show by evidence satisfactory to Customs 
that the exported or destroyed merchandise was defective at the time of 
importation, or was not in accordance with sample or specifications, or 
was shipped without the consent of the consignee (see subpart P for 
drawback of internal-revenue taxes for unmerchantable or nonconforming 
distilled spirits, wines, or beer).



Sec. 191.42  Procedure.

    (a) Return to Customs custody. The claimant must return the 
merchandise to Customs custody within 3 years after the date the 
merchandise was originally released from Customs custody. Drawback will 
be denied on merchandise returned to Customs custody after the statutory 
3-year time period or exported or destroyed without return to Customs 
custody.
    (b) Required documentation. The claimant shall submit documentation 
to the drawback office as part of the drawback claim to establish that 
the merchandise did not conform to sample or specification, was shipped 
without the consent of the consignee, or was defective as of the time of 
importation. If the claimant was not the importer, the claimant must:
    (1) Submit a statement signed by the importer and every other 
person, other than the ultimate purchaser, that owned the goods that no 
other claim for drawback was made on the goods by any other person; and
    (2) Certify that records are available to support the statement 
required in paragraph (b)(1) of this section.
    (c) Notice. A notice of intent to export or destroy merchandise 
which may be the subject of a rejected merchandise drawback claim (19 
U.S.C. 1313(c)) must be provided to the Customs Service to give Customs 
the opportunity to examine the merchandise. The claimant, or the 
exporter (for destruction, see Sec. 191.44), must file at the port of 
intended redelivery to Customs custody a Notice of Intent to Export, 
Destroy, or Return Merchandise for Purposes of Drawback on Customs Form 
7553 at least 5 working days prior to the date of intended return to 
Customs custody. Waiver of prior notice for exportations under 19 U.S.C. 
1313(j) (see Sec. 191.91 of this part) is inapplicable to exportations 
under 19 U.S.C. 1313(c).
    (d) Required Information. The notice shall provide the bill of 
lading number, if known, the name and telephone number, mailing address, 
and, if available, fax number and e-mail address of a contact person, 
and the location of the merchandise.
    (e) Decision to waive examination. Within two (2) working days after 
receipt of the Notice of Intent to Export, Destroy, or Return 
Merchandise for Purposes of Drawback (see paragraph (c) of this 
section), Customs will notify, in writing, the party designated on the 
Notice of Customs decision to either examine the merchandise to be 
exported or destroyed, or to waive examination. If Customs timely 
notifies the designated party, in writing, of its

[[Page 554]]

decision to examine the merchandise (see paragraph (f) of this section), 
but the merchandise is exported or destroyed without having been 
presented to Customs for such examination, any drawback claim, or part 
thereof, based on the Notice of Intent to Export, Destroy, or Return 
Merchandise for Purposes of Drawback, shall be denied. If Customs 
notifies the designated party, in writing, of its decision to waive 
examination of the merchandise, or, if timely notification of a decision 
by Customs to examine or to waive examination is absent, the merchandise 
may be exported or destroyed without delay and shall be deemed to have 
been returned to Customs custody.
    (f) Time and place of examination. If Customs gives timely notice of 
its decision to examine the merchandise to be exported or destroyed, the 
merchandise to be examined shall be promptly presented to Customs. 
Customs shall examine the merchandise within five (5) working days after 
presentation of the merchandise. The merchandise may be exported or 
destroyed without examination if Customs fails to timely examine the 
merchandise after presentation to Customs, and in such case the 
merchandise shall be deemed to have been returned to Customs custody. If 
the examination is completed at a port other than the port of actual 
exportation or destruction, the merchandise shall be transported in-bond 
to the port of exportation or destruction.
    (g) Extent of examination. The appropriate Customs office may permit 
release of merchandise without examination, or may examine, to the 
extent determined to be necessary, the items exported or destroyed.
    (h) Drawback claim. When filing the drawback claim, the drawback 
claimant must correctly calculate the amount of drawback due (see Sec. 
191.51(b) of this part). The procedures for restructuring a claim (see 
Sec. 191.53 of this part) shall apply to rejected merchandise drawback 
if the claimant has an ongoing export program which qualifies for this 
type of drawback.
    (i) Exportation. The claimant shall export the merchandise and shall 
provide documentary evidence of exportation (see subpart G of this 
part). The claimant may establish exportation by mail as set out in 
Sec. 191.74 of this part.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.43  Unused merchandise claim.

    Rejected merchandise may be the subject of an unused merchandise 
drawback claim under 19 U.S.C. 1313(j)(1), in accordance with subpart C 
of this part, to the extent that the merchandise qualifies therefor.



Sec. 191.44  Destruction under Customs supervision.

    A claimant may destroy merchandise and obtain rejected merchandise 
drawback by complying with the procedures set forth in Sec. 191.71 of 
this part relating to destruction.



                 Subpart E_Completion of Drawback Claims



Sec. 191.51  Completion of drawback claims.

    (a) General--(1) Complete claim. Unless otherwise specified, a 
complete drawback claim under this part shall consist of the drawback 
entry on Customs Form 7551, applicable certificate(s) of manufacture and 
delivery, applicable Notice(s) of Intent to Export, Destroy, or Return 
Merchandise for Purposes of Drawback, applicable import entry number(s), 
coding sheet unless the data is filed electronically, and evidence of 
exportation or destruction under subpart G of this part.
    (2) Certificates. Additionally, at the time of the filing of the 
claim, the associated certificate(s) of delivery must be in the 
possession of the party to whom the merchandise or article covered by 
the certificate was delivered. Any required certificate(s) of 
manufacture and delivery, if not previously filed with Customs, must be 
filed with the claim. Previously filed certificates of manufacture and 
delivery, if required, shall be referenced in the claim.
    (b) Drawback due--(1) Claimant required to calculate drawback. 
Drawback claimants are required to correctly calculate the amount of 
drawback due. The amount of drawback requested on the drawback entry is 
generally to be

[[Page 555]]

99 percent of the import duties eligible for drawback. (For example, if 
$1,000 in import duties are eligible for drawback less 1 percent ($10), 
the amount claimed on the drawback entry should be for $990.) Claims 
exceeding 99 percent (or 100% when 100% of the duty is available for 
drawback) will not be paid until the calculations have been corrected by 
the claimant. Claims for less than 99 percent (or 100% when 100% of the 
duty is available for drawback) will be paid as filed, unless the 
claimant amends the claim in accordance with Sec. 191.52(c).
    (2) Merchandise processing fee apportionment calculation. Where a 
drawback claimant seeks unused merchandise drawback pursuant to 19 
U.S.C. 1313(j), or drawback for substitution of finished petroleum 
derivatives pursuant to 19 U.S.C. 1313(p)(2)(A)(iii) or (iv), for a 
merchandise processing fee paid pursuant to 19 U.S.C. 58c(a)(9)(A), the 
claimant is required to correctly apportion the fee to that merchandise 
that provides the basis for drawback when calculating the amount of 
drawback requested on the drawback entry. This is determined as follows:
    (i) Relative value ratio for each line item. The value of each line 
item of entered merchandise subject to a merchandise processing fee is 
calculated (to four decimal places) by dividing the value of the line 
item subject to the fee by the total value of entered merchandise 
subject to the fee. The resulting value forms the relative value ratio.
    (ii) Merchandise processing fee apportioned to each line item. To 
apportion the merchandise processing fee to each line item, the relative 
value ratio for each line item is multiplied by the merchandise 
processing fee paid.
    (iii) Amount of merchandise processing fee eligible for drawback per 
line item. The amount of merchandise processing fee apportioned to each 
line item is multiplied by 99 percent to calculate that portion of the 
fee attributable to each line item that is eligible for drawback.
    (iv) Amount of merchandise processing fee eligible for drawback per 
unit of merchandise. To calculate the amount of a merchandise processing 
fee eligible for drawback per unit of merchandise, the line item amount 
that is eligible for drawback is divided by the number of units covered 
by that line item (to two decimal places).

    Example 1: 
Line item 1--5,000 articles valued at $10 each total $50,000
Line item 2--6,000 articles valued at $15 each total $90,000
Line item 3--10,000 articles valued at $20 each total $200,000
Total units = 21,000
Total value = $340,000
Merchandise processing fee = $485 (for purposes of this example, the fee 
cap of $485, as per 19 U.S.C. 58c(a)(9)(B)(i), is applicable)

    Line item relative value ratios. The relative value ratio for line 
item 1 is calculated by dividing the value of that line item by the 
total value ($50,000 / 340,000 = .1470). The relative value ratio for 
line item 2 is .2647. The relative value ratio for line item 3 is .5882.
    Merchandise processing fee apportioned to each line item. The amount 
of fee attributable to each line item is calculated by multiplying $485 
by the applicable relative value ratio. The amount of the $485 fee 
attributable to line item 1 is $71.295 (.1470 x $485 = $71.295). The 
amount of the fee attributable to line item 2 is $128.3795 (.2647 x $485 
= $128.3795). The amount of the fee attributable to line item 3 is 
$285.277 (.5882 x $485 = $285.277).
    Amount of merchandise processing fee eligible for drawback per line 
item. The amount of merchandise processing fee eligible for drawback for 
line item 1 is $70.5821 / (.99 x $71.295). The amount of fee eligible 
for drawback for line item 2 is $127.0957 (.99 x $128.3795). The amount 
of fee eligible for drawback for line item 3 is $282.4242 (.99 x 
$285.277).
    Amount of merchandise processing fee eligible for drawback per unit 
of merchandise. The amount of merchandise processing fee eligible for 
drawback per unit of merchandise is calculated by dividing the amount of 
fee eligible for drawback for the line item by the number of units in 
the line item. For line item 1, the amount of merchandise processing fee 
eligible for drawback per unit is $.0141 ($70.5821 / 5,000 = $.0141). If 
1,000 widgets form the basis of a claim for drawback under 19 U.S.C. 
1313(j), the total amount of drawback attributable to the merchandise 
processing fee is $14.10 (1,000 x .0141 = $14.10). For line item 2, the 
amount of fee eligible for drawback per unit is $.0212 ($127.0957 / 
6,000 = $.0212). For line item 3, the amount of fee eligible for 
drawback per unit is $.0282 ($282.4242 / 10,000 = $.0282).
    Example 2: This example illustrates the treatment of dutiable 
merchandise that is exempt from the merchandise processing fee and duty-
free merchandise that is subject to the merchandise processing fee.


[[Page 556]]


Line item 1--700 meters of printed cloth valued at $10 per meter (total 
value $7,000) that is exempt from the merchandise processing fee under 
19 U.S.C. 58c(b)(8)(B)(iii)
Line item 2--15,000 articles valued at $100 each (total value 
$1,500,000)

Line item 3--10,000 duty-free articles valued at $50 each (total value 
$500,000)

    The relative value ratios are calculated using line items 2 and 3 
only, as there is no merchandise processing fee imposed by reason of 
importation on line item 1.

Line item 2--1,500,000 / 2,000,000 = .75 (line items 2 and 3 form the 
total value of the merchandise subject to the merchandise processing 
fee).
Line item 3--500,000 / 2,000,000 = .25.

    If the total merchandise processing fee paid was $485, the amount of 
the fee attributable to line item 2 is $363.75 (.75 x $485 = $363.75). 
The amount of the fee attributable to line item 3 is $121.25 (.25 x $485 
= $121.25).
    The amount of merchandise processing fee eligible for drawback for 
line item 2 is $360.1125 (.99 x $363.75). The amount of fee eligible for 
line item 3 is $120.0375 (.99 x $121.25).
    The amount of drawback on the merchandise processing fee 
attributable to each unit of line item 2 is $.0240 ($360.1125 / 15,000 = 
$.0240). The amount of drawback on the merchandise processing fee 
attributable to each unit of line item 3 is $.0120 ($120.0375 / 10,000 = 
$.0120).
    If 1,000 units of line item 2 were exported, the drawback 
attributable to the merchandise processing fee is $24.00 ($.0240 x 1,000 
= $24.00).

    (c) HTSUS number(s) or Schedule B commodity number(s) of imports and 
exports--(1) General. Drawback claimants are required to provide, on all 
drawback claims they submit, the Harmonized Tariff Schedule of the 
United States (HTSUS) number(s) for the designated imported merchandise 
and the HTSUS number(s) or the Schedule B commodity number(s) for the 
exported article or articles.
    (2) Imports. For imports, HTSUS numbers shall be provided from the 
entry summary(s) and other entry documentation, when the claimant is the 
importer of record, or from the certificate of delivery and/or the 
certificate of manufacture and delivery, otherwise. Manufacturing 
drawback claimants filing drawback claims based on certificate(s) of 
manufacture and delivery filed with the claims or previously filed with 
Customs (see paragraph (a) of this section), may meet this requirement 
with the HTSUS number(s) for the designated imported merchandise on such 
certificate(s).
    (3) Exports. For exports, the HTSUS number(s) or Schedule B 
commodity number(s) shall be from the Shipper's Export Declaration(s) 
(SEDs), when required. If no SED is required (see, e.g., 15 CFR 30.58), 
the claimant shall provide the Schedule B commodity number(s) or HTSUS 
number(s) that the exporter would have set forth on the SED, but for the 
exemption from the requirement for an SED.
    (4) 6-digit level for HTSUS and Schedule B commodity numbers. The 
HTSUS numbers and Schedule B commodity numbers shall be stated to at 
least 6 digits.
    (5) Effective date. For imports, HTSUS numbers are required for 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after April 6, 1998. For exports, HTSUS numbers or Schedule B commodity 
numbers are required for exported merchandise or articles exported on or 
after the date 1 year after April 6, 1998.
    (d) Place of filing. For manufacturing drawback, the claimant shall 
file the drawback claim with the drawback office listed, as appropriate, 
in the general manufacturing drawback ruling or the specific 
manufacturing drawback ruling (see Sec. Sec. 191.7 and 191.8 of this 
part). For other kinds of drawback, the claimant shall file the claim 
with any drawback office.
    (e) Time of filing--(1) General. A completed drawback claim, with 
all required documents, shall be filed within 3 years after the date of 
exportation or destruction of the merchandise or articles which are the 
subject of the claim. Except for landing certificates (see Sec. 191.76 
of this part), or unless this time is extended as provided in paragraph 
(e)(2) of this section, claims not completed within the 3-year period 
shall be considered abandoned. Except as provided in paragraph (e)(2) of 
this section, no extension will be granted unless it is established that 
Customs was responsible for the untimely filing.
    (2) Major disaster. The 3-year period for filing a completed 
drawback claim provided for in paragraph (e)(1) of this section may be 
extended for a period not to exceed 18 months if:

[[Page 557]]

    (i) The claimant establishes to the satisfaction of Customs that the 
claimant was unable to file the drawback claim because of an event 
declared by the President to be a major disaster, within the meaning 
given to that term in 42 U.S.C. 5122(2), on or after January 1, 1994; 
and
    (ii) The claimant files a request for such extension with Customs 
within 1 year from the last day of the 3-year period referred to in 
paragraph (e)(1) of this section.
    (3) Record retention. If an extension is granted with respect to a 
request filed under paragraph (e)(2)(ii) of this section, the periods of 
time for retaining records under 19 U.S.C. 1508(c)(3) shall be extended 
for an additional 18 months.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 01-14, 66 FR 
8767, Feb. 2, 2001; T.D. 01-18, 66 FR 9649, Feb. 9, 2001; T.D. 02-39, 67 
FR 48548, July 25, 2002; CBP Dec. 04-33, 69 FR 60083, Oct. 7, 2004]



Sec. 191.52  Rejecting, perfecting or amending claims.

    (a) Rejecting the claim. Upon review of a drawback claim, if the 
claim is determined to be incomplete (see Sec. 191.51(a)(1)), the claim 
will be rejected and Customs will notify the filer in writing. The filer 
shall then have the opportunity to complete the claim subject to the 
requirement for filing a complete claim within 3 years.
    (b) Perfecting the claim; additional evidence required. If Customs 
determines that the claim is complete according to the requirements of 
Sec. 191.51(a)(1), but that additional evidence or information is 
required, Customs will notify the filer in writing. The claimant shall 
furnish, or have the appropriate party furnish, the evidence or 
information requested within 30 days of the date of notification by 
Customs. Customs may extend this 30 day period for good cause if the 
claimant files a written request for such extension within the 30 day 
period. The evidence or information required under this paragraph may be 
filed more than 3 years after the date of exportation or destruction of 
the articles which are the subject of the claim. Such additional 
evidence or information may include, but is not limited to:
    (1) The export bill of lading or other actual evidence of 
exportation, as provided for in Sec. 191.72(a) of this part, which 
shall show that the articles were shipped by the person filing the 
drawback entry, or a letter of endorsement from the party in whose name 
the articles were shipped which shall be attached to such bill of 
lading, showing that the party filing the entry is authorized to claim 
drawback and receive payment (the claimant shall have on file and make 
available to Customs upon request, the endorsement from the exporter 
assigning the right to claim drawback);
    (2) A copy of the import entry and invoice annotated for the 
merchandise identified or designated;
    (3) A copy of the export invoice annotated to indicate the items on 
which drawback is being claimed; and
    (4) Certificate(s) of delivery upon which the claim is based (see 
Sec. 191.10(e) of this part).
    (c) Amending the claim; supplemental filing. Amendments to claims 
for which the drawback entries have not been liquidated must be made 
within three (3) years after the date of exportation or destruction of 
the articles which are the subject of the original drawback claim. 
Liquidated drawback entries may not be amended; however, they may be 
protested as provided for in Sec. 191.84 of this part and part 174 of 
this chapter.



Sec. 191.53  Restructuring of claims.

    (a) General. Customs may require claimants to restructure their 
drawback claims in such a manner as to foster Customs administrative 
efficiency. In making this determination, Customs will consider the 
following factors:
    (1) The number of transactions of the claimant (imports and 
exports);
    (2) The value of the claims;
    (3) The frequency of claims;
    (4) The product or products being claimed; and
    (5) For 19 U.S.C. 1313(a) and 1313(b) claims, the provisions, as 
applicable, of the general manufacturing drawback ruling or the specific 
manufacturing drawback ruling.

[[Page 558]]

    (b) Exemption from restructuring; criteria. In order to be exempt 
from a restructuring, a claimant must demonstrate an inability or 
impracticability in restructuring its claims as required by Customs and 
must provide a mutually acceptable alternative. Criteria used in such 
determination will include a demonstration by the claimant of one or 
more of the following:
    (1) Complexities caused by multiple commodities or the applicable 
general manufacturing drawback ruling or the specific manufacturing 
drawback ruling;
    (2) Variable and conflicting manufacturing and inventory periods 
(for example, financial, accounting and manufacturing records maintained 
are significantly different);
    (3) Complexities caused by multiple manufacturing locations;
    (4) Complexities caused by difficulty in adjusting accounting and 
inventory records (for example, records maintained--financial or 
accounting--are significantly different); and/or
    (5) Complexities caused by significantly different methods of 
operation.



                    Subpart F_Verification of Claims



Sec. 191.61  Verification of drawback claims.

    (a) Authority--(1) Drawback office. All claims shall be subject to 
verification by the port director where the claim is filed.
    (2) Two or more locations. The port director selecting the claim for 
verification may forward copies of the claim and, as applicable, letters 
of notification and acknowledgement for the general manufacturing 
drawback ruling or application and letter of approval for a specific 
manufacturing drawback ruling, and request for verification, to other 
drawback offices when deemed necessary.
    (b) Method. The verifying office shall verify compliance with the 
law and this part, the accuracy of the related general manufacturing 
drawback ruling or specific manufacturing drawback ruling (as 
applicable), and the selected drawback claims. Verification may include 
an examination of all records relating to the transaction(s).
    (c) Liquidation. When a claim has been selected for verification, 
liquidation will be postponed only on the drawback entries for those 
claims selected for verification. Postponement will continue in effect 
until the verification has been completed and the appropriate port 
director issues a report. In the event that a substantial error is 
revealed during the verification, Customs may postpone liquidation of 
all related product line claims, or, in Customs discretion, all claims 
for that claimant.
    (d) Errors in specific or general manufacturing drawback rulings--
(1) Specific manufacturing drawback ruling; action by port director. If 
verification of a drawback claim filed under a specific manufacturing 
drawback ruling (see Sec. 191.8 of this part) reveals errors of 
deficiencies in the drawback ruling or application therefor, the port 
director shall promptly inform CBP Headquarters (Attention: Entry 
Process and Duty Refunds Branch, Regulations and Rulings, Office of 
International Trade).
    (2) General manufacturing drawback ruling. If verification of a 
drawback claim filed under a general manufacturing drawback ruling (see 
Sec. 191.7 of this part) reveals errors or deficiencies in a general 
manufacturing drawback ruling, the letter of notification of intent to 
operate under the general manufacturing drawback ruling, or the 
acknowledgment of the letter of notification of intent, the port 
director shall promptly inform CBP Headquarters (Attention: Entry 
Process and Duty Refunds Branch, Regulations and Rulings, Office of 
International Trade).
    (3) Action by CBP Headquarters. CBP Headquarters shall review the 
stated errors or deficiencies and take appropriate action (see 19 U.S.C. 
1625; 19 CFR part 177).

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15288, Mar. 31, 1998]



Sec. 191.62  Penalties.

    (a) Criminal penalty. Any person who knowingly and willfully files 
any false or fraudulent entry or claim for the payment of drawback upon 
the exportation of merchandise or knowingly or willfully makes or files 
any false document for the purpose of securing the payment to himself or 
others of any

[[Page 559]]

drawback on the exportation of merchandise greater than that legally 
due, shall be subject to the criminal provisions of 18 U.S.C. 550, 1001 
or any other appropriate criminal sanctions.
    (b) Civil penalty. Any person who seeks, induces or affects the 
payment of drawback, by fraud or negligence, or attempts to do so, is 
subject to civil penalties, as provided under 19 U.S.C. 1593a. A 
fraudulent violation is subject to a maximum administrative penalty of 3 
times the total actual or potential loss of revenue. Repetitive 
negligent violations are subject to a maximum penalty equal to the 
actual or potential loss of revenue.



                  Subpart G_Exportation and Destruction



Sec. 191.71  Drawback on articles destroyed under Customs supervision.

    (a) Procedure. At least 7 working days before the intended date of 
destruction of merchandise or articles upon which drawback is intended 
to be claimed, a Notice of Intent to Export, Destroy, or Return 
Merchandise for Purposes of Drawback on Customs Form 7553 shall be filed 
by the claimant with the Customs port where the destruction is to take 
place, giving notification of the date and specific location where the 
destruction is to occur. Within 4 working days after receipt of the 
Customs Form 7553, Customs shall advise the filer in writing of its 
determination to witness or not to witness the destruction. If the filer 
of the notice is not so notified within 4 working days, the merchandise 
may be destroyed without delay and will be deemed to have been destroyed 
under Customs supervision. Unless Customs determines to witness the 
destruction, the destruction of the articles following timely 
notification on Customs Form 7553 shall be deemed to have occurred under 
Customs supervision. If Customs attends the destruction, it must certify 
the Notice of Intent to Export, Destroy, or Return Merchandise for 
Purposes of Drawback.
    (b) Evidence of destruction. When Customs does not attend the 
destruction, the claimant must submit evidence that destruction took 
place in accordance with the approved Notice of Intent to Export, 
Destroy, or Return Merchandise for Purposes of Drawback. The evidence 
must be issued by a disinterested third party (for example, a landfill 
operator). The type of evidence depends on the method and place of 
destruction, but must establish that the merchandise was, in fact, 
destroyed within the meaning of ``destruction'' in Sec. 191.2(g) (i.e., 
that no articles of commercial value remained after destruction).
    (c) Completion of drawback entry. After destruction, the claimant 
must provide the Customs Form 7553, certified by the Customs official 
witnessing the destruction in accordance with paragraph (a) of this 
section, to Customs as part of the completed drawback claim based on the 
destruction (see Sec. 191.51(a) of this part). If Customs has not 
attended the destruction, the claimant must provide the evidence that 
destruction took place in accordance with the approved Customs Form 
7553, as provided for in paragraph (b) of this section, as part of the 
completed drawback claim based on the destruction (see Sec. 191.51(a) 
of this part).



Sec. 191.72  Exportation procedures.

    Exportation of articles for drawback purposes shall be established 
by complying with one of the procedures provided for in this section (in 
addition to providing prior notice of intent to export if applicable 
(see Sec. Sec. 191.35, 191.36, 191.42, and 191.91 of this part)). 
Supporting documentary evidence shall establish fully the date and fact 
of exportation and the identity of the exporter. The procedures for 
establishing exportation outlined by this section include, but are not 
limited to:
    (a) Actual evidence of exportation consisting of documentary 
evidence, such as an originally signed bill of lading, air waybill, 
freight waybill, Canadian Customs manifest, and/or cargo manifest, or 
certified copies thereof, issued by the exporting carrier;
    (b) Export summary (Sec. 191.73);
    (c) Certified export invoice for mail shipments (Sec. 191.74);
    (d) Notice of lading for supplies on certain vessels or aircraft 
(Sec. 191.112); or
    (e) Notice of transfer for articles manufactured or produced in the 
U.S. which are transferred to a foreign trade zone (Sec. 191.183).

[[Page 560]]



Sec. 191.73  Export summary procedure.

    (a) General. The export summary procedure consists of a 
Chronological Summary of Exports used to support a drawback claim. It 
may be submitted as part of the claim in lieu of actual documentary 
evidence of exportation. It may be used by any claimant for 
manufacturing drawback, and for unused or rejected merchandise drawback, 
as well as for drawback involving the substitution of finished petroleum 
derivatives (19 U.S.C. 1313(a), (b), (c), (j), or (p)). It is intended 
to improve administrative efficiency.
    (b) Format of Chronological Summary of Exports. The Chronological 
Summary of Exports shall contain the data provided for in the following 
sample:

                    Chronological Summary of Exports

Drawback entry No. --------.
Claimant --------; Exporter -------- (if different from claimant)

Period from -------- to --------.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Sched. B com.
         Date of export             Exporter if not      Unique export        Description        Net quantity      or HTSUS      Destination
                                       claimant         identifier \1\                                                 
(1)                               (2)...............  (3)...............  (4)...............  (5)...............  (6)...............  (7)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 \1\ This number is to be used to associate the export transaction presented on the Chronological Summary of Exports to the appropriate documentary
  evidence of exportation (for example, Bill of Lading, Manifest no., invoice, identification of vessel or aircraft and voyage or aircraft number (see
  subpart K), etc.).

    (c) Documentary evidence--(1) Records. The claimant, whether or not 
the exporter, shall maintain the Chronological Summary of Exports and 
such additional evidence of exportation required by Customs to establish 
fully the identity of the exported articles and the fact of exportation. 
Actual evidence of exportation, as described in Sec. 191.72(a) of this 
subpart, is the primary evidence of export for drawback purposes.
    (2) Maintenance of records. The claimant shall submit as part of the 
claim the Chronological Summary of Exports (see Sec. 191.51). The 
claimant shall retain records supporting the Chronological Summary of 
Exports for 3 years after payment of the related claim, and such records 
are subject to review by Customs.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15289, Mar. 31, 1998]



Sec. 191.74  Certification of exportation by mail.

    If the merchandise on which drawback is to be claimed is exported by 
mail or parcel post, the official postal records which describe the mail 
shipment shall be sufficient to prove exportation. The postal record 
shall be identified on the drawback entry, and shall be retained by the 
claimant and submitted as part of the drawback claim (see Sec. 
191.51(a).

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15289, Mar. 31, 1998]



Sec. 191.75  Exportation by the Government.

    (a) Claim by U.S. Government. When a department, branch, agency, or 
instrumentality of the United States Government exports products with 
the intention of claiming drawback, it may establish the exportation in 
the manner provided in Sec. Sec. 191.72 and 191.73 of this subpart (see 
Sec. 191.4 of this part).
    (b) Claim by supplier. When a supplier of merchandise to the 
Government or any of the parties specified in Sec. 191.82 of this part 
claims drawback, exportation shall be established under Sec. Sec. 
191.72 and 191.73 of this subpart.



Sec. 191.76  Landing certificate.

    (a) Requirement. Prior to the liquidation of the drawback entry, 
Customs may require a landing certificate for every aircraft departing 
from the United States under its own power if drawback is claimed on the 
aircraft or a part thereof, except for the exportation of supplies under 
Sec. 309 of the Act, as amended (19 U.S.C. 1309). The certificate shall 
show the exact time of landing in the foreign destination and describe 
the aircraft or parts subject to drawback in sufficient detail to enable 
Customs officers to identify them with the documentation of exportation.

[[Page 561]]

    (b) Written notice of requirement and time for filing. A landing 
certificate shall be filed within one year from the written Customs 
request, unless Customs Headquarters grants an extension.
    (c) Signature. A landing certificate shall be signed by a revenue 
officer of the foreign country of the export's destination, unless the 
embassy of that country certifies in writing that there is no Customs 
administration in that country, in which case the landing certificate 
may be signed by the consignee or the carrier's agent at the place of 
unlading.
    (d) Inability to produce landing certificates. A landing certificate 
shall be waived by the requiring Customs authority if the claimant 
demonstrates inability to obtain a certificate and offers other 
satisfactory evidence of export.



          Subpart H_Liquidation and Protest of Drawback Entries



Sec. 191.81  Liquidation.

    (a) Time of liquidation. Drawback entries may be liquidated after:
    (1) Liquidation of the import entry becomes final; or
    (2) Deposit of estimated duties on the imported merchandise and 
before liquidation of the import entry.
    (b) Claims based on estimated duties. (1) Drawback may be paid on 
estimated duties if the import entry has not been liquidated, or the 
liquidation has not become final (because of a protest being filed) (see 
also Sec. 173.4(c) of this chapter), and the drawback claimant and any 
other party responsible for the payment of liquidated import duties each 
files a written request for payment of each drawback claim, waiving any 
right to payment or refund under other provisions of law, to the extent 
that the estimated duties on the unliquidated import entry are included 
in the drawback claim for which drawback on estimated duties is 
requested under this paragraph. The drawback claimant shall, to the best 
of its knowledge, identify each import entry that has been protested or 
that is the subject of a request for reliquidation (19 U.S.C. 
1520(c)(1)) and that is included in the drawback claim. A drawback 
entry, once finally liquidated on the basis of estimated duties, shall 
not be adjusted by reason of a subsequent final liquidation of the 
import entry.
    (2) However, if final liquidation of the import entry discloses that 
the total amount of import duty is different from the total estimated 
duties deposited, except in those cases when drawback is 100% of the 
duty, the party responsible for the payment of liquidated duties, as 
applicable, shall:
    (i) Be liable for 1 percent of all increased duties found to be due 
on that portion of merchandise recorded on the drawback entry; or
    (ii) Be entitled to a refund of 1 percent of all excess duties found 
to be paid on that portion of the merchandise recorded on the drawback 
entry.
    (c) Claims based on voluntary tenders or other payments of duties--
(1) General. Subject to the requirements in paragraph (c)(2) of this 
section, drawback may be paid on voluntary tenders of the unpaid amount 
of lawful ordinary Customs duties or any other payment of lawful 
ordinary Customs duties for an entry, or withdrawal from warehouse, for 
consumption (see Sec. 191.3(a)(1)(iii) of this part), provided that:
    (i) The tender or payment is specifically identified as duty on a 
specifically identified entry, or withdrawal from warehouse, for 
consumption;
    (ii) Liquidation of the specifically identified entry, or withdrawal 
from warehouse, for consumption became final prior to such tender or 
payment; and
    (iii) Liquidation of the drawback entry in which that specifically 
identified import entry, or withdrawal from warehouse, for consumption 
is designated has not become final.
    (2) Written request and waiver. Drawback may be paid on claims based 
on voluntary tenders or other payments of duties under this subsection 
only if the drawback claimant and any other party responsible for the 
payment of the voluntary tenders or other payments of duties each files 
a written request for payment of each drawback claim based on such 
voluntary tenders or other payments of duties, waiving any claim to 
payment or refund under other provisions of law, to the extent

[[Page 562]]

that the voluntary tenders or other payment of duties under this 
paragraph are included in the drawback claim for which drawback on the 
voluntary tenders or other payment of duties is requested under this 
paragraph.
    (d) Claims based on liquidated duties. Drawback shall be based on 
the final liquidated duties paid that have been made final by operation 
of law (except in the case of the written request for payment of 
drawback on the basis of estimated duties, voluntary tender of duties, 
and other payments of duty, and waiver, provided for in paragraphs (b) 
and (c) of this section).
    (e) Liquidation procedure. When the drawback claim has been 
completed by the filing of the entry and other required documents, and 
exportation (or destruction) of the articles has been established, the 
drawback office shall determine drawback due on the basis of the 
complete drawback claim, the applicable general manufacturing drawback 
ruling or specific manufacturing drawback ruling, and any other relevant 
evidence or information.
    (f) Relative value; multiple products--(1) Distribution. Where two 
or more products result from the manufacture or production of 
merchandise, drawback shall be distributed to the several products in 
accordance with their relative value at the time of separation.
    (2) Value. The value to be used in computing the distribution of 
drawback where two or more products result from the manufacture or 
production of merchandise under drawback conditions shall be the market 
value (see Sec. 191.2(u) of this part), unless another value is 
approved by Customs.
    (g) Payment. The drawback office shall authorize the amount of the 
refund due as drawback to the claimant.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15289, Mar. 31, 1998]



Sec. 191.82  Person entitled to claim drawback.

    Unless otherwise provided in this part (see Sec. Sec. 191.42(b), 
191.162, 191.175(a), 191.186), the exporter (or destroyer) shall be 
entitled to claim drawback, unless the exporter (or destroyer), by means 
of a certification, waives the right to claim drawback and assigns such 
right to the manufacturer, producer, importer, or intermediate party (in 
the case of drawback under 19 U.S.C. 1313(j)(1) and (2), see Sec. 
191.33(a) and (b)). Such certification shall also affirm that the 
exporter (or destroyer) has not and will not assign the right to claim 
drawback on the particular exportation or destruction to any other 
party. The certification provided for in this section may be a blanket 
certification for a stated period.



Sec. 191.83  Person entitled to receive payment.

    Drawback is paid to the claimant (see Sec. 191.82).



Sec. 191.84  Protests.

    Procedures to protest the denial, in whole or in part, of a drawback 
entry shall be in accordance with part 174 of this chapter (19 CFR part 
174).



   Subpart I_Waiver of Prior Notice of Intent To Export; Accelerated 
                           Payment of Drawback



Sec. 191.91  Waiver of prior notice of intent to export.

    (a) General--(1) Scope. The requirement in Sec. 191.35 of this part 
for prior notice of intent to export merchandise which may be the 
subject of an unused merchandise drawback claim under Sec. 313(j) of 
the Act, as amended (19 U.S.C. 1313(j)), may be waived under the 
provisions of this section.
    (2) Effective date for claimants with existing approval. For 
claimants approved for waiver of prior notice as of April 6, 1998, such 
approval of waiver of prior notice shall remain in effect, under the 
Customs Regulations in effect as of the time of the approval of waiver 
of prior notice, for a period of 1 year after April 6, 1998. The 
previously approved waiver of prior notice shall terminate at the end of 
such 1-year period unless the claimant applies for waiver of prior 
notice under this section. If a claimant approved for waiver of prior 
notice as of April 6, 1998 applies for waiver of prior notice under this 
section within such 1-year period, the claimant may continue to operate 
under its existing waiver of prior notice until Customs approves or 
denies the application for waiver of prior notice under this section, 
subject to the provisions in this

[[Page 563]]

section (see, in particular, paragraphs (d) and (e) of this section).
    (3) Limited successorship for waiver of prior notice. When a 
claimant (predecessor) is approved for waiver of prior notice under this 
section and all of the rights, privileges, immunities, powers, duties 
and liabilities of the claimant are transferred by written agreement, 
merger, or corporate resolution to a successor, such approval of waiver 
of prior notice shall remain in effect for a period of 1 year after such 
transfer. The approval of waiver of prior notice shall terminate at the 
end of such 1-year period unless the successor applies for waiver of 
prior notice under this section. If such successor applies for waiver of 
prior notice under this section within such 1-year period, the successor 
may continue to operate under the predecessor's waiver of prior notice 
until Customs approves or denies the successor's application for waiver 
of prior notice under this section, subject to the provisions in this 
section (see, in particular, paragraphs (d) and (e) of this section).
    (b) Application--(1) Who may apply. A claimant for unused 
merchandise drawback under 19 U.S.C. 1313(j) may apply for a waiver of 
prior notice of intent to export merchandise under this section.
    (2) Contents of application. An applicant for a waiver of prior 
notice under this section must file a written application with the 
drawback office where the claims will be filed. Such application shall 
include the following:
    (i) Required information:
    (A) Name, address, and Internal Revenue Service (IRS) number (with 
suffix) of applicant;
    (B) Name, address, and Internal Revenue Service (IRS) number (with 
suffix) of current exporter(s) (if more than 3 exporters, such 
information is required only for the 3 most frequently used exporters), 
if applicant is not the exporter;
    (C) Export period covered by this application;
    (D) Commodity/product lines of imported and exported merchandise 
covered by this application;
    (E) Origin of merchandise covered by this application;
    (F) Estimated number of export transactions during the next calendar 
year covered by this application;
    (G) Port(s) of exportation to be used during the next calendar year 
covered by this application;
    (H) Estimated dollar value of potential drawback during the next 
calendar year covered by this application; and
    (I) The relationship between the parties involved in the import and 
export transactions;
    (ii) A written declaration whether or not the applicant has 
previously been denied a waiver request, or had an approval of a waiver 
revoked, by any other drawback office, and whether the applicant has 
previously requested a 1-time waiver of prior notice under Sec. 191.36, 
and whether such request was approved or denied; and
    (iii) A certification that the following documentary evidence will 
be made available for Customs review upon request:
    (A) For the purpose of establishing that the imported merchandise 
was not used in the United States (for purposes of drawback under 19 
U.S.C. 1313(j)(1)) or that the exported merchandise was not used in the 
United States and was commercially interchangeable with the imported 
merchandise (for purposes of drawback under 19 U.S.C. 1313(j)(2)), and, 
as applicable:
    (1) Business records prepared in the ordinary course of business;
    (2) Laboratory records prepared in the ordinary course of business; 
and/or
    (3) Inventory records prepared in the ordinary course of business 
tracing all relevant movements and storage of the imported merchandise, 
substituted merchandise, and/or exported merchandise; and
    (B) Any other evidence establishing compliance with other applicable 
drawback requirements, upon Customs request under paragraph (b)(2)(iii) 
of this section.
    (3) Samples of records to accompany application. To expedite the 
processing of applications under this section, the application should 
contain at least one sample of each of the records to be used to 
establish compliance with the applicable requirements (that is, sample 
of

[[Page 564]]

import document (for example, Customs Form 7501), sample of export 
document (for example, bill of lading), and samples of business, 
laboratory, and inventory records certified, under paragraph 
(b)(2)(iii)(A)(1) through (3) of this section, to be available to 
Customs upon request).
    (c) Action on application--(1) Customs review. The drawback office 
shall review and verify the information submitted on and with the 
application. Customs will notify the applicant in writing within 90 days 
of receipt of the application of its decision to approve or deny the 
application, or of Customs inability to approve, deny, or act on the 
application and the reason therefor. In order for Customs to evaluate 
the application, Customs may request any of the information listed in 
paragraph (b)(2)(iii)(A)(1) through (3) of this section. Based on the 
information submitted on and with the application and any information so 
requested, and based on the applicant's record of transactions with 
Customs, the drawback office will approve or deny the application. The 
criteria to be considered in reviewing the applicant's record with 
Customs include, but are not limited to (as applicable):
    (i) The presence or absence of unresolved Customs charges (duties, 
taxes, or other debts owed Customs);
    (ii) The accuracy of the claimant's past drawback claims;
    (iii) Whether waiver of prior notice was previously revoked or 
suspended; and
    (iv) The presence or absence of any failure to present merchandise 
to Customs for examination after Customs had timely notified the party 
filing a Notice of Intent to Export, Destroy, or Return Merchandise for 
Purposes of Drawback of Customs intent to examine the merchandise (see 
Sec. 191.35 of this part).
    (2) Approval. The approval of an application for waiver of prior 
notice of intent to export, under this section, shall operate 
prospectively, applying only to those export shipments occurring after 
the date of the waiver. It shall be subject to a stay, as provided in 
paragraph (d) of this section.
    (3) Denial. If an application for waiver of prior notice of intent 
to export, under this section, is denied, the applicant shall be given 
written notice, specifying the grounds therefor, together with what 
corrective action may be taken, and informing the applicant that the 
denial may be appealed in the manner prescribed in paragraph (g) of this 
section. The applicant may not reapply for a waiver until the reason for 
the denial is resolved.
    (d) Stay. An approval of waiver of prior notice may be stayed, for a 
specified reasonable period, should Customs desire for any reason to 
examine the merchandise being exported with drawback prior to its 
exportation for purposes of verification. Customs shall provide written 
notice, by registered or certified mail, of such a stay to the person 
for whom waiver of prior notice was approved. Customs shall specify the 
reason(s) for the stay in such written notice. The stay shall take 
effect 2 working days after the date the person signs the return post 
office receipt for the registered or certified mail. The stay shall 
remain in effect for the period specified in the written notice, or 
until such earlier date as Customs notifies the person for whom waiver 
of prior notice was approved in writing that the reason for the stay has 
been satisfied. After the stay is lifted, operation under the waiver of 
prior notice procedure may resume for exports on or after the date the 
stay is lifted.
    (e) Proposed revocation. Customs may propose to revoke the approval 
of an application for waiver of prior notice of intent to export, under 
this section, for good cause (noncompliance with the drawback law and/or 
regulations). Customs shall give written notice of the proposed 
revocation of a waiver of prior notice of intent to export. The notice 
shall specify the reasons for Customs proposed action and provide 
information regarding the procedures for challenging Customs proposed 
revocation action as prescribed in paragraph (g) of this section. The 
written notice of proposed revocation may be included with a notice of 
stay of approval of waiver of prior notice as provided under paragraph 
(d) of this section. The revocation of the approval of waiver of prior 
notice shall take effect 30 days after the date of the proposed 
revocation if not timely challenged

[[Page 565]]

under paragraph (g) of this section. If timely challenged, the 
revocation will take effect after completion of the challenge procedures 
in paragraph (g) of this section unless the challenge is successful.
    (f) Action by drawback office controlling. Action by the appropriate 
drawback office to approve, deny, stay, or revoke waiver of prior notice 
of intent to export, unless reversed by Customs Headquarters, will 
govern the applicant's eligibility for this procedure in all Customs 
drawback offices. If the application for waiver of prior notice of 
intent to export is approved, the claimant shall refer to such approval 
in the first drawback claim filed after such approval in the drawback 
office approving waiver of prior notice and shall submit a copy of the 
approval letter with the first drawback claim filed in any drawback 
office other than the approving office, when the export upon which the 
claim is based was without prior notice, under this section.
    (g) Appeal of denial or challenge to proposed revocation. An appeal 
of a denial of an application under this section, or challenge to the 
proposed revocation of an approved application under this section, may 
be made by letter to the drawback office issuing the denial or proposed 
revocation and must be filed within 30 days of the date of denial or 
proposed revocation. A denial of an appeal or challenge made to the 
drawback office may itself be appealed to CBP Headquarters, Office of 
International Trade, Trade Policy and Programs, and must be filed within 
30 days of the denial date of the initial appeal or challenge. The 30-
day period for appeal or challenge to the drawback office or to CBP 
Headquarters may be extended for good cause, upon written request by the 
applicant or holder for such extension filed with the appropriate office 
within the 30-day period.



Sec. 191.92  Accelerated payment.

    (a) General--(1) Scope. Accelerated payment of drawback is available 
under this section on drawback claims under this part, unless 
specifically excepted from such accelerated payment. Accelerated payment 
of drawback consists of the payment of estimated drawback before 
liquidation of the drawback entry. Accelerated payment of drawback is 
only available when Customs review of the request for accelerated 
payment of drawback does not find omissions from, or inconsistencies 
with the requirements of the drawback law and part 191 (see, especially, 
subpart E of this part). Accelerated payment of a drawback claim does 
not constitute liquidation of the drawback entry.
    (2) Effective date for claimants with existing approval. For 
claimants approved for accelerated payment of drawback as of April 6, 
1998, such approval of accelerated payment shall remain in effect, under 
the Customs Regulations in effect as of the time of the approval of 
accelerated payment, for a period of 1 year after April 6, 1998. The 
previously approved accelerated payment of drawback shall terminate at 
the end of such 1-year period unless the claimant applies for 
accelerated payment under this section. If a claimant approved for 
accelerated payment of drawback as of April 6, 1998 applies for 
accelerated payment under this section within such 1-year period, the 
claimant may continue to operate under its existing approval of 
accelerated payment until Customs approves or denies the application for 
accelerated payment under this section, subject to the provisions in 
this section (see, in particular, paragraph (f) of this section).
    (3) Limited successorship for approval of accelerated payment. When 
a claimant (predecessor) is approved for accelerated payment of drawback 
under this section and all of the rights, privileges, immunities, 
powers, duties and liabilities of the claimant are transferred by 
written agreement, merger, or corporate resolution to a successor, such 
approval of accelerated payment shall remain in effect for a period of 1 
year after such transfer. The approval of accelerated payment of 
drawback shall terminate at the end of such 1-year period unless the 
successor applies for accelerated payment of drawback under this 
section. If such successor applies for accelerated payment of drawback 
under this section within such 1-year period, the successor may continue 
to operate under the predecessor's approval of accelerated payment until

[[Page 566]]

Customs approves or denies the successor's application for accelerated 
payment under this section, subject to the provisions in this section 
(see, in particular, paragraph (f) of this section).
    (b) Application for approval; contents. A person who wishes to apply 
for accelerated payment of drawback must file a written application with 
the drawback office where claims will be filed.
    (1) Required information. The application must contain:
    (i) Company name and address;
    (ii) Internal Revenue Service (IRS) number (with suffix);
    (iii) Identity (by name and title) of the person in claimant's 
organization who will be responsible for the drawback program;
    (iv) Description of the bond coverage the applicant intends to use 
to cover accelerated payments of drawback (see paragraph (d) of this 
section), including:
    (A) Identity of the surety to be used;
    (B) Dollar amount of bond coverage for the first year under the 
accelerated payment procedure; and
    (C) Procedures to ensure that bond coverage remains adequate (that 
is, procedures to alert the applicant when and if its accelerated 
payment potential liability exceeds its bond coverage);
    (v) Description of merchandise and/or articles covered by the 
application;
    (vi) Type(s) of drawback covered by the application; and
    (vii) Estimated dollar value of potential drawback during the next 
12-month period covered by the application.
    (2) Previous applications. In the application, the applicant must 
state whether or not the applicant has previously been denied an 
application for accelerated payment of drawback, or had an approval of 
such an application revoked by any drawback office.
    (3) Certification of compliance. In or with the application, the 
applicant must also submit a certification, signed by the applicant, 
that all applicable statutory and regulatory requirements for drawback 
will be met.
    (4) Description of claimant's drawback program. With the 
application, the applicant must submit a description (with sample 
documents) of how the applicant will ensure compliance with its 
certification that the statutory and regulatory drawback requirements 
will be met. This description may be in the form of a booklet. The 
detail contained in this description should vary depending on the size 
and complexity of the applicant's accelerated drawback program (for 
example, if the dollar amount is great and there are several kinds of 
drawback involved, with differing inventory, manufacturing, and shipping 
methods, greater detail in the description will be required). The 
description must include at least:
    (i) The name of the official in the claimant's organization who is 
responsible for oversight of the claimant's drawback program;
    (ii) The procedures and controls demonstrating compliance with the 
statutory and regulatory drawback requirements;
    (iii) The parameters of claimant's drawback record-keeping program, 
including the retention period and method (for example, paper, 
electronic, etc.);
    (iv) A list of the records that will be maintained, including at 
least sample import documents, sample export documents, sample inventory 
and transportation documents (if applicable), sample laboratory or other 
documents establishing the qualification of merchandise or articles for 
substitution under the drawback law (if applicable), and sample 
manufacturing documents (if applicable);
    (v) The procedures that will be used to notify Customs of changes to 
the claimant's drawback program, variances from the procedures described 
in this application, and violations of the statutory and regulatory 
drawback requirements; and
    (vi) The procedures for an annual review by the claimant to ensure 
that its drawback program complies with the statutory and regulatory 
drawback requirements and that Customs is notified of any modifications 
from the procedures described in this application.
    (c) Sample application. The drawback office, upon request, shall 
provide applicants for accelerated payment with a sample letter format 
to assist them in preparing their submissions.

[[Page 567]]

    (d) Bond required. If approved for accelerated payment, the claimant 
must furnish a properly executed bond in an amount sufficient to cover 
the estimated amount of drawback to be claimed during the term of the 
bond. If outstanding accelerated drawback claims exceed the amount of 
the bond, the drawback office will require additional bond coverage as 
necessary before additional accelerated payments are made.
    (e) Action on application--(1) Customs review. The drawback office 
shall review and verify the information submitted in and with the 
application. In order for Customs to evaluate the application, Customs 
may request additional information (including additional sample 
documents) and/or explanations of any of the information provided for in 
paragraph (b)(4) of this section. Based on the information submitted on 
and with the application and any information so requested, and based on 
the applicant's record of transactions with Customs, the drawback office 
will approve or deny the application. The criteria to be considered in 
reviewing the applicant's record with Customs include, but are not 
limited to (as applicable):
    (i) The presence or absence of unresolved Customs charges (duties, 
taxes, or other debts owed Customs);
    (ii) The accuracy of the claimant's past drawback claims; and
    (iii) Whether accelerated payment of drawback or waiver of prior 
notice of intent to export was previously revoked or suspended.
    (2) Notification to applicant. Customs will notify the applicant in 
writing within 90 days of receipt of the application of its decision to 
approve or deny the application, or of Customs inability to approve, 
deny, or act on the application and the reason therefor.
    (3) Approval. The approval of an application for accelerated 
payment, under this section, shall be effective as of the date of 
Customs written notification of approval under paragraph (e)(2) of this 
section. Accelerated payment of drawback shall be available under this 
section to unliquidated drawback claims filed before and after such 
date. For claims filed before such date, accelerated payment of drawback 
shall be paid only if the claimant furnishes a properly executed single 
transaction bond covering the claim, in an amount sufficient to cover 
the amount of accelerated drawback to be paid on the claim.
    (4) Denial. If an application for accelerated payment of drawback 
under this section is denied, the applicant shall be given written 
notice, specifying the grounds therefor, together with what corrective 
action may be taken, and informing the applicant that the denial may be 
appealed in the manner prescribed in paragraph (i) of this section. The 
applicant may not reapply for accelerated payment of drawback until the 
reason for the denial is resolved.
    (f) Revocation. Customs may propose to revoke the approval of an 
application for accelerated payment of drawback under this section, for 
good cause (that is, noncompliance with the drawback law and/or 
regulations). In case of such proposed revocation, Customs shall give 
written notice, by registered or certified mail, of the proposed 
revocation of the approval of accelerated payment. The notice shall 
specify the reasons for Customs proposed action and the procedures for 
challenging Customs proposed revocation action as prescribed in 
paragraph (h) of this section. The revocation shall take effect 30 days 
after the date of the proposed revocation if not timely challenged under 
paragraph (h) of this section. If timely challenged, the revocation will 
take effect after completion of the challenge procedures in paragraph 
(h) of this section unless the challenge is successful.
    (g) Action by drawback office controlling. Action by the appropriate 
drawback office to approve, deny, or revoke accelerated payment of 
drawback will govern the applicant's eligibility for this procedure in 
all Customs drawback offices. If the application for accelerated payment 
of drawback is approved, the claimant shall refer to such approval in 
the first drawback claim filed after such approval in the drawback 
office approving accelerated payment of drawback and shall submit a copy 
of the approval letter with the first drawback claim filed in a drawback 
office other than the approving office.

[[Page 568]]

    (h) Appeal of denial or challenge to proposed revocation. An appeal 
of a denial of an application under this section, or challenge to the 
proposed revocation of an approved application under this section, may 
be made in writing to the drawback office issuing the denial or proposed 
revocation and must be filed within 30 days of the date of denial or 
proposed revocation. A denial of an appeal or challenge made to the 
drawback office may itself be appealed to CBP Headquarters, Office of 
International Trade, Trade Policy and Programs, and must be filed within 
30 days. The 30-day period for appeal or challenge to the drawback 
office or to CBP Headquarters may be extended for good cause, upon 
written request by the applicant or holder for such extension filed with 
the appropriate office within the 30-day period.
    (i) Payment. The drawback office approving a drawback claim in which 
accelerated payment of drawback was requested shall certify the drawback 
claim for payment within 3 weeks after filing, if a component for 
electronic filing of drawback claims, records, or entries which has been 
implemented under the National Customs Automation Program (NCAP) (19 
U.S.C. 1411-1414) is used, and within 3 months after filing, if the 
claim is filed manually. After liquidation, the drawback office shall 
certify payment of any amount due or demand a refund of any excess 
amount paid. Any excess amount of duty the subject of accelerated 
payment that is not refunded within 30 days after the date of 
liquidation of the related drawback entry shall be considered delinquent 
(see Sec. Sec. 24.3a and 113.65(b) of this chapter.)

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 27489, May 19, 1998]



Sec. 191.93  Combined applications.

    An applicant for the procedures provided for in Sec. Sec. 191.91 
and 191.92 of this subpart may apply for only one procedure, both 
procedures separately, or both procedures in one application package 
(see also Sec. 191.195 of this part regarding combined applications for 
certification in the drawback compliance program and waiver of prior 
notice and/or approval of accelerated payment of drawback). In the 
latter instance, the intent to apply for both procedures must be clearly 
stated. In all instances, all of the requirements for the procedure(s) 
applied for must be met (for example, in a combined application for both 
procedures, all of the information required for each procedure, all 
required sample documents for each procedure, and all required 
certifications must be included in and with the application).



 Subpart J_Internal Revenue Tax on Flavoring Extracts and Medicinal or 
  Toilet Preparations (Including Perfumery) Manufactured From Domestic 
                            Tax-Paid Alcohol



Sec. 191.101  Drawback allowance.

    (a) Drawback. Section 313(d) of the Act, as amended (19 U.S.C. 
1313(d)), provides for drawback of internal revenue tax upon the 
exportation of flavoring extracts and medicinal or toilet preparations 
(including perfumery) manufactured or produced in the United States in 
part from the domestic tax-paid alcohol.
    (b) Shipment to Puerto Rico, the Virgin Islands, Guam, and American 
Samoa. Drawback of internal revenue tax on articles manufactured or 
produced under this subpart and shipped to Puerto Rico, the Virgin 
Islands, Guam, or American Samoa shall be allowed in accordance with 
Sec. 7653(c) of the Internal Revenue Code (26 U.S.C. 7653(c)). However, 
there is no authority of law for the allowance of drawback of internal-
revenue tax on flavoring extracts or medicinal or toilet preparations 
(including perfumery) manufactured or produced in the United States and 
shipped to Wake Island, Midway Islands, Kingman Reef, Canton Island, 
Enderbury Island, Johnston Island, or Palmyra Island.



Sec. 191.102  Procedure.

    (a) General. Other provisions of this part relating to direct 
identification drawback (see subpart B of this part) shall apply to 
claims for drawback filed under this subpart insofar as applicable to 
and not inconsistent with the provisions of this subpart.

[[Page 569]]

    (b) Manufacturing record. The manufacturer of flavoring extracts or 
medicinal or toilet preparations on which drawback is claimed shall 
record the products manufactured, the quantity of waste, if any, and a 
full description of the alcohol. These records shall be available at all 
times for inspection by Customs officers.
    (c) Additional information required on the manufacturer's 
application for a specific manufacturing drawback ruling. The 
manufacturer's application for a specific manufacturing drawback ruling, 
under Sec. 191.8 of this part, shall state the quantity of domestic 
tax-paid alcohol contained in each product on which drawback is claimed.
    (d) Variance in alcohol content--(1) Variance of more than 5 
percent. If the percentage of alcohol contained in a medicinal 
preparation, flavoring extract or toilet preparation varies by more than 
5 percent from the percentage of alcohol in the total volume of the 
exported product as stated in a previously approved application for a 
specific manufacturing drawback ruling, the manufacturer shall apply for 
a new specific manufacturing drawback ruling pursuant to Sec. 191.8 of 
this part. If the variation differs from a previously filed schedule, 
the manufacturer shall file a new schedule incorporating the change.
    (2) Variance of 5 percent or less. Variances of 5 percent or less of 
the volume of the product shall be reported to the appropriate drawback 
office where the drawback entries are liquidated. In such cases, the 
drawback office may allow drawback without specific authorization from 
Customs Headquarters.
    (e) Time period for completing claims. The 3-year period for the 
completion of drawback claims prescribed in 19 U.S.C. 1313(r)(1) shall 
be applicable to claims for drawback under this subpart.
    (f) Filing of drawback entries on duty-paid imported merchandise and 
tax-paid alcohol. When the drawback claim covers duty-paid imported 
merchandise in addition to tax-paid alcohol, the claimant shall file one 
set of entries for drawback of Customs duty and another set for drawback 
of internal revenue tax.
    (g) Description of the alcohol. The description of the alcohol 
stated in the drawback entry may be obtained from the description on the 
package containing the tax-paid alcohol.



Sec. 191.103  Additional requirements.

    (a) Manufacturer claims domestic drawback. In the case of medicinal 
preparations and flavoring extracts, the claimant shall file with the 
drawback entry, a declaration of the manufacturer showing whether a 
claim has been or will be filed by the manufacturer with the regional 
regulatory administrator of the Bureau of Alcohol, Tobacco and Firearms 
for domestic drawback on alcohol under Sec. Sec. 5131, 5132, 5133 and 
5134, Internal Revenue Code, as amended (26 U.S.C. 5131, 5132, 5133 and 
5134).
    (b) Manufacturer does not claim domestic drawback--(1) Submission of 
statement. If no claim has been or will be filed with the Bureau of 
Alcohol, Tobacco and Firearms for domestic drawback on medicinal 
preparations or flavoring extracts, the manufacturer shall submit a 
statement, in duplicate, setting forth that fact to the appropriate 
regional regulatory administrator of the Bureau of Alcohol, Tobacco and 
Firearms for the region in which the manufacturer's factory is located.
    (2) Contents of the statement. The statement shall show the:
    (i) Quantity and description of the exported products;
    (ii) Identity of the alcohol used by serial number of package or 
tank car;
    (iii) Name and registry number of the warehouse from which the 
alcohol was withdrawn;
    (iv) Date of withdrawal;
    (v) Serial number of the tax-paid stamp or certificate, if any; and
    (vi) Drawback office where the claim will be filed.
    (3) Verification of the statement. The regional regulatory 
administrator, Bureau of Alcohol, Tobacco and Firearms, shall verify 
receipt of this statement, forward the original of the document to the 
drawback office designated, and retain the copy.

[[Page 570]]



Sec. 191.104  Alcohol, Tobacco and Firearms certificates.

    (a) Request. The drawback claimant or manufacturer shall file a 
written request with the regional regulatory administrator, Bureau of 
Alcohol, Tobacco and Firearms, in whose region the alcohol used in the 
manufacture was withdrawn requesting him to provide the Customs drawback 
office where the drawback claim will be processed, a tax-paid 
certificate on Alcohol, Tobacco and Firearms Form 5100.4 (Certificate of 
Tax-Paid Alcohol).
    (b) Contents. The request shall state the:
    (1) Quantity of alcohol in taxable gallons;
    (2) Serial number of each package;
    (3) Serial number of the stamp, if any;
    (4) Amount of tax paid on the alcohol;
    (5) Name, registry number, and location of the warehouse;
    (6) Date of withdrawal;
    (7) Name of the manufacturer using the alcohol in producing the 
exported articles;
    (8) Address of the manufacturer and his manufacturing plant; and
    (9) Customs drawback office where the drawback claim will be 
processed.
    (c) Extracts of Alcohol, Tobacco and Firearms certificates. If a 
certification of any portion of the alcohol described in the Bureau of 
Alcohol, Tobacco and Firearms Form 5100.4 is required for liquidation of 
drawback entries processed in another drawback office, the drawback 
office, on written application of the person who requested its issuance, 
shall transmit a copy of the extract from the certificate for use at 
that drawback office. The drawback office shall note that the copy of 
the extract was prepared and transmitted.



Sec. 191.105  Liquidation.

    The drawback office shall ascertain the final amount of drawback due 
by reference to the certificate of manufacture and delivery and the 
specific manufacturing drawback ruling under which the drawback claimed 
is allowable.



Sec. 191.106  Amount of drawback.

    (a) Claim filed with Bureau of Alcohol, Tobacco and Firearms. If the 
declaration required by Sec. 191.103 of this subpart shows that a claim 
has been or will be filed with the Bureau of Alcohol, Tobacco and 
Firearms for domestic drawback, drawback under Sec. 313(d) of the Act, 
as amended (19 U.S.C. 1313(d)), shall be limited to the difference 
between the amount of tax paid and the amount of domestic drawback 
claimed.
    (b) Claim not filed with Bureau of Alcohol, Tobacco and Firearms. If 
the declaration and verified statement required by Sec. 191.103 show 
that no claim has been or will be filed by the manufacturer with the 
Bureau of Alcohol, Tobacco and Firearms for domestic drawback, the 
drawback shall be the full amount of the tax on the alcohol used.
    (c) No deduction of 1 percent. No deduction of 1 percent shall be 
made in drawback claims under Sec. 313(d) of the Act, as amended (19 
U.S.C. 1313(d)).
    (d) Payment. The drawback due shall be paid in accordance with Sec. 
191.81(f) of this part.



           Subpart K_Supplies for Certain Vessels and Aircraft



Sec. 191.111  Drawback allowance.

    Section 309 of the Act, as amended (19 U.S.C. 1309), provides for 
drawback on articles laden as supplies on certain vessels or aircraft of 
the United States or as supplies including equipment upon, or used in 
the maintenance or repair of, certain foreign vessels or aircraft.



Sec. 191.112  Procedure.

    (a) General. The provisions of this subpart shall override other 
conflicting provisions of this part.
    (b) Customs forms. The drawback claimant shall file with the 
drawback office the drawback entry on Customs Form 7551 annotated for 19 
U.S.C. 1309, and attach thereto a notice of lading on Customs Form 7514, 
in quadruplicate, unless the export summary procedure, provided for in 
Sec. 191.73, is used. If the export summary procedure is used, the 
requirements in Sec. 191.73 shall be complied with, as applicable,

[[Page 571]]

and the requirements in paragraphs (d)(1) and (f)(1) of this section 
shall also be complied with.
    (c) Time of filing notice of lading. In the case of drawback in 
connection with 19 U.S.C. 1309(b), the drawback notice of lading on 
Customs Form 7514 may be filed either before or after the lading of the 
articles. If filed after lading, the notice shall be filed within 3 
years after exportation of the articles.
    (d) Contents of notice. The notice of lading shall show:
    (1) The name of the vessel or identity of the aircraft on which 
articles were or are to be laden;
    (2) The number and kind of packages and their marks and numbers;
    (3) A description of the articles and their weight (net), gauge, 
measure, or number; and
    (4) The name of the exporter.
    (e) Assignment of numbers and return of one copy. The drawback 
office shall assign a number to each notice of lading and return one 
copy to the exporter for delivery to the master or authorized officer of 
the vessel or aircraft.
    (f) Declaration--(1) Requirement. The master or an authorized 
representative of the vessel or aircraft having knowledge of the facts 
shall complete the section of the notice entitled ``Declaration of 
Master or Other Officer''.
    (2) Procedure if notice filed before lading. If the notice is filed 
before lading of the articles, the declaration must be completed on the 
copy of the numbered drawback notice that was filed with the drawback 
office and returned to the exporter for this purpose.
    (3) Procedure if notice filed after lading. If the drawback notice 
is filed after lading of the articles, the drawback claimant may file a 
separate document containing the declaration required on the Drawback 
Notice, Customs Form 7514.
    (4) Filing. The drawback claimant shall file with the drawback 
office both the drawback entry and the drawback notice or separate 
document containing the declaration of the master or other officer or 
representative.
    (g) Information concerning class or trade. Information about the 
class of business or trade of a vessel or aircraft is required to be 
furnished in support of the drawback entry if the vessel or aircraft is 
American.
    (h) Vessel or aircraft not required to clear or obtain a permit to 
proceed. If the vessel or aircraft is not required to clear or obtain a 
permit to proceed to another port, the drawback office shall return to 
the exporter or the person designated by the exporter two copies of the 
notice, noting the absence of a requirement for clearance or permit to 
proceed, for subsequent filing with the drawback claim. The claimant 
shall file with the claim an itinerary of the vessel or aircraft for the 
immediate voyage or flight showing that the vessel or aircraft is 
engaged in a class of business or trade which makes it eligible for 
drawback.
    (i) Articles laden or installed on aircraft as equipment or used in 
the maintenance or repair of aircraft. The drawback office where the 
drawback claim is filed shall require a declaration or other evidence 
showing to its satisfaction that articles have been laden or installed 
on aircraft as equipment or used in the maintenance or repair of 
aircraft.
    (j) Fuel laden on vessels or aircraft as supplies--(1) Composite 
notice of lading. In the case of fuel laden on vessels or aircraft as 
supplies, the drawback claimant may file with the drawback office a 
composite notice of lading on the reverse side of Customs Form 7514, for 
each calendar month. The composite notice of lading shall describe all 
of the drawback claimant's deliveries of fuel supplies during the one 
calendar month at a single port or airport to all vessels or airplanes 
of one vessel owner or operator or airline. This includes fuel laden for 
flights or voyages between the contiguous U.S. and Hawaii, Alaska, or 
any U.S. possessions (see Sec. 10.59 of this chapter).
    (2) Contents of composite notice.omposite notice shall show for each 
voyage or flight, either on the reverse side of Customs Form 7514 or on 
a continuation sheet:
    (i) The identity of the vessel or aircraft;
    (ii) A description of the fuel supplies laden;
    (iii) The quantity laden; and
    (iv) The date of lading.

[[Page 572]]

    (3) Declaration of owner or operator. An authorized vessel or 
airline representative having knowledge of the facts shall complete the 
section ``Declaration of Master or Other Officer'' on Customs Form 7514.
    (k) Desire to land articles covered by notice of lading. The master 
of the vessel or commander of the aircraft desiring to land in the 
United States articles covered by a notice of lading shall apply for a 
permit to land those articles under Customs supervision. All articles 
landed, except those transferred under the original notice of lading to 
another vessel or aircraft entitled to drawback, shall be considered 
imported merchandise for the purpose of Sec. 309(c) of the Act, as 
amended (19 U.S.C. 1309(c)).



                Subpart L_Meats Cured With Imported Salt



Sec. 191.121  Drawback allowance.

    Section 313(f) of the Act, as amended (19 U.S.C. 1313(f)), provides 
for the allowance of drawback upon the exportation of meats cured with 
imported salt.



Sec. 191.122  Procedure.

    (a) General. Other provisions of this part relating to direct 
identification manufacturing drawback shall apply to claims for drawback 
under this subpart insofar as applicable to and not inconsistent with 
the provisions of this subpart.
    (b) Customs form. The forms used for other drawback claims shall be 
used and modified to show that the claim is being made for refund of 
duties paid on salt used in curing meats.



Sec. 191.123  Refund of duties.

    Drawback shall be refunded in aggregate amounts of not less than 
$100 and shall not be subject to the retention of 1 percent of duties 
paid.



   Subpart M_Materials for Construction and Equipment of Vessels and 
            Aircraft Built for Foreign Ownership and Account



Sec. 191.131  Drawback allowance.

    Section 313(g) of the Act, as amended (19 U.S.C. 1313(g)), provides 
for drawback on imported materials used in the construction and 
equipment of vessels and aircraft built for foreign account and 
ownership, or for the government of any foreign country, notwithstanding 
that these vessels or aircraft may not be exported within the strict 
meaning of the term.



Sec. 191.132  Procedure.

    Other provisions of this part relating to direct identification 
manufacturing drawback shall apply to claims for drawback filed under 
this subpart insofar as applicable to and not inconsistent with the 
provisions of this subpart.



Sec. 191.133  Explanation of terms.

    (a) Materials. Section 313(g) of the Act, as amended (19 U.S.C. 
1313(g)), applies only to materials used in the original construction 
and equipment of vessels and aircraft, or to materials used in a ``major 
conversion'', as defined in this section, of a vessel or aircraft. 
Section 313(g) does not apply to materials used for alteration or 
repair, or to materials not required for safe operation of the vessel or 
aircraft.
    (b) Foreign account and ownership. Foreign account and ownership, as 
used in Sec. 313(g) of the Act, as amended (19 U.S.C. 1313(g)), means 
only vessels or aircraft built or equipped for the account of an owner 
or owners residing in a foreign country and having a bona fide intention 
that the vessel or aircraft, when completed, shall be owned and operated 
under the flag of a foreign country.
    (c) Major conversion. For purposes of this subpart, a ``major 
conversion'' means a conversion that substantially changes the 
dimensions or carrying capacity of the vessel or aircraft, changes the 
type of the vessel or aircraft, substantially prolongs the life of the 
vessel or aircraft, or otherwise so changes

[[Page 573]]

the vessel or aircraft that it is essentially a new vessel or aircraft, 
as determined by Customs (see 46 U.S.C. 2101(14a)).



  Subpart N_Foreign-Built Jet Aircraft Engines Processed in the United 
                                 States



Sec. 191.141  Drawback allowance.

    Section 313(h) of the Act, as amended (19 U.S.C. 1313(h)), provides 
for drawback on the exportation of jet aircraft engines manufactured or 
produced abroad that have been overhauled, repaired, rebuilt, or 
reconditioned in the United States with the use of imported merchandise, 
including parts.



Sec. 191.142  Procedure.

    Other provisions of this part shall apply to claims for drawback 
filed under this subpart insofar as applicable to and not inconsistent 
with the provisions of this subpart.



Sec. 191.143  Drawback entry.

    (a) Filing of entry. Drawback entries covering these foreign-built 
jet aircraft engines shall be filed on Customs Form 7551, modified to 
show that the entry covers jet aircraft engines processed under Sec. 
313(h) of the Act, as amended (19 U.S.C. 1313(h)).
    (b) Contents of entry. The entry shall show the country in which 
each engine was manufactured and describe the processing performed 
thereon in the United States.



Sec. 191.144  Refund of duties.

    Drawback shall be refunded in aggregate amounts of not less than 
$100, and shall not be subject to the deduction of 1 percent of duties 
paid.



     Subpart O_Merchandise Exported From Continuous Customs Custody



Sec. 191.151  Drawback allowance.

    (a) Eligibility of entered or withdrawn merchandise--(1) Under 19 
U.S.C. 1557(a). Section 557(a) of the Act, as amended (19 U.S.C. 
1557(a)), provides for drawback on the exportation to a foreign country, 
or the shipment to the Virgin Islands, American Samoa, Wake Island, 
Midway Islands, Kingman Reef, Johnston Island, or Guam, of merchandise 
upon which duties have been paid which has remained continuously in 
bonded warehouse or otherwise in Customs custody for a period not to 
exceed 5 years from the date of importation.
    (2) Under 19 U.S.C. 1313. Imported merchandise that has not been 
regularly entered or withdrawn for consumption, shall not satisfy any 
requirement for use, importation, exportation or destruction, and shall 
not be available for drawback, under Sec. 313 of the Act, as amended 
(19 U.S.C. 1313) (see 19 U.S.C. 1313(u)).
    (b) Guantanamo Bay. Guantanamo Bay Naval Station shall be considered 
foreign territory for drawback purposes under this subpart and 
merchandise shipped there is eligible for drawback. Imported merchandise 
which has remained continuously in bonded warehouse or otherwise in 
Customs custody since importation is not entitled to drawback of duty 
when shipped to Puerto Rico, Canton Island, Enderbury Island, or Palmyra 
Island.



Sec. 191.152  Merchandise released from Customs custody.

    No remission, refund, abatement, or drawback of duty shall be 
allowed under this subpart because of the exportation or destruction of 
any merchandise after its release from Government custody, except in the 
following cases:
    (a) When articles are exported or destroyed on which drawback is 
expressly provided for by law;
    (b) When prohibited articles have been regularly entered in good 
faith and are subsequently exported or destroyed pursuant to statute and 
regulations prescribed by the Secretary of the Treasury; or
    (c) When articles entered under bond are destroyed within the bonded 
period, as provided in Sec. 557(c) of the Act, as amended (19 U.S.C. 
1557(c)), or destroyed within the bonded period by death, accidental 
fire, or other casualty, and satisfactory evidence of destruction is 
furnished to Customs (see Sec. 191.71), in which case any accrued 
duties shall be remitted or refunded and any condition in the bond that 
the articles shall be exported shall be deemed

[[Page 574]]

to have been satisfied (see 19 U.S.C. 1558).



Sec. 191.153  Continuous Customs custody.

    (a) Merchandise released under an importer's bond and returned. 
Merchandise released to an importer under a bond prescribed by Sec. 
142.4 of this chapter and later returned to the public stores upon 
requisition of the appropriate Customs office shall not be deemed to be 
in the continuous custody of Customs officers.
    (b) Merchandise released under Chapter 98, Subchapter XIII, 
Harmonized Tariff Schedule of the United States (HTSUS). Merchandise 
released as provided for in Chapter 98, Subchapter XIII, HTSUS (19 
U.S.C. 1202), shall not be deemed to be in the continuous custody of 
Customs officers.
    (c) Merchandise released from warehouse. For the purpose of this 
subpart, in the case of merchandise entered for warehouse, Customs 
custody shall be deemed to cease when estimated duty has been deposited 
and the appropriate Customs office has authorized the withdrawal of the 
merchandise.
    (d) Merchandise not warehoused, examined elsewhere than in public 
stores--(1) General rule. Except as stated in paragraph (d)(2) of this 
section, merchandise examined elsewhere than at the public stores, in 
accordance with the provisions of Sec. 151.7 of this chapter, shall be 
considered released from Customs custody upon completion of final 
examination for appraisement.
    (2) Merchandise upon the wharf. Merchandise which remains on the 
wharf by permission of the appropriate Customs office shall be 
considered to be in Customs custody, but this custody shall be deemed to 
cease when the Customs officer in charge accepts the permit and has no 
other duties to perform relating to the merchandise, such as measuring, 
weighing, or gauging.



Sec. 191.154  Filing the entry.

    (a) Direct export. At least 6 working hours before lading the 
merchandise on which drawback is claimed under this subpart, the 
importer or the agent designated by him in writing shall file with the 
drawback office a direct export drawback entry on Customs Form 7551 in 
duplicate.
    (b) Merchandise transported to another port for exportation. The 
importer of merchandise to be transported to another port for 
exportation shall file in triplicate with the drawback office an entry 
naming the transporting conveyance, route, and port of exit. The 
drawback office shall certify one copy and forward it to the Customs 
office at the port of exit. A bonded carrier shall transport the 
merchandise in accordance with the applicable regulations. Manifests 
shall be prepared and filed in the manner prescribed in Sec. 144.37 of 
this chapter.



Sec. 191.155  Merchandise withdrawn from warehouse for exportation.

    The regulations in part 18 of this chapter concerning the 
supervision of lading and certification of exportation of merchandise 
withdrawn from warehouse for exportation without payment of duty shall 
be followed to the extent applicable.



Sec. 191.156  Bill of lading.

    (a) Filing. In order to complete the claim for drawback under this 
subpart, a bill of lading covering the merchandise described in the 
drawback entry (Customs Form 7551) shall be filed within 2 years after 
the merchandise is exported.
    (b) Contents. The bill of lading shall either show that the 
merchandise was shipped by the person making the claim or bear an 
endorsement of the person in whose name the merchandise was shipped 
showing that the person making the claim is authorized to do so.
    (c) Limitation of the bill of lading. The terms of the bill of 
lading may limit and define its use by stating that it is for Customs 
purposes only and not negotiable.
    (d) Inability to produce bill of lading. When a required bill of 
lading cannot be produced, the person making the drawback entry may 
request the drawback office, within the time required for the filing of 
the bill of lading, to accept a statement setting forth the cause of 
failure to produce the bill of lading and such evidence of exportation 
and of his right to make the drawback entry as may be available. The 
request shall be granted if the drawback office

[[Page 575]]

is satisfied by the evidence submitted that the failure to produce the 
bill of lading is justified, that the merchandise has been exported, and 
that the person making the drawback entry has the right to do so. If the 
drawback office is not so satisfied, such office shall transmit the 
request and its accompanying evidence to the Office of International 
Trade, CBP Headquarters, for final determination.
    (e) Extracts of bills of lading. Drawback offices may issue extracts 
of bills of lading filed with drawback claims.



Sec. 191.157  Landing certificates.

    When required, a landing certificate shall be filed within the time 
prescribed in Sec. 191.76 of this part.



Sec. 191.158  Procedures.

    When the drawback claim has been completed and the bill of lading 
filed, together with the landing certificate, if required, the reports 
of inspection and lading made, and the clearance of the exporting 
conveyance established by the record of clearance in the case of direct 
exportation or by certificate in the case of transportation and 
exportation, the drawback office shall verify the importation by 
referring to the import records to ascertain the amount of duty paid on 
the merchandise exported. To the extent appropriate and not inconsistent 
with the provisions of this subpart, drawback entries shall be 
liquidated in accordance with the provisions of Sec. 191.81 of this 
part.



Sec. 191.159  Amount of drawback.

    Drawback due under this subpart shall not be subject to the 
deduction of 1 percent.



Subpart P_Distilled Spirits, Wines, or Beer Which Are Unmerchantable or 
               Do Not Conform to Sample or Specifications



Sec. 191.161  Refund of taxes.

    Section 5062(c), Internal Revenue Code, as amended (26 U.S.C. 
5062(c)), provides for the refund, remission, abatement or credit to the 
importer of internal-revenue taxes paid or determined incident to 
importation, upon the exportation, or destruction under Customs 
supervision, of imported distilled spirits, wines, or beer found after 
entry to be unmerchantable or not to conform to sample or specifications 
and which are returned to Customs custody.



Sec. 191.162  Procedure.

    The export procedure shall be the same as that provided in Sec. 
191.42 except that the claimant must be the importer and as otherwise 
provided in this subpart.



Sec. 191.163  Documentation.

    (a) Entry. Customs Form 7551 shall be used to claim drawback under 
this subpart.
    (b) Documentation. The drawback entry for unmerchantable merchandise 
shall be accompanied by a certificate of the importer setting forth in 
detail the facts which cause the merchandise to be unmerchantable and 
any additional evidence that the drawback office requires to establish 
that the merchandise is unmerchantable.



Sec. 191.164  Return to Customs custody.

    There is no time limit for the return to Customs custody of 
distilled spirits, wine, or beer subject to refund of taxes under the 
provisions of this subpart.



Sec. 191.165  No exportation by mail.

    Merchandise covered by this subpart shall not be exported by mail.



Sec. 191.166  Destruction of merchandise.

    (a) Action by the importer. A drawback claimant who proposes to 
destroy rather than export the distilled spirits, wine, or beer shall 
state that fact on Customs Form 7551.
    (b) Action by Customs. Distilled spirits, wine, or beer returned to 
Customs custody at the place approved by the drawback office where the 
drawback entry was filed shall be destroyed under the supervision of the 
Customs officer who shall certify the destruction on Customs Form 7553.

[[Page 576]]



Sec. 191.167  Liquidation.

    No deduction of 1 percent of the internal revenue taxes paid or 
determined shall be made in allowing entries under Sec. 5062(c), 
Internal Revenue Code, as amended (26 U.S.C. 5062(c)).



Sec. 191.168  Time limit for exportation or destruction.

    Merchandise not exported or destroyed within 90 days from the date 
of notification of acceptance of the drawback entry shall be considered 
unclaimed, unless upon written request by the importer, prior to the 
expiration of the 90-day period, the drawback office grants an extension 
of not more than 90 days.



        Subpart Q_Substitution of Finished Petroleum Derivatives



Sec. 191.171  General; drawback allowance.

    (a) General. Section 313(p) of the Act, as amended (19 U.S.C. 
1313(p)), provides for drawback on the basis of qualified articles which 
consist of either petroleum derivatives that are imported, duty-paid, 
and qualified for drawback under the unused merchandise drawback law (19 
U.S.C. 1313(j)(1)), or petroleum derivatives that are manufactured or 
produced in the United States, and qualified for drawback under the 
manufacturing drawback law (19 U.S.C. 1313(a) or (b)).
    (b) Allowance of drawback. Drawback may be granted under 19 U.S.C. 
1313(p):
    (1) In cases where there is no manufacture, upon exportation of the 
imported article, an article of the same kind and quality, or any 
combination thereof; or
    (2) In cases where there is a manufacture or production, upon 
exportation of the manufactured or produced article, an article of the 
same kind and quality, or any combination thereof.
    (c) Merchandise processing fees. In cases where the requirements of 
paragraph (b)(1) of this section have been met, merchandise processing 
fees will be eligible for drawback.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 
16637, Apr. 8, 2002; CBP Dec. 04-33, 69 FR 60083, Oct. 7, 2004]



Sec. 191.172  Definitions.

    The following are definitions for purposes of this subpart only:
    (a) Qualified article. ``Qualified article'' means an article 
described in headings 2707, 2708, 2710 through 2715, 2901, 2902, 
2909.19.14, or 3901 through 3914 of the Harmonized Tariff Schedule of 
the United States (HTSUS). In the case of an article described in 
headings 3901 through 3914, the definition covers the article in its 
primary forms as provided in Note 6 to chapter 39 of the HTSUS.
    (b) Same kind and quality article. ``Same kind and quality article'' 
means an article which is commercially interchangeable with, or which is 
referred to under the same 8-digit classification of the HTSUS as, the 
article to which it is compared. (For example, unleaded gasoline and jet 
fuel (naphtha or kerosene-type), both falling under the same HTSUS 
classification (2710.00.15) would be considered same kind and quality 
articles because they fall under the same 8 digit HTSUS classification, 
even though they are not ``commercially interchangeable''.)
    (c) Exported article. ``Exported article'' means an article which 
has been exported and is the qualified article, an article of the same 
kind and quality as the qualified article, or any combination thereof.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 
16637, Apr. 8, 2002]



Sec. 191.173  Imported duty-paid derivatives (no manufacture).

    When the basis for drawback under 19 U.S.C. 1313(p) is imported 
duty-paid petroleum derivatives (that is, not articles manufactured 
under 19 U.S.C. 1313(a) or (b)), the requirements for drawback are as 
follows:
    (a) Imported duty-paid merchandise. The imported duty-paid 
merchandise designated for drawback must be a ``qualified article'' as 
defined in Sec. 191.172(a) of this subpart;
    (b) Exported article. The exported article on which drawback is 
claimed must be an ``exported article'' as defined in Sec. 191.172(c) 
of this subpart;
    (c) Exporter. The exporter of the exported article must have either:

[[Page 577]]

    (1) Imported the qualified article in at least the quantity of the 
exported article; or
    (2) Purchased or exchanged (directly or indirectly) from an importer 
an imported qualified article in at least the quantity of the exported 
article;
    (d) Time of export. The exported article must be exported within 180 
days after the date of entry of the designated imported duty-paid 
merchandise; and
    (e) Amount of drawback. The amount of drawback payable may not 
exceed the amount of drawback which would be attributable to the 
imported qualified article under 19 U.S.C. 1313(j)(1) which serves as 
the basis for drawback.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 
16637, Apr. 8, 2002]



Sec. 191.174  Derivatives manufactured under 19 U.S.C. 1313(a) or (b).

    When the basis for drawback under 19 U.S.C. 1313(p) is petroleum 
derivatives which were manufactured or produced in the United States and 
qualify for drawback under the manufacturing drawback law (19 U.S.C. 
1313(a) or (b)), the requirements for drawback are as follows:
    (a) Merchandise. The merchandise which is the basis for drawback 
under 19 U.S.C. 1313(p) must:
    (1) Have been manufactured or produced as described in 19 U.S.C. 
1313(a) or (b) from crude petroleum or a petroleum derivative; and
    (2) Be a ``qualified article'' as defined in Sec. 191.172(a) of 
this subpart;
    (b) Exported article. The exported article on which drawback is 
claimed must be an ``exported article'' as defined in Sec. 191.172(c) 
of this subpart;
    (c) Exporter. The exporter of the exported article must have either:
    (1) Manufactured or produced the qualified article in at least the 
quantity of the exported article; or
    (2) Purchased or exchanged (directly or indirectly) from a 
manufacturer or producer described in 19 U.S.C. 1313(a) or (b) the 
qualified article in at least the quantity of the exported article;
    (d) Manufacture in specific facility. The qualified article must 
have been manufactured or produced in a specific petroleum refinery or 
production facility which must be identified;
    (e) Time of export. The exported article must be exported either:
    (1) During the period provided for in the manufacturer's or 
producer's specific manufacturing drawback ruling (see Sec. 191.8 of 
this part) in which the qualified article is manufactured or produced; 
or
    (2) Within 180 days after the close of the period in which the 
qualified article is manufactured or produced; and
    (f) Amount of drawback. The amount of drawback payable may not 
exceed the amount of drawback which would be attributable to the article 
manufactured or produced under 19 U.S.C. 1313(a) or (b) which serves as 
the basis for drawback.



Sec. 191.175  Drawback claimant; maintenance of records.

    (a) Drawback claimant. A drawback claimant under 19 U.S.C. 1313(p) 
must be the exporter of the exported article, or the refiner, producer, 
or importer of either the qualified article or the exported article. Any 
of these persons may designate another person to file the drawback 
claim.
    (b) Certificate of manufacture and delivery or delivery--(1) 
General. A drawback claimant under 19 U.S.C. 1313(p) must provide a 
certificate of manufacture and delivery or a certificate of delivery, as 
applicable, establishing the drawback eligibility of the articles for 
which drawback is claimed.
    (2) Article substituted for the qualified article. (i) Subject to 
paragraph (b)(2)(iii) of this section, the manufacturer, producer, or 
importer of a qualified article may transfer to the exporter an article 
of the same kind and quality as the qualified article, as so certified, 
respectively, in a certificate of manufacture and delivery or a 
certificate of delivery, in a quantity not greater than the quantity of 
the qualified article.
    (ii) Subject to paragraph (b)(2)(iii) of this section, any 
intermediate party in the chain of commerce leading to the exporter from 
the manufacturer, producer, or importer of a qualified article may also 
transfer to the exporter or to another intermediate party an article

[[Page 578]]

of the same kind and quality as the article purchased or exchanged from 
the prior transferor (whether the manufacturer, producer, importer, or 
another intermediate transferor), as so certified in a certificate of 
delivery, in a quantity not greater than the quantity of the article 
purchased or exchanged.
    (iii) Under either paragraph (b)(2)(i) or (b)(2)(ii) of this 
section, the article transferred, regardless of its origin (imported, 
manufactured, substituted, or any combination thereof), so designated on 
a certificate of delivery or, in the case of the manufacturer or 
producer of a qualified article under 19 U.S.C. 1313(a) or (b), on a 
certificate of manufacture and delivery, will be the qualified article 
eligible for drawback for purposes of section 1313(p), provided that the 
following conditions are met:
    (A) The party who issues the applicable certificate for the 
transferred article must expressly state on the certificate that the 
certificate is prepared pursuant to 19 U.S.C. 1313(p) (the article may 
not be designated for any other drawback purposes);
    (B) The party must certify to the Commissioner of Customs on the 
certificate or an attachment that it has not, and will not, designate on 
that certificate and on any other such certificates issued a quantity of 
the article greater than the amount eligible for drawback; and
    (C) The party must certify to the Commissioner of Customs on the 
applicable certificate or on an attachment that it will maintain 
appropriate records which establish that it has not designated on any 
such certificates issued a greater quantity than the amount eligible for 
drawback.
    (c) Maintenance of records. The manufacturer, producer, importer, 
transferor, exporter and drawback claimant of the qualified article and 
the exported article must all maintain their appropriate records 
required by this part.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 02-16, 67 FR 
16637, Apr. 8, 2002]



Sec. 191.176  Procedures for claims filed under 19 U.S.C. 1313(p).

    (a) Applicability. The general procedures for filing drawback claims 
shall be applicable to claims filed under 19 U.S.C. 1313(p) unless 
otherwise specifically provided for in this section.
    (b) Administrative efficiency, frequency of claims, and 
restructuring of claims. The procedures regarding administrative 
efficiency, frequency of claims, and restructuring of claims (as 
applicable, see Sec. 191.53 of this part) shall apply to claims filed 
under this subpart.
    (c) Imported duty-paid derivatives (no manufacture). When the basis 
for drawback under 19 U.S.C. 1313(p) is imported duty-paid petroleum 
(not articles manufactured under 19 U.S.C. 1313(a) or (b)), claims under 
this subpart may be paid and liquidated if:
    (1) The claim is filed on Customs Form 7551; and
    (2) The claimant provides a certification stating the basis (such as 
company records, or customer's written certification), for the 
information contained therein and certifying that:
    (i) The exported merchandise was exported within 180 days of entry 
of the designated, imported merchandise;
    (ii) The qualified article and the exported article are commercially 
interchangeable or both articles are subject to the same 8-digit HTSUS 
tariff classification;
    (iii) To the best of the claimant's knowledge, the designated 
imported merchandise, the qualified article and the exported article 
have not and will not serve as the basis of any other drawback claim;
    (iv) Evidence in support of the certification will be retained by 
the person providing the certification for 3 years after payment of the 
claim; and
    (v) Such evidence will be available for verification by Customs.
    (d) Derivatives manufactured under 19 U.S.C. 1313(a) or (b). When 
the basis for drawback under 19 U.S.C. 1313(p) is articles manufactured 
under 19 U.S.C. 1313(a) or (b), claims under this section may be paid 
and liquidated if:
    (1) The claim is filed on Customs Form 7551;
    (2) All documents required to be filed with a manufacturing claim 
under 19 U.S.C. 1313(a) or (b) are filed with the claim;
    (3) The claim identifies the specific refinery or production 
facility at which

[[Page 579]]

the derivatives were manufactured or produced;
    (4) The claim states the period of manufacture for the derivatives; 
and
    (5) The claimant provides a certification stating the basis (such as 
company records or a customer's written certification), for the 
information contained therein and certifying that:
    (i) The exported merchandise was exported during the manufacturing 
period for the qualified article or within 180 days after the close of 
that period;
    (ii) The qualified article and the exported article are commercially 
interchangeable or both articles are subject to the same 8-digit HTSUS 
tariff classification;
    (iii) To the best of the claimant's knowledge, the designated 
imported merchandise, the qualified article and the exported article 
have not and will not serve as the basis of any other drawback claim;
    (iv) Evidence in support of the certification will be retained by 
the person providing the certification for 3 years after payment of the 
claim; and
    (v) Such evidence will be available for verification by Customs.



 Subpart R_Merchandise Transferred to a Foreign Trade Zone From Customs 
                                Territory



Sec. 191.181  Drawback allowance.

    The fourth proviso of Sec. 3 of the Foreign Trade Zones Act of June 
18, 1934, as amended (19 U.S.C. 81c), provides for drawback on 
merchandise transferred to a foreign trade zone for the sole purpose of 
exportation, storage or destruction (except destruction of distilled 
spirits, wines, and fermented malt liquors), provided there is 
compliance with the regulations of this subpart.



Sec. 191.182  Zone-restricted merchandise.

    Merchandise in a foreign trade zone for the purposes specified in 
Sec. 191.181 shall be given status as zone-restricted merchandise on 
proper application (see Sec. 146.44 of this chapter).



Sec. 191.183  Articles manufactured or produced in the United States.

    (a) Procedure for filing documents. Except as otherwise provided, 
the drawback procedures prescribed in this part shall be followed as 
applicable to drawback under this subpart on articles manufactured or 
produced in the United States with the use of imported or substituted 
merchandise, and on flavoring extracts or medicinal or toilet 
preparations (including perfumery) manufactured or produced with the use 
of domestic tax-paid alcohol.
    (b) Notice of transfer--(1) Evidence of export. The notice of zone 
transfer on Customs Form 214 shall be in place of the documents under 
subpart G of this part to establish the exportation.
    (2) Filing procedures. The notice of transfer, in triplicate, shall 
be filed with the drawback office where the foreign trade zone is 
located prior to the transfer of the articles to the zone, or within 3 
years after the transfer of the articles to the zone. A notice filed 
after the transfer shall state the foreign trade zone lot number.
    (3) Contents of notice. Each notice of transfer shall show the:
    (i) Number and location of the foreign trade zone;
    (ii) Number and kind of packages and their marks and numbers;
    (iii) Description of the articles, including weight (gross and net), 
gauge, measure, or number; and
    (iv) Name of the transferor.
    (c) Action of foreign trade zone operator. After articles have been 
received in the zone, the zone operator shall certify on a copy of the 
notice of transfer the receipt of the articles (see Sec. 191.184(d)(2)) 
and forward the notice to the transferor or the person designated by the 
transferor, unless the export summary procedure, provided for in Sec. 
191.73, is used. If the export summary procedure is used, the 
requirements in Sec. 191.73 shall be complied with, as applicable. The 
transferor shall verify that the notice has been certified before filing 
it with the drawback claim.
    (d) Drawback entries. Drawback entries shall be filed on Customs 
Form 7551 to indicate that the merchandise was transferred to a foreign 
trade zone. The ``Declaration of Exportation'' shall be modified as 
follows:

             Declaration of Transfer to a Foreign Trade Zone

I,--------------------__________________________________________________
(member of firm, officer representing corporation, agent, or attorney), 
of

[[Page 580]]

--------------------, declare that, to the best of my knowledge and 
belief, the particulars of transfer stated in this entry, the notices of 
transfer, and receipts are correct, and that the merchandise was 
transferred to a foreign trade zone for the sole purpose of exportation, 
destruction, or storage, not to be removed from the foreign trade zone 
for domestic consumption.

Dated:__________________________________________________________________

________________________________________________________________________
Transferor or agent



Sec. 191.184  Merchandise transferred from continuous Customs custody.

    (a) Procedure for filing claims. The procedure described in subpart 
O of this part shall be followed as applicable, for drawback on 
merchandise transferred to a foreign trade zone from continuous Customs 
custody.
    (b) Drawback entry. Before the transfer of merchandise from 
continuous Customs custody to a foreign trade zone, the importer or a 
person designated in writing by the importer for that purpose shall file 
with the drawback office a direct export drawback entry on Customs Form 
7551 in duplicate. The drawback office shall forward one copy of Customs 
Form 7551 to the zone operator at the zone.
    (c) Certification by zone operator. After the merchandise has been 
received in the zone, the zone operator shall certify on the copy of 
Customs Form 7551 the receipt of the merchandise (see paragraph (d)(2) 
of this section) and forward the form to the transferor or the person 
designated by the transferor, unless the export summary procedure, 
provided for in Sec. 191.73, is used. If the export summary procedure 
is used, the requirements in Sec. 191.73 shall be complied with, as 
applicable. After executing the declaration provided for in paragraph 
(d)(3) of this section, the transferor shall resubmit Customs Form 7551 
to the drawback office in place of the bill of lading required by Sec. 
191.156.
    (d) Modification of drawback entry--(1) Indication of transfer. 
Customs Form 7551 shall indicate that the merchandise is to be 
transferred to a foreign trade zone.
    (2) Endorsement. The transferor or person designated by the 
transferor shall endorse Customs Form 7551 as follows, for execution by 
the foreign trade zone operator:

              Certification of Foreign Trade Zone Operator

    The merchandise described in the entry was received from ----------
-- on ------------------, 19----; in Foreign Trade Zone No.------------,
(City and State)
Exceptions ------------_________________________________________________
(Name and title)
By ------------_________________________________________________________
(Name of operator)

    (3) Transferor's declaration. The transferor shall declare on 
Customs Form 7551 as follows:

                        Transferor's Declaration

I, --------------------_________________________________________________
of the firm of--------------------, declare that the merchandise 
described in this entry was duly entered at the customhouse on arrival 
at this port; that the duties thereon have been paid as specified in 
this entry; and that it was transferred to Foreign Trade Zone No. ------
, located at ------------, (City and State) for the sole purpose of 
exportation, destruction, or storage, not to be removed from the foreign 
trade zone for domestic consumption. I further declare that to the best 
of my knowledge and belief, this merchandise is in the same quantity, 
quality, value, and package, unavoidable wastage and damage excepted, as 
it was at the time of importation; that no allowance nor reduction of 
duties has been made for damage or other cause except as specified in 
this entry; and that no part of the duties paid has been refunded by 
drawback or otherwise.

Dated:__________________________________________________________________
(Transferor)



Sec. 191.185  Unused merchandise drawback and merchandise not conforming to sample or specification, shipped without consent of the consignee, or found to be 
          defective as of the time of importation.

    (a) Procedure for filing claims. The procedures described in subpart 
C of this part relating to unused merchandise drawback, and in subpart D 
of this part relating to rejected merchandise, shall be followed as 
applicable to drawback under this subpart for unused merchandise 
drawback and merchandise that does not conform to sample or 
specification, is shipped without consent of the consignee, or is found 
to be defective as of the time of importation.
    (b) Drawback entry. Before transfer of the merchandise to a foreign 
trade

[[Page 581]]

zone, the importer or a person designated in writing by the importer for 
that purpose shall file with the drawback office an entry on Customs 
Form 7551 in duplicate. The drawback office shall forward one copy of 
Customs Form 7551 to the zone operator at the zone.
    (c) Certification by zone operator. After the merchandise has been 
received in the zone, the zone operator at the zone shall certify on the 
copy of Customs Form 7551 the receipt of the merchandise and forward the 
form to the transferor or the person designated by the transferor, 
unless the export summary procedure, provided for in Sec. 191.73, is 
used. If the export summary procedure is used, the requirements in Sec. 
191.73 shall be complied with, as applicable. After executing the 
declaration provided for in paragraph (d)(3) of this section, the 
transferor shall resubmit Customs Form 7551 to the drawback office in 
place of the bill of lading required by Sec. 191.156.
    (d) Modification of drawback entry--(1) Indication of transfer. 
Customs Form 7551 shall indicate that the merchandise is to be 
transferred to a foreign trade zone.
    (2) Endorsement. The transferor or person designated by the 
transferor shall endorse Customs Form 7551 as follows, for execution by 
the foreign trade zone operator:

              Certification of Foreign Trade Zone Operator

    The merchandise described in this entry was received from ----------
-- on ------------, 19 ----, in Foreign Trade Zone No. ------------, --
---------- (City and State).
Exceptions:_____________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Name of operator)
By______________________________________________________________________
(Name and title)

    (3) Transferor's declaration. The transferor shall declare on 
Customs Form 7551 as follows:

                        Transferor's Declaration

I, ------------_________________________________________________________
of the firm of ------------, declare that the merchandise described in 
the within entry was duly entered at the customhouse on arrival at this 
port; that the duties thereon have been paid as specified in this entry; 
and that it was transferred to Foreign Trade Zone No. ------------, 
located at------------
(City and State) for the sole purpose of exportation, destruction, or 
storage, not to be removed from the foreign trade zone for domestic 
consumption. I further declare that to the best of my knowledge and 
belief, said merchandise is the same in quantity, quality, value, and 
package as specified in this entry; that no allowance nor reduction in 
duties has been made; and that no part of the duties paid has been 
refunded by drawback or otherwise.
Dated:__________________________________________________________________
Transferor

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15289, Mar. 31, 1998]



Sec. 191.186  Person entitled to claim drawback.

    The person named in the foreign trade zone operator's certification 
on the notice of transfer or the drawback entry, as applicable, shall be 
considered to be the transferor. Drawback may be claimed by, and paid 
to, the transferor.



                  Subpart S_Drawback Compliance Program



Sec. 191.191  Purpose.

    This subpart sets forth the requirements for the Customs drawback 
compliance program in which claimants and other parties in interest, 
including Customs brokers, may participate after being certified by 
Customs. Participation in the program is voluntary. Under the program, 
Customs is required to inform potential drawback claimants and related 
parties clearly about their rights and obligations under the drawback 
law and regulations. Reduced penalties and/or warning letters may be 
issued once a party has been certified for the program, and is in 
general compliance with the appropriate procedures and requirements 
thereof.



Sec. 191.192  Certification for compliance program.

    (a) General. A party may be certified as a participant in the 
drawback compliance program after meeting the core requirements 
established under the program, or after negotiating an alternative 
drawback compliance program suited to the needs of both the party and 
Customs. Certification requirements shall take into account the size

[[Page 582]]

and nature of the party's drawback program, the type of drawback claims 
filed, and the volume of claims filed. Whether the party is a drawback 
claimant, a broker, or one that provides data and documentation on which 
a drawback claim is based, will also be considered.
    (b) Core requirements of program. In order to be certified as a 
participant in the drawback compliance program or negotiated alternative 
drawback compliance program, the party must be able to demonstrate that 
it:
    (1) Understands the legal requirements for filing claims, including 
the nature of the records that are required to be maintained and 
produced and the time periods involved;
    (2) Has in place procedures that explain the Customs requirements to 
those employees involved in the preparation of claims, and the 
maintenance and production of required records;
    (3) Has in place procedures regarding the preparation of claims and 
maintenance of required records, and the production of such records to 
Customs;
    (4) Has designated a dependable individual or individuals who will 
be responsible for compliance under the program, and maintenance and 
production of required records;
    (5) Has in place a record maintenance program approved by Customs 
regarding original records, or if approved by Customs, alternative 
records or recordkeeping formats for other than the original records; 
and
    (6) Has procedures for notifying Customs of variances in, or 
violations of, the drawback compliance or other alternative negotiated 
drawback compliance program, and for taking corrective action when 
notified by Customs of violations and problems regarding such program.
    (c) Broker certification. A Customs broker may be certified as a 
participant in the drawback compliance program only on behalf of a given 
claimant (see Sec. 191.194(b)). To do so, a Customs broker who is 
employed to assist a claimant in filing for drawback must be able to 
demonstrate, for and on behalf of such claimant, conformity with the 
core requirements of the drawback compliance program as set forth in 
paragraph (b) of this section. The broker shall ensure that the claimant 
has the necessary documentation and records to support the drawback 
compliance program established on its behalf, and that claims to be 
filed under the program are reviewed by the broker for accuracy and 
completeness.



Sec. 191.193  Application procedure for compliance program.

    (a) Who may apply. Claimants and other parties in interest may apply 
for participation in the drawback compliance program. This includes any 
person, corporation or business entity that provides supporting 
information or documentation to one who files drawback claims, as well 
as Customs brokers who assist claimants in filing for drawback. Program 
participants may further consist of importers, manufacturers or 
producers, agent-manufacturers, complementary recordkeepers, 
subcontractors, intermediate parties, and exporters.
    (b) Place of filing. An application in letter format containing the 
information as prescribed in paragraphs (c) and (d) of this section 
shall be submitted to any drawback office. However, in the event the 
applicant is a claimant for drawback, the application shall be submitted 
to the drawback office where the claims will be filed.
    (c) Letter of application; contents. A party requesting 
certification to become a participant in the drawback compliance program 
shall file with the applicable drawback office a written application in 
letter format, signed by an authorized individual (see Sec. 191.6(c) of 
this part). The detail required in the application shall take into 
account the size and nature of the applicant's drawback program, the 
type of drawback claims filed, and the dollar value and volume of claims 
filed. However, the application shall contain at least the following 
information:
    (1) Name of applicant, address, IRS number (with suffix), and the 
type of business in which engaged, as well as the name(s) of the 
individual(s) designated by the applicant to be responsible for 
compliance under the program;

[[Page 583]]

    (2) A description of the nature of the applicant's drawback program, 
including the type of drawback in which involved (such as, 
manufacturing, or unused or rejected merchandise), and the applicant's 
particular role(s) in the drawback claims process (such as claimant and/
or importer, manufacturer or producer, agent-manufacturer, complementary 
recordkeeper, subcontractor, intermediate party (possessor or 
purchaser), or exporter (destroyer)); and
    (3) Size of applicant's drawback program. (For example, if the 
applicant is a claimant, the number of claims filed over the previous 
12-month period should be included, along with the number estimated to 
be filed over the next 12-month period, and the estimated amount of 
drawback to be claimed annually. Other parties should describe the 
extent to which they are involved in drawback activity, based upon their 
particular role(s) in the drawback process; for example, manufacturers 
should explain how much manufacturing they are engaged in for drawback, 
such as the quantity of drawback product produced on an annual basis, as 
established by the certificates of manufacture and delivery they have 
executed.)
    (d) Application package. Along with the letter of application as 
prescribed in paragraph (c) of this section, the application package 
must include a description of how the applicant will ensure compliance 
with statutory and regulatory drawback requirements. This description 
may be in the form of a booklet or set forth otherwise. The description 
must include at least the following:
    (1) The name and title of the official in the applicant's 
organization who is responsible for oversight of the applicant's 
drawback program, and the name and title, with mailing address and, if 
available, fax number and e-mail address, of the person[s] in the 
applicant's organization responsible for the actual maintenance of the 
applicant's drawback program;
    (2) If the applicant is a manufacturer and the drawback involved is 
manufacturing drawback, a copy of the letter of notification of intent 
to operate under a general manufacturing drawback ruling or the 
application for a specific manufacturing drawback ruling (see Sec. Sec. 
191.7 and 191.8 of this part), as appropriate;
    (3) A description of the applicant's drawback record-keeping 
program, including the retention period and method (for example, paper, 
electronic, etc.);
    (4) A list of the records that will be maintained, including at 
least sample import documents, sample export documents, sample inventory 
and transportation documents (if applicable), sample laboratory or other 
documents establishing the qualification of merchandise or articles for 
substitution under the drawback law (if applicable), and sample 
manufacturing documents (if applicable);
    (5) A description of the applicant's specific procedures for:
    (i) How drawback claims are prepared (if the applicant is a 
claimant); and
    (ii) How the applicant will fulfill any requirements under the 
drawback law and regulations applicable to its role in the drawback 
program;
    (6) A description of the applicant's procedures for notifying 
Customs of variances in, or violations of, its drawback compliance 
program or negotiated alternative drawback compliance program, and 
procedures for taking corrective action when notified by Customs of 
violations or other problems in such program; and
    (7) A description of the applicant's procedures for annual review to 
ensure that its drawback compliance program meets the statutory and 
regulatory drawback requirements and that Customs is notified of any 
modifications from the procedures described in this application.



Sec. 191.194  Action on application to participate in compliance program.

    (a) Review by applicable drawback office--(1) General. It is the 
responsibility of the drawback office where the drawback compliance 
application package is filed to coordinate its decision making on the 
package both with CBP Headquarters and with the other field drawback 
offices as appropriate. CBP processing of the package will consist of 
the review of the information contained therein as well as any 
additional

[[Page 584]]

information requested (see paragraph (a)(2) of this section).
    (2) Criteria for CBP review. The drawback office shall review and 
verify the information submitted in and with the application. In order 
for CBP to evaluate the application, CBP may request additional 
information (including additional sample documents) and/or explanations 
of any of the information provided for in Sec. 191.193(c) and (d) of 
this subpart. Based on the information submitted on and with the 
application and any information so requested, and based on the 
applicant's record of transactions with CBP, the drawback office will 
approve or deny the application. The criteria to be considered in 
reviewing the applicant's record with CBP shall include (as applicable):
    (i) The presence or absence of unresolved customs charges (duties, 
taxes, or other debts owed CBP);
    (ii) The accuracy of the claimant's past drawback claims; and
    (iii) Whether accelerated payment of drawback or waiver of prior 
notice of intent to export was previously revoked or suspended.
    (b) Approval. Certification as a participant in the drawback 
compliance program will be given to applicants whose applications are 
approved under the criteria in paragraph (a)(2) of this section. The 
applicable drawback office will give written notification to an 
applicant of its certification as a participant in the drawback 
compliance program. A Customs broker obtaining certification for a 
drawback claimant will be sent written notification on behalf of such 
claimant, with a copy of the notification also being sent to the 
claimant.
    (c) Benefits of participation in program. When a party that has been 
certified as a participant in the drawback compliance program and is 
generally in compliance with the appropriate procedures and requirements 
of the program commits a violation of 19 U.S.C. 1593a(a) (see Sec. 
191.62(b) of this part), CBP shall, in the absence of fraud or repeated 
violations, and in lieu of a monetary penalty as otherwise provided 
under Sec. 1593a, issue a written notice of the violation to the party. 
Repeated violations by a participant, including a CBP broker, may result 
in the issuance of penalties and the removal of certification under the 
program until corrective action, satisfactory to CBP, is taken.
    (d) Denial. If certification as a participant in the drawback 
compliance program is denied to an applicant, the applicant shall be 
given written notice by the applicable drawback office, specifying the 
grounds for such denial, together with any action that may be taken to 
correct the perceived deficiencies, and informing the applicant that 
such denial may be appealed to the appropriate drawback office and then 
appealed to CBP Headquarters.
    (e) Certification removal--(1) Grounds for removal. The 
certification for participation in the drawback compliance program by a 
party may be removed when any of the following conditions are 
discovered:
    (i) The certification privilege was obtained through fraud or 
mistake of fact;
    (ii) The program participant is no longer in compliance with the 
customs laws and CBP regulations, including the requirements set forth 
in Sec. 191.192;
    (iii) The program participant repeatedly files false drawback claims 
or false or misleading documentation or other information relating to 
such claims; or
    (iv) The program participant is convicted of any felony or has 
committed acts which would constitute a misdemeanor or felony involving 
theft, smuggling, or any theft-connected crime.
    (2) Removal procedure. If CBP determines that the certification of a 
program participant should be removed, the applicable drawback office 
will serve the program participant with written notice of the removal. 
Such notice will inform the program participant of the grounds for the 
removal and will advise the program participant of its right to file an 
appeal of the removal in accordance with paragraph (f) of this section.
    (3) Effect of removal. The removal of certification will be 
effective immediately in cases of willfulness on the part of the program 
participant or when required by public health, interest, or safety. In 
all other cases, the removal of certification will be effective

[[Page 585]]

when the program participant has received notice under paragraph (e)(2) 
of this section and either no appeal has been filed within the time 
limit prescribed in paragraph (f)(2) of this section or all appeal 
procedures have been concluded by a decision that upholds the removal 
action. Removal of certification may subject the affected person to 
penalties.
    (f) Appeal of certification denial or removal--(1) Appeal of 
certification denial. A party may challenge a denial of an application 
for certification as a participant in the drawback compliance program by 
filing a written appeal, within 30 days of issuance of the notice of 
denial, with the applicable drawback office. A denial of an appeal may 
itself be appealed to CBP Headquarters, Trade Policy and Programs, 
Office of International Trade, within 30 days after issuance of the 
applicable drawback office's appeal decision. CBP Headquarters will 
review the appeal and will respond with a written decision within 30 
days after receipt of the appeal unless circumstances require a delay in 
issuance of the decision. If the decision cannot be issued within the 
30-day period, CBP Headquarters will advise the appellant of the reasons 
for the delay and of any further actions which will be carried out to 
complete the appeal review and of the anticipated date for issuance of 
the appeal decision.
    (2) Appeal of certification removal. A party who has received a CBP 
notice of removal of certification for participation in the drawback 
compliance program may challenge the removal by filing a written appeal, 
within 30 days after issuance of the notice of removal, with the 
applicable drawback office. A denial of an appeal may itself be appealed 
to CBP Headquarters, Trade Policy and Programs, Office of International 
Trade, within 30 days after issuance of the applicable drawback office's 
appeal decision. CBP Headquarters will consider the allegations upon 
which the removal was based and the responses made to those allegations 
by the appellant and will render a written decision on the appeal within 
30 days after receipt of the appeal.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998, as amended by T.D. 00-5, 65 FR 
3812, Jan. 25, 2000]



Sec. 191.195  Combined application for certification in drawback compliance program and waiver of prior notice and/or approval of accelerated payment of 
          drawback.

    An applicant for certification in the drawback compliance program 
may also, in the same application, apply for waiver of prior notice of 
intent to export and accelerated payment of drawback, under subpart I of 
this part. Alternatively, an applicant may separately apply for 
certification in the drawback compliance program and either or both 
waiver of prior notice and accelerated payment of drawback. In the 
former instance, the intent to apply for certification and waiver of 
prior notice and/or approval of accelerated payment of drawback must be 
clearly stated. In all instances, all of the requirements for 
certification and the procedure applied for must be met (for example, in 
a combined application for certification in the drawback compliance 
program and both procedures, all of the information required for 
certification and each procedure, all required sample documents for 
certification and each procedure, and all required certifications must 
be included in and with the application).



   Sec. Appendix A to Part 191--General Manufacturing Drawback Rulings

                            Table of Contents

I. General Instructions
II. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) (T.D. 
81-234; T.D. 83-123)
III. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) or 
1313(b) for Agents (T.D. 81-181)
IV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for 
Burlap or Other Textile Material (T.D. 83-53)
V. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
Component Parts (T.D. 81-300)
VI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for 
Flaxseed (T.D. 83-80)
VII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for 
Fur Skins or Fur Skin Articles (T.D. 83-77)

[[Page 586]]

VIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
Orange Juice (T.D. 85-110)
IX. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
Petroleum or Petroleum Derivatives (T.D. 84-49)
X. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
Piece Goods (T.D. 83-73)
XI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
Raw Sugar (T.D. 83-59)
XII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
Steel (T.D. 81-74)
XIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
Sugar (T.D. 81-92)
XIV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for 
Woven Piece Goods (T.D. 83-84)

                         I. General Instructions

    A. There follow various general manufacturing drawback rulings which 
have been designed to simplify drawback procedures. Any person who can 
comply with the conditions of any one of these rulings may notify a 
Customs drawback office in writing of its intention to operate under the 
ruling (see Sec. 191.7 of this part). Such a letter of notification 
shall include the following information:
    1. Name and address of manufacturer or producer;
    2. IRS (Internal Revenue Service) number (with suffix) of 
manufacturer or producer;
    3. Location[s] of factory[ies] which will operate under the general 
ruling;
    4. If a business entity, names of persons who will sign drawback 
documents (see Sec. 191.6 of this part);
    5. Identity (by T.D. number and title, as stated in this Appendix) 
of general manufacturing drawback ruling under which the manufacturer or 
producer intends to operate;
    6. Description of the merchandise and articles, unless specifically 
described in the general manufacturing drawback ruling;
    7. Only for General Manufacturing Drawback Ruling Under 19 U.S.C. 
1313(b) for Petroleum or Petroleum Derivatives, the name of each article 
to be exported or, if the identity of the product is not clearly evident 
by its name, what the product is, and the abstract period to be used for 
each refinery (monthly or other specified period (not to exceed 1 
year)), subject to the conditions in the General Manufacturing Drawback 
Ruling Under 19 U.S.C. 1313(b) for Petroleum or Petroleum Derivatives, 
I. Procedures and Records Maintained, 4(a) or (b);
    8. Basis of claim used for calculating drawback; and
    9. Description of the manufacturing or production process, unless 
specifically described in the general manufacturing drawback ruling.
    For the General Manufacturing Drawback Ruling under Sec. 1313(a), 
the General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
Component Parts, and the General Manufacturing Drawback Ruling Under 19 
U.S.C. 1313(a) or 1313(b) for Agents, if the drawback office has doubts 
as to whether there is a manufacture or production, as defined in Sec. 
191.2(q) of this part, the manufacturer or producer will be asked to 
provide details of the operation purported to be a manufacture or 
production.
    B. These general manufacturing drawback rulings supersede general 
``contracts'' previously published under the following Treasury 
Decisions (T.D.'s): 81-74, 81-92, 81-181, 81-234, 81-300, 83-53, 83-59, 
83-73, 83-77, 83-80, 83-84, 83-123, 84-49, and 85-110.

Anyone currently operating under any of the above-listed Treasury 
Decisions will automatically be covered by the superseding general 
ruling, including all privileges of the previous ``contract''.

II. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) (T.D. 
                          81-234; T.D. 83-123)

          A. Imported Merchandise or Drawback Products \1\ Used

    Imported merchandise or drawback products are used in the 
manufacture of the exported articles upon which drawback claims will be 
based.
---------------------------------------------------------------------------

    \1\ Drawback products are those produced in the United States in 
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

         B. Exported Articles on which Drawback will be Claimed

    Exported articles on which drawback will be claimed will be 
manufactured in the United States using imported merchandise or drawback 
products.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

                 D. Process Of Manufacture Or Production

    The imported merchandise or drawback products will be used to 
manufacture or produce articles in accordance with Sec. 191.2(q) of 
this part.

[[Page 587]]

                          E. Multiple Products

                           1. Relative Values

    Drawback law mandates the assignment of relative values when two or 
more products necessarily are produced concurrently in the same 
operation. If multiple products are produced records will be maintained 
of the market value of each product at the time it is first separated in 
the manufacturing process.

                         2. Appearing-in method

    The appearing in basis may not be used if multiple products are 
produced.

                             F. Loss or Gain

    Records will be maintained showing the extent of any loss or gain in 
net weight or measurement of the imported merchandise, caused by 
atmospheric conditions, chemical reactions, or other factors.

                               G. Tradeoff

    The use of any domestic merchandise acquired in exchange for 
imported merchandise that is of the same kind and quality as the 
imported merchandise, meeting specifications set forth in the 
application by the manufacturer or producer for a determination of same 
kind and quality (see Sec. 191.11(c)), shall be treated as use of the 
imported merchandise if no certificate of delivery is issued covering 
the imported merchandise (19 U.S.C. 1313(k)) upon compliance with the 
applicable regulations and rulings (see 19 CFR 191.11).

                           H. Stock In Process

    Stock in process does not result; or if it does result, details will 
be given in claims as filed, and it will not be included in the 
computation of the merchandise used to manufacture the finished articles 
on which drawback is claimed.

                                I. Waste

    No drawback is payable on any waste which results from the 
manufacturing operation. Unless the claim for drawback is based on the 
quantity of merchandise appearing in the exported articles, records will 
be maintained to establish the value, the quantity, and the disposition 
of any waste that results from manufacturing the exported articles. If 
no waste results, records will be maintained to establish that fact.

                  J. Procedures And Records Maintained

    Records will be maintained to establish:
    1. That the exported articles on which drawback is claimed were 
produced with the use of the imported merchandise, and
    2. The quantity of imported merchandise \2\ used in producing the 
exported articles.
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of the sentence should read ``appearing in the exported 
articles.''
---------------------------------------------------------------------------

(To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after importation of the imported 
merchandise. Records establishing compliance with these requirements 
will be available for audit by Customs during business hours. Drawback 
is not payable without proof of compliance).

                         K. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures And Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.

                     L. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of merchandise used in 
producing the exported articles only if there is no waste or valueless 
or unrecovered waste in the manufacturing operation. Drawback may be 
claimed on the quantity of eligible merchandise that appears in the 
exported articles, regardless of whether there is waste, and no records 
of waste need be maintained. If there is valuable waste recovered from 
the manufacturing operation and records are kept which show the quantity 
and value of the waste, drawback may be claimed on the quantity of 
eligible material used to produce the exported articles less the amount 
of that merchandise which the value of the waste would replace.

                         M. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9)

[[Page 588]]

or the corporate name or corporate organization by succession or 
reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this general ruling.

 III. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) or 
                    1313(b) for Agents (T.D. 81-181)

    Manufacturers or producers operating under this general 
manufacturing drawback ruling must comply with T.D.s 55027(2), 55207(1), 
and 19 U.S.C. 1313(b), if applicable, as well as 19 CFR part 191 (see 
particularly, Sec. 191.9).

                    A. Name and Address of Principal

                 B. Process of Manufacture or Production

    The imported merchandise or drawback products or other substituted 
merchandise will be used to manufacture or produce articles in 
accordance with Sec. 191.2(q) of this part.

                  C. Procedures and Records Maintained

    Records will be maintained to establish:
    1. Quantity, kind and quality of merchandise transferred from the 
principal to the agent;
    2. Date of transfer of the merchandise from the principal to the 
agent;
    3. Date of manufacturing or production operations performed by the 
agent;
    4. Total quantity and description of merchandise appearing in or 
used in manufacturing or production operations performed by the agent;
    5. Total quantity and description of articles produced in 
manufacturing or production operations performed by the agent;
    6. Quantity, kind and quality of articles transferred from the agent 
to the principal; and
    7. Date of transfer of the articles from the agent to the principal.

                         D. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when 
manufacturing or producing articles for account of the principal under 
the principal's general manufacturing drawback ruling or specific 
manufacturing drawback ruling, as appropriate;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates the claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this general ruling.

 IV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for 
              Burlap or Other Textile Material (T.D. 83-53)

    Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation 
of bags or meat wrappers manufactured with the use of imported burlap or 
other textile material, subject to the following special requirements:

          A. Imported Merchandise or Drawback Products \1\ Used

    Imported merchandise or drawback products (burlap or other textile 
material) are used in the manufacture of the exported articles upon 
which drawback claims will be based.
---------------------------------------------------------------------------

    \1\ Drawback products are those produced in the United States in 
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

    B. Exported Articles on Which Drawback Will Be Claimed
    Exported articles on which drawback will be claimed will be 
manufactured in the United States using imported merchandise or drawback 
products.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

                 D. Process of Manufacture or Production

    The imported merchandise or drawback products will be used to 
manufacture or produce articles in accordance with Sec. 191.2(q) of 
this part.

[[Page 589]]

                          E. Multiple Products

    Not applicable.

                             F. Loss or Gain

    Not applicable.

                                G. Waste

    No drawback is payable on any waste which results from the 
manufacturing operation. Unless the claim for drawback is based on the 
quantity of merchandise appearing in the exported articles, records will 
be maintained to establish the value, the quantity, and the disposition 
of any waste that results from manufacturing the exported articles. If 
no waste results, records will be maintained to establish that fact.

                  H. Procedures and Records Maintained

    Records will be maintained to establish:
    1. That the exported articles on which drawback is claimed were 
produced with the use of the imported merchandise; and
    2. The quantity of imported merchandise \2\ used in producing the 
exported articles.
    To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after importation of the imported 
merchandise. Records establishing compliance with these requirements 
will be available for audit by Customs during business hours. Drawback 
is not payable without proof of compliance.

                         I. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures and Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.
    Each lot of imported material received by a manufacturer or producer 
shall be given a lot number and kept separate from other lots until 
used. The records of the manufacturer or producer shall show, as to each 
manufacturing lot or period of manufacture, the quantity of material 
used from each import lot and the number of each kind and size of bags 
or meat wrappers obtained. If applicable, a certificate of manufacture 
and delivery shall be filed covering each manufacturing lot or period of 
manufacture.
    All bags or meat wrappers manufactured or produced for the account 
of the same exporter during a specified period may be designated as one 
manufacturing lot and, as applicable, covered by one certificate of 
manufacture and delivery. All exported bags or meat wrappers shall be 
identified by the exporter with the certificate of manufacture and 
delivery covering their manufacture, if applicable.

                     J. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of merchandise used in 
producing the exported articles only if there is no waste or valueless 
or unrecovered waste in the manufacturing operation. Drawback may be 
claimed on the quantity of eligible merchandise that appears in the 
exported articles, regardless of whether there is waste, and no records 
of waste need be maintained. If there is valuable waste recovered from 
the manufacturing operation and records are kept which show the quantity 
and value of the waste, drawback may be claimed on the quantity of 
eligible material used to produce the exported articles, less the amount 
of that merchandise which the value of the waste would replace.

                         K. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation.
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with 19, United 
States Code, Sec. 1313, part 191 of the CBP Regulations and this 
general ruling.

  V. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
                      Component Parts (T.D. 81-300)

[[Page 590]]



               A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback         Duty-Paid, Duty-Free or
 Products \1\ to be Designated as the     Domestic Merchandise of the
 Basis for Drawback on the Exported       Same Kind and Quality as that
 Products.                                Designated which will be Used
                                          in the Production of the
                                          Exported Products.
Component parts identified by            Component parts identified with
 individual part numbers.                 the same individual part
                                          numbers as those in the column
                                          immediately to the left
                                          hereof.
 
\1\ Drawback products are those produced in the United States in
  accordance with the drawback law and regulations. Such products have
  ``dual status'' under section 1313(b). They may be designated as the
  basis for drawback and also may be deemed to be domestic merchandise.

    The designated\2\ components will have been manufactured in 
accordance with the same specifications and from the same materials, and 
identified by the same part number as the substituted components. 
Further, the designated and substituted components are used 
interchangeably in the manufacture of the exported articles upon which 
drawback will be claimed. Specifications or drawings will be maintained 
and made available for Customs officers. The imported merchandise 
designated on drawback claims will be so similar to the merchandise used 
in producing the exported articles on which drawback is claimed that the 
merchandise used would, if imported, be subject to the same rate of duty 
as the imported designated merchandise. Fluctuations in market value 
resulting from factors other than quality will not affect the drawback.
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of the sentence should read ``appearing in the exported 
articles.''
---------------------------------------------------------------------------

         B. Exported Articles on Which Drawback Will Be Claimed

    The exported articles will have been manufactured in the United 
States using components described in the parallel columns above.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

                 D. Process of Manufacture or Production

    The components described in the parallel columns will be used to 
manufacture or produce articles in accordance with Sec. 191.2(q) of 
this part.

                          E. Multiple Products

    Not applicable.

                                F. Waste

    No drawback is payable on any waste which results from the 
manufacturing operation. Unless the claim for drawback is based on the 
quantity of components appearing in the exported articles, records will 
be maintained to establish the value (or the lack of value), the 
quantity, and the disposition of any waste that results from 
manufacturing the exported articles. If no waste results, records will 
be maintained to establish that fact.

                               G. Tradeoff

    The use of any domestic merchandise acquired in exchange for 
imported merchandise that meets the same kind and quality specifications 
contained in the parallel columns of this general ruling shall be 
treated as use of the imported merchandise if no certificate of delivery 
is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon 
compliance with the applicable regulations and rulings.

                  H. Procedures and Records Maintained

    Records will be maintained to establish:
    1. The identity and specifications of the designated merchandise;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise \2\ used to produce the exported articles;
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles produced.''
---------------------------------------------------------------------------

    3. That, within 3 years after receiving the designated merchandise 
at its factory, the manufacturer or producer used the merchandise to 
produce articles. During the same 3-year period, the manufacturer or 
producer produced \3\ the exported articles. To obtain drawback the 
claimant must establish that the completed articles were exported within 
5 years after the importation of the imported

[[Page 591]]

merchandise. Records establishing compliance with these requirements 
will be available for audit by Customs during business hours. Drawback 
is not payable without proof of compliance.
---------------------------------------------------------------------------

    \3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

                         I. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures And Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.

                     J. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of eligible components used 
in producing the exported articles only if there is no waste or 
valueless or unrecovered waste in the manufacturing operation. Drawback 
may be claimed on the quantity of eligible components that appear in the 
exported articles, regardless of whether there is waste, and no records 
of waste need be maintained. If there is valuable waste recovered from 
the manufacturing operation and records are kept which show the quantity 
and value of the waste, drawback may be claimed on the quantity of 
eligible components used to produce the exported articles less the 
amount of those components which the value of the waste would replace.

                         K. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this general ruling.

 VI. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for 
                          Flaxseed (T.D. 83-80)

    Drawback may be allowed under the provision of 19 U.S.C. 1313(a) 
upon the exportation of linseed oil, linseed oil cake, and linseed oil 
meal, manufactured or produced with the use of imported flaxseed, 
subject to the following special requirements:

          A. Imported Merchandise or Drawback Products \1\ Used

    Imported merchandise or drawback products (flaxseed) are used in the 
manufacture of the exported articles upon which drawback claims will be 
based.
---------------------------------------------------------------------------

    \1\ Drawback products are those produced in the United States in 
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

         B. Exported Articles on Which Drawback Will Be Claimed

    Exported articles on which drawback will be claimed will be 
manufactured in the United States using imported merchandise or drawback 
products.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

                 D. Process of Manufacture or Production

    The imported merchandise or drawback products will be used to 
manufacture or produce articles in accordance with Sec. 191.2(q) of 
this part.

                          E. Multiple Products

    Drawback law mandates the assignment of relative values when two or 
more products necessarily are produced concurrently in the same 
operation. If multiple products are produced records will be maintained 
of the market value of each product at the time it is first separated in 
the manufacturing process (when a claim covers a manufacturing period, 
the entire period covered by the claim is the time of separation of the 
products and the value per unit of product is the market value for the 
period (see Sec. Sec. 191.2(u), 191.22(e)). The ``appearing in'' basis 
may not be used if multiple products are produced.

[[Page 592]]

                             F. Loss or Gain

    Records will be maintained showing the extent of any loss or gain in 
net weight or measurement of the imported merchandise, caused by 
atmospheric conditions, chemical reactions, or other factors.

                                G. Waste

    No drawback is payable on any waste which results from the 
manufacturing operation. Unless the claim for drawback is based on the 
quantity of merchandise appearing in the exported articles, records will 
be maintained to establish the value, the quantity, and the disposition 
of any waste that results from manufacturing the exported articles. If 
no waste results, records will be maintained to establish that fact.

                  H. Procedures and Records Maintained

    Records will be maintained to establish:
    1. That the exported articles on which drawback is claimed were 
produced with the use of the imported merchandise; and
    2. The quantity of imported merchandise \2\ used in producing the 
exported articles.
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of the sentence should read ``appearing in the exported 
articles.''
---------------------------------------------------------------------------

    To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after importation of the imported 
merchandise. Records establishing compliance with these requirements 
will be available for audit by Customs during business hours. Drawback 
is not payable without proof of compliance.

                         I. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures and Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.
    The inventory records of the manufacturer or producer shall show the 
inclusive dates of manufacture; the quantity, identity, and value of the 
imported flaxseed or screenings, scalpings, chaff, or scourings used; 
the quantity by actual weight and value, if any, of the material removed 
from the foregoing by screening prior to crushing; the quantity and kind 
of domestic merchandise added, if any; the quantity by actual weight or 
gauge and value of the oil, cake, and meal obtained; and the quantity 
and value, if any, of the waste incurred. The quantity of imported 
flaxseed, screenings, scalpings, chaff, or scourings used or of material 
removed shall not be estimated nor computed on the basis of the quantity 
of finished products obtained, but shall be determined by actually 
weighing the said flaxseed, screenings, scalpings, chaff, scourings, or 
other material; or, at the option of the crusher, the quantities of 
imported materials used may be determined from Customs weights, as shown 
by the import entry covering such imported materials, and the Government 
weight certificate of analysis issued at the time of entry. The entire 
period covered by an abstract shall be deemed the time of separation of 
the oil and cake covered thereby.
    If the records of the manufacturer or producer do not show the 
quantity of oil cake used in the manufacture or production of the 
exported oil meal and the quantity of oil meal obtained, the net weight 
of the oil meal exported shall be regarded as the weight of the oil cake 
used in the manufacture thereof.
    If various tanks are used for the storage of imported flaxseed, the 
mill records shall establish the tank or tanks in which each lot or 
cargo is stored. If raw or processed oil manufactured or produced during 
different periods of manufacture is intermixed in storage, a record 
shall be maintained showing the quantity, identity, and kind of oil so 
intermixed. Identity of merchandise or articles in either instance shall 
be in accordance with Sec. 191.14 of this part.

                     J. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of merchandise used in 
producing the exported articles only if there is no waste or valueless 
or unrecovered waste in the manufacturing operation. Drawback may be 
claimed on the quantity of eligible merchandise that appears in the 
exported articles, regardless of whether there is waste, and no records 
of waste need be maintained. If there is valuable waste recovered from 
the manufacturing operation and records are kept which show the quantity 
and value of the waste, drawback may be claimed on the quantity of 
eligible material used to produce the exported articles, less the amount 
of that merchandise which the value of the waste would replace.

                         K. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current

[[Page 593]]

by reporting promptly to the drawback office which liquidates its claims 
any changes in the information required by the General Instructions of 
this Appendix to be included therein (I. General Instructions, 1 through 
9) or the corporate name or corporate organization by succession or 
reincorporation.
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with 19, United 
States Code, Sec. 1313, part 191 of the CBP Regulations and this 
general ruling.

 VII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for 
               Fur Skins or Fur Skin Articles (T.D. 83-77)

    Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation 
of dressed, redressed, dyed, redyed, bleached, blended, or striped fur 
skins or fur skin articles manufactured or produced by any one or a 
combination of the foregoing processes with the use of fur skins or fur 
skin articles, such as plates, mats, sacs, strips, and crosses, imported 
in a raw, dressed, or dyed condition, subject to the following special 
requirements:

          A. Imported Merchandise or Drawback Products \1\ Used

    Imported merchandise or drawback products (fur skins or fur skin 
articles) are used in the manufacture of the exported articles upon 
which drawback claims will be based.
---------------------------------------------------------------------------

    \1\ Drawback products are those produced in the United States in 
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

         B. Exported Articles on Which Drawback Will Be Claimed

    Exported articles on which drawback will be claimed will be 
manufactured in the United States using imported merchandise or drawback 
products.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

                 D. Process of Manufacture or Production

    The imported merchandise or drawback products will be used to 
manufacture or produce articles in accordance with Sec. 191.2(q) of 
this part.
    Drawback shall not be allowed under this general manufacturing 
drawback ruling when the process performed results only in the 
restoration of the merchandise to its condition at the time of 
importation.

                          E. Multiple Products

    Not applicable.

                             F. Loss or Gain

    Records will be maintained showing the extent of any loss or gain in 
net weight or measurement of the imported merchandise, caused by 
atmospheric conditions, chemical reactions, or other factors.

                                G. Waste

    No drawback is payable on any waste which results from the 
manufacturing operation. Unless the claim for drawback is based on the 
quantity of merchandise appearing in the exported articles, records will 
be maintained to establish the value, the quantity, and the disposition 
of any waste that results from manufacturing the exported articles. If 
no waste results, records will be maintained to establish that fact.

                  H. Procedures and Records Maintained

    Records will be maintained to establish:
    1. That the exported articles on which drawback is claimed were 
produced with the use of the imported merchandise; and
    2. The quantity of imported merchandise \2\ used in producing the 
exported articles.
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of the sentence should read ``appearing in the exported 
articles.''
---------------------------------------------------------------------------

    To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after importation of the imported 
merchandise. Records establishing compliance with these requirements 
will be available for audit by Customs during business hours. Drawback 
is not payable without proof of compliance.

                         I. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures and Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.
    The records of the manufacturer or producer shall show, as to each 
lot of fur skins and/or fur skin articles used in the manufacture or 
production of articles for exportation

[[Page 594]]

with benefit of drawback, the lot number and date or inclusive dates of 
manufacture or production, the quantity, identity, and description of 
the imported merchandise used, the condition in which imported, the 
process or processes applied thereto, the quantity and description of 
the finished articles obtained, and the quantity of imported pieces 
rejected, if any, or spoiled in manufacture or production.

                     J. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of merchandise used in 
producing the exported articles only if there is no waste or valueless 
or unrecovered waste in the manufacturing operation. Drawback may be 
claimed on the quantity of eligible merchandise that appears in the 
exported articles, regardless of whether there is waste, and no records 
of waste need be maintained. If there is valuable waste recovered from 
the manufacturing operation and records are kept which show the quantity 
and value of the waste, drawback may be claimed on the quantity of 
eligible material used to produce the exported articles, less the amount 
of that merchandise which the value of the waste would replace. (If 
rejects and/or spoilage are incurred, the quantity of imported 
merchandise used shall be determined by deducting from the quantity of 
fur skins or fur skin articles put into manufacture or production the 
quantity of such rejects and/or spoilage.)

                         K. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation.
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with 19, United 
States Code, Sec. 1313, part 191 of the CBP Regulations and this 
general ruling.

VIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
                       Orange Juice (T.D. 85-110)

               A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback         Duty-Paid, Duty-Free or
 Products \1\ To Be Designated as the     Domestic Merchandise of the
 Basis for Drawback on the Exported       Same Kind and Quality as That
 Products.                                Designated Which Will Be Used
                                          in the Production of the
                                          Exported Products
Concentrated orange juice for            Concentrated orange juice for
 manufacturing (of not less than          manufacturing as described in
 55[deg] Brix) as defined in the          the left-hand parallel column.
 standard of identity of the Food and
 Drug Administration (21 CFR 146.53)
 which meets the Grade A standard of
 the U.S. Dept. of Agriculture (7 CFR
 52.1557, Table IV).
 
\1\ Drawback products are those produced in the United States in
  accordance with the drawback law and regulations. Such products have
  ``dual status'' under section 1313(b). They may be designated as the
  basis for drawback and also may be deemed to be domestic merchandise.

    The imported merchandise designated on drawback claims will be so 
similar in quality to the merchandise used in producing the exported 
articles on which drawback is claimed that the merchandise used would, 
if imported, be subject to the same rate of duty as the imported 
designated merchandise. Fluctuations in the market value resulting from 
factors other than quality will not affect the drawback.

         B. Exported Articles on Which Drawback Will Be Claimed

    1. Orange juice from concentrate (reconstituted juice).
    2. Frozen concentrated orange juice.
    3. Bulk concentrated orange juice.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account

[[Page 595]]

of the manufacturer or producer under contract within the principal and 
agency relationship outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 
191.9 of this part).

                 D. Process of Manufacture or Production

    1. Orange juice from concentrate (reconstituted juice). Concentrated 
orange juice for manufacturing is reduced to a desired 11.8[deg] Brix by 
a blending process to produce orange juice from concentrate. The 
following optional blending processes may be used:
    i. The concentrate is blended with fresh orange juice (single 
strength juice); or
    ii. The concentrate is blended with essential oils, flavoring 
components, and water; or
    iii. The concentrate is blended with water and is heat treated to 
reduce the enzymatic activity and the number of viable microorganisms.
    2. Frozen concentrated orange juice. Concentrated orange juice for 
manufacturing is reduced to a desired degree Brix of not less than 
41.8[deg] Brix by the following optional blending processes:
    i. The concentrate is blended with fresh orange juice (single 
strength juice); or
    ii. The concentrate is blended with essential oils and flavoring 
components and water.
    3. Bulk concentrated orange juice. Concentrated orange juice for 
manufacturing is blended with essential oils and flavoring components 
which would enable another processor such as a dairy to prepare finished 
frozen concentrated orange juice or orange juice from concentrate by 
merely adding water to the (intermediate) bulk concentrated orange 
juice.

                E. Multiple Products, Waste, Loss or Gain

    Not applicable.

                               F. Tradeoff

    The use of any domestic merchandise acquired in exchange for 
imported merchandise that meets the same kind and quality specifications 
contained in the parallel columns of this general ruling shall be 
treated as use of the imported merchandise if no certificate of delivery 
is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon 
compliance with the applicable regulations and rulings.

                  G. Procedures and Records Maintained

    Records will be maintained to establish:
    1. The identity and specifications of the designated merchandise;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise \2\ used to produce the exported articles;
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles produced.''
---------------------------------------------------------------------------

    3. That, within 3 years after receiving the designated merchandise 
at its factory, the manufacturer or producer used the designated 
merchandise to produce articles. During the same 3-year period, the 
manufacturer or producer produced \3\ the exported articles.
---------------------------------------------------------------------------

    \3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

    To obtain drawback it must be established that the completed 
articles were exported within 5 years after the importation of the 
imported merchandise. Records establishing compliance with these 
requirements will be available for audit by Customs during business 
hours. No drawback is payable without proof of compliance.

                         H. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures And Records Maintained'', and will show what 
components were blended with the concentrated orange juice for 
manufacturing. If those records do not establish satisfaction of those 
legal requirements, drawback cannot be paid.

                     I. Basis of Claim for Drawback

    The basis of claim for drawback will be the quantity of concentrated 
orange juice for manufacturing used in the production of the exported 
articles. It is understood that when fresh orange juice is used as 
``cutback'', it will not be included in the ``pound solids'' when 
computing the drawback due.

                         J. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim
predicated in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require

[[Page 596]]

all officials and employees concerned to familiarize themselves with the 
provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this general ruling.

 IX. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
             Petroleum or Petroleum Derivatives (T.D. 84-49)

             A. Parallel Columns--``Same Kind and Quality''
Imported Merchandise or Drawback         Duty-Paid, Duty-Free or
 Products \1\ To Be Designated as the     Domestic Merchandise of the
 Basis for Drawback on the Exported       Same Kind and Quality as That
 Products.                                Designated Which Will Be Used
                                          in the Production of the
                                          Exported Products.
 
\1\ Drawback products are those produced in the United States in
  accordance with the drawback law and regulations. Such products have
  ``dual status'' under section 1313(b). They may be designated as the
  basis for drawback and also may be deemed to be domestic merchandise.

    The manufacturer or producer will substitute crude petroleum for 
crude petroleum and a petroleum derivative for the same petroleum 
derivative on a class-for-class basis only.
Class Designations:
    Class I--API Gravity 0--11.9
    Class II--API Gravity 12.0--24.9
    Class III--API Gravity 25.0--44.9
    Class IV--API Gravity 45--up
    The imported merchandise which the manufacturer or producer will 
designate on its claims will be so similar in quality to the merchandise 
used in producing the exported articles on which drawback is claimed 
that the merchandise used would, if imported, be subject to the same 
rate of duty as the imported designated merchandise.

            B. Exported Articles Produced From Fractionation

1. Motor Gasoline
2. Aviation Gasoline
3. Special Naphthas
4. Jet Fuel
5. Kerosene & Range Oils
6. Distillate Oils
7. Residual Oils
8. Lubricating Oils
9. Paraffin Wax
10. Petroleum Coke
11. Asphalt
12. Road Oil
13. Still Gas
14. Liquified Petroleum Gas
15. Petrochemical Synthetic Rubber
16. Petrochemical Plastics & Resins
17. All Other Petrochemical Products

         C. Exported Articles on Which Drawback Will Be Claimed

    See the General Instructions, I.A.7., for this general drawback 
ruling. Each article to be exported must be named. When the identity of 
the product is not clearly evident by its name, there must be a 
statement as to what the product is, e.g., a herbicide.

                          D. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

                 E. Process of Manufacture or Production

    Heated crude oil is charged to an atmospheric distillation tower 
where it is subjected to fractionation. The charge to the distillation 
tower consists of a single crude oil, or of commingled crudes which are 
fed to the tower simultaneously or after blending in a tank. During 
fractionation, components of different boiling ranges are separated.

                          F. Multiple Products

                           1. Relative Values

    Fractionation results in 17 products. In order to insure proper 
distribution of drawback to each of these products, the manufacturer or 
producer agrees to record the relative values as the time of separation. 
The entire period covered by an abstract is to be treated at the time of 
separation. The value per unit of each product shall be the average 
market value for the abstract period.

                            2. Producibility

    The manufacturer or producer can vary the proportionate quantity of 
each product. The manufacturer or producer understands that drawback is 
payable on exported products only to the extent that these products 
could have been produced from the designated merchandise. The records of 
the manufacturer or producer will show that all of the products exported 
for which drawback will be claimed under this general manufacturing 
drawback

[[Page 597]]

ruling could have been produced concurrently on a practical operating 
basis from the designated merchandise.
    The manufacturer or producer agrees to establish the amount to be 
designated by reference to the Industry Standards of Potential 
Production published in T.D. 66-16.\2\
---------------------------------------------------------------------------

    \2\ A manufacturer who proposes to use standards other than those in 
T.D. 66-16 must state the proposed standards and provide sufficient 
information to the Customs Service in order for those proposed standards 
to be verified in accordance with T.D. 84-49.
---------------------------------------------------------------------------

    There are no valuable wastes as a result of the processing.

                             G. Loss or Gain

    Because the manufacturer or producer keeps records on a volume basis 
rather than a weight basis, it is anticipated that the material balance 
will show a volume gain. For the same reason, it is possible that 
occasionally the material balance will show a volume loss. Fluctuations 
in type of crude used, together with the type of finished product 
desired make an estimate of an average volume gain meaningless. However, 
records will be kept to show the amount of loss or gain with respect to 
the production of export products.

                               H. Tradeoff

    The use of any domestic merchandise acquired in exchange for 
imported merchandise that meets the same kind and quality specifications 
contained in the parallel columns of this general ruling shall be 
treated as use of the imported merchandise if no certificate of delivery 
is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon 
compliance with the applicable regulations and rulings.

                  I. Procedures and Records Maintained

    Records will be maintained to establish:
    1. The identity and specifications of the merchandise designated;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise used to produce the exported articles.
    3. That, within 3 years after receiving it at its refinery, the 
manufacturer or producer used the designated merchandise to produce 
articles. During the same 3-year period, the manufacturer or producer 
produced the exported articles.
    4(a). The manufacturer or producer agrees to use a 28-31 day period 
(monthly) abstract period for each refinery covered by this general 
manufacturing drawback ruling, or
    (b). The manufacturer or producer agrees to use an abstract period 
(not to exceed 1 year) for each refinery covered by this general 
manufacturing drawback ruling. The manufacturer or producer certifies 
that if it were to file abstracts covering each manufacturing period of 
not less than 28 days and not more than 31 days (monthly) within the 
longer period, in no such monthly abstract would the quantity of 
designated merchandise exceed, for the same class of designated 
merchandise, the material introduced into the manufacturing process 
during that monthly period. (Select (a) or (b), and state which is 
selected in the application, and, if (b) is selected, specify the length 
of the particular abstract period chosen (not to exceed 1 year (see 
General Instruction I.A.7.)).)
    5. On each abstract of production the manufacturer or producer 
agrees to show the value per barrel to five decimal places.
    6. The manufacturer or producer agrees to file claims in the format 
set forth in exhibits A through F which are attached to this general 
manufacturing drawback ruling. The manufacturer or producer realizes 
that to obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after importation of the imported 
merchandise. Records establishing compliance with these requirements 
will be available for audit by Customs during business hours. It is 
understood that drawback is not payable without proof of compliance. 
Records will be kept in accordance with T.D. 84-49, as amended by T.D. 
95-61.

                           J. Residual Rights

    It is understood that the refiner can reserve as the basis for 
future payment the right to drawback only on the number of barrels of 
raw material computed by subtracting from Line E the larger of Lines A 
or B, of a given Exhibit E. It is further understood that this right to 
future payment can be claimed only against products concurrently 
producible with the products listed in Column 21, in the quantities 
shown in Column 22 of such Exhibit E. Such residual right can be 
transferred to another refinery of the same refiner only when Line B of 
Exhibit E is larger than Line A. Unless the number of residual barrels 
is specifically computed and rights thereto are expressly reserved on 
Exhibit E, such residual rights shall be deemed waived. The procedure 
the manufacturer or producer shall follow in preparing drawback entries 
claiming this residual right is illustrated in the attached sample 
Exhibit E-1. It is understood that claims involving residual rights 
shall be filed only at the port where the Exhibit E reserving such right 
was filed.

                         K. Inventory Procedures

    The manufacturer or producer realizes that inventory control is of 
major importance. In accordance with the normal accounting procedures of 
the manufacturer or producer, each refinery prepares a monthly stock and 
yield report, which accounts for inventories,

[[Page 598]]

production and disposals from time of receipt to time of disposition. 
This provides an audit trail of all products.
    The above-noted records will provide the required audit trail from 
the initial source documents to the drawback claims of the manufacturer 
or producer and will support adherence with the requirements discussed 
under the heading PROCEDURES AND RECORDS MAINTAINED.

                     L. Basis of Claim for Drawback

    The amount of raw material on which drawback may be based shall be 
computed by multiplying the quantity of each product exported by the 
drawback factor for that product. The amount of any one type and class 
of raw material which may be designated as the basis for drawback on the 
exported products produced at a given refinery and covered by a drawback 
entry shall not exceed the quantity of such raw material used at the 
refinery during the abstract period or periods from which the exported 
products were produced. The quantity of raw material to be designated as 
the basis for drawback on exported products must be at least as great as 
the quantity of raw material of the same type and class which would be 
required to produce the exported products in the quantities exported.

                              M. Agreements

    The manufacturer or producer specifically agrees that it will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its refinery and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this application;
    4. Keep this application current by reporting promptly to the 
drawback office which liquidates its claims any changes in the 
information required by the General Instructions of this Appendix to be 
included therein (I. General Instructions, 1 through 9) or the corporate 
name or corporate organization by succession or reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this general ruling.

[[Page 599]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.000


[[Page 600]]


[GRAPHIC] [TIFF OMITTED] TR05MR98.001


[[Page 601]]



            Exhibit C--Inventory Control Sheet: ABC Oil Co., Inc.; Beaumont, Texas Refinery, Period from January 1, 1995 to January 31, 1995
                                                    [All quantities exclude non-petroleum additives]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Aviation gasoline       Residual oils       Lubricating oils     Petrochemicals, all
                                                                 ------------------------------------------------------------------         other
                                                                                                                                   ---------------------
                                                                    Bbls.     Drawback    Bbls.     Drawback    Bbls.     Drawback              Drawback
                                                                               factor                factor                factor     Bbls.      factor
--------------------------------------------------------------------------------------------------------------------------------------------------------
(10) Opening Inventory..........................................     11,218    1.00126     21,221     .45962      9,242    4.52178        891    1.00244
(11) Production.................................................    108,269    1.01300    308,002     .43642    292,492    4.64041      7,996    1.07895
(11-A) Receipts.................................................
(12) Exports....................................................     11,218    1.00126     21,221     .45962      8,774    4.52178        195    1.00244
                                                                        176    1.01300    104,397     .43642
(13) Drawback Deliveries........................................  .........  .........  .........  .........  .........  .........        696    1.00244
                                                                  .........  .........  .........  .........  .........  .........        319    1.07895
(14) Domestic Shipments.........................................     97,863    1.01300    180,957     .43642        468    4.52178      6,867    1.07895
                                                                  .........  .........  .........  .........    278,286    4.64041
(15) Closing Inventory..........................................     10,230    1.01300     22,648     .43642     14,206    4.64041        810    1.07895
--------------------------------------------------------------------------------------------------------------------------------------------------------
Line (10)--Opening inventory from previous period's closing inventory.
Line (11)--From production period under consideration.
Line (11-A)--Product received from other sources.
Line (12)--From earliest on hand (inventory or production). Totals from drawback entry or entries recapitulated (see column 18).
Line (13)--Deliveries for export or for designation against further manufacture--earliest on hand after exports are deducted.
Line (14)--From earliest on hand after lines (12) and (13) are deducted.
Line (15)--Balance on hand.


[[Page 602]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.002


[[Page 603]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.003


[[Page 604]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.004


[[Page 605]]


 Exhibit E (Combination)--Producibility Test for Products Exported (Including Drawback Deliveries) ABC Oil Co.,
                 Inc.; Beaumont, Texas Refinery, Period From January 1, 1995 to January 31, 1995
                          [Type and Class of Raw Material Designated--Crude, Class III]
----------------------------------------------------------------------------------------------------------------
                                                                       (24)  Quantity of
                                                                        raw material of                  (20)
                                                  (22)        (23)       type and class      (19)        Crude
                (21)  Product                   Quantity    Industry   designated needed   Drawback     allowed
                                               in barrels   standard       to produce       factor        for
                                                               (%)        product per                  drawback
                                                                             barrel
----------------------------------------------------------------------------------------------------------------
Aviation Gasoline \1\........................  \1\ 11,218          40             28,045     1.00126      11,232
                                                  \1\ 176          40                440     1.01300         178
Residual Oils \1\............................  \1\ 21,221          83             25,567      .45962       9,754
                                                      \1\          83            125,780      .43642      45,561
                                                  104,397
Lubricating Oils \1\.........................   \1\ 8,774          50             17,548     4.52178      39,674
Petrochemicals, Other \1\....................     \1\ 195          29                672     1.00244         195
Petrochemicals, Other \2\....................     \2\ 696          29              2,400     1.00244         698
Petrochemicals, Other \2\....................     \2\ 319          29              1,100     1.07895         344
                                              ------------------------------------------------------------------
      Total..................................     146,996  ..........  .................  ..........     107,636
----------------------------------------------------------------------------------------------------------------
\1\ Exports.
\2\ Drawback deliveries.
A--Crude allowed (column 20: 107,636 bbls. (106,594 for export, plus 1,042 for drawback deliveries)).
B--Total quantity exported (including drawback deliveries) (column 22): 146,996.
C--Largest quantity of raw material needed to produce an individual exported product (see column 24): 151,347.
D--The excess of raw material over the largest of lines A, B, or C, required to produce concurrently on a
  practical operating basis, using the most efficient processing equipment existing within the domestic
  industry, the exported articles (including drawback deliveries) in the quantities exported (or delivered):
  None.
E--Minimum quantity of raw material required to be designated (which is A, B, or C, whichever is largest, plus
  D, if applicable): 151,347 bbs.
I hereby certify that all the above drawback deliveries and products exported by the Beaumont refinery of ABC
  Oil Co., Inc. during the period from January 1, 1995 to January 31, 1995, could have been produced
  concurrently on a practical operating basis from 151,347 barrels of imported Class III crude against which
  drawback is claimed.


[[Page 606]]

[GRAPHIC] [TIFF OMITTED] TR05MR98.005


[[Page 607]]


                                 Exhibit F--Designations for Drawback Claim, ABC Oil Co., Inc.; Beaumont, Texas Refinery
                                                    [Period From January 1, 1995 to January 31, 1995]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Quantity
                                                                                                   of
     Certificate of delivery No.       Entry No.    Date of           Kind of materials        materials     Date          Date consumed        Rate of
                                                  importation                                      in      received                               duty
                                                                                                barrels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                           26192    04/13/93   Class III Crude...............     75,125   04/13/93  May 1993................     $.1050
                                           23990    08/04/94   ......do......................     37,240   08/04/94  Oct. 1994...............      .1050
3155.................................      22517    10/05/94   ......do......................     38,982   10/05/94  Nov. 1994...............      .1050
--------------------------------------------------------------------------------------------------------------------------------------------------------

  X. General Manufacturing Drawback Ruling under 19 U.S.C. 1313(b) for 
                        Piece Goods (T.D. 83-73)

               A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback         Duty-Paid, Duty-Free or
 Products \1\ to be Designated as the     Domestic Merchandise of the
 Basis for Drawback on the Exported       Same Kind and Quality as that
 Products.                                Designated which will be Used
                                          in the Production of the
                                          Exported Products.
Piece goods............................  Piece goods.
 
\1\ Drawback products are those produced in the United States in
  accordance with the drawback law and regulations. Such products have
  ``dual status'' under 19 U.S.C. 1313(b). They may be designated as the
  basis for drawback and also may be deemed to be domestic merchandise.

    The piece goods used in manufacture will be the same kind and 
quality as the piece goods designated as the basis of claim for 
drawback, and are used interchangeably without change in manufacturing 
processes or resultant products (including, if applicable, multiple 
products), or wastes. Some tolerances between imported-designated piece 
goods and the used-exported piece goods will be permitted to accommodate 
variations which are normally found in piece goods. These tolerances are 
no greater than the tolerances generally allowed in the industry for 
piece goods of the same kind and quality as follows:
    1. A 4% weight tolerance so that the piece goods used in manufacture 
will be not more than 4% lighter or heavier than the imported piece 
goods which will be designated;
    2. A tolerance of 4% in the aggregate thread count per square inch 
so that the piece goods used in manufacture will have an aggregate 
thread count within 4%, more or less of the aggregate thread count of 
the imported piece goods which will be designated. In each case, the 
average yarn number of the domestic piece goods will be the same or 
greater than the average yarn number of the imported piece goods 
designated, and in each case, the substitution and tolerance will be 
employed only within the same family of fabrics, i.e., print cloth for 
print cloth, gingham for gingham, greige for greige, dyed for dyed, 
bleached for bleached, etc. The piece goods used in manufacture of the 
exported articles will be designated as containing the identical 
percentage of identical fibers as the piece goods designated as the 
basis for allowance of drawback; for example, piece goods containing 65% 
cotton and 35% dacron will be designated against the use of piece goods 
shown to contain 65% cotton and 35% dacron. The actual fiber composition 
may vary slightly from that described on the invoice or other acceptance 
of the fabric as having the composition described on documents in 
accordance with trade practices. The substituted piece goods used in the 
manufacture of articles for exportation with drawback will be so similar 
in quality to the imported piece goods designated for the basis of 
allowance of drawback, that the piece goods used, if imported, would 
have been subject to the same or greater amount of duty as was paid on 
the imported designated piece goods. Differences in value resulting from 
factors other than quality, as for example, price fluctuations, will not 
preclude an allowance of drawback.

         B. Exported Articles on Which Drawback Will Be Claimed

    Finished piece goods.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.'s. 55027(2) and 55207(1) (see Sec. 191.9 of this 
part).

                 D. Process of Manufacture or Production

    Piece goods are subject to any one of the following finishing 
productions:
    1. Bleaching,
    2. Mercerizing,
    3. Dyeing,
    4. Printing,

[[Page 608]]

    5. A combination of the above, or
    6. Any additional finishing processes.

                          E. Multiple Products

    Not applicable.

                                F. Waste

    Rag waste may be incurred. No drawback is payable on any waste which 
results from the manufacturing operation. Unless the claim for drawback 
is based on the quantity of merchandise appearing in the exported 
articles, the records of the manufacturer or producer will show the 
quantity of rag waste, if any, and its value. If necessary to establish 
the quantity of merchandise (eligible piece goods) appearing in the 
exported articles, such waste records will also be kept. In instances 
where rag waste occurs and it is impractical to account for the actual 
quantity of rag waste incurred, it may be assumed that such rag waste 
constituted 2% of the piece goods put into the finishing processes.

                    G. Shrinkage, Gain, and Spoilage

    Unless the claim for drawback is based on the quantity of 
merchandise appearing in the exported articles, the records of the 
manufacturer or producer will show the yardage lost by shrinkage or 
gained by stretching during manufacture or production, and the quantity 
of remnants resulting and of spoilage incurred, if any. If necessary to 
establish the quantity of merchandise (eligible piece goods) appearing 
in the exported articles, such records for shrinkage, gain and spoilage 
will also be kept.

                               H. Tradeoff

    The use of any domestic merchandise acquired in exchange for 
imported merchandise that meets the same kind and quality specifications 
contained in the parallel columns of this general ruling shall be 
treated as use of the imported merchandise if no certificate of delivery 
is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon 
compliance with the applicable regulations and rulings.

                  I. Procedures and Records Maintained

    Records will be maintained to establish:
    1. The identity and specifications of the designated merchandise;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise \2\ used to produce the exported articles;
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles produced.''
---------------------------------------------------------------------------

    3. That, within 3 years after receiving the designated merchandise 
at its factory, the manufacturer or producer used the merchandise to 
produce articles. During the same 3-year period, the manufacturer or 
producer produced \3\ the exported articles.
---------------------------------------------------------------------------

    \3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

    To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after the importation of the 
imported merchandise. Records establishing compliance with these 
requirements will be available for audit by Customs during business 
hours. Drawback is not payable without proof of compliance.

                         J. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures And Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.

                     K. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of eligible piece goods 
used in producing the exported articles only if there is no waste or 
valueless or unrecovered waste in the manufacturing operation. Drawback 
may be claimed on the quantity of eligible piece goods that appears in 
the exported articles, regardless of whether there is waste, and no 
records of waste need be maintained. If there is valuable waste 
recovered from the manufacturing operation and records are kept which 
show the quantity and value of the waste from each lot of piece goods, 
drawback may be claimed on the quantity of eligible piece goods used to 
produce the exported articles less the amount of piece goods which the 
value of the waste would replace.

                         L. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9)

[[Page 609]]

or the corporate name or corporate organization by succession or 
reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this general ruling.

 XI. General Manufacturing Drawback Ruling under 19 U.S.C. 1313(b) for 
                         Raw Sugar (T.D. 83-59)

    Drawback may be allowed under 19 U.S.C. 1313(b) upon the exportation 
of hard or soft refined sugars and sirups manufactured from raw sugar, 
subject to the following special requirements:
    A. The drawback allowance shall not exceed 99 percent of the duty 
paid on a quantity of raw sugar designated by the refiner which contains 
a quantity of sucrose not in excess of the quantity required to 
manufacture the exported sugar or sirup, ascertained as provided in this 
general rule.
    B. The refined sugars and sirups shall have been manufactured with 
the use of duty-paid, duty-free, or domestic sugar, or combinations 
thereof, within 3 years after the date on which designated sugar was 
received by the refiner, and shall have been exported within 5 years 
from the date of importation of the designated sugar.
    C. All granulated sugar testing by the polariscope 99.5[deg] and 
over shall be deemed hard refined sugar. All refined sugar testing by 
the polariscope less than 99.5[deg] shall be deemed soft refined sugar. 
All ``blackstrap,'' ``unfiltered sirup,'' and ``final molasses'' shall 
be deemed sirup.
    D. The imported duty-paid sugar selected by the refiner as the basis 
for the drawback claim (designated sugar) shall be of the same kind and 
quality as that used in the manufacture of the exported refined sugar or 
sirup and shall have been used within 3 years after the date on which it 
was received by the refiner. Duty-paid sugar which has been used at a 
plant of a refiner within 3 years after the date on which it was 
received by such refiner may be designated as the basis for the 
allowance of drawback on refined sugars or sirups manufactured at 
another plant of the same refiner.
    E. For the purpose of distributing the drawback, relative values 
shall be established between hard refined (granulated) sugar, soft 
refined (various grades) sugar, and sirups at the time of separation. 
The entire period covered by an abstract shall be deemed the time of 
separation of the sugars and sirups covered by such abstract.
    F. The sucrose allowance per pound on hard refined (granulated) 
sugar established by an abstract, as provided for in this general 
ruling, shall be applied to hard refined sugar commercially known as 
loaf, cut loaf, cube, pressed, crushed, or powdered sugar manufactured 
from the granulated sugar covered by the abstract.
    G. The sucrose allowance per gallon on sirup established by an 
abstract, as provided for in this general ruling, shall be applied to 
sirup further advanced in value by filtration or otherwise, unless such 
sirup is the subject of a special manufacturing drawback ruling.
    H. As to each lot of imported or domestic sugar used in the 
manufacture of refined sugar or sirup on which drawback is to be 
claimed, the raw stock records shall show the refiner's raw lot number, 
the number and character of the packages, the settlement weight in 
pounds, and the settlement polarization. Such records covering imported 
sugar shall show, in addition to the foregoing, the import entry number, 
date of importation, name of importing carrier, country of origin, the 
Government weight, and the Government polarization.
    I. The melt records shall show the date of melting, the number of 
pounds of each lot of raw sugar melted, and the full analysis at 
melting.
    J. There shall be kept a daily record of final products boiled 
showing the date of the melt, the date of boiling, the magma filling 
serial number, the number of the vacuum pan or crystallizer filling, the 
date worked off, and the sirup filling serial number.
    K. The sirup manufacture records shall show the date of boiling, the 
period of the melt, the sirup filling serial number, the number of 
barrels in the filling, the magma filling serial number, the quantity of 
sirup, its disposition in tanks or barrels and the refinery serial 
manufacture number.
    L. The refined sugar stock records shall show the refinery serial 
manufacture number, the period of the melt, the date of manufacture, the 
grade of sugar produced, its polarization, the number and kind of 
packages, and the net weight. When soft sugars are manufactured, the 
commercial grade number and quantity of each shall be shown.
    M. Each lot of hard or soft refined sugar and each lot of sirup 
manufactured, regardless of the character of the containers or vessels 
in which it is packed or stored, shall be marked immediately with the 
date of manufacture and the refinery manufacture number applied to it in 
the refinery records provided for and shown in the abstract, as provided 
for in this general ruling, from such records. If all the sugar or sirup 
contained in any lot manufactured is not intended for exportation, only 
such of the packages as are intended for exportation need be marked as 
prescribed above, provided there is filed with the drawback office 
immediately after such marking a statement showing the date of 
manufacture, the refinery manufacture number, the number of packages 
marked, and the

[[Page 610]]

quantity of sugar or sirup contained therein. No drawback shall be 
allowed in such case on any sugar or sirup in excess of the quantity 
shown on the statement as having been marked. If any packages of sugar 
or sirup so marked are repacked into other containers, the new 
containers shall be marked with the marks which appeared on the original 
containers and a revised statement covering such repacking and remarking 
shall be filed with the drawback office. If sirups from more than one 
lot are stored in the same tank, the refinery records shall show the 
refinery manufacture number and the quantity of sirup from each lot 
contained in such tank.
    N. An abstract from the foregoing records covering manufacturing 
periods of not less than 1 month nor more than 3 months, unless a 
different period shall have been authorized, shall be filed when 
drawback is to be claimed on any part of the refined sugar or sirup 
manufactured during such period. Such abstract shall be filed by each 
refiner with the drawback office where drawback claims are filed on the 
basis of this general ruling. Such abstract shall consist of: (1) A raw 
stock record (accounting for Refiner's raw lot No., Import entry No., 
Packages No. and kind, Pounds, Polarization, By whom imported or 
withdrawn, Date of importation, Date of receipt by refiner, Date of 
melt, Importing carrier, Country of origin); (2) A melt record [number 
of pounds in each lot melted] (accounting for Lot No. Pounds, and 
Polarization degrees and pounds sucrose); (3) Sirup stock records 
(accounting for Date of boiling, Refinery serial manufacture No., 
Quantity of sirup in gallons, and Pounds sucrose contained therein); (4) 
Refined sugar stock record (accounting for Refinery serial production 
No., Date of manufacture, Hard or soft refined, Polarization and No., 
Net weight in pounds); (5) Recapitulation (consisting of (in pounds): 
(a) sucrose in process at beginning of period, (b) sucrose melted during 
period, (c) sucrose in process at end of period, (d) sucrose used in 
manufacture, and (e) sucrose contained in manufacture, in which item (a) 
plus item (b), minus item (c), should equal item (d)); and (6) A 
statement as follows:
    I, --------, the -------- refiner at the -------- refinery of ------
--, located at --------, do solemnly and truly declare that each of the 
statements contained in the foregoing abstract is true to the best of my 
knowledge and belief and can be verified by the refinery records, which 
have been kept in accordance with Treasury Decision 83-59 and Appendix A 
of 19 CFR Part 191 and which are at all times open to the inspection of 
Customs.
. Date__________________________________________________________________
. Signature_____________________________________________________________
    O. The refiner shall file with each abstract a statement, showing 
the average market values of the products specified in the abstract and 
including a statement as follows:
    I, --------, (Official capacity) of the -------- (Refinery), do 
solemnly and truly declare that the values shown above are true to the 
best of my knowledge and belief, and can be verified by our records.
 Date___________________________________________________________________
 Signature______________________________________________________________
    P. At the end of each calendar month the refiner shall furnish to 
the drawback office a statement showing the actual sales of sirup and 
the average market values of refined sugars for the calendar month.
    Q. The sucrose allowance to be applied to the various products based 
on the abstract and statement provided for in this general ruling shall 
be in accordance with the example set forth in Treasury Decision 83-59.
    R. Certificates of manufacture and delivery under this general 
ruling shall be in the following form:
    Certificate of manufacture and delivery--Sugar and Sirup No. ------
--
    Certificate of manufacture and delivery of -------- manufactured by 
-------- under abstract No. -------- filed at the port of --------.

------------------------------------------------------------------------
           Description               Quantity         Polarization
------------------------------------------------------------------------
 
 
 
------------------------------------------------------------------------


                                                              Designation of Imported Sugar
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    By whom imported or                                                           Quantity of
         Import entry No.             withdrawn from       Name of importing       When        Where imported      raw sugar   Polarization    Sucrose
                                         warehouse              carrier          imported                           (pounds)                   (pounds)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
 
 
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 611]]

    I, --------, the -------- of --------, located at --------, declare 
that the sugar (or sirup) described in the within certificate of 
manufacture and delivery was manufactured by said company at its 
refinery at -------- and is part of the sugar (or sirup) covered by 
abstract No. ------------, filed at the port of -------- and was 
delivered to -------- on or about --------, ------------, and that no 
other certificate of manufacture and delivery has been issued covering 
the above merchandise; that, subject to 19 U.S.C. 1508 and 1313(t), the 
refinery and other records of the company verifying the statements 
contained in said abstract are now and at all times hereafter will be 
open to inspection by Customs.
    I further declare that the above-designated imported sugar (upon 
which the duties have been paid) was received by said company on ------
-- and was used in the manufacture of sugar and sirup on --------.
. Date__________________________________________________________________
. Signature_____________________________________________________________
    S. Drawback entries under this general ruling shall be on Customs 
Form 7551 and, in addition to the information required thereon, shall 
state the polarization in degrees and the sucrose in pounds for the 
designated imported sugar. Drawback claims under this general ruling 
shall include a statement as follows:
    I, --------, the -------- of --------, located at -------- declare 
that the sugar (or sirup) described in this entry, was manufactured by 
said company at its refinery at -------- [or, if the claim is based on a 
certificate of manufacture and delivery, was manufactured by -------- at 
its refinery at -------- for which the accompanying certificate of 
manufacture and delivery was received by this company] and is part of 
the sugar (or sirup) covered by abstract No. --------, filed at the port 
of --------; that, subject to 19 U.S.C. 1508 and 1313(t), the refinery 
and other records of the company verifying the statements contained in 
said abstract are now and at all times hereafter will be open to 
inspection by Customs. I further declare that the above-designated 
imported sugar (upon which the duties have been paid) was received by 
said company on -------- and was used in the manufacture of sugar and 
sirup during the period covered by abstract No. --------, Customs No. --
------, on file with the port director at --------.
    I further declare that the sugar or sirup specified therein was 
exported as stated in the entry.
. Date__________________________________________________________________
. Signature_____________________________________________________________
    T. General Statement. The refiner manufactures or produces for its 
own account. The refiner may manufacture or produce articles for the 
account of another or another manufacturer or producer may manufacture 
or produce for the refiner's account under contract within the principal 
and agency relationship outlined in T.D.'s 55027(2) and 55207(1) (see 
Sec. 191.9 of this part).
    U. Waste. No drawback is payable on any waste which results from the 
manufacturing operation. Unless drawback claims are based on the 
``appearing in'' method, records will be maintained to establish the 
value (or the lack of value), the quantity, and the disposition of any 
waste that results from manufacturing the exported articles. If no waste 
results, records to establish that fact will be maintained.
    V. Loss or Gain. The refiner will maintain records showing the 
extent of any loss or gain in net weight or measurement of the sugar 
caused by atmospheric conditions, chemical reactions, or other factors.
    W. Tradeoff. The use of any domestic merchandise acquired in 
exchange for imported merchandise that meets the same kind and quality 
requirements provided for in this general ruling shall be treated as use 
of the imported merchandise if no certificate of delivery is issued 
covering the imported merchandise (19 U.S.C. 1313(k)) upon compliance 
with the applicable regulations and rulings.
    X. Procedures And Records Maintained. Records will be maintained to 
establish:
    1. The identity and specifications of the designated merchandise;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise \1\ used to produce the exported articles; and
---------------------------------------------------------------------------

    \1\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles produced.''
---------------------------------------------------------------------------

    3. That, within 3 years after receiving the designated merchandise 
at its factory, the refiner used the designated merchandise to produce 
articles. During the same 3-year period, the refiner produced \2\ the 
exported articles.
---------------------------------------------------------------------------

    \2\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

    To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after the importation of the 
imported merchandise. Records establishing compliance with these 
requirements will be available for audit by Customs during business 
hours. Drawback is not payable without proof of compliance.
    Y. General requirements. The refiner will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;

[[Page 612]]

    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this general ruling.

 XII. General Manufacturing Drawback Ruling under 19 U.S.C. 1313(b) for 
                           Steel (T.D. 81-74)

               A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback         Duty-Paid, Duty-Free or
 Products \1\ to be Designated as the     Domestic Merchandise of the
 Basis for Drawback on the Exported       Same Kind and Quality as that
 Products.                                Designated which will be Used
                                          in the Production of the
                                          Exported Products.
Steel of one general class, e.g., an     Steel of the same general
 ingot, falling within one SAE, AISI,     class, specification, and
 or ASTM \2\ specification and, if the    grade as the steel in the
 specification contains one or more       column immediately to the left
 grades, falling within one grade of      hereof.
 the specification.
 
\1\ Drawback products are those produced in the United States in
  accordance with the drawback law and regulations. Such products have
  ``dual status'' under section 1313(b). They may be designated as the
  basis for drawback and also may be deemed to be domestic merchandise.
\2\ Standards set by the Society of Automotive Engineers (SAE), the
  American Iron and Steel Institute (AISI), or the American Society for
  Testing and Materials (ASTM).

    1. The duty-paid, duty-free, or domestic steel used instead of the 
imported, duty-paid steel (or drawback products) will be interchangeable 
for manufacturing purposes with the duty-paid steel. To be 
interchangeable a steel must be able to be used in place of the 
substituted steel without any additional processing step in the 
manufacture of the article on which drawback is to be claimed.
    2. Because the duty-paid steel (or drawback products) that is to be 
designated as the basis for drawback is dutiable according to its value, 
the amount of duty can vary with its size (gauge, width, or length) or 
composition (e.g., chrome content). If such variances occur, designation 
will be by ``price extra'', and in no case will drawback be claimed in a 
greater amount than that which would have accrued to that steel used in 
manufacture of or appearing in the exported articles. Price extra is not 
available for coated or plated steel, covered in paragraph 5, infra, 
insofar as the coating or plating is concerned.
    3. The duty-paid steel (or drawback products) will be so similar in 
quality to the steel used to manufacture the articles on which drawback 
will be claimed that the steel so used, if imported, would be 
classifiable in the same tariff subheading number and at the same rate 
of duty as the duty-paid imported steel.
    4. Any fluctuation in market value caused by a factor other than 
quality does not affect drawback.
    5. If the steel is coated or plated with a base metal, in addition 
to meeting the requirements for uncoated or unplated steel set forth in 
the parallel columns, the base-metal coating or plating on the duty-
paid, duty-free, or domestic steel used in place of the duty-paid steel 
(or drawback products) will have the same composition and thickness as 
the coating or plating on the duty-paid steel. If the coated or plated 
duty-paid steel is within a SAE, AISI, ASTM specification, any duty-
paid, duty-free, or domestic coated or plated steel covered by the same 
specification and grade (if two or more grades are in the specification) 
is considered to meet this criterion for ``same kind and quality.''

         B. Exported Articles on Which Drawback Will Be Claimed

    The exported articles will have been manufactured in the United 
States using steels described in the parallel columns above.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

[[Page 613]]

                 D. Process of Manufacture or Production

    The steel described in the parallel columns will be used to 
manufacture or produce articles in accordance with Sec. 191.2(q) of 
this part.

                          E. Multiple Products

    Not applicable.

                                F. Waste

    No drawback is payable on any waste which results from the 
manufacturing operation. Unless the claim for drawback is based on the 
quantity of steel appearing in the exported articles, records will be 
maintained to establish the value (or the lack of value), the quantity, 
and the disposition of any waste that results from manufacturing the 
exported articles. If no waste results, records to establish that fact 
will be maintained.

                             G. Loss or Gain

    The manufacturer or producer will maintain records showing the 
extent of any loss or gain in net weight or measurement of the steel 
caused by atmospheric conditions, chemical reactions, or other factors.

                               H. Tradeoff

    The use of any domestic merchandise acquired in exchange for 
imported merchandise that meets the same kind and quality specifications 
contained in the parallel columns of this general ruling shall be 
treated as use of the imported merchandise if no certificate of delivery 
is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon 
compliance with the applicable regulations and rulings.

                  I. Procedures and Records Maintained

    Records will be maintained to establish:
    1. The identity and specifications of the designated merchandise;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise \3\ used to produce the exported articles;
---------------------------------------------------------------------------

    \3\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles produced.''
---------------------------------------------------------------------------

    3. That, within 3 years after receiving the designated merchandise 
at its factory, the manufacturer or producer used the merchandise to 
produce articles. During the same 3-year period, the manufacturer or 
producer produced \4\ the exported articles.
---------------------------------------------------------------------------

    \4\ The date of production is the date an article is completed.

    To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after the importation of the 
imported merchandise. Records establishing compliance with these 
requirements will be available for audit by Customs during business 
hours. Drawback is not payable without proof of compliance.

                         J. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures And Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.

                     K. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of steel used in producing 
the exported articles only if there is no waste or valueless or 
unrecovered waste in the manufacturing operation. Drawback may be 
claimed on the quantity of eligible steel that appears in the exported 
articles, regardless of whether there is waste, and no records of waste 
need be maintained. If there is valuable waste recovered from the 
manufacturing operation and records are kept which show the quantity and 
value of the waste from each lot of steel, drawback may be claimed on 
the quantity of eligible steel used to produce the exported articles 
less the amount of that steel which the value of the waste would 
replace.

                         L. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification to operate under this general 
ruling current by reporting promptly to the drawback office which 
liquidates its claims any changes in the information required by the 
General Instructions of this Appendix to be included therein (I. General 
Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code,

[[Page 614]]

section 1313, part 191 of the CBP Regulations and this general ruling.

XIII. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(b) for 
                           Sugar (T.D. 81-92)

               A. Same Kind and Quality (Parallel Columns)
Imported Merchandise or Drawback         Duty-Paid, Duty-Free or
 Products \1\ to be Designated as the     Domestic Merchandise of the
 Basis for Drawback on the Exported       Same Kind and Quality as that
 Products.                                Designated which will be Used
                                          in the Production of the
                                          Exported Products.
1. Granulated or liquid sugar for        1. Granulated or liquid sugar
 manufacturing, containing sugar solids   for manufacturing, containing
 of not less than 99.5 sugar degrees.     sugar solids of not less than
                                          99.5 sugar degrees.
2. Granulated or liquid sugar for        2. Granulated or liquid sugar
 manufacturing, containing sugar solids   for manufacturing, containing
 of less than 99.5 sugar degrees.         sugar solids of less than 99.5
                                          sugar degrees.
 
\1\ Drawback products are those produced in the United States in
  accordance with the drawback law and regulations. Such products have
  ``dual status'' under section 1313(b). They may be designated as the
  basis for drawback and also may be deemed to be domestic merchandise.

    The sugars listed above test within three-tenths of a degree on the 
polariscope. Sugars in each column are completely interchangeable with 
the sugars directly opposite and designation will be made on this basis 
only. The designated sugar on which claims for drawback will be based 
will be so similar in quality to the sugar used in manufacture of the 
products exported with drawback that the sugar used in manufacture 
would, if imported, be subject to the same amount of duty paid on a like 
quantity of designated sugar. Differences in value resulting from 
factors other than quality, such as market fluctuation, will not affect 
the allowance of drawback.

         B. Exported Articles on Which Drawback Will Be Claimed

    Edible substances (including confectionery) and/or beverages and/or 
ingredients therefor.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.'s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

                 D. Process of Manufacture or Production

    The sugars are subjected to one or more of the following operations 
to form the desired product(s):
    1. Mixing with other substances,
    2. Cooking with other substances
    3. Boiling with other substances,
    4. Baking with other substances,
    5. Additional similar processes

                          E. Multiple Products

    Not applicable.

                                F. Waste

    No drawback is payable on any waste which results from the 
manufacturing operation. Unless the claim for drawback is based on the 
quantity of sugar appearing in the exported articles, records will be 
maintained to establish the value (or the lack of value), the quantity, 
and the disposition of any waste that results from manufacturing the 
exported articles. If no waste results, records to establish that fact 
will be maintained.

                             G. Loss or Gain

    The manufacturer or producer will maintain records showing the 
extent of any loss or gain in net weight or measurement of the sugar 
caused by atmospheric conditions, chemical reactions, or other factors.

                               H. Tradeoff

    The use of any domestic merchandise acquired in exchange for 
imported merchandise that meets the same kind and quality specifications 
contained in the parallel columns of this general ruling shall be 
treated as use of the imported merchandise if no certificate of delivery 
is issued covering the imported merchandise (19 U.S.C. 1313(k)) upon 
compliance with the applicable regulations and rulings.

                  I. Procedures And Records Maintained

    Records will be maintained to establish:
    1. The identity and specifications of the designated merchandise;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise \2\ used to produce the exported articles;
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles produced.''

---------------------------------------------------------------------------

[[Page 615]]

    3. That, within 3 years after receiving the designated merchandise 
at its factory, the manufacturer or producer used the merchandise to 
produce articles. During the same 3-year period, the manufacturer or 
producer produced \3\ the exported articles.
---------------------------------------------------------------------------

    \3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after the importation of the 
imported merchandise. Records establishing compliance with these 
requirements will be available for audit by Customs during business 
hours. Drawback is not payable without proof of compliance.

                         J. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures And Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.

                     K. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of sugar used in producing 
the exported articles only if there is no waste or valueless or 
unrecovered waste in the manufacturing operation. Drawback may be 
claimed on the quantity of eligible sugar that appears in the exported 
articles regardless of whether there is waste, and no records of waste 
need be maintained. If there is valuable waste recovered from the 
manufacturing operation and records are kept which show the quantity and 
value of the waste, drawback may be claimed on the quantity of eligible 
material used to produce the exported articles less the amount of that 
sugar which the value of the waste would replace.

                         L. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation;
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this general ruling.

 XIV. General Manufacturing Drawback Ruling Under 19 U.S.C. 1313(a) for 
                     Woven Piece Goods (T.D. 83-84)

    Drawback may be allowed under 19 U.S.C. 1313(a) upon the exportation 
of bleached, mercerized, printed, dyed, or redyed piece goods 
manufactured or produced by any one or a combination of the foregoing 
processes with the use of imported woven piece goods, subject to the 
following special requirements:

          A. Imported Merchandise or Drawback Products \1\ Used

    Imported merchandise or drawback products (woven piece goods) are 
used in the manufacture of the exported articles upon which drawback 
claims will be based.
---------------------------------------------------------------------------

    \1\ Drawback products are those produced in the United States in 
accordance with the drawback law and regulations.
---------------------------------------------------------------------------

         B. Exported Articles on Which Drawback Will Be Claimed

    Exported articles on which drawback will be claimed will be 
manufactured in the United States using imported merchandise or drawback 
products.

                          C. General Statement

    The manufacturer or producer manufactures or produces for its own 
account. The manufacturer or producer may manufacture or produce 
articles for the account of another or another manufacturer or producer 
may manufacture or produce for the account of the manufacturer or 
producer under contract within the principal and agency relationship 
outlined in T.D.s 55027(2) and 55207(1) (see Sec. 191.9 of this part).

                 D. Process of Manufacture or Production

    The imported merchandise or drawback products will be used to 
manufacture or produce articles in accordance with Sec. 191.2(q) of 
this part.
    The piece goods used in manufacture or production under this general 
manufacturing drawback ruling may also be subjected to one or more 
finishing processes. Drawback

[[Page 616]]

shall not be allowed under this general manufacturing drawback ruling 
when the process performed results only in the restoration of the 
merchandise to its condition at the time of importation.

                          E. Multiple Products

    Not applicable.

                                F. Waste

    Rag waste may be incurred. No drawback is payable on any waste which 
results from the manufacturing operation. Unless the claim for drawback 
is based on the quantity of merchandise appearing in the exported 
articles, the records of the manufacturer or producer will show the 
quantity of rag waste, if any, its value, and its disposition. If 
necessary to establish the quantity of merchandise (eligible piece 
goods) appearing in the exported articles, such waste records will also 
be kept. If no waste results, records will be maintained to establish 
that fact. In instances where rag waste occurs and it is impractical to 
account for the actual quantity of rag waste incurred, it may be assumed 
that such rag waste constituted 2% of the woven piece goods put into 
process.

                    G. Shrinkage, Gain, and Spoilage

    Unless the claim for drawback is based on the quantity of 
merchandise appearing in the exported articles, the records of the 
manufacturer or producer will show the yardage lost by shrinkage or 
gained by stretching during manufacture, and the quantity of remnants 
resulting and of spoilage incurred, if any. If necessary to establish 
the quantity of merchandise (eligible piece goods) appearing in the 
exported articles, such records for shrinkage, gain, and spoilage will 
also be kept.

                  H. Procedures and Records Maintained

    Records will be maintained to establish:
    1. That the exported articles on which drawback is claimed were 
produced with the use of the imported merchandise; and
    2. The quantity of imported merchandise \2\ used in producing the 
exported articles.
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of the sentence should read ``appearing in the exported 
articles.''
---------------------------------------------------------------------------

    To obtain drawback the claimant must establish that the completed 
articles were exported within 5 years after importation of the imported 
merchandise. Records establishing compliance with these requirements 
will be available for audit by Customs during business hours. Drawback 
is not payable without proof of compliance.

                         I. Inventory Procedures

    The inventory records of the manufacturer or producer will show how 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(a) 
and part 191 of the CBP Regulations will be met, as discussed under the 
heading ``Procedures and Records Maintained''. If those records do not 
establish satisfaction of those legal requirements, drawback cannot be 
paid.
    The records of the manufacturer or producer shall show, as to each 
lot of piece goods manufactured or produced for exportation with benefit 
of drawback, the lot number and the date or inclusive dates of 
manufacture or production, the quantity, identity, and value of the 
imported (or drawback product) piece goods used, the condition in which 
imported or received (whether in the gray, bleached, dyed, or 
mercerized), the working allowance specified in the contract under which 
they are received, the process or processes applied thereto, and the 
quantity and description of the piece goods obtained. The records shall 
also show the yardage lost by shrinkage or gained by stretching during 
manufacture or production, and the quantity of remnants resulting and of 
spoilage incurred.

                     J. Basis of Claim for Drawback

    Drawback will be claimed on the quantity of merchandise used in 
producing the exported articles only if there is no waste or valueless 
or unrecovered waste in the manufacturing operation. Drawback may be 
claimed on the quantity of eligible merchandise that appears in the 
exported articles, regardless of whether there is waste, and no records 
of waste need be maintained. If there is valuable waste recovered from 
the manufacturing operation and records are kept which show the quantity 
and value of the waste, drawback may be claimed on the quantity of 
eligible material used to produce the exported articles, less the amount 
of that merchandise which the value of the waste would replace. (If 
remnants and/or spoilage occur during manufacture or production, the 
quantity of imported merchandise used shall be determined by deducting 
from the quantity of piece goods received and put into manufacture or 
production the quantity of such remnants and/or spoilage. The remaining 
quantity shall be reduced by the quantity thereof which the value of the 
rag waste, if any, would replace.)

                         K. General Requirements

    The manufacturer or producer will:
    1. Comply fully with the terms of this general ruling when claiming 
drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;

[[Page 617]]

    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this general ruling;
    4. Keep its letter of notification of intent to operate under this 
general ruling current by reporting promptly to the drawback office 
which liquidates its claims any changes in the information required by 
the General Instructions of this Appendix to be included therein (I. 
General Instructions, 1 through 9) or the corporate name or corporate 
organization by succession or reincorporation.
    5. Keep a copy of this general ruling on file for ready reference by 
employees and require all officials and employees concerned to 
familiarize themselves with the provisions of this general ruling; and
    6. Issue instructions to insure proper compliance with 19, United 
States Code, Sec. 1313, part 191 of the CBP Regulations and this 
general ruling.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 13105, Mar. 17, 1998; 63 
FR 15291, Mar. 31, 1998; 63 FR 65060, Nov. 25, 1998; T.D. 02-16, 67 FR 
16638, Apr. 8, 2002]



    Sec. Appendix B to Part 191--Sample Formats for Applications for 
                 Specific Manufacturing Drawback Rulings

                            Table of Contents

I. General.
II. Format for Application for Specific Manufacturing Drawback Ruling 
          Under 19 U.S.C. 1313(a) and 1313(b) (Combination).
III. Format for Application for Specific Manufacturing Drawback Ruling 
          Under 19 U.S.C. 1313(b).
IV. Format for Application for Specific Manufacturing Drawback Ruling 
          Under 19 U.S.C. 1313(d).
V. Format for Application for Specific Manufacturing Drawback Ruling 
          Under 19 U.S.C. 1313(g).

                               I. General

    These sample formats for applications for specific manufacturing 
drawback rulings must be submitted to and reviewed and approved by CBP 
Headquarters. A specific manufacturing drawback ruling consists of the 
letter of approval that CBP issues to the applicant, a synopsis of which 
is published in the Customs Bulletin, as provided in 19 CFR 191.8. In 
these application formats, remarks in parentheses and footnotes are for 
explanatory purposes only and should not be copied. Other material 
should be quoted directly in the applications.

 II. Format for Application for Specific Manufacturing Drawback Ruling 
            Under 19 U.S.C. 1313(a) and 1313(b) (Combination)

                      COMPANY LETTERHEAD (Optional)

U.S. Customs and Border Protection, Entry Process and Duty Refunds, 
Regulations and Rulings, Office of International Trade, 1300 
Pennsylvania Avenue, N.W., Washington, D.C. 20229.
    Dear Sir: We, (Applicant's Name), a (State, e.g., Delaware) 
corporation (or other described entity) submit this application for a 
specific manufacturing drawback ruling that our manufacturing operations 
qualify for drawback under title 19, United States Code, Sec. Sec. 1313 
(a) & (b), and part 191 of the CBP Regulations. We request that the 
Customs Service authorize drawback on the basis of this application.

       NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT

    (Section 191.8(a) of the CBP Regulations provides that each 
manufacturer or producer of articles intended for exportation with the 
benefit of drawback shall apply for a specific manufacturing drawback 
ruling, unless operating under a general manufacturing drawback ruling 
under Sec. 191.7 of the CBP Regulations. Customs will not approve an 
application which shows an unincorporated division or company as the 
applicant (see Sec. 191.8(a)).)

                           LOCATION OF FACTORY

    (Give the address of the factory(s) where the process of manufacture 
or production will take place. If the factory is a different legal 
entity from the applicant, so state and indicate if operating under an 
Agent's general manufacturing drawback ruling.)

                PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS

    (List persons legally authorized to bind the corporation who will 
sign drawback documents. Section 191.6 of the CBP Regulations permits 
only the president, vice-president, secretary, treasurer, or any 
employee legally authorized to bind the corporation to sign for a 
corporation. In addition, a person within a business entity with a 
Customs power of attorney for the company may sign. A Customs power of 
attorney may also be given to a licensed Customs broker. This heading 
should be changed to Names of Partners or Proprietor in the case of a 
partnership or sole proprietorship, respectively (see footnote at end of 
this sample format for persons who may sign applications for specific 
manufacturing drawback rulings).)

[[Page 618]]

             CBP OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED

(The 8 offices where drawback claims can be filed are located at: 
Boston, MA; New York, NY; Miami, FL; New Orleans, LA; Houston, TX; Long 
Beach, CA; Chicago, IL; San Francisco, CA)
(An original application and two copies must be filed. If the applicant 
intends to file drawback claims at more than one drawback office, one 
additional copy of the application must be furnished for each additional 
office indicated.)

                            GENERAL STATEMENT

(The following questions must be answered:)
    1. Who will be the importer of the designated merchandise?
(If the applicant will not always be the importer of the designated 
merchandise, does the applicant understand its obligations to obtain the 
appropriate certificates of delivery (19 CFR 191.10), certificates of 
manufacture and delivery (19 CFR 191.24), or both?)
    2. Will an agent be used to process the designated or the 
substituted merchandise into articles?
(If an agent is to be used, the applicant must state it will comply with 
T.D.'s 55027(2) and 55207(1) and Sec. 191.9, as applicable, and that 
its agent will submit a letter of notification of intent to operate 
under the general manufacturing drawback ruling for agents (see Sec. 
191.7 and Appendix A) or an application for a specific manufacturing 
drawback ruling (see Sec. 191.8 and this Appendix B).)
    3. Will the applicant be the exporter?
(If the applicant will not be the exporter in every case but will be the 
claimant, the manufacturer must state that it will reserve the right to 
claim drawback with the knowledge and written consent of the exporter 
(19 CFR 191.82).)
(Since the permission to grant use of the accelerated payment procedure 
rests with the Customs office with which claims will be filed, do not 
include any reference to that procedure in this application.)

   Procedures Under Section 1313(b) (Parallel Columns--``Same Kind and
                               Quality'')
Imported Merchandise or Drawback     Duty-paid, Duty-free or Domestic
 Products \1\ to be Designated as     Merchandise of the Same Kind and
 the Basis for Drawback on the        Quality as That Designated Which
 Exported Products                    Will be Used in the Production of
                                      the Exported Products.
1.                                   1.
2.                                   2.
3.                                   3.
 
\1\ Drawback products are those produced in the United States in
  accordance with the drawback law and regulations. Such products have
  ``dual status'' under section 1313(b). They may be designated as the
  basis for drawback and also may be deemed to be domestic merchandise.)

(Following the items listed in the parallel columns, a statement will be 
made, by the applicant, that affirms the ``same kind and quality'' of 
the merchandise. This statement should be included in the application 
exactly as it is stated below:)
    The imported merchandise which we will designate on our claims will 
be so similar in quality to the merchandise used in producing the 
exported articles on which we claim drawback that the merchandise used 
would, if imported, be subject to the same rate of duty as the imported 
designated merchandise.
    Fluctuations in the market value resulting from factors other than 
quality will not affect the drawback.
(In order to successfully claim drawback it is necessary to prove that 
the duty-paid, duty-free or domestic merchandise which is to be 
substituted for the imported merchandise is the ``same kind and 
quality''. ``Same kind and quality'' does not necessarily mean that the 
merchandise is identical. It does mean that the merchandise is of the 
same nature or character (``same kind'') and that the merchandise to be 
substituted is interchangeable with the imported merchandise with little 
or no change in the manufacturing process to produce the same exported 
article (``same quality''). In order to enable Customs to rule on ``same 
kind and quality'', the application must include a detailed description 
of the designated imported merchandise and of the substituted duty-paid, 
duty-free or domestic merchandise to be used to produce the exported 
articles.)
(It is essential that all the characteristics which determine the 
quality of the merchandise are provided in the application in order to 
substantiate that the merchandise meets the ``same kind and quality'' 
statutory requirement. These characteristics should clearly distinguish 
merchandise of different qualities. For example, USDA standards; FDA 
standards; industry standards, e.g., ASTM; concentration; specific 
gravity; purity; luster; melting point, boiling point; odor; color; 
grade; type; hardness; brittleness; etc. Note that these are only a few 
examples of characteristics and that each kind of merchandise has its 
own set of specifications that characterizes its quality. If 
specifications are given with a minimum value, be sure to include a 
maximum value. The converse is also true. Often characteristics

[[Page 619]]

are given to Customs on attached specification sheets. These 
specifications should not include Material Safety Data sheets or other 
descriptions of the merchandise that do not contribute to the ``same 
kind and quality'' determination. When the merchandise is a chemical, 
state the chemical's generic name as well as its trade name plus any 
generally recognized identifying number, e.g., CAS number; Color Index 
Number, etc.)

(In order to expedite the specific manufacturing drawback ruling 
process, it will be helpful if you provide copies of technical 
standards/specifications (particularly industry standards such as ASTM 
standards) referred to in your application.)
(The descriptions of the ``same kind and quality'' merchandise should be 
formatted in the parallel columns. The left-hand column will consist of 
the name and specifications of the designated imported merchandise under 
the heading set forth above. The right-hand column will consist of the 
name and specifications for the duty-paid, duty-free or domestic 
merchandise under the heading set forth above.)

           EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED

(Name each article to be exported. When the identity of the product is 
not clearly evident by its name state what the product is, e.g., a 
herbicide. There must be a match between each article described under 
the PROCESS OF MANUFACTURE OR PRODUCTION section below and each article 
listed here.)

                  PROCESS OF MANUFACTURE OR PRODUCTION

(Drawback under Sec. 1313(b) is not allowable except where a 
manufacture or production exists. Manufacture or production is defined, 
for drawback purposes, in Sec. 191.2(q). In order to obtain drawback 
under Sec. 1313(b), it is essential for the applicant to show use in 
manufacture or production by giving a thorough description of the 
manufacturing process. This description should include the name and 
exact condition of the merchandise listed in the Parallel Columns, a 
complete explanation of the processes to which it is subjected in this 
country, the effect of such processes, the name and exact description of 
the finished article, and the use for which the finished article is 
intended. When applicable, give equations of the chemical reactions. The 
attachment of a flow chart in addition to the description showing the 
manufacturing process is an excellent means of illustrating whether or 
not a manufacture or production has occurred. Flow charts can clearly 
illustrate if and at what point during the manufacturing process by-
products and wastes are generated.)
(This section should contain a description of the process by which each 
item of merchandise listed in the parallel columns above is used to make 
or produce every article that is to be exported.)

                            MULTIPLE PRODUCTS

                           1. Relative Values

(Some processes result in the separation of the merchandise used in the 
same operation into two or more products. List all of the products. 
State that you will record the market value of each product at the time 
it is first separated in the manufacturing process. If this section is 
not applicable to you, then state so.)
Drawback law mandates the assignment of relative values when two or more 
products necessarily are produced concurrently in the same operation. 
For instance, the refining of flaxseed necessarily produces linseed oil 
and linseed husks (animal feed), and drawback must be distributed to 
each product in accordance with its relative value. However, the 
voluntary election of a steel fabricator, for instance, to use part of a 
lot of imported steel to produce automobile doors and part of the lot to 
produce automobile fenders does not call for relative value 
distribution.)

(The relative value of a product is its value divided by the total value 
of all products, whether or not exported. For example, 100 gallons of 
drawback merchandise are used to produce 100 gallons of products, 
including 60 gallons of product A, 20 gallons of product B, and 20 
gallons of product C. At the time of separation, the unit values of 
products A, B, and C are $5, $10, and $50 respectively. The relative 
value of product A is $300 divided by $1500 or \1/5\. The relative value 
of B is \2/15\ and of product C is \2/3\, calculated in the same manner. 
This means that \1/5\ of the drawback product payments will be 
distributed to product A, \2/15\ to product B, and \2/3\ to product C.)
(Drawback is allowable on exports of any of multiple products, but is 
not allowable on exports of valuable waste. In making this distinction 
between a product and valuable waste, the applicant should address the 
following significant elements: (1) the nature of the material of which 
the residue is composed; (2) the value of the residue as compared to the 
value of the principal manufactured product and the raw material; (3) 
the use to which it is put; (4) its status under the tariff laws, if 
imported; (5) whether it is a commodity recognized in commerce; (6) 
whether it must be subjected to some process to make it saleable.)

                            2. Producibility

(Some processes result in the separation of fixed proportions of each 
product, while other processes afford the opportunity to increase or 
decrease the proportion of each

[[Page 620]]

product. An example of the latter is petroleum refining, where the 
refiner has the option to increase or decrease the production of one or 
more products relative to the others. State under this heading whether 
you can or cannot vary the proportionate quantity of each product.)

(The MULTIPLE PRODUCTS section consists of two sub-sections: Relative 
Values and Producibility. If multiple products do not result from your 
operation state ``Not Applicable'' for the entire section. If multiple 
products do result from your operation Relative Values will always 
apply. However, Producibility may or may not apply. If Producibility 
does not apply to your multiple product operation state ``Not 
Applicable'' for this sub-section.)

                                  WASTE

(Many processes result in residue materials which, for drawback 
purposes, are treated as wastes. Describe any residue materials which 
you believe should be so treated. If no waste results, include a 
positive statement to that effect under this heading.)
(If waste occurs, state: (1) whether or not it is recovered, (2) whether 
or not it is valueless, and (3) what you do with it. This information is 
required whether claims are made on a ``used in'' or ``appearing in'' 
basis and regardless of the amount of waste incurred.)
(Irrecoverable wastes are those consisting of materials which are lost 
in the process. Valueless wastes are those which may be recovered but 
have no value. These irrecoverable and valueless wastes do not reduce 
the drawback claim provided the claim is based on the quantity of 
imported material used in manufacturing. If the claim is based upon the 
quantity of imported merchandise appearing in the exported article, 
irrecoverable and valueless waste will cause a reduction in the amount 
of drawback.)
(Valuable wastes are those recovered wastes which have a value either 
for sale or for use in a different manufacturing process. However, it 
should be noted that this standard applies to the entire industry and is 
not a selection on your part. An option by you not to choose to sell or 
use the waste in some different operation does not make it valueless if 
another manufacturer can use the waste. State what you do with the 
waste. If you have to pay someone to get rid of it, or if you have 
buyers for the waste, you must state so in your application regardless 
of what ``Basis'' you are using.)
(If you recover valuable waste and if you choose to claim on the basis 
of the quantity of imported or substituted merchandise used in producing 
the exported articles (less valuable waste), state that you will keep 
records to establish the quantity and value of the waste recovered. See 
``Basis of Claim for Drawback'' section below.)

                            STOCK IN PROCESS

(Some processes result in another type of residual material, namely, 
stock in process, which affects the allowance of drawback. Stock in 
process may exist when residual material resulting from a manufacturing 
or processing operation is reintroduced into a subsequent manufacturing 
or processing operation; e.g., trim pieces from a cast article. The 
effect of stock in process on a drawback claim is that the amount of 
drawback for the period in which the stock in process was withdrawn from 
the manufacturing or processing operation (or the manufactured article, 
if manufacturing or processing periods are not used) is reduced by the 
quantity of merchandise or drawback products used to produce the stock 
in process if the ``used in'' or ``used in less valuable waste'' methods 
are used (if the ``appearing in'' method is used, there will be no 
effect on the amount of drawback), and the quantity of merchandise or 
drawback products used to produce the stock in process is added to the 
merchandise or drawback products used in the subsequent manufacturing or 
production period (or the subsequently produced article)).

(If stock in process occurs and claims are to be based on stock in 
process, the application must include a statement to that effect. The 
application must also include a statement that merchandise is considered 
to be used in manufacture at the time it was originally processed so 
that the stock in process will not be included twice in the computation 
of the merchandise used to manufacture the finished articles on which 
drawback is claimed.)

                                TRADEOFF

(If an applicant proposes to use tradeoff (19 CFR 191.11), the applicant 
should so state and the applicant should describe the contractual 
arrangement between the applicant and its partner for tradeoff. The 
person claiming drawback under the tradeoff provision has the burden of 
establishing compliance with the law and regulations. In this regard, 
the terms of a written contract are always easier to establish than 
those of an oral contract.)

             LOSS OR GAIN (Separate and distinct from WASTE)

(Some manufacturing processes result in an intangible loss or gain of 
the net weight or measurement of the merchandise used. This loss or gain 
is caused by atmospheric conditions, chemical reactions, or other 
factors. State the approximate usual percentage or quantity of such loss 
or gain. Note that percentage values will be considered to be measured 
``by weight'' unless otherwise specified. Loss or gain does not occur 
during all manufacturing processes. If loss or gain does not

[[Page 621]]

apply to your manufacturing process, state ``Not Applicable.'')

                    PROCEDURES AND RECORDS MAINTAINED

    We will maintain records to establish:
    1. The identity and specifications of the merchandise we designate;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise \2\ we used to produce the exported articles;
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles we produce.''
---------------------------------------------------------------------------

    3. That, within 3 years after receiving it at our factory, we used 
the designated merchandise to produce articles. During the same 3-year 
period, we produced \3\ the exported articles.
---------------------------------------------------------------------------

    \3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

    We realize that to obtain drawback the claimant must establish that 
the completed articles were exported within 5 years after the 
importation of the imported merchandise. Our records establishing our 
compliance with these requirements will be available for audit by 
Customs during business hours. We understand that drawback is not 
payable without proof of compliance.

                          INVENTORY PROCEDURES

(Describe your inventory records and state how those records will meet 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) 
and part 191 of the CBP Regulations as discussed under the heading 
PROCEDURES AND RECORDS MAINTAINED. To insure compliance the following 
areas, as applicable, should be included in your discussion:)
RECEIPT AND STORAGE OF DESIGNATED MERCHANDISE
RECORDS OF USE OF DESIGNATED MERCHANDISE
BILLS OF MATERIALS
MANUFACTURING RECORDS
WASTE RECORDS
RECORDS OF USE OF DUTY-PAID, DUTY-FREE OR DOMESTIC MERCHANDISE OF THE 
REQUIRED SAME KIND AND QUALITY WITHIN 3 YEARS AFTER THE RECEIPT OF THE 
DESIGNATED MERCHANDISE
FINISHED STOCK STORAGE RECORDS
SHIPPING RECORDS
(Proof of time frames may be specific or inclusive, e.g. within 120 
days, but specific proof is preferable. Separate storage and 
identification of each article or lot of merchandise usually will permit 
specific proof of exact dates. Proof of inclusive dates of use, 
production or export may be acceptable, but in such cases it is well to 
describe very specifically the data you intend to use to establish each 
legal requirement, thereby avoiding misunderstandings at the time of 
audit.)
(If you do not describe the inventory records that you will use, a 
statement that the legal requirements will be met by your inventory 
procedures is acceptable. However, it should be noted that without a 
detailed description of the inventory procedures set forth in the 
application a judgement as to the adequacy of such a statement cannot be 
made until a drawback claim is verified. Approval of this application 
for a specific manufacturing drawback ruling merely constitutes approval 
of the ruling application as submitted; it does not constitute approval 
of the applicant's record keeping procedures if, for example, those 
procedures are merely described as meeting the legal requirements, 
without specifically stating how the requirements will be met. Drawback 
is not payable without proof of compliance.)

                       BASIS OF CLAIM FOR DRAWBACK

(There are three different bases that may be used to claim drawback: (1) 
Used in; (2) Appearing In; and (3) Used less Valuable Waste.)
(The ``Used In'' basis may be employed only if there is either no waste 
or valueless or unrecovered waste in the operation. Irrecoverable or 
valueless waste does not reduce the amount of drawback when claims are 
based on the ``Used In'' basis. Drawback is payable in the amount of 99 
percent of the duty paid on the quantity of imported material designated 
as the basis for the allowance of drawback on the exported articles. The 
designated quantity may not exceed the quantity of material actually 
used in the manufacture of the exported articles.)
(For example, if 100 pounds of material, valued at $1.00 per pound, were 
used in manufacture resulting in 10 pounds of irrecoverable or valueless 
waste, the 10 pounds of irrecoverable or valueless waste would not 
reduce the drawback. In this case drawback would be payable on 99% of 
the duty paid on the 100 pounds of designated material used to produce 
the exported articles.)
(The ``Appearing In'' basis may be used regardless of whether there is 
waste. If the ``Appearing in'' basis is used, the claimant does not need 
to keep records of waste and its value. However, the manufacturer must 
establish the identity and quantity of the merchandise appearing in the 
exported product and provide this information. Waste reduces the amount 
of drawback when claims are made on the ``Appearing In'' basis. Drawback 
is payable on 99 percent of the duty paid on the quantity of material 
designated, which may not exceed the quantity of eligible material that 
appears in the exported articles. ``Appearing In'' may not be used if 
multiple products are involved.)

[[Page 622]]

(Based on the previous example, drawback would be payable on the 90 
pounds of merchandise which actually went into the exported product 
(appearing in) rather than the 100 pounds used in as set forth 
previously.)
(The ``Used Less Valuable Waste'' basis may be employed when the 
manufacturer recovers valuable waste, and keeps records of the quantity 
and value of waste from each lot of merchandise. The value of the waste 
reduces the amount of drawback when claims are based on the ``Used Less 
Valuable Waste'' basis. When valuable waste is incurred, the drawback 
allowance on the exported article is based on the duty paid on the 
quantity of merchandise used in the manufacture, reduced by the quantity 
of such merchandise which the value of the waste would replace. Thus in 
this case, drawback is claimed on the quantity of eligible material 
actually used to produce the exported product, less the amount of such 
material which the value of the waste would replace. Note section 
191.26(c) of the CBP Regulations.)
(Based on the previous examples, if the 10 pounds of waste had a value 
of $.50 per pound, then the 10 pounds of waste, having a total value of 
$5.00, would be equivalent in value to 5 pounds of the designated 
material. Thus the value of the waste would replace 5 pounds of the 
merchandise used, and drawback is payable on 99 percent of the duty paid 
on the 95 pounds of imported material designated as the basis for the 
allowance of drawback on the exported article rather than on the 100 
pounds ``Used In'' or the 90 pounds ``Appearing In'' as set forth in the 
above examples.)
(Two methods exist for the manufacturer to show the quantity of material 
used or appearing in the exported article: (1) Schedule or (2) 
Abstract.)
(A ``schedule'' shows the quantity of material used in producing each 
unit of product. The schedule method is usually employed when a standard 
line of merchandise is being produced according to fixed formulas. Some 
schedules will show the quantity of merchandise used to manufacture or 
produce each article and others will show the quantity appearing in each 
finished article. Schedules may be prepared to show the quantity of 
merchandise either on the basis of percentages or by actual weights and 
measurements. A schedule determines the amount that will be needed to 
produce a unit of product before the material is actually used in 
production;)
(An ``abstract'' is the summary of the records (which may be set forth 
on Customs Form 7551) which shows the total quantity used in producing 
all products during the period covered by the abstract. The abstract 
looks at a duration of time, for instance 3 months, in which the 
quantity of material has been used. An abstract looks back on how much 
material was actually used after a production period has been 
completed.)
(An applicant who fails to indicate the ``schedule'' choice must base 
his claims on the ``abstract'' method. State which Basis and Method you 
will use. An example of Used In by Schedule follows:)
    We shall claim drawback on the quantity of (specify material) used 
in manufacturing (exported article) according to the schedule set forth 
below.
(Section 191.8(f) of the CBP Regulations requires submission of the 
schedule with the application for a specific manufacturing drawback 
ruling. An applicant who desires to file supplemental schedules with the 
drawback office whenever there is a change in the quantity or material 
used should state:)
    We request permission to file supplemental schedules with the 
drawback office covering changes in the quantities of material used to 
produce the exported articles, or different styles or capacities of 
containers of such exported merchandise.
(Neither the ``Appearing In'' basis nor the ``schedule'' method for 
claiming drawback may be used where the relative value procedure is 
required.)

                    PROCEDURES UNDER SECTION 1313(a)

      IMPORTED MERCHANDISE OR DRAWBACK PRODUCTS USED UNDER 1313(a)

(List the imported merchandise or drawback products)

           EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED

(Name each article to be exported. When the identity of the product is 
not clearly evident by its name state what the product is, e.g., a 
herbicide. There must be a match between each article described under 
the PROCESS OF MANUFACTURE AND PRODUCTION section below and each article 
listed here.)
(If the merchandise used under Sec. 1313(a) is not also used under 
Sec. 1313(b), the sections entitled PROCESS OF MANUFACTURE OR 
PRODUCTION, BY-PRODUCTS, LOSS OR GAIN, and STOCK IN PROCESS should be 
included here to cover merchandise used under Sec. 1313(a). However, if 
the merchandise used under Sec. 1313(a) is also used under Sec. 
1313(b) these sections need not be repeated unless they differ in some 
way from the Sec. 1313(b) descriptions.)

                    PROCEDURES AND RECORDS MAINTAINED

    We will maintain records to establish:
    1. That the exported articles on which drawback is claimed were 
produced with the use of the imported merchandise, and

[[Page 623]]

    2. The quantity of imported merchandise \4\ we used in producing the 
exported articles
---------------------------------------------------------------------------

    \4\ If claims are to be made on an ``appearing In'' basis, the 
remainder of the sentence should read ``appearing in the exported 
articles we produce.''
---------------------------------------------------------------------------

    We realize that to obtain drawback the claimant must establish that 
the completed articles were exported within 5 years after importation of 
the imported merchandise. We understand that drawback is not payable 
without proof of compliance.

                          INVENTORY PROCEDURES

(This section must be completed separately from that set forth under the 
Sec. 1313(b) portion of your application. The legal requirements under 
Sec. 1313(a) differ from those under Sec. 1313(b).) (Describe your 
inventory procedures and state how you will identify the imported 
merchandise from the time it is received at your factory until it is 
incorporated in the articles to be exported. Also describe how you will 
identify the finished articles from the time of manufacture until 
shipment.)

                       BASIS OF CLAIM FOR DRAWBACK

(See section with this title for procedures under Sec. 1313(b). Either 
repeat the same basis of claim or use a different basis of claim, as 
described above, specifically for drawback claimed under Sec. 1313(a).)

                               AGREEMENTS

    The Applicant specifically agrees that it will:
    1. Operate in full conformance with the terms of this application 
for a specific manufacturing drawback ruling when claiming drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this application;
    4. Keep this application current by reporting promptly to the 
drawback office which liquidates its claims any changes in the number or 
locations of its offices or factories, the corporate name, the persons 
who will sign drawback documents, the basis of claim used for 
calculating drawback, the decision to use or not to use an agent under 
Sec. 191.9 or the identity of an agent under that section, the drawback 
office where claims will be filed under the ruling, or the corporate 
organization by succession or reincorporation;
    5. Keep this application current by reporting promptly to the 
Headquarters, U.S. Customs Service all other changes affecting 
information contained in this application;
    6. Keep a copy of this application and the letter of approval by 
Customs Headquarters on file for ready reference by employees and 
require all officials and employees concerned to familiarize themselves 
with the provisions of this application and that letter of approval; and
    7. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this application and letter of approval.

                         DECLARATION OF OFFICIAL

    I declare that I have read this application for a specific 
manufacturing drawback ruling; that I know the averments and agreements 
contained herein are true and correct; and that my signature on this --
------ day of -------------- 19----, makes this application binding on
________________________________________________________________________
(Name of Applicant Corporation, Partnership, or Sole Proprietorship)
By \5\__________________________________________________________________
---------------------------------------------------------------------------

    \5\ Section 191.6(a) requires that applications for specific 
manufacturing drawback rulings be signed by any individual legally 
authorized to bind the person (or entity) for whom the application is 
signed or the owner of a sole proprietorship, a full partner in a 
partnership, or, if a corporation, the president, a vice president, 
secretary, treasurer or employee legally authorized to bind the 
corporation. In addition, any employee of a business entity with a 
customs power of attorney filed with the Customs port for the drawback 
office which will liquidate your drawback claims may sign such an 
application, as may a licensed Customs broker with a Customs power of 
attorney. You should state in which Customs port your Customs power(s) 
of attorney is/are filed.
---------------------------------------------------------------------------

(Signature and Title)
________________________________________________________________________
(Print Name)

 III. Format for Application for Specific Manufacturing Drawback Ruling 
                         Under 19 U.S.C. 1313(b)

                      COMPANY LETTERHEAD (Optional)

U.S. Customs and Border Protection, Commercial and Trade Facilitation 
Division, Regulations and Rulings, Office of International Trade, 1300 
Pennsylvania Avenue, N.W., Washington, D.C. 20229.
    Dear Sir: We, (Applicant's Name), a (State, e.g., Delaware) 
corporation (or other described entity) submit this application for a 
specific manufacturing drawback ruling that our manufacturing operations 
qualify for drawback under title 19, United States Code, section 
1313(b), and part 191 of the Customs

[[Page 624]]

Regulations. We request that the Customs Service authorize drawback on 
the basis of this application.

       NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT

(Section 191.8(a) of the CBP Regulations provides that each manufacturer 
or producer of articles intended for exportation with the benefit of 
drawback shall apply for a specific manufacturing drawback ruling, 
unless operating under a general manufacturing drawback ruling under 
Sec. 191.7 of the CBP Regulations. Customs will not approve an 
application which shows an unincorporated division or company as the 
applicant (see Sec. 191.8(a)).)

                           LOCATION OF FACTORY

(Give the address of the factory(ies) where the process of manufacture 
or production will take place. If the factory is a different legal 
entity from the applicant, so state and indicate if operating under an 
Agent's general manufacturing drawback ruling.)

                PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS

(List persons legally authorized to bind the corporation who will sign 
drawback documents. Section 191.6 of the CBP Regulations permits only 
the president, vice-president, secretary, treasurer, or any employee 
legally authorized to bind the corporation to sign for a corporation. In 
addition, a person within a business entity with a Customs power of 
attorney for the company may sign. A Customs power of attorney may also 
be given to a licensed Customs broker. This heading should be changed to 
NAMES OF PARTNERS or PROPRIETOR in the case of a partnership or sole 
proprietorship, respectively (see footnote at end of this sample format 
for persons who may sign applications for specific manufacturing 
drawback rulings).)

             CBP OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED

(The 8 offices where drawback claims can be filed are located at: 
Boston, MA; New York, NY; Miami, FL; New Orleans, LA; Houston, TX; Long 
Beach, CA; Chicago, IL; San Francisco, CA)
(An original application and two copies must be filed. If the applicant 
intends to file drawback claims at more than one drawback office, one 
additional copy of the application must be furnished for each additional 
office indicated.)

                            GENERAL STATEMENT

(The following questions must be answered:
    1. Who will be the importer of the designated merchandise?
(If the applicant will not always be the importer of the designated 
merchandise, does the applicant understand its obligations to obtain the 
appropriate certificates of delivery (19 CFR 191.10), certificates of 
manufacture and delivery (19 CFR 191.24), or both?)
    2. Will an agent be used to process the designated or the 
substituted merchandise into articles?
(If an agent is to be used, the applicant must state it will comply with 
T.D.'s 55027(2) and 55207(1), and Sec. 191.9, as applicable, and that 
its agent will submit a letter of notification of intent to operate 
under the general manufacturing drawback ruling for agents (see Sec. 
191.7 and Appendix A), or an application for a specific manufacturing 
drawback ruling (see Sec. 191.8 and this Appendix B).)
    3. Will the applicant be the exporter?
(If the applicant will not be the exporter in every case but will be the 
claimant, the manufacturer must state that it will reserve the right to 
claim drawback with the knowledge and written consent of the exporter 
(19 CFR 191.82).)
(Since the permission to grant use of the accelerated payment procedure 
rests with the Drawback office with which claims will be filed, do not 
include any reference to that procedure in this application.)

              (Parallel Columns--``Same Kind and Quality'')
Imported Merchandise or Drawback     Duty-paid, Duty-free or Domestic
 Products \1\ to be Designated as     Merchandise of the Same Kind and
 the Basis for Drawback on the        Quality as That Designated Which
 Exported Products.                   Will be Used in the Production of
                                      the Exported Products.
1.                                   1.
2.                                   2.
3.                                   3.
 
\1\ Drawback products are those produced in the United States in
  accordance with the drawback law and regulations. Such products have
  ``dual status'' under Sec.  1313(b). They may be designated as the
  basis for drawback and also may be deemed to be domestic merchandise.

(Following the items listed in the parallel columns, a statement will be 
made, by the applicant, that affirms the ``same kind and quality'' of 
the merchandise. This statement should be included in the application 
exactly as it is stated below:)
    The imported merchandise which we will designate on our claims will 
be so similar in

[[Page 625]]

quality to the merchandise used in producing the exported articles on 
which we claim drawback that the merchandise used would, if imported, be 
subject to the same rate of duty as the imported designated merchandise.
    Fluctuations in the market value resulting from factors other than 
quality will not affect the drawback.
(In order to successfully claim drawback it is necessary to prove that 
the duty-paid, duty-free or domestic merchandise which is to be 
substituted for the imported merchandise is the ``same kind and 
quality''. ``Same kind and quality'' does not necessarily mean that the 
merchandise is identical. It does mean that the merchandise is of the 
same nature or character (``same kind'') and that the merchandise to be 
substituted is interchangeable with the imported merchandise with little 
or no change in the manufacturing process to produce the same exported 
article (``same quality''). In order to enable Customs to rule on ``same 
kind and quality'', the application must include a detailed description 
of the designated imported merchandise and of the substituted duty-paid, 
duty-free or domestic merchandise to be used to produce the exported 
articles.)
(It is essential that all the characteristics which determine the 
quality of the merchandise are provided in the application in order to 
substantiate that the merchandise meets the ``same kind and quality'' 
statutory requirement. These characteristics should clearly distinguish 
merchandise of different qualities. For example, USDA standards; FDA 
standards; industry standards, e.g., ASTM; concentration; specific 
gravity; purity; luster; melting point, boiling point; odor; color; 
grade; type; hardness; brittleness; etc. Note that these are only a few 
examples of characteristics and that each kind of merchandise has its 
own set of specifications that characterizes its quality. If 
specifications are given with a minimum value, be sure to include a 
maximum value. The converse is also true. Often characteristics are 
given to Customs on attached specification sheets. These specifications 
should not include Material Safety Data sheets or other descriptions of 
the merchandise that do not contribute to the ``same kind and quality'' 
determination. When the merchandise is a chemical, state the chemical's 
generic name as well as its trade name plus any generally recognized 
identifying number, e.g., CAS number; Color Index Number, etc.)
(In order to expedite the specific manufacturing drawback ruling review 
process, it will be helpful if you provide copies of technical 
standards/specifications (particularly industry standards such as ASTM 
standards) referred to in your application.)
(The descriptions of the ``same kind and quality'' merchandise should be 
formatted in the parallel columns. The left-hand column will consist of 
the name and specifications of the designated imported merchandise under 
the heading set forth above. The right-hand column will consist of the 
name and specifications for the duty-paid, duty-free or domestic 
merchandise under the heading set forth above.)

           EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED

(Name each article to be exported. When the identity of the product is 
not clearly evident by its name state what the product is, e.g., a 
herbicide. There must be a match between each article described under 
the PROCESS OF MANUFACTURE AND PRODUCTION section below and each article 
listed here.)

                  PROCESS OF MANUFACTURE OR PRODUCTION

(Drawback under Sec. 1313(b) is not allowable except where a 
manufacture or production exists. Manufacture or production is defined, 
for drawback purposes, in Sec. 191.2(q). In order to obtain drawback 
under Sec. 1313(b), it is essential for the applicant to show use in 
manufacture or production by giving a thorough description of the 
manufacturing process. This description should include the name and 
exact condition of the merchandise listed in the Parallel Columns, a 
complete explanation of the processes to which it is subjected in this 
country, the effect of such processes, the name and exact description of 
the finished article, and the use for which the finished article is 
intended. When applicable, give equations of the chemical reactions. The 
attachment of a flow chart in addition to the description showing the 
manufacturing process is an excellent means of illustrating whether or 
not a manufacture or production has occurred. Flow charts can clearly 
illustrate if and at what point during the manufacturing process by-
products and wastes are generated.)
(This section should contain a description of the process by which each 
item of merchandise listed in the parallel columns above is used to make 
or produce every article that is to be exported.)

                            MULTIPLE PRODUCTS

                           1. Relative Values

(Some processes result in the separation of the merchandise used in the 
same operation into two or more products. List all of the products. 
State that you will record the market value of each product or by-
product at the time it is first separated in the manufacturing process. 
If this section is not applicable to you, then state so.)
(Drawback law mandates the assignment of relative values when two or 
more products necessarily are produced concurrently in the same 
operation. For instance, the refining of

[[Page 626]]

flaxseed necessarily produces linseed oil and linseed husks (animal 
feed), and drawback must be distributed to each product in accordance 
with its relative value. However, the voluntary election of a steel 
fabricator, for instance, to use part of a lot of imported steel to 
produce automobile doors and part of the lot to produce automobile 
fenders does not call for relative value distribution.)

(The relative value of a product is its value divided by the total value 
of all products, whether or not exported. For example, 100 gallons of 
drawback merchandise are used to produce 100 gallons of products, 
including 60 gallons of product A, 20 gallons of product B, and 20 
gallons of product C. At the time of separation, the unit values of 
products A, B, and C are $5, $10, and $50 respectively. The relative 
value of product A is $300 divided by $1500 or \1/5\. The relative value 
of B is \2/15\ and of product C is \2/3\, calculated in the same manner. 
This means that \1/5\ of the drawback product payments will be 
distributed to product A, \2/15\ to product B, and \2/3\ to product C.)

(Drawback is allowable on exports of any of multiple products, but is 
not allowable on exports of valuable waste. In making this distinction 
between a product and valuable waste, the applicant should address the 
following significant elements: (1) the nature of the material of which 
the residue is composed; (2) the value of the residue as compared to the 
value of the principal manufactured product and the raw material; (3) 
the use to which it is put; (4) its status under the tariff laws, if 
imported; (5) whether it is a commodity recognized in commerce; (6) 
whether it must be subjected to some process to make it saleable.)

                            2. Producibility

(Some processes result in the separation of fixed proportions of each 
product, while other processes afford the opportunity to increase or 
decrease the proportion of each product. An example of the latter is 
petroleum refining, where the refiner has the option to increase or 
decrease the production of one or more products relative to the others. 
State under this heading whether you can or cannot vary the 
proportionate quantity of each product.)
(The MULTIPLE PRODUCTS section consists of two sub-sections: Relative 
Values and Producibility. If multiple products do not result from your 
operation state ``Not Applicable'' for the entire section. If multiple 
products do result from your operation Relative Values will always 
apply. However, Producibility may or may not apply. If Producibility 
does not apply to your multiple product operation state ``Not 
Applicable'' for this sub-section.)

                                  WASTE

(Many processes result in residue materials which, for drawback 
purposes, are treated as wastes. Describe any residue materials which 
you believe should be so treated. If no waste results, include a 
positive statement to that effect under this heading.)
(If waste occurs, state: (1) whether or not it is recovered, (2) whether 
or not it is valueless, and (3) what you do with it. This information is 
required whether claims are made on a ``used in'' or ``appearing in'' 
basis and regardless of the amount of waste incurred.)
(Irrecoverable wastes are those consisting of materials which are lost 
in the process. Valueless wastes are those which may be recovered but 
have no value. These irrecoverable and valueless wastes do not reduce 
the drawback claim provided the claim is based on the quantity of 
imported material used in manufacturing. If the claim is based upon the 
quantity of imported merchandise appearing in the exported article, 
irrecoverable and valueless waste will cause a reduction in the amount 
of drawback.)
(Valuable wastes are those recovered wastes which have a value either 
for sale or for use in a different manufacturing process. However, it 
should be noted that this standard applies to the entire industry and is 
not a selection on your part. An option by you not to choose to sell or 
use the waste in some different operation does not make it valueless if 
another manufacturer can use the waste. State what you do with the 
waste. If you have to pay someone to get rid of it, or if you have 
buyers for the waste, you must state so in your application regardless 
of what ``Basis'' you are using.)
(If you recover valuable waste and if you choose to claim on the basis 
of the quantity of imported or substituted merchandise used in producing 
the exported articles less valuable waste, state that you will keep 
records to establish the quantity and value of the waste recovered. See 
``Basis of Claim for Drawback'' section below.)

                            STOCK IN PROCESS

(Some processes result in another type of residual material, namely, 
stock in process, which affects the allowance of drawback. Stock in 
process may exist when residual material resulting from a manufacturing 
or processing operation is reintroduced into a subsequent manufacturing 
or processing operation; e.g., trim pieces from a cast article. The 
effect of stock in process on a drawback claim is that the amount of 
drawback for the period in which the stock in process was withdrawn from 
the manufacturing or processing operation (or the manufactured article, 
if manufacturing or processing periods are not used) is reduced by the 
quantity of merchandise or drawback products used to produce the stock 
in process if the ``used in''

[[Page 627]]

or ``used in less valuable waste'' methods are used (if the ``appearing 
in'' method is used, there will be no effect on the amount of drawback), 
and the quantity of merchandise or drawback products used to produce the 
stock in process is added to the merchandise or drawback products used 
in the subsequent manufacturing or production period (or the 
subsequently produced article)).

(If stock in process occurs and claims are to be based on stock in 
process, the application must include a statement to that effect. The 
application must also include a statement that merchandise is considered 
to be used in manufacture at the time it was originally processed so 
that the stock in process will not be included twice in the computation 
of the merchandise used to manufacture the finished articles on which 
drawback is claimed.)

                                TRADEOFF

(If an applicant proposes to use tradeoff (19 CFR 191.11), the applicant 
should so state and the applicant should describe the contractual 
arrangement between the applicant and its partner for tradeoff. The 
person claiming drawback under the tradeoff provisions has the burden of 
establishing compliance with the law and regulations. In this regard, 
the terms of a written contract are always easier to establish than 
those of an oral contract.)

             LOSS OR GAIN (Separate and distinct from WASTE)

(Some manufacturing processes result in an intangible loss or gain of 
the net weight or measurement of the merchandise used. This loss or gain 
is caused by atmospheric conditions, chemical reactions, or other 
factors. State the approximate usual percentage or quantity of such loss 
or gain. Note that percentage values will be considered to be measured 
``by weight'' unless otherwise specified. Loss or gain does not occur 
during all manufacturing processes. If loss or gain does not apply to 
your manufacturing process, state ``Not Applicable.'')

                    PROCEDURES AND RECORDS MAINTAINED

    We will maintain records to establish:
    1. The identity and specifications of the merchandise we designate;
    2. The quantity of merchandise of the same kind and quality as the 
designated merchandise \2\ we used to produce the exported articles;
---------------------------------------------------------------------------

    \2\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles we produce.''
---------------------------------------------------------------------------

    3. That, within 3 years after receiving it at our factory, we used 
the designated merchandise to produce articles. During the same 3-year 
period, we produced \3\ the exported articles;
---------------------------------------------------------------------------

    \3\ The date of production is the date an article is completed.
---------------------------------------------------------------------------

    We realize that to obtain drawback the claimant must establish that 
the completed articles were exported within 5 years after the 
importation of the imported merchandise. Our records establishing our 
compliance with these requirements will be available for audit by 
Customs during business hours. We understand that drawback is not 
payable without proof of compliance.

                          INVENTORY PROCEDURES

(Describe your inventory records and state how those records will meet 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(b) 
and part 191 of the CBP Regulations as discussed under the heading 
PROCEDURES AND RECORDS MAINTAINED. To insure compliance the following 
areas, as applicable, should be included in your discussion:)
RECEIPT AND STORAGE OF DESIGNATED MERCHANDISE
RECORDS OF USE OF DESIGNATED MERCHANDISE
BILLS OF MATERIALS
MANUFACTURING RECORDS
WASTE RECORDS
RECORDS OF USE OF DUTY-PAID, DUTY-FREE OR DOMESTIC
MERCHANDISE OF THE REQUIRED SAME KIND AND QUALITY
WITHIN 3 YEARS AFTER THE RECEIPT OF THE DESIGNATED MERCHANDISE
FINISHED STOCK STORAGE RECORDS
SHIPPING RECORDS
(Proof of time frames may be specific or inclusive, e.g., within 120 
days, but specific proof is preferable. Separate storage and 
identification of each article or lot of merchandise usually will permit 
specific proof of exact dates. Proof of inclusive dates of use, 
production or export may be acceptable, but in such cases it is well to 
describe very specifically the data you intend to use to establish each 
legal requirement, thereby avoiding misunderstandings at the time of 
audit.)
(If you do not describe the inventory records that you will use, a 
statement that the legal requirements will be met by your inventory 
procedures is acceptable. However, it should be noted that without a 
detailed description of the inventory procedures set forth in the 
application a judgement as to the adequacy of such a statement cannot be 
made until a drawback claim is verified. Approval of this application 
for a specific manufacturing drawback ruling merely constitutes approval 
of the ruling application as submitted; it

[[Page 628]]

does not constitute approval of the applicant's record keeping 
procedures if, for example, those procedures are merely described as 
meeting the legal requirements, without specifically stating how the 
requirements will be met. Drawback is not payable without proof of 
compliance.)

                       BASIS OF CLAIM FOR DRAWBACK

(There are three different bases that may be used to claim drawback: (1) 
Used in; (2) Appearing In; and (3) Used less Valuable Waste.)
(The ``Used In'' basis may be employed only if there is either no waste 
or valueless or unrecovered waste in the operation. Irrecoverable or 
valueless waste does not reduce the amount of drawback when claims are 
based on the ``Used In'' basis. Drawback is payable in the amount of 99 
percent of the duty paid on the quantity of imported material designated 
as the basis for the allowance of drawback on the exported articles. The 
designated quantity may not exceed the quantity of material actually 
used in the manufacture of the exported articles.)
(For example, if 100 pounds of material, valued at $1.00 per pound, were 
used in manufacture resulting in 10 pounds of irrecoverable or valueless 
waste, the 10 pounds of irrecoverable or valueless waste would not 
reduce the drawback. In this case drawback would be payable on 99% of 
the duty paid on the 100 pounds of designated material used to produce 
the exported articles.)
(The ``Appearing In'' basis may be used regardless of whether there is 
waste. If the ``Appearing In'' basis is used, the claimant does not need 
to keep records of waste and its value. However, the manufacturer must 
establish the identity and quantity of the merchandise appearing in the 
exported product and provide this information. Waste reduces the amount 
of drawback when claims are made on the ``Appearing In'' basis. Drawback 
is payable on 99 percent of the duty paid on the quantity of material 
designated, which may not exceed the quantity of eligible material that 
appears in the exported articles. ``Appearing In'' may not be used if 
multiple products are involved.)
(Based on the previous example, drawback would be payable on the 90 
pounds of merchandise which actually went into the exported product 
(appearing in) rather than the 100 pounds used in as set forth 
previously.)
(The ``Used Less Valuable Waste'' basis may be employed when the 
manufacturer recovers valuable waste, and keeps records of the quantity 
and value of waste from each lot of merchandise. The value of the waste 
reduces the amount of drawback when claims are based on the ``Used Less 
Valuable Waste'' basis. When valuable waste is incurred, the drawback 
allowance on the exported article is based on the duty paid on the 
quantity of merchandise used in the manufacture, reduced by the quantity 
of such merchandise which the value of the waste would replace. Thus in 
this case, drawback is claimed on the quantity of eligible material 
actually used to produce the exported product, less the amount of such 
material which the value of the waste would replace. Note section 
191.26(c) of the CBP Regulations.)
(Based on the previous examples, if the 10 pounds of waste had a value 
of $.50 per pound, then the 10 pounds of waste, having a total value of 
$5.00, would be equivalent in value to 5 pounds of the designated 
material. Thus the value of the waste would replace 5 pounds of the 
merchandise used, and drawback is payable on 99 percent of the duty paid 
on the 95 pounds of imported material designated as the basis for the 
allowance of drawback on the exported article rather than on the 100 
pounds ``Used In'' or the 90 pounds ``Appearing In'' as set forth in the 
above examples.)
(Two methods exist for the manufacturer to show the quantity of material 
used or appearing in the exported article: (1) Schedule or (2) 
Abstract.)
(A ``schedule'' shows the quantity of material used in producing each 
unit of product. The schedule method is usually employed when a standard 
line of merchandise is being produced according to fixed formulas. Some 
schedules will show the quantity of merchandise used to manufacture or 
produce each article and others will show the quantity appearing in each 
finished article. Schedules may be prepared to show the quantity of 
merchandise either on the basis of percentages or by actual weights and 
measurements. A schedule determines the amount that will be needed to 
produce a unit of product before the material is actually used in 
production;)
(An ``abstract'' is the summary of the records (which may be set forth 
on Customs Form 7551) which shows the total quantity used in producing 
all products during the period covered by the abstract. The abstract 
looks at a duration of time, for instance 3 months, in which the 
quantity of material has been used. An abstract looks back on how much 
material was actually used after a production period has been 
completed.)
(An applicant who fails to indicate the ``schedule'' choice must base 
his claims on the ``abstract'' method. State which Basis and Method you 
will use. An example of Used In by Schedule would read:)
    We shall claim drawback on the quantity of (specify material) used 
in manufacturing (exported article) according to the schedule set forth 
below.
(Section 191.8(f) of the CBP Regulations requires submission of the 
schedule with the application for a specific manufacturing drawback 
ruling. An applicant who desires to file supplemental schedules with the 
drawback office whenever there is a change in the quantity or material 
used should state:)

[[Page 629]]

    We request permission to file supplemental schedules with the 
drawback office covering changes in the quantities of material used to 
produce the exported articles, or different styles or capacities of 
containers of such exported merchandise.
(Neither the ``Appearing In'' basis nor the ``schedule'' method for 
claiming drawback may be used where the relative value procedure is 
required.)

                               AGREEMENTS

    The Applicant specifically agrees that it will:
    1. Operate in full conformance with the terms of this application 
for a specific manufacturing drawback ruling when claiming drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this application;
    4. Keep this application current by reporting promptly to the 
drawback office which liquidates its claims any changes in the number or 
locations of its offices or factories, the corporate name, the persons 
who will sign drawback documents, the basis of claim used for 
calculating drawback, the decision to use or not to use an agent under 
Sec. 191.9 or the identity of an agent under that section, the drawback 
office where claims will be filed under the ruling, or the corporate 
organization by succession or reincorporation;
    5. Keep this application current by reporting promptly to the 
Headquarters, U.S. Customs Service all other changes affecting 
information contained in this application;
    6. Keep a copy of this application and the letter of approval by 
Customs Headquarters on file for ready reference by employees and 
require all officials and employees concerned to familiarize themselves 
with the provisions of this application and that letter of approval; and
    7. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this application and letter of approval.

                         Declaration of Official

    I declare that I have read this application for a specific 
manufacturing drawback ruling; that I know the averments and agreements 
contained herein are true and correct; and that my signature on this --
------ day of ------------------ 19----, makes this application binding 
on
________________________________________________________________________
(Name of Applicant Corporation, Partnership, or Sole Proprietorship)
By\4\___________________________________________________________________
---------------------------------------------------------------------------

    \4\ Section 191.6(a) requires that applications for specific 
manufacturing drawback rulings be signed by any individual legally 
authorized to bind the person (or entity) for whom the application is 
signed or the owner of a sole proprietorship, a full partner in a 
partnership, or, if a corporation, the president, a vice president, 
secretary, treasurer or employee legally authorized to bind the 
corporation. In addition, any employee of a business entity with a 
customs power of attorney filed with the Customs port for the drawback 
office which will liquidate your drawback claims may sign such an 
application, as may a licensed Customs broker with a Customs power of 
attorney. You should state in which Customs port your Customs power(s) 
of attorney is/are filed.
---------------------------------------------------------------------------

(Signature and Title)
________________________________________________________________________
(Print Name)

 IV. Format for Application for Specific Manufacturing Drawback Ruling 
                         Under 19 U.S.C. 1313(d)

                      COMPANY LETTERHEAD (Optional)

U.S. Customs and Border Protection, Commercial and Trade Facilitation 
Division, Regulations and Rulings, Office of International Trade, 1300 
Pennsylvania Avenue, N.W., Washington, D.C. 20229.
    Dear Sir: We, (Applicant's Name), a (State, e.g., Delaware) 
corporation (or other described entity) submit this application for a 
specific manufacturing drawback ruling that our manufacturing operations 
qualify for drawback under title 19, United States Code, section 
1313(d), and part 191 of the Customs Regulations. We request that the 
Customs Service authorize drawback on the basis of this application.

       NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT

(Section 191.8(a) of the CBP Regulations provides that each manufacturer 
or producer of articles intended for exportation with the benefit of 
drawback shall apply for a specific manufacturing drawback ruling, 
unless operating under a general manufacturing drawback ruling under 
Sec. 191.7 of the CBP Regulations. Customs will not approve an 
application which shows an unincorporated division or company as the 
applicant (see Sec. 191.8(a)).)

                           LOCATION OF FACTORY

(Give the address of the factory(s) where the process of manufacture or 
production will take place. If the factory is a different legal entity 
from the applicant, so state and indicate if operating under an Agent's 
general manufacturing drawback ruling.)

[[Page 630]]

                PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS

(List persons legally authorized to bind the corporation who will sign 
drawback documents. Section 191.6 of the CBP Regulations permits only 
the president, vice-president, secretary, treasurer, or any employee 
legally authorized to bind the corporation to sign for a corporation. In 
addition, a person within a business entity with a Customs power of 
attorney for the company may sign. A Customs power of attorney may also 
be given to a licensed Customs broker. This heading should be changed to 
NAMES OF PARTNERS or PROPRIETOR in the case of a partnership or sole 
proprietorship, respectively (see footnote at end of this sample format 
for persons who may sign applications for specific manufacturing 
drawback rulings).

             CBP OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED

(The 8 offices where drawback claims can be filed are located at: 
Boston, MA; New York, NY; Miami, FL; New Orleans, LA; Houston, TX; Long 
Beach, CA; Chicago, IL; San Francisco, CA)
(An original application and two copies must be filed. If the applicant 
intends to file drawback claims at more than one drawback office, one 
additional copy of the application must be furnished for each additional 
office indicated.)

                            GENERAL STATEMENT

(The exact material placed under this heading in individual cases will 
vary, but it should include such information as the type of business in 
which the manufacturer is engaged, whether the manufacturer is 
manufacturing for his own account or is performing the operation on a 
toll basis (including commission or conversion basis) for the account of 
others, whether the manufacturer is a direct exporter of his products or 
sells or delivers them to others for export, and whether drawback will 
be claimed by the manufacturer or by others.)
(If an agent is to be used, the applicant must state it will comply with 
T.D.'s 55027(2) and 55207(1), and Sec. 191.9, as applicable, and that 
its agent will submit a letter of notification of intent to operate 
under the general manufacturing drawback ruling for agents (see Sec. 
191.7 and Appendix A), or an application for a specific manufacturing 
drawback ruling (see Sec. 191.8 and this Appendix B).)
(Regarding drawback operations conducted under Sec. 1313(d), the data 
may describe the flavoring extracts, medicinal, or toilet preparations 
(including perfumery) manufactured with the use of domestic tax-paid 
alcohol; and where such alcohol is obtained or purchased.)
(Since the permission to grant use of the accelerated payment procedure 
rests with the Drawback office with which claims will be filed, do not 
include any reference to that procedure in this application.)

              TAX-PAID MATERIAL USED UNDER SECTION 1313(d)

(Describe or list the tax-paid material)

           EXPORTED ARTICLES ON WHICH DRAWBACK WILL BE CLAIMED

(Name each article to be exported)

                  PROCESS OF MANUFACTURE OR PRODUCTION

(Drawback under Sec. 1313(d) is not allowable except where a 
manufacture or production exists. ``Manufacture or production'' is 
defined, for drawback purposes, in Sec. 191.2(q). In order to obtain 
drawback under Sec. 1313(d), it is essential for the applicant to show 
use in manufacture or production by giving a thorough description of the 
manufacturing process. Describe how the tax-paid material is processed 
into the export article.)

                                  WASTE

(Many processes result in residue materials which, for drawback 
purposes, are treated as wastes. Describe any residue materials which 
you believe should be so treated. If no waste results, include a 
positive statement to that effect under this heading.) (If waste occurs, 
state: (1) whether or not it is recovered, (2) whether or not it is 
valueless, and (3) what you do with it. This information is required 
whether claims are made on a ``used in'' or ``appearing in'' basis and 
regardless of the amount of waste incurred.)
(Irrecoverable wastes are those consisting of materials which are lost 
in the process. Valueless wastes are those which may be recovered but 
have no value. These irrecoverable and valueless wastes do not reduce 
the drawback claim provided the claim is based on the quantity of 
domestic tax-paid alcohol used in manufacturing. If the claim is based 
upon the quantity of domestic tax-paid alcohol appearing in the exported 
article, irrecoverable and valueless waste will cause a reduction in the 
amount of drawback.)
(Valuable wastes are those recovered wastes which have a value either 
for sale or for use in a different manufacturing process. However, it 
should be noted that this standard applies to the entire industry and is 
not a selection on your part. An option by you not to choose to sell or 
use the waste in some different operation, does not make it valueless if 
another manufacturer can use the waste. State what you do with the 
waste. If you have to pay someone to get rid of it, or if you have 
buyers for the waste, you must state so in your application regardless 
of what ``Basis'' you are using.)
(If you recover valuable waste and if you choose to claim on the basis 
of the quantity

[[Page 631]]

of domestic tax-paid alcohol used in producing the exported articles 
(less valuable waste), state that you will keep records to establish the 
quantity and value of the waste recovered. See ``Basis of Claim for 
Drawback'' section below.)

                            STOCK IN PROCESS

(Some processes result in another type of residual material, namely, 
stock in process, which affects the allowance of drawback. Stock in 
process may exist when residual material resulting from a manufacturing 
or processing operation is reintroduced into a subsequent manufacturing 
or processing operation; e.g., trim pieces from a cast article. The 
effect of stock in process on a drawback claim is that the amount of 
drawback for the period in which the stock in process was withdrawn from 
the manufacturing or processing operation (or the manufactured article, 
if manufacturing or processing periods are not used) is reduced by the 
quantity of merchandise or drawback products used to produce the stock 
in process if the ``used in'' or ``used in less valuable waste'' methods 
are used (if the ``appearing in'' method is used, there will be no 
effect on the amount of drawback), and the quantity of merchandise or 
drawback products used to produce the stock in process is added to the 
merchandise or drawback products used in the subsequent manufacturing or 
production period (or the subsequently produced article)).
(If stock in process occurs and claims are to be based on stock in 
process, the application must include a statement to that effect. The 
application must also include a statement that the domestic tax-paid 
alcohol is considered to be used in manufacture at the time it was 
originally processed so that the stock in process will not be included 
twice in the computation of the domestic tax-paid alcohol used to 
manufacture the finished articles on which drawback is claimed.)

             LOSS OR GAIN (Separate and distinct from WASTE)

(Some manufacturing processes result in an intangible loss or gain of 
the net weight or measurement of the merchandise used. This loss or gain 
is caused by atmospheric conditions, chemical reactions, or other 
factors. State the approximate usual percentage or quantity of such loss 
or gain. Note that percentage values will be considered to be measured 
``by weight'' unless otherwise specified. Loss or gain does not occur 
during all manufacturing processes. If loss or gain does not apply to 
your manufacturing process, state ``Not Applicable.'')

                    PROCEDURES AND RECORDS MAINTAINED

    We will maintain records to establish:
    1. That the exported articles on which drawback is claimed were 
produced with the use of a particular lot (or lots) of domestic tax-paid 
alcohol, and
    2. The quantity of domestic tax-paid alcohol \1\ we used in 
producing the exported articles.
---------------------------------------------------------------------------

    \1\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles we produce.''
---------------------------------------------------------------------------

    We realize that to obtain drawback the claimant must establish that 
the completed articles were exported within 5 years after the tax has 
been paid on the domestic alcohol. Our records establishing our 
compliance with these requirements will be available for audit by 
Customs during business hours. We understand that drawback is not 
payable without proof of compliance.

                          INVENTORY PROCEDURES

(Describe your inventory records and state how those records will meet 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313(d) 
and part 191 of the CBP Regulations as discussed under the heading 
PROCEDURES AND RECORDS MAINTAINED. To insure compliance the following 
areas should be included in your discussion:)
RECEIPT AND RAW STOCK STORAGE RECORDS
MANUFACTURING RECORDS
FINISHED STOCK STORAGE RECORDS

                       BASIS OF CLAIM FOR DRAWBACK

(There are three different bases that may be used to claim drawback: (1) 
Used in; (2) Appearing In; and (3) Used less Valuable Waste.)
(The ``Used In'' basis may be employed only if there is either no waste 
or valueless or unrecovered waste in the operation. Irrecoverable or 
valueless waste does not reduce the amount of drawback when claims are 
based on the ``Used In'' basis. Drawback is payable in the amount of 
100% of the tax paid on the quantity of domestic alcohol used in the 
manufacture of flavoring extracts and medicinal or toilet preparation 
(including perfumery).)
(For example, if 100 gallons of alcohol, valued at $1.00 per gallon, 
were used in manufacture resulting in 10 gallons of irrecoverable or 
valueless waste, the 10 gallons of irrecoverable or valueless waste 
would not reduce the drawback. In this case drawback would be payable on 
100% of the tax paid on the 100 gallons of domestic alcohol used to 
produce the exported articles.)
    The ``Appearing In'' basis may be used regardless of whether there 
is waste. If the ``Appearing In'' basis is used, the claimant does not 
need to keep records of waste and its value. However, the manufacturer 
must establish the identity and quantity of the

[[Page 632]]

merchandise appearing in the exported product and provide this 
information. Waste reduces the amount of drawback when claims are made 
on the ``Appearing In'' basis. Drawback is payable on 100% of the tax 
paid on the quantity of domestic alcohol which appears in the exported 
articles.
(Based on the previous example, drawback would be payable on the 90 
gallons of domestic alcohol which actually went into the exported 
product (appearing in) rather than the 100 gallons used in as set forth 
previously.)
(The ``Used Less Valuable Waste'' basis may be employed when the 
manufacturer recovers valuable waste, and keeps records of the quantity 
and value of waste from each lot of domestic tax-paid alcohol. The value 
of the waste reduces the amount of drawback when claims are based on the 
``Used Less Valuable Waste'' basis. When valuable waste is incurred, the 
drawback allowance on the exported article is based on the quantity of 
tax-paid alcohol used to manufacture the exported articles, reduced by 
the quantity of such alcohol which the value of the waste would 
replace.)
(Based on the previous examples, if the 10 gallons of waste had a value 
of $.50 per gallon, then the 10 gallons of waste, having a total value 
of $5.00, would be equivalent in value to 5 gallons of the tax-paid 
alcohol. Thus the value of the waste would replace 5 gallons of the 
alcohol used, and drawback is payable on 100% of the tax paid on 95 
gallons of alcohol rather than on the 100 gallons ``Used In'' or the 90 
gallons ``Appearing In'' as set forth in the above examples.)
(Two methods exist for the manufacturer to show the quantity of material 
used or appearing in the exported article: (1) Schedule or (2) 
Abstract.)
(A ``schedule'' shows the quantity of material used in producing each 
unit of product. The schedule method is usually employed when a standard 
line of merchandise is being produced according to fixed formulas. Some 
schedules will show the quantity of merchandise used to manufacture or 
produce each article and others will show the quantity appearing in each 
finished article. Schedules may be prepared to show the quantity of 
merchandise either on the basis of percentages or by actual weights and 
measurements. A schedule determines the amount that will be needed to 
produce a unit of product before the material is actually used in 
production;)
(An ``abstract'' is the summary of the records (which may be set forth 
on Customs Form 7551) which shows the total quantity used in producing 
all products during the period covered by the abstract. The abstract 
looks at a duration of time, for instance 3 months, in which the 
quantity of material has been used. An abstract looks back on how much 
material was actually used after a production period has been 
completed.)
(An applicant who fails to indicate the ``schedule'' choice must base 
his claims on the ``abstract'' method. State which Basis and Method you 
will use. An example of Used In by schedule follows:)
    We shall claim drawback on the quantity of (specify material) used 
in manufacturing (exported article) according to the schedule set forth 
below.
(Section 191.8(f) of the CBP Regulations requires submission of the 
schedule with the application for a specific manufacturing drawback 
ruling. An applicant who desires to file supplemental schedules with the 
drawback office whenever there is a change in the quantity or material 
used should state:)
    We request permission to file supplemental schedules with the 
drawback office covering changes in the quantities of material used to 
produce the exported articles, or different styles or capacities of 
containers of such exported merchandise.
(Neither the ``Appearing In'' basis nor the ``schedule'' method for 
claiming drawback may be used where the relative value procedure is 
required.)

                               AGREEMENTS

    The Applicant specifically agrees that it will:
    1. Operate in full conformance with the terms of this application 
for a specific manufacturing drawback ruling when claiming drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this application;
    4. Keep this application current by reporting promptly to the 
drawback office which liquidates its claims any changes in the number or 
locations of its offices or factories, the corporate name, the persons 
who will sign drawback documents, the basis of claim used for 
calculating drawback, the decision to use or not to use an agent under 
Sec. 191.9 or the identity of an agent under that section, the drawback 
office where claims will be filed under the ruling, or the corporate 
organization by succession or reincorporation;
    5. Keep this application current by reporting promptly to the 
Headquarters, U.S. Customs Service all other changes affecting 
information contained in this application;
    6. Keep a copy of this application and the letter of approval by 
Customs Headquarters on file for ready reference by employees and 
require all officials and employees concerned to familiarize themselves 
with the provisions of this application and that letter of approval; and

[[Page 633]]

    7. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this application and letter of approval.

                         DECLARATION OF OFFICIAL

    I declare that I have read this application for a specific 
manufacturing drawback ruling; that I know the averments and agreements 
contained herein are true and correct; and that my signature on this --
---------- day of ------------------ 19----, makes this application 
binding on
________________________________________________________________________
(Name of Applicant Corporation, Partnership, or Sole Proprietorship)
By \2\__________________________________________________________________
(Signature and Title)
---------------------------------------------------------------------------

    \2\ Section 191.6(a) requires that applications for specific 
manufacturing drawback rulings be signed by any individual legally 
authorized to bind the person (or entity) for whom the application is 
signed or the owner of a sole proprietorship, a full partner in a 
partnership, or, if a corporation, the president, a vice president, 
secretary, treasurer or employee legally authorized to bind the 
corporation. In addition, any employee of a business entity with a 
customs power of attorney filed with the Customs port for the drawback 
office which will liquidate your drawback claims may sign such an 
application, as may a licensed Customs broker with a Customs power of 
attorney. You should state in which Customs port your Customs power(s) 
of attorney is/are filed.
---------------------------------------------------------------------------

________________________________________________________________________
(Print Name)

  V. Format for Application for Specific Manufacturing Drawback Ruling 
                         Under 19 U.S.C. 1313(g)

                      COMPANY LETTERHEAD (Optional)

U.S. Customs and Border Protection, Commercial and Trade Facilitation 
Division, Regulations and Rulings, Office of International Trade, 1300 
Pennsylvania Avenue, N.W., Washington, D.C. 20229.
    Dear Sir: We, (Applicant's Name), a (State, e.g., Delaware) 
corporation (or other described entity) submit this application for a 
specific manufacturing drawback ruling that our manufacturing operations 
qualify for drawback under title 19, United States Code, section 
1313(g), and part 191 of the Customs Regulations. We request that the 
Customs Service authorize drawback on the basis of this application.

       NAME AND ADDRESS AND IRS NUMBER (WITH SUFFIX) OF APPLICANT

(Section 191.8(a) of the CBP Regulations provides that each manufacturer 
or producer of articles intended for exportation with the benefit of 
drawback shall apply for a specific manufacturing drawback ruling, 
unless operating under a general manufacturing drawback ruling under 
Sec. 191.7 of the CBP Regulations. Customs will not approve an 
application which shows an unincorporated division or company as the 
applicant (see Sec. 191.8(a).)

                     LOCATION OF FACTORY OR SHIPYARD

(Give the address of the factory(s) or shipyard(s) at which the 
construction and equipment will take place. If the factory or shipyard 
is a different legal entity from the applicant, so state and indicate if 
operating under an Agent's general manufacturing drawback ruling.)

                PERSONS WHO WILL SIGN DRAWBACK DOCUMENTS

(List persons legally authorized to bind the corporation who will sign 
drawback documents. Section 191.6 of the CBP Regulations permits only 
the president, vice-president, secretary, treasurer, or any employee 
legally authorized to bind the corporation to sign for a corporation. In 
addition, a person within a business entity with a Customs power of 
attorney for the company may sign. A Customs power of attorney may also 
be given to a licensed Customs broker. This heading should be changed to 
NAMES OF PARTNERS or PROPRIETOR in the case of a partnership or sole 
proprietorship, respectively (see footnote at end of this sample format 
for persons who may sign applications for specific manufacturing 
drawback rulings).)

             CBP OFFICE WHERE DRAWBACK CLAIMS WILL BE FILED

(The 8 offices where drawback claims can be filed are located at: 
Boston, MA; New York, NY; Miami, FL; New Orleans, LA; Houston, TX; Long 
Beach, CA; Chicago, IL; San Francisco, CA)
(An original application and two copies must be filed. If the applicant 
intends to file drawback claims at more than one drawback office, one 
additional copy of the application must be furnished for each additional 
office indicated.)

                            GENERAL STATEMENT

(The following questions must be answered:
    1. Who will be the importer of the merchandise?
(If the applicant will not always be the importer, does the applicant 
understand its obligations to obtain the appropriate certificates of 
delivery (19 CFR 191.10), certificates of manufacture and delivery (19 
CFR 191.24), or both?)
    2. Who is the manufacturer?
(Is the applicant constructing and equipping for his own account or 
merely performing the operation on a toll basis for others?)

[[Page 634]]

(If an agent is to be used, the applicant must state it will comply with 
T.D.s 55027(2) and 55207(1), and Sec. 191.9, as applicable, and that 
its agent will submit a letter of notification of intent to operate 
under the general manufacturing drawback ruling for agents (see Sec. 
191.7 and Appendix A), or an application for a specific manufacturing 
drawback ruling (see Sec. 191.8 and this Appendix B).)
    3. Will the applicant be the drawback claimant?
(State how the vessel will qualify for drawback under 19 U.S.C. 1313(g). 
Who is the foreign person or government for whom the vessel is being 
made or equipped?)
(There shall be included under this heading the following statement:
    We are particularly aware of the terms of Sec. 191.76(a)(1) of and 
subpart M of part 191 of the Customs Regulations, and shall comply with 
these sections where appropriate.)
(Since the permission to grant use of the accelerated payment procedure 
rests with the Drawback office with which claims will be filed, do not 
include any reference to that procedure in this application.)

             IMPORTED MERCHANDISE OR DRAWBACK PRODUCTS USED

(Describe the imported merchandise or drawback products)

              ARTICLES CONSTRUCTED AND EQUIPPED FOR EXPORT

(Name the vessel or vessels to be made with imported merchandise or 
drawback products)

                  PROCESS OF CONSTRUCTION AND EQUIPMENT

(What is required here is a clear, concise description of the process of 
construction and equipment involved. The description should also trace 
the flow of materials through the manufacturing process for the purpose 
of establishing physical identification of the imported merchandise or 
drawback products and of the articles resulting from the processing.)

                                  WASTE

(Many processes result in residue materials which, for drawback 
purposes, are treated as wastes. Describe any residue materials which 
you believe should be so treated. If no waste results, include a 
positive statement to that effect under this heading.)
(If waste occurs, state: (1) whether or not it is recovered, (2) whether 
or not it is valueless, and (3) what you do with it. This information is 
required whether claims are made on a ``used in'' or ``appearing in'' 
basis and regardless of the amount of waste incurred.)
(Irrecoverable wastes are those consisting of materials which are lost 
in the process. Valueless wastes are those which may be recovered but 
have no value. These irrecoverable and valueless wastes do not reduce 
the drawback claim provided the claim is based on the quantity of 
imported material used in manufacturing. If the claim is based upon the 
quantity of imported merchandise appearing in the exported article, 
irrecoverable and valueless waste will cause a reduction in the amount 
of drawback.)
(Valuable wastes are those recovered wastes which have a value either 
for sale or for use in a different manufacturing process. However, it 
should be noted that this standard applies to the entire industry and is 
not a selection on your part. An option by you not to choose to sell or 
use the waste in some different operation does not make it valueless if 
another manufacturer can use the waste. State what you do with the 
waste. If you have to pay someone to get rid of it, or if you have 
buyers for the waste, you must state so in your application regardless 
of what ``Basis'' you are using.)
(If you recover valuable waste and if you choose to claim on the basis 
of the quantity of imported or substituted merchandise used in producing 
the exported articles (less valuable waste), state that you will keep 
records to establish the quantity and value of the waste recovered. See 
``Basis of Claim for Drawback'' section below.)

             LOSS OR GAIN (Separate and distinct from WASTE)

(Some manufacturing processes result in an intangible loss or gain of 
the net weight or measurement of the merchandise used. This loss or gain 
is caused by atmospheric conditions, chemical reactions, or other 
factors. State the approximate usual percentage or quantity of such loss 
or gain. Note that percentage values will be considered to be measured 
``by weight'' unless otherwise specified. Loss or gain does not occur 
during all manufacturing processes. If loss or gain does not apply to 
your manufacturing process, state ``Not Applicable.'')

                    PROCEDURES AND RECORDS MAINTAINED

    We will maintain records to establish:
    1. That the exported article on which drawback is claimed was 
constructed and equipped with the use of a particular lot (or lots) of 
imported material; and
    2. The quantity of imported merchandise \1\ we used in producing the 
exported article.
---------------------------------------------------------------------------

    \1\ If claims are to be made on an ``appearing in'' basis, the 
remainder of this sentence should read ``appearing in the exported 
articles we produce.''
---------------------------------------------------------------------------

    We realize that to obtain drawback the claimant must establish that 
the completed articles were exported within 5 years after

[[Page 635]]

the importation of the imported merchandise. Our records establishing 
our compliance with these requirements will be available for audit by 
Customs during business hours. We understand that drawback is not 
payable without proof of compliance.

                          INVENTORY PROCEDURES

(Describe your inventory records and state how those records will meet 
the drawback recordkeeping requirements set forth in 19 U.S.C. 1313 and 
part 191 of the CBP Regulations as discussed under the heading 
PROCEDURES AND RECORDS MAINTAINED. To insure compliance the following 
should be included in your discussion:)

RECEIPT AND RAW STOCK STORAGE RECORDS
CONSTRUCTION AND EQUIPMENT RECORDS
FINISHED STOCK STORAGE RECORDS
SHIPPING RECORDS

                       BASIS OF CLAIM FOR DRAWBACK

(There are three different bases that may be used to claim drawback: (1) 
Used in; (2) Appearing In; and (3) Used less Valuable Waste.)
(The ``Used In'' basis may be employed only if there is either no waste 
or valueless or unrecovered waste in the operation. Irrecoverable or 
valueless waste does not reduce the amount of drawback when claims are 
based on the ``Used In'' basis. Drawback is payable in the amount of 99 
percent of the duty paid on the quantity of imported material used to 
construct and equip the exported article.)
(For example, if 100 pounds of material, valued at $1.00 per pound, were 
used in manufacture resulting in 10 pounds of irrecoverable or valueless 
waste, the 10 pounds of irrecoverable or valueless waste would not 
reduce the drawback. In this case drawback would be payable on 99% of 
the duty paid on the 100 pounds of imported material used in 
constructing and equipping the exported articles.)
(The ``Appearing In'' basis may be used regardless of whether there is 
waste. If the ``Appearing In'' basis is used, the claimant does not need 
to keep records of waste and its value. However, the manufacturer must 
establish the identity and quantity of the merchandise appearing in the 
exported product and provide this information. Waste reduces the amount 
of drawback when claims are made on the ``Appearing In'' basis. Drawback 
is payable on 99 percent of the duty paid on the quantity of imported 
material which appears in the exported articles. ``Appearing In'' may 
not be used if multiple products are involved.)
(Based on the previous example, drawback would be payable on the 90 
pounds of imported material which actually went into the exported 
product (appearing in) rather than the 100 pounds used in as set forth 
previously.)
(The ``Used Less Valuable Waste'' basis may be employed when the 
manufacturer recovers valuable waste, and keeps records of the quantity 
and value of waste from each lot of merchandise. The value of the waste 
reduces the amount of drawback when claims are based on the ``Used Less 
Valuable Waste'' basis. When valuable waste is incurred, the drawback 
allowance on the exported article is based on the duty paid on the 
quantity of imported material used to construct and equip the exported 
product, reduced by the quantity of such material which the value of the 
waste would replace. Thus in this case, drawback is claimed on the 
quantity of eligible material actually used to produce the exported 
product, less the amount of such material which the value of the waste 
would replace. Note section 191.26(c) of the CBP Regulations.)
(Based on the previous examples, if the 10 pounds of waste had a value 
of $.50 per pound, then the 10 pounds of waste, having a total value of 
$5.00, would be equivalent in value to 5 pounds of the imported 
material. Thus the value of the waste would replace 5 pounds of the 
merchandise used, and drawback is payable on 99 percent of the duty paid 
on the 95 pounds of imported material rather than on the 100 pounds 
``Used In'' or the 90 pounds ``Appearing In'' as set forth in the above 
examples.)
(Two methods exist for the manufacturer to show the quantity of material 
used or appearing in the exported article: (1) Schedule or (2) 
Abstract.)
(A ``schedule'' shows the quantity of material used in producing each 
unit of product. The schedule method is usually employed when a standard 
line of merchandise is being produced according to fixed formulas. Some 
schedules will show the quantity of merchandise used to manufacture or 
produce each article and others will show the quantity appearing in each 
finished article. Schedules may be prepared to show the quantity of 
merchandise either on the basis of percentages or by actual weights and 
measurements. A schedule determines the amount that will be needed to 
produce a unit of product before the material is actually used in 
production;)
(An ``abstract'' is the summary of the records (which may be set forth 
on Customs Form 7551) which shows the total quantity used in producing 
all products during the period covered by the abstract. The abstract 
looks at a duration of time, for instance 3 months, in which the 
quantity of material has been used. An abstract looks back on how much 
material was actually used after a production period has been 
completed.)
(An applicant who fails to indicate the ``schedule'' choice must base 
his claims on the ``abstract'' method. State which Basis

[[Page 636]]

and Method you will use. An example of Used In by Schedule would read:)
    We shall claim drawback on the quantity of (specify material) used 
in manufacturing (exported article) according to the schedule set forth 
below.
(Section 191.8(f) of the CBP Regulations requires submission of the 
schedule with the application for a specific manufacturing drawback 
ruling. An applicant who desires to file supplemental schedules with the 
drawback office whenever there is a change in the quantity or material 
used should state:)
    We request permission to file supplemental schedules with the 
drawback office covering changes in the quantities of material used to 
produce the exported articles, or different styles or capacities of 
containers of such exported merchandise.
(Neither the ``Appearing In'' basis nor the ``schedule'' method for 
claiming drawback may be used where the relative value procedure is 
required.)

                               AGREEMENTS

    The Applicant specifically agrees that it will:
    1. Operate in full conformance with the terms of this application 
for a specific manufacturing drawback ruling when claiming drawback;
    2. Open its factory and records for examination at all reasonable 
hours by authorized Government officers;
    3. Keep its drawback related records and supporting data for at 
least 3 years from the date of payment of any drawback claim predicated 
in whole or in part upon this application;
    4. Keep this application current by reporting promptly to the 
drawback office which liquidates its claims any changes in the number or 
locations of its offices or factories, the corporate name, the persons 
who will sign drawback documents, the basis of claim used for 
calculating drawback, the decision to use or not to use an agent under 
Sec. 191.9 or the identity of an agent under that section, the drawback 
office where claims will be filed under the ruling, or the corporate 
organization by succession or reincorporation;
    5. Keep this application current by reporting promptly to the 
Headquarters, U.S. Customs Service all other changes affecting 
information contained in this application;
    6. Keep a copy of this application and the letter of approval by 
Customs Headquarters on file for ready reference by employees and 
require all officials and employees concerned to familiarize themselves 
with the provisions of this application and that letter of approval; and
    7. Issue instructions to insure proper compliance with title 19, 
United States Code, section 1313, part 191 of the CBP Regulations and 
this application and letter of approval.

                         DECLARATION OF OFFICIAL

    I declare that I have read this application for a specific 
manufacturing drawback ruling; that I know the averments and agreements 
contained herein are true and correct; and that my signature on this --
-------------- day of -------------------- 19----, makes this 
application binding on
________________________________________________________________________
(Name of Applicant Corporation, Partnership, or Sole Proprietorship)
By\2\___________________________________________________________________
(Signature and Title)
---------------------------------------------------------------------------

    \2\ Section 191.6(a) requires that applications for specific 
manufacturing drawback rulings be signed by any individual legally 
authorized to bind the person (or entity) for whom the application is 
signed or the owner of a sole proprietorship, a full partner in a 
partnership, or, if a corporation, the president, a vice president, 
secretary, treasurer or employee legally authorized to bind the 
corporation. In addition, any employee of a business entity with a 
Customs power of attorney filed with the Customs port for the drawback 
office which will liquidate your drawback claims may sign such an 
application, as may a licensed Customs broker with a Customs power of 
attorney. You should state in which Customs port your Customs power(s) 
of attorney is/are filed.

[T.D. 98-16, 63 FR 11006, Mar. 5, 1998; 63 FR 15291, Mar. 31, 1998; 63 
FR 65060, Nov. 25, 1998]



PART 192_EXPORT CONTROL--Table of Contents




Sec.
192.0 Scope.

  Subpart A_Exportation of Used Self-Propelled Vehicles, Vessels, and 
                                Aircraft

192.1 Definitions.
192.2 Requirements for exportation.
192.3 Penalties.
192.4 Liability of carriers.

  Subpart B_Filing of Export Information Through the Automated Export 
                              System (AES)

192.11 Description of the AES.
192.12 Criteria for denial of applications requesting AES post-departure 
          (Option 4) filing status; appeal procedures.
192.13 Revocation of participant's AES post-departure (Option 4) filing 
          privileges; appeal procedures.
192.14 Electronic information for outward cargo required in advance of 
          departure.

    Authority: 19 U.S.C. 66, 1624, 1646c. Subpart A also issued under 19 
U.S.C. 1627a,

[[Page 637]]

1646a, 1646b; subpart B also issued under 13 U.S.C. 303; 19 U.S.C. 2071 
note; 46 U.S.C. 91.

    Source: T.D. 89-46, 54 FR 15403, Apr. 18, 1989, unless otherwise 
noted.



Sec. 192.0  Scope.

    This part sets forth regulations pertaining to procedures for the 
lawful exportation of used self-propelled vehicles, vessels and 
aircraft, and the penalties and liabilities incurred for failure to 
comply with any of the procedures. This part also sets forth regulations 
concerning controls exercised by Customs with respect to the exportation 
of certain merchandise. This part also makes provision for the Automated 
Export System (AES), implemented by the Census Regulations at part 30, 
subpart E (15 CFR part 30, subpart E), and provides the grounds under 
which Customs, as one of the reviewing agencies of the government's 
export partnership, may deny an application for post-departure filing 
status or revoke a participant's privilege to use such filing option, 
and provides for the appeal procedures to challenge such action by 
Customs.

[T.D. 89-46, 54 FR 15403, Apr. 18, 1989, as amended by T.D. 99-57, 64 FR 
40987, July 28, 1999]



  Subpart A_Exportation of Used Self-Propelled Vehicles, Vessels, and 
                                Aircraft



Sec. 192.1  Definitions.

    The following are general definitions for the purposes of this 
subpart A.
    Certified. ``Certified'' when used with reference to a copy means a 
document issued by a government authority that includes on it a signed 
statement by the authority that the copy is an authentic copy of the 
original.
    Copy. ``Copy'' refers to a duplicate or photocopy of an original 
document. Where there is any writing on the backside of an original 
document, a ``complete copy'' means that both sides of the document are 
copied.
    Export. ``Export'' refers to the transportation of merchandise out 
of the U.S. for the purpose of being entered into the commerce of a 
foreign country.
    Self-propelled vehicle. ``Self-propelled vehicle'' includes any 
automobile, truck, tractor, bus, motorcycle, motor home, self-propelled 
agricultural machinery, self-propelled construction equipment, self-
propelled special use equipment, and any other self-propelled vehicle 
used or designed for running on land but not on rail.
    Ultimate purchaser. ``Ultimate purchaser'' means the first person, 
other than a dealer purchasing in his capacity as a dealer, who in good 
faith purchases a self-propelled vehicle for purposes other than resale.
    Used. ``Used'' refers to any self-propelled vehicle the equitable or 
legal title to which has been transferred by a manufacturer, 
distributor, or dealer to an ultimate purchaser.

[T.D. 89-46, 54 FR 15403, Apr. 18, 1989, as amended by T.D. 99-34, 64 FR 
16639, Apr. 6, 1999]



Sec. 192.2  Requirements for exportation.

    (a) Basic requirements. A person attempting to export a used self-
propelled vehicle shall present to Customs, at the port of exportation, 
both the vehicle and the required documentation describing the vehicle, 
which includes the Vehicle Identification Number or, if the vehicle does 
not have a Vehicle Identification Number, the product identification 
number. Exportation of a vehicle will be permitted only upon compliance 
with these requirements, unless the vehicle was entered into the United 
States under an in-bond procedure, or under a carnet or Temporary 
Importation Bond; a vehicle entered under an in-bond procedure, or under 
a carnet or Temporary Importation Bond is exempt from these 
requirements. The person attempting to export the vehicle may employ an 
agent for the exportation of the vehicle.
    (b) Documentation required--(1) For U.S.-titled vehicles.--
(i)Vehicles issued an original certificate of title. For used, self-
propelled vehicles issued, by any jurisdiction in the United States, a 
Certificate of Title or a Salvage Title that remains in force, the owner 
must provide to Customs, at the time and place specified in this 
section, the original Certificate of Title or a certified copy of

[[Page 638]]

the Certificate of Title and two complete copies of the original 
Certificate of Title or certified copy of the original.
    (ii) Where title evidences third-party ownership/claims. If the 
used, self-propelled vehicle is leased or a recorded lien exists in the 
U.S., in addition to complying with paragraph (b)(1)(i) of this section, 
the provisional owner must provide to Customs a separate writing from 
the third-party-in-interest which expressly provides that the subject 
vehicle may be exported. This writing must be on the third-party's 
letterhead paper, and contain a complete description of the vehicle 
including the Vehicle Identification Number (VIN), the name of the owner 
or lienholder of the leased vehicle, and the telephone numbers at which 
that owner or lienholder may be contacted. The writing must bear an 
original signature of the third-party and state the date it was signed.
    (iii) Where U.S. Government employees are involved. If the used, 
self-propelled vehicle is owned by a U.S. government employee and is 
being exported in conjunction with that employee's reassignment abroad 
pursuant to official travel orders, then, in lieu of complying with 
paragraph (b)(1)(i) of this section, the employee may be required to 
establish that he has complied with the sponsoring agency's internal 
travel department procedures for vehicle export.
    (2) For foreign-titled vehicles. For used, self-propelled vehicles 
that are registered or titled abroad, the owner must provide to Customs, 
at the time and place specified in this section, the original document 
that provides satisfactory proof of ownership (with an English 
translation of the text if the original language is not in English), and 
two complete copies of that document (and translation, if necessary).
    (3) For untitled vehicles.--(i) Newly-manufactured vehicles issued 
an MSO. For newly-manufactured, self-propelled vehicles that are 
purchased from a U.S. manufacturer, distributor, or dealer that become 
used, as defined in this subpart, and are issued a Manufacturer's 
Statement of Origin (MSO), but not issued a Certificate of Title by any 
jurisdiction of the United States, the owner must provide to Customs, at 
the time and place specified in this section, the original MSO and two 
complete copies of the original MSO.
    (ii) Newly-manufactured vehicles not issued an MSO. For newly-
manufactured, self-propelled vehicles purchased from a U.S. 
manufacturer, distributor, or dealer that become used, as defined in 
this subpart, and not issued an MSO or a Certificate of Title by any 
jurisdiction of the United States, the owner must establish that the 
jurisdiction from where the vehicle comes does not have any ownership 
documentation requirements regarding such vehicles and provide to 
Customs, at the time and place specified in this section, an original 
document that proves ownership, such as a dealer's invoice, and two 
complete copies of such original documentation.
    (iii) Vehicles issued a junk or scrap certificate. For used, self-
propelled vehicles for which a junk or scrap certificate issued, by any 
jurisdiction of the United States, remains in force, the owner must 
provide to Customs, at the time and place specified in this section, the 
original certificate or a certified copy of the original document and 
two complete copies of the original document or certified copy of the 
original.
    (iv) Vehicles issued a title or certificate that is not in force or 
are otherwise not registered. For used, self-propelled vehicles that 
were issued, by any jurisdiction of the United States, a title or 
certificate that is no longer in force, or that are not required to be 
titled or registered, and for which an MSO was not issued, the owner 
must establish that the jurisdiction from where the vehicle comes does 
not have any ownership documentation requirements regarding such 
vehicles and provide to Customs, at the time and place specified in this 
section, the original document that shows his basis for ownership or 
right of possession, such as a bill of sale, and two complete copies of 
that original document. Further, the owner must certify in writing to 
Customs that the procurement of the vehicle was a bona fide transaction, 
and that the vehicle presented for export is not stolen.

[[Page 639]]

    (c) When presented--(1) Exportation by vessel or aircraft. For those 
vehicles exported by vessel or aircraft, the required documentation and 
the vehicle must be presented to Customs at least 72 hours prior to 
export.
    (2) Exportation at land border crossing points. For those vehicles 
exported by rail, highway, or under their own power:
    (i) The required documentation must be submitted to Customs at least 
72 hours prior to export; and
    (ii) The vehicle must be presented to Customs at the time of 
exportation.
    (d) Where presented. Port directors will establish locations at 
which exporters must present the required documentation and the vehicles 
for inspection. Port directors will publicize these locations, including 
their hours of operation.
    (e) Authentication of documentation. Customs will determine the 
authenticity of the documents submitted. Once the authenticity of the 
documents is established, Customs will mark the documents. In most cases 
the original document(s) will be returned to the exporter. In those 
cases where the original title document was presented to and retained by 
Customs and cannot be found prior to the vehicle's export, the 
exporter's authenticated copy of the original documentation serves as 
evidence of compliance with the reporting requirements.

[T.D. 89-46, 54 FR 15403, Apr. 18, 1989, as amended by T.D. 90-71, 55 FR 
37708, Sept. 13, 1990; T.D. 99-34, 64 FR 16639, Apr. 6, 1999]



Sec. 192.3  Penalties.

    (a) A $500 penalty shall be assessed against an exporter attempting 
to export a vehicle without complying with the requirements set forth in 
this part of the regulations.
    (b) A $500 penalty shall be assessed against an exporter who has 
exported a vehicle without complying with the requirements set forth in 
this part of the regulations.
    (c) A penalty not to exceed $10,000 may be assessed against an 
importer or exporter who knowingly imports, exports or attempts to 
import or export:
    (1) Any stolen self-propelled vehicle, vessel, aircraft or part of a 
self-propelled vehicle, vessel or aircraft; or
    (2) Any self-propelled vehicle or part of a self-propelled vehicle 
from which the identification number has been removed, obliterated, 
tampered with, or altered.
    (d) Any stolen self-propelled vehicle, vessel or aircraft or part 
thereof or any self-propelled vehicle or part of a self-propelled 
vehicle from which the identification number has been removed, 
obliterated, tampered with or altered may be subject to seizure and 
foreiture pursuant to 19 U.S.C. 1627a.



Sec. 192.4  Liability of carriers.

    Under the provisions of 19 U.S.C. 1436, the vessel master is charged 
with the responsibility for presenting a true manifest. If used vehicles 
are not included on the manifest or are inaccurately described thereon, 
a liability for penalties may be incurred.

[T.D. 89-46, 54 FR 15403, Apr. 18, 1989, as amended by T.D. 98-74, 63 FR 
51290, Sept. 25, 1998]



  Subpart B_Filing of Export Information Through the Automated Export 
                              System (AES)

    Source: T.D. 99-57, 64 FR 40987, July 28, 1999, unless otherwise 
noted.



Sec. 192.11  Description of the AES.

    AES is a voluntary program that allows all exporters required to 
report commodity export information (see, 15 CFR 30.16) to submit such 
information electronically, rather than on paper, and sea carriers to 
report required outbound vessel information electronically (see, 
Sec. Sec. 4.63, 4.75, and 4.76 of this chapter). Eligibility and 
application procedures are found at subpart E of part 30 of the Census 
Regulations (15 CFR part 30, subpart E), denominated Electronic Filing 
Requirements--Exporters. These Census Regulations (15 CFR part 30, 
subpart E) provide that exporters may choose to submit export 
information through AES by any one of three electronic filing options 
available. Only Option 4, the complete post-departure submission of 
export information, requires prior approval by participating agencies 
before it can be used by AES participants.

[[Page 640]]



Sec. 192.12  Criteria for denial of applications requesting AES post-departure (Option 4) filing status; appeal procedures.

    (a) Approval process. Applications for the option of filing export 
commodity information electronically through AES after the vessel has 
departed (Option 4 filing status) must be unanimously approved by 
Customs, Census and other participating government agencies. Disapproval 
by one of the participating agencies will cause rejection of the 
application.
    (b) Grounds for denial. Customs may deny a participant's application 
for any of the following reasons:
    (1) The applicant is not an exporter, as defined in the Census 
Regulations (15 CFR 30.7(d));
    (2) The applicant has a history of non-compliance with export 
regulations (e.g., exporter has a history of late electronic submission 
of commodity records or a record of non-submission of required export 
documentation);
    (3) The applicant has been indicted, convicted, or is currently 
under an investigation, wherein Customs has developed probable cause, 
for a felony involving any Customs law or any export law administered by 
another government agency; or
    (4) The applicant has made or caused to be made in the ``Letter of 
Intent'', a false or misleading statement or omission with respect to 
any material fact.
    (c) Notice of denial; appeal procedures. Applicants will be notified 
of approval or denial in writing by Census. (Applicants whose 
applications are denied by other agencies must contact those agencies 
for their specific appeal procedures.) Applicants whose applications are 
denied by Customs will be provided with the specific reason(s) for non-
selection. Applicants may challenge Customs decision by following the 
appeal procedure provided at Sec. 192.13(b).



Sec. 192.13  Revocation of participants' AES post-departure (Option 4) filing privileges; appeal procedures.

    (a) Reasons for revocation. Customs may revoke Option 4 privileges 
of participants for the following reasons:
    (1) The exporter has made or caused to be made in the ``Letter of 
Intent'', a false or misleading statement or omission with respect to 
any material fact;
    (2) The exporter submitting the ``Letter of Intent'' is indicted, 
convicted, or is currently under an investigation, wherein Customs has 
developed probable cause, for a felony involving any Customs law or any 
export law administered by another government agency;
    (3) The exporter fails to substantially comply with export 
regulations; or
    (4) Continued participation in AES as an Option 4 filer would pose a 
threat to national security, such that continued participation in Option 
4 should be terminated.
    (b) Notice of revocation; appeal procedures. When Customs has 
decided to revoke a participant's Option 4 filing privileges, the 
participant will be notified in writing of the reason(s) for the 
decision. The participant may challenge Customs decision by filing an 
appeal within thirty (30) calendar days of receipt of the notice of 
decision. Except as stated elsewhere in this paragraph, the revocation 
will become effective when the participant has either exhausted all 
appeal proceedings or thirty (30) calendar days after receipt of the 
notice of revocation if no appeal is filed. However, in cases of 
intentional violations of any Customs law on the part of the program 
participant or when required by the national security, revocations will 
become effective immediately upon notification. Appeals should be 
addressed to the Director, Outbound Programs, U.S. Customs, Ronald 
Reagan Building, 1300 Pennsylvania Ave, NW, Room 5.4c, Washington, DC 
20229. Customs will issue a written decision or notice of extension to 
the participant within thirty (30) calendar days of receipt of the 
appeal. If a notice of extension is forwarded, the applicant will be 
provided with the reason(s) for extension of this time period and an 
expected date of decision. Participants who have had their Option 4 
filing privileges revoked and applicants not selected to participate in 
Option 4 of AES may not reapply for this filing status for one year 
following written notification of rejection or revocation.

[[Page 641]]



Sec. 192.14  Electronic information for outward cargo required in advance of departure.

    (a) General requirement. Pursuant to section 343(a), Trade Act of 
2002, as amended (19 U.S.C. 2071 note), and subject to paragraph (e) of 
this section, for any commercial cargo that is to be transported out of 
the United States by vessel, aircraft, rail, or truck, unless exempted 
under paragraph (d) of this section, the United States Principal Party 
in Interest (USPPI), or its authorized agent, must electronically 
transmit for receipt by Customs and Border Protection (CBP), no later 
than the time period specified in paragraph (b) of this section, certain 
cargo information, as enumerated in paragraph (c) of this section. 
Specifically, to effect the advance electronic transmission of the 
required cargo information to CBP, the USPPI or its authorized agent 
must use a CBP-approved electronic data interchange system (currently, 
the Automated Export System (AES)).
    (b) Presentation of data--(1) Time for presenting data. USPPIs or 
their authorized agents must electronically transmit and verify system 
acceptance of required cargo information for outbound cargo no later 
than the time period specified as follows (see paragraph (b)(3) of this 
section):
    (i) For vessel cargo, the USPPI or its authorized agent must 
transmit and verify system acceptance of export vessel cargo information 
no later than 24 hours prior to departure from the U.S. port where the 
vessel cargo is to be laden;
    (ii) For air cargo, including cargo being transported by Air Express 
Couriers, the USPPI or its authorized agent must transmit and verify 
system acceptance of export air cargo information no later than 2 hours 
prior to the scheduled departure time of the aircraft from the last U.S. 
port;
    (iii) For truck cargo, including cargo departing by Express 
Consignment Courier, the USPPI or its authorized agent must transmit and 
verify system acceptance of export truck cargo information no later than 
1 hour prior to the arrival of the truck at the border; and
    (iv) For rail cargo, the USPPI or its authorized agent must transmit 
and verify system acceptance of export rail cargo information no later 
than two hours prior to the arrival of the train at the border.
    (2) Applicability of time frames. The time periods in paragraph 
(b)(1) of this section for reporting required export cargo information 
to CBP for outward vessel, air, truck, or rail cargo only apply to 
shipments without an export license, that require full pre-departure 
reporting of shipment data, in order to comply with the advance cargo 
information filing requirements under section 343(a), as amended. 
Paragraph (e) of this section details dates for compliance with the time 
frames provided in paragraph (b)(1) of this section. Requirements placed 
on exports controlled by other Government agencies will remain in force 
unless changed by the agency having the regulatory authority to do so. 
The CBP will also continue to require 72-hour advance notice for used 
vehicle exports pursuant to Sec. 192.2(c)(1) and (c)(2)(i) of this 
part. USPPIs or their authorized agents should refer to the relevant 
titles of the Code of Federal Regulations (CFR) for pre-filing 
requirements of other Government agencies. In particular, for the 
advance reporting requirements for exports of U.S. Munitions List items, 
see the U.S. Department of State's International Traffic in Arms 
Regulations (ITAR) (22 CFR parts 120 through 130).
    (3) System verification of data acceptance. Once the USPPI or its 
authorized agent has transmitted the data required under paragraphs 
(c)(1) and (c)(2) of this section, and the CBP-approved electronic 
system has received and accepted this data, the system will generate and 
transmit to the USPPI or its authorized agent (whichever is the filer in 
AES) a confirmation number (this number is known as the Internal 
Transaction Number (ITN)), which verifies that the data has been 
accepted as transmitted for the outgoing shipment.
    (c) Information required--(1) Currently collected commodity data. 
The export cargo information to be collected from USPPIs or their 
authorized agents for outbound cargo is already contained in the Bureau 
of Census electronic Shipper's Export Declaration (SED) that

[[Page 642]]

the USPPI or its authorized agent currently presents to CBP through the 
approved electronic system. The AES Commodity Module already captures 
the requisite export data, so no new data elements for export cargo are 
required under this section. The export cargo data elements that are 
required to be reported electronically through the approved system are 
also found in Sec. 30.63 of the Bureau of Census Regulations (15 CFR 
30.63).
    (2) Transportation data. Reporting of the following transportation 
information is currently mandatory for AES participants under 15 CFR 
30.63 for the vessel, air, truck, and rail modes (see also paragraph 
(c)(3) of this section):
    (i) Method of transportation (the method of transportation is 
defined as that by which the goods are exported or shipped (vessel, air, 
rail, or truck));
    (ii) Carrier identification (for vessel, rail and truck shipments, 
the unique carrier identifier is the 4-character Standard Carrier Alpha 
Code (SCAC); for aircraft, the carrier identifier is the 2- or 3-
character International Air Transport Association (IATA) code);
    (iii) Conveyance name (the conveyance name is the name of the 
carrier; for sea carriers, this is the name of the vessel; for others, 
the carrier name);
    (iv) Country of ultimate destination (this is the country as known 
to the USPPI or its authorized agent at the time of exportation, where 
the cargo is to be consumed or further processed or manufactured; this 
country would be identified by the 2-character International Standards 
Organization (ISO) code for the country of ultimate destination);
    (v) Estimated date of exportation (the USPPI or its authorized agent 
must report the date the cargo is scheduled to leave the United States 
for all modes of transportation; if the actual date is not known, the 
USPPI or its authorized agent must report the best estimate as to the 
time of departure); and
    (vi) Port of exportation (the port where the outbound cargo departs 
from the United States is designated by its unique code, as set forth in 
Annex C, Harmonized Tariff Schedule of the United States (HTSUS); the 
USPPI or its authorized agent must report the port of exportation as 
known when the USPPI or its agent tenders the cargo to the outbound 
carrier; should the carrier export the cargo from a different port and 
the carrier so informs the USPPI or agent, the port of exportation must 
be corrected by the filer in AES.).
    (3) Proof of electronic filing; exemption from filing. The USPPI, or 
its authorized agent, must furnish to the outbound carrier a proof of 
electronic filing citation (the ITN), low-risk exporter citation 
(currently, the Option 4 filing citation), or exemption statement, for 
annotation on the carrier's outward manifest, waybill, or other export 
documentation covering the cargo to be shipped. The proof of electronic 
filing citation, low-risk exporter citation, or exemption statement, 
will conform to the approved data formats found in the Bureau of Census 
Foreign Trade Statistics Regulations (FTSR) (15 CFR part 30) and FTSR 
Letter 168, Amendment 2 (this Letter may be obtained from the Census 
Bureau).
    (4) Carrier responsibility--(i) Loading of cargo. The carrier may 
not load cargo without first receiving from the USPPI or its authorized 
agent either the related electronic filing citation as prescribed under 
paragraph (c)(3) of this section, or an appropriate exemption statement 
for the cargo as specified in paragraph (d) of this section.
    (ii) High-risk cargo. For cargo that CBP has identified as 
potentially high-risk, the carrier, after being duly notified by CBP, 
will be responsible for delivering the cargo for inspection/examination. 
If the cargo identified as high risk has already departed, CBP may 
demand that the export carrier redeliver the cargo in accordance with 
the terms of its international carrier bond (see Sec. 113.64(g)(2) of 
this chapter).
    (5) USPPI receipt of information believed to be accurate. Where the 
USPPI or its authorized agent electronically presenting the cargo 
information required in paragraphs (c)(1) and (c)(2) of this section 
receives any of this information from another party, CBP will take into 
consideration how, in accordance with ordinary commercial practices, the 
USPPI or its authorized agent acquired this information, and

[[Page 643]]

whether and how the USPPI or authorized agent is able to verify this 
information. Where the USPPI or authorized agent is not reasonably able 
to verify any information received, CBP will permit this party to 
electronically present the information on the basis of what it 
reasonably believes to be true.
    (d) Exemptions from reporting; Census exemptions applicable. The 
USPPI or authorized agent must furnish to the outbound carrier an 
appropriate exemption state-ment (low-risk exporter or other exemption) 
for any export shipment laden that is not subject to pre-departure 
electronic information filing under this section. The exemption 
statement will conform to the proper format approved by the Bureau of 
Census. Any exemptions from reporting requirements for export cargo are 
enumerated in Sec. Sec. 30.50 through 30.58 of the Bureau of Census 
Regulations (15 CFR 30.50 through 30.58). These exemptions are equally 
applicable under this section.
    (e) Date for compliance. The requirements of this section, including 
the pre-departure time frames for reporting export cargo information for 
required shipments, and the requirement of the ITN, will be implemented 
concurrent with the completion of the redesign of the AES commodity 
module and the effective date of mandatory filing regulations that will 
be issued by the Department of Commerce pursuant to the Security 
Assistance Act (Pub. L. 107-228). This date will be announced in the 
Federal Register.

[CBP Dec. 03-32, 68 FR 68176, Dec. 5, 2003]

                        PARTS 193	199 [RESERVED]


[[Page 645]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  Chapter I Subject Index
  List of CFR Sections Affected

[[Page 647]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2008)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 100--
                199)
        II  Office of Management and Budget Circulars and Guidance 
                (200--299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300-- 
                399)
        VI  Department of State (Parts 600--699)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
        XI  Department of Defense (Parts 1100--1199)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1880--1899)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
    XXXVII  Peace Corps (Parts 3700--3799)

[[Page 648]]

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600-- 3699)
    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
      XXXV  Office of Personnel Management (Parts 4500--4599)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)

[[Page 649]]

       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
      XCIX  Department of Defense Human Resources Management and 
                Labor Relations Systems (Department of Defense--
                Office of Personnel Management) (Parts 9900--9999)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 0--99)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)

[[Page 650]]

        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)

[[Page 651]]

     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1303--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)

[[Page 652]]

         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board, Department of 
                Commerce (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board, 
                Department of Commerce (Parts 500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

[[Page 653]]

        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  Bureau of Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

[[Page 654]]

        IV  Bureau of Immigration and Customs Enforcement, 
                Department of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millenium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)

[[Page 655]]

        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                HousingCommissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)

[[Page 656]]

       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)

[[Page 657]]

        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)

[[Page 658]]

        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)

[[Page 659]]

        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvmeent, 
                Department of Education [Reserved]
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [RESERVED]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                301--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

[[Page 660]]

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
       129  200 [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)

[[Page 661]]

       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10010)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)

[[Page 662]]

         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)

[[Page 663]]

         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement [RESERVED]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

[[Page 664]]

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation [RESERVED]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 665]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2008)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX

[[Page 666]]

Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs and Border Protection Bureau              19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII

[[Page 667]]

  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, II
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3

[[Page 668]]

  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102

[[Page 669]]

  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A,
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  6, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection Bureau            19, I
  Federal Emergency Management Agency             44, I
  Immigration and Customs Enforcement Bureau      19, IV
  Immigration and Naturalization                  8, I
  Transportation Security Administration          49, XII
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B, 2, 
                                                  XXIV; 2424
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration and Naturalization                    8, I
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
   Archives and Records Administration
[[Page 670]]

Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50

[[Page 671]]

  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
  Copyright Royalty Board                         37, III
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Millenium Challenge Corporation                   22, XIII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI

[[Page 672]]

Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Privacy and Civil Liberties Oversight Board       6, X
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III

[[Page 673]]

Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection Bureau            19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 675]]

                         Chapter I_Subject Index

  Editorial Note: This listing is provided for information purposes 
only. It is compiled and kept up-to-date by the Bureau of Customs and 
Border Protection, Department of Homeland Security, Department of the 
Treasury. This index is updated as of April 1, 2008.

 The number preceding the decimal is the part number. The number 
following the decimal is the section number. The letter ``N'' 
indicates a footnote.

                                      A

ABANDONED MERCHANDISE (See, Unclaimed and Abandoned Merchandise)

ABORTION................................................................

12.40(f), 12.40(h), 145.52
ACCOUNTS
Bills for sums due......................................................
24.3
Inventory control and record-keeping system.............................
19.12
Overtime service, charges for...........................................
24.16
Sale of merchandise; presentation.......................................
127.35
Services of officers, reimbursable......................................
24.17
ACH (See, Automated Clearinghouse)

ACTUAL USE..............................................................

10.131, 10.133, 10.134, 10.137-10.139, 54.5

ADJUSTMENT OF DUTIES (Withdrawals from warehouse for Consumption).......

144.38

ADMINISTRATIVE DUTY EXEMPTIONS..........................................

10.151-10.153, 128.24(e), 145.31-145.34, 148.12(b), 148.51-148.55, 
148.64, 159.6

ADMINISTRATIVE OVERHEAD CHARGES.........................................

24.21
ADMINISTRATIVE REVIEW
Authority to review.....................................................
173.1
Commissioner's decision.................................................
158.30(b)
Mail entries............................................................
145.21-145.26
Port director's decision................................................
158.30(a)
    Review of entry
Covering household and personal effects.................................
173.5
Reviewable transactions.................................................
173.2
Voluntary reliquidation.................................................
173.3
ADMINISTRATIVE RULINGS
    Drawback rulings
General manufacturing drawback rulings..................................
191.7
Specific manufacturing drawback rulings.................................
191.8
General Ruling Procedure................................................
Part 177, subpart A
Change in status of transaction.........................................
177.5
Change of practice......................................................
177.10(c)
Coastwise transportation of merchandise.................................
4.80b
Completed transactions, not subject to..................................
177.1(a)(2)(ii)

[[Page 676]]

Current (ongoing) transactions..........................................
177.1(a)(2)(i), 177.11(b)
Definitions.............................................................
177.1(d)
Drawback rulings........................................................
191.7, 191.8
Effect of...............................................................
177.9
How to submit request for...............................................
177.2
Inconsistent customs decisions..........................................
177.13
Internal advice.........................................................
177.11
NAFTA
Advance Ruling Procedures...............................................
Part 181, subpart I
Review and Appeal of Adverse Marking Decisions..........................
Part 181, subpart J
Nonconforming requests for rulings......................................
177.3
Oral discussions........................................................
177.4
Prospective transactions................................................
177.1(a)(1)
Publication of decisions................................................
177.10
Requests for advice by field offices....................................
177.11
When requests for rulings will not be issued............................
177.1(a)(1), (2)
Withdrawal of ruling requests...........................................
177.6
Government procurement, country-of-origin determinations................
Part 177, subpart B
Applicability...........................................................
177.21
Country of origin advisory ruling
By whom a request is filed..............................................
177.24
Form and content of request.............................................
177.25
Issuance................................................................
177.28
Oral discussion of issues...............................................
177.27
Where request filed.....................................................
177.26
Who may request.........................................................
177.23
Definitions.............................................................
177.22
Final determinations
Issuance................................................................
177.28
Publication of notice...................................................
177.29
Review..................................................................
177.30
Reexamination...........................................................
177.31
Request.................................................................
177.23

ADMINISTRATOR OR EXECUTOR--Entry by.....................................

141.14

AD VALOREM USER FEE MERCHANDISE.........................................

24.23

ADVANCE ELECTRONIC INFORMATION FOR AIR, TRUCK AND RAIL CARGO EXEMPT FROM 
DISCLOSURE..............................................................

103.31a

ADVANCE FILING OF VESSEL CARGO DECLARATION (``24-hour'' rule)...........

4.7, 4.7a

ADVANCE ELECTRONIC INFORMATION FOR CARGO ARRIVING BY RAIL, TRUCK, VESSEL 
OR AIRCRAFT.............................................................

123.91, 123.92, 4.7, 122.48(a)

ADVANCE IN VALUE--Notice to importer....................................

152.2
ADVERTISEMENTS
Sale of unclaimed and abandoned merchandise.............................
127.25
Sale of seized perishable and other property............................
162.48
Seizure and intent to forfeit property..................................
162.45
AFRICA
Special duty-free treatment.............................................
10.178a
Trade benefits to designated sub-Saharan................................
10.211-217

AGENCIES, OTHER.........................................................

12.1, 12.16, 145.56, 145.57,161.2

AGENT, DECLARATION BY, ON ENTRY.........................................

141.19

[[Page 677]]

AGRICULTURAL AND VEGETABLE SEEDS
Admittance requirements.................................................
12.16

AGREEMENT ON TRADE IN CEMENT............................................

12.155, Appendix to Part 163 Interim (a)(1)(A) List
AIR COMMERCE REGULATIONS
Access to Customs security areas........................................
Part 122, subpart S
Air carrier smuggling prevention program................................
Part 122, subpart R
AIRCRAFT
Air cabotage............................................................
122.165
Application.............................................................
122.21
    Arrival
Advance notice..........................................................
122.22, 122.31
Private aircraft from south of U.S......................................
122.23-122.25
Private aircraft, defined...............................................
122.23(a)
Arriving, search of.....................................................
162.5
Baggage.................................................................
Part 122, subpart K
Bonds international carrier condition...................................
113.64
Brought in for temporary use under international traffic................
10.41, Part 122
Certificate.............................................................
122.94
Civil...................................................................
10.183
Clearance and permission to depart......................................
Part 122, subpart G
    Clearance
Contiguous country, from................................................
122.87
Cuba, entry and clearance...............................................
Part 122, subpart O
Customs laws and regulations applicable.................................
122.2, 122.30, 122.161
Documents...............................................................
122.3, 122.5, Part 122, subpart H
Emergency landing.......................................................
122.35, 122.37
Failure to depart.......................................................
122.65
General requirements....................................................
Part 122, subparts E and F, 122.61
Scheduled airlines......................................................
122.63
Crew list...............................................................
122.45, 122.46
    Entry
Documents required......................................................
122.42
General order merchandise or baggage....................................
122.50
General requirements....................................................
122.2, 122.30, 122.41-122.49, 122.161
Landing requirements....................................................
Part 122, subpart D
Scheduled airlines......................................................
122.41, 122.42, 122.63
Equipment, supplies, spare parts for searches, etc. for accidentally 
damaged aircraft........................................................
10.107
Fees, private aircraft..................................................
24.22(e)
Forced landings.........................................................
122.35
Foreign-owned, brought in for temporary stay, when entry required.......
10.41, 122.53
Forfeiture and sale.....................................................
162.45
Forms of documents......................................................
122.3-122.5

[[Page 678]]

Inspection of documents.................................................
162.5
    Landing
Emergency or forced.....................................................
122.35
Exemption from..........................................................
122.25
Requirements............................................................
122.24, Part 122, subpart D
Liquor kits.............................................................
Part 122, subpart M
Passengers..............................................................
122.88
    Penalties
Limitation of...........................................................
122.161
Petitions, relief from penalties and forfeitures........................
122.161, Part 171
Smuggling, aviation.....................................................
122.167
Permit and special license to unlade and lade...........................
122.38
Permit, international traffic...........................................
Part 122, subpart F
Permit to proceed, when required........................................
122.32, 122.41, 122.83
Precleared..............................................................
122.37
    Private aircraft
Application.............................................................
122.21
Arrival.................................................................
122.22, 122.23
Documents required......................................................
122.27
Entry and clearance.....................................................
122.26
Landing requirements....................................................
122.24, 122.25
List of designated airports.............................................
122.24
Notice of arrival.......................................................
122.22
Taken abroad by U.S. residents..........................................
122.28
Overtime service........................................................
122.29
Repair or alteration....................................................
10.36a
Residue cargo...........................................................
Part 122, subpart I
Responsibility of aircraft commander....................................
122.36
    Seized
Appraisement............................................................
162.43
Award or sale...........................................................
162.45, 162.46
Transfer to another port for sale.......................................
162.46
    Seizure
When used in or employed to aid in unlawful importation of merchandise..
122.161, 161.2, 162.22
Supplies and equipment, foreign trade zone, removal.....................
146.42
Stores list.............................................................
122.47
Substitution............................................................
122.86
Supplies and stores aboard arriving aircraft............................
122.43, 122.47
Supplies for, exempt from duty and internal-revenue tax.................
10.59
Taken abroad for temporary use, tariff status on return.................
148.32
Tobacco products for use on.............................................
10.65
    Transit air cargo
Documentation...........................................................
122.112-122.114, 122.116
Exportation at port of arrival..........................................
122.118
Labeling of.............................................................
122.115
Manifest procedures.....................................................
Part 122, subpart L
Penalties...............................................................
Part 122, subpart Q
Requirements for........................................................
122.117

[[Page 679]]

Shipments to interior port..............................................
122.164
Time limits, delivering and exportation.................................
122.119
Transfer to another port for export.....................................
122.120
Virgin Islands, flight to and from......................................
Part 122, subpart N
Transportation in bond and merchandise in transit.......................
Part 122, subpart J
Withdrawal of turbine fuel..............................................
10.62b

AIRCRAFT, AUTOMOBILES, AND TRAILERS STOLEN AND RETURNED FROM MEXICO-
LBCIP...................................................................

123.82

AIRMEN, RESIDENT--Registration of valuable effects......................

148.1
AIRPORTS
Customs security areas..................................................
Part 122, subpart S
    International
Defined.................................................................
122.1(e)
Designated as international.............................................
122.11
Listed..................................................................
122.13
Operation...............................................................
122.12
Landing rights..........................................................
122.1(f), 122.14
Defined.................................................................
122.1(f)
Operation...............................................................
122.14
Permission to land......................................................
122.14, 122.15, 122.33
Private aircraft, list of airports designated for.......................
122.24
User-fee................................................................
122.1(m), 122.15
Defined.................................................................
122.1(m)
Listed..................................................................
122.15

ALCOHOL, ETHYL--Importation for non-beverage purposes...................

10.99
ALCOHOLIC BEVERAGES
Belonging to crewmember.................................................
148.64
Import taxes............................................................
24.4
Imported by nonresidents................................................
148.8, 148.43
Imported in bottles and similar containers, regulations of Bureau of 
Alcohol, Tobacco and Firearms applicable................................
11.7
Imported or destined to foreign countries via U.S. on small vessels, 
bond for foreign landing certificate....................................
4.13
In baggage of returning residents.......................................
148.33
Mail importations of....................................................
145.54
Trade fair, entered for.................................................
147.22
Vessels not over 500 tons, on...........................................
4.13
ALLOWANCE
Claim for moisture in sugar.............................................
151.23
Drawback................................................................
191.4
Excessive moisture petroleum............................................
151.46, 158.13
Losses, clean yield of wool and hair, defined...........................
151.61
Smelting and refining (metal-bearing materials).........................
19.18, 151.55
Wastage in smelting and refining........................................
19.18, 19.19
ALTERATIONS (See also, REPAIRS)
    Articles
Exported................................................................
10.8
Imported................................................................
10.36a
Re-entered

ALUMINUM AND ALLOYS, ADDITIONAL INFORMATION REQUIRED ON INVOICE.........

141.89

AMERICAN FISHERIES, ENTRY OF PRODUCTS OF................................

10.78

[[Page 680]]

AMERICAN GOODS RETURNED.................................................

10.1, 10.103, 145.35
Animals straying or driven across border................................
10.74
Articles assembled abroad with U.S. components..........................
10.11-10.18, 10.21, 10.23-10.26
Certificate of exportation, form, contents, and disposition.............
10.1
Cloth boards............................................................
10.5
Containers or coverings.................................................
10.3
Containers, substantial.................................................
10.3, 10.7
    Declaration of
Foreign shipper, form and use...........................................
10.1
Owner, form.............................................................
10.1, 145.35
Drawback paid, dutiable or not dutiable.................................
10.3
Drums, drawback, amount to be paid......................................
10.3, 10.7
Entry requirements......................................................
10.1, 145.35
Government importations, procedure......................................
10.103
Internal-revenue marks on containers, removal of........................
10.4
Mail....................................................................
145.35
Merchandise exported from bonded manufacturing warehouse, duties........
10.3
Motion-picture films, exhibited on vessels, etc., or otherwise..........
10.68
    Shooks and staves
Certificates
Boxmaker--Form 4455.....................................................
10.6
Exportation--Form 4455..................................................
10.5
Theatrical effects......................................................
10.68
Tools of trade..........................................................
10.68

AMERICAN SAMOA..........................................................

7.2, 148.101, 148.102, Part 148, subpart K, 191.5

AMMUNITION, IMPORTS AND EXPORTS.........................................

161.2

ANDEAN TRADE PREFERENCE.................................................

10.201-10.208
ANDEAN TRADE PROMOTION AND DRUG ERADICATION ACT
    Apparel and Other Textile Articles Under the Andean Trade Promotion 
and Drug Eradication Act
Additional requirements for preferential treatment of brassieres........
10.248
Applicability...........................................................
10.241
Articles eligible for preferential treatment............................
10.243
Certificate of origin...................................................
10.244
Definitions.............................................................
10.242
Filing of claim for preferential treatment..............................
10.245
Maintenance of records and submission of certificate by importer........
10.246
Verification and justification of claim for preferential treatment......
10.247
    Extension of ATPA Benefits to Tuna and Certain Other Non-Textile 
Articles
Applicability...........................................................
10.251
Articles eligible for preferential treatment............................
10.253
Certificate of Origin...................................................
10.254
Definitions.............................................................
10.252
Filing of claim for preferential treatment..............................
10.255
Maintenance of records and submission of Certificate by importer........
10.256
Verification and justification of claim for preferential treatment......
10.257

[[Page 681]]

ANIMAL & PLANT HEALTH INSPECTION SERVICE, U.S.D.A.
    Animals, domestic, and animal by-products, etc.
Jurisdiction............................................................
12.24
Animals for export, inspection by.......................................
4.71
Animals, purebred, inspection by........................................
10.70
Meat and meat-food products
For export--inspection, certification...................................
4.61, 4.72
Imported, inspection by.................................................
12.8, 12.9
Notice of arrival of viruses, serums, and toxins to be furnished to.....
12.17

ANIMAL BY-PRODUCTS, FEEDING MATERIALS, ETC.--Entry procedure............

12.24

ANIMAL CASINGS, RELEASE--Restriction....................................

12.9

ANIMAL FEEDING MATERIALS--Inspection....................................

12.24
ANIMALS
Brought in for breeding, exhibition, or competition for prizes..........
10.33, 10.70, 10.71
    Domestic
Importation procedure...................................................
12.24
Pastured or strayed abroad, dutiable status upon return.................
10.3(e), 10.74
    Dying
During bond period......................................................
10.39(c)
While under transportation entry........................................
18.6
Exportation of, inspection by Department of Agriculture.................
4.71
Exported for exhibition, return, entry requirements.....................
10.66
Feeding and watering of (in-transit through Canada).....................
123.27
    Game
Killed for noncommercial purposes.......................................
10.76(d)
Live, for stocking purposes.............................................
10.76(a)
Offspring, foreign pasturage and strays.................................
10.74
Purebred, entry.........................................................
10.70, 10.71
Seizure of, when used in or employed to aid in unlawful importation of 
merchandise.............................................................
162.22
Straying or driven across border........................................
10.74
Temporary importation bond..............................................
10.31
Theatrical effects, as..................................................
10.33
    Wild
Importation procedure...................................................
10.76, 12.26-12.28
Scientific or educational purposes, for.................................
10.75
Zoological collection...................................................
10.75

ANTIDUMPING MATTERS.....................................................

159.58

ANTIQUES................................................................

10.53
APPEALS
By domestic interested party(ies).......................................
Part 175
Centralized Examination Stations........................................
118.23(a)
Commercial gaugers......................................................
151.13
Commercial laboratories.................................................
151.12
Customs brokers.........................................................
111.75
Decision of Court of Appeals for the Federal Circuit....................
176.31(b)
Decision of Court of International Trade................................
176.31(a)
Land Border Carrier Initiative Program (LBCIP)..........................
123.74, 123.75
Notice of appeal to U. S. Court of Appeals for the Federal Circuit......
176.2
Request for records, from denial of.....................................
103.5-103.7
Suspension or revocation of license, cartage or lighterage..............
112.30

[[Page 682]]

APPORTIONMENT, ASSISTS, TRADE AGREEMENTS ACT OF 1979....................

152.103(e)
APPRAISEMENT
    Basis for
Articles assembled abroad with U.S. components, exported to the U.S. 
prior to July 1, 1980...................................................
10.18
Basis of appraisement, Trade Agreements Act of 1979, when...............
152.101
Computed value, Trade Agreements Act of 1979, when......................
152.106
Country of exportation..................................................
152.23
Deductive value, Trade Agreements Act of 1979, when.....................
152.105
Definition, Trade Agreements Act of 1979................................
152.102
Dutiable charges defined for articles exported to the U.S. prior to July 
1, 1980.................................................................
152.101
Exportation, time of....................................................
152.1(c)
Interpretative notes, Trade Agreements Act of 1979......................
152.100
Property under seizure, subject to forfeiture, or prohibited merchandise
162.43
Transaction value
Identical merchandise and similar merchandise...........................
152.104
Trade Agreements Act of 1979............................................
152.103
Unacceptable bases of appraisement, Trade Agreements Act of 1979........
152.108
Unclaimed and abandoned merchandise.....................................
127.23
Value if other values cannot be determined, Trade Agreements Act of 1979
152.107
    Entries (Appraisement entries)
Form and procedure......................................................
143.12-143.16
Liquidation of..........................................................
159.9
Merchandise eligible for................................................
143.11
    Examination
At importer's premises..................................................
151.7(a)
At place where assembled................................................
151.8(c)
At place of arrival.....................................................
151.6, 151.7
At public stores........................................................
151.6, 151.7
At wharf................................................................
151.6, 151.7
Cording and sealing, when required......................................
151.7(a)
Expenses of, when assessed..............................................
151.7(c)
Information as to values prior to appraisement, request of importer.....
152.26
Loss, theft, injury, or destruction of merchandise in public stores.....
158.21
    Merchandise
Entered by false documents..............................................
152.103
Produced in one country, imported from another..........................
152.23
    Protests
Domestic interested party(ies)..........................................
Part 175
By importer or consignee................................................
174.11, 174.12
Quantities to be examined...............................................
151.2
Samples from packages not designated, request...........................
151.11
Samples, when permitted.................................................
151.10, 151.11
Seized property.........................................................
162.43
Time period.............................................................
158.21
Unclaimed and abandoned merchandise.....................................
127.23

ARMED FORCES OF THE U.S.--Household and personal effects................

148.74
ARMS, AMMUNITION AND IMPLEMENTS OF WAR
Controlled imports and exports, seizure of..............................
161.2, 145.53

[[Page 683]]

Exportation.............................................................
4.61, 4.73, 145.53, 161.2
Mail importations.......................................................
145.59
ARMY AND NAVY TRANSPORTS
Baggage declaration and manifest........................................
148.73
Manifest of passengers and baggage......................................
4.5
Search..................................................................
162.3(b)

ARRESTS, WHO MAY MAKE...................................................

162.22

ART, WORKS OF...........................................................

10.48, 10.49, 10.52-10.54
ARTICLES
Agreements in restraint of trade, imported under--special duties........
159.44
Assembled abroad with U.S. components...................................
10.11-10.26
Appraisement
Basis of appraisement...................................................
152.101
Transaction value.......................................................
152.103
Valuation of assembled articles.........................................
10.18
Valuation of exempted components........................................
10.17
Assembly operations abroad..............................................
10.16
Definitions.............................................................
10.12
Documents required......................................................
10.24
Fabricated components
Subject to exemption....................................................
10.14
Not subject to exemption................................................
10.15
Operations incidental to assembly process...............................
10.16(b)
Operations not incidental to assembly process...........................
10.16(c)
Quotas, standards and visas.............................................
10.23
Subheading 9802.00.80, HTSUS............................................
10.13
Substantial transformation of foreign-made articles or materials........
10.14(b)
Updating cost data and other information................................
10.21
Bearing trade-marks or trade names......................................
133.21-133.24
Disposition of, not properly marked.....................................
134.51-134.53
Exported for exhibition, return of--entry requirements..................
10.66
    Exported
For processing..........................................................
10.9
For reimportation.......................................................
10.8a
For scientific, or educational purposes, return of......................
10.67
For testing, experimental, or review purposes--Temporary importation 
bond....................................................................
10.31
Gold or silver, marking--False, penalty.................................
11.13
Illustrators and photographers, imported by, for use solely as models--
Temporary importation bond..............................................
10.31
In violation of laws....................................................
161.2
Of special design, for use in connection with manufacture of articles 
for export--Temporary importation bond..................................
10.31
Registration of foreign.................................................
148.1
Special marking requirements--Exception.................................
11.9, 11.13, 134.32-134.36, 134.43
Taken ashore by crew members............................................
Part 148, subpart G
To be repaired, altered, or otherwise changed in condition--Temporary 
importation bond........................................................
10.31

ASSAYING AND SAMPLING OF METAL BEARING ORES AND OTHER METAL-BEARING 
MATERIALS...............................................................

Part 151, subpart D

[[Page 684]]

ASSEMBLY OF ARTICLES ABROAD WITH U.S. COMPONENTS........................

10.11-10.26

ASSENT OF SURETIES TO EXTENSION OF TIME OF BONDS........................

113.44

ASSERTED LIQUIDATION....................................................

159.11

ASSIGNED ENTRY NUMBERS..................................................

142.3a

ASSIST-DEFINED, TRADE AGREEMENTS ACT OF 1979............................

152.102(a)

ATOMIC ENERGY MATERIAL, CONTROLLED IMPORTS AND EXPORTS--Seizure.........

161.2

ATTORNEY, POWER OF--Surety..............................................

113.37, Part 141, subpart C

AUCTIONEER'S CHARGES FOR SELLING MERCHANDISE............................

127.34

AUTOMATED CLEARINGHOUSE (ACH)...........................................

24.1, 24.25
Credit..................................................................
24.26

AUTOMATED COMMERCIAL SYSTEM(ACS)........................................

128.11, 128.23, Part 143, subpart D
Automated Broker Interface (ABI)........................................
24.1, 24.25, Part 143, subpart A, 143.32
Automated Export System (AES)...........................................
4.76, Part 192, subpart B
Automated Manifest System (AMS).........................................
103.31, 128.11, 128.23
AUTOMOBILES
Brought in by a person not a returning resident.........................
148.45
Brought in for temporary use under international traffic................
10.41
Export of...............................................................
192.2
Rented abroad by returning resident and brought in for temporary use....
148.39

AUTOMOBILES, MOTORCYCLES, AIRPLANES, ETC., TO TAKE PART IN RACES--
Temporary importation bond..............................................

10.31

AUTOMOBILES--Safety standards...........................................

12.80

AUTOMOBILES, TRAILERS, AND AIRCRAFT STOLEN AND RETURNED FROM MEXICO.....

123.82

AUTOMOTIVE PRODUCTS TRADE ACT...........................................

10.84
AVAILABILITY OF INFORMATION
Disclosure or production in federal, state, local, and foreign 
proceedings.............................................................
Part 103, subpart B
Documents and records available for inspection and copying..............
103.11, 103.31
Documents and records exempt from disclosure............................
103.12
Fees....................................................................
103.10
Investigatory files.....................................................
103.12(g)
Personnel and medical files.............................................
103.12(f)
Privileged or confidential information--improper disclosure, penalty....
103.34
    Public reading rooms
Documents available for inspection and copying..........................
103.11
List....................................................................
103.1
Release of information to foreign agencies..............................
103.33
    Request for a record
Administrative appeal to Director, Office of Regulations & Rulings......
103.7
Definition..............................................................
103.5(h)
Improper disclosure of confidential information, penalty................
103.34
Judicial review--U.S. district court....................................
103.9

[[Page 685]]

Procedure to follow.....................................................
103.5
Referral to other agencies..............................................
103.5(b)
Time extensions.........................................................
103.8
Requests for records, documents and testimony by U.S. Court.............
103.22, 103.26
Seizures and investigations pending.....................................
103.32
Vessel manifests, examination of........................................
103.31

AVIATION SMUGGLING, Penalties...........................................

122.167

AWARDS OF COMPENSATION TO INFORMERS--Claims.............................

Part 161, subpart B

                                      B

BAD ORDER, BREAKAGE, OUTAGE, DAMAGE--Duty allowance.....................

158.11, 158.12, 158.21-158.27
BAGGAGE
Accompanied in transit..................................................
122.48(e), 122.101, 122.102
    Alcoholic beverages
By returning resident...................................................
148.33
By a nonresident........................................................
148.43
Antiques in.............................................................
10.53
Appraisement............................................................
148.24
Army and Navy transports................................................
148.73
Cigars and cigarettes...................................................
148.33, 148.43, 148.51, 148.74
Civilian (U.S.) employees...............................................
Part 148, subpart H
    Commercial travelers' samples
Transported by automobile
Through Canada and returned.............................................
123.51
Through U.S. and returned to Canada.....................................
123.52
Exported and returned...................................................
10.68
Under bond..............................................................
10.36
Consular officers.......................................................
148.82
Contiguous country......................................................
123.1, 123.2, Part 123, subpart G
Crews' effects..........................................................
Part 148, subpart G
Customs officer may unlock vehicle or compartment.......................
123.63
    Declaration
Amendment...............................................................
148.16
Crew members............................................................
148.65, 148.66
False statement, etc., penalty..........................................
148.18, 148.19, 148.67
Failure to declare, etc., penalty.......................................
148.18, 148.19, 148.67
Form and contents.......................................................
148.12, 148.13, 148.65, 148.66
Requirements............................................................
Part 148, subpart B
Detained if not opened by owner or agent, penalty.......................
123.63(b)
Diplomatic, consular, and other official representatives................
148.82, 148.87
Domestic, through contiguous foreign territory..........................
123.51, 123.52, 123.64, 123.65

[[Page 686]]

Duty exemption, restrictions, penalty...................................
148.18, 148.19
Evacuees................................................................
Part 148, subpart H
Examination in foreign country..........................................
148.22
    Examination procedure
Formal entry, when required.............................................
143.22, 148.15, 148.23
Inspector may pass......................................................
148.23
Invoice.................................................................
148.23
Opening closed baggage..................................................
148.21
Preclearance of air travelers...........................................
148.4, 148.22
Preclearance stations...................................................
148.4(c)
Reappraisement..........................................................
148.24, 148.25
Receipts for duty, forms................................................
148.27
Reexamination and receipt form..........................................
148.25(a)
    Exemptions allowed
Returning resident......................................................
Part 148, subpart D
Nonresident.............................................................
Part 148, subpart E
Other special...........................................................
Part 148, subpart F
Failure to declare, penalty.............................................
148.18, 148.19
Foreign military personnel and immediate families.......................
148.90
Gifts...................................................................
148.33(c), 148.44
    In bond
For examination at port of destination..................................
18.13
For exportation in transit through the U.S..............................
18.14, 123.64
    In transit
Through foreign territory...............................................
123.65
Through U.S.............................................................
123.64
Inspection..............................................................
162.6
Landed, undisposed of, when to be sent to general order.................
148.7
Liquors, entry forms, internal-revenue tax, strip stamps................
148.26, 148.27
List, passengers........................................................
4.7, 4.7a
Merchandise.............................................................
148.15, 148.23
Military (U.S.) personnel...............................................
Part 148, subpart H
Narcotics, marihuana and certain other drugs............................
Part 162, subpart F
Noncommercial importations of limited value.............................
Part 148, subpart J
Nonresidents............................................................
Part 148, subparts E and F
Organization of American States, representatives........................
148.87, 148.88
Permit or special license for unlading or lading........................
4.30
Public international organizations, representatives.....................
148.87
Regular entry...........................................................
148.5
Release for unaccompanied shipment......................................
148.6
Replacements for unsatisfactory articles acquired abroad................
148.37
Residents, returning....................................................
Part 148, subpart D
Search of baggage and persons...........................................
162.6, 162.7
Seizure.................................................................
162.21
Status of passengers, residents or other................................
148.2
Tea.....................................................................
148.23(d)
Tobacco and tobacco products............................................
148.26, 148.33(d), 148.43, 148.74

[[Page 687]]

Tools of trade under bond...............................................
10.36
Unaccompanied, arriving by aircraft.....................................
122.48(d)
    Unaccompanied articles
Entry, declaration......................................................
148.6, 148.11
Unclaimed and unaccompanied.............................................
148.7
Undeclared, penalty.....................................................
148.18
Value...................................................................
148.24

BAGGAGE AND MERCHANDISE, REPORT OF REQUIRED TO BE MADE BY CERTAIN 
PASSENGER VESSELS.......................................................

4.2

BAGGAGE ENTRIES, LIQUIDATION OF.........................................

159.10

BAGS OR DUNNAGE OF VESSEL...............................................

4.39

BAHAMAS, THE--Customs preclearance offices..............................

101.5
BAHRAIN FREE TRADE AGREEMENT (See, UNITED STATES-BAHRAIN FREE TRADE 
AGREEMENT)
BANKRUPT IMPORTERS
Duties due U.S.--Priority of claim......................................
141.1
Refund of excessive duty................................................
24.36

BARGES..................................................................

4.81(g)

BEEF, FRESH--Chilled or frozen..........................................

10.180

BEES, HONEY--Importation procedure......................................

12.32

BERMUDA--Customs preclearance office....................................

101.5

BILLS AND ACCOUNTS......................................................

24.3

BILLS OF HEALTH (PRATIQUE), PRODUCTION OF, ON ENTRY OF VESSEL...........

4.9(d)
BILLS OF LADING
Bond, form..............................................................
113.14, 113.69, 141.15(b)
Bond for production.....................................................
141.15
Consolidated shipments..................................................
141.54
Disposition.............................................................
141.16
    Duplicate
Disposition, receipt....................................................
141.16(a)
Entry on................................................................
141.11(a)(1)
Extract from, to be certified by carrier................................
141.11(a)(2)
Unique bill of lading number............................................
4.7a
BIRDS
Dying while under transportation entry..................................
18.6
    Game
Killed for noncommercial purposes.......................................
10.76
Live, for stocking purposes.............................................
10.76(a)
    Wild
Importation procedure...................................................
10.76, 12.26-12.29
Scientific or educational purposes......................................
10.75
Zoological collection...................................................
10.75

BLACK STRAP MOLASSES....................................................

10.139(b)

BLENDING OF WINES OR LIQUORS--Permit requirements.......................

12.37

BOARDING AND SEARCHING OF VESSELS AND VEHICLES..........................

4.1, 162.3-162.7
BOARDING OF VESSELS OR VEHICLES
Master's refusal to comply with lawful demand--Penalty..................
4.1
Obstruction of officer by master, penalty...............................
4.1(b)(4)
Who may board...........................................................
4.1

BOARDING OF VESSELS WITHOUT PERMISSION-Penalty..........................

4.1

BOATS, PLEASURE, FOREIGN OWNED--When exempt from duties.................

4.94, 148.32, 148.45

BOATS--Safety standards.................................................

12.85

BOLTING CLOTH FOR MILLING PURPOSES......................................

10.58

[[Page 688]]

BOND CONDITIONS FOR DEFERRAL OF DUTY ON LARGE YACHTS IMPORTED FOR SALE 
AT UNITED STATES BOAT SHOWS.............................................

113.75

BOND CONDITIONS TO INDEMNIFY A COMPLAINANT UNDER SECTION 337 OF TARIFF 
ACT OF 1930, AS AMENDED.................................................

113.74

BONDING AND LICENSING CUSTOMS CARTMEN AND LIGHTERMEN....................

Part 112, subpart C

BOND LIABILITY..........................................................

122.189
BONDS
Agricultural and vegetable seeds........................................
12.16
Aircraft................................................................
113.62-113.64
Air waybill, evidence of right to make entry............................
141.15
Alcohol on vessels......................................................
4.13
Alterations.............................................................
113.23
Amount, less than $100..................................................
113.13
Application for.........................................................
113.12
Approved by port directors..............................................
113.11
Retention of............................................................
113.15
Approved forms, when inapplicable, procedure............................
113.14
Assent of sureties to extension of time.................................
113.44
Attorneys in fact acting for both principal and surety..................
113.31
Authority to require....................................................
113.0-113.2
    Bills of lading
Conditions..............................................................
113.69
Evidence of right to make entry.........................................
141.15
Cancellation of.........................................................
10.39, Part 113, subpart F
Cancellation or crediting--Vessel supplies..............................
10.64
Carnets, serves as......................................................
113.4, 114.3
Carpet wool and camel's hair............................................
113.68
Carrier's certificate and duplicate bill of lading--Bonds not to be 
taken...................................................................
141.15
Carrier's (International)...............................................
113.64
Cartmen's or lightermen's, form.........................................
112.2, 113.63
Cartmen's or lightermen's liability.....................................
125.35, 125.41
Cash deposit in lieu of surety on bond..................................
113.40
Centralized Examination Stations........................................
118.4(g)
Certificate of pure breeding, form--Cancellation........................
10.71
Charges, cancellation of erroneous......................................
113.54
Claim for seized property...............................................
162.47
Claimant of seized goods, form..........................................
113.72
Clearance of vessels, unmanifested narcotics............................
162.65(b), 162.65(e)
Commercial gaugerand commercial laboratory conditions...................
113.67, 151.12, 151.13
    Common and contract carrier
Application.............................................................
18.1, 112.12
Discontinuance..........................................................
18.1, 112.14
Form....................................................................
112.12
Liabilities.............................................................
18.8
Conditions..............................................................
Part 113, subpart G
Custodial...............................................................
113.63
Consignee's declaration.................................................
141.20
Consumption entry.......................................................
113.62
Containerized cargo, form...............................................
113.66

[[Page 689]]

Copyright, form.........................................................
113.70
Corporation, as principals..............................................
113.33
Documents, time period for production...................................
113.42
Documents, free entry, cancellation of bond (or charge against bond)....
172.22(c)
Entry, general term.....................................................
113.62
Entry requirements......................................................
142.4
Exhibition, works of art................................................
10.49
Export, cancellation of.................................................
113.55
Exportation, form.......................................................
18.25, 113.62
Extension of time, application..........................................
113.42-113.44
Fiber products..........................................................
113.68
Foods, drugs, devices, cosmetics, insecticides, pesticides, etc.........
12.3, 141.113
Foreign merchandise destined foreign on board arriving vessels, form....
4.88
Foreign trade zone operator conditions..................................
113.73
Forms, approved, when inapplicable--Procedure...........................
113.14
Forwarder, freight......................................................
18.1
Fur products............................................................
113.68
General instructions....................................................
Part 113, subpart C
General term bond for entry of merchandise..............................
113.62
Government importations.................................................
10.104, 141.102(d), 143.3(a)
Importation and entry...................................................
113.62
Incorporating by reference, bond conditions to particular Customs 
activity................................................................
113.61
Information required on bond............................................
113.21
Installment shipments, invoices covering................................
141.82
Instruments of international traffic....................................
113.66
International carrier conditions........................................
113.64
    Invoices
Cancellation of, by 1 photocopy.........................................
141.84(e)
Photocopy to satisfy bond entry without required invoice................
141.84(e), 141.91(d)
Production of...........................................................
141.91(d)
Laboratory, commercial..................................................
113.67, 151.12
Landing certificate, alcoholic liquors..................................
4.13
Landing from vessels in distress--Customs custody.......................
4.32
Liability of surety on terminated.......................................
113.3
Liens in dispute........................................................
141.112(g)
Manifest................................................................
113.64
Manufacturing warehouse.................................................
19.3, 113.63
Meat and meat-food products, importation of.............................
12.8
    Missing documents
Bond required for.......................................................
141.66
Charge for production...................................................
113.45
Entry made prior to production of documents, form.......................
113.41
Failure to produce--Liquidated damages..................................
113.45, 172.22
Narcotic drug penalty, for vessel clearance.............................
162.65
Neutrality observance--Clearance of vessels, form.......................
4.73, 113.71
Outward manifest........................................................
4.75, 122.74
Overtime................................................................
4.10, 24.16, 113.62-113.64
Aircraft, unlading or lading of.........................................
122.38
Vessels, boarding, entry or clearance of, lading, etc...................
4.10, 4.30

[[Page 690]]

Overtime service, vessels less than 5 net tons..........................
123.8
Partnership, execution by...............................................
113.32
Plants and plant products...............................................
12.12
Power of attorney, surety...............................................
113.35, 113.37
Preparation and execution of............................................
Part 113, subparts C and D
Principals and sureties.................................................
Part 113, subpart D
Proprietor's warehouse, form............................................
19.2
Prosecution for failure to satisfy......................................
113.52
Recall of merchandise...................................................
113.62, 141.113
Release of seized property..............................................
113.72, 162.47, 162.49
    Removal from Customs custody
Examination of merchandise at importer's premises.......................
151.7(d)
Failure to--Liquidated damages..........................................
10.39(d), 141.113, 151.11
Repayment of erroneous drawback payment.................................
113.65
Requirements............................................................
Part 113, subpart C, 142.4
Retention of approved...................................................
113.15
Rewarehouse.............................................................
144.41(d)
Salt for curing fish....................................................
10.80, 10.81, 10.83
Seals...................................................................
113.25
Seized property.........................................................
113.72, 162.47
Simultaneous vessel transactions........................................
4.90
Summary forfeiture......................................................
162.47
Supplies for vessels....................................................
10.59, 10.60
    Sureties
Assent for extension of period..........................................
113.44
Cash deposit accepted in lieu of, application of, or default............
113.40
Corporation.............................................................
113.37
Delinquent..............................................................
113.38
Individual..............................................................
113.35
Liability...............................................................
113.3
Married women...........................................................
113.35(b)(2)
Partners................................................................
113.36
Principals cannot act as................................................
113.31
U.S. bonds and notes in lieu of.........................................
113.40
U.S. obligations accepted in lieu of....................................
113.40
Tea importations........................................................
12.33
Temporary importations..................................................
10.31, 10.37, 10.39, 10.104, 113.62
Uncommon transaction....................................................
113.14
Unfair practices in import trade........................................
12.39, 113.62
Vehicle, form...........................................................
113.62-113.64
Vessel, form............................................................
113.62-113.64
Vessels owned by the U.S., to unlade or lade, not required..............
4.30(j)
    Warehouse entry
Form....................................................................
113.63, 144.13, 144.14
Liability under.........................................................
144.2
Warehouse proprietor's..................................................
19.2, 113.63
Withdrawals from warehouse, conditionally free..........................
113.63
Wool, carpet, and camel's hair, form....................................
113.68

[[Page 691]]

BOOKS (See also, PROHIBITED OR RESTRICTED IMPORTATIONS)
And other articles--Institutions, Conditionally free....................
145.36
Engravings, etc.--U.S. Conditionally Free...............................
10.46, 145.37
In packages for Library of Congress, Conditionally free.................
10.46, 145.37

BOUNDARY LINE OF U.S., MERCHANDISE FOUND IN BUILDINGS ON OR NEAR........

123.81

BOUNTIES--Countervailing duties.........................................

159.47

BRASSIERES , ADDITIONAL REQUIREMENTS FOR PREFERENTIAL TREATMENT OF......

10.228

BREEDING ANIMALS........................................................

10.70, 10.71

BRIX VALUES--Fruit juices...............................................

151.91
BUILDINGS, SEARCH OF
On international boundary line..........................................
123.81
Warrants--Restrictions..................................................
162.11-162.13,162.15

BULK CARGO--Correction of manifest......................................

4.12

BULLETIN NOTICE OF LIQUIDATION..........................................

159.9, 159.10

BUNKER FUEL, STORES, AND EQUIPMENT--Transfer............................

4.39

BUSINESS INFORMATION, Confidentiality...................................

103.31; 177.2; Part 181, subpart K
BUSSES
Brought in for temporary use under international traffic................
10.41(a)
Domestic, repaired abroad...............................................
123.17
Foreign-owned--Brought in for hire......................................
10.41(d)
Taken abroad for temporary use..........................................
123.16

                                      C

CABOTAGE--Air, penalties................................................

122.165

CANADA..................................................................

Parts 123 and 181
    Articles
Repaired or altered.....................................................
181.64
Customs (U.S.) preclearance offices.....................................
101.5
In-transit truck shipments..............................................
123.51, 123.52
Softwood lumber entries.................................................
12.140

CANADA, U.S.-FREE TRADE AGREEMENT.......................................

10.84, Part 10, subpart G

CANADIAN ARTICLE--Automotive products...................................

10.84

CANADIAN CRUDE PETROLEUM................................................

10.179
CANCELLATION
Bonds...................................................................
10.39, Part 113, subpart F
Carnets.................................................................
114.26
Liability of cartage....................................................
125.42
Liquidated damages......................................................
125.42, 172.11, Part 172, subpart C
Penalty and forfeiture claims...........................................
133.51, 171.11
CARGO
    Bonded
Carried coastwise, report of vessel.....................................
4.2, 4.81
Seal requirements.......................................................
18.4
    Bulk
Discharge of, outside port of entry.....................................
4.35
For orders, amendment of manifest.......................................
4.36
Coastwise--Vessels touching at foreign port.............................
4.82
Container certification.................................................
115.41
Declaration.............................................................
4.7a
Discharge, time limit and compensation of discharging officer...........
4.36, 24.17, 122.36

[[Page 692]]

Entry of, from wrecked vessels..........................................
4.41
Foreign--Destined to foreign countries via U.S. port--Bond for foreign 
landing certificate.....................................................
4.88
Inaccessible............................................................
4.34
Inward, accounting for..................................................
4.61, 4.62
    Landing from vessels in distress
Customs custody.........................................................
4.32
Narcotic drugs or marihuana contained in................................
Part 162, subpart F
Outbound, advance reporting requirements................................
192.14
Overage of manifested quantity..........................................
4.12, 122.49
Overcarried.............................................................
4.34
Permit or special license for unlading or lading........................
4.30, 122.38
Prematurely discharged..................................................
4.34
Recovered from sunk or wrecked vessel or as derelict....................
4.41
Release, permits........................................................
4.38
Residue.................................................................
4.85, 4.86, 4.88, 4.90, 122.81-122.84, 122.86-122.87
Short of manifested quantity............................................
4.12
    Transit Air (See Aircraft)
    Transshipment
Casualty................................................................
4.31(a)
Procedure...............................................................
4.91
Undelivered, return from foreign destination of.........................
4.34
Unentered, when to be sent to general order warehouse...................
4.37
Unique bill of lading number............................................
4.7a
Unladen or transshipped on account of unavoidable cause.................
4.31
    Vessel
In trade with noncontiguous territory...................................
4.84
Proceeding foreign via domestic ports...................................
4.87
Trading between U.S. ports on Great Lakes and other U.S. ports..........
4.83
Wrecked or dismantled, disposition of...................................
4.40, 4.41

CARGO CONTAINER CERTIFICATION...........................................

Part 115

CARIBBEAN BASIN INITIATIVE..............................................

Part 10, subpart B
certain leather-related articles........................................
10.198a
Non-textile articles....................................................
10.231-10.237
Puerto Rico.............................................................
10.198b
Textile articles........................................................
10.221-10.227
CARNETS
Acceptance..............................................................
114.21
For various samples.....................................................
114.32
Additional items prohibited.............................................
114.24
Approval of issuing and guaranteeing associations.......................
Part 114, subpart B
Bond....................................................................
114.3
Customs Conventions and Agreements......................................
114.2
Definitions.............................................................
114.1
Destruction, loss, or theft of carnet document..........................
114.25
Discharge of............................................................
114.26
Entry document..........................................................
114.3
Fraud, violation, or abuse of privileges................................
114.33
Liquidated damages......................................................
114.33, 114.34
Merchandise covered by..................................................
114.22
Period of validity......................................................
114.23
Processing..............................................................
Part 114, subpart C

[[Page 693]]

Provisions, scope.......................................................
Part 114
Restrictions--Mail importations, temporary importations and 
transportation in bond..................................................
114.31
Samples for taking orders...............................................
114.32
Use and area of validity................................................
114.3

CARPET WOOL AND CAMEL'S HAIR--BOND......................................

113.68

CARRIAGE OF U.S. SECURITIES, ETC........................................

4.61
CARRIERS
Approval of applications................................................
112.13
Authorization to carry bonded material..................................
Part 112, subpart B
Bond or license required................................................
112.2
    Certificate
Bond for, not to be taken...............................................
141.15
Disposition of..........................................................
141.16
Entry on................................................................
141.11
Release of merchandise..................................................
141.111
Types of................................................................
112.11
CARTAGE
Appraisement entries--Additional expense payable by importer............
Part 143, subpart B
Discrepancies...........................................................
125.34
Expenses................................................................
127.32
Government--Contract requirements.......................................
125.1, 125.3, 125.11
    Importers
Failure to designate cartmen............................................
125.23
Procedure to designate cartmen..........................................
125.1(b), 125.22
Marking of vehicles, lighters, etc......................................
112.27
Marking, removal of.....................................................
112.27(d)
Supervision of..........................................................
125.2, 125.24

CARTAGE AND LIGHTERAGE..................................................

112.1, 112.2, Part 125
Examination.............................................................
125.11, 125.12
Not for examination.....................................................
125.21

CARTAGE CONTRACT BOND--Form.............................................

113.63

CARTAGE TICKETS--Form, disposition......................................

125.31-125.34
CARTMEN
Accidents to be reported to port director...............................
125.35
Bonding and licensing of................................................
112.2, 112.21-112.26, 112.28, 112.30
Designation of, by importer on entry and permit.........................
125.22
Designation of, on warehouse entry......................................
144.11(b)
Government contracts....................................................
125.1, 125.3, 125.11
Identification cards for employees......................................
Part 112, subpart D
Liability for loss or damage to merchandise.............................
125.41
License or identification card, production of...........................
112.28
Receipt for merchandise delivered to, form..............................
125.31-125.33
Suspension or revocation of licenses of.................................
112.30
Undeliverable merchandise...............................................
125.36
CASH DEPOSIT IN LIEU OF SURETY
Cash deposits or obligations on bonds...................................
113.40
    Temporary importation bonds
Amount..................................................................
10.31(f)
Refund..................................................................
10.40

CASUALTY, LOSS, AND THEFT OF MERCHANDISE................................

Part 158, subpart C

[[Page 694]]

CASUALTY--Vessel--Unlading or transshipment at other than port of entry.

4.31

CATALOGS OF SALES OF MERCHANDISE........................................

127.26
CATTLE
Dying while under bond, duty allowance..................................
18.6
Immediate transportation restrictions...................................
18.11
Importation restrictions................................................
12.24
Straying or driven across boundary......................................
10.74

CAUSTIC SUBSTANCES--Importation procedure...............................

12.1, 12.3-12.5

CEMENT PRODUCTS.........................................................

12.155, Appendix to Part 163--Interim (a)(1)(A) List

CENTRALIZED EXAMINATION STATIONS (CES)..................................

Part 118, 151.15
Appeal to the Asst. Commissioner........................................
118.23
Application contents....................................................
118.11
Customs review of application...........................................
118.12
Fee schedule............................................................
118.5
Notice..................................................................
118.13, 118.22
Responsibility..........................................................
118.4
Suspension..............................................................
118.21
Written agreement.......................................................
118.3
CERTIFICATE
Alcohol, tobacco and firearms...........................................
191.104
Arrival.................................................................
146.38
Delivery--Drawback......................................................
191.10, 191.24, 191.34
Export; beef............................................................
132.15
Lamb meat...............................................................
132.16
Sugar-containing products...............................................
132.17
For liquor shipments on small vessels, penalty..........................
4.13
Landing.................................................................
191.76
Manufacture.............................................................
191.24
    Merchandise from
Insular possessions.....................................................
7.3
NAFTA Countries.........................................................
181.11
Of exportation--American goods returned, waiver of......................
10.1
Of lading for exportation (aircraft)....................................
122.94
    Of origin
AGOA....................................................................
10.214
CBTPA...................................................................
10.224, 10.234
Foreign--Merchandise not produced by convict, forced, or indentured 
labor...................................................................
12.43
Unaccompanied shipments from insular possessions........................
Part 148, subpart K
Of pedigree--Animals for pure breeding, bond............................
10.70, 10.71
    Of registration
Automobiles, etc., taken abroad temporarily.............................
148.32
Commercial traveler's samples taken abroad..............................
10.68, 10.69
Exports for repairs or alterations--Form--Waiver of.....................
10.8
Moving-picture films and Theatrical effects taken abroad................
10.68
Of tonnage tax or light money payment-form..............................
4.23
CERTIFICATION
Blanket.................................................................
10.183, 12.121
Chemical substances.....................................................
12.121
Civil aircraft parts....................................................
10.183
Containers and road vehicles............................................
Part 115

[[Page 695]]

Drawback compliance program.............................................
191.192, 191.195
Substantial containers or holders.......................................
10.7

CHANGE OF PRACTICE......................................................

177.10(c)
CHARGES
Cartage, storage, and labor; additional, borne by importer on 
appraisement entry......................................................
143.14
Dutiable and nondutiable for articles exported to the U.S. prior to July 
1, 1980, definitions....................................................
152.1
CHECKS
Acceptable in payment of duties.........................................
24.1
Mailed to other than payee, authority, form.............................
24.36

CHEESE, affidavits for entry............................................

12.6

CHEMICALS, TOXIC SUBSTANCES.............................................

12.118-12.127
CHILE FREE TRADE AGREEMENT (See, UNITED STATES-CHILE FREE TRADE 
AGREEMENT)

CIGARETTE PAPERS AND TUBES, PACKAGE AND NOTICE REQUIREMENTS.............

11.3
CIGARS, CIGARETTES, AND TOBACCO
Cuban origin............................................................
151.111
For consumption on vessel or aircraft...................................
10.65
Importation.............................................................
11.1
In passengers' baggage..................................................
148.33, 148.43, 148.51, 148.74
In mail.................................................................
145.13
Manufactured tobacco, examination, marking..............................
11.2
Release without payment of tax..........................................
11.2a

CITIZEN OF U.S.--Presumed to be a resident..............................

148.2

CITIZENS DYING ABROAD, EFFECTS OF.......................................

143.21, 148.54

CIVIL AIRCRAFT..........................................................

10.183

CIVIL ASSET FORFEITURE REFORM ACT.......................................

Part 162, subpart H
CLAIMS
AGOA....................................................................
10.215, 10.217
CBTPA...................................................................
10.225, 10.227, 10.235, 10.237
Compensation to informants..............................................
Part 161, subpart B
Compromise of...........................................................
161.5
Damage to or loss of privately-owned property caused by customs 
employees...............................................................
24.71
Death benefits..........................................................
24.32(b)
Deceased importers, payment due.........................................
24.70(a)
Deceased or incompetent public creditors or contractors, payment due....
24.70(c)
In favor of U.S., payment by set-off....................................
24.72
Miscellaneous...........................................................
24.73
Personal injury.........................................................
24.71
Seized property.........................................................
162.47
Surplus proceeds of sale of unclaimed merchandise.......................
127.36
Unpaid salary and other moneys due deceased employees...................
24.32(a)
CLASSIFICATION (See also, APPRAISEMENT and ADMINISTRATIVE RULINGS)
Applicable rates of duty................................................
152.11, 152.12
    Change in rate of duty by
Headquarters decisions
Current (ongoing) transactions..........................................
177.10
Petitions, Domestic interested party(ies), etc..........................
175.22

[[Page 696]]

Prospective transactions................................................
177.10
Protests................................................................
174.27, 174.29, 174.32
Judicial decisions......................................................
152.16
Law.....................................................................
152.17
Notice of port director to increase duties..............................
152.2
Presidential proclamation...............................................
152.17
Commingling of merchandise..............................................
152.13
Merchandise from
Designated beneficiary developing countries (GSP).......................
10.171-10.178
Guantanamo Bay Naval Station............................................
7.11
Insular possessions.....................................................
7.3
Reimported merchandise..................................................
10.1, 10.11, 141.2
Rewarehouse entries.....................................................
144.41

CLEAN AIR ACT...........................................................

12.73, 12.74
CLEARANCE OF AIRCRAFT
Documents for...........................................................
Part 122.71, subpart H
General requirements....................................................
Part 122, subpart G
Preclearance of passengers..............................................
24.18
Scheduled airlines......................................................
122.63
Serially numbered holders...............................................
10.41b
CLEARANCE OF VESSELS
At other than port of entry, expenses...................................
24.17, 101.4
Canal Zone, to..........................................................
4.60
    Coastwise
Requirements............................................................
4.81, 4.83, 4.84
To or from Great Lakes ports
Via Hudson River........................................................
4.83
Via St. Lawrence River..................................................
4.83
Coastwise and foreign trade combined....................................
4.89
Common carrier may be refused...........................................
162.22(c)
Crew list...............................................................
4.61, 4.68
Documentation required..................................................
4.61
Foreign and coastwise trade combined....................................
4.89
Foreign vessels proceeding coastwise, when permitted....................
4.80, 4.81
Livestock, carrying--Exportation of animals--Inspection.................
4.61, 4.71
Manifests, outward foreign, and bond for................................
4.63, 4.75
Maritime administration--Exemption from liabilities.....................
162.22(e)
Meat Inspection certificate requirements................................
4.61, 4.72
Nationality and tonnage, verification of................................
4.61, 4.65
Neutrality observance--Bond.............................................
4.61, 4.73
Not required, when......................................................
4.60
Pratique................................................................
4.70
Proceeding foreign via domestic ports...................................
4.87
Records.................................................................
4.95
Requirements............................................................
4.60, 4.61
Seamen's Act............................................................
4.61, 4.69
Shipping articles.......................................................
4.61, 4.69
    Withheld until
Compliance with State inspection laws...................................
4.61
Federal and State fees are paid.........................................
4.61

[[Page 697]]

Narcotic drug penalty paid..............................................
162.65(e)
Reimbursable expenses paid..............................................
4.36

CLEARANCE OF VESSELS TO CLOSED PORTS OR PLACES..........................

4.61, 4.67

CLEARANCE OR PERMISSION TO DEPART DENIED................................

122.66

CLERICAL ERROR (See also, ADMINISTRATIVE REVIEW)........................

4.12(a)(5), 162.73, 173.4, 173.4a

CLOSED PORTS OR PLACES..................................................

4.61, 4.67
CLOTH
Boards..................................................................
10.5
Bolting for milling purposes............................................
10.58
COASTWISE MOVEMENTS
Entry and clearance of vessels..........................................
4.81-4.89
Foreign vessels, restrictions...........................................
4.80, 4.81
COASTWISE TRADE
Break in continuity.....................................................
4.80b
Empty vans, tanks, and barges, etc......................................
4.93
Foreign vessels, restrictions...........................................
4.80, 4.80a
Intent..................................................................
4.80
Limited to American vessels.............................................
4.80
New and different product...............................................
4.80b
Privileges reciprocal, nations granting.................................
4.93(b)(1) and (b)(2)
Vessels entitled to engage in...........................................
4.80
Vessels touching at foreign port, while in..............................
4.82, 4.90

COFFEE--Puerto Rico, shipped to, from U.S...............................

7.1(c)
COINS
Counterfeit--Prohibited importation.....................................
12.48
Illustrations of, when permitted entry..................................
12.48
COLLECTIONS
Accounts due, receipt for payment of....................................
24.3
Customs, persons authorized to receive..................................
24.2

COMMERCIAL GAUGERS......................................................

151.13

COMMERCIAL LABORATORIES.................................................

151.12

COMMERCIAL INVOICE......................................................

141.83(c), 142.3(c)
Requirements............................................................
142.6
When not required.......................................................
141.83(d)
COMMERCIAL TRAVELERS' SAMPLES
Accompanied through Canada and return...................................
123.52
Accompanied through U.S. and return to Canada...........................
123.51
Exported and returned...................................................
10.68, 10.69
Temporary importation bond..............................................
10.31, 10.36
COMMINGLING OF GOODS
Assessment at higher rate...............................................
152.13
When imported by U.S. Government and covering American goods returned 
and other duty-free items...............................................
10.103(b)

COMMISSION-DEFINED, TRADE AGREEMENTS ACT OF 1979........................

152.102(b)
COMMON CARRIER
Bonded..................................................................
18.1
Bonds, discontinued use of..............................................
112.14
Clearance may be refused................................................
162.22(c)
Receipt for merchandise transported in bond.............................
18.2
Sealing of conveyances, etc.............................................
18.4
Transshipment of merchandise............................................
18.3
Warning cards to be attached to doors of car, etc.--Form................
18.4

[[Page 698]]

COMPENSATION (See also, WAGES)
Overtime................................................................
24.16
Reimbursable............................................................
4.35, 24.17, 101.4, 134.55, 141.86(f), 151.5, 151.7(c)
    Reimbursable and not reimbursable
Full charge made if services are not clearly segregated.................
24.17

COMPROMISE OF CLAIMS....................................................

161.5

COMPUTED VALUE..........................................................

152.106

CONCENTRATED FRUIT JUICES--Brix values..................................

151.91

CONDEMNED MERCHANDISE--Allowance in duty................................

158.14

CONDITIONAL SALE, PROPERTY SOLD ON--Seized from purchaser--Petition for 
restoration.............................................................

171.41-171.43

CONFIDENTIAL COMMERCIAL INFORMATION; EXEMPT.............................

103.35

CONFIDENTIALITY OF BUSINESS INFORMATION.................................

103.12(d), 103.31, 177.2, 181.121, 181.122
CONSIGNEE
Liability for additional or increased duties............................
141.20
Nonresident, entry of merchandise by....................................
141.17
Notice of sale of unclaimed goods to be sent to.........................
127.24
Refusal of merchandise by, to be treated as unclaimed...................
141.1(f)

CONSOLIDATED SHIPMENTS, ENTRY OF........................................

141.52, 141.54

CONSOLIDATION OF SHIPMENTS, IMMEDIATE TRANSPORTATION ENTRY, ON..........

18.11
CONSULAR OFFICERS
Baggage.................................................................
148.82, 148.83
Free entry privilege....................................................
148.82, 148.85

CONTAINER--Cargo, certification.........................................

Part 115
CONTAINER STATIONS
Application for transfer of merchandise.................................
19.42
Carrier responsibility..................................................
19.44
Employee lists..........................................................
19.46
Entry of containerized merchandise......................................
19.49
Establishment, relocation or alteration of containerized stations.......
19.40
Filing of application...................................................
19.43
Movement of containerized cargo to a container station..................
19.41
Security................................................................
19.47
Suspension or revocation of the privilege of operating a container 
station; hearings.......................................................
19.48
Transfer of merchandise, approval and method............................
19.45
CONTAINERS
Clearance of serially numbered..........................................
10.41b
    For compressed gases, and other merchandise
Temporary importation bond..............................................
10.31
Instruments of international traffic....................................
10.41(a)
Substantial.............................................................
10.3, 10.7
CONTAINERS OR COVERINGS
American manufacture, returned as.......................................
10.3
In manufacturing warehouse, disposition of..............................
19.15
CONTIGUOUS COUNTRY
Importations from.......................................................
123.1, 123.3, 123.7, 123.51, 123.52, 148.35(a)
In transit through, between U.S. ports..................................
18.14, Part 123, subpart C, 123.51, 123.65

[[Page 699]]

In transit through U.S..................................................
123.31, 123.32, 123.34, 123.42, 123.52, 123.64
Report of arrival from..................................................
123.1, 123.2, 123.5, 123.6
Vehicles and vessels arriving from......................................
123.1-123.5
CONTINUED DUMPING AND SUBSIDY OFFSET
Certifications..........................................................
159.63
Distribution of offset..................................................
159.64
General.................................................................
159.61
Notice of distribution..................................................
159.62

CONTRACTORS--Deceased or incompetent, claims for payment due............

24.70

CONTRACTS--Cartage and lighterage.......................................

125.11

CONTRARY TO LAW--Importing merchandise..................................

12.97, 145.4, 162.22

CONTROLLED SUBSTANCES...................................................

162.45, 162.45a

CONTROLLED EXPORTS--Imports, seizure....................................

161.2
CONVERSION OF CURRENCY
Date of exportation, definition.........................................
152.1(c), 159.32
Rates of exchange.......................................................
Part 159, subpart C

CONVEYANCES--Seizure of, when used in or employed to aid in unlawful 
importation of merchandise..............................................

162.22

CONVICT, FORCED, OR INDENTURED LABOR--Merchandise produced by, 
importation prohibited..................................................

12.42-12.45

COPIES OF RECORDS--When importers may make..............................

103.4

COPPER-BEARING FLUXING MATERIAL--Entry requirements.....................

10.98

COPPER-METAL-BEARING MATERIALS, SMELTING AND REFINING--Allowance for 
loss....................................................................

19.18, 151.55

COPYRIGHT--Mail importations marked.....................................

145.37

COPYRIGHTED ARTICLES....................................................

Part 133, subparts D and E

CORN OR MAIZE SEED--REDUCED RATE........................................

10.57
CORPORATIONS
Bonds, execution by.....................................................
113.33
Sureties on bonds.......................................................
113.37

CORROSIVE SUBSTANCES--Importation procedure.............................

12.1, 12.3-12.5
COST OF PRODUCTION
Definition and when to be shown on invoice..............................
141.88
Valuation of articles assembled abroad..................................
10.18
COTTON
Commercial travelers' samples of........................................
10.68
Examination and measurement.............................................
Part 151, subpart F

COUNTERFEIT COINS, OBLIGATIONS, AND SECURITIES--Importation prohibited..

12.48

COUNTERVAILING DUTIES--Port director, action by.........................

159.58
COUNTRY OF ORIGIN
CBI.....................................................................
10.195, 10.198
Definitions.............................................................
134.1
Evidence of for GSP purposes............................................
10.173
GSP.....................................................................
10.173, 10.176
Marking requirements....................................................
Part 134, subpart B, Part 134, subpart E
Exceptions to...........................................................
Part 134, subpart D

[[Page 700]]

COUNTRY OF ORIGIN DETERMINATIONS--Government procurement................

Part 177, subpart B

COUNTRY OF ORIGIN (NAFTA)...............................................

Part 102

COURTESY NOTICE--Liquidation............................................

159.9, 159.11, 159.12

COURT OF INTERNATIONAL TRADE (CIT)......................................

4.20(h), 19.3(g), 111.17(c), 111.75, 112.30(f), 152.16, 159.57, 174.31, 
175.31, 176, 177.2, 177.7(b), 177.11(b)(8), 177.30, 177.31, 181.33, 
181.93, 181.98, 181.102, 181.115, 181.116

COURT SUBPOENA FOR CUSTOMS DOCUMENTS....................................

176.11

CREAM AND MILK--Importation, special requirements.......................

12.7
CREW OF VESSELS
    Crew list
Deposit of, on entry of American vessel.................................
4.68
Presentation of, form...................................................
4.61, 4.68
Declarations and exemptions.............................................
Part 148, subpart G
Declaration of articles unladen by, when required.......................
148.62

CREWS, ARTICLES ACQUIRED BY, LISTED AS SEA STORES--Form.................

4.7

CREW'S EFFECTS..........................................................

148.63

CUBA--Entry and clearance of aircraft...................................

Part 122, subpart O

CUBAN CIGARS OR CIGARILLOS..............................................

151.111

CULTURAL PROPERTY.......................................................

12.104-12.104i

CURRENCY CONVERSION.....................................................

152.25, Part 159, subpart C
Date of exportation, Definition.........................................
152.1(c), 159.32
Rates of exchange.......................................................
Part 159, subpart C
CUSTOMS BROKERS
    Charges against
Statement of............................................................
111.58
Notice of...............................................................
111.62
Hearing.................................................................
111.67
Extension of time for...................................................
111.65
Failure to appear.......................................................
111.66
Service of notice and other papers for..................................
111.64
Mistakes, immaterial....................................................
111.71
New proceedings.........................................................
111.72
Preliminary proceedings.................................................
111.59
Decision on.............................................................
111.61
Proposed findings and conclusions.......................................
111.68
Recommended decision....................................................
111.69
Reopening the case......................................................
111.76
Representation..........................................................
111.5
Request for additional information......................................
111.60
Service of notice and statement of charges..............................
111.63
Settlement and compromise...............................................
111.81
Submissions, additional.................................................
111.70
Vacated or modified order, notice of....................................
111.77

[[Page 701]]

Complaints, investigation of............................................
111.55
Review..................................................................
111.56
Determination...........................................................
111.57
Definitions.............................................................
111.1
Diligence in correspondence and payment monies..........................
111.29
Duties and responsibilities.............................................
Part 111, subpart C
Fees....................................................................
111.96
    License or Permit
Appeal from the Secretary's decision revoking or suspending.............
111.75
Application for--.......................................................
111.11-111.15
Application for--Investigation and examination..........................
111.11-111.15
Cancellation of.........................................................
111.51
Employment of broker who has lost.......................................
111.79
For more than one Customs port..........................................
111.19
Issuance or denial of...................................................
111.13, 111.15-111.19
Reprimands..............................................................
111.78
Required................................................................
111.2
Revocation, cancellation or suspension of...............................
111.50-111.53, 111.81
Grounds for.............................................................
111.53
When voluntary..........................................................
111.52
Monetary penalty........................................................
111.74, 111.91-111.95
    Permit (See, License or permit)
Records.................................................................
111.21-111.27
Representation before Government agencies...............................
111.5

CUSTOMS COLLECTIONS--Persons authorized to receive......................

24.2
CUSTOMS COURT (See also, COURT OF INTERNATIONAL TRADE (CIT))
Documents and other evidence, produced for..............................
103.22, 176.11
Reliquidation under decision of.........................................
176.31
CUSTOMS CUSTODY
Continuous, merchandise exported from...................................
18.25-18.26
Demand to return to.....................................................
141.113
CUSTOMS EMPLOYEES
Death--Claim for unpaid salary and other moneys due.....................
24.32
Identification cards....................................................
101.8
Information, giving out.................................................
103.0, 103.12
Prohibitions against....................................................
4.101
CUSTOMS FEES (See, FEES)
CUSTOMS FORMS (CF)
Reproduction or substitution............................................
4.99, 122.5
Salable.................................................................
24.14

CUSTOMS INSPECTION STAMPS--Cigars, etc., imported in mails..............

11.2(b), 145.13
CUSTOMS--List of
Offices in foreign countries............................................
101.5
Ports...................................................................
101.3
Stations................................................................
101.4
CUSTOMS OFFICERS
Authority of............................................................
101.2
Baggage, not to open....................................................
123.63
Boarding or search by...................................................
162.3-162.8, 162.13
    Compensation for service
Required in the discharge of cargo after time limit.....................
4.36, 24.17
When assigned on board a vessel or vehicle
Proceeding between ports................................................
24.17

[[Page 702]]

To protect the revenue..................................................
4.36, 24.17
Identification cards....................................................
101.8
Marking, supervision of, by--Compensation...............................
134.55
Prohibitions against....................................................
4.101
Search and seizure by...................................................
162.3-162.13, 162.21, 162.22
Supervision by..........................................................
101.2(c)

CUSTOMS OFFICES (U.S.)--In foreign countries............................

101.5

CUSTOMS REVENUE FUNCTION REGULATIONS....................................

0.1
All other Customs regulations issued under the Authority of DHS.........
0.2

CUSTOMS SEAL--Impression................................................

101.7
CUSTOM SEALS
Penalty for breaking....................................................
18.4
Procuring and accounting................................................
24.13
Removal, by carrier.....................................................
18.3(d)
When required...........................................................
18.4

CUSTOMS SECURITY AREAS--Access..........................................

Part 122 subpart S

CUSTOMS STATIONS and PORTS OF ENTRY.....................................

101.3, 101.4

CUSTOMS SUPERVISION.....................................................

19.4, 19.34, 19.38, 101.2(c), 146.3
Trade fairs.............................................................
Part 147, subpart D

                                      D

DAMAGED MERCHANDISE--Duty allowance.....................................

Part 158, subparts B and C

DANGEROUS AND HIGHLY INFLAMMABLE MERCHANDISE, RESTRICTIONS ON--
Warehousing.............................................................

144.1(a)

DATE OF ENTRY--Definition...............................................

141.68

DATE OF IMPORTATION--Definition.........................................

101.1

DEATHS OF CUSTOMS EMPLOYEES--Claim for unpaid salary and other monies 
due.....................................................................

24.32

DEBTS DUE U.S.--Duties, collection......................................

141.1, 141.3

DECISIONS AFFECTING RATE OF DUTY........................................

152.16, 152.17, 174.27, 174.29, 175.22, 177.10

DECLARATION OF USE--Vessel supplies.....................................

10.64
DECLARATIONS
Agent's, on entry.......................................................
141.19(b)
American goods returned.................................................
10.103, 145.35
    Articles
Assembled abroad........................................................
10.24
Exported for processing.................................................
10.9
For repairs.............................................................
10.8
ATPA....................................................................
10.207
    Baggage
Articles not declared or false statement, penalty.......................
148.18, 148.19, 148.67
Bond for production of consignee's......................................
141.19
Books, periodicals, etc.................................................
141.19(c)
CBI.....................................................................
10.198
Consignee to make, on entry.............................................
141.19

[[Page 703]]

Crew....................................................................
148.62, 148.66
Department of Defense transports, baggage...............................
148.73
Domestic products.......................................................
10.1
GSP.....................................................................
10.173
Household effects used abroad, form, bond...............................
148.52
Imported articles exported..............................................
10.8a
Mail shipments..........................................................
145.11
Match importations......................................................
12.34
Motor vehicles and motor vehicle equipment..............................
12.80
Oral....................................................................
148.12
Owner's declaration, production of by nominal consignee.................
141.20
Requirements............................................................
148.11-148.17, 148.65, 148.66
Tools of trade, form....................................................
148.53

DEDUCTIVE VALUE.........................................................

152.105

DEEMED LIQUIDATEDS......................................................

159.11

DEFENSE PRODUCTION ACT OF 1950--Transportation orders...................

4.74

DEFICIENCIES IN CONTENTS OF PACKAGES....................................

158.5

DEFICIT IN DUTY AFTER APPLYING PROCEEDS OF SALE.........................

127.37
DEFINITIONS
ABI.....................................................................
143.32(b)
Absolute (or quantitative) quotas.......................................
132.1
Abstract................................................................
191.2(a)
Abstract (drawback).....................................................
191.2(i)
Accessories, spare parts or tools that are delivered with a good and 
form part of the good's standard accessories, spare parts or tools......
181 App
ACS.....................................................................
143.32(a)
Act.....................................................................
12.90, 12.110, 146.1(b)(1), 147.1, 191.2(b)
Activation..............................................................
146.1(b)(2)
Activities..............................................................
163.1
Actual loss of duties...................................................
162.71(a)(1)
Actual loss of revenue..................................................
162.71(b)(1)
Adjusted to an F.O.B basis..............................................
181 App
Administrative workweek.................................................
24.16(b)(2)
Administrator...........................................................
12.110
Admit...................................................................
146.1(b)(3)
Advanced in value.......................................................
102.1(a)
Advance ruling..........................................................
181.92(a)(1)
Adverse marking decision................................................
181.112(a)
Advisory ruling (government procurement)................................
177.22(b)
Agent...................................................................
122.1, 141.19(b)(1)
Agreement (NAFTA).......................................................
143.32(c)
Aircraft................................................................
122.1
Civil...................................................................
10.183(a)
Foreign.................................................................
122.165(a)
Commercial..............................................................
122.1
Private.................................................................
122.1(h), 122.23(a)
Aircraft commander......................................................
122.1
Alteration..............................................................
146.1(b)(4)
American fishery........................................................
10.78(b)
American-made...........................................................
10.12(a)
American vessel.........................................................
4.9

[[Page 704]]

Analysis record (Laboratories)..........................................
151.12
Apparel article.........................................................
10.26
AGOA....................................................................
10.212
CBTPA...................................................................
10.222
Applicable change in tariff classification..............................
181 App.
Archaeological or ethnological material of the State Party to the 1970 
UNESCO Convention.......................................................
12.104(a)
Arrival(fees for services)..............................................
24.22(a)(2)
Arrival of a vessel.....................................................
4.0
Article.................................................................
12.120(a)
Chemical substances.....................................................
12.120(a)(1)(iii)
Exported................................................................
191.172(c)
Qualified...............................................................
191.172(a)
Same kind and quality...................................................
191.172(b)
    Articles
Apparel.................................................................
10.26(c)(1)
For a fair..............................................................
147.1
Textile.................................................................
10.26(c)(1)
Textile or apparel......................................................
10.26(c)(1)
Assembly................................................................
10.12(b)
Assembled articles......................................................
10.12
 In one or more countries
 AGOA...................................................................
10.212
 CBTPA..................................................................
10.222
Assembly operations abroad..............................................
10.16(a)
Operations incidental to assembly.......................................
10.16(b)
Operations not incidental to assembly...................................
10.16(c)
Assist (valuation of merchandise).......................................
152.102(a)
Assistant Commissioner (Laboratories)...................................
151.12
Assistant Commissioner (Office of Field Operations).....................
111.1
Associated equipment (safety standards).................................
12.85
A.T.A. carnet (admission Temporaire--Temporary Admission)...............
114.1(d)
Attribution (petroleum/FTZ).............................................
146.92(a)
Audit (recordkeeping)...................................................
163.1
Authorized agent........................................................
177.1(d)(4), 181.92(a)(2)
Automotive component (NAFTA)............................................
181 App.
Automotive component (assembly).........................................
181 App.
Baggage and effects (personal or household use).........................
148.81(b), 148.84(b)
Barges, Lash-Types......................................................
4.81(g), 4.81a
Barrels.................................................................
151.41
Base pay (overtime services)............................................
24.16
    Beneficiary country
AGOA....................................................................
10.212
ATPA....................................................................
10.26(c)(2), 10.202
CBI.....................................................................
10.191(b)(1), 10.195(b)
Developing..............................................................
10.178a
Blackstrap molasses.....................................................
10.139
Boats (safety standards)................................................
12.85(a)
Bona fide gift..........................................................
10.153
Broker..................................................................
111.1, 143.32(d)
Business day............................................................
101.1
Calendar year (fees for services).......................................
24.22(a)(3)
Callback (overtime services)............................................
24.16
Canada (NAFTA)..........................................................
181.1(a)

[[Page 705]]

Canadian article........................................................
10.84
Cargo...................................................................
128.1(b)
Cargo (harbor maintenance fee)..........................................
24.24
Carrier.................................................................
112.1
Common..................................................................
18.1(a)(1), 112.1
Contract................................................................
112.1
Private.................................................................
112.1
Cartman.................................................................
112.1
Casualty................................................................
4.14(h)(2)(i)
CBERA...................................................................
10.222, 10.232
CBTPA beneficiary country...............................................
10.222, 10.232
Originating good........................................................
10.232
Centralized examination station (CES)...................................
118.1
Certificate of delivery.................................................
191.2(c)
Certificate of manufacture and delivery.................................
191.2(d)
Certification...........................................................
143.32(e)
Certified (export control)..............................................
192.1
Certified recordkeeper..................................................
163.1
Certifying Authority....................................................
115.3(a)
Change in classification (CFTA).........................................
10.303(c)
Charges (liens).........................................................
141.112
Check samples (Laboratories)............................................
151.12
Chemical substance in bulk form.........................................
12.120(b)
Citizen.................................................................
4.0
Civil aircraft..........................................................
10.183
Claimant (liens)........................................................
141.112
Clean kg................................................................
151.61(a)
Clean pound (wool and hair).............................................
151.61
Clean yield (wool and hair).............................................
151.61(b)
Clerical error or other mistake.........................................
122.162, 123.9(g)
Manifest discrepancy....................................................
4.12(a)(5)(a)
Special procedures......................................................
162.71(e)
Closely integrated administrative control...............................
128.1(f)
Closing date (trade fairs)..............................................
147.1
Coastwise port..........................................................
4.80a
    Commercial
Aircraft................................................................
122.1
Cargo (harbor maintenance fee)..........................................
24.24
Gaugers.................................................................
151.13
Importation (NAFTA).....................................................
181.1(b)
Laboratories............................................................
151.12
Vessel (harbor maintenance fee).........................................
24.24
Commercially interchangeable merchandise................................
191.2(e)
Commingled (rules of origin)............................................
102.1(b)
Commission..............................................................
152.102(b)
    Commissioner
Carnets.................................................................
114.1
Certification...........................................................
115.3(b)
Commodity Group Brochure (Laboratories).................................
151.12
Common carrier..........................................................
18.1, 112.1
Control, ownership; trademarks..........................................
133.2
Commute compensation (overtime).........................................
24.16
Complete copy (export control)..........................................
192.1
Compliance assessment (recordkeeping)...................................
163.1(e)
Conditionally admissible merchandise....................................
146.1
Conspicuous (marking)...................................................
134.1(k)
Constructive transfer (foreign trade zones).............................
146.1(b)

[[Page 706]]

Container (certification)...............................................
115.3(c)
Continuous assignment (overtime services)...............................
24.16(b)(6)
Contract carrier........................................................
112.1
Convention (cultural property)..........................................
12.104(b)
Vessel..................................................................
4.96
Copy (export control)...................................................
192.1
Costs incurred in packing (NAFTA).......................................
181 App.
    Country
GSP.....................................................................
10.171(b)
Marking.................................................................
134.1
Political entity........................................................
134.1(a)
Possessions.............................................................
152.23
    Country of origin
Government procurement..................................................
177.22(a)
Marking purposes........................................................
134.1(b)
Pre-Columbian monumental or architectural sculpture or mural............
12.105(c)
Textile and apparel products............................................
102.21(b)(1)
Courier shipment........................................................
128.1(c)
Crib....................................................................
19.37(a)
Crude petroleum.........................................................
10.179
Cuba....................................................................
122.151(b)
Cultural property.......................................................
12.104(c)
Current (ongoing) transactions..........................................
177.1(d)(3)
    Customs
Accredited Laboratories.................................................
151.12
Administration (NAFTA)..................................................
181.1
And related laws........................................................
177.1(d)(5)
And TIR/Container Plan..................................................
115.3(g)
Approved gaugers........................................................
151.13
Broker..................................................................
111.1
Business................................................................
111.1
Documents...............................................................
103.21(c)
Duty (NAFTA)............................................................
181.1(d)
Employee................................................................
103.21(b)
Officer (overtime services).............................................
24.16
Security area...........................................................
122.181
Station.................................................................
101.1
Supervision.............................................................
101.2(c)
Territory (foreign trade zones).........................................
146.1(b)
Territory of the U.S....................................................
101.1, 134.1(f), 145 (Appendix)
Value (NAFTA)...........................................................
181 App.
    Cut in one or more
AGOA....................................................................
10.212
CBTPA...................................................................
10.222
Dangerous caustic or corrosive substances...............................
12.1
Data....................................................................
143.32(f)
Data, technical (recordkeeping).........................................
163.1
    Date
Closing.................................................................
147.1(e)
Entry...................................................................
101.1, 141.68
Exportation.............................................................
101.1, 152.1
Importation.............................................................
101.1(h)
Landing.................................................................
158.14
Liquidation.............................................................
159.9, 159.10, 174.12
Days (NAFTA)............................................................
181 App.

[[Page 707]]

Deactivation (foreign trade zones)......................................
146.1(b)(7)
Default.................................................................
146.1(b)(8)
Degree/sugar degree.....................................................
151.21(a)
Departure of a vessel...................................................
4.0(g)
Designated archaeological or ethnological material......................
12.104(d)
Designated merchandise (drawback).......................................
191.2(f)
Destruction.............................................................
191.2(g)
Determination of origin.................................................
181.1(e)
Development assistance (harbor maintenance fee).........................
24.24
Direct cost of processing operations (GSP)..............................
10.178(a)
Direct cost of processing or assembly (CFTA)............................
10.305
Direct costs of processing (ATP)........................................
10.206
Direct costs of processing (CBI)........................................
10.197
Direct identification drawback..........................................
191.2(h)
Direct labor costs (NAFTA)..............................................
181 App.
Direct material costs (NAFTA)...........................................
181 App.
Direct overhead (NAFTA).................................................
181 App.
Direct physical identification..........................................
102.1(c)
Direct shipment (insular possessions)...................................
7.3(e)
Direct shipment (CFTA)..................................................
10.306
Distant foreign port....................................................
4.80(a)
District................................................................
111.1, 112.1
Documentation...........................................................
143.32
Documented (Vessel).....................................................
4.0(c)
Domestic interested party(ies)..........................................
175.3
Domestic (international traffic)........................................
123.12
Domestic (locomotives and equipment)....................................
123.12
Domestic material (rules of origin).....................................
102.1
Domestic merchandise (foreign trade zones)..............................
146.1(b)
Domestic value (seized property)........................................
162.43
Drawback (drawback).....................................................
191.2(i)
Drawback claim (drawback)...............................................
191.2(j)
Drawback entry (drawback)...............................................
191.2(k)
Drawback product (drawback).............................................
191.2(r)
Duties..................................................................
101.1(i)
EDIFACT.................................................................
143.32(h)
Electronic entry........................................................
143.32(j)
Electronic entry summary................................................
143.32(k)
Electronic immediate delivery...........................................
143.32(i)
Eligible (ATP)..........................................................
10.202
Eligible articles (CBI).................................................
10.191
Embark..................................................................
4.80a(a)(4)
Employee................................................................
111.1
Entered (ATP)...........................................................
10.202(c)
Entered (CBI)...........................................................
10.191(b)(4)
Entered for consumption.................................................
141.0a(f)
Entered for warehouse...................................................
141.0a(g)
Enterprise (NAFTA)......................................................
181 App.
Entry for temporary inspection bond.....................................
141.0a(h)
Entry...................................................................
141.0a(a)
Entry or withdrawal for consumption.....................................
101.1
Entry records/(a)(1)(A) list (recordkeeping)............................
163.1(f)
Entry summary...........................................................
141.0a(b)
Estimated duties........................................................
10.39
Excluded costs (NAFTA)..................................................
181 App.
Executive Director (Labs)...............................................
151.12(a)
Exemption (assembled articles)..........................................
10.12

[[Page 708]]

Export..................................................................
192.1
Exportation.............................................................
101.1
Exportation, country of.................................................
152.23
Exportation (drawback)..................................................
191.2(m)(1)
Exported article (petroleum derivatives)................................
191.172(c)
Exporter (drawback).....................................................
191.2(m)(2)
Exporter (NAFTA)........................................................
181.1(f), 181.112(b)
Express consignment operator or carrier.................................
128.1(a)
Fabric..................................................................
10.25
Fabric (CBI)............................................................
10.195
Fabric-making process...................................................
102.21
Fabricated component (assembled abroad with U.S. components)............
10.12(d)
Fabricated component (assembled abroad with U.S. components)............
10.14
Fabricated component (assembled abroad with U.S. components)............
10.15
Fair (trade fairs)......................................................
147.1
Fair operator (trade fairs).............................................
147.1
Fair retail value (classification and appraisement).....................
152.1(d)
Feedstock factor (petroleum/FTZ)........................................
146.92(c)
Feedstocks (petroleum/FTZ)..............................................
146.92(b)
Ferry (fees for services)...............................................
24.22(a)(4)
Ferry (harbor maintenance fee)..........................................
24.24(b)(4)
Filer...................................................................
143.32
Filing..................................................................
141.0a(d)
Filing (drawback).......................................................
191.2
Final determination (gov't procurement).................................
177.22
Final product (petroleum/FTZ)...........................................
146.92
    Findings and trimmings
AGOA....................................................................
10.213
CBTPA...................................................................
10.223
Fiscal year pay cap (overtime services).................................
24.16(b)(8)
Fishing.................................................................
4.96
    Foreign
AGOA....................................................................
10.212
CBTPA...................................................................
10.222
Foreign (international traffic).........................................
123.12
Foreign (locomotives and other equipment)...............................
123.12
Foreign account and ownership...........................................
191.133
Foreign area............................................................
122.141
Foreign civil aircraft..................................................
122.165
Foreign material (rules of origin)......................................
102.1
Foreign materials (insular possessions).................................
7.3
Foreign merchandise (foreign trade zones)...............................
146.1(b)
Foreign origin (marking)................................................
134.1(c)
Foreign port or place...................................................
4.2
Formal entry (vessels)..................................................
4.9
Formed uppers...........................................................
102.20
Fraud...................................................................
181.82
Freight (liens).........................................................
141.112
Freight forwarder.......................................................
111.1, 112.1
Fungible goods (NAFTA)..................................................
181 App.
Fungible goods/materials (rules of origin)..............................
102.1
Fungible materials (NAFTA)..............................................
181 App.
Fungible merchandise (foreign trade zones)..............................
146.1(b)
Fungible merchandise/articles (drawback)................................
191.2(o)

[[Page 709]]

Fur product.............................................................
11.12a
Further review (protests)...............................................
174.1
Gaugers, Customs-approved (testing of merchandise)......................
151.13(a)
General average (liens).................................................
141.112
General manufacturing drawback..........................................
191.2
General sample (wool and hair)..........................................
151.61(e)
Generally accepted accounting principles................................
152.102(c), 181.1
Good of a NAFTA country (country of origin marking).....................
134.1(g)
Good wholly obtained/produced (rules of origin).........................
102.1(g)
Government cartage......................................................
125.1(a)
Guaranteeing association (carnets)......................................
114.1(c)
Harmonized System (NAFTA)...............................................
181 App.
Harmonized System (rules of origin).....................................
102.1
Headquarters office.....................................................
177.1
Headquarters office (NAFTA).............................................
181.92
Heavy-duty vehicle (NAFTA)..............................................
181 App.
Holiday (hours of business).............................................
101.6
Holiday (overtime services).............................................
24.16(b)
Household effects.......................................................
148.52
    HTSUS
AGOA....................................................................
10.212
CBTPA...................................................................
10.222 and 10.232
NAFTA...................................................................
181.1
Hub.....................................................................
128.1
Humanitarian assistance (harbor maintenance fee)........................
24.24(b)(5)
Identical goods (NAFTA).................................................
181 App.
Identical materials (NAFTA).............................................
181 App.
Identical merchandise (valuation).......................................
152.102(d)
Imported directly.......................................................
10.175
AGOA....................................................................
10.213
CBTPA...................................................................
10.223 and 10.233
    Imported directly
ATP.....................................................................
10.204
CBI.....................................................................
10.193
GSP.....................................................................
10.175(e)(2)
Importer................................................................
101.1
Importer (NAFTA)........................................................
181.1
Importer's cartage......................................................
125.1(b)
Improved in condition (rules of origin).................................
102.1
Incorporated (NAFTA)....................................................
181 App.
Incorporated (rules of origin)..........................................
102.1
Indirect material (NAFTA)...............................................
181 App.
Indirect materials (rules of origin)....................................
102.1
Information letter......................................................
177.1(d)(2)
Information letter (NAFTA)..............................................
181.92
Inquiry (recordkeeping).................................................
163.1
Insignificant preliminary preparation...................................
12.95(b)
Instruments of int'l traffic............................................
10.41a
Interest costs (NAFTA)..................................................
181 App.
    Interlinings
AGOA....................................................................
10.213
CBTPA...................................................................
10.223
Intermediate material (NAFTA)...........................................
181.1, 181 App.
Intermittent employee (overtime services)...............................
24.16(b)(10)
Issuing association (carnets)...........................................
114.1
International airport...................................................
122.1
Knit to shape...........................................................
102.21

[[Page 710]]

AGOA....................................................................
10.212
CBTPA...................................................................
10.222
Laboratory, Customs-accredited..........................................
151.12
Landing rights airport..................................................
122.1
LASH-type barges........................................................
4.81(g)
Letter class mail.......................................................
145.1(b)
Light-duty automotive good (NAFTA)......................................
181 App.
Light-duty vehicle (NAFTA)..............................................
181 App.
Lighterman..............................................................
112.1
Limits of any Customs port..............................................
4.6(b), 101.3
Liquidation.............................................................
159.1
Listed material (NAFTA).................................................
181 App.
Location of the producer (NAFTA)........................................
181 App.
Locomotives or other railroad equipment, domestic and foreign...........
123.12(d)
Loss of duties (special procedures).....................................
162.71
Loss of revenue (special procedures)....................................
162.71
Made in one or more CBTPA...............................................
10.222
Mail article............................................................
145.1
Major conversion........................................................
191.133
Majority of hours (overtime services)...................................
24.16
Major parts.............................................................
102.21
AGOA....................................................................
10.212
CBTPA...................................................................
10.222
Manufacturing period (petroleum/FTZs)...................................
146.92(e)
Manufacture or production (drawback)....................................
191.2
Manufacturer (certification)............................................
115.3
Marking rules (NAFTA)...................................................
134.1, 181.1
Material (NAFTA)........................................................
181 App.
Material (rules of origin)..............................................
102.1
Materials (CFTA)........................................................
10.303
Materials produced in a (CBI)...........................................
10.196
Materials produced in the U.S. (ATPA)...................................
10.206(c)
Measure (NAFTA).........................................................
181.1
Meat and meat food products.............................................
12.8
Merchandise (foreign trade zones).......................................
146.1
Merchandise of the same class...........................................
152.102
Mexico (NAFTA)..........................................................
181.1
Minor processing (rules of origin)......................................
102.1
Mistake of fact (special procedures)....................................
162.71
Month (NAFTA)...........................................................
181 App.
Motor vehicle assembler (NAFTA).........................................
181 App.
Multiple products (drawback)............................................
191.2
Museum (cultural property)..............................................
12.104
NAFTA...................................................................
181.1
AGOA....................................................................
10.212
CBTPA...................................................................
10.222, 10.232
Country (NAFTA).........................................................
181.App.
Drawback................................................................
181.1
Marking and marking rules...............................................
134.1
Transaction (NAFTA).....................................................
181.92
National (NAFTA)........................................................
181 App.
National Commodity Specialist Division..................................
181.92(a)(6)
Nearby foreign port.....................................................
4.80a
Net cost method (NAFTA).................................................
181 App.
Net cost of a good (NAFTA)..............................................
181.1
New or different article (GSP)..........................................
10.176

[[Page 711]]

Night work (overtime services)..........................................
24.16
Noncommerical importation (special procedures)..........................
162.71(d)
Noncontiguous territory of the U.S......................................
4.0(d)
    Nonconvention
Cargo vessel............................................................
4.96(a)(3)
Fishing vessel..........................................................
4.96(a)(2)
Nonresidents............................................................
141.31, 148.2
Non-allowable interest costs (NAFTA)....................................
181 App.
Non-originating good (NAFTA)............................................
181 App.
Non-originating material (NAFTA)........................................
181 App.
Non-profit (harbor maintenance fee).....................................
24.24
Officer.................................................................
111.1
Operations incidental to assembly.......................................
10.16
Operator (foreign trade zones)..........................................
146.1
Origin of goods (insular possessions)...................................
7.3
Original (recordkeeping)................................................
163.1
Original equipment (NAFTA)..............................................
181 App.
Original motor-vehicle equipment........................................
10.84
    Originating
AGOA....................................................................
10.212
CFTA....................................................................
10.302
NAFTA...................................................................
181.1
Originating component (availability of information).....................
103.21(d)
Originating good (NAFTA)................................................
181 App.
Originating material (NAFTA)............................................
181 App.
Other costs (NAFTA).....................................................
181 App.
Overtime pay (overtime services)........................................
24.16
Package.................................................................
145.1(a)
Packaging materials (NAFTA).............................................
181 App.
Packing costs...........................................................
152.102(e)
Packing materials (NAFTA)...............................................
181 App.
Party-at-interest (government procurement)..............................
177.22(d)
Party/person (recordkeeping)............................................
163.1
Passenger...............................................................
4.50, 4.80a
Payable.................................................................
152.103
Payments (NAFTA)........................................................
181 App.
Period costs (NAFTA)....................................................
181 App.
Permit..................................................................
111.1
Permitted merchandise...................................................
158.1
Person..................................................................
111.1
Person (NAFTA)..........................................................
181 App., 181.1
Person of a NAFTA country (NAFTA).......................................
181 App.
Personal effects........................................................
148.74
Petroleum refinery (petroleum/FTZ)......................................
146.92
Piratical copies (trademarks)...........................................
133.42(a)
Place...................................................................
122.23
Point of direct shipment (NAFTA)........................................
181 App.
Port director (foreign trade zones).....................................
146.1
Port (harbor maintenance fee)...........................................
24.24
Port of arrival.........................................................
122.112
Port/port of entry......................................................
101.1
Port (trade fairs)......................................................
147.1
Possession (drawback)...................................................
191.2
Possessions of the U.S. (harbor maintenance fee)........................
24.24
Potential loss of duties................................................
162.71
Potential loss of revenue...............................................
162.71
Preclassification/binding ruling number.................................
143.32(m)

[[Page 712]]

Preclearance............................................................
122.1
Pre-Columbian monumental and architectural sculpture and murals.........
12.105
    Preferential tariff treatment
CBTPA...................................................................
10.232
NAFTA...................................................................
181.1
    Preferential treatment
CBTPA...................................................................
10.222
AGOA....................................................................
10.212
Premium pay differential (overtime services)............................
24.16
Presentation............................................................
141.0a(e)
Presentation (quotas)...................................................
132.1
Price of product (petroleum/FTZ)........................................
146.92
Price paid or payable...................................................
152.102(f)
Principal field officer.................................................
101.1
Private aircraft........................................................
122.1, 122.23
Private carrier.........................................................
112.1
Produced in beneficiary developing country (GSP)........................
10.177(a)
Producer (NAFTA)........................................................
181.1, 181.112, 181 App.
Producibility (petroleum/FTZ)...........................................
146.92
Product costs (NAFTA)...................................................
181 App.
Production (NAFTA)......................................................
181.1, 181 App.
Production (rules of origin)............................................
102.1
Product of the U.S. (assembly)..........................................
10.12(e)
Product (safety standards)..............................................
12.85
Prohibited merchandise (foreign trade zones)............................
146.1(b)
Prospective Customs transaction.........................................
177.1(d)(3)
Prototype (certification)...............................................
115.3
Public aircraft.........................................................
122.1
Qualified article (petroleum derivatives)...............................
191.172(a)
Quotas..................................................................
132.1
Reactivation (foreign trade zones)......................................
146.1
Recordkeeper, certified (recordkeeping).................................
163.1(d)
Recordkeeper, third-party (recordkeeping)...............................
163.1(l)
Records.................................................................
111.1
Records (drawback)......................................................
191.2
Records (recordkeeping).................................................
163.1(a)(1)
Records (special entry procedures)......................................
143.32
Region..................................................................
111.1
Regularly-scheduled administrative workweek.............................
24.16(b)(15)
Reimbursable............................................................
128.1
Related persons (cultural property).....................................
12.104c
Related persons (NAFTA).................................................
181 App.
Related persons (valuation of merchandise)..............................
152.102(g)
Relative value (drawback)...............................................
191.2
Relative value (petroleum/FTZ)..........................................
146.92
Released conditionally..................................................
141.0a
Repetitive violation (special procedures)...............................
162.71(c)
Request for record......................................................
103.5(h)
Residents (powers of attorney)..........................................
141.31
Residents (status of arriving persons)..................................
148.2
Residue cargo...........................................................
122.1
Responsible supervision and control.....................................
111.1
Reusable scrap (NAFTA)..................................................
181 App.
Right to use (NAFTA)....................................................
181 App.
Road vehicle (certification)............................................
115.3

[[Page 713]]

Royalties (NAFTA).......................................................
181 App.
Ruling..................................................................
177.1(d)(1)
Sales promotion, marketing (NAFTA)......................................
181 App.
Same class or kind......................................................
152.102(h)
Same kind and quality article (petroleum derivatives)...................
191.172(b)
Sampling unit (wool and hair)...........................................
151.61(d)
Satisfactory evidence (cultural property)...............................
12.104(c)
Schedule (drawback).....................................................
191.2
Scheduled airline.......................................................
122.1
Sealed letter class mail................................................
145.1(c)
Secretary (cultural property)...........................................
12.104
Selectivity criteria....................................................
143.32
Self-produced material (NAFTA)..........................................
181 App.
Self-propelled vehicle (export control).................................
192.1
Selling commission (valuation of merchandise)...........................
152.102
Sent....................................................................
10.152
Service port............................................................
101.1
Shipment................................................................
101.1
Shipping and packing costs (NAFTA)......................................
181 App.
Shook...................................................................
10.5
Similar goods (NAFTA)...................................................
181 App.
Similar materials (NAFTA)...............................................
181 App.
Similar merchandise (valuation of merchandise)..........................
152.102(i)
Simple assembly (rules of origin).......................................
102.1
Specific manufacturing drawback ruling..................................
191.2
Staple length (cotton)..................................................
151.81
Statement processing....................................................
143.32
State party (cultural property).........................................
12.104
Stone carving/wall art..................................................
12.105
Sub-component (NAFTA)...................................................
181 App.
Subject to a regional value-content requirement.........................
181 App.
Submission..............................................................
141.0a(c)
Substantial transformation (assembled abroad)...........................
10.14(b)
Substituted merchandise/articles (drawback).............................
191.2(x)
Subzone (foreign trade zones)...........................................
146.1
Sufficient information (valuation of merchandise).......................
152.102(j)
Summons (recordkeeping).................................................
163.1(j)
Switchblade knife.......................................................
12.95(a)
Sugar degree............................................................
151.21(a)
Tariff provision (NAFTA)................................................
181 App.
Tariff-rate quotas......................................................
132.1
TECRO/Al carnet (carnets)...............................................
114.1
Territory (NAFTA).......................................................
10.26
Textile component.......................................................
10.25
Textile component (CBI).................................................
10.195
Textile or apparel product..............................................
10.26, 102.21
Theatrical scenery, properties and apparel..............................
10.33(b)
Third-party recordkeeper (recordkeeping)................................
163.1(l)
Time of separation (petroleum/FTZ)......................................
146.92
TIR carnet (carnets)....................................................
114.1
Tonnage years...........................................................
4.20
Total cost (NAFTA)......................................................
181 App.
Total sugars (sugars, sirups and molasses)..............................
151.21(b)
Transaction value (NAFTA)...............................................
181.1
Transaction value method (NAFTA)........................................
181 App.
Transfer (foreign trade zones)..........................................
146.1
Transfer/transferred....................................................
122.112

[[Page 714]]

Transit air cargo.......................................................
122.112
Transit air cargo manifest..............................................
122.112
Treasury Dept. or any representative of the Treas. Dept.................
111.1
Treaty vessel...........................................................
4.96
Ultimate purchaser (export control).....................................
192.1
Ultimate purchaser (marking)............................................
134.1(d)
Unclaimed merchandise...................................................
127.11
Unique identifier (foreign trade zones).................................
146.1
United States (marking).................................................
134.1
United States (NAFTA)...................................................
181.1
United States/U.S. (cultural property)..................................
12.104
Unit price in greatest aggregate quantity...............................
152.102(k)
U.S.....................................................................
122.1, 122.141, 122.151
U.S. (American fisheries)...............................................
10.78(b)
Used (export control)...................................................
192.1
Used (NAFTA)............................................................
181.1, 181 App.
User fee airport........................................................
122.1
User (foreign trade zones)..............................................
146.1
U.S. mainland (harbor maintenance fee)..................................
24.24
Utilitarian use (switchblade knife).....................................
12.95
Value limitation (insular possessions)..................................
7.3
Value (NAFTA)...........................................................
181.1
Value of materials (CFTA)...............................................
10.305
Value of the goods when exported........................................
10.305(c)
Value (rules of origin).................................................
102.1
Verification (drawback).................................................
191.2
Verification of origin (NAFTA)..........................................
181 App.
Vessel..................................................................
4.0
Vessel, arrival.........................................................
4.0
Vessel, citizen.........................................................
4.0
Vessel, convention (fisheries)..........................................
4.96
Vessel, departure.......................................................
4.0
Vessel, documented......................................................
4.0
Vessel, (fees for services).............................................
24.22
Vessel, noncontiguous territory of the U.S..............................
4.0
Vessel, nonconvention cargo (fisheries).................................
4.96(a)(3)
Vessel, nonconvention fishing (fisheries)...............................
4.96(a)(2)
Vessel of the U.S.......................................................
4.0
Vessel, treaty (fisheries)..............................................
4.96(a)(4)
Voluntarily.............................................................
181.82
Weighted average (petroleum/FTZ)........................................
146.92
Wholly assembled........................................................
102.21
AGOA....................................................................
10.212
CBTPA...................................................................
10.222
    Wholly formed
AGOA....................................................................
10.212
CBTPA...................................................................
10.222
    Wholly the growth
ATP.....................................................................
10.202
GSP.....................................................................
10.176
Wholly the growth, product, or manufacture (CBI)........................
10.191(b)(3)
Wool product............................................................
11.12
Zone lot (foreign trade zones)..........................................
146.1
Zone site (foreign trade zones).........................................
146.1
Zone status (foreign trade zones).......................................
146.1

DEMAND FOR RETURN TO CUSTOMS CUSTODY--Form..............................

141.113

[[Page 715]]

DENATURING OF VEGETABLE OILS............................................

10.56

DEPARTURE BEFORE REPORT OF VESSEL OR VEHICLE--Penalty...................

4.6

DERELICTS--Vessels, report of arrival...................................

4.2(c)

DESCRIPTIVE LIST OF THEATRICAL EFFECTS, FILMS, AND TRAVELERS' SAMPLES 
TAKEN ABROAD AND RETURNED...............................................

10.68, 10.69

DESIGNATION OF EXAMINATION PACKAGES.....................................

151.1-151.11

DESIGNATION OF EXAMINATION PACKAGES, INFORMATION AS TO RESTRICTED.......

151.4, 151.5
DESTRUCTION
Abandoned merchandise subject to sale--Application--Form................
158.43, 158.44
Articles subject to internal revenue tax................................
127.28(g)
In lieu of payment of duty on merchandise in bond.......................
158.43
Merchandise--Expenses of supervision of.................................
24.17
    Rejected merchandise
Food and drug products..................................................
159.55
Plants and plant products
Refund of duty..........................................................
12.15
Viruses, serums, toxins, etc............................................
12.20-12.23
Seizure.................................................................
162.46(d), 162.50(c)

DETENTION, VESSEL OR VEHICLE............................................

162.22

DIPLOMATIC AND CONSULAR OFFICERS--Free entry privilege..................

148.82, 148.85

DISASSEMBLED ENTITIES...................................................

141.58

DISASSEMBLY.............................................................

181.132
DISCLOSURE OF INFORMATION
Judicial proceedings....................................................
Part 103, subpart B
Restricted access.......................................................
Part 103, subpart C
Under the FOIA..........................................................
Part 103, subpart A

DISCLOSURE, PRIOR, PENALTIES............................................

162.74

DISMANTLED VESSELS, TREATMENT OF CARGO AND STORES.......................

4.40, 4.41

DISPOSITION OF GOODS AFTER SUMMARY FORFEITURE...........................

162.46
DISTILLED SPIRITS, BOTTLES AND SIMILAR CONTAINERS, IMPORTED
Regulations of Internal Revenue Service applicable......................
11.7
DISTILLED SPIRITS, WINES, AND MALT LIQUORS
Marking requirements....................................................
11.6
Summary forfeiture......................................................
162.46(e)
DIVERSIONS
Bonded merchandise......................................................
18.5
Vessel, while en route..................................................
4.91
Vessel or cargo, emergency..............................................
4.33
Vessel supplies.........................................................
10.63

DOCK PASSES.............................................................

4.1

DOCUMENTED, DEFINITION..................................................

4.0(c)
DOCUMENTS
Availability of.........................................................
10.24, Part 103
Extension of time to produce............................................
113.43
    Free entry
Cancellation of bond (or charge against bond)...........................
10.64, 113.51
Late filing of..........................................................
10.112

[[Page 716]]

Missing--Bond for.......................................................
141.66
Official, charge for copies of..........................................
103.10
Reduced duty, late filing of............................................
10.112
Time for production of missing documents................................
113.42, 113.43
Waiver of requirement for--Effect on liability..........................
113.53

DOMESTIC CONTAINERS RETURNED--Procedure.................................

10.7
DOMESTIC INTERESTED PARTY(IES), APPEALS AND PROTESTS BY
    Petitions
Contents................................................................
175.12
Court decision, procedure following.....................................
175.31
Decision, procedure following...........................................
175.22-175.24
Public inspection.......................................................
175.21
Published notice of filing..............................................
175.21
When and how filed......................................................
175.11
Requests for classification, appraised value and rate of duty...........
175.1, 175.2
DOMINICAN REPUBLIC-CENTRAL AMERICA-UNITED STATES FREE TRADE AGREEMENT
Textile and apparel goods, refunds of excessive duties on...............
10.699
DRAWBACK
Abstract of manufacturer's records......................................
191.2, 191.23
Agency..................................................................
191.9
Aircraft, supplies for..................................................
191.141
Allowance...............................................................
191.4
Allowance, Meats cured with imported salt...............................
191.121
American goods returned--Dutiability....................................
10.3
Ascertainment of........................................................
191.105
Authority of the Commissioner of Customs................................
191.1
Claims filed under NAFTA................................................
191.0a
Definitions.............................................................
191.2
Designation of imported merchandise, substitution.......................
191.32
Distilled Spirits, wines or beers which are unmerchantable, etc.........
Part 191, subpart P
Destruction of merchandise..............................................
191.166
Documentation...........................................................
191.163
Exportation by mail.....................................................
191.165
Liquidation.............................................................
191.167
Procedure...............................................................
191.162
Refund of taxes.........................................................
191.161
Returned to Customs custody.............................................
191.164
Time limit for exportation or destruction...............................
191.168
Documents, powers of attorney required for signing of...................
191.6
    Documents required to complete claim
Notice of exportation--Form.............................................
191.51-191.53
Duties and fees subject or not subject to drawback......................
191.3
Duties paid to Puerto Rico, drawback on.................................
191.5, 191.151
    Entries
Liquidation of..........................................................
191.81
Suspension of liquidation until rate established........................
191.81
Exportation and destruction.............................................
Part 191, subpart G
Certification of exportation by mail....................................
191.74
Exportation by the Government...........................................
191.75
Exportation, notice of..................................................
191.35, 191.36, 191.51-191.53, 191.91

[[Page 717]]

Exportation procedures..................................................
191.72
Falsification of drawback claims........................................
191.62, 191.194
Foreign-Built Jet Aircraft Engines Processed in the United States.......
Part 191, subpart N
Guam....................................................................
191.5, 191.151
Guantanamo Bay Naval Station............................................
191.5, 191.151
Identification of imported merchandise..................................
191.22, 191.23
Identification of merchandise or articles by accounting method..........
191.14
Import entries, charges against for.....................................
191.81
Import entries, liquidation.............................................
191.81
Internal Revenue Tax on Flavoring Extracts and Medicinal or Toilet 
Preparations (Including Perfumery) Manufactured From Domestic Tax-Paid 
Alcohol.................................................................
Part 191, subpart J
Landing certificates....................................................
191.76
Liquidation and Protest of Drawback Entries.............................
Part 191, subpart H
Liquidation of duties...................................................
Part 159
Liquidation of entries, bulletin notice of..............................
159.9
Liquidation of import entries necessary prior to allowance of...........
191.81
Manufacturing...........................................................
Part 191, subpart B
Person entitled to claim drawback.......................................
191.28
Time limitations........................................................
191.27
Materials for construction and equipment of vessels and aircraft........
Part 191, subpart M
Allowance...............................................................
191.111
Procedure...............................................................
191.112
Meats cured with imported salt..........................................
191.121-191.123
Merchandise Exported From Continuous Customs Custody....................
Part 191, subpart O
Merchandise not conforming to sample or specifications or shipped 
without the consent of the consignee....................................
181.45, 181.47, 191.185
Merchandise shipped to U.S. possessions.................................
191.5, 191.151
Merchandise sold to U.S. Government.....................................
191.4
Merchandise Transferred to a Foreign Trade Zone From Customs Custody....
Part 191, subpart R
Multiple products.......................................................
191.2, 191.22, 191.23, 191.81
    Notice of exportation
Certification by port director..........................................
191.51-191.53
Form....................................................................
191.51-191.53
Numbering...............................................................
191.51-191.53
Time of filing, limitations as to.......................................
191.51-191.53
Notice of intent to export..............................................
191.35, 191.36, 191.91
Notice of lading, supplies for vessels or aircraft......................
191.72, 191.112
Powers of attorney......................................................
191.6
    Proposal
Proper applicant........................................................
191.21(a)

[[Page 718]]

Sample..................................................................
191.21(c)
Subcontractors..........................................................
191.21(a)(2)
Protests................................................................
191.7
Quantities of merchandise, ascertainment................................
191.22
Rate, application, establishment........................................
191.22
Recordkeeping...........................................................
191.15
Record of, on import entries............................................
191.71
Records, manufacturers'.................................................
191.22, 191.23
Rejected merchandise....................................................
191.142, 191.165
Renewal of rate.........................................................
191.22
Restrictions............................................................
Part 181, subpart E
Salt used for curing meats..............................................
191.121-191.123
Samoa...................................................................
191.5, 191.151
Statement of manufacturer (basis for rate)..............................
191.22
Substitution of Finished Petroleum Derivatives..........................
Part 191, subpart Q
Time limitations........................................................
191.27, 191.32(d)
Two or more products, distribution......................................
191.81
Unused merchandise......................................................
Part 191, subpart C
Destruction under Customs supervision...................................
191.37
Direct identification...................................................
191.31
Failure to file ``Notice of Intent to Export Destroy or Return 
Merchandise for Purposes of Drawback''..................................
191.36
Notice of intent to export; examination of Merchandise..................
191.35
Records.................................................................
191.38
U.S. possessions, applicability on shipments to.........................
191.5, 191.151
Verification of drawback claims.........................................
191.61
    Vessels
Documents required to complete claim....................................
191.51, 191.52
Material for original construction and equipment........................
Part 191, subpart M
Virgin Islands, shipments to............................................
191.5, 191.151
Wastes, valuable........................................................
Part 191, subpart B

DRUGS, ETC.--Importation procedure......................................

12.1, 12.3-12.5
DRUMS (substantial containers or holders)
Domestic manufacture returned...........................................
10.7(a)
Duty to be collected in lieu of drawback paid, amount of................
10.7(f)
Foreign manufacture exported and returned...............................
10.7(b)

DUMPING DUTIES..........................................................

159.41, 159.58

DUNNAGE.................................................................

4.14, 4.39

DUTIABLE CONTENTS METAL BEARING MATERIALS...............................

19.19, 151.55
DUTIES
Abandoned merchandise--Refund...........................................
Part 158, subpart D
Accrue, when............................................................
141.1
    Additional
Antiques................................................................
159.45
Articles not legally marked.............................................
134.2, 159.46
Discrimination by foreign country.......................................
159.42
Dumping.................................................................
159.41, 159.58
Foreign export duties, etc., contingent upon............................
159.44

[[Page 719]]

    Allowance
Casualty, loss, or theft while in Customs custody.......................
Part 158, subpart C
Damaged or defective merchandise........................................
Part 158, subpart B
Destroyed, abandoned, or exported merchandise...........................
Part 158, subpart D
Excessive moisture, etc.................................................
151.46, 158.13
Merchandise lost, stolen, destroyed, injured, abandoned, or shortshipped
159.8
Natural force or leakage................................................
158.7
Nonimportation..........................................................
158.11
Perishable and condemned merchandise....................................
158.11, 158.14
Shortages, lost or missing packages.....................................
158.3
Warehoused merchandise..................................................
144.3, 144.4
Bill to importer for increased or additional--Form......................
24.11
Change in rates.........................................................
152.16, 152.17, 175.22, 177.10
Chargeable..............................................................
127.33
Checks receivable in payment of.........................................
24.1
Computation of..........................................................
159.1, 159.3, 159.4, 159.6, 141.104
Consignee's liability for...............................................
141.19, 141.20
Corn or maize seed, reduced rate........................................
10.57
Countervailing..........................................................
159.47
Death of importer.......................................................
141.1
Deficit after applying proceeds of sale.................................
127.37
Difference between liquidated and estimated duties......................
159.6
Dumping.................................................................
159.58
Effective date..........................................................
141.1
Erroneous construction of law or regulation--Importer's liability.......
141.1
    Estimated
Depositing of...........................................................
Part 141, subpart G
On entries..............................................................
 Part 141, subpart G
Raw sugar...............................................................
151.22
Warehouse entries, on...................................................
144.12
Flat rate...............................................................
148.102
Government importations.................................................
10.100-10.104, 141.102(d)
Importations having a value not exceeding $200..........................
10.151
Importer's liability as a personal debt.................................
141.1
Increased (possible)....................................................
141.105, 152.2
Insolvency of importer..................................................
141.1
Insufficient proceeds of sale...........................................
127.37
Liability for...........................................................
162.80
Liability for--Warehouse merchandise....................................
144.2, 144.3
Lien on merchandise.....................................................
141.1(d)
Marking, assessment of..................................................
134.2, 159.46
Noncommercial importations of limited value.............................
Part 148, subpart J
Personal debt...........................................................
141.1(b)
Potatoes, seed--Reduced rate of duty....................................
10.57
Priority of Government claim for........................................
141.1(c)
Protest of payment......................................................
145.22, 174.11

[[Page 720]]

Rates of informal mail entry............................................
145.12
Rates of, to be noted on invoice........................................
141.90
Receipt for, baggage declarations--Forms................................
148.27
Receipts for formal or appraisement entries--Form.......................
24.3
    Refund of
Certain leather-related articles........................................
10.198a
Exportation of merchandise from Customs custody.........................
158.45
Reliquidation, refunds..................................................
24.36, 176.31
To whom payable.........................................................
24.36
Salt for curing fish--Conditionally free................................
10.80, 10.81,10.83
Seized merchandise......................................................
148.18, 148.19
Seizure or Penalty--Collection..........................................
148.19, 162.79(b)
Smuggled articles.......................................................
148.18(a)
Special, on articles imported under agreements in restraint of trade....
159.44
States not exempt from payment of.......................................
141.1(e)
Supplies for vessels exempt from........................................
10.59
Wool and hair products after determining clean content..................
151.65

DUTY-FREE ENTRY FOR CERTAIN BEVERAGES PRODUCED IN CANADA FROM CARIBBEAN 
RUM.....................................................................

10.199

DUTY-FREE STORES........................................................

19.35-19.39

DUTY-FREE TREATMENT FOR SUB-SAHARAN AFRICAN COUNTRIES...................

10.178a

DUTY-FREE TREATMENT; PUERTO RICO........................................

10.198b

DUTY-PAID GOODS IN PUBLIC STORES OR BONDED WAREHOUSE UNDELIVERED--
Disposition.............................................................

127.14

                                      E

EDUCATIONAL PURPOSES, ARTICLES FOR......................................

10.67

EFFECTS OF CITIZENS DYING ABROAD........................................

148.54
EFFECTS, PERSONAL AND HOUSEHOLD
Military, Civilian employees of U.S. and evacuees.......................
Part 148, subpart H
Noncommercial importations of limited value.............................
Part 148, subpart J
Nonresidents............................................................
Part 148, subpart E
Returning residents.....................................................
Part 148, subpart D
Repairs or alterations..................................................
148.31(b)

EGGS AND PLUMAGE OF WILD BIRDS, IMPORTATION--Restrictions...............

12.29

ELECTRONIC INFORMATION FOR AIR CARGO REQUIRED IN ADVANCE OF ARRIVAL.....

122.48a

ELECTRONIC INFORMATION FOR OUTWARD CARGO REQUIRED IN ADVANCE OF 
DEPARTURE...............................................................

192.14

ELECTRONIC MANIFEST REQUIREMENT FOR CREW MEMBERS AND NON-CREW MEMBERS 
ON-BOARD COMMERCIAL AIRCRAFT ARRIVING IN, CONTINUING WITHIN, AND 
OVERFLYING THE UNITED STATES............................................

122.49b

ELECTRONIC MANIFEST REQUIREMENT FOR CREW MEMBERS AND NON-CREW MEMBERS 
ONBOARD COMMERCIAL AIRCRAFT DEPARTING FROM THE UNITED STATES............

122.75b

ELECTRONIC MANIFEST REQUIREMENT FOR PASSENGERS ONBOARD COMMERCIAL 
AIRCRAFT ARRIVING IN THE UNITED STATES..................................

122.49a

[[Page 721]]

ELECTRONIC MANIFEST REQUIREMENT FOR PASSENGERS ONBOARD COMMERCIAL 
AIRCRAFT DEPARTING FROM THE UNITED STATES...............................

122.75a

ELECTRONIC PASSENGER AND CREW ARRIVAL MANIFESTS.........................

4.7b

ELECTRONIC PASSENGER AND CREW MEMBER DEPARTURE MANIFESTS................

4.64

ELECTRONIC PRODUCTS.....................................................

12.90, 12.91

EMERGENCY--Diversion of cargo...........................................

4.33

EMERGENCY LANDING, AIRCRAFT.............................................

122.35

EMERGENCY PURCHASES OF WAR MATERIAL ABROAD..............................

10.102(b)

EMERGENT TEMPORARY USE OF FIRE-FIGHTING, RESCUE AND RELIEF EQUIPMENT AND 
SUPPLIES................................................................

10.107

EMISSION STANDARDS......................................................

12.73

ENFORCEMENT POWERS......................................................

Part 161

ENGINES, NONROAD, COMPLIANCE WITH FEDERAL ANTIPOLLUTION EMISSION 
REQUIREMENTS............................................................

12.74

ENGLISH LANGUAGE; REQUIREMENT...........................................

122.4, 141.86

ENGRAVINGS, BOOKS, ETC.--U.S. Agencies, conditionally free..............

10.46, 145.37

ENGRAVINGS--Free entry, evidence required...............................

10.48
ENTRIES
Affidavits required to accompany........................................
12.6
Engines, nonroad........................................................
12.74
Filing of--When.........................................................
141.4, 141.5
Form of.................................................................
141.61, 143.31-143.37, 143.39
Gauging, measuring, or weighing order when noted on.....................
141.86(f)
Requirements on.........................................................
141.61-141.64, 141.66-141.68
Shipments arriving on one vessel or vehicle consigned to one consignee--
Separate, when..........................................................
141.51, 141.52
Signing of..............................................................
141.61(b)

ENTRY AND CLEARANCE, AIRCRAFT...........................................

122.41, 122.42, 122.62, 122.64, 122.77

ENTRY AND CLEARANCE, CUBA...............................................

122.151-122.158

ENTRY AND CLEARANCE--Vessels, who may make..............................

4.9

ENTRY DOCUMENT--Carnet..................................................

114.3

ENTRY--Gifts, not exceeding $100 in value, no entry required............

10.152
ENTRY OF MERCHANDISE
Abandoned or destroyed goods--Duty allowance............................
158.41-158.44
Actual owner's declaration--superseding bond............................
141.20
Administrator or executor may make......................................
141.14
Agent of consignee may make.............................................
141.19(b)
Applicable rate of duty.................................................
141.69
    Appraisement entries
Form and procedure......................................................
143.11-143.16
Liquidation of..........................................................
159.9
Warehouse entries may be substituted for................................
143.16
Arrival as condition for................................................
141.63, 141.68
Auditory or visual materials............................................
10.121
Automated broker interface (ABI)........................................
143.1-143.8
Automobiles, safety standards...........................................
12.80
    Baggage--
Declaration and baggage entries--Forms..................................
148.6, 148.11-148.17
Formal entry, when not required.........................................
148.23(c), 143.21

[[Page 722]]

Liquidation of, entries.................................................
159.10
Baggage not declared penalty............................................
148.18
Bills of lading.........................................................
141.11
Boats, safety standards.................................................
12.85
Bond for production of bill of lading...................................
141.15
Bonded cartman or lighterman to be designated on warehouse entry........
125.11
Bonded merchandise, cartman to be designated by importer................
125.22
Caribbean Basin Initiative..............................................
10.191-10.198
Cheeses.................................................................
12.6
Commercial invoices, when and when not required.........................
141.91, 141.92, 141.81-141.83
Condemned perishable goods--Duty allowance..............................
158.14
Conditionally free, cancellation of bond................................
10.39
Consignee...............................................................
141.19, 141.20, 101.1, 141.14
Consolidated shipments..................................................
141.52-141.54, 141.61(d)(2)
Damaged goods, duty allowance...........................................
158.11, 158.12, 158.14, 158.21-58.27
Declarations required on entry..........................................
141.19, 141.20
Derelict merchandise, ships' stores, equipment, etc.....................
4.40, 4.41
Discrepancy between shipment and invoice--Liquidation...................
152.3
Duty liability..........................................................
141.1-141.3
Electronic entry........................................................
Part 143, subpart D
Entered for consumption.................................................
141.0a(f)
Entered for warehouse...................................................
141.0a(g)
Entered for temporary importation bond..................................
141.0a(h)
Entire consignment, when to be covered by one entry.....................
141.51, 141.52
Estimated duties to be deposited by importer............................
143.28, 143.15, 141.101-141.105
Estimation of duties on entries.........................................
141.90
Entry, definition.......................................................
141.0a(a)
    Entry documentation
Assigned entry numbers..................................................
142.3a
Bond requirements.......................................................
142.4
Examination.............................................................
142.7
Failure to file timely..................................................
142.8
Invoice requirements....................................................
142.6
Required................................................................
142.3
Time for filing.........................................................
142.2
Entry, rate of duty.....................................................
141.69
    Entry summary
Definition..............................................................
141.0a(b)
Delinquent payment......................................................
142.14
Electronic entry/entry summary..........................................
143.31-143.37, 143.39
Failure to file timely..................................................
142.15
Form....................................................................
142.11, 142.16
Mandatory filing........................................................
142.13
Multiple ultimate consignees............................................
142.17a
Multiple entries........................................................
142.17
Preliminary review......................................................
141.63
Prohibited merchandise..................................................
142.18

[[Page 723]]

Release of merchandise..................................................
142.19
Single for one transportation entry.....................................
141.56
Statistics..............................................................
141.61(e)
Entry, time of..........................................................
141.68
Evidence of right to make...............................................
141.11
Excessive moisture and other impurities--Duty allowance.................
158.13
Exportation, direct.....................................................
18.25
Exported under lease and returned.......................................
10.108
Express consignments....................................................
Part 128
Extracts from invoices for use in.......................................
141.84
    Filing
Definition..............................................................
141.0a(d)
Time and place of.......................................................
141.62
Foreign corporation may make--Special requirements......................
141.18, 143.22, 145.12
Free under executive order..............................................
148.87, 148.88
Late filing of documents................................................
10.112
Immediate delivery, articles for........................................
142.0, 142.3
Immediate delivery, articles for U.S. Government........................
10.100-10.104
Immediate transportation without appraisement entries...................
18.11, 18.12, 151.9
Imports from Guantanamo Bay Naval Station...............................
7.11
In transit through U.S..................................................
18.20-18.24
Incomplete invoices.....................................................
141.86-141.89
    Informal entries
Information to be shown on--Form........................................
Part 141.82
Liquidation of..........................................................
159.10
Informal entry procedures...............................................
128.24, 143.21, 145.31, 148.12, 148.62
Institutions, articles for..............................................
10.43, 10.49, 10.52, 145.36
Instruments and apparatus for educational and scientific institutions...
10.114
    Invoices
Commercial or special--Failure to produce, liquidated damages...........
163.6
Installment shipments...................................................
141.82
Requirements and exceptions.............................................
Part 141, Subpart F
Liability of consignee for duty.........................................
101.1,141.19, 141.20
Library of Congress, articles...........................................
10.46, 145.37
Liens...................................................................
141.112
Limited to ports of entry and customs stations..........................
101.1
Liquidation of entries..................................................
159.9, 159.10
Mail entries liquidation of.............................................
159.10
Mail importations.......................................................
132.24
Over $2,000 in value....................................................
145.12
Under $2,000 in value...................................................
145.12, 145.35, 145.41
Making entry............................................................
141.61-141.64, 141.66-141.69
Manifest used as an entry for unconditionally free merchandise valued 
not over $250...........................................................
123.7
Motor vehicles, safety standards........................................
12.80
Motor vehicles and engines--Clean Air Act...............................
12.73

[[Page 724]]

Noncommercial importations of limited value.............................
148.101-148.106
Nonresident consignee may make--Bond requirements.......................
141.17
Not specified on invoice................................................
152.3
Packed packages.........................................................
141.52
Passengers baggage......................................................
148.4-148.27
Possession, when evidence of ownership for entry purposes...............
141.12
Powers of attorney......................................................
141.31, 141.39, 141.46, 174.3
Preliminary examination of entry papers.................................
141.63
Preparation and form of entries.........................................
141.61-141.64, 141.66-141.69
Pro forma invoice, use..................................................
141.82, 141.84, 141.91
Quota quantity limits...................................................
132.4
Rate of duty applicable.................................................
141.69
Receiver may make.......................................................
141.14
Reduced duty, late filing of documents..................................
10.112
Reliquidation of entries upon protest...................................
152.16, 173.2, 174.26, 174.2, 175.22, 176.31
Repairs and equipment obtained abroad for vessels.......................
4.14
Required, when and when not.............................................
141.4, 10.151, 10.152, 148.62(b), 148.85-148.88
    Rewarehouse entries
Combined rewarehouse and withdrawal for consumption.....................
144.42
General provisions......................................................
144.34(b), 144.41
Samples, taking of, prior to............................................
151.3-151.5
Shipments arriving on one vessel or vehicle consigned to one consignee, 
separate entries--When..................................................
141.51, 141.52
Shortages--Duty allowance...............................................
158.2-158.6
Softwood lumber from Canada.............................................
12.140
Special invoices, when and when not required............................
141.91, 141.83
Submission, definition..................................................
141.0a(c)
    Supplies for aircraft or vessels withdrawn from warehouse
Cancellation of bonds...................................................
10.64
Form and procedure......................................................
10.60
Permit for delivery.....................................................
10.61
Temporary importation bond entries--Form and contents...................
10.31
Temporary removal and return to port before customs release.............
141.69
Time within which entry must be made....................................
141.5
Trade-mark or trade names, goods bearing................................
133.21-133.24
Transportation and exportation entries..................................
144.37
Transportation entries, classes of......................................
18.10
Unclaimed merchandise...................................................
127.11
Unclaimed merchandise, entry before sale................................
127.14
Unfair competition, exclusion--Entry under bond.........................
12.39
U.S., articles for......................................................
10.46, 141.102(d), 145.37, 10.100-10.104
Value to be shown by importer...........................................
141.90(c)
Value when not in excess of $200........................................
10.151

[[Page 725]]

Visual or auditory materials............................................
10.121
    Warehouse entries
General provisions......................................................
144.1-144.5, 144.7
Making entry............................................................
141.11-141.64, 141.66-141.69, 144.11-144.15
    Warehouse withdrawals
Consumption.............................................................
144.38
Exportation.............................................................
144.37
Transportation..........................................................
144.22, 144.36
When and by whom to be made.............................................
141.4
Who may make............................................................
141.11-141.20
Wrecked or abandoned at sea.............................................
141.13
ENTRY OF VESSELS
American................................................................
4.9(b)
At other than port of entry, expenses...................................
101.4
    Coastwise
Requirements............................................................
4.81, 4.83, 4.84
Via Hudson River........................................................
4.83(b)
Via St. Lawrence River..................................................
4.83(a)
Coastwise and foreign trade combined....................................
4.89
Contiguous country, vessels arriving from--Report required..............
123.1, 123.34
Foreign.................................................................
4.9(c)
Formal--Oath, Form......................................................
4.9(b)
Preliminary--Certification, Form........................................
4.8
Records.................................................................
4.95
Repairs and equipment obtained abroad...................................
4.14
When required...........................................................
4.3
Who may make............................................................
4.9
Yachts, when not required...............................................
4.94
EQUIPMENT AND REPAIRS
American vessels abroad.................................................
4.14
Election to proceed.....................................................
162.72(a)
EQUIPMENT AND STORES OF VESSELS
Landing--Entry, when required...........................................
4.39
EQUIPMENT AND SUPPLIES
Aircraft searches, fire-fighting, rescue and relief.....................
10.107
Withdrawal for vessels..................................................
10.59

EQUIPMENT, ETC., FROM WRECKED OR DISMANTLED VESSELS.....................

4.40

ERRONEOUS CONSTRUCTION OF LAW OR REGULATION, LIABILITY FOR DUTIES.......

141.1

ERRORS, CORRECTION OF, ON LIQUIDATION OR RELIQUIDATION OF ENTRIES.......

173.1-173.5

ESTABLISHED AND UNIFORM PRACTICE........................................

177.10(c)

ESTATES OF DECEDENTS, LIABILITY FOR DUTY................................

141.1

ETHYL ALCOHOL--Importation for non-beverage purposes....................

10.99
EXAMINATION OF MERCHANDISE
Additional packages, requisition for --Form.............................
141.113, 151.11
Altars, etc., to be set up..............................................
151.8
Baggage in foreign countries............................................
148.22
Cotton..................................................................
151.81-151.85
Crew effects............................................................
148.62-148.67
Designation of packages.................................................
151.1-151.11
Expenses of outside examination.........................................
151.7
Immediate transportation entries........................................
151.9

[[Page 726]]

    Importer's premises
Bond for return to Customs custody......................................
151.7(d)
Cording and sealing of packages required................................
151.7(a)
Machinery, etc., to be set up...........................................
151.8
Mail importations.......................................................
145.2, 145.4
On vessels and vehicles.................................................
162.3
Outside of public stores................................................
151.7
Petroleum products......................................................
151.41, 151.42, 151.44-151.47
Prior to entry, inspection charges......................................
151.5
Sugar, syrups, and molasses.............................................
151.21-151.30
Tobacco, Cuban leaf--Examiners..........................................
151.111
Wool and hair...........................................................
151.61-151.71; 151.73-151.76

EXAMINATION OF PERSONS AND BAGGAGE......................................

162.3-162.7

EXAMINATION OF WOOL AND HAIR BY IMPORTER................................

151.67
EXAMINATION PACKAGES
Cartage of, to importer's premises or elsewhere.........................
125.11-125.14
Designation of..........................................................
151.1-151.11

EXCESSIVE MOISTURE AND OTHER IMPURITIES--Duty allowance.................

158.13
EXECUTOR
Entry by................................................................
141.14
Liability of Estate for debts due the U.S...............................
141.1
EXEMPTION
Allowed nonresidents....................................................
Part 148, Subpart E
Allowed returning residents.............................................
Part 148, Subpart D
Other...................................................................
Part 148, Subpart F

EXEMPTION, FALSE CLAIM, FAILURE TO DECLARE PENALTY......................

148.18, 148.19

EXHIBITION BOND--Form...................................................

113.14

EXHIBITION, RETURN OF ARTICLES EXPORTED FOR.............................

10.66
EXHIBITION, WORKS OF ART, AND OTHER ARTICLES
Entry...................................................................
10.49
Transfer to other institution...........................................
10.49(c)
EXPENSES
Examination of merchandise outside public stores........................
151.7
General expenses and profit.............................................
152.105(e), 152.106(c)
Seizure and forfeiture payment of.......................................
162.51
For services rendered...................................................
24.17
EXPLOSIVE SUBSTANCES
Exportation of, on arrival..............................................
18.21(d), 18.25
Sale of unclaimed.......................................................
127.22
Warehousing of, prohibited..............................................
18.25(f)

EXPORTED ARTICLES RETURNED..............................................

10.66, 10.67

EXPORT BONDS, CANCELLATION OF...........................................

113.55
EXPORT CONTROL
Definition..............................................................
192.1
Liability of carriers...................................................
192.4
Penalties...............................................................
192.3
Requirements for exportations...........................................
192.2
EXPORT DECLARATIONS
Filing of...............................................................
4.61, 4.63, 4.75, 122.76

[[Page 727]]

Incomplete--Bond........................................................
4.75
Vessel, proceeding foreign via domestic ports...........................
4.87
EXPORTATION
Arms and munitions......................................................
4.61, 4.73, 161.2
    Articles
Repaired abroad, to be..................................................
10.8
Scientific or educational purposes, return of...........................
10.67
Atomic energy material, equipment, and devices..........................
161.2
Bond--Cancellation of requirement for...................................
113.55
Bonds--Form.............................................................
18.25, 113.14
Cancellation of bond to produce export declaration......................
172.22, 113.55
Continuous Customs custody..............................................
158.45
Customs supervision.....................................................
18.7, 18.45
Date of, for conversion of currency.....................................
159.32
Date of, for textiles...................................................
102.23(c)
Drawback on merchandise exported via ports outside continental U.S......
191.51-191.53
Entered merchandise in Customs custody--Liquidated and unliquidated 
entries.................................................................
158.45
Expenses of.............................................................
24.17
Helium gas..............................................................
161.2
In bond--Indirect.......................................................
18.26
Inspection..............................................................
Part 118
Limitation of time for..................................................
18.24
Mail, dutiable articles by--Waiver of right to withdraw.................
145.40, 145.71
Manufacturing warehouse products........................................
19.15
Marihuana...............................................................
162.61
    Merchandise
Denied admission by a Government agency.................................
18.25, 18.26
Received under warehouse withdrawal for transportation..................
144.36(h)
Unclaimed, restrictions.................................................
127.14
Unentered...............................................................
18.25, 18.26
Unliquidated consumption entry..........................................
18.25, 18.26
Munitions of war........................................................
161.2(a)(1)
Narcotics and certain other drugs--Requirements, penalties..............
12.36, 161.2, 162.61, 162.63
Port of, final..........................................................
123.28
    Rejected merchandise
Food and drug products..................................................
12.4
General provisions......................................................
158.45
Plants and plant products, refund of duty...............................
12.15
Viruses, serums, and toxins.............................................
12.20, 12.23
Seizure of articles and transporting vessel, vehicle or aircraft........
161.2(b)
Temporary importation bond entries......................................
10.38, 10.39
Time of, to be used in appraising.......................................
152.1(c)
Tobacco products for consumption on vessel or aircraft deemed to be.....
10.65
Used self-propelled vehicles............................................
Part 192, Subpart A
Warehouse, withdrawals for..............................................
144.37
Wild animals, birds, etc., when prohibited..............................
12.27

EXPORT LICENSE..........................................................

12.155, Appendix to Part 163-Interim (a)(1)(A) List

[[Page 728]]

EXPORTS, CONTROLLED--Seizure............................................

161.2(b)

EXPRESS CONSIGNMENT CARRIERS............................................

Part 128

EXTENSION OF TIME--Liquidation..........................................

159.12

                                      F

FAILURE TO DECLARE ARTICLES IN BAGGAGE--Penalty.........................

148.18

FAMILY GROUP, BAGGAGE DECLARATIONS......................................

148.14, 148.34, 148.103

FATS, INEDIBLE--Exportation.............................................

4.61, 4.72
FEES
Ad valorem merchandise..................................................
24.23
Aircraft arrival........................................................
24.22, 122.29
Commercial truck........................................................
24.22(c)
Commercial vessel.......................................................
24.22(b)
Container Station, establishment of.....................................
19.40(b)
Customs bonded warehouse, establishment of..............................
19.2, 19.13
Customs brokers.........................................................
24.22(h), 111.96
Customs cartage or lighterage license, issuance of......................
111.96, 112.22
Customhouse broker's license, issuance of...............................
111.12, 111.19
Dutiable mail...........................................................
24.22(f)
Express consignment application.........................................
128.13
Freedom of Information Act..............................................
103.10
Harbor maintenance......................................................
24.24
Issuance of a customhouse broker's license/permits......................
24.22(h) 111.12, 111.19,
Navigational............................................................
4.98
Patent infringement information.........................................
24.12
Passengers aboard vessels or aircraft...................................
24.22(g)
Private vessel/aircraft.................................................
24.22(e)
Railroad car............................................................
24.22(d)
    Recording
Copyright...............................................................
Part 133, subpart C
Trademark...............................................................
Part 133, subpart A
Tradename...............................................................
Part 133, subpart B
Storage in Government buildings.........................................
24.12
Tonnage.................................................................
4.20

FIBER PRODUCTS IDENTIFICATION ACT, COMPLIANCE WITH......................

11.12b(d)-(f)
FILMS
Exhibited on vessels....................................................
10.68
Motion picture, return of--Domestic or foreign origin...................
10.68(b)
When prohibited.........................................................
12.41

FINAL PORT OF EXPORTATION IN CROSSING CONTIGUOUS FOREIGN TERRITORY......

123.28
FINES, PENALTIES, AND FORFEITURES (See also, PENALTIES)
Applicability...........................................................
162.70
Importations contrary to law............................................
161.2(b), 162.22
Information.............................................................
103.32
Notice of, to offender..................................................
162.31
Prior disclosure........................................................
162.74
Remission or mitigation of..............................................
162.31, 171.11, 171.21-171.24

[[Page 729]]

FINGERPRINTS............................................................

19.2, 111.12, 112.42, 118.4, 122.182, 146.6

FIREARMS, MAIL IMPORTATIONS.............................................

145.53, 145.59

FIRE FIGHTING, RESCUE AND RELIEF EQUIPMENT FOR EMERGENT TEMPORARY USE...

10.107

FISH, SALT FOR CURING...................................................

10.80, 10.81, 10.83
FISHERIES, AMERICAN
Definition..............................................................
10.78
Entry products of.......................................................
10.78
Limited to American vessels.............................................
4.96
Products of--Definition.................................................
10.78(d)

FISHING VESSELS TOUCHING AND TRADING AT FOREIGN PLACES--Permit form.....

4.15

FLAT RATE OF DUTY.......................................................

148.102

FLIES, ARTIFICIAL, ENTRY PROCEDURE......................................

12.29

FLUXING MATERIAL, ENTRY REQUIREMENTS....................................

10.98

FOODS, IMPORTATION PROCEDURE............................................

12.1, 12.3-12.5

FORCED LABOR, MERCHANDISE PRODUCED BY...................................

12.42-12.45

FORCED LANDING, AIRCRAFT................................................

122.35

FOREIGN ASSETS CONTROL..................................................

12.150, 145.56, 161.2

FOREIGN CERTIFICATE OF INSPECTION, MATCH IMPORTATIONS...................

12.34

FOREIGN CERTIFICATE OF ORIGIN, MERCHANDISE NOT PRODUCED BY CONVICT, 
FORCED, OR INDENTURED LABOR, WHEN.......................................

12.43, 12.44

FOREIGN CORPORATION, ENTRY OF MERCHANDISE BY............................

141.18

FOREIGN INLAND FREIGHT..................................................

152.103(a)(5)

FOREIGN MILITARY PERSONNEL AND IMMEDIATE FAMILIES.......................

148.90
FOREIGN REPRESENTATIVES
Diplomatic pouches, bags and mail.......................................
145.38, 148.83, 145.2
Free entry privilege....................................................
148.81, 148.82, 148.85, 148.89
Mail for................................................................
145.2

FOREIGN TRADE STATISTICS................................................

18.25(c), 113.62(b)(3), 141.0a(b) and (d)(2), 141.92(a)(2)

FOREIGN TRADE ZONES.....................................................

Part 146
Application, zone, who may file.........................................
146.9, 146.32
Carriers, use of zone by................................................
146.12
Changes.................................................................
146.7
Customs, control of merchandise in......................................
146.51
Customs forms and procedures............................................
146.13
    Merchandise
Admission of, procedure for.............................................
146.10, Part 146, subpart C
Appraisement and tariff classification..................................
146.65
Destruction or exhibition of............................................
146.52
Exportation of, direct..................................................
146.67
Manipulation or manufacture of..........................................
146.52
Permitted in a zone.....................................................
146.31
Release and removal from zone...........................................
146.71
Seals; authority of operator to break or affix..........................
146.8
Sending of into Customs territory.......................................
146.61-146.68
Shortages and overages..................................................
146.53

[[Page 730]]

Transfer of to another zone.............................................
146.66
Transportation of to a zone.............................................
146.11
With Zone status of
Nonprivileged domestic..................................................
146.43
Nonprivileged foreign...................................................
146.42, 146.65
Privileged domestic.....................................................
146.43
Privileged foreign......................................................
146.41, 146.65
Zone restricted.........................................................
146.44
Transfer into Customs territory.........................................
146.70
Penalties...............................................................
146.81
Port director as board representative...................................
146.2
Retail trade within a zone..............................................
146.14
Revocation of zone grant................................................
146.83
Suspension..............................................................
146.82
Supplies, equipment, and repair material for vessels or aircraft........
146.69

FOREIGN VESSELS, BOARDING OR SEARCH.....................................

162.3
FORFEITURES
Actions for--Property valued in excess of $10,000.......................
162.32
Appraisement of merchandise subject to forfeiture.......................
162.43
Controlled substances, narcotics and marihuana..........................
162.61
Compromise of claims....................................................
161.5
Copyrights, trademarks; procedures......................................
Part 133, subpart F
Destruction of, in lieu of sale.........................................
162.46, 162.50(c)
Disposition of goods summarily forfeited................................
162.46
Expenses of seizure and forfeiture......................................
162.51
Importations contrary to law............................................
162.22
Notice of, to offender and prepenalty notice............................
162.31
Passengers baggage......................................................
148.18
Prior disclosure........................................................
162.74
Prohibited importation of immoral articles..............................
12.40-12.42
Release of, upon payment of appraised value.............................
162.44
Relief..................................................................
133.51
Remission or mitigation of, by port director, when......................
171.21-171.24
Remission or mitigation of--Petitions...................................
162.31, 162.32, 171.11-171.33
Reports to U.S. Attorney--When required.................................
162.32(c), 162.47(d), 162.49
Sale of.................................................................
162.45, 162.46, 162.48, 162.50, 162.51, 162.52
Seizure of property subject to..........................................
162.11-162.22, 122.161, 148.18, 148.19
Smuggling or other fraudulent acts......................................
161.2
Summary--Disposition of goods...........................................
162.46, 162.48
Value not exceeding $500,000............................................
162.45, 162.46, 162.48
Value not exceeding $500,000--Filing of claim and bond to stop summary 
forfeiture proceedings..................................................
162.47
FORMS
Reproduction or substitution............................................
4.99, 122.5
Salable.................................................................
24.14

FORMULAS, DENATURING VEGETABLE OILS.....................................

10.56

FORWARDER, FREIGHT, BONDED..............................................

18.1

[[Page 731]]

FREE TRADE AGREEMENTS
NAFTA
United States-Bahrain Free Trade Agreement..............................
Part 10, subpart N
United States-Chile Free Trade Agreement................................
Part 10, subpart H
United States-Jordan Free Trade Agreement...............................
Part 10, subpart K
United States-Morocco Free Trade Agreement..............................
Part 10, subpart M
United States-Singapore Free Trade Agreement............................
Part 10, subpart I

FREEDOM OF INFORMATION ACT..............................................

103.0-103.13

FRESH FRUITS AND VEGETABLES FROM CANADA AND MEXICO--Special permit for 
immediate delivery......................................................

142.21(b)

FRUIT BOXES, SHOOKS, DUTIABLE STATUS....................................

10.5

FRUIT, CONDEMNED........................................................

158.14

FRUIT JUICES--Brix values...............................................

151.91
FUR PRODUCTS
Definition..............................................................
11.12a
Labeling of.............................................................
11.12a

FURS AND FUR SKINS......................................................

12.60-12.63
FURTHER PROCESSING-VALUATION
Deductive value.........................................................
152.105(i)

                                      G

GAME ANIMALS AND BIRDS
Killed for noncommercial purposes.......................................
10.76
Live, for stocking purposes.............................................
10.76

GAUGERS, COMMERCIAL.....................................................

151.13
GAUGING
Ethyl alcohol...........................................................
10.99
    Liquors
Bulk....................................................................
11.6
Dutiable and taxable quantities.........................................
159.21
Molasses and syrups.....................................................
151.28
Petroleum products......................................................
151.41,151.42, 151.44-151.47
Warehoused goods for exportation or transportation......................
144.37

GENERAL AVERAGE LIENS...................................................

141.112
GENERALIZED SYSTEM OF PREFERENCES
ATPA....................................................................
10.207
Certificate of origin...................................................
10.173
    Costs or value of materials produced in the beneficiary developing 
country
Determination of........................................................
10.177(c)
Produced in the beneficiary developing country, defined.................
10.177(a)
When origin is questionable.............................................
10.177(b)
Country, defined........................................................
10.171(b), 10.176(a)
    Country of origin
Criteria................................................................
10.176
Evidence of--certification of origin....................................
10.173(b)
Shipments valued in excess of $250......................................
10.173(a)
    Direct cost of processing operations
Defined.................................................................
10.178(a)
Items included in.......................................................
10.178(a)
Items not included in...................................................
10.178(b)
    Direct shipment
Evidence of
Documents required......................................................
10.174(a)
Waiver of...............................................................
10.174(b)

[[Page 732]]

Imported directly, defined..............................................
10.175
Informal entry of.......................................................
143.23(g)

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES--Defined, Trade Agreements Act 
(1979)..................................................................

152.102(c)
GENERAL ORDER
Baggage.................................................................
4.37, 148.7
Defined.................................................................
127.4
    Merchandise
Immediate transportation entry, forwarding under........................
18.11
Period, how calculated..................................................
4.37
When to be sent.........................................................
4.37
Period of, defined......................................................
127.4
Weighing merchandise before deposit in warehouse........................
4.37
Withdrawal from general order for entry or exportation..................
127.2
Withdrawal of less than single lot......................................
127.2(c)
GIFTS
Baggage in..............................................................
148.33(c), 148.44
Bona fide, not exceeding $100 in value..................................
10.152, 10.153, 145.32
Flat rate of duty for noncommercial importations of limited value.......
Part 148, Subpart J

GOBELIN TAPESTRIES......................................................

10.54

GOLD ARTICLES, FALSE MARKING OF--Penalty................................

11.13

GOVERNMENT, IMPORTATIONS LIQUIDATION....................................

10.104, 141.102(d)

GOVERNMENT PROCUREMENT; COUNTRY OF ORIGIN DETERMINATIONS................

Part 177, Subpart B
GOVERNMENT VESSELS
Manifest of passengers and baggage......................................
4.5

GREAT LAKES, U.S. PORTS ON--Vessels trading between such ports and other 
ports of U.S............................................................

4.83
GUAM
Customs administration of...............................................
7.2
Exports to--Drawback....................................................
191.5, 191.81, 191.131, 191.151
Imports in..............................................................
7.2(b)
Not within Customs territory of U.S.....................................
7.2(a)
Unaccompanied shipments from............................................
Part 148, Subpart K

GUANO BROUGHT IN VESSELS ENGAGED IN COASTWIDE TRADE.....................

4.84
GUANTANAMO BAY NAVAL STATION
Drawback, foreign territory for.........................................
191.5, 191.13, 191.131, 191.151
Importations from.......................................................
7.11

GUNPOWDER, EXPORTATION OF, ON ARRIVAL...................................

18.25

                                      H

HAITIAN HEMISPHERIC OPPORTUNITY THROUGH PARTNERSHIP ENCOURAGEMENT ACT 
(``Haiti Hope'')........................................................

Part 10, subpart O

HARBOR MAINTENANCE FEE..................................................

24.24

HEADQUARTERS PORTS, LIST OF.............................................

101.3

HELIUM GAS, CONTROLLED EXPORTS--Seizure.................................

161.2
HOLIDAYS
Definition..............................................................
24.16

[[Page 733]]

National, list of.......................................................
101.6

HONEY BEES AND SEMEN....................................................

12.32
HORSES
Exported for racing.....................................................
10.66
Exported for temporary exhibition.......................................
10.66, 10.67
Taken abroad temporarily; tariff status on return.......................
148.31, 148.32
HOURS
Entry papers............................................................
141.62
Of business, official...................................................
101.6
Quota-class merchandise.................................................
132.3
HOUSEHOLD EFFECTS
Baggage.................................................................
148.31, 148.51
Definitions.............................................................
148.52, 148.74
Diplomatic, consular and military personnel, foreign representatives, 
etc.....................................................................
Part 148, Subpart I
Entry of, not accompanying the importer.................................
148.6
Entry, requirements on..................................................
148.6, 148.52
Military, civilian employees of U.S., and evacuees......................
148.74
Noncommercial importations of limited value.............................
Part 148, subpart J
Reliquidation of entry..................................................
173.5
Used abroad, definition.................................................
148.52

HOUSES OF WORSHIP, STAINED OR PAINTED GLASS WINDOWS.....................

10.52

                                      I

IDENTICAL MERCHANDISE--Defined, Trade Agreements Act (1979).............

152.102(d)
Transaction value of....................................................
152.104
IDENTIFICATION CARDS
Cartmen's employees.....................................................
Part 112, subpart D
Customs employees.......................................................
101.8
Customs Security Areas..................................................
Part 122, subpart S

IDENTIFICATION NUMBER...................................................

24.5

IMMEDIATE DELIVERY OF ARTICLES PRIOR TO ENTRY...........................

Part 142, subpart C

IMMEDIATE DELIVERY OF ARTICLES PRIOR TO ENTRY--U.S. Government 
importations............................................................

10.100-10.104
IMMEDIATE TRANSPORTATION WITHOUT APPRAISEMENTS
By aircraft.............................................................
122.92(b)
Consolidated shipments..................................................
18.11(g)
Form of entry...........................................................
18.11(h)
From general order warehouse............................................
18.11(a)
Livestock shipments.....................................................
18.11(d)
Procedure at destination................................................
18.12, 151.9, 151.7
Procedure at port of origin.............................................
18.11(c)
Restricted products.....................................................
18.11(e)
Splitting shipments at port of origin...................................
122.92(d), 18.11
To other than a port of entry...........................................
18.11(c)
Unclaimed merchandise, entry permitted when.............................
18.12
Value stated on entry...................................................
18.11(e)
When consumption or warehouse entry may be accepted.....................
141.55

[[Page 734]]

Who may make entry......................................................
18.11(b)

IMMIGRANTS, PROFESSIONAL BOOKS--Tools of trade..........................

148.53

IMMORAL ARTICLES--Importation prohibited................................

12.40,12.41
IMPORTATIONS
Atomic energy material, equipment, and devices..........................
161.2
Contiguous country, from................................................
123.0-123.9, 123.63
Contrary to law.........................................................
161.2, 162.11, 162.22
Controlled--Penalty.....................................................
161.2
Copyright articles......................................................
133.42-133.44, 133.46
Date of, definition.....................................................
101.1
Engines, nonroad........................................................
12.74
Mail....................................................................
Part 145
Narcotics and certain other drugs--Requirements--Penalties..............
12.36, 161.2, 162.61
Noncommercial importations of limited value.............................
148.101-148.106
Temporarily free of duty, metal articles................................
54.5, 54.6
Trademarked articles....................................................
133.21-133.24
U.S. Government, for....................................................
10.100-10.104

IMPORTATIONS BY STATES ARE DUTIABLE.....................................

141.1
IMPORTER
Identification number...................................................
24.5
Liability of, for duty..................................................
141.1
Refund of excessive duties or taxes.....................................
24.36
Request for value information...........................................
152.26
Warehouse designated by.................................................
144.11(c)

IMPORT LICENSE..........................................................

12.155, Appendix to Part 163-Interim (a)(1)(A) List

IMPURITIES, DUTY ALLOWANCE, WHEN........................................

158.13

IN BOND SEALS, PROCURING AND ACCOUNTING.................................

24.13

INCONSISTENT CUSTOMS DECISIONS..........................................

177.13

INDENTURED LABOR, MERCHANDISE PRODUCED BY--Importations prohibited......

12.42-12.45

INEDIBLE FATS--Exportation..............................................

4.61, 4.72
INFORMAL ENTRIES
Generalized system of preferences.......................................
143.23
Information to be shown on--Form........................................
141.82(d), Part 143, subpart C
Liquidation of..........................................................
159.10
Procedure...............................................................
143.23-143.28

INFORMATION AS TO VALUES; FURNISHED TO IMPORTERS........................

152.26

INFORMATION, CLASSES OF CUSTOMS DOCUMENTS EXEMPT FROM DISCLOSURE........

103.12

INFORMATION COLLECTION REQUIREMENTS, APPROVAL OF........................

Part 178

INFORMATION, FREEDOM OF.................................................

103.0-103.13
INFORMATION, RESTRICTED
Fines, Penalties........................................................
103.32
Foreign agents..........................................................
103.33
Sanctions...............................................................
103.34

INFORMATION SUBJECT TO RESTRICTED ACCESS................................

Part 103, subpart C
INFORMERS
Awards of compensation to...............................................
161.12, 161.14-161.16

[[Page 735]]

Claim for compensation--Form............................................
161.12
Confidentiality of identity.............................................
161.15

INFRINGING COPIES--Definition...........................................

133.42

INLAND FREIGHT, FOREIGN.................................................

152.103(a)(5)

INSECTICIDES, IMPORTATION PROCEDURE.....................................

12.1, 12.3

INSOLVENT DEBTORS--Duty due U.S. is a preferred claim...................

141.1

INSPECTION AND SEARCH OF TRUNKS, VEHICLES, ETC., FROM CONTIGUOUS COUNTRY

123.63

INSPECTION OF CUSTOMS RECORDS...........................................

103.0-103.11
INSPECTION OF MERCHANDISE
By importer prior to entry..............................................
151.4, 151.5
Centralized examination stations........................................
Part 118
Exported merchandise....................................................
161.2
Meat and meat food products.............................................
12.8, 12.9

INSPECTION OF PERSONS, BAGGAGE, AND MERCHANDISE ON BOARD VESSELS AND 
VEHICLES................................................................

162.3-162.7
INSPECTION OF VESSELS
    Certificate
Required................................................................
4.66
Verification............................................................
4.61, 4.66

INSTALLMENT SHIPMENTS, INVOICES FOR.....................................

141.82
INSTITUTIONS
Character of, evidence as to............................................
10.43
INSTRUMENTS AND APPARATUS FOR EDUCATIONAL AND SCIENTIFIC INSTITUTIONS
General provisions......................................................
10.114

INSTRUMENTS OF INTERNATIONAL TRAFFIC....................................

10.41(a)

INSULAR POSSESSIONS, CUSTOMS RELATIONS..................................

7.2, 191.5
Drawback................................................................
191.5
Duty....................................................................
148.101, 148.102, Part 148, subpart K
Guantanamo Bay Naval Station............................................
7.11
Puerto Rico, spirits, wines, and coffee.................................
7.1

INTERCOASTAL RESIDUE CARGO PROCEDURE....................................

4.83, 4.85, 4.86, 4.89

INTEREST CHARGES ON CERTAIN BILLS.......................................

24.3a

INTERIM (A)(1)(a) LIST..................................................

Appendix to Part 163

INTERNAL ADVICE.........................................................

177.11

INTERNAL-REVENUE MARKS, ERASURE OF, AT EXPENSE OF IMPORTER..............

10.4
INTERNAL-REVENUE REQUIREMENTS
Cigarette papers, and tubes.............................................
11.3, 159.5
Cigars, cigarettes, medicinal preparations, and perfumery...............
11.1
Distilled spirits.......................................................
11.6, 11.7, 134.21, 159.4
Tobacco.................................................................
11.2
INTERNAL-REVENUE TAXES
American goods returned.................................................
10.3
Bill to importer for taxes due--Form....................................
24.11
Carrier liable for, shortage, etc.......................................
18.8
Computation of, upon liquidation........................................
159.4, 159.6, 159.21(b)
Destruction of articles subject to......................................
127.28(e)-(g)
Diplomatic, consular and military personnel, foreign representatives, 
etc., exempt from.......................................................
148.89, 148.90

[[Page 736]]

Ethyl alcohol for nonbeverage purposes, conditionally exempt from.......
10.99
Forfeited or unclaimed goods............................................
127.28, 162.45
Importations having a value not exceeding $200..........................
10.151
Liquor in passengers' baggage...........................................
148.26, 148.27, 148.51, 148.64
Liquor--Taxable quantity................................................
159.21
Merchandise subject to seizure..........................................
148.18, 148.19
Refund of...............................................................
24.36
Regauge of liquors for assessment of....................................
159.21(b)
Sale of articles subject to.............................................
127.28
Supplies for vessels exempt from........................................
10.59
Tobacco and tobacco products in baggage of nonresident..................
148.43
Tobacco products for consumption on vessel or aircraft..................
10.65

INTERNATIONAL CUSTOMS CONVENTIONS, PURSUANT TO CARGO CONTAINER AND ROAD 
VEHICLE CERTIFICATION...................................................

Part 115

INTERNATIONAL (Public) ORGANIZATIONS....................................

148.87, 148.88

INTERNATIONAL TRAFFIC...................................................

10.41, 10.41a, 10.41b, Part 123, subpart B

INTERSTATE COMMERCE COMMISSION, MERCHANDISE SHIPPED IN BOND, EXAMINATION 
BY......................................................................

18.9

IN-TRANSIT MERCHANDISE..................................................

Part 123, subparts A-F
Restricted and prohibited merchandise...................................
18.21-18.23
    Through contiguous foreign territory
Animals.................................................................
123.24(a)(3), 123.27
Authority for...........................................................
123.21
Manifest--Form, contents and disposition of.............................
123.21, 123.22, 123.25
Procedure at port of exit...............................................
123.22(a), 123.28
Procedure at port of reentry............................................
123.29
Sealing of..............................................................
123.24
Seals, in bond or in transit, breaking of...............................
123.21, 123.26, 123.29
Storage in foreign territory............................................
123.26(b)
Train consist sheets....................................................
123.23, 123.29
Transshipment in foreign territory......................................
123.26
Through U.S. between ports of a contiguous foreign country..............
Part 123, subpart D, 123.52, 123.64

IN-TRANSIT SEALS, PROCURING AND ACCOUNTING PROCEDURE....................

24.13

INVENTORIES OF TOBACCO PRODUCTS FOR CONSUMPTION ON VESSELS OR AIRCRAFT..

10.65

INVENTORY, RAILWAY SUPPLIES, INTERNATIONAL TRAINS.......................

123.11

INVESTIGATORY FILES--Disclosure of information..........................

103.10(g)
INVOICES
Additional information, when required...................................
141.86, 141.89
All invoices with entry to be numbered consecutively....................
141.86(h)
Baggage declarations, special or commercial invoices....................
148.23(c)
Bond for, canceled by photocopy.........................................
141.84(e)
    Commercial
Bond for production of..................................................
141.91(d)
When required...........................................................
141.83, 141.92

[[Page 737]]

Cost of production, when to be shown on.................................
141.88
Cotton..................................................................
151.82
Duty rates to be noted..................................................
141.90
Entry of merchandise....................................................
Part 141, subpart F
General requirements on.................................................
141.86
Goods arriving within a period of 10 days...............................
141.82
Information required on.................................................
141.86-141.92
Mail shipments..........................................................
145.11
Merchandise found not to correspond with invoice description............
152.3
Merchandise, list of, requiring special information.....................
141.89
Multiple................................................................
141.61(f)
Photocopies from, for entry purposes....................................
141.84
Pro forma...............................................................
141.82, 141.84, 141.85, 141.91, 141.92, 142.22
    Required on entry
Exceptions..............................................................
141.83, 141.91, 141.92
Single shipment to be covered...........................................
141.81, 141.82(a), 141.84
Requirements............................................................
142.6
Separate sheets to be numbered..........................................
141.86(h)
Single..................................................................
141.61(f)
    Special
Bond for productions of.................................................
141.91, 141.92
Entry procedures........................................................
143.27
When required...........................................................
141.83
Time limit, failure to produce--Liquidated damages......................
172.22
Wool and hair...........................................................
151.62

INWARD CARGO, ACCOUNTING FOR............................................

4.61, 4.62

IRREGULAR DELIVERY OF BONDED MERCHANDISE................................

18.6

                                      J

JEWELRY AND ARTICLES OF PERSONAL ADORNMENT EXEMPTIONS, SALE OF..........

148.46

JOHNSTON ATOLL..........................................................

7.2, 191.5
JORDAN FREE TRADE AGREEMENT (See, UNITED STATES-JORDAN FREE TRADE 
AGREEMENT)

JUICES, FRUIT--Brix values..............................................

151.91

JUDICIAL REVIEW.........................................................

103.9, 112.30(f), 151.12(g) and (k), 151.13(e) and (i), 174.31, Part 176
Disclosure of information...............................................
Part 103, subpart B

                                      K

KINGMAN REEF............................................................

4.0, 4.21, 122.0, 134.1, 191.5, 191.101, 191.151

                                      L

LABELING
Fur products............................................................
11.12a

[[Page 738]]

Textile fiber products..................................................
11.12b
Wool products...........................................................
11.12

LABELS, IN BOND, IN LIEU OF CORDS AND SEALS--Form.......................

18.4

LABORATORY, COMMERCIAL..................................................

151.12, 151.14

LABORATORY TESTING (WOOL AND HAIR)......................................

151.71

LADING AND UNLADING OF VESSELS, PERMIT OR SPECIAL LICENSE FOR--Form.....

4.30

LADING, EXPORTATION IN BOND, CUSTOMS SUPERVISION........................

18.7

LADING, CERTIFICATE OF, FOR AIRCRAFT....................................

122.94

LADING OR UNLADING, VEHICLES AND VESSELS OF LESS THAN 5 NET TONS FROM 
CONTIGUOUS COUNTRY, PERMITS FOR.........................................

123.8

LANDING CARGO AT OTHER THAN PORT OF DESTINATION DUE TO DISTRESS.........

4.32
LANDING CERTIFICATES
Cancellation of export bonds............................................
113.51, 113.55
Foreign merchandise destined for foreign ports--Bond....................
4.88
Temporary importation bond--Exportation.................................
10.39
Waivers.................................................................
113.55(c)(3)

LARGE YACHTS IMPORTED FOR SALE..........................................

4.94a

LASH-TYPE BARGES........................................................

4.81a

LAY-ORDER PERIOD, EXTENSION OF, HOW CALCULATED..........................

4.37

LEASE, ARTICLES UNDER, EXPORTED AND REIMPORTED..........................

10.108

LEATHER ARTICLES........................................................

10.198a

LETTERS, SEARCH AND SEIZURE.............................................

162.4
LIBRARY OF CONGRESS
Articles for............................................................
10.46, 145.37(a)
Books, engravings, etc., conditionally free.............................
10.46, 145.37(b)

LICENSE FOR CERTAIN WORSTED WOOL FABRIC SUBJECT TO TARIFF-RATE QUOTA....

132.18

LICENSE, SPECIAL FOR UNLADING AND LADING................................

4.30, 122.38
LICENSES
Carriers, cartmen and lightermen........................................
112.30
Cartmen and lightermen to produce.......................................
112.28
Cartmen's suspension or revocation......................................
112.30
CES; revocation.........................................................
118.21
Customs brokers.........................................................
111.0
Revocation..............................................................
Part 111, subpart D
Gaugers revocation......................................................
151.13
Importations in vessel less than 30 net tons............................
4.100
Laboratories; revocation................................................
151.12
LBCIP; revocation.......................................................
123.75
Yachts, pleasure, when required.........................................
4.94

LICENSING AND BONDING OF CARTMEN AND LIGHTERMEN.........................

Part 112, subpart C
LIENS
Discharge of............................................................
141.112
Duty constitutes........................................................
141.1
Freight and other charges...............................................
141.112(a)(1), 171.44
Payment from proceeds of sales..........................................
127.31
Seized property--Awarded for official use--Payment of liens.............
171.44

[[Page 739]]

LIGHTERAGE..............................................................

Part 112, subparts A, C and D; 125; 127.32

LIGHTERMEN, designation of, on warehouse entry..........................

144.11

LIGHTERMEN'S BOND.......................................................

113.63

LIGHTERS, ETC., MARKING OF LICENSED.....................................

112.27
LIGHT MONEY
Exemptions..............................................................
4.21
Payment of--Certificate, form...........................................
4.23
Refund of...............................................................
4.24
Table, classes of vessels...............................................
4.20
LIQUIDATED DAMAGES
Bonded cartmen, failure to remove marking...............................
112.27(d)
Carnets, fraud, violation, or abuse of privileges.......................
114.33, 114.34
Copyrights, trademarks..................................................
Part 133, subpart F
Decisions not protestable...............................................
172.22
Failure to petition for relief..........................................
172.2
Free withdrawal of supplies.............................................
10.59
Notice of liquidated damages incurred...................................
172.1(a)
Petiition for relief....................................................
133.51, Part 172, subparts A-C
Return to Customs custody, failure to...................................
10.39(e), 141.113(g)
Temporary importation bond--Application for relief......................
10.39(e)
Temporary importation bond, assessment under............................
10.39
Under carrier's bond....................................................
18.8
LIQUIDATION
Appraisement entries....................................................
159.9
Articles not specified on invoice.......................................
152.3
Baggage entries.........................................................
159.10
Bonded merchandise--Shortages...........................................
18.6
Bulletin notice--Forms..................................................
159.9, 159.10
    Change in rate of duty by
Congress or presidential proclamation...................................
152.17
Court decision..........................................................
152.16
Headquarters decisions..................................................
174.27, 174.29, 175.22, 177.10
Classification, change in...............................................
152.2
Clerical errors, correction of..........................................
Part 173
Commingling of goods....................................................
152.13
Computation of duties...................................................
141.104, 159.1, 159.3, 159.4, 159.6
Conditionally free--Failure to produce missing documents................
172.22
Conversion of currency..................................................
Part 159, subpart C
Courtesy notice.........................................................
159.9(d)
Currency, basis for conversion of.......................................
159.35
Deemed..................................................................
159.1
Difference between estimated and liquidated duties......................
159.6
Effective date of rate of duty..........................................
152.16, 159.7(b), 177.10
    Entries
Discrepancy on--New entry required......................................
152.3
Drawback................................................................
191.71
Informal................................................................
159.10
Mail....................................................................
159.10
Protest.................................................................
145.22(c)

[[Page 740]]

Merchandise entered by false documents and seized.......................
162.80
Rewarehouse.............................................................
159.7
Subject to--Exceptions..................................................
159.2
Stamped with date.......................................................
159.9(c)
Visual or auditory materials, suspension................................
10.121(b)
Warehouse...............................................................
159.9, 159.21, 159.52
Withdrawals.............................................................
159.9
Evidence................................................................
159.9(c)
Excessive duties or taxes paid, notice of refund of--Form...............
24.36
Exportation, date of....................................................
159.32
Extension of time.......................................................
159.12
Fractional parts of dollar or unit of quantity..........................
159.3
Instruments and apparatus...............................................
10.114
Internal revenue taxes, computation of..................................
159.4, 159.21
Merchandise manipulated in warehouse....................................
159.21(a)
Method of...............................................................
159.3-159.10
Net weight, when basis for..............................................
159.21, 159.22
Notice of...............................................................
159.9, 159.10
Operation of law........................................................
159.11
Protests against........................................................
174.11
Rates of exchange.......................................................
159.31, 159.38
Required................................................................
159.2
Shortages, allowance of.................................................
18.6, 158.2-158.6
Smelting or refining of metal-bearing materials, entries of.............
151.55
Special duties..........................................................
Part 159, subpart D
Suspension of...........................................................
159.51-159.53, 159.54, 159.55
Weight, gauge, or measure...............................................
159 subpart B
LIQUORS
Aircraft kits...........................................................
Part 122, subpart M
Baggage of diplomatic officials or other representatives................
148.81, 148.82, 148.87-148.90
Blending, permit requirements...........................................
12.37
Bottles and similar containers, imported................................
11.7
Bottling, permit requirements...........................................
12.37
Bulk importations (in casks and similar containers).....................
11.6
Certificate for shipments on small vessels--Penalty.....................
4.13
Crewmembers' declarations and exemptions................................
148.66
Distilled spirits and wines shipped to Puerto Rico......................
7.1
Foreign military personnel, exemptions..................................
148.90
Importation restricted, permits.........................................
12.37
Labeling packages, requirements--penalty................................
12.38
Nonresidents............................................................
148.43
Quantities dutiable or taxable..........................................
159.21
Residents...............................................................
148.33
Strip stamps for bottled................................................
11.6, 11.7
Taxes, internal revenue.................................................
148.26(b)

LITERATURE, TREASONABLE, ETC.--Importation prohibited...................

12.40, 145.51
LIVESTOCK
Exported for exhibition, return--Entry requirements.....................
10.66
Immediate transportation restricted.....................................
18.11

LOAD-LINE REGULATIONS...................................................

4.61, 4.65a

[[Page 741]]

LOCOMOTIVES
Domestic, repaired in foreign country--Dutiable status..................
123.13
Foreign, operating in U.S.--Entry of, when not required.................
123.12

LOSS OF MERCHANDISE IN PUBLIC STORES....................................

158.26

LOTTERY MATTER, MAIL IMPORTATIONS, PROHIBITION..........................

145.51, 146.1

LUMBER, SOFTWOOD FROM CANADA............................................

12.140

                                      M

MACHINERY, EXAMINATION OF, AT MILL OR FACTORY...........................

151.8
MAIL
Absolute quota merchandise..............................................
Part 132, subpart C
Books, engravings, etc., for Government departments or agencies.........
145.37
Books or other articles imported for institutions.......................
145.36
Carnets not accepted for importation by mail............................
114.31(a)
Carriage on vessels.....................................................
4.61
Cigars..................................................................
11.1, 11.2, 145.13
Commercial shipments, invoice requirements..............................
145.11(b)
Copyright, articles marked for..........................................
145.37
Customs declarations and invoices required..............................
145.11(a)
Diplomatic pouches, official documents..................................
145.38
Duties, refund of.......................................................
Part 145, subpart C
    Entry
Examination of..........................................................
145.2, 145.3
Firearms................................................................
145.53
Formal..................................................................
145.12(a)
Forms...................................................................
145.12(e)(2)
Free, conditionally.....................................................
10.43, 10.46, 145.12(d), 145.35-145.39, 145.41
Gifts valued not over $100..............................................
145.32
Informal................................................................
145.12(b)
Institutions, free list of; books, music, etc., for.....................
10.43, 145.36,
Internal revenue tax on mail entries....................................
11.1(a), 145.13
Liquidation of..........................................................
159.9, 159.10
Lottery matter..........................................................
145.51
Marking requirements law (Search for letters)...........................
162.4
Personal and household effects..........................................
145.34
Plant material for export...............................................
145.40, 145.57
Plants and plant products...............................................
145.57
Prohibited or restricted articles, disposition of.......................
145.4, Part 145, subpart E
Protests................................................................
145.22, 145.23
Rates of duty in effect.................................................
145.12(b)(2)
Reading of correspondence, when prohibited..............................
145.2, 145.3
Review of...............................................................
Part 145, subpart C
Search for letters......................................................
162.4
Search warrant to read foreign mail.....................................
145.3
Seizure of, addressee to be notified....................................
145.59(b)
Seizure, when imported contrary to law..................................
145.4, 145.59
Separate shipments, combining for entry.................................
145.12(a)(3)
Shipments not exceeding $200 in value...................................
145.31
Trademarks, trade names and copyrights..................................
145.55

[[Page 742]]

Tools of trade..........................................................
145.34
Undeliverable, detention and disposition of.............................
145.5
U.S. Government offices or officials, articles for......................
145.12(c)
Value exceeding $2,000, entry of........................................
145.12(a)(2)
Value not more than $200................................................
145.31
When not exceeding $2,000 in value......................................
145.4, 145.12(b), 145.41
    Exportations
Continuous Customs custody..............................................
145.71
Imported articles, remission of duties, when............................
145.40, 145.71, 145.72
Plant material..........................................................
145.40
Waiver of right to withdraw.............................................
145.71(b)
Fees, dutiable mail.....................................................
24.22(f)
Foreign representatives, for............................................
145.2(b)(3), 145.38, 145.39, 148.83, 148.85
    Importations
Abortion and contraceptive matter.......................................
145.52
Absolute quota merchandise..............................................
Part 132, subpart C
Addressee dissatisfied with duties assessed.............................
Part 145, subpart C
Administrative review of mail entries...................................
Part 145, subpart C
Alcoholic beverages, nonmailable........................................
145.54
American, Samoa, Guam, or Virgin Islands, from..........................
Part 148, subpart K

MAIZE SEED--Reduced rate................................................

10.57
MANIFESTS
Amendment of, bulk cargo................................................
4.12
    Baggage
Domestic, through contiguous foreign territory..........................
123.21, 123.65
Foreign, from contiguous foreign territory..............................
123.3-123.5
In bond--Form...........................................................
18.13
In transit through U.S..................................................
18.14, 123.64
Boarding vessels for examination of.....................................
162.3
Cargo, departure with to noncontiguous territory........................
4.84
Cargo from wrecked vessel...............................................
4.41
Cargo, vessels trading between U.S. ports on Great Lakes and other U.S. 
ports...................................................................
4.83
Coastwise, vessel touching at foreign port..............................
4.82
    Commercial travelers' samples
Accompanied through Canada and return...................................
10.68, 123.21, 123.51
Accompanied through U.S. and return to Canada...........................
10.68, 123.21, 123.52
Confidential treatment of information...................................
103.31(d)
Contiguous countries, vehicles and vessels less than 5 net tons, from--
Form....................................................................
123.3, 123.4, 123.7
Delivery to boarding officer............................................
4.7
Discrepancies in--Penalty...............................................
4.12
Diversion of cargo from port shown on, amendment of.....................
4.33
Entry of merchandise; line release......................................
142.46, 142.48
Failure to manifest articles when required..............................
4.7a(b)(4)
Failure to manifest narcotic drugs or marihuana.........................
162.65
Failure to list crew's purchases........................................
4.7a(b)(4)
Form....................................................................
18.2, 122.92

[[Page 743]]

Government vessel from foreign port, required...........................
4.5
    In-transit
Baggage through foreign territory, form.................................
123.64, 123.65
Commercial travelers' samples
Merchandise through contiguous foreign territory, form..................
Part 123, subpart C
Merchandise through U.S., form..........................................
Part 123, subpart D
Truck procedures........................................................
123.41, 123.42
    Inward Foreign
Contents, forms.........................................................
4.7
Information required and alternative forms..............................
4.7a
Shipments of containerized or palletized cargo..........................
4.7a(c)(1)
Shipper's load and count and use of term ``SLAC''.......................
4.7a(c)(2)
    Merchandise transported in bond
Conveyance, manifest to accompany each..................................
18.2, 18.3
Disposition of..........................................................
18.2
Merchandise valued not over $250 unconditionally free, manifest used as 
entry...................................................................
123.7
    Outward foreign
Before clearance........................................................
4.61, 4.63, 4.75
Incomplete, bond........................................................
4.75
Passenger--Unaccompanied baggage on board vessel........................
4.7a(e)(4)
Permit, used as.........................................................
18.2
Prematurely discharged or overcarried cargo, form.......................
4.34
Refusal of master to produce to boarding officer, penalty...............
4.7
Sea and ships' stores, etc., when to be manifested......................
4.7, 4.7a
Special manifest........................................................
18.10a
Transit air cargo procedures............................................
Part 122, subpart L
Transshipment of........................................................
18.3
Vehicles................................................................
123.3, 123.4
    Vessels
Discrepancies, and corrections..........................................
4.12
In trade with noncontiguous territory...................................
4.84
Inward foreign--Forms, contents.........................................
4.7
Overage of cargo--Form..................................................
4.12, 4.62
Proceeding foreign via domestic ports...................................
4.87
Shortage of cargo--Form.................................................
4.12, 4.62
Vessels and vehicles, examination of....................................
162.3

MANIPULATION IN WAREHOUSE OR ELSEWHERE..................................

19.11

MANIPULATION OUTSIDE BONDED WAREHOUSE, EXPENSES OF......................

24.17(a)(8)
MARIHUANA AND NARCOTIC DRUGS
Permit to unlade, penalty...............................................
162.66
Unmanifested, penalty...................................................
162.65
When permissible on vessels, aircraft and individuals...................
162.62

MARINE PRODUCTS, CONDITIONALLY FREE.....................................

10.78

MARITIME ADMINISTRATION, VESSELS OF, EXEMPT FROM PENALTIES..............

162.22(e)
MARKING
Bolting cloth for milling purposes......................................
10.58
Containers, foreign substantial, for reimportation......................
10.7
Corn or maize, seed.....................................................
10.57
Country of origin.......................................................
Part 134
Additional duties.......................................................
134.2

[[Page 744]]

Articles repacked or manipulated........................................
134.26, 134.34
Articles subject to marking.............................................
Part 134, subpart B
Certificate of marking..................................................
134.52
Compensation for services of Customs officers and employees.............
134.55
Containers and holders, marking of......................................
Part 134, subpart C
Definition of...........................................................
134.1(b)
Delivery withheld.......................................................
134.3
Exceptions to marking...................................................
Part 134, subpart D
Filing of false certificate, penalty....................................
134.52(d)
Intentional alterations, penalty........................................
134.4
Liquidated damages......................................................
134.54
Notice to mark or redeliver, form.......................................
134.51(a)
Requirements and methods of marking.....................................
Part 134, subpart E
Specific articles, method of marking....................................
134.43
Ultimate purchaser, defined.............................................
134.1(d)
Watches, clocks, and timing apparatus...................................
11.9, 134.43(b)
Customs officers, compensation of.......................................
24.17, 134.55
Disposition of articles not properly marked.............................
134.51-134.54
Drums of foreign manufacture exported...................................
10.7
Duties..................................................................
159.46
Furs, other skins or seal skins.........................................
12.61-12.63
Gold or silver articles, false, penalty.................................
11.13
Labeling................................................................
11.9, 11.12, 11.12a, 11.12b, 11.13
Liquor packages, penalty................................................
12.38
Liquors in casks and similar containers.................................
11.6
Milk and cream containers...............................................
12.7
Packages containing merchandise produced by convict labor, penalty......
12.45
Potatoes, seed..........................................................
10.57
Vehicles and vessels....................................................
112.27
Viruses, serums, and toxins, containers of..............................
12.18, 12.22

MARKING OF LICENSED VEHICLES AND LIGHTERS, CARTAGE......................

112.27

MARKING OF PACKAGES SHIPPED BY MAIL.....................................

145.11

MASTER CREW MEMBER LIST AND MASTER NON-CREW MEMBER LIST REQUIREMENT FOR 
COMMERCIAL AIRCRAFT ARRIVING IN, CONTINUING WITHIN, AND OVERFLYING THE 
UNITED STATES...........................................................

122.49c

MASTER RECORDS AND METAL MATRICES.......................................

10.90

MASTER'S DECLARATION--Repairs and equipment obtained abroad.............

4.14

MASTER'S OATH, CLEARANCE OF VESSEL ON--Form.............................

4.63

MATCHES, WHITE PHOSPHORUS--Importation prohibited.......................

12.34
MEASUREMENT
Cotton..................................................................
Part 151, subpart F
Petroleum products......................................................
Part 151, subpart C
Sugar, syrups, and molasses.............................................
Part 151, subpart B
Wool and hair...........................................................
Part 151, subpart E

[[Page 745]]

MEASURING WAREHOUSED GOODS FOR EXPORTATION OR TRANSPORTATION............

144.37(e)
MEAT AND MEAT-FOOD PRODUCTS
Entry procedure.........................................................
12.8, 12.9
Exportation of, inspection by Animal and Plant Health Inspection 
Service, U.S.D.A........................................................
4.61, 4.72

MEDICINAL PREPARATIONS, STAMPING........................................

11.1

MELTING, METAL ARTICLES TO BE USED IN REMANUFACTURE BY..................

54.5, 54.6
MERCHANDISE
Abandoned, forfeited, or unclaimed goods subject to internal-revenue 
tax, disposition of.....................................................
127.28(e), (f), (g)
    Abandoned or destroyed
Application to abandon, form............................................
Part 158, subpart D
Duty allowance..........................................................
Part 158, subpart D
Appraisement entries....................................................
Part 143, subpart B
Appraisement to be made.................................................
152.101
Articles not specified on invoice.......................................
152.3
Baggage, not for personal use, in.......................................
148.23(c)
Bearing trademarks or trade names.......................................
Part 133, subpart C
    Bonded
Carrier to furnish warning cards for cars, etc..........................
18.4
Diversion of Transportation entry to another port.......................
18.5
Immediate transportation without appraisement...........................
18.11, 18.12
Marking required for vehicles or lighters to carry......................
112.27
Receipt by Carrier......................................................
18.2
Sealing of conveyances, etc.............................................
18.4
Seals, removal..........................................................
18.3(d)
Shortages...............................................................
18.6
Splitting shipments at intermediate or destination port.................
18.5(d)
Transportation of.......................................................
18.1-18.7, Part 112, subpart B
Transportation of, nonbonded goods with.................................
18.4(c)
Transshipment...........................................................
18.3
Cartage and lighterage..................................................
Part 125
Cartmen's liability.....................................................
125.41, 125.42
Coastwise transportation................................................
4.80b
Commingling of--Segregation.............................................
152.13
Condemned perishable--Allowance in duty.................................
158.14
Contiguous country, from................................................
123.3-123.8
Contrary to law, imported...............................................
162.21, 162.22
Copyrighted.............................................................
Part 133, subpart E
Damaged or Defective--Duty allowance....................................
Part 158, subpart B
Designation of packages for examination.................................
151.1-151.3
Detention of............................................................
151.16
Discrepancy between shipment and invoice, liquidation...................
152.3
Dutiable, in baggage examined in foreign country........................
148.22
Duty paid, in public stores or bonded warehouses--Undelivered, 
disposition.............................................................
127.14
Entry for manipulation..................................................
19.11
Entry; line release processing..........................................
Part 142, subpart D

[[Page 746]]

    Entry of
From vessel sunk for 2 years............................................
4.41(c)
Unclaimed, before sale..................................................
127.14
Entry, when and when not required.......................................
141.4, 10.151-10.153, 148.62(b), 148.85-148.88
Examination of, prior to entry, inspection charges......................
151.5
Excessive moisture and other impurities--Duty allowance.................
158.13
Exportation of, final port, in transit..................................
123.28
Exported contrary to law, seizure.......................................
161.2(b)
    Exported for
Alterations or repairs..................................................
10.8
Exhibition, return of...................................................
10.66
Scientific or educational purposes, return..............................
10.67
Exported from Customs custody...........................................
158.45
Fee, ad valorem merchandise.............................................
24.23
Foreign, destined to foreign countries via U.S. port....................
4.88, 4.89
Foreign military personnel and their immediate families.................
148.90
Foreign representative, free entry privilege............................
Part 148, subpart I
    Forfeited
Remission or mitigation of fine, penalty, and forfeiture--Petitions.....
162.32, Part 171, subparts B-D
Sold, petition for restoration of proceeds..............................
Part 171, subpart E
    Forfeiture
Failure to declare in baggage, penalty..................................
148.18
Prohibited importation of immoral articles..............................
12.40-12.41
Sale....................................................................
162.45-162.48
General order procedure.................................................
4.37
Government importations.................................................
141.102(d), 10.100-10.104, 145.37
Immediate delivery, special permit for..................................
Part 142, subpart C
Importation date........................................................
101.1
Imported in vessels of less than 30 net tons............................
4.100
Importing contrary to law...............................................
162.22
Informal entry of, information to be shown..............................
Part 143, subpart C
Institutions, articles--Conditionally free..............................
10.43
    In transit through contiguous foreign territory
Authority for...........................................................
123.21(c)
Manifest--Form, contents, and disposition...............................
Part 123, subpart C
Procedure at port of exit...............................................
123.22(a), 123.28
Procedure at port of reentry............................................
123.29
Sealing.................................................................
123.24
Seals, in bond or in transit, breaking..................................
123.21, 123.26, 123.29
Storage in foreign territory............................................
123.26(b)
Train consist sheets....................................................
123.23, 123.29
Transshipment in foreign country........................................
Part 123, subpart D, 123.52, 123.64
    In transit through U.S.
Between ports of a contiguous country...................................
Part 123, subpart D, 123.52, 123.64

[[Page 747]]

To foreign countries....................................................
18.20-18.24
Laden on vehicle or vessel without special license or permit............
148.67(b), 162.22
Landed, unentered, when to be sent to general order.....................
4.37
Library of Congress, articles for.......................................
10.46, 145.37
Line release processing.................................................
Part 142, subpart D
Loss of, by cartmen--Liability..........................................
125.35, Part 125, subpart E
Loss of, in public stores...............................................
Part 158, subpart C
Mail importations.......................................................
Part 145
Manipulated in warehouse................................................
19.11, 159.21(a)
Marking country of origin, exceptions...................................
11.9, Part 134, subparts D and E
Noncommercial importations of limited value.............................
Part 148, subpart J
Nonimportation--Duty allowance..........................................
158.11
Not properly marked, disposition of.....................................
Part 134, subpart F
Obscene, etc.--Importation..............................................
12.40, 12.41
Omission of merchandise on invoice......................................
152.3
    Perishable
Inspection before entry or while in transit, inspection charges.........
151.4, 151.5
Unclaimed, sale.........................................................
127.28(c)
Place of examination....................................................
151.6, 151.7, 151.8
Proceeds of sale of, disposition of.....................................
Part 127, subpart D
Produced by convict, forced, or indentured labor--Importation prohibited
12.42-12.45
Recall..................................................................
141.113, 151.11
Recovered from wrecked vessel or as derelict, Disposition...............
4.41
Refused by consignee, when to be treated as unclaimed...................
141.1(f)
Reimported goods dutiable, exceptions...................................
141.2
    Rejected
Exportation of..........................................................
158.45
Exportation of--Drawback................................................
191.42
Viruses, serums, and toxins.............................................
12.20, 12.23
    Release of
In warehouse, limitation on.............................................
19.6
Nonexamination packages, form...........................................
141.102(d)
From carrier or warehouse proprietor....................................
Part 141, subpart H
When lien exists........................................................
141.112
Remaining unsold........................................................
127.29
Responsibility for, in warehouse........................................
144.2
Restricted or prohibited importations, exportation......................
18.25, 18.26
Return to Customs custody--Default on bond, liquidated damages..........
141.113(g), Part 113, subpart F, Part 172, subpart C
Rewarehousing...........................................................
144.41, 144.42

[[Page 748]]

Sale notices--Catalogs..................................................
127.24, 127.26
    Sale
Abandoned or unclaimed..................................................
Part 127, subpart C
Forfeited...............................................................
162.46, 162.48, 162.49
Forfeited, disposition of proceeds--Expenses............................
162.51
Unclaimed perishable goods..............................................
127.28(c)
Samples, taking of prior to entry.......................................
151.4, 151.5
Sealed by Customs officer...............................................
123.24, 123.33, 18.4
Search and examination..................................................
162.6
    Seized
Appraisement of.........................................................
162.43
By State officer--Adoption by Customs...................................
162.21
Disposition after summary forfeitures...................................
162.46
Disposition when inspection by other Government agency required.........
162.46(b)
Perishable or liable to waste or deteriorate in value--sale.............
162.48
Release
On payment of appraised value...........................................
162.44
Petition for............................................................
162.31, Part 171, subpart B, 171.22, Part 171, subpart D
Under bond--Petition to court...........................................
162.47(b), 162.49(b)
 Subject to summary forfeiture
 Release under bond.....................................................
162.47, 162.49
 Claim and bond to stop summary forfeiture..............................
162.47
Treatment of............................................................
Part 162, subpart E
Proceedings by libel....................................................
162.42
    Seized and forfeited
Destruction of, when....................................................
162.46, 162.50
Disposition.............................................................
162.46, 162.48
Reports to U.S. attorneys--When required................................
162.32, 162.47(d), 162.49(a), 172.3
Sale....................................................................
162.45-162.52
State laws prohibiting sale.............................................
162.46(c)(2), 162.50
Transfer to other districts for sale....................................
162.46, 162.50
Seizure of--In passengers' baggage......................................
148.18, 148.19
Shortages--Duty allowance...............................................
158.2-158.6
Smuggled................................................................
162.22, 148.18(a)
Special marking requirements, exceptions................................
11.9, Part 134, subpart D 134.42-134.44
Special permit for immediate delivery...................................
Part 142, subpart C
State importations dutiable.............................................
141.1(e)
Summary sale............................................................
162.45 -162.48
Supplies for vessels withdrawn from warehouse...........................
10.59
Transfer to another warehouse...........................................
144.34
Transportation of, by bonded carriers...................................
Part 112, subpart B
    Transported by pipeline
Abandonment of exportation..............................................
18.44
Applicability...........................................................
18.41

[[Page 749]]

Direct exportation......................................................
18.42
Indirect exportation....................................................
18.43
Pipeline transportation of bonded merchandise...........................
18.31
Supervision of exportation..............................................
18.45
    Unclaimed
Abandonment and sale....................................................
127.13, 127.14, Part 127, subpart C, Part 127, subpart D
Entry of................................................................
127.13(a), 127.2
Storage and other expenses, payment of..................................
127.13(b)
Unclaimed or in warehouse beyond the time fixed by law, disposition.....
127.11, 127.14
Undeliverable by cartmen................................................
125.36
Unentered, exportation of...............................................
158.45(a)
U.S., articles of.......................................................
145.37, 141.102(d), 10.100-10.104
Unladen from vehicle or vessel without special license or permit........
162.22
Valuation...............................................................
152.101
Value not exceeding $5..................................................
10.153(e)
Warehouse, sent to public stores--Disposition...........................
19.10
Warehouse withdrawal period.............................................
144.5
Warehouse withdrawals for exportation...................................
144.37
Warehoused, liability for duties........................................
144.2
Weighing, gauging, or measuring warehouse merchandise for exportation or 
transportation..........................................................
144.37(e)
When duties accrue on...................................................
141.1
Withdrawal from warehouse for consumption--Form and procedure...........
144.38
Withdrawal from sale....................................................
127.14
Withdrawal of, by transferee............................................
144.27, Part 144, subpart C
Withdrawn for exportation but not laden, disposition of by inspector....
144.37(f)

METAL ARTICLES FOR REMANUFACTURE BY MELTING.............................

Part 54

METAL-BEARING ORES AND METAL-BEARING MATERIALS..........................

Part 151, subpart D

METAL MATRICES FOR SOUND RECORDS FOR EXPORT.............................

10.90
MEXICO
Articles repaired or altered............................................
181.64
Resident returning from--exemption......................................
148.35(a)
Vehicles, stolen, returned from.........................................
123.82

MIDWAY ISLANDS..........................................................

7.2, 7.3, 191.5

MILK AND CREAM, IMPORTATION OF--Special requirements....................

12.7

MISSING DOCUMENTS, BOND FOR.............................................

141.66

MISTAKE OF FACT.........................................................

162.71, 162.73

MITIGATION OF FINES, PENALTIES, AND FORFEITURES--Petitions..............

162.31, 162.32, Part 171, subpart B

MODELS AND PATTERNS FOR INSTITUTIONS....................................

10.43

MODELS OF WOMEN'S WEARING APPAREL--Temporary importation bond...........

10.31, 10.35
MOISTURE ALLOWANCE
Ores and metals.........................................................
151.55

[[Page 750]]

Petroleum products......................................................
151.46
Raw sugar...............................................................
151.23

MOISTURE, EXCESSIVE, DUTY ALLOWANCE.....................................

158.13
MOLASSES (SEE SUGAR, SIRUPS, AND MOLASSES.)
MOROCCO FREE TRADE AGREEMENT (See, UNITED STATES-MOROCCO FREE TRADE 
AGREEMENT)
MOTION-PICTURE FILMS
American goods returned.................................................
10.1
Exported and returned...................................................
10.68
Theatrical effects, not.................................................
10.33

MOTOR CARRIERS, BONDED CARRIERS, AS.....................................

18.1, 112.11, 112.12(b)(4)

MOTOR VEHICLES--Safety standards........................................

12.80

MULTIPLE ENTITIES.......................................................

141.58

MULTIPLE INVOICES.......................................................

141.61(f)

MUNITIONS AND ARMS, EXPORTATION OF......................................

4.61, 4.73

MUNITIONS OF WAR, CONTROLLED IMPORTS AND EXPORTS--Seizure...............

161.2

                                      N

NAFTA (See NORTH AMERICAN FREE TRADE AGREEMENT)
NARCOTICS
Arrests and seizures....................................................
162.63
Controlled imports and exports, seizure of..............................
161.2(b), 162.63
Exportation to other countries, unlawful................................
162.61
Forfeited, disposition of...............................................
162.63
Importation and exportation procedure...................................
12.36
In transit through U.S..................................................
18.21
Medical stores on vessels...............................................
4.39, 162.62
Permit to unlade--Penalty...............................................
162.66
Seized, disposition.....................................................
162.63
Unmanifested--Penalties.................................................
162.65

NATIONALITY OF VESSEL, VERIFICATION OF..................................

4.61, 4.65

NAVIGATION FEES.........................................................

4.98
NEUTRALITY
Bonds, special..........................................................
113.71
Observance of, by vessels...............................................
4.73

NEWSPAPERS, INFORMATION TO..............................................

10.31, 103.31

NEWSREEL FILMS EXPOSED ABROAD...........................................

10.10

NIGHT, DEFINITION.......................................................

24.16

NOMINAL CONSIGNEE, BANKRUPT--REFUND OF EXCESSIVE DUTIES AND INTERNAL-
REVENUE TAXES...........................................................

24.36
NONCONTIGUOUS TERRITORY
Definition..............................................................
4.0
Vessels in trade with...................................................
4.84, 4.90

NONIMPORTATION, WHAT CONSTITUTES--Duty allowance........................

158.11
NONRESIDENTS
Articles carried through U.S............................................
148.41
Consignee, entry of merchandise.........................................
141.17
Definition..............................................................
148.2(c)
Exemptions allowed......................................................
Part 148, subparts E and F
Jewelry, sale...........................................................
148.46
Vehicles, free entry....................................................
148.45

[[Page 751]]

NORTH AMERICAN FREE TRADE AGREEMENT.....................................

10.31(f), 24.23(c)(3), Part 102, 174.12(a)(5), 174.15(b), Part 181

NORTHERN MARIANA ISLANDS, Commonwealth of the...........................

7.2, 148.101, 148.102, Part 148,subpart K
NOTICES
Advance in value........................................................
152.2
Clean yield (wool or hair) to importer..................................
151.64, 151.71(b)
Commingling of merchandise..............................................
152.13(a)
Denial of protest.......................................................
174.30
Duties due, to importer.................................................
24.11
Fines, penalties, and forfeitures, to offender..........................
162.31(a)
Grade (wool or hair), to importer.......................................
151.76(b)
Increased duties, possible..............................................
152.2
Internal-revenue taxes due, to importer.................................
24.11
Internal-revenue taxes, refund of.......................................
24.36
Liquidated damages incurred.............................................
172.1
Liquidated entries, to be posted........................................
159.9, 159.10
Mail importations value over $2,000, notice to addressee................
145.12(a)(4)
Motor vehicles--Safety standards........................................
12.80(h)
Penalties...............................................................
111.92
Return to customs custody--Form.........................................
141.113, 151.11
Sale of merchandise, to importer........................................
127.24
Seizure, addressee to be notified.......................................
145.59
Seizure and intent to forfeit property..................................
162.45
Shooks and staves--Form.................................................
10.5
Staple length (cotton), to importer.....................................
151.84
Substantial containers or holders.......................................
10.7
Test of sugar, molasses, and syrup, to importer.........................
151.31

                                      O

OBLIGATIONS OF THE U.S.
Counterfeit, prohibited importation.....................................
12.48

OBSCENE MATTER--Importation prohibited..................................

12.40, 12.41

OFFERS IN COMPROMISE....................................................

161.5

OFFICIALS OF FOREIGN GOVERNMENT--FREE ENTRY PRIVILEGE...................

Part 148, subpart I

OFFSPRING OF ANIMALS--FOREIGN PASTURAGE AND STRAYS......................

10.74

OIL OR REFUSE DISCHARGED BY VESSEL IN NAVIGABLE WATERS..................

4.66a, 4.66b, 4.66c
OILS
Product of American fisheries...........................................
10.78
    Vegetable--Olive, palm-kernel, rapeseed, sunflower, and sesame
Denaturing..............................................................
10.56
Release.................................................................
10.56

OMB CONTROL NUMBERS, LISTING OF.........................................

178.2
OPIUM
Controlled substances...................................................
162.61
Unmanifested--Penalty...................................................
162.65

OPTIONAL PORTS IN INTERCOASTAL TRADE....................................

4.86

ORAL DECLARATIONS.......................................................

148.12

ORES AND CRUDE METALS...................................................

Part 151, subpart D

[[Page 752]]

ORES AND METALS
Domestic substituted, for drawback......................................
191.32
Entry of, in bond.......................................................
19.17
Sampling and assaying...................................................
19.17, 151.51, 151.52

ORGANIZATION OF AMERICAN STATES.........................................

148.88

ORIGINAL EQUIPMENT--AUTOMOTIVE..........................................

10.84
ORIGIN
Country of..............................................................
Part 134
Rules; NAFTA............................................................
181.131

OTTER FUR SKINS.........................................................

12.60-12.63

OUTBOUND ADVANCE CARGO REPORTING REQUIREMENTS...........................

192.14

OVERAGE OF CARGO--FORM..................................................

4.12, 4.62
OVERTIME
Application for service--Form--Bond.....................................
4.10, 24.16
Application for unlading or lading, approval of--Form--Bond.............
4.30
Assignments.............................................................
24.16(d)
Bond covering--Vehicles.................................................
123.8
Bond for--Vessel of less than 5 net tons, contiguous country, from......
123.8
Compensation--Bond......................................................
24.16
Computation of compensation.............................................
24.16
    Definition--
Holiday.................................................................
24.16
Night...................................................................
24.16
Entry and clearance on board vessels....................................
4.16
License, special, unlading or lading vessels--Form......................
4.30
Marking, supervision....................................................
134.55
One-half day's pay, definition of.......................................
24.16
Request for service in connection with boarding, entry or clearance of 
vessels--Form--Bond.....................................................
4.10
Waiting time subject to overtime compensation...........................
24.16
OWNER OF MERCHANDISE
Consignee (nominal) as..................................................
141.19, 141.20
Examination of, citation to appear and testify..........................
162.2

                                      P

PACKAGE SEALS, PROCURING AND ACCOUNTING.................................

24.13

PACKAGES, DESIGNATION OF, FOR EXAMINATION...............................

151.1-151.3

PACKED PACKAGES, ENTRY OF...............................................

141.52

PACKING COSTS--VALUATION-DEFINED, TRADE AGREEMENTS ACT OF 1979..........

152.102(e)

PACKING TOBACCO PRODUCTS................................................

11.1, 11.2
PANAMA CANAL
    Vessels transiting--
Clearance of............................................................
4.60
Crews' effects..........................................................
148.3
Passengers' baggage.....................................................
148.3
Report of...............................................................
4.4
Tonnage tax not affected by transiting..................................
4.20

PARCEL POST, IMPORTATIONS BY............................................

Part 145, subpart B

PARCEL POST PACKAGES, EXPORTATION FROM WAREHOUSE........................

144.37(c)

PARROTS--IMPORTATION PROCEDURE..........................................

12.26
PARTNERSHIPS
Bond, execution by......................................................
113.32

[[Page 753]]

Partners as sureties on bond............................................
113.36
PASSENGER LIST
Foreign trade--Production...............................................
4.50
Specifications..........................................................
4.50, 4.7

PASSENGER NAME RECORD (PNR) INFORMATION.................................

122.49d
PASSENGERS
Aircraft; stopover......................................................
122.88
Articles taken out, registered for identification.......................
148.1
Baggage not accompanying................................................
148.6
Classes--Residents and all others.......................................
148.2
Coastwise transportation................................................
4.80a
Contiguous country, from--..............................................
123.1-123.5
Definition..............................................................
4.50
Fees, passengers aboard vessels or aircraft.............................
24.22(g)
Personal or household effects not accompanying..........................
148.51-148.53
Report of arrival.......................................................
123.1
Request for reexamination of baggage....................................
148.25

PASSENGERS AND BAGGAGE, LIST OF.........................................

4.7

PASSENGERS' DECLARATIONS--OMITTED ARTICLES--PENALTY.....................

148.18

PASSES, CUTTER AND DOCK.................................................

4.1
PATENTS
Fee.....................................................................
24.12(a)
ATNA RICE...............................................................
10.132

PAYMENTS OF STATE AND FEDERAL FEES......................................

4.61

PAYMENTS DUE DECEASED OR INCOMPETENT PUBLIC CONTRACTORS AND IMPORTERS OR 
OWNERS OF MERCHANDISE...................................................

24.70
PENALTIES
Air cabotage............................................................
122.165
Cargo manifest discrepencies............................................
122.162
Commerce................................................................
Part 122, subpart Q
Aircraft, remission or mitigation of....................................
171.11
Arrival, departure, discharge, and......................................
122.166
Articles, various--Import and export controls...........................
161.2(b)
Aviation smuggling......................................................
122.167
Baggage and vehicles from contiguous country, failure to open...........
123.63
Baggage declaration, false statement, etc., as to.......................
148.19
Baggage, failure to declare articles in.................................
148.18
Boarding or leaving vessels without permission--Penalty.................
4.1
Cancellation of.........................................................
133.51
Clerical errors.........................................................
162.73
Compromise of claims....................................................
161.5
Contiguous countries, vehicles and vessels from, failure to report......
123.2
Controlled imports and exports..........................................
161.2, 162.61
Copyrighted articles....................................................
133.41(b), 133.52(b)
Crews' effects--Failure to declare......................................
148.67
Definitions.............................................................
162.71
Demand for payment of, smuggled articles of small value.................
162.31(c)
Determination of, measured by value.....................................
162.43
Exportation from different port.........................................
122.164
Fishing vessels, touching and trading foreign...........................
4.15, 4 N 28
Fraud...................................................................
162.73
Gold and silver articles, false marking of..............................
11.13

[[Page 754]]

Gross negligence........................................................
162.73
    Guidelines
19 U.S.C. 1497..........................................................
Part 171, Appendix A
19 U.S.C. 1592..........................................................
Part 171, Appendix B
19 U.S.C. 1641..........................................................
Part 171, Appendix C
Mitigation, availability of.............................................
171.23
Holding and proceeding against vessel or vehicle for payment of.........
162.22
Importations contrary to law............................................
162.21, 162.22, 145.4, 162.63, 123.81
Liquor, Customs marking and stamping bulk...............................
11.6
Locomotives and railway equipment, foreign--irregular use...............
123.12(c)
Mail, unlabeled, dutiable goods in sealed...............................
145.4
Manifest--Discrepancies in..............................................
4.12
Marihuana--Unmanifested-Unladen without permit..........................
162.65, 162.66
Maritime Administration vessels, exemption from.........................
162.22(e)
Marking of gold or silver articles, false...............................
11.13
Marking of liquor packages..............................................
12.38
    Master of vessel or vehicle--
Failure to--
Report arrival from contiguous countries................................
123.1, 123.2
Merchandise arriving under bond, failure to deliver.....................
18.8
Merchandise in buildings on boundary line...............................
123.81
Mitigation of--Petition.................................................
162.31, 171.11
NAFTA transactions......................................................
Part 181, subpart H
    Narcotics and certain other drugs--
Unmanifested--Unladen without permit....................................
162.65, 162.66
Narcotics, marihuana, and certain other drugs--Importation and 
exportation of..........................................................
12.36, 162.63
Negligence..............................................................
162.73
Nonpayment of--Claim to be referred to U.S. attorney....................
162.32
Notice of, to offender, and prepenalty notice...........................
162.31, 162.76-162.79(a)
Obscene matter, etc., importation of....................................
12.40, 12.41
Oil or refuse discharged from vessel into navigable waters..............
4.66a, 4.66b
Oral presentations seeking relief.......................................
171.3
    Passenger--
Failure to declare......................................................
148.18
    Personal--
Detention of vessel or vehicle as security..............................
162.22(d)
Persons assisting or financing unlawful importation or transportation of 
merchandise.............................................................
162.22(b)
Smuggling activities, etc...............................................
162.22
Petition for relief from................................................
171.11, 171.12
Pre-Columbian artifacts.................................................
12.109
Prepenalty notice.......................................................
162.76-162.79(a)
Prior disclosure........................................................
162.74
Railway equipment and supplies..........................................
123.12(c)
Recovery of actual loss of duties, taxes and fees or actual loss of 
revenue.................................................................
162.79b

[[Page 755]]

Remission or mitigation of fines, penalties, and forfeitures............
148.18(b), 162.32, 171.11
Remission or mitigation of--Petitions...................................
171.11
Seals, breaking of bond.................................................
18.4
Section 593A, Tariff Act of 1930........................................
162.73a
Switchblade knives......................................................
12.97, 12.101, 12.103
Trademarked articles....................................................
133.21, 133.52(a)
Transit air cargo.......................................................
122.163
Transportation in bond--Shortage or irregular delivery..................
18.8
Unlading prior to report or entry.......................................
4.6
Unmanifested merchandise of vessel crew.................................
4.7a(b)(4)
    Vessels--
Departure of, before report or entry....................................
4.6
Discharging oil or refuse matter in navigable waters....................
4.66a, 4.66b
Failure to make report of arrival or entry..............................
123.2
Maritime Administration, exemption from.................................
162.22(e)
Violation of coastwise laws.............................................
4.80(b)
Wild animals and birds, unlawful importation............................
12.27, 12.28

PERFUMERY, STAMPING.....................................................

11.1
PERISHABLE MERCHANDISE
Condensed--Allowance in duty............................................
158.14(b)
Inspection before entry or while in transit.............................
151.4, 151.5
Sale of seized..........................................................
162.48-162.51
Sale of unclaimed.......................................................
Part 127, subpart C
Unclaimed, transfer to bonded cold-storage warehouse....................
127.28(c)
Warehousing of, prohibited..............................................
144.1

PERMISSION TO DEPART TO NONCONTIGUOUS TERRITORY, WHEN REQUIRED FOR 
VESSELS OF U.S..........................................................

4.84
PERMITS
Agency of U.S. Government...............................................
142.21(c)
Application for, form...................................................
142.22
Articles of a trade fair................................................
142.21(d)
Blending or rectifying wines or liquors.................................
12.37
Bottling liquors........................................................
12.37
Customs brokers.........................................................
111.19
Delinquent payment......................................................
142.26
Discontinuance of immediate delivery....................................
142.25
Failure to file timely..................................................
142.27
Fresh fruits and vegetables.............................................
142.21(b)
Immediate delivery, special permit......................................
142.21-142.28
Lading or unlading vehicle and vessel of less than 5 net tons from 
contiguous country......................................................
123.8
Liquor, when required...................................................
12.37
Merchandise eligible for................................................
142.21
Merchandise from Canada and Mexico (including fresh fruits and 
vegetables).............................................................
142.21(b)
Milk and cream importations.............................................
12.7
Plant and plant product importations....................................
12.11-12.13
Prohibited merchandise..................................................
142.28
Quota-class merchandise.................................................
142.21(e)
Release of cargo........................................................
4.38
Rewarehouse, issuance of--form..........................................
144.34
Supplies for vessels withdrawn from warehouse, delivery permit..........
10.61
Term special permit.....................................................
142.24

[[Page 756]]

Time for filing.........................................................
142.23
Trucks, buses, and taxicabs--international traffic......................
123.14(d)
Unlading of crews effects...............................................
4.30, 4.39
Vehicles and vessels from contiguous country............................
123.2
Vessel permit to unlade or lade--form...................................
4.30, 123.8
Viruses, serums, and toxins for treatment of domestic animals...........
12.17
Warehouse entry, issuance of............................................
144.11, 144.38, 144.21
Warehouse withdrawals for consumption, disposition of, by warehouse 
officer.................................................................
144.38

PERSONAL AND HOUSEHOLD EFFECTS OF CERTAIN CLASSES OF PERSONS IN THE 
SERVICE OF THE U.S., OF THEIR FAMILIES, AND OF EVACUEES, FREE ENTRY OF..

148.71
PERSONAL EFFECTS
Baggage.................................................................
Part 148, subpart C
Citizens dying abroad...................................................
148.54
Noncommercial importations of limited value.............................
Part 148, subpart J
Reliquidation of entry..................................................
173.5

PERSONAL OR HOUSEHOLD EFFECTS--PROTEST UNNECESSARY FOR RELIQUIDATION....

173.5

PERSONNEL AND MEDICAL FILES--DISCLOSURE OF INFORMATION..................

103.12(f)

PERSONS AUTHORIZED TO RECEIVE CUSTOMS COLLECTIONS.......................

24.2

PERSONS RETURNING FROM ABROAD--PROFESSIONAL BOOKS--TOOLS OF TRADE.......

148.53

PERSONS, SEARCH AND EXAMINATION OF......................................

162.6

PESTICIDES AND DEVICES..................................................

12.110-12.117
PETITIONS
Authority of Customs officers to act....................................
171.11-171.13, 172.11-172.13
Disposition of..........................................................
Part 171, subpart C, Part 172, subpart C
Generally...............................................................
Part 171, subpart A, Part 172, subpart A
Headquarters advice.....................................................
171.14, 172.14
Limitation on consideration of petitions................................
171.13
Offers to compromise....................................................
Part 171, subpart D, Part 172, subpart D
Relief from fines, penalties, or forfeitures............................
162.31, 171.11, 171.21, 171.24
Relief from liquidated damages..........................................
Part 172, subpart B
Restoration of proceeds.................................................
Part 171, subpart E
Waivers of statutes of limitation.......................................
171.64, 172.43

PETROLEUM AND PETROLEUM PRODUCTS........................................

Part 146, subpart H
Allowance for excessive water and sediment..............................
151.46, 158.13
Controls on lading and gauging..........................................
151.42

[[Page 757]]

Information on entry summary............................................
151.41
Released under entry or immediate delivery..............................
151.47
Storage tanks...........................................................
151.44
Storage tanks bonded as warehouses......................................
151.45

PETROLEUM, CRUDE, CANADIAN..............................................

10.179

PIRATICAL Articles......................................................

133.42

PLANT PESTS.............................................................

12.31
PLANTS AND PLANT PRODUCTS
Entry procedure.........................................................
12.10-12.15
Mail importations.......................................................
12.10-12.15, 145.40, 145.57
Unclaimed shipments, disposition of.....................................
12.13
PLUMAGE
Artificial flies for fishing............................................
12.29
Domesticated and wild birds.............................................
12.29
Game birds..............................................................
10.76, 12.29

PLUMAGE AND EGGS OF WILD BIRDS, IMPORTATION--RESTRICTIONS...............

12.29

POLLUTION OF COASTAL AND NAVIGABLE WATERS...............................

4.66a, 4.66b, 4.66c
PORT MARKS
Merchandise to be exported..............................................
18.27
Merchandise withdrawn from warehouse for exportation....................
144.37(d)

PORT OF DESTINATION, CHANGE OF, EMERGENCY...............................

4.33
PORTS OF ENTRY
By districts............................................................
101.3(b)
Customs stations........................................................
101.4
Definition..............................................................
101.1
Merchandise subject to sale at, to be reported to headquarters for 
disposition.............................................................
127.22
Shortage reports under transportation entries...........................
18.6

PORTS OR PLACES, CLOSED.................................................

4.61, 4.67

PORT ENTRY..............................................................

4.12, 4.62

POSTAGE STAMPS, ILLUSTRATIONS OF........................................

12.48

POTATOES, SEED--REDUCED RATE OF DUTY....................................

10.57
POWERS OF ATTORNEY
Corporate surety........................................................
113.37
General, definitions and form of........................................
141.31-141.32,191.6
Protests................................................................
174.3

PRACTICE, ESTABLISHED AND UNIFORM.......................................

177.10(c)

PRATIQUE................................................................

4.9, 4.61, 4.70

PRE-COLUMBIAN SCULPTURE.................................................

12.106-12.109

PRECLEARANCE OF AIR TRAVELERS' BAGGAGE..................................

148.22

PREFERENTIAL TARIFF TREATMENT (CBTPA)...................................

10.233, 10.235, 10.237
PREFERENTIAL TREATMENT
AGOA....................................................................
10.213, 10.215, 10.217
CBTPA...................................................................
10.223, 10.225, 10.227

PRELIMINARY ENTRY OF VESSELS--CERTIFICATION--FORM.......................

4.8

PRESS, INFORMATION......................................................

10.31, 103.31
PRESUMPTIONS
ATPA....................................................................
10.206
CBI.....................................................................
10.195
GSP.....................................................................
10.176

PRICE PAID OR PAYABLE--VALUATION-DEFINED, TRADE AGREEMENTS ACT OF 1979..

152.102(f)

[[Page 758]]

PRIOR DISCLOSURE, PENALTIES.............................................

162.74
PRIVILEGES
Container station; revocation...........................................
19.48
FTZ; revocation.........................................................
146.83

PROCEEDINGS, FOREIGN; DISCLOSURE OF.....................................

Part 103, subpart B
PROCEEDS OF SALE
Abandoned merchandise, disposition of...................................
158.44
Seized property--Disposition, expenses..................................
162.51
Petition for restoration of.............................................
171.41-171.44
Surplus, claim for......................................................
127.36
Unclaimed merchandise...................................................
127.31-127.37
Warehouse merchandise...................................................
127.32, 127.37
When insufficient to pay duty...........................................
127.32
PROCESSING, FURTHER-VALUATION
Deductive value.........................................................
152.105(i)

PROFESSIONAL ARTISTS, LECTURERS, AND SCIENTISTS, ARTICLES BROUGHT IN 
UNDER TEMPORARY IMPORTATION BOND BY.....................................

10.31

PROFESSIONAL EQUIPMENT OF NONRESIDENTS SOJOURNING TEMPORARILY--TEMPORARY 
IMPORTATION BOND........................................................

10.31, 10.36
PROFIT AND GENERAL EXPENSES--VALUATION
Computed value..........................................................
152.106(c)
Deductive value.........................................................
152.105(e)

PROGRAM; AIR CARRIER SMUGGLING PREVENTION...............................

Part 122, subpart R
PROGRAMS
CES.....................................................................
Part 118
Customs.................................................................
Part 122, subpart R, Part 123, subpart H, Part 142, subpart D, 163.12, 
Part 191, subpart S
Entry of merchandise; line release......................................
Part 142, subpart D
Gaugers.................................................................
151.13
Immediate delivery......................................................
Part 142, subpart C
Laboratories............................................................
151.12
Land Border Carrier Initiative..........................................
Part 123, subpart H
LBCIP...................................................................
Part 123, subpart H
Line release............................................................
Part 142, subpart D
Test procedures.........................................................
101.9
Testing of merchandise; accredited......................................
151.12
Testing of merchandise; approved........................................
151.13
PROHIBITED OR RESTRICTED IMPORTATIONS
Abortions, articles for causing.........................................
12.40, 145.51
Agricultural and vegetable seeds........................................
12.16
Alcoholic beverages.....................................................
12.37, 145.54
Animals, domestic, animal by-products, etc..............................
12.24
Arms and munitions......................................................
145.53, 161.2
Articles with false designation of origin...............................
11.13(a)
Birds, wild.............................................................
10.76, 12.26-12.28

[[Page 759]]

Caustic or corrosive substances.........................................
12.1-12.5
Conception, articles for preventing.....................................
12.40, 145.51
Controlled substances...................................................
161.2, Part 162, subpart F
Convict, forced, or indentured labor, goods made by.....................
12.42-12.45
Copyrights..............................................................
133.41
Counterfeit coins, etc..................................................
12.48
Cream...................................................................
12.7
Destruction of..........................................................
158.41
Diversion of, under transportation entry................................
18.5(e)
Drugs...................................................................
12.1-12.5
Eggs of wild birds......................................................
12.29
Exportation of..........................................................
18.25-18.26
Films...................................................................
12.41
Foods...................................................................
12.1-12.5
Foreign trade zones.....................................................
146.1
Fungicides..............................................................
12.1-12.5
Immoral articles........................................................
12.40, 145.51
Insect pests............................................................
12.31
Insecticides............................................................
12.1-12.5
In transit through U.S. to foreign countries............................
18.21-18.23
Liquors.................................................................
12.37, 145.54
Literature, seditious, treasonable, etc.................................
12.40, 145.51
Lottery matter..........................................................
145.51(b)
Mail, arriving via......................................................
145.51-145.59
Marihuana...............................................................
161.2, Part 162, subpart F
Matches.................................................................
12.34
Meat and meat-food products.............................................
12.8-12.9
Milk....................................................................
12.7
Motor vehicles and engines--Clear Air Act--Emission standards...........
12.73
Motor vehicles and equipment--Safety standards..........................
12.80
Munitions of war........................................................
145.53, 161.2
Narcotics and certain other drugs.......................................
12.36, 161.2, Part 162, subpart F
Obscene matter..........................................................
12.40, 12.41
Packages containing obscene or immoral matter...........................
145.51
Parrots.................................................................
12.26
Pesticides and devices..................................................
12.110-12.117
Piratical copies........................................................
133.42
Plants and plant products...............................................
12.10-12.15
Plumage of wild birds...................................................
12.29
Postage stamps, facsimiles of uncanceled................................
12.48
Pre-Columbian artifacts.................................................
12.105-12.109
Securities and illustrations thereof, etc...............................
12.48
Serums..................................................................
12.17-12.23
Skins, fur-seal or sea-otter............................................
12.60
Stamps, postage.........................................................
12.48
Switchblade knives......................................................
12.95-12.103
Tea.....................................................................
12.33
Toxins..................................................................
12.17-12.23
Trademarks or trade names...............................................
133.21
Treasonable or insurrectionary matter--Forcible resistance to law--
Threats to persons......................................................
12.40, 145.51
Unfair competitions, articles involved in...............................
12.39

[[Page 760]]

Value...................................................................
162.43
Viruses.................................................................
12.17-12.23
Whales..................................................................
12.30
Wild animals............................................................
10.76, 12.26-12.28
PROPERTY
    Forfeited
Destruction of..........................................................
162.46(d), 162.50(c)
Disposition of proceeds of sale
Not under 19 U.S.C. 1592................................................
162.51
Under 19 U.S.C. 1592....................................................
162.52
Liens, payment of, when property awarded for official use...............
171.44
State laws prohibiting sale of..........................................
162.46(c)(2), 162.50
Transfer to other port for sale.........................................
162.46(c)(2), 162.50
Forfeiture and sale of..................................................
162.45-162.48
Petitions for remission or mitigation of forfeiture.....................
148.18(b), 162.32, 171.11, 171.22
Privately owned, damage to or loss of, caused by Customs officer........
24.71
Release of, on payment of appraised value...............................
162.44
Reports to U.S. attorney--When required.................................
162.32(c), 162.47(d), 162.49
Search and seizure......................................................
Part 162, subparts A-C
    Seized--
Appraisement of.........................................................
162.43
Award or sale of........................................................
162.46
Claim and bond to stop summary forfeiture...............................
162.47, 162.47(b), 162.49(b)
Disposition.............................................................
162.46-162.52

PROSPECTIVE IMPORTS, CLASSIFICATION OF..................................

177.1
PROTESTS
Accelerated disposition of..............................................
174.22
Amendment of............................................................
174.14
Appeals from court decision.............................................
176.31
Applicability of provisions.............................................
174.2
Application for further review..........................................
174.25
Consideration of additional arguments...................................
174.28
Contents of.............................................................
174.13
Criteria for further review.............................................
174.24
Domestic interested party(ies)..........................................
Part 175, subparts B and C
Form of.................................................................
174.12
Further review of.......................................................
174.23
General requirements....................................................
Part 174, subpart B
Household or personal effects--Formal protest unnecessary for 
reliquidation...........................................................
173.5
Mail entries............................................................
145.22, 145.23
Matters subject to protests.............................................
174.11
Notice or denial of.....................................................
174.30
Power of attorney.......................................................
174.3
Publication of protest review decision..................................
174.32
Refund of duties on reliquidation.......................................
24.36, 174.29, 176.31
Review of, by port director.............................................
174.21, 174.26, 174.29

[[Page 761]]

Review of further protests, by whom.....................................
174.26
Rewarehouse entries.....................................................
144.41(h)
Samples, when required for protest purposes.............................
176.11
Stipulations............................................................
176.21
Time for filing.........................................................
174.12(e)
Transmission to court...................................................
176.11

PROTOTYPES USED EXCLUSIVELY FOR PRODUCT DEVELOPMENT AND TESTING.........

10.91
PUBLICATION--
    Customs Bulletin
Federal Register........................................................
103.3

PUBLIC INTERNATIONAL ORGANIZATIONS......................................

148.87, 148.88

PUBLIC READING ROOMS....................................................

103.1
PUERTO RICO
Coffee, foreign-grown shipped from U.S.--Entry of.......................
7.1(c)
Distilled spirits and wines from warehouse, shipped to--Dutiable........
7.1
Shipments to--Drawback of internal-revenue tax..........................
191.101

PURCHASER, DEFINITION (SPECIAL MARKING).................................

11.9

PUREBRED ANIMALS, ENTRY OF..............................................

10.70, 10.71

                                      Q

QUARANTINE, ANIMALS, DOMESTIC...........................................

12.24
QUOTA; EXPORT CERTIFICATE
Beef....................................................................
132.15
Lamb meat...............................................................
132.16
Sugar-containing........................................................
132.17
QUOTAS
Absolute quota defined..................................................
132.1(a)
Administration..........................................................
132.2
Definitions.............................................................
132.1
Effect of release under immediate delivery..............................
132.14(a)(2)
    Entry of quota merchandise--
Acceptance of entry.....................................................
132.3
As establishing priority................................................
132.11-132.14
Informal................................................................
132.11(c)
Mail importation........................................................
Part 132, subpart C
Noting of time of filing on the entry, when.............................
132.13
Exception to reduced rates..............................................
132.6
Excess merchandise......................................................
132.5
Export certificates.....................................................
132.15-132.17
Immediate delivery permits..............................................
132.14
Inadvertent release.....................................................
132.14
Notification of restrictions, mail entries..............................
132.23(a)
Official office hours...................................................
132.3
Presentation--definition................................................
132.1(d)
Priority and status.....................................................
132.11
Tariff-rate quota defined...............................................
132.1(b)
Time of presentation....................................................
132.11(a)

                                      R

RAILROAD--
Car fees................................................................
24.22(d)
    Equipment
Domestic, repaired in foreign country, dutiable status..................
123.13

[[Page 762]]

Foreign, operating in U.S.--Entry of, when required.....................
123.12
Supplies................................................................
123.11

RAPESEED OIL............................................................

10.56

RATES OF DUTY, INVOICE TO SHOW..........................................

141.90
RECEIPTS
Bills and accounts, for.................................................
24.3
Duties on baggage declarations--Forms...................................
148.27
Seizures, for...........................................................
162.15

RECEIVER, ENTRY BY......................................................

141.14

RECORDKEEPING...........................................................

Part 163
AGOA....................................................................
10.216
Agreement on Trade in Cement (March 6, 2006)............................
12.155, Appendix to Part 163 Interim (a)(1)(A) List
CBTPA...................................................................
10.226, 10.236
Requirements, warehouse.................................................
19.12, Part 163
RECORDS
Actual use..............................................................
10.137
Copies of, importers may make...........................................
103.7-103.11
Classified..............................................................
103.5(b)(3)
Confidential or privilege...............................................
103.11(g), 103.31(d), 111.24, 143.4, 174.15, 177.2, 177.8, 177.13, 
181.93, 181.99, 181.121, 181.122
Definition..............................................................
163.1
Entry and clearance of vessels..........................................
4.95
Laboratory analysis.....................................................
151.12
Persons required to maintain............................................
163.2
Retention...............................................................
143.37

RECORDS AND FILES, DISCLOSURE OF INFORMATION FROM.......................

Part 103, subpart A
REDELIVERY OF MERCHANDISE (See, RETURN TO CUSTOMS CUSTODY)

RE-EXAMINATION OF PERSONS, BAGGAGE OR MERCHANDISE.......................

148.25
REFUNDS
Abandoned or destroyed merchandise......................................
158.41
Cash deposit on temporary importation bond..............................
10.40
Duties, to whom payable.................................................
24.36
Internal-revenue tax....................................................
24.36

REFUSE MATTER, DISCHARGED FROM VESSEL IN NAVIGABLE WATERS--PENALTY......

4.66a, 4.66b

REGALIA.................................................................

10.43
REGISTER OF VESSELS
Deposit of upon entry...................................................
4.9
REGISTRATION OF ARTICLES
Exported for alterations or repairs.....................................
10.8
Of foreign origin being taken out of the U.S............................
148.1

[[Page 763]]

REIMBURSABLE COMPENSATION...............................................

4.35, 19.7, 24.16, 24.17, 101.4, 134.52(e), 134.55, 141.86(f), 151.5(c), 
151.7(c)

REIMPORTATION OF MERCHANDISE, DUTIABLE STATUS--EXCEPTIONS...............

141.2

RELATED PERSONS--VALUATION-DEFINED, TRADE AGREEMENTS ACT OF 1979........

152.102(g)
RELEASE OF MERCHANDISE
Foods, drugs, devices, cosmetics, insecticides, etc.....................
12.3, 141.113
From warehouse..........................................................
144.38(e)
Immediate delivery, special permit for..................................
Part 142, subpart C
Immediate delivery for U.S. Government..................................
10.100-10.104
Liens, existence of.....................................................
141.112
Meat and meat-food products--Restriction................................
12.8, 12.9
Permits, when issued for release of cargo...............................
4.38
Release order from carrier, form........................................
141.111
Release order from warehouse proprietor--Form...........................
141.111
    Seized--
Payment of appraised value..............................................
162.44
Under bond--Petition to court...........................................
162.47, 162.49
Warehouse entry permits, issuance of--Form..............................
144.38(e)

RELIEF AND RESCUE EQUIPMENT AND SUPPLIES FOR EMERGENT TEMPORARY USE.....

10.107

RELIGIOUS PURPOSES, ARTICLES FOR........................................

10.43, 10.52
RELIQUIDATION
Change in rate of duty..................................................
177.10
Change of practice......................................................
177.10(c)
Clerical error, mistake of fact, inadvertence...........................
173.4
Excessive duties or taxes paid, notice of refund of--Form...............
24.36
Limitation upon.........................................................
173.4(c)
Mail entries............................................................
Part 145, subpart C
Notice of...............................................................
173.3(b)
Protest.................................................................
173.2(d)
Refund of duty..........................................................
24.36(a)(1)(ii), 176.31
Rewarehouse--District of liquidation....................................
159.7(b)
Under decisions of U.S. Court of International Trade and Court of 
Appeals for the Federal Circuit.........................................
Part 176, subpart D
Voluntary...............................................................
173.3

REMISSION OR MITIGATION OF FINES, PENALTIES AND FORFEITURES.............

148.18(b), 162.32, 171.1, 171.11, 172.2

REPACKING BY IMPORTER, MERCHANDISE IN WAREHOUSE.........................

19.8
REPAIRS
Antiquities.............................................................
10.53(d)
Articles exported for...................................................
10.8
Automobiles, vehicles, aircraft, boats, teams and saddle horses, 
noncommercial, taken abroad.............................................
148.31(a), 148.32(c)
Busses, trucks, taxicabs, and their equipment taken abroad for temporary 
use.....................................................................
123.17
Dutiable status of merchandise repaired abroad..........................
10.8

[[Page 764]]

Personal and household effects taken abroad by returning resident.......
148.31(b)
Railway, made in foreign country, dutiable status.......................
123.12, 123.13
    Railway, made in foreign country, report--
Penalty.................................................................
123.12(c), 123.13
Vehicles, pleasure boats, and aircraft..................................
10.36a
Vessels, made abroad....................................................
4.14

REPLACEMENTS FOR ARTICLES DECLARED BY RETURNING RESIDENTS...............

148.37
REPORT OF ARRIVAL
Aircraft, penalties.....................................................
122.166
Coastwise trade.........................................................
4.81
Contiguous country, from................................................
123.1, 123.2
Method of reporting.....................................................
123.1(d)
Of individuals..........................................................
4.51, 123.1(a)
Of vehicles.............................................................
123.1(b)
Of vessels..............................................................
4.2
Panama Canal............................................................
4.4
Penalties for failure to report.........................................
4.3a, 4.52, 123.2
Vessels, failure to make--Penalty.......................................
4.3a, 123.2

REPORTS; LABORATORY ANALYSIS............................................

151.12

REPORTS TO U.S. ATTORNEY, WHEN REQUIRED.................................

12.103, 162.32(c), 162.47(d), 162.65(d), 172.3

REPRODUCTION OF FORMS...................................................

4.99, 122.5

REQUESTS FOR CUSTOMS RECORDS AND DOCUMENTS, PROCEDURE...................

103.2-103.5

RESCUE AND RELIEF EQUIPMENT AND SUPPLIES FOR EMERGENT TEMPORARY USE.....

10.107
RESIDENTS
Definition..............................................................
148.2
Exemption allowed returning.............................................
Part 148, subpart D, 148.52
Failure to declare......................................................
148.18
False or fraudulent claim on returning..................................
148.19

RESIDUE CARGO...........................................................

4.85, 4.86, 4.88, 4.90

RESTRAINT OF TRADE, ARTICLES IMPORTED UNDER AGREEMENTS IN--SPECIAL 
DUTIES..................................................................

159.44
RESTRICTED IMPORTATIONS (See, PROHIBITED OR RESTRICTED IMPORTATIONS)
RESTRICTED INFORMATION
Fines, Penalties........................................................
103.32
Foreign agencies........................................................
103.33
Sanctions...............................................................
103.32-103.34

RESTRICTED MERCHANDISE, IMMEDIATE TRANSPORTATION........................

18.11

RETENTION OF VESSEL OR VEHICLE..........................................

162.22(d)

RETIREMENT DEDUCTIONS, DECEASED EMPLOYEES--PROCEDURE OF REFUND..........

24.32

RETURN TO CUSTOMS CUSTODY--DEFAULT ON BOND--LIQUIDATED DAMAGES..........

141.113, 151.11, 172.21, 172.22, 172.33
RETURN TO UNITED STATES OF ARTICLES
Exported for exhibition.................................................
10.66
Exported for scientific or educational purposes.........................
10.67

RETURNING RESIDENTS, CREW MEMBERS AS....................................

148.63

[[Page 765]]

REVIEW OF PROTESTS BY COMMISSIONER......................................

158.30, 174.26

REVIEW OF PROTESTS BY PORT DIRECTOR.....................................

174.21, 174.26, 174.29
REVOCATION
ABI participation.......................................................
143.7
Access to Customs Security Area.........................................
122.187
Accredited laboratory...................................................
151.12
Air Carrier Smuggling Prevention Program................................
122.176
Approved gauger.........................................................
151.13
CES.....................................................................
Part 118, subpart C
Container stations......................................................
19.48
Customs brokers.........................................................
Part 111, subpart D
FTZ grant...............................................................
146.83
Identification card.....................................................
112.48
LBCIP...................................................................
123.75
Recordkeeping Compliance Program........................................
163.13

REWARDS, INFORMER'S COMPENSATION--CLAIM.................................

Part 161, subpart B

REWAREHOUSE AND WITHDRAWAL FOR CONSUMPTION ENTRY........................

144.42
REWAREHOUSE ENTRY
Bond--Form..............................................................
144.41(d)
Form and procedure......................................................
144.41, 144.42
Liquidation.............................................................
159.7, 159.52
Reliquidation change in duty rate.......................................
159.7(b)
Transferee--Right to withdraw...........................................
144.27

ROAD VEHICLE CERTIFICATION..............................................

Part 115
ROYALTIES--LICENSE FEES
Trade Agreements Act of 1979, Transaction value.........................
152.103(f)
RULES OF ORIGIN
Appendix--Textile and apparel manufacturer identification...............
102
Disassembly.............................................................
181.132
Entry of textile and apparel products...................................
102.24
For textile and apparel products of Israel..............................
102.22
Origin and manufacturer identification..................................
102.23
Textile or apparel products under the North American Free Trade 
agreement...............................................................
102.25
RULINGS, ADMINISTRATIVE
    General Ruling Procedure
Change of practice......................................................
177.10(c)
Completed transactions, not subject to..................................
177.1(a)(2)(ii)
Current (ongoing) transactions..........................................
177.1(a)(2)(i), 177.11
Definitions.............................................................
177.1(d)
Effect..................................................................
177.9, 177.10
How to submit request for...............................................
177.2
Internal advice.........................................................
177.11
Oral discussions........................................................
177.4
Prospective transactions................................................
177.1(a)(1)
Publication of decisions................................................
177.10
Requests for advice by field offices....................................
177.11
When requests for rulings will not be issued............................
177.1(a)(1), 177.1(a)(2)
    Government Procurement; country-of-origin determinations
Applicability...........................................................
177.21

[[Page 766]]

Definitions.............................................................
177.22
Country of origin advisory ruling.......................................
177.24
Form and content of request.............................................
177.25
Issuance................................................................
177.28
Oral discussion of issues...............................................
177.27
Where request filed.....................................................
177.26
Who may request.........................................................
177.23
Final Determinations
Issuance................................................................
177.28
Publication of notice of................................................
177.29
Review..................................................................
177.30
Reexamination...........................................................
177.31
Request.................................................................
177.23

                                      S

SAFETY STANDARDS FOR BOATS AND OTHER EQUIPMENT..........................

12.85

SAFETY STANDARDS FOR ELECTRONIC PRODUCTS................................

12.90, 12.91

SAFETY STANDARDS--MOTOR VEHICLES AND EQUIPMENT..........................

12.80

ST. LAWRENCE RIVER, VESSELS IN COASTWISE TRADE VIA......................

4.83

SALABLE CUSTOMS FORMS...................................................

24.14
SALE OF MERCHANDISE
Abandoned in bonded warehouse...........................................
127.14
Abandoned or unclaimed..................................................
Part 127, subparts B and C
Advertising.............................................................
127.25
Articles subject to internal-revenue taxes..............................
127.28(e)-(g)
Auctioneer's commission.................................................
127.34
Catalogs................................................................
127.26
Charges, payment........................................................
127.31, 127.32
Inspection by Department of Agriculture of seeds, drugs, etc., prior to.
127.28(a)
Inspection by Environmental Protection Agency of pesticides and devices.
127.28(b)
Merchandise previously offered for sale.................................
127.29
Merchandise remaining unsold............................................
127.29
Notice of--Catalogs.....................................................
127.26
    Proceeds, disposition--
Claim for surplus.......................................................
127.36
Unclaimed goods.........................................................
127.36(a)
Warehouse goods.........................................................
127.36(b)
    Seized goods--
Court decree............................................................
162.49-162.51
Inspection by other Government agency, when required....................
162.46(b)
Perishable or liable to waste or deteriorate in value--Procedure........
162.48, 162.50
Petition for restoration of proceeds....................................
Part 171, subpart E
Proceeds, disposition of--Expenses......................................
162.51
State laws prohibiting..................................................
162.46(c)(2), 162.50
Transfer to other district for sale.....................................
162.46(c)(2), 162.50

[[Page 767]]

Storage and other expenses, payment of..................................
127.31, 127.32
Unclaimed and abandoned goods...........................................
Part 127, subparts B and C
Unclaimed perishable goods..............................................
127.22, 127.28(c)
Unclaimed and remaining on dock.........................................
127.28(h)
Withdrawal of goods from sale...........................................
127.14

SALT FOR CURING FISH....................................................

10.80, 10.81, 10.83

SALVAGE VESSELS--RESTRICTIONS...........................................

4.97

SALVORS AND UNDERWRITERS, ENTRY BY......................................

141.13

SAME CLASS OR KIND OF MERCHANDISE--VALUATION-DEFINED, TRADE AGREEMENTS 
ACT OF 1979.............................................................

152.102(h)
SAMOA, American
Shipments to--Drawback of internal-revenue tax..........................
191.5, 191.81
Unaccompanied shipments from............................................
Part 148, subpart K

SAMPLES.................................................................

181.62
Appraisement on.........................................................
151.10, 151.11
Carnets.................................................................
114.32
Commercial travelers' baggage...........................................
10.31, 10.36, 10.68, 10.69
    Commercial travelers' samples
Accompanied through Canada and return...................................
123.51
Accompanied through U.S. and return to Canada...........................
123.52
Temporary importation bond..............................................
10.36
For reproduction--Temporary importation bond............................
10.31
For taking orders--Temporary importation bond...........................
10.31
Metal-bearing ores......................................................
151.51-151.53
Official samples, transmission to Court.................................
176.11
Pesticides and devices..................................................
12.116
Prior to entry, taking of...............................................
151.4, 151.5, 151.11
Request for ruling......................................................
177.2(b)(3)
Sugar...................................................................
151.24, 151.27, 151.29
Viruses, serums, and toxins for treatment of domestic animals and man...
12.19, 12.22
Wool and hair...........................................................
Part 151, subpart E
Wool and hair, for importer.............................................
151.67
SAMPLING
Agricultural and vegetable seeds........................................
12.16
Cotton..................................................................
Part 151, subpart F
Metal-bearing ores and metal-bearing materials..........................
151.51-151.53
Merchandise in warehouse................................................
19.17(f), 151.51
Sugars, syrups, and molasses............................................
Part 151, subpart B
Wool and hair...........................................................
Part 151, subpart E

SCIENTIFIC OR EDUCATIONAL ARTICLES EXPORTED, RETURN.....................

10.67

SCULPTURE AND MODELS FOR EDUCATIONAL PURPOSES...........................

10.43

SCULPTURE, ORIGINAL, FREE ENTRY, EVIDENCE REQUIRED......................

10.48

SCULPTURE OR MURAL--PRE-COLUMBIAN MONUMENTAL OR ARCHITECTURAL...........

12.106-12.109

SEAL, FUR SKINS.........................................................

12.60-12.63

[[Page 768]]

SEALING, MEAT AND MEAT-FOOD PRODUCTS....................................

12.8
SEALS
Bond requirements.......................................................
113.25
    Car, compartment, package
Kinds...................................................................
24.13
Car, compartment, and package seals; and fastenings; standards; 
acceptance by Customs...................................................
24.13a
    In bond
Penalty for breaking....................................................
18.4(h)
Removal of..............................................................
18.3(d)
When required...........................................................
18.4, 18.4a
In transit..............................................................
123.21-123.26
    On railcars
Numbering and marking of................................................
24.13
Of stores...............................................................
4.11

SEAMEN, DECLARATION OF ARTICLES UNLADEN BY, WHEN REQUIRED...............

148.62

SEAMEN'S ACT............................................................

4.61, 4.69

SEARCH AND SEIZURE......................................................

162.5-162.7, 162.21, 162.22

SEARCH OF PERSONS, BAGGAGE, AND MERCHANDISE.............................

162.6
SEARCH OF BUILDINGS
Dwelling, search rooms..................................................
162.13
On boundary line........................................................
123.81
Warrants................................................................
Part 162, subpart B
Application for.........................................................
162.11
Requirements............................................................
Part 162, subpart B
Seizure without.........................................................
162.21

SEARCHING AND BOARDING OF VESSELS AND VEHICLES..........................

162.3, 162.5
SEA STORES
Excessive...............................................................
4.39(d)
Manifesting.............................................................
4.7, 4.7a
Narcotics included in...................................................
4.39(e)
Retained on board vessel................................................
4.7
Sealing and release.....................................................
4.11
Transfer, landing.......................................................
4.39
Vessels proceeding foreign via domestic ports...........................
4.87
Vessels with residue cargo for domestic ports...........................
4.85
Wrecked or dismantled vessels...........................................
4.40

SECURITIES, ETC., CARRIAGE ON VESSELS...................................

4.61

SEDITIOUS MATTER, PROHIBITED FROM ENTRY.................................

12.40
SEEDS, AGRICULTURAL AND VEGETABLE
Entry procedure.........................................................
12.16
Prohibited entry, when..................................................
12.16
Samples and sampling....................................................
12.16
SEIZURE
Abandoned merchandise...................................................
123.81
Addressee of mail articles to be notified of............................
145.59(b)
Alcoholic beverages, containers not labeled.............................
12.38
Alcoholic beverages imported in the mails...............................
145.54(b)
Appraisement of.........................................................
162.43
Articles requiring inspection by other Government agencies, disposition 
of......................................................................
162.46(b)
Claim for...............................................................
162.47
Compromise of claims....................................................
161.5

[[Page 769]]

Contrary to law.........................................................
145.4, 162.21, 162.22
Contributions in general average........................................
141.112(f)
Conveyances importing contrary to law...................................
162.22
Criminal or civil action--Reports to U.S. attorney......................
162.32(c), 162.47(d), 162.65(d), 172.2
Destruction of forfeited property, when.................................
162.46(d), 162.50
Disposition of goods summarily forfeited................................
133.42, 162.46
Duties on...............................................................
148.18(a)
Expenses, payment of....................................................
162.51(a)
Exporting merchandise contrary to law...................................
161.2
Forfeiture and sale of..................................................
162.45-162.48
Immoral articles, etc...................................................
12.40, 12.41
Liens for freight and other charges.....................................
171.44
Limited under section 592, Tariff Act of 1930, as amended...............
162.75
Mail importations contrary to law.......................................
Part 145, subpart E
Marihuana...............................................................
Part 162, subpart F
Merchandise imported contrary to law....................................
162.21, 162.22
Narcotics and certain other drugs.......................................
Part 162, subpart F
Penalty, demand for payment of, articles of small value.................
162.31(c)
Perishable or liable to waste or deteriorate in value--Sale of..........
162.48, 162.49
Persons other than Customs officers making..............................
162.21(b)
Pre-Columbian artifacts.................................................
12.109
Receipts................................................................
162.15, 162.21(a)
    Release of
Payment of appraised value..............................................
162.44
Petitions for...........................................................
162.31, 171.11, 171.21, 171.52
Release of information--pending seizures and investigations.............
103.12, 103.13
Reports to U.S. attorney, when required.................................
12.103, 162.32(c), 162.47(d), 162.65(d), 172.2
State officers, by--Adoption of by Customs..............................
162.21(c)
Summary sale............................................................
162.45, 162.46, 162.48
Switchblade knives......................................................
12.97, 12.101-12.103
Taxes on................................................................
148.18(a)
Transfer to other district for sale.....................................
162.46(c)
Vehicles used in or employed to aid in lawful importation of merchandise
162.22
Warrant, without, when..................................................
162.11
Who may make............................................................
162.21

SEMEN, HONEYBEE.........................................................

12.32
SERUMS
For treatment of domestic animals--Entry procedure......................
12.17-12.20
For treatment of man--Entry procedure...................................
12.21-12.23
SERVICES
Officers, reimbursable..................................................
24.17
Overtime, charges for...................................................
24.16

SET-OFF CLAIMS..........................................................

24.72

SETTLEMENT TEST, ORES AND CRUDE METALS--ASSAYING AND SAMPLING...........

151.52, 151.54

[[Page 770]]

SHIPMENTS ARRIVING ON ONE VESSEL OR VEHICLE, CONSIGNED TO ONE 
CONSIGNEE--SEPARATE ENTRIES FOR, WHEN...................................

141.52
SHIPPER'S EXPORT DECLARATIONS
Aircraft................................................................
122.76
Bond for, cancellation of--Liquidation damages..........................
113.54, 172.22,
Bond for--Form..........................................................
113.14
Confidential treatment of information...................................
103.31(d)
Filing of...............................................................
4.61, 4.63, 4.75, 4.84
Filing of, in event of war..............................................
4.75(c)
Incomplete--Bond........................................................
4.75, 4.84
Penalties...............................................................
171.21, 171.31
Vessel proceeding foreign via domestic ports............................
4.87

SHIPPING ARTICLES.......................................................

4.61, 4.69

SHIPPING COMMISSIONER, EXECUTION OF SHIPPING ARTICLES BEFORE............

4.69

SHIPPING RECEIPT, ENTRY ON..............................................

141.11
SHIPS' STORES
Landing of..............................................................
4.39
Manifesting.............................................................
4.7, 4.7a
Retention on board......................................................
4.7
Transfer of.............................................................
4.39
Vessels proceeding foreign via domestic ports...........................
4.87
Vessels with residue cargo for domestic ports...........................
4.85
Wrecked or dismantled vessels...........................................
4.40
SHOOKS AND STAVES
Certificate of exportation..............................................
10.5
Certificate of foreign shipper and box matter--Form.....................
10.6
Declaration of importer, when required..................................
10.6
Definition..............................................................
10.5(b)
Exported and returned...................................................
10.5, 10.6
Notice of intent to export..............................................
10.5
SHORTAGES
Duty allowance..........................................................
158.3
In packages.............................................................
158.5, 158.6
Withdrawal for export from manufacturing warehouse......................
19.15

SILVER ARTICLES, FALSE MARKING OF--PENALTY..............................

11.13

SIMILAR MERCHANDISE--VALUATION-DEFINED, TRADE AGREEMENT ACT OF 1979.....

152.102(i)
Transaction value of....................................................
152.104

SIMULTANEOUS VESSEL TRANSACTIONS--BOND..................................

4.90
SINGAPORE FREE TRADE AGREEMENT (See, UNITED STATES-SINGAPORE FREE TRADE 
AGREEMENT)

SINGLE ENTRY FOR SPLIT SHIPMENTS........................................

141.57

SINGLE ENTRY FOR UNASSEMBLED OR DISASSEMBLED ENTITIES...................

141.58

SINGLE INVOICES.........................................................

141.61(f)
SIRUPS (See, SUGAR, SIRUPS, AND MOLASSES)

SKINS--Seal or Sea-Otter................................................

12.60-12.63

SMUGGLING...............................................................

122.167, 148.18(a), 162.22, 162.31(b)

SMUGGLING, PASSENGERS' BAGGAGE--PENALTY.................................

148.18

SOFTWOOD LUMBER FROM CANADA.............................................

12.140

SOUND RECORDING--RECORDATION COPYRIGHTS.................................

133.32(f)

SPECIAL CUSTOMS INVOICE.................................................

141.83, 141.89

SPECIAL DUTY-FREE TREATMENT FOR SUB-SAHARAN AFRICAN COUNTRIES...........

10.178a
SPLITTING OF SHIPMENTS
Immediate transportation at port of origin..............................
18.11

[[Page 771]]

Transportation and exportation entries..................................
18.24
Withdrawals for transportation and exportation..........................
144.32, 144.36, 144.37

STAINED OR PAINTED GLASS WINDOWS FOR HOUSES OF WORSHIP..................

10.52
STAMPING
Cigarette papers and tubes..............................................
11.3
Liquors in casks and similar containers.................................
11.6
Medicinal preparations..................................................
11.1
Perfumery...............................................................
11.1
Tobacco products, returned domestic.....................................
11.1, 11.2
STAMPS
Customs inspection--Cigars, etc., imported in mails.....................
11.1, 145.13
    Postage
Illustrations of, prohibited entry--Exceptions..........................
12.48
Revenue, illustrations of, prohibited entry--Exceptions.................
12.48

STANDARDS, OFFICIAL COTTON, FOR LENGTH OF STAPLE........................

Part 151, subpart F

STANDARDS, OFFICIAL, FOR GRADES OF WOOL.................................

Part 151, subpart E

STAPLING OF COTTON......................................................

Part 151, subpart F

STATE INSPECTION AND FEES--CLEARANCE OF VESSELS WITHHELD FOR COMPLIANCE.

4.61

STATE LAWS PROHIBITING SALE OF FORFEITED PROPERTY.......................

162.46(c)(2)

STATEMENT PROCESSING....................................................

24.1, 24.25

STATES AND THEIR INSTRUMENTALITIES NOT EXEMPT FROM PAYMENT OF DUTY......

141.1(e)

STATIONS, CUSTOMS.......................................................

101.4
STATUARY
Original--Free entry evidence required..................................
10.48
Sculptures, patterns, models, etc., imported by institutions............
10.43

STATUTE OF LIMITATIONS..................................................

171.64, 172.43
STEEL PRODUCTS
Entry or admission of certain steel products............................
12.145

STIPULATION OF LESSEES OF BONDED WAREHOUSES.............................

19.2(b)

STIPULATIONS............................................................

176.21

STOCKPILING, STRATEGIC AND CRITICAL MATERIALS FOR.......................

10.100-10.104

STOLEN OR EMBEZZLED MOTOR VEHICLES, ETC., TAKEN TO MEXICO AND RETURNED..

123.82

STOPPING VEHICLES OR PERSONS............................................

162.5, 162.7

STORAGE CHARGES ON GOODS IN PUBLIC STORES...............................

19.7, 24.12

STORAGE, GOODS IN MANUFACTURING WAREHOUSES..............................

19.13

STORAGE OF CARGO--FORM..................................................

4.12, 4.62

STORE LIST OF VESSEL SUPPLIES WITHDRAWN.................................

10.60
STOREKEEPERS (See, WAREHOUSE OFFICERS, CUSTOMS)
STORES AND EQUIPMENT OF VESSELS, LANDING OF
Entry, when required....................................................
4.39
Wrecked or dismantled vessels...........................................
4.40
STORES, SEA AND SHIPS'
Issuing of, while under seal............................................
4.11
Permit or special license for unlading or lading--Form..................
4.30

[[Page 772]]

Sealing of, when........................................................
4.11

STRATEGIC AND CRITICAL MATERIALS, STOCKPILING...........................

10.100-10.104
STRIP STAMPS
Bottles and similar containers..........................................
11.7
Liquor in passengers' baggage...........................................
148.26, 148.27, 148.51, 148.64
When not required.......................................................
148.26(b)

SUBPOENA FOR CUSTOMS DOCUMENTS..........................................

Part 103, subpart B

SUBSTANTIAL TRANSFORMATION..............................................

10.14(b), 10.16(c), 10.195(a), 10.196, 102.20, 134.1, 134.35

SUBSTITUTION OF FORMS...................................................

4.99, 122.5
SUGAR, SIRUPS, AND MOLASSES
Allowance for moisture in raw sugar.....................................
151.23
Closets.................................................................
151.30
Definitions, degree, sugar degree, total sugars.........................
151.22
Estimated duties on raw sugar refund....................................
151.22
Expense of unlading, weighing, sampling, etc............................
151.29
Facilities for unlading bulk sugar......................................
151.24
Molasses, Blackstrap....................................................
10.139
Molasses or syrups gauging of, discharged in storage tanks..............
151.28
Molasses or syrups in tank cars, certificate necessary..................
151.26
Weighing and sampling done at time of unlading..........................
151.27

SUMMONS--Defined........................................................

163.1(j), 163.7

SUPERVISION.............................................................

111.1, 111.2, 125.2, 146.4

SUPPLEMENTAL PETITION FOR RELIEF FROM LIQUIDATED DAMAGES OR PENALTIES 
SECURED BY BONDS........................................................

Part 172, subpart E

SUPPLEMENTAL PETITION FOR RELIEF FROM UNSECURED PENALTIES OR FORFEITURES

Part 171, subpart G
SUPPLIES
Sealing of railway cars.................................................
123.11
Vessels, for--Bond......................................................
10.60-10.64
SUPPLIES WITHDRAWN FROM BONDED WAREHOUSE FOR
Aircraft and vessels....................................................
10.59-10.65

SURETIES, LIABILITY UNDER WAREHOUSE ENTRY BOND..........................

144.2

SURETIES ON BONDS.......................................................

Part 113, subpart D, 141.41

SURETIES ON BONDS--ASSENT TO EXTENSION OF TIME ON BONDS.................

113.44

SURPLUS PROCEEDS FROM SALE--UNCLAIMED MERCHANDISE--DISPOSITION OF--CLAIM 
FOR.....................................................................

127.36
SWITCHBLADE KNIVES
Definitions.............................................................
12.95
Forfeiture..............................................................
12.102
    Importations allowed
Common and special purpose knives--utilitarian use......................
12.96
Permitted by statute....................................................
12.98
Importations allowed/prohibited.........................................
12.97

[[Page 773]]

Notice of seizure.......................................................
12.101(b)
One-armed person........................................................
12.98(c), 12.99(a)(3), 12.99(c)(2)
Procedures for permitted entry..........................................
12.99
Report to U.S. attorney.................................................
12.103
    Seizure of prohibited switchblade knives
Importations in good faith--exportations................................
12.100
Inadmissible importations...............................................
12.101(a)

                                      T

TABLE OF NAVIGATION FEES TO BE POSTED...................................

4.98

TAPESTRIES, GOBELIN.....................................................

10.54
TARE
Actual--Invoice--Schedule...............................................
Part 159, subpart B
Excessive moisture and other impurities.................................
158.13

TAXES ON SEIZED MERCHANDISE.............................................

148.18(a), 148.19
TAXICABS
Domestic, repaired abroad...............................................
123.17
Foreign-owned, brought in for hire......................................
10.41, 123.14, 123.15
Taken abroad for hire, return...........................................
123.16
Taken abroad for temporary use--Tariff status on return.................
123.16
TEAS
Baggage, in.............................................................
148.23(d)
Importation procedure...................................................
12.33
TEMPORARY IMPORTATION BOND
Amount of...............................................................
10.31
Application for extension...............................................
10.37
Cancellation............................................................
10.39
Cash deposit in lieu of surety, refund of...............................
10.31, 10.40
    Entry--
Liquidation.............................................................
10.31(h)
Substitute for another entry............................................
10.31
Exportation of articles under--Landing certificate, when required.......
10.38, 10.39
Entry--Form and contents................................................
10.31
Liquidated damages, when assessed.......................................
10.39
Merchandise destroyed by casualty or during experiment..................
10.39
    Proof of purpose--
Models of women's wearing apparel.......................................
10.35
Theatrical effects......................................................
10.33

TESTING.................................................................

115.31, 115.66, 151.54, 151.71,151.73
TEST--VALUES-RELATED PARTY TRANSACTIONS, TRADE AGREEMENTS ACT OF 1979
Test programs...........................................................
101.9
Transaction value.......................................................
152.103(l)(2)
TEXTILE AND APPAREL ARTICLES
African countries.......................................................
10.211-10. 217
Caribbean countries.....................................................
10.221-10.227

TEXTILE AND APPAREL GOODS UNDER NAFTA...................................

102.25

TEXTILE FIBER PRODUCTS--LABELING........................................

11.12b

TEXTILE MACHINERY--FOR INSTITUTIONS, CONDITIONALLY FREE.................

10.43

TEXTILES AND APPAREL PRODUCTS...........................................

102.21-102.25

[[Page 774]]

THEATRICAL EFFECTS, EXPORTED AND RETURNED...............................

10.68

THEATRICAL SCENERY, PROPERTIES, ETC., BROUGHT IN BY PROPRIETORS OR 
MANAGERS OF THEATRICAL EXHIBITIONS--TEMPORARY IMPORTATION BOND..........

10.31, 10.33

THEFT OF MERCHANDISE IN PUBLIC STORES...................................

158.26

THREATS TO TAKE LIFE OR INFLICT BODILY HARM ON ANY PERSON IN U.S., ANY 
MATTER ON--PROHIBITED IMPORTATION.......................................

12.40
TIME LIMIT
Discharge of cargo......................................................
4.36
Entry of merchandise....................................................
141.5
TITLE TO UNCLAIMED AND ABANDONED MERCHANDISE VESTING IN GOVERNMENT
Government title to unclaimed and abandoned merchandise.................
127.41
Disposition of merchandise owned by Government..........................
127.42
Petition of party for surplus proceeds had merchandise been sold........
127.43
TOBACCO AND TOBACCO PRODUCTS
Baggage, nonresidents...................................................
148.43, 148.44
Baggage, residents......................................................
148.33
Cuban leaf tobacco--Examiners...........................................
151.111
For consumption on vessel or aircraft...................................
10.65
Mail importations.......................................................
145.13
Packing and marking requirements........................................
11.1, 11.2

TONNAGE OF VESSELS, VERIFICATION OF.....................................

4.61, 4.65
TONNAGE TAX
Exemptions..............................................................
4.21
Noncitizen officers of vessels..........................................
4.20
Panama Canal, vessels passing through...................................
4.20(e)
Payment of--Certificate--Form...........................................
4.23
Rates--Table............................................................
4.20
Refund of...............................................................
4.24
Special--Exemptions.....................................................
4.20, 4.22
Vessels, coastwise, touching at Canadian ports..........................
4.83
Vessels touching at foreign port while in coastwise trade...............
4.82
Wrong tonnage on document--How fixed....................................
4.20
Yachts..................................................................
4.21(b)(5)

TONNAGE YEAR--HOW COMPUTED..............................................

4.20

TOOLS OF TRADE BY NONRESIDENTS SOJOURNING TEMPORARILY IN U.S.--TEMPORARY 
IMPORTATION BOND........................................................

10.31, 10.36

TOOLS OF TRADE OF IMMIGRANTS OR PERSONS RETURNING FROM ABROAD, ENTRY 
PROCEDURE...............................................................

148.53

TOUCH AND TRADE.........................................................

4.15, 4 N 28

TOWING OPERATIONS.......................................................

4.92

TOXIC SUBSTANCES CONTROL ACT............................................

12.118-12.127
TOXINS
For treatment of domestic animals--Entry procedure......................
12.17-12.20
For treatment of man--Entry procedure...................................
12.21-12.23
TRADE FAIRS
Abandonment.............................................................
147.46, 147.47
Articles which may be entered...........................................
147.2
Compliance, provisions of Plant Quarantine Act of 1912, and Federal 
Food, Drug and Cosmetic Act.............................................
147.23
Definitions.............................................................
147.1
Detail of Customs officers to protect revenue--Expenses.................
147.32

[[Page 775]]

    Disposition of articles entered for fairs--Entry or transfer--
Destruction--Abandonment, voluntary or mandatory--
Exportation.............................................................
Part 147, subpart E
Entry--Appraisement--Procedure..........................................
Part 147, subpart B
Invoices--Marking--Bond.................................................
147.3, 147.12, 147.21, 147.22
Requirements of other laws..............................................
Part 147, subpart C

TRADEMARKS; Recordation.................................................

Part 133, subpart A

TRADEMARKS AND TRADE NAMES..............................................

133.21-133.24
Importations violating..................................................
Part 133, subpart C

TRADEMARKS AS SPECIAL MARKING...........................................

11.9

TRADE NAMES; Recordation................................................

Part 133, subpart B

TRANSACTION VALUE.......................................................

152.103

TRANSACTION VALUE--IDENTICAL AND SIMILAR MERCHANDISE....................

152.104

TRANSFER OF CARGO AND PASSENGERS--AMERICAN VESSELS......................

4.91
TRANSFEREES
Liability for duties....................................................
144.2
Rewarehouse entry--Procedure............................................
Part 144, subpart E
Rights and privileges, warehouse merchandise--..........................
Part 144, subpart D
    Withdrawals by--
For consumption.........................................................
144.31, 144.38
For exportation.........................................................
144.31, 144.37
TRANSIT AIR CARGO (See, Aircraft)

TRANSIT AIR CARGO MANIFEST (TACM).......................................

Part 122, subpart L
TRANSPORTATION AND EXPORTATION
    Baggage--
For examination at port of destination..................................
18.13
For exportation in transit through U.S..................................
18.14, 123.31, 123.52
Bond for--Form..........................................................
113.14
Cargo not sealed allowed to proceed.....................................
18.4
Carriers--Bonds.........................................................
18.1
Change of destination...................................................
18.23
Change of Entry.........................................................
18.23
Common carrier not available............................................
18.20
Diversions at port......................................................
18.5
Entries, kinds..........................................................
18.10
Entry procedure--Form...................................................
18.20, 122.92
Examination of merchandise by agents of the Surface Transportation Board 
and trunk line associations.............................................
18.9
Exit, procedure at port.................................................
18.22, 122.92
Foreign manifests.......................................................
123.32
Forwarding port, procedure at...........................................
18.20
Immediate transportation without appraisement...........................
18.11, 122.92(b)

[[Page 776]]

In transit through U.S..................................................
18.20, Part 123, subparts C and D
Irregular delivery (shortages)..........................................
18.6, 18.8
Labeling of packages in lieu of sealing.................................
18.4, 122.92(f), 122.92(g)
Liability of carrier....................................................
18.8
Limit of time merchandise may remain in U.S.............................
18.24, 18 N 9
Manifests, disposition..................................................
18.2, 18.3, 122.93
Merchandise entered for, when treated as unclaimed......................
18.2, 18 N 9
Nonbonded goods with bonded.............................................
18.4
Receipt by bonded common carrier........................................
18.2
Restricted and prohibited merchandise...................................
18.21-18.23
Retention of goods on dock..............................................
18.24
Sealing of conveyances..................................................
18.4, 122.92(f)
Short shipments.........................................................
18.6, 18.8
Shortages of irregular deliveries, report of--Penalty...................
18.6, 18.8
Splitting of shipments..................................................
18.24, 122.92(d)
Transportation and exportation warehouse withdrawals....................
Part 144, subpart D
Warehouse and rewarehouse withdrawals for transportation................
144.22, 144.36, 159.7
Warehouse withdrawals for exportation...................................
144.32, 144.37
Warning cards on cars, etc..............................................
18.4
Withdrawals from smelting and refining warehouse........................
19.20

TRANSPORTATION OF WILD ANIMALS AND BIRDS--RESTRICTIONS..................

12.27

TRANSPORTATION ORDERS--DEFENSE PRODUCTION ACT OF 1950...................

4.74

TRANSSHIPMENT--BONDED MERCHANDISE.......................................

18.3

TRANSSHIPMENT OF CARGO..................................................

4.91

TREASONABLE LITERATURE, ETC.............................................

12.40

TRUCK SHIPMENTS TRANSITING CANADA.......................................

123.41

TRUCK SHIPMENTS TRANSITING THE U.S......................................

123.42
TRUCKS
Brought in for temporary use in international traffic...................
10.41, 123.14
Domestic, repaired abroad...............................................
123.17
Fees, commercial trucks.................................................
24.22(c)
Foreign-owned brought in for hire.......................................
10.41, 123.14, 123.15
Taken abroad for temporary use--Tariff status on return.................
123.16
Taken abroad under hire and returned....................................
123.16

TRUNK LINE ASSOCIATIONS--MERCHANDISE SHIPPED IN BOND, EXAMINATION BY....

18.9

TRUST TERRITORIES.......................................................

191.5

``TWENTY-FOUR HOUR'' RULE (``24-hour'' rule)............................

4.7

                                      U

UNASSEMBLED ENTITIES....................................................

141.58
UNCLAIMED AND ABANDONED MERCHANDISE
Allowance in duties.....................................................
Part 158, subpart D
Application to abandon..................................................
158.42, 158.43
Appraisement of.........................................................
127.23
Auctioneer's commission.................................................
127.34
Cartage.................................................................
125.14
Defined.................................................................
127.11

[[Page 777]]

Dutiable status after 1 year............................................
127.14
Duty deficit collectible from consignee, when...........................
127.37
Entry of, before sale...................................................
127.14
Exportation of--Controlled..............................................
161.2
Immediate transportation entry after 6 months from date of importation, 
when permitted..........................................................
127.2
Involuntarily, abandonment of...........................................
127.12
Plants and plant products...............................................
12.13
    Sale --
General procedure.......................................................
127.21-127.27
Notice of--Catalogs.....................................................
127.26
Perishable..............................................................
127.28(c)
Proceeds, claim for surplus.............................................
127.36
Proceeds, disposition of................................................
127.31
Proceeds insufficient...................................................
127.37
Proceeds, surplus, payable to owner or consignee........................
127.36
Special items, i.e., drugs, arms, tobacco and alcoholic beverages.......
127.28
Storage.................................................................
127.13
Time period--abandonment................................................
158.43(c)(2)
Time period--destruction................................................
158.43(d)(2)
Transportation and exportation, merchandise entered for, when treated as
18.20, 18 N 9
Unordered goods not accepted by consignee...............................
141.1(f)
Warehouse entry when not permitted......................................
127.14
Withdrawal from sale....................................................
127.14(b)

UNCLAIMED FOR UNACCOMPANIED BAGGAGE.....................................

148.7

UNDERVALUATION, ENTRY BY MEANS OF FALSE INVOICES, DOCUMENTS, PRACTICES, 
ETC.--PENALTY...........................................................

148.19
UNDERWRITERS
Certificate of, for bonded warehouse....................................
19.2
Entry by................................................................
141.13

UNFAIR COMPETITION; Patent owner import survey..........................

12.39

UNFAIR PRACTICES IN IMPORT TRADE--BOND..................................

113.62

UNITED NATIONS AND ITS SPECIALIZED AGENCIES.............................

148.87, 148.88

UNITED STATES, CERTAIN CLASSES OF PERSONS IN THE SERVICE OF, AND THEIR 
FAMILIES--FREE ENTRY OF PERSONAL AND HOUSEHOLD EFFECTS..................

148.71

UNITED STATES-BAHRAIN FREE TRADE AGREEMENT..............................

Part 10, subpart N

UNITED STATES-CHILE FREE TRADE AGREEMENT................................

Part 10, subpart H

UNITED STATES-JORDAN FREE TRADE AGREEMENT...............................

Part 10, subpart K

UNITED STATES-MOROCCO FREE TRADE AGREEMENT..............................

Part 10, subpart M

UNITED STATES-SINGAPORE FREE TRADE AGREEMENT............................

Part 10, subpart I

UNIT PRICE--VALUATION-DEFINED, TRADE AGREEMENTS ACT OF 1979.............

152.102(k)
UNLADING
Crews effects...........................................................
Part 148, subpart G
Merchandise or baggage, from contiguous country.........................
123.8
Vessels--Permit or special license, form................................
4.30

USER FEES...............................................................

24.22, 111.96
U.S.
American goods returned consigned to--Free entry procedure..............
10.103
Articles for any department, bureau, or division of.....................
10.46, 10.100-10.104, 141.102(d), 145.37

[[Page 778]]

Books, engravings and other articles, conditionally free................
10.46, 145.37
Emergency purchases abroad by armed forces..............................
10.100-10.104
Enforcement of laws administered by agencies other than Customs.........
161.2
Entry and liquidation procedure.........................................
10.100 -10.104, 141.83(d)(8), 141.102(d)
Fisheries--See ``Fisheries, American''..................................
10.78
Mail importations for offices or officials..............................
145.37
Shipments consigned to Government departments, bureaus, etc.--Entry of..
10.100-10.104, 141.83(d)(8), 141.102(d)
Strategical and critical materials, stockpiling.........................
10.102
U.S. AGENCIES
Books, engravings, etc., conditionally free.............................
10.46, 145.37

U.S. ATTORNEYS, REPORTS TO, IN CIVIL, CRIMINAL, PENALTY, OR FORFEITURE 
CASES, WHEN REQUIRED....................................................

162.32(c), 162.47(d), 162.65(d), 172.3

U.S. DEPARTMENT OF AGRICULTURE--MEAT AND MEAT-FOOD PRODUCTS FOR EXPORT, 
INSPECTION BY...........................................................

4.61, 4.72
U.S. MARITIME ADMINISTRATION
Vessels exempt from penalties...........................................
162.22(e)

U.S. OBLIGATIONS ACCEPTED IN LIEU OF SURETIES ON BONDS..................

113.39

U.S., VESSELS OWNED BY--Bond not required to unlade on bonds............

4.30

                                      V

VALUE
Absence of, cannot be determined........................................
152.107
Advances in--Notice to importer.........................................
152.2
Articles assembled abroad and exported to the U.S. prior to July 1, 1980
10.18
Baggage.................................................................
148.13(d), 148.24, 148.33
Basis upon which appraisement is made...................................
152.101
Computed value..........................................................
141.88
Cost of production--When to be shown on invoice.........................
141.88
Date of exportation.....................................................
152.1(c)
Declarations............................................................
148.13(d)
Entered value, how shown on entry.......................................
141.61
Furnishing of information to importer...................................
152.26
Further processing......................................................
152.105(i)
Immediate transportation entry, used on.................................
18.11
Importer to show on entry...............................................
141.90(c)
Rewarehouse entries.....................................................
144.41(e)
Seized property or penalty..............................................
162.43
Time of exportation.....................................................
152.1(c)

VEGETABLE OILS--OLIVE, PALM-KERNEL, RAPESEED, SUNFLOWER, AND SESAME--
DENATURING--RELEASE, REQUIREMENTS FOR...................................

10.56

VEHICLE, ROAD, CERTIFICATION............................................

Part 115
VEHICLES
Automotive products--Canadian article...................................
10.84
Bond--Form..............................................................
113.62-113.64

[[Page 779]]

Common carrier, clearance of............................................
162.22
Compensation of Customs officer assigned to board--Proceeding between 
ports...................................................................
24.17(a)(7)
To protect the revenue..................................................
24.17(a)(1)
Contiguous countries, from--Report and Manifest--Permits--Penalty.......
Part 123, subpart A
Detention of, to secure payment of personal penalties...................
162.22(d)
Entry...................................................................
12.73, 12.74, 12.80
Exportation of used.....................................................
Part 192, subpart A
Forfeited, petition to be filed.........................................
162.31, 162.32
Forfeiture and sale of..................................................
162.45, 162.46, 162.47
Holding and proceeding against, for payment of penalty..................
162.22
Inspection..............................................................
Part 162, subpart A
Lading without special license or permit................................
162.22
    Manifest--
Disposition of..........................................................
4.7
Examination of..........................................................
162.5
Marking of licensed cartage and lighterage..............................
112.27
Motor vehicles--Canadian article........................................
10.84
Motor vehicles--Clean Air Act--emission standards.......................
12.73
Motor vehicles--safety standards........................................
12.80
Narcotics and certain other drugs--Unmanifested--Unladen without permit.
162.65, 162.66
Nonresident--Free entry.................................................
148.45
Overtime, bond--Form....................................................
123.8(c)
Persons and baggage, examination........................................
162.6, 162.7
Petitions, relief from penalties and forfeitures........................
171.2, 171.11
Repair or alteration....................................................
10.36a
Report of arrival.......................................................
123.1(b)
Retention of............................................................
162.22(d)
Safety standards--National Traffic and Motor Vehicle Safety Act.........
12.80
Sealed merchandise arriving in--Penalty.................................
18.4
Search..................................................................
162.5, 162.7
    Seized--
Appraisement............................................................
162.43
Award or sale...........................................................
162.45-162.47
Seizure.................................................................
161.2, 162.22
Conveyances.............................................................
162.22
Release of, on payment of appraised value...............................
162.44
Release of, petition for................................................
162.31, 162.32, 171.11
Release on bond.........................................................
162.47, 162.49
Remission or mitigation of forfeiture...................................
162.31, 162.32, Part 171, subparts B-D
Stolen in Mexico........................................................
123.82
Subject to summary forfeiture--Release under bond.......................
162.47, 162.49
Taken abroad temporarily, tariff status on return.......................
148.32
Transfers to other district for sale....................................
162.46(c)(2)
Claim and bond to stop summary forfeiture...............................
162.47
Seizure by State officers, adoption of, by Customs......................
162.21

[[Page 780]]

Seizure --
When used in or employed to aid in unlawful importation merchandise.....
162.21, 162.22
Stopping and searching..................................................
162.5, 162.7
Unlading without special license or permit..............................
162.22

VEHICLES, MOTOR, ETC., STOLEN OR EMBEZZLED, TAKEN TO MEXICO AND RETURNED

123.82
VESSELS
Alcoholic liquors on vessels not over 500 tons..........................
4.13
American--Transfer of cargo and passengers..............................
4.91
American-built, for foreign account, clearance of.......................
4.61(c)
Army and Navy transports, Customs supervision and search of.............
162.3(b)
Arrival of..............................................................
4.1, 4.2
Arriving with foreign merchandise destined for foreign ports............
4.88, 4.89
Arrival, reports of, Coastwise Trade....................................
4.81
Boarding of.............................................................
162.3, 4.1
Boarding or leaving without permission--Penalty.........................
4.1
Bonds--Forms............................................................
113.62-113.64
Bonded cargo not sealed.................................................
18.4
Bulk merchandise, unlading of, outside port of entry--Expenses 
reimbursable............................................................
4.35
    Cargo--
Bulk for orders--Manifest, amendment....................................
4.36
Certificate of inspection, verification.................................
4.61, 4.66
Discharge of, exceeding time limit--Compensation of discharging officer.
4.36, 24.17
Discharge of, outside port of entry--Compensation and expenses of 
discharging officer.....................................................
24.17
General-order procedure.................................................
4.37
Inward, accounting for..................................................
4.61, 4.62
Recovered from sunk or wrecked vessel or as derelict....................
4.41, 4 N 76, 4 N 78
Unlading, time limit....................................................
4.36
    Clearance--
Bond--Unmanifested narcotics............................................
162.65(e)
Common carrier--Penalty incurred by master or owner.....................
162.22(c)
Foreign--Penalty........................................................
4.61, 162.22
Requirements............................................................
4.60, 4.61
Transportation orders issued under Defense Production Act of 1950.......
4.74
When not required.......................................................
4.60
    Clearance of--(See also Clearance of vessels)
At other than port of entry--Expenses...................................
24.17, 101.4
Documentation required..................................................
4.61
Neutrality observance...................................................
4.61, 4.73
Outward foreign manifests required......................................
4.61, 4.63, 4.75
Requirements as to crew list............................................
4.61, 4.68
Requirements as to seamen's act and shipping articles...................
4.61, 4.69
To Panama Canal.........................................................
4.60(c)
To closed ports or places...............................................
4.61, 4.67
When not required.......................................................
4.60
Coasting trade and fishing--Documents required..........................
4.80
    Coastwise--
Bonded cargo, report of.................................................
4.81(b)

[[Page 781]]

Clearance...............................................................
4.81, 4.83, 4.84
Entitled to engage in...................................................
4.80
Entry of................................................................
4.81, 4.83, 4.84
Intercoastal movements..................................................
4.86
Passengers on foreign vessels taken on board and landed in the U.S......
4.80a
Report of arrival.......................................................
4.81
St. Lawrence River, via.................................................
4.83
Touching at foreign port................................................
4.82, 4.90
Common carriers, clearance may be refused...............................
162.22
Compensation of Customs officers assigned to board--Proceeding between 
ports...................................................................
24.17
To protect the revenue..................................................
4.36, 24.17
Contiguous country, from--Report and manifest--Permits--Penalty.........
123.1-123.8
Convention--Fisheries...................................................
4.96
Crew-Articles landed or taken ashore....................................
148.62-148.66
Crew assisting in unlawful importation of merchandise--Penalty..........
148.67, 162.22
Crew list...............................................................
4.61, 4.68
Crews, articles acquired by.............................................
4.7, 4.81, 148.62-148.66
Customs stations........................................................
101.4
Definition..............................................................
4.0
    Departure--
Before report or entry--Penalty.........................................
4.6
Time of, definition.....................................................
4.3
    Derelict--
Report of arrival.......................................................
4.2
Who may report..........................................................
4.2
Detention of, to secure penalty.........................................
162.22
Discrepancies in cargo correction--Penalty..............................
4.12, 4.62
Discriminating countries, from--Restrictions............................
4.17
Dismantled in American port, hulls and fittings.........................
4.40
Distress--Landing cargo at other than port of destination...............
4.32
Diversion of cargo from port of destination.............................
4.33
Diversion of, while en route............................................
4.91
Diverted after clearance, with supplies withdrawn from warehouse........
10.63
Drawback--Material for original construction and equipment..............
Part 191, subpart M
Dunnage.................................................................
4.39(c)
Electronic passenger and crew arrival manifests.........................
4.7b
Electronic passenger and crew member departure manifests................
4.64
Engaged in several movements or transactions simultaneously.............
4.90
Enrolled or licensed for coasting trade and mackerel fisheries--
Restrictions............................................................
4.15(d)
Entitled to engage in coastwise trade...................................
4.80
Entry and clearance of records..........................................
4.95
    Entry of--
American................................................................
4.9
At other than port of entry--Expenses...................................
24.17, 101.4

[[Page 782]]

Foreign.................................................................
4.9
When required...........................................................
4.3
Equipment purchased abroad for American.................................
4.14
Examination of..........................................................
162.3, 162.5
Export declarations--Vessel proceeding foreign via domestic ports.......
4.87
Fees, commercial vessel.................................................
24.22(b)
Fees for recording documents............................................
4.98
Fees, private vessels...................................................
24.22(e)
Fisheries of U.S.--Limited to American..................................
4.96
Fishing, enrolled and licensed for, touching and trading at foreign 
places--Permit--Form....................................................
4.15
    Foreign trade--
Touching at intermediate foreign port while proceeding via domestic 
ports...................................................................
4.89
Forfeiture and sale of..................................................
162.45-162.47
Formal entry--Oath--Form................................................
4.9
Frontier enrollment and license, under--Touching at foreign port........
4.82, 4.90
Government owned........................................................
4.5
Great Lakes, trade between ports........................................
4.83
Holding and proceeding against, for payment of penalty..................
162.22(d)
Hudson River, proceeding to sea via.....................................
4.83(b)
Importation restrictions--Vessels of less than 30 net tons..............
4.100
Inspection of...........................................................
162.3, 162.5
Lading or unlading without special license or permit....................
4.30
Letters on, disposition.................................................
162.4
    Licenses--
Less than 30 net tons...................................................
4.100
Yachts, cruising licenses...............................................
4.94
Light money, table......................................................
4.20
Light money, yachts.....................................................
4.94
Livestock-carrying--Exportation of animals--Inspection..................
4.61, 4.71
Mail, carriage..........................................................
4.61
    Manifest--
Examination.............................................................
162.3, 162.5
Incorrect...............................................................
4.12
Inward foreign--Contents--Form..........................................
4.7
Outward foreign.........................................................
4.61, 4.63, 4.75
Vessel proceeding foreign via domestic ports............................
4.87
    Marihuana--
Cargo or passenger's baggage............................................
162.65
Unladen without a permit--Penalty.......................................
162.66
Unmanifested--Penalty...................................................
162.65
Maritime Administration, exempted from penalties........................
162.22(e)
Measuring, expenses of, reimbursable....................................
24.17
Meat inspection certificate required before clearance of--Master's oath.
4.61, 4.72
Merchandise and baggage on vessels not required to enter, report of.....
4.2
    Narcotics and certain other drugs, etc.--
Cargo or passenger's baggage............................................
162.65
Clearance...............................................................
162.65(e)
Sea stores..............................................................
4.39
Unladen without permit..................................................
162.66
Unmanifested--Penalties.................................................
162.65

[[Page 783]]

No clearance without issuance of certificate of free pratique...........
4.70
Noncontiguous territory; report of arrival, entry, clearance or 
permission to depart to.................................................
4.84
Nonconvention--Fisheries................................................
4.96
Oil discharged into coastal navigable waters --Penalty..................
4.66a, 4.66b
Overage of cargo--Form..................................................
4.12, 4.62
Overtime--Boarding, entry or clearance in connection with--Forms--Bond..
4.10
Panama Canal, transiting, report........................................
4.4
Passenger list, to be submitted by master...............................
4.50
    Passengers--
Requirements............................................................
4.50
Passengers and baggage, list............................................
4.7
Permit or special license to unlade or lade--Form.......................
4.30
Persons and baggage, examination........................................
162.6
Petitions, relief from penalties and forfeitures........................
162.31, 162.32, Part 171
Pleasure yachts, when required to be licensed...........................
4.94
Pratique (bills of health), when required...............................
4.9(d)
Preliminary entry of vessels--Certification--Form.......................
4.8
Prematurely discharged or overcarried cargo, disposition................
4.34
Proceeding foreign via domestic ports...................................
4.87
Reexamination and search................................................
162.6
Refuse matter discharged or deposited in navigable waters--Penalty......
4.66a, 4.66b
Repair or alteration....................................................
10.36a
Repairs to American, abroad.............................................
4.14
Residue cargo...........................................................
4.85, 4.86, 4.88
Retention of............................................................
162.22(d)
St. Lawrence River, via.................................................
4.83
Salvage--Restrictions as to.............................................
4.97
Sea, and ships' stores..................................................
4.39, 4.87
Sealed..................................................................
4.11, 18.3, 18.4, 18.4a, 123.24
Sea or medical stores--Narcotic drugs...................................
4.39, 162.65, 162.66
Search of--Baggage and persons..........................................
4.1, 162.6, 162.7
Securities, etc., carriage..............................................
4.61
    Seized--
Appraisement............................................................
162.43
Claim and bond to stop summary forfeiture...............................
162.47
Release of, on payment of appraised value...............................
162.44
Release on bond.........................................................
162.47, 162.49(b)
Remission or mitigation of forfeiture...................................
162.31,162.32, Part 171, subparts B-E
Seizure by State officers, adoption of, by Customs......................
162.21
    Seizure --
When used in or employed to aid in unlawful importation of merchandise..
162.21,162.22
When used in unlawful exportation of articles...........................
161.2(b)
Shippers' export declarations...........................................
4.63, 4.75
Shortage of cargo--Form.................................................
4.12, 4.62
Sold under chattel mortgage or conditional sale contract--Petition......
171.13(b)
Special license issued under Anti-Smuggling Act to vessels of less than 
30 net tons.............................................................
4.100

[[Page 784]]

Special license to unlade or lade--Form.................................
4.30
Stores and equipment, landing of retention on board--Entry, when 
required................................................................
4.39
Stores, sea and ships', sealing of, when................................
4.11
Subject to summary forfeiture--Release under bond.......................
162.47, 162.49
Supervision of, while in port...........................................
4.1
    Supplies and equipment for--
Foreign Trade Zone, Removal.............................................
146.69
Withdrawn from bonded warehouse, Customs custody, internal-revenue 
bonded warehouse, etc...................................................
10.59-10.64
Tonnage tax--Exemptions.................................................
4.20-4.22
Towing operations.......................................................
4.92
Transfer to other districts for sale....................................
162.46
Transiting Panama Canal--baggage........................................
148.3
Transports, Government, manifest of passengers and baggage--Form........
4.5
Transshipment of cargo due to casualty..................................
4.31
Undelivered cargo at foreign destination, returned, disposition of......
4.34
    Unlading--
Articles by seaman or officer...........................................
Part 148, subpart G
Elsewhere than at port of entry.........................................
4.35
Prior to report or entry--Penalty.......................................
4.6
Unlading or transshipment at other than port of entry to casualty.......
4.31
Unmanifested narcotics, marihuana, and certain other drugs..............
162.65
U.S. Government owned, bond not required to unlade or lade..............
4.30(j)
U.S. Government, supplies withdrawn for.................................
10.59
U.S. ports on Great Lakes and other ports in U.S., trading between......
4.83
Verification of nationality and tonnage.................................
4.61, 4.65
    Voyage--
Inward foreign, when completed..........................................
4 N 121
Outward foreign, when begun.............................................
4 N 121
Whale fisheries, privileges and exemptions..............................
4.96
Withdrawal of supplies and equipment from...............................
10.59
Aircraft turbine fuel...................................................
10.62b
Blanket.................................................................
10.62a
Bunker fuel oil.........................................................
10.62
Foreign Trade Zone......................................................
146.69
Warehouse...............................................................
144.35
Wrecked--
Manifest for an entry of cargo..........................................
4.41
Underwriters or salver of cargo deemed consignee........................
141.13
Yachts..................................................................
4.94, 4.94a

VIRGIN ISLANDS, U.S.....................................................

101.1, 191.5
Drawback................................................................
191.5
Duty....................................................................
148.101, 148.102
Flights to and from.....................................................
Part 122, subpart N
Not ``ports of entry''..................................................
101.1
Unaccompanied shipments from............................................
148.110-148.116
Vessels arriving at or from, examination of persons, baggage, or 
merchandise.............................................................
162.6

[[Page 785]]

VIRUSES, SERUMS, AND TOXINS
For treatment of domestic animals--Entry procedures.....................
12.17-12.20
For treatment of man--Entry procedure...................................
12.21-12.23
Mail importations.......................................................
12.17-12.23, 145.57

VOUCHERS, BILLS OF SALE, OR INVOICES; CERTIFICATION.....................

24.34

                                      W

WAGES
Callback................................................................
24.16
    Customs--
Employees...............................................................
24.17
Officers................................................................
24.16
Customs Officer Pay Reform Act..........................................
24.16
Federal Employees Pay Act...............................................
24.17
Limitations.............................................................
24.16(h)
Overtime pay............................................................
24.16(e)
Premium pay.............................................................
24.16(g)
Work assignment priorities..............................................
24.16(d)

WAKE ISLAND.............................................................

7.2, 191.5
WAREHOUSE ENTRY
Allowance of duties on..................................................
144.3
Arrival as condition for................................................
141.63
Bond--Form..............................................................
144.13
Estimated duties on.....................................................
144.12
Form and procedure......................................................
Part 144, subparts B and C
Liquidation.............................................................
159.7, 159.9
    Transferee--
Liability for duties....................................................
144.2
Rights and obligations of...............................................
144.21-144.31
Transferor--Liability for duties........................................
144.2, 144.21
Unclaimed merchandise...................................................
127.14

WAREHOUSE PROPRIETOR'S BOND--FORM.......................................

113.14
WAREHOUSES
Abandonment of merchandise--Duty allowance..............................
158.41-158.43
    Bonded
Alterations or Relocation...............................................
19.3
Amount of bond..........................................................
113.13
Application to bond--Annual Fee.........................................
19.2
Articles exported from, and returned....................................
10.3(d)
Bins for storage of grain...............................................
19.1
Bonded stores, definition...............................................
19.1
Bonds...................................................................
19.2
Buildings or enclosures as..............................................
19.1
Charges after sale of merchandise.......................................
Part 127, subpart D
Suspensions; discontinuance.............................................
19.3
Classes of, description.................................................
19.1
Cleaning, sorting, and repacking--Established for.......................
19.1
Damage or loss of merchandise...........................................
Part 158, subparts B and C
Destruction of merchandise in...........................................
Part 158, subpart D
Discontinuance of.......................................................
19.3
Disposition of merchandise in--
After expiration of warehouse period....................................
127.13, 127.14

[[Page 786]]

Duty paid, undelivered..................................................
127.14
Elevators for storage of grain..........................................
19.1
Examination packages, delivery of.......................................
19.10
Examining, repacking, sampling, transferring merchandise by importers...
19.8
Expenses of labor and storage, merchandise liable for...................
19.7
Fires, lights, and locks................................................
19.4
Importer to designate on entry--the bonded warehouse....................
144.11(c)
Importer's private, definition..........................................
19.1
Liability for duty on merchandise in....................................
144.2, 144.3
Liens for freight.......................................................
19.6
Locks, Customs, required................................................
19.4
Manipulated merchandise--Dutiable weight, etc...........................
159.21, 159.22
Merchandise in, under change of law.....................................
152.12, 152.16, 152.17
New bond, when necessary................................................
19.2
Offices for warehouse officer...........................................
19.4
Protection requirements.................................................
19.1
Public--For merchandise.................................................
19.1
Public store, definition................................................
19.1
Release of merchandise..................................................
19.6, 144.38(e)
Renewal of bond.........................................................
19.2
Recordkeeping, storage..................................................
19.12
Sanitary requirements...................................................
19.4
Stables for storage of animals..........................................
19.1
Stipulation of lessee...................................................
19.2
Storage and labor charges...............................................
19.7, 24.12
Storage tanks for petroleum products....................................
151.45
Suspended status, nonbonded, storage permitted..........................
19.3
Transfer of merchandise from discontinued...............................
19.3
Yards or sheds for bulky articles.......................................
19.1
    Cigar manufacturing--
Application for establishing............................................
19.13(b)
Bond--Form..............................................................
19.13, 113.11
Buildings or parts of, designated as....................................
19.13
Byproducts, withdrawal of...............................................
19.15
Constructive manipulation warehouses....................................
19.1
Containers or coverings of materials....................................
19.15
Entry of goods into--Form--Bond.........................................
19.14
Export procedure........................................................
19.15
Exportation of products required........................................
19.15
Formula of manufacture..................................................
19.13
Free material, application to receive--Form.............................
19.14
Manufacturer's statement................................................
19.15
Manufacturing...........................................................
19.13-19.15
Marking of products.....................................................
19.13
Puerto Rico, liquors withdrawn for shipment to..........................
7.1, 19.15(i)
Rectifying liquors......................................................
7 N 2
Shortages, etc., in transportation--Charge against carrier..............
19.15(m)
Storage of goods........................................................
19.13
Transfer of domestic spirits and wines to...............................
19.14(d)
Waste, withdrawal of....................................................
19.15
Warehouse officer to verify manufacturer's statement....................
19.15(j)

[[Page 787]]

Withdrawals.............................................................
19.15
Smelting and refining...................................................
19.17-19.25
Assaying of metal-bearing ores and metals...............................
Part 151, subpart D
Bond, renewal...........................................................
19.17
Bond charges and credits, basis for.....................................
19.15
Credit for dutiable metals lost.........................................
19.25
Different establishments, done in.......................................
19.21
Discontinuance..........................................................
19.17
Entry procedure.........................................................
19.17
Establishment of--Application--Bond.....................................
19.17, 113.12
Manufacturer's statements...............................................
19.19
Metal refined from crude metal (imported and produced from imported 
materials)..............................................................
19.22
Moisture allowance in ores and metals...................................
151.52, 151.54
Premises, change in list................................................
19.17
Records, manufacturer's, required.......................................
19.19
Sampling procedures.....................................................
19.17, 151.52
Segregation of bonded metal-bearing ores................................
19.17
Theoretical transfer....................................................
19.24
Transfer of credits on bonds............................................
19.24
Wastage, allowance for..................................................
19.18, 19.19
Withdrawal credits......................................................
19.25
Withdrawals for consumption.............................................
19.18
Withdrawals for exportation, credit for.................................
19.20, 19.23
Withdrawals for transfer................................................
19.20, 19.24, 19.25
    Storage-manipulation--
Application to manipulate...............................................
19.11
Entry for...............................................................
19.11
Repacking after manipulation............................................
19.11
Requirements............................................................
19.11
Transfer of merchandise.................................................
19.11
Withdrawal from.........................................................
19.11

WARRANTS, SEARCH, PROCURING AND SERVING OF..............................

Part 162, subpart B

WASTAGE--SMELTING AND REFINING..........................................

19.18, 19.19

WATCHES AND WATCH MOVEMENTS FROM........................................

7.4, 11.9, 134.43

WAX DISKS AS MASTER RECORDS FOR SOUND RECORDS FOR EXPORT................

10.90
WEIGHING
Expenses................................................................
141.86(f)
Sugar, syrup, and molasses..............................................
151.27, 151.29
Tare, determination.....................................................
159.22
Warehoused goods, for exportation or transportation.....................
144.37(e)
Wool and hair...........................................................
151.68, 151.69

WHALE FISHERIES, VESSELS IN, PRIVILEGES AND EXEMPTIONS..................

4.96(h)

WHALES--IMPORTATION AND EXPORTATION RESTRICTIONS........................

12.30

WHEAT...................................................................

19.29-19.34
WILD ANIMALS
Exported for exhibition, return.........................................
10.66
Importation procedure...................................................
10.76, 12.26-12.28
Scientific or educational purposes, for.................................
10.75

WINDOWS, STAINED OR PAINTED GLASS--Houses of worship....................

10.52

[[Page 788]]

WINES (BULK IMPORTATIONS), IN CASKS AND SIMILAR CONTAINERS..............

11.6

WITHDRAWAL OF MERCHANDISE FROM SALE.....................................

127.14
WITHDRAWAL OF SUPPLIES
Aircraft turbine fuel...................................................
10.62b
Blanket.................................................................
10.62a
Bunker fuel oil.........................................................
10.62

WITHDRAWALS, CONDITIONALLY FREE, BOND FOR--FORM.........................

113.62

WITHDRAWALS FOR TRANSPORTATION AND EXPORTATION CONVERTED TO WITHDRAWAL 
FOR CONSUMPTION.........................................................

144.37
WITHDRAWALS FROM WAREHOUSE
Bonded manufacturing....................................................
19.15
    Consumption
Computation of duties...................................................
141.104
Form and procedure......................................................
Part 144, subpart D
Transferee, when by.....................................................
Part 144, subpart C
Exportation.............................................................
144.37
Manipulated merchandise.................................................
19.11
Period..................................................................
127.14, 144.5
Petroleum products......................................................
151.45
Smelting and refining...................................................
19.18, 19.25
    Transportation, for--
Before liquidation......................................................
144.36
Before liquidation without deposit in warehouse.........................
144.36
Entry--Form.............................................................
144.36(c)
Procedure at destination................................................
144.36(g)
Procedure, forwarding...................................................
144.36(f)
Samples withdrawn, duties on............................................
144.36(e)
Vessel supplies--Form...................................................
10.60-10.64
Weighing, gauging, and measuring merchandise for exportation or 
transportation..........................................................
144.37(e)

WITHDRAWALS FROM WAREHOUSE OR CUSTOMS CUSTODY--TOBACCO PRODUCTS FOR 
CONSUMPTION ON VESSELS--BLANKET WITHDRAWALS--INVENTORIES................

10.65

WITHDRAWAL OF SUPPLIES AND EQUIPMENT FOR VESSELS........................

10.59
WOOL AND HAIR
    Clean content
Determination of by laboratory testing..................................
151.70, 151.71
Expenses of retests.....................................................
151.71(d), 151.73(c), 151.74
Notice to importer required.............................................
151.71(b)
Commercial test, clean content by.......................................
151.73
Definitions of clean pound, clean yield, general sample and sampling 
unit....................................................................
151.61
Duties, collection postponed, when......................................
151.66
Duties, how determined..................................................
151.65
Duties on samples.......................................................
151.66
Entry...................................................................
151.63, 151.64
Grading.................................................................
151.76
Invoice requirements....................................................
151.62
Losses, commercial cleaning wool and hair...............................
151.61(b)
Notice of higher rate of duty...........................................
151.76(b)
Notice of percentage clean yield and grade of wool or hair filed with 
entry...................................................................
151.64

[[Page 789]]

Official standards for grade............................................
151.76(a)
Retest..................................................................
151.71(c), 151.73, 151.74
Samples drawn by importer, weighed and recorded.........................
151.67
Sampling procedure......................................................
151.68
Standards for grades....................................................
151.76
Weighing................................................................
151.61-151.63, 151.68

WOOL, CARPET, AND CAMEL'S HAIR--BOND--FORM..............................

113.68

WOOL PRODUCTS, LABELING OF..............................................

11.12
WORKS OF ART
Antiquities.............................................................
10.53
Baggage, in.............................................................
148.23
Exhibition, articles for--Bond..........................................
10.49
Gobelin and other hand-woven tapestries.................................
10.54
Professional artists, temporary importations by.........................
10.31
Stained or painted glass windows........................................
10.52
Statuary and casts of sculpture.........................................
10.48
Transfer of imported--For exhibition....................................
10.49

WORKS OF ART, DRAWINGS, ETC., BROUGHT BY PROFESSIONAL ARTISTS, 
LECTURERS, OR SCIENTISTS--TEMPORARY IMPORTATION BOND....................

10.31

WRECKED OR ABANDONED AT SEA--ENTRY OF MERCHANDISE.......................

4.40, 4.41, 141.13

WRECKED VESSELS, DISPOSITION OF CARGO AND STORES........................

4.40, 4.41

                                      Y

YACHTS
Cargo and passengers, restrictions in carriage of.......................
4.94(a)
    Foreign--
Cruising licenses may be issued.........................................
4.94(b)
Tonnage tax and other charges, when exempt..............................
4.94
Imported for sale.......................................................
4.94a
Pleasure, when required to be licensed..................................
4.94(a)
When exempt from foreign clearances.....................................
4.60(b)(1)
When not required to make entry.........................................
4.94(a)

                                      Z

ZOOLOGICAL COLLECTIONS OF WILD ANIMALS AND BIRDS........................

10.75

[[Page 791]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, 1973-1985, and 1986-2000,'' published in 
11 separate volumes.

                                  2001

19 CFR
                                                                   66 FR
                                                                    Page
Chapter I
141.113 (h) amended; eff. 4-27-01..................................16854
143.1 (a) amended...................................................8767
146.6 (a) amended...................................................8767
148.101 Examples 1 and 2 amended...................................46218
148.102 Revised....................................................46218
159 Authority citation revised.....................................16399
    Authority citation amended.....................................48552
159.1 Revised; eff. 4-25-01........................................16400
159.2 Amended; eff. 4-25-01........................................16400
159.4 Authority citation removed; eff. 4-25-01.....................16400
    Corrected......................................................20589
159.5 Authority citation removed; eff. 4-25-01.....................16400
    Corrected......................................................20589
159.6 Authority citation removed; eff. 4-25-01.....................16400
    Corrected......................................................20589
159.7 Authority citation removed; eff. 4-25-01.....................16400
    Corrected......................................................20589
159.11 (b) amended; eff. 4-25-01...................................16400
159.21 Authority citation removed; eff. 4-25-01....................16400
    Corrected......................................................20589
159.22 Authority citation removed; eff. 4-25-01....................16400
    Corrected......................................................20589
159.44 Authority citation removed; eff. 4-25-01....................16400
    Corrected......................................................20589
159.46 Authority citation removed; eff. 4-25-01....................16400
    Corrected......................................................20589
159.55 Authority citation removed; eff. 4-25-01....................16400
    Corrected......................................................20589
159.57 Authority citation removed; eff. 4-25-01....................16400
    Corrected......................................................20589
159.61--159.64 (Subpart F) Added...................................48552
163 Technical correction...........................................27454
163 Appendix amended; interim.........................9647, 21667, 50541
178.2 Table amended; interim (OMB numbers)....................8767, 9647
    Table amended (OMB numbers); eff. 4-25-01......................16400
    Table amended (OMB numbers).............................48555, 67485
191.2 (u) amended; interim..........................................9649
191.3 (a) introductory text, (1)(ii), (2) and (3) amended; (a)(4) 
        added; (b)(2) revised; interim..............................9649
191.51 (b) revised..................................................8767
    (b) existing text designated as (b)(1); new (b)(1) heading and 
(2) added; interim..................................................9649

                                  2002

19 CFR
                                                                   67 FR
                                                                    Page
Chapter I
141 Authority citation amended; eff. 2-15-02 through 5-16-02........7072
    Technical correction...........................................13092

[[Page 792]]

    Authority citation amended; eff. 3-20-02 through 4-30-02.......12801
    Authority citation amended..............................15098, 36097
141.4 (b)(1) and (c) introductory text amended.....................15098
    (b)(3) revised.................................................36097
141.5 Revised......................................................68035
141.102 (e) added; eff. 2-15-02 through 5-16-02.....................7072
    (f) added; eff. 3-20-02 through 4-30-02........................12801
142.2 (a) revised..................................................68035
145 Authority citation revised.....................................15099
146 Authority citation revised.....................................15099
148 Authority citation revised.....................................15099
151 Authority citation revised.....................................15099
152 Authority citation amended.....................................15099
152.13 (b)(1), (2), (c) introductory text, (1), (2), (3) and (d) 
        amended....................................................15099
162.91 Revised......................................................9191
162.94 (c) amended; (d)(2) revised; (e) redesignated as (f); new 
        (e) added...................................................9191
162.95 (b)(1) revised...............................................9191
163 Regulation at 66 FR 21667 confirmed............................55723
    Regulation at 66 FR 9647 confirmed.............................62882
163 Appendix amended........................................46588, 62884
177 Authority citation revised..............................15099, 53496
177.2 (b)(2)(ii)(B) amended........................................53496
177.9 Heading revised; (a) and (c) amended; (d) and (e) removed....53496
177.10 (a) and (e) amended; (b) removed; (c) revised...............53496
177.11 (b)(7) amended..............................................53496
177.12 Redesignated as 177.13; new 177.12 added....................53497
    (c)(2)(ii) and (d)(1)(viii) corrected..........................54733
177.13 Redesignated from 177.12....................................53497
178.2 Table amended (OMB numbers)....................53499, 66333, 68035
    Regulation at 66 FR 9647 confirmed.............................62882
181 Authority citation revised..............................15099, 15482
181.72 (b) revised.................................................15482
181 Appendix amended...............................................15482
    Appendix corrected.............................................19810
191 Authority citation revised.....................................15099
191 Authority citation amended.....................................48548
191.13 (a) designation, (a) heading and (b) added; (a) amended.....16637
191.26 (b)(2) and (3) amended; (b)(4) added; interim...............48370
191.51 (b)(2) Example 2 revised....................................48548
191.171 (a) revised................................................16637
191.172 (a) revised................................................16637
191.173 (e) revised................................................16637
191.175 (b) redesignated as (b)(1); (a) amended; (b)(1) heading 
        and (2) added; (c) revised.................................16637
191 Appendix A amended.............................................16638

                                  2003

19 CFR
                                                                   68 FR
                                                                    Page
Chapter I
Chapter I Heading revised..........................................51869
141.51 Revised......................................................8719
141.57 Added........................................................8719
142.21 (e)(1) and (2) amended; (g) redesignated as (h); new (g) 
        added; new (h) revised......................................8721
142.22 (a) amended..................................................8721
148.87 (b) amended.................................................50699
163 Technical correction...........................................67338
    Appendix amended; CFR correction...............................67352
178 Technical correction...........................................14478
178.2 Table amended (OMB numbers); eff. 4-21-03....................13626
    Table corrected (OMB numbers)..................................24052
    Table amended (OMB numbers)....................................68175
191.26 (b)(4) example revised......................................50703
192 Authority citation revised.....................................68176
192.14 Added.......................................................68176

                                  2004

19 CFR
                                                                   69 FR
                                                                    Page
Chapter I
141.4 (b)(4) amended; (d) revised..................................52600
162.76 (c) amended.................................................52600

[[Page 793]]

163 Appendix amended...............................................52600
171 Authority citation amended.....................................52600
171.51 (b)(7) amended..............................................52600
171.52 (a) amended.................................................52600
178.2 Table amended (OMB numbers)..................................63452
181 Authority citation amended.....................................52600
191.3 (a)(4) and (b)(2) revised....................................60083
191.51 (b)(2) introductory text revised............................60083
191.171 (c) added..................................................60083

                                  2005

19 CFR
                                                                   70 FR
                                                                    Page
Chapter I
141 Authority citation amended.....................................53062
141.4 (b)(1) and (c)(2) amended....................................53062
141.113 (b) amended; interim.......................................58016
144.38 (f)(1) amended; interim.....................................58016
145 Authority citation revised.....................................53062
146 Authority citation revised..............................53062, 58016
146.63 (d)(1) amended; interim.....................................58016
148 Authority citation revised.....................................53062
151 Authority citation revised.....................................53062
152 Authority citation amended.....................................53062
152.13 (b)(1), (2), (c) introductory text, (1), (2), (3) and (d) 
        amended....................................................53062
162.0 Amended; interim.............................................10884
162.45 (b)(1) amended...............................................8510
163 Appendix amended; interim......................................58016
163.1 (a)(2)(vi) redesignated as (a)(2)(vii); new (a)(2)(vi) 
        added; interim.............................................10884
163 Appendix amended; interim......................................10884
177 Authority citation revised.....................................53062
178.2 Table amended (OMB numbers); interim.........................10884
    Table amended (OMB numbers)....................................17856
181 Authority citation revised..............................37674, 53063
181.132 Added......................................................37674
191 Authority citation revised..............................10884, 53063
191.0 Amended; interim.............................................10884

                                  2006

19 CFR
                                                                   71 FR
                                                                    Page
Chapter I
141.51 Revised.....................................................31925
141.58 Added.......................................................31925
142.21 (h) redesignated as (i); (e)(1) heading, (2) heading, (g) 
        and new (i) revised; (a), (b)(2), (e)(1), (2) and (f)(2) 
        amended; new (h) added.....................................31927
142.22 (a), (b) heading, introductory text and (1) amended.........31927
163 Appendix amended; interim......................................61403
178.2 Table amended (OMB numbers)..................................44584
191.0 Amended......................................................76134

                                  2007

19 CFR
                                                                   72 FR
                                                                    Page
Chapter I
141.113 Heading revised; (a) introductory text through (5) and (c) 
        through (h) redesignated as (a)(1) introductory text 
        through (v) and (d) through (i); (a) concluding text 
        designated as (a)(2); new (a)(2), (b) and new (d) through 
        (i) amended; new (c) added; eff. 5-1-07.....................4429
142.3a Amended.....................................................59170
143.7 (a) amended..................................................59170
143.8 Amended......................................................59170
146.81 (b) amended.................................................59170
146.83 (a) amended.................................................59170
151 Authority citation amended; eff. 5-1-07.........................4430
151.11 Amended; eff. 5-1-07.........................................4430
151.12 Introductory text and (a) amended...........................59170
159.63 (a) amended.................................................59170
162.0 Amended; interim...............................32003, 35658, 58522
162.74 (c) amended.................................................59170
163.1 (a)(2)(vii) redesignated as (a)(2)(viii); new (a)(2)(vii) 
        added; interim.............................................32003
    (a)(2)(viii) redesignated as (a)(2)(ix); new (a)(2)(viii) 
added..............................................................35160
    (a)(2)(ix) redesignated as (a)(2)(x); new (a)(2)(ix) added; 
interim............................................................35658
    (a)(2)(x) redesignated as (a)(2)(xi); new (a)(2)(x) added; 
interim............................................................58522

[[Page 794]]

163.5 (b)(1) amended...............................................59171
163.11 (a)(5) and (b) amended......................................59171
163.12 (b)(2) and (c)(1) amended...................................59171
163.13 (d)(1) and (2) amended......................................59171
163 Appendix amended; eff. 4-5-07..................................10006
    Appendix amended; interim..........32004, 34376, 35160, 35658, 58522
171.12 Amended.....................................................59171
171.14 Amended.....................................................59171
171.62 (a) and (b) amended.........................................59171
    (c) and (d) removed............................................59175
171.63 Removed.....................................................59175
171 Appendix C amended.............................................59171
172.14 Amended.....................................................59171
172.42 (b) and (c) amended.........................................59171
173.3 (a) amended..................................................40737
177.0 Amended......................................................59171
177.1 (d)(6) amended...............................................59171
177.2 (a) amended..................................................59171
    (a), (b)(2)(i) and (ii)(C) amended.............................59172
177.9 (c) amended..................................................59172
177.13 (b)(1) amended..............................................59172
177.22 (b) introductory text, (3) and (c) amended..................59172
177.26 Amended.....................................................59172
178.2 Table amended; interim...........32004, 34376, 35160, 35658, 58522
    Table amended..................................................52782
181.21 (a) revised; (b) amended....................................52782
181.22 (b) introductory text, (1), (4) and (d)(1)(iii) amended.....52782
    (b)(1) amended.................................................59172
181.74 (a), (b), (c), (d) introductory text, (e)(1) and (2) 
        amended....................................................52783
181.92 (a)(3) and (6) amended......................................59172
181.93 (a), (b)(1)(i), (ii), (3), (4), (5)(i)(A) and (d) amended 
                                                                   52783
    (a) amended....................................................59172
181.100 (a)(3) amended.............................................59172
181.102 (a)(1) introductory text amended...........................59172
191.7 (c) heading and (3) amended..................................59172
191.8 (d), (e) heading, introductory text, (2), (g)(1) and (2)(ii) 
        amended....................................................59172
191.11 (c) amended.................................................59173
191.32 (c)(1) amended..............................................59173
191.36 (d) amended.................................................59173
191.61 (d)(1), (2) and (3) amended.................................59173
191.91 (g) amended.................................................59173
191.92 (h) amended.................................................59173
191.156 (d) amended................................................59173
191.194 (a)(1), (2) introductory text, (i), (c), (d), (e)(1)(ii), 
        (2), (f)(1) and (2) amended................................59173
191 Appendixes A and B amended.....................................59173

                                  2008

   (Regulations published from January 1, 2008 through April 1, 2008)

19 CFR
                                                                   73 FR
                                                                    Page
Chapter I
162 Authority citation revised......................................9011
162.21 (a) amended; interim.........................................9011
162.22 (a) amended; (d) removed; (e) redesignated as new (d); 
        interim.....................................................9012
162.91 Amended; interim.............................................9012
162.92 (d) heading and (1) amended; interim.........................9012
163.1 Regulation at 72 FR 35160 confirmed;.........................16754
178.2 Regulation at 72 FR 35160 confirmed;.........................16754


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